1973-04-03

ROUTINE PROCEEDINGS


Mr. Tom Cossitt (Leeds):: Mr. Speaker, I rise pursuant to Standing Order 43 to move a motion of urgent and pressing necessity superseding the one I read in the House yesterday on the matter of an alleged statement by Mr. Keith Spicer referring to English-speaking Quebeckers as "Westmount Rhodesians". I move, seconded by the hon. member for Cumberland-Colchester North (Mr. Coates):
That the matter of the address made last Saturday in Washington, D.C., by Mr. Keith Spicer, Commissioner of Official Languages, be referred immediately to the Standing Committee on Privileges and Elections for a full investigation and examination and in order to permit Mr. Spicer to answer any charges that may be made, and that the said committee report its findings along with any recommendations it may have for further action to this House as quickly as possible.


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


Some hon. Members:: Agreed.


Some hon. Members:: No.


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


UNEMPLOYMENT INSURANCE
Mr. Roland Godin (Portneuf):: Mr. Speaker, pursuant to Standing Order 43, I ask the unanimous consent of the House to present a motion on a matter of national interest.
Since the media are inviting Canadians to contact the friendly advisers appointed by the Department of National Revenue to guide us on the way to complete our tax returns and since a large number of unemployed people have not received their payments for the months of November and December 1972, and therefore are in danger of losing their homes or their cars or having to move, I move, seconded by the hon. member for Abitibi (Mr. Laprise):
That the House examine as promptly as possible steps to be taken in order that the Department of Manpower and Immigration be vested with authority to hire all personnel required to issue cheques refused by defective computers.


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


Some hon. Members:: Agreed.


Some hon. Members:: No.


Mr. Speaker:: There is no unanimity. The hon. member's motion therefore cannot be put.


COMMUNICATIONS
Mr. Terry Grier (Toronto-Lakeshore):: Mr. Speaker, I rise to move, under the terms of Standing Order 43, seconded by the hon. member for Sault Ste. Marie (Mr. Symes):
That the matter of the rate increases granted to Bell Canada by the Canadian Transport Commission last Friday, March 30, be referred to the Standing Committee on Transport and Communications.


Mr. Speaker:: Is there unanimous consent?


Some hon. Members:: Agreed.


Some hon. Members:: No.


Mr. Speaker:: There is not unanimous consent.


DOLLAR A YEAR BILL
Mr.   Yvon@: for leave to introduce Bill C-169, respecting "dollar a year" men.


Some hon. Members:: Explain.


Mr. L'Heureux:: Mr. Speaker, in the interest of all Canadians, I move that experts in all fields of human endeavours become "dollar a year" men as provided in an act respecting "dollar a year" men. It would, therefore, be advantageous for the government to secure the services of these experts, in order to resolve today's numerous problems, at no cost to the taxpayer.

April 3, 1973
Oral Questions


[Stage Direction]
Motion agreed to, bill read the first time and ordered to be printed.


Hon. Robert L. Stanfield (Leader of the Opposition):: Mr. Speaker, I should like to ask the Minister of Finance a question about the bill to amend the Income Tax Act affecting those who are filing returns for 1972 and looking for refunds. Assuming that the ways and means motion is debated later this afternoon, I should like to ask the minister whether he would be prepared to confer with the House leader with a view to the bill being brought on for second reading tomorrow, having regard to its urgency. If he is prepared to do this, we would waive the requirement of notice for this purpose.


Hon. John N. Turner (Minister of Finance):: I will certainly do that.


INTRODUCTION OF WAYS AND MEANS MOTION ON CORPORATE TAX REDUCTION-METHOD OF ENACTING ACCELERATED DEPRECIATION PROPOSAL
Robert Lorne Stanfield: have a supplementary question, Mr. Speaker, regarding the proposed corporate tax reduction. Recognizing and accepting the importance of proceeding with the 1972 measures first, as the minister proposes to do, may I ask him when may we expect to see the notice of ways and means motion respecting the proposed corporate tax reduction?


Mr. Guay (St. Boniface):: That's better than you did last night, Bob.


Some hon. Members:: Oh, oh!


John Napier Turner: Mr. Speaker, I do not want to interrupt an extraneous conversation but I would like to say that, as I explained to the House last week, I would hope we could dispose of the 1972 matters before we introduce the 1973 matters. But here again I should like to consult my colleague, the leader of the House, first.


Robert Lorne Stanfield: Mr. Speaker, I do not see why the introduction of the ways and means motion would in any way interfere with our proceeding with the other matters first. I should like to ask the minister whether he can tell the House how he intends to proceed with the fast write-off provisions? Does he propose to bring the matter into the House at all and, of so, in precisely what form?


John Napier Turner: Mr. Speaker, as I
explained when the question was put to me outside the House, the definition governing the regulations concern-

ing fast write-offs or accelerated capital cost allowance relates to manufacturing and processing, which happens to be the same definition that is relevant in the case of the corporate tax reduction, as the hon. gentleman knows. I felt that the House should have the opportunity to express its views on that issue. Whether or not I would exercise the option of bringing those forward by order in council, I have not yet determined, but I know the hon. gentlemen's views.


POSSIBLE MEETING OF BRITISH COLUMBIA PREMIER AND MINISTER ON PROVINCIAL PROPOSAL THAT ALASKAN OIL BE TRANSPORTED BY RAIL
Mr. T. C. Douglas (Nanaimo-Cowichan-The Islands):: Mr. Speaker, my question is for the right hon. Prime Minister. Has the right hon. gentleman received a telegram from Premier Barrett of British Columbia regarding the proposal of that government for transporting Alaskan oil and gas by rail to Lower Post, B.C. and then by underground pipeline to the United States? If so, may I ask the Prime Minister whether the telegram requests a meeting with the Minister of Energy, Mines and Resources, has such a meeting been arranged and, if so, when and, if not, can the Prime Minister assure the House that such a meeting will be arranged?


Right Hon. P. E. Trudeau (Prime Minister):: Mr. Speaker, I would have to refresh my memory as to the existence or otherwise of a telegram to me. I do know that the subject was raised, but I am rather certain it was not in a telegram to me.
As regards the substance of the question of a meeting, I believe that my colleague, the Minister of Energy, Mines and Resources, has indicated that he is prepared to discuss this topic. He has indicated, and I certainly agree with him, that any discussion would be more fruitful if he were able to know more about the proposal. In particular, he has asked for the background documents and research upon which this proposal has presumably been based.


INQUIRY AS TO DEPARTMENTAL STUDY OF FEASIBILITY OF RAIL TRANSPORT IN FAR NORTH
Thomas Clement (Tommy) Douglas: Mr. Speaker, I have a supplementary question for the Minister of Energy, Mines and Resources. Since the group at Queen's University have done a fairly exhaustive feasibility study on rail transport in the far north, and since Canadian National Railways has announced that it is undertaking an extensive study, may I ask the minister whether his department has set up any task force to make a study of rail transport in the far north, both as to the economics and as to the ecological feasibility of such a proposal similar to the advisory committee that he set up to study financing of a Mackenzie route pipeline?


Hon. Donald S. Macdonald (Minister of Energy, Mines and Resources):: Mr. Speaker, we have not set up an advisory committee but we have instituted a study to
April 3, 1973

examine the feasibility of the Queen's University study. However, the hon. gentleman will recall that that was with respect to the Mackenzie valley rather than the Yukon.


OIL-POSSIBLE SHARING OF RESOURCES BY OECD COUNTRIES IN EVENT OF MIDDLE EAST CUT-OFF- CANADIAN PARTICIPATION-BILATERAL APPROACH
Thomas Clement (Tommy) Douglas: Mr. Speaker, may I ask the minister a question in reference to his statement that the OECD members propose to have some sharing of their oil resources in the event of a Middle East oil cut-off. What surplus of oil does Canada have to contribute to such a plan, have any commitments been made, and is the minister making any approaches to Venezuela or any of the OPEC countries regarding a bilateral agreement to assure security of supply in the event of Middle Eastern oil being cut off?


Donald Stovel Macdonald: Mr. Speaker, the OECD discussion is with regard to offshore supplies of oil coming to Canada, the United States, western Europe, Japan and Australia. For that reason it is not so much a question of Canada contributing to it but of the way in which offshore supplies would be dealt with. With respect to the bilateral approach suggested by the hon. gentleman, he will recall that Dr. Howland advised the standing committee that one of the aspects of the OECD agreement is that there should not be in effect competitive bilateral deals between various members of the OECD and the OPEC countries because of the competitive element that this would bring about.


TRANSPORT OF OIL FROM NORTH-CANADIAN NATIONAL RAILWAYS STUDY
Mr. G. W. Baldwin (Peace River):: Mr. Speaker, I should like to ask the Minister of Transport whether he would inquire about the studies carried out by the Canadian National Railway in respect of railway construction in the far north, and if they will be made available to committees of the House?


Hon. lean Marchand (Minister of Transport):: Mr. Speaker, the department and the CNR have carried out and are still proceeding with detailed studies on the possibility of constructing a railroad to Northern Canada, but the reports are not yet completed.


PROPOSED WEST COAST OIL TANKER ROUTE-ALLEGED LACK OF DEPARTMENTAL CO-ORDINATION OF OPPOSITION
Mr. Barry Mather (Surrey-White Rock):: Mr. Speaker, I have a supplementary question concerning the shipment of oil which I should like to direct to the attention of the Minister of the Environment. Is he aware of the statement by Dr. McTaggart Cownan, Director of the Science Council of Canada, to the effect that he is concerned about the apparent lack of a co-ordinated effort by the Department of the Environment and the Department of Transport in
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respect of opposing and being ready to meet the threatened shipment of oil down the B.C.. coast in particular?


Hon. Jack Davis (Minister of the Environment):: Mr. Speaker, I understand this comment was contained in a report that was finalized about a year ago.


Mr. Speaker:: Order, please. The hon. member will appreciate that his question simply asked whether the minister was aware of a statement, and to that extent it would hardly be in order.


BUSINESS OF THE HOUSE
Mr. Gerard Laprise (Abitibi):: Mr. Speaker, I wish to put a question to the President of the Privy Council.
Since Bill C-125 amending the Unemployment Insurance Act of 1971 includes fine provisions, can the President of the Privy Council assure us that it will be studied before the Easter holiday?


Hon. Allan J. MacEachen (President of the Privy Council):: Mr. Speaker, I doubt whether that would be possible.


Mr. Hees:: I rather doubt that it is possible in view of the way it has been shifted or put aside, and we know why, Al.


Some hon. Members:: Oh, oh!


NATIONAL SECURITY
Mr. Erik Nielsen (Yukon):: Mr. Speaker, I should like to direct my question to the Solicitor General. Can he advise the House whether the offices of the police and security planning and analysis group, newly expanded and located next to the minister's own departmental office, include sophisticated electronic equipment capable of monitoring conversations in other offices or rooms or via telephone?


Hon. Warren Allmand (Solicitor General):: No, Mr. Speaker.


Erik Nielsen: I should like to ask the minister a supplementary question. Is he prepared to arrange a familiarization visit by Members of Parliament, perhaps the members of the Standing Committee on Justice and Legal Affairs, to the offices of the police and security planning and analysis group, with such visit to include the communications room known as "Interex"?


William Warren Allmand: I will look into the possibility of that, Mr. Speaker.
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April 3, 1973
Oral Questions


REASON FOR APPOINTMENT OF LIEUTENANT GENERAL DARE AS DIRECTOR GENERAL, RCMP SECURITY SERVICE
Erik Nielsen: Mr. Speaker, may I direct a last supplementary question to the Solicitor General. Since the policy of the government has invariably been to fill top level vacancies in the RCMP by promotions from within the force, the last rare exception being the appointment of Major General J. H. MacBrien over 40 years ago, will the minister explain the government's departure from this policy in the recent appointment of Lieutenant General Dare of the police and security planning and analysis group as Director General, Security Service, of the RCMP?


William Warren Allmand: Mr. Speaker, General Dare was appointed to replace a man who was also not a member of the RCMP, Mr. Starnes, who was appointed some years ago because it was felt there should be some civilians in the security area of the RCMP.


POLICE AND SECURITY PLANNING AND ANALYSIS
Mr. Robert C. Coates (Cumberland-Colchester North):: Mr. Speaker, I have a supplementary for the Solicitor General. Will the minister advise the House whether it is government policy to have the police and security planning and analysis group collect data on public servants? If so, is it government policy to maintain files of information, including any indication of the political affiliation of public servants and the frequency of their communication with Members of Parliament, and are such files available to the cabinet through the minister?


William Warren Allmand: Mr. Speaker, there are many questions there but generally the answer is no. There is no such policy.


POLICE AND SECURITY PLANNING AND ANALYSIS GROUP-INVESTIGATION OF LABOUR UNIONS- POSSIBLE USE OF MONITORING EQUIPMENT
Robert Carman Coates: Is the minister aware of whether the police and security planning and analysis group conducts investigations of labour unions in Canada and the leaders of unions, and can he inform the house if there is a policy which permits the use of electronic monitoring equipment in such investigations?


William Warren Allmand: Mr. Speaker, the group referred to is not an operational group. It does not conduct investigations. It is merely a policy, planning and advisory group and is not operational.


PENITENTIARIES
Right Hon. I. G. Diefenbaker (Prince Albert):: Mr. Speaker, I should like to ask the Solicitor General whether he has looked into the seriously developing situation at the Saskatchewan penitentiary at Prince Albert with respect to an outbreak a couple of weeks ago involving the shooting and wounding of a guard by a prisoner who is serving a life sentence for murder but was out of the penitentiary and had a gun, and also other attacks on guards that have taken place there very recently?


William Warren Allmand: Yes, Mr. Speaker. There was an unfortunate incident on March 30 where an inmate had been taken outside the penitentiary to a hospital. Once the handcuffs were removed he drew a homemade zip gun and shot one of the guards. The guard was not seriously wounded but it was still a serious incident. To protect the guards and staff the penitentiary service has standing orders regarding the frisking of inmates who are taken out of the penitentiary. In this case, although the guards had frisked the inmate before taking him out of the penitentiary, for some reason they did not discover the double-barrelled zip gun which was later drawn on them and used to shoot a particular guard. It was an unfortunate incident. As a result of this incident we are conducting a thorough search of Prince Albert penitentiary to discover other zip guns and further contraband has been discovered.


John George Diefenbaker: Mr. Speaker, I do want to thank the new Solicitor General for being so generous in answering the question at such length. I appreciate that very much. I would ask him whether or not action will be taken to remove numbers of prisoners from this institution which today is grossly overcrowded? I would also ask him whether action will be taken in respect of those prisoners who have a gun or knife record behind them to remove them therefrom, for the guards are facing grave dangers and so state. I should add that my informants fear that from day to day the situation worsens.


William Warren Allmand: Mr. Speaker, there is a serious population problem at the Saskatchewan penitentiary as well as at other penitentiaries in the prairie region. In the estimates which are now before the House we request funds to expand our facilities on the Prairies and also to expand our staff so we can better handle this increased population. I would also like to say that disciplinary measures will be taken with respect to men who are found with contraband weapons, and in particular the man who was involved in this case.


Mr. Speaker:: Order, please. The Chair will recognize the hon. member for a last supplementary question on this subject and then recognize the hon. member for Northwest Territories.


April 3, 1973


NATIONAL SECURITY
Mr.   Sean@: Mr. Speaker, my supplementary question to the Solicitor General is supplementary to the questions asked by the hon. member for Cumberland-Colchester North and the hon. member for Yukon. Will the minister advise the House whether it is government policy to permit the police and security planning and analysis group to collect or to receive from any investigative branch of the government files of information on college or university professors and students, and whether it is government policy to have such information collected by paid agents stationed on college or university campuses?


William Warren Allmand: Mr. Speaker, the group in question does not have any agents. It gets its information from the RCMP and other departments of the government. Once it receives information it analyses it and advises the government with respect to security questions, but it does not have agents of its own.



INCOME TAX


Mr. Wally Firth (Northwest Territories):: Mr. Speaker, I have a question for the Minister of National Revenue. In view of today's radio news broadcast I should like to ask the minister to inform the House whether or not he has instructed his department to consider subsidized housing and similar benefits in the Northwest Territories as income for tax purposes?


Hon. Robert Stanbury (Minister of National Revenue):: Mr. Speaker, I have had this broadcast and this matter drawn to my attention and have asked my officials to advise me on it. I will be pleased to let the hon. member know the result as soon as possible.



CANADIAN BROADCASTING CORPORATION


Mr. Alexandre Cyr (Gaspe):: Mr. Speaker, I should like to put a question to the Secretary of State.
In its 1971-72 annual report, the Canadian Broadcasting Corporation pointed out that its coverage work group would submit to the government in November 1972 a complete master plan for the extension of its television and radio services in communities of at least 500 inhabitants. Can the minister tell the House whether the government has obtained from the CBC some details on that
Oral Questions
master plan and does it expect to report to the House in the near future?


Hon. James Hugh Faulkner (Secretary of State):: Mr. Speaker, yes. The department has received proposals for accelerated coverage from the CBC. We are in the process now of discussing the proposals with the CBC, and I would hope to be in a position to report to cabinet shortly.



REGIONAL ECONOMIC EXPANSION


Mr. Gilles Caouette (Charlevoix):: Mr. Speaker, I would like to put a question to the Minister of Regional Economic Expansion. Could he tell us if the studies on the Temis-caming plant are completed and when does he expect this industry to resume operations?


Hon. Donald C. Jamieson (Minister of Regional Economic Expansion):: Mr. Speaker, on the first part of the question, the studies have in fact been completed and have been translated into a set of proposals which have had preliminary consideration and will be considered in final form later this week. It is my hope and intention to be able to make an announcement before the end of the current week.


Gilles Caouette: Mr. Speaker, could the minister tell us if this industry will resume operations or not?


Donald Campbell Jamieson: Mr. Speaker, all I can say at the moment, as I replied earlier, I believe, to the hon. member for York South, is that I am optimistic that some suitable arrangement can be worked out.



INDUSTRY


Mr. Dan McKenzie (Winnipeg South Centre):: Mr. Speaker, my question is directed to the Minister of National Defence and the Minister of Transport. My question is in regard to C.A.E. Aircraft Limited in Winnipeg and the laying off of personnel. Can the government give an assurance that there will be no further lay-offs and that there will be future contracts that will keep the plant in operation?


Hon. James Richardson (Minister of National Defence):: Mr. Speaker, C.A.E. Aircraft does not come under the responsibility of the Minister of National Defence, but we
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April 3, 1973
Oral Questions
do have defence orders that are being undertaken by the company at the present time.


A. Daniel McKenzie: Since the Department of National Defence was involved in the initial arrangements regarding the setting up of this company, can the Minister of Transport give us any information on these lay-offs and tell us whether there will be future contracts?


Jean Marchand: Mr. Speaker, I will inquire whether there will be contracts and make a report to the hon. gentleman.



PUBLIC SERVICE


Mr. J. M. Forrestall (Dartmouth-Halifax East):: Mr. Speaker, I have a question I would like to direct to the President of the Treasury Board. It arises out of press reports this morning indicating a breakdown in negotiations between the Dockyard Trades and Labour Council and his departmental officials. In light of this breakdown, largely over the question of regional pay rates, can the minister say whether the government is at least considering a movement away from the rigidity of its position with respect to prevailing rates so as to avoid an unnecessary and possibly prolonged walkout which would have the consequence of tying up virtually all of the Canadian Armed Forces maritime capability?


Hon. C. M. Drury (President of the Treasury Board):: Mr. Speaker, I am as eager as anyone in this House to avoid any kind of tie-up, walkout or prolonged period of indecision, but I am sure the hon. gentleman would not want to have me interfere with the normal bargaining process. The next step is to proceed through the conciliation process as provided in the law.


Mr. Speaker:: The hon. member for Cumberland-Col-chester North.


J. Michael Forrestall: A supplementary-


Mr. Speaker:: Order, please. I apologize to the hon. member for Cumberland-Colchester North but the hon. member for Dartmouth-Halifax East has a supplementary.


J. Michael Forrestall: Can I construe the minister's statement as meaning that the government is not prepared to move away from its oft-stated position with respect to the principle of regional prevailing rates? Do I understand him correctly on that?


Charles Mills (Bud) Drury: Mr. Speaker, I do not think that interpretation should be placed, by any reasonable person, on my remarks. I merely say that we should proceed through the normal business of conciliation rather than negotiating on the floor of the House.


Mr. Speaker:: Order, please. I would invite hon. members to limit supplementaries. The hon. member for Cumberland-Colchester North has a supplementary to a question asked much earlier during the question period. He will be recognized after the hon. member for Dartmouth-Halifax East who I believe has a last supplementary.


J. Michael Forrestall: Mr. Speaker, may I ask the Minister of Regional Economic Expansion whether or not, in light of the government's position that regional disparities should be removed, he has made any overtures or is prepared to make overtures with respect to eliminating archaic wage disparities?


Donald Campbell Jamieson: Mr. Speaker, I am afraid I would have to have more specific information before answering. Generally speaking, no incentives are offered, or indeed granted, unless at the very minimum the wage laws of the particular province concerned are adhered to.


Mr. Speaker:: Order, please. The Chair will recognize the hon. member for Cumberland-Colchester North and then go to another subject.



NATIONAL SECURITY


Robert Carman Coates: Mr. Speaker, I would like to direct a further question, for clarification purposes, to the Solicitor General. Has the government given a directive to the Royal Canadian Mounted Police to carry out investigations at the direction of the police and security planning and analysis group that would permit the police and security planning and analysis group to maintain files of information on union activities and union leaders, with such files available to the cabinet through the minister?


William Warren Allmand: To the best of my knowledge, no, Mr. Speaker, but I will check this out. Generally speaking-as a matter of fact, I think this is the rule-the group does not give instructions to the RCMP to carry out investigations but receives information from the RCMP. As I say, I will check this out for the hon. member.



LAKES ERIE AND ONTARIO-PAYMENT BY MUNICIPALITIES FOR USE OF ARMED FORCES-REQUEST THAT POLICY BE CHANGED

Mr. Don Blenkarn (Peel South):: Mr. Speaker, last week I posed a question to the Minister of National Defence about the use of the Canadian Armed Forces in connection with the emergency situation along the shores of Lake Ontario and Lake Erie. I now find out from the Emergency Measures Organization that the municipalities involved must reimburse the government for the use of

April 3, 1973

the armed forces. Is the minister prepared to change that policy in view of the present emergency?


James Armstrong Richardson: Mr. Speaker, our policy is to provide these services on a cost recovery basis.


Donald Alex Blenkarn: In view of the fact that the Armed Forces have their salaries paid in any event and already have the necessary equipment on hand, can the minister explain why municipalities must be charged for what is already paid for in the budget of the minister?


James Armstrong Richardson: Mr. Speaker, we do not charge for the salaries or for the use of the equipment. It is really the direct out-of-pocket costs that arise from assisting in any particular emergency.



UNEMPLOYMENT INSURANCE


Mr. John Rodriguez (Nickel Belt):: Mr. Speaker, I wish to direct a question to the Minister of Manpower and Immigration. In view of the allegation that innocent claimants have been disqualified from receiving unemployment insurance benefits by certain investigative techniques of benefit control officers, is the advisory committee looking into the conduct and techniques of these officers?


Hon. Robert K. Andras (Minister of Manpower and Immigration):: As I previously indicated to the House, Mr. Speaker, the answer to that question is yes.


John R. Rodriguez: How soon will the minister have a report for parliament from the advisory committee?


Robert Knight Andras: I am consulting regularly with the chairman of the advisory committee and he tells me they are proceeding as expeditiously as possible.'


John R. Rodriguez: Is the minister considering changing the regulations so that the innocent are not penalized along with those who take advantage of the system?


Robert Knight Andras: I would hope that the regulations are now such that the innocent are not penalized.



COMMUNICATIONS


Mr. Roch La Salle (Joliette):: Mr. Speaker, I have a question for the Minister of Communications.
The Quebec Minister of Communications stated recently that there had been no consultation between him and his federal counterpart concerning the publication of the
Oral Questions
green paper, and on February 23, the Quebec minister stated, and I quote:
-Quebec's jurisdiction over cablevision is a matter of fact, and not open to negotiations.
I should therefore like to ask the minister if he still intends to start further negotiations or if he is inclined to recognize Quebec's jurisdiction over cablevision?


Hon. Gerard Pelletier (Minister of Communications):: Mr. Speaker, the statement by my counterpart in Quebec surprised me as much, I suppose, as it surprised the hon. member for Joliette, for the Quebec minister had himself not consulted the federal government before publishing a green paper, and since the green paper published by the federal government is precisely for use in consultation, discussions and negotiations, consultation should normally take place after, not before publication. No provinces were consulted about this publication, but all provinces, including Quebec, were informed of the publication of the green paper at the same time as members of the federal parliament.
Regarding the federal government's position concerning the claims of the Quebec Minister of Communications, I believe that the papers I have tabled in the House, that is to say my correspondence with the Quebec minister, should put the hon. member for Joliette clearly in the picture, if he takes the trouble to read them.


Roch La Salle: Mr. Speaker, I have a supplementary question for the hon. minister.
I should like to ask him if he intends to meet his Quebec counterpart to clarify the situation.


Gérard Pelletier: Mr. Speaker, once again the answer is clear and I have repeated it several times in this House: now that the green paper has been published I plan to meet the provincial ministers of communications.



OPPORTUNITIES FOR YOUTH PROGRAM-REQUEST THAT MEMBERS BE GIVEN MORE TIME TO STUDY APPLICATIONS BEFORE COMMENTING

Mr. Ellwood Madill (Peel-Dufferin-Simcoe):: Mr. Speaker, I should like to direct a question to the Secretary of State. In view of the fact that the members of this House this morning received the applications for the Opportunities for Youth program, with a reply required by April 9, can he extend the date so we can give them more informed study and make a better reply?


James Hugh Faulkner: Mr. Speaker, I am prepared to look at this on an individual basis because I want to be as fair as possible. But generally I would like to resist delays because we are on target across the country, and in fact in parts of the country we are ahead of schedule. I think all members of the House agree that it is important to get the announcements out to the students themselves as soon as possible, but if there is

April 3, 1973
Oral Questions
a clear case of injustice I am prepared to look at it on an individual basis.


John Ellwood Madill: Can we have an undertaking from the Secretary of State that in those cases where projects are not recommended by Members of Parliament the department will not adopt the practice of telling people they were turned down because they were not on the list of projects recommended by the Secretary of State?


James Hugh Faulkner: Mr. Speaker, we take responsibility for both the approvals and the rejections.



OPPORTUNITIES FOR YOUTH PROGRAM-ROLE OF MEMBERS OF PARLIAMENT IN SELECTING PROJECTS

Mr. Edward Broadbent (Oshawa-Whitby):: Mr. Speaker, I wonder if the minister would clarify his position with a little more care as to the role individual Members of Parliament are to play in the selection process. The memo that the minister sent to all members implied one possibility, that members were to act as some kind of veto agency in terms of a certain percentage of those applications. Would he clarify the situation for the House now?


James Hugh Faulkner: Mr. Speaker, this year, as last year, the role of the Member of Parliament is consultative-


Some hon. Members:: Oh?


An hon. Member:: Isn't that nice?


Mr. Fairweather:: In what way are we consulted?


James Hugh Faulkner: If hon. members want a dictionary definition of the word "consultation" I will be happy to comply, but it is perfectly clear that it does not imply a veto.



POLLUTION


Hon. J. A. MacLean (Malpeque):: Mr. Speaker, I should like to pose a question to the Minister of Transport. Has the minister agreed to meet with the government of Prince Edward Island, as I believe they requested, with regard to the suggestion that it would be feasible to leave the Irving Whale lying on the bottom of the Gulf of St. Lawrence? Also, regardless of the decision in that regard, does his department accept primary responsibility for any oil spill that might occur?


Jean Marchand: Yes, Mr. Speaker, I will meet with the Premier of Prince Edward Island next Monday, April 9. I have already written a letter to Mr. Campbell on this subject and we are going to discuss it on Monday. There is no doubt that we accept responsibility. If there is an oil spill we are going to

assume the financial responsibility for cleaning up the whole thing.



THREAT OF OIL SPILL FROM SUNKEN &quot;IRVING WHALE&quot;- UNDERWATER INSPECTION

Mr. David MacDonald (Egmont):: I have a supplementary question, Mr. Speaker. Could the minister indicate to the House when the last underwater inspection of the Irving Whale took place and when the next underwater inspection may take place in order to determine the actual condition of this vessel and the likelihood of it causing a serious pollution problem on the shores of Prince Edward Island?


Jean Marchand: Mr. Speaker, a few days ago I asked the Minister of National Defence if he could help in examining the Irving Whale. I did not get any answer yet.


Some hon. Members:: Oh, oh!


George Harris Hees: That is not surprising; that is routine.


Jean Marchand: I know they have special devices that we do not have. As for the last date it was examined, I will inquire about that because I do not know exactly.


George Harris Hees: Jean, now you know how we feel.



TRANSPORT


Mr. Jean-Marie Boisvert (Drummond):: Mr. Speaker, when the Minister of Transport meets the P.E.I. authorities, will there be any talk of setting up a Canadian merchant marine?


Jean Marchand: Mr. Speaker, please forgive my absentmindedness. Could the question be repeated?


Jean-Marie Boisvert: I shall repeat it, Mr. Speaker.
When the Minister of Transport meets the P.E.I. authorities, will there be any talk of setting up a Canadian merchant marine?


Jean Marchand: Mr. Speaker, even if we managed to set afloat the Irving Whale it would certainly not be the first ship in our merchant marine. In any event, the matter is still on my mind and I trust that some day or other its solution will be found.
April 3, 1973



AGRICULTURE


Mr. Jack Murta (Lisgar):: Mr. Speaker, I should like to direct a question to the Minister of Agriculture. Since the Minister of Industry, Trade and Commerce has pledged assistance if needed to small business firms affected by the upcoming trade negotiations with the United States, can the minister tell the House if Canadian agriculture and specifically farmers can look for economic aid if they are in any way adversely affected by the same negotiations?


Hon. E. F. Whelan (Minister of Agriculture):: Mr. Speaker, even by the seating arrangement in the House hon. members can see that the Minister of Industry, Trade and Commerce and myself are in constant consultation.


Mr. Speaker:: The hon. member for Vancouver South. Order, please. I apologize to the hon. member but I believe the hon. member for Lisgar has a supplementary. I will recognize him for that purpose and then I will see the hon. member for Vancouver South.


Jack Burnett Murta: In light of the hardships that will be experienced under the new tariff reductions brought down by the present government and presumably with the minister's knowledge and seal of approval, how does he intend to convince the farmers of Canada that he is sincere in what he has said?


Mr. Speaker:: Order, please. That question obviously is not in order.



OPPORTUNITIES FOR YOUTH PROGRAM-REPORTED RESIGNATION OF VANCOUVER ADVISORY BOARD

Mr. John A. Fraser (Vancouver South):: Mr. Speaker, my question is for the Secretary of State and arises out of the questions that have just been asked him involving opportunities for youth grants. Word has just been received that the advisory board in Vancouver has resigned. Can the minister advise whether this is so? I might also advise him that I have not received any OFY applications in my office.


James Hugh Faulkner: Mr. Speaker, on the first part of the question, my information is about as sketchy as that of the hon. member. I hope to get clarification on the status of this board at the end of the question period. In terms of having received projects or not, these are going out across the country in stages. Some areas are being dealt with first and in those areas the projects will be arriving in members' offices ahead of some other members. There is nothing to fear. The hon. member's city will get its share.
Oral Questions


John Allen Fraser: Could the minister give some assurance that if this in fact happens an appropriate extension will be given for OFY grants in Vancouver?


Mr. Speaker:: Order, please. The question is hypothetical. I bring to the attention of hon. members that we are coming to the end of the question period. I recognize that a number of members are seeking supplementaries but there would not be time between now and the end of the question period to have all the supplementaries on this subject. The hon. member for Edmonton Centre.



POSSIBLE MERGER OF NATIONAL HOCKEY LEAGUE AND WORLD HOCKEY ASSOCIATION-ACTION TO RETAIN PRESENT CANADIAN FRANCHISES IN WHA

Mr. Steven E. Paproski (Edmonton Centre):: Mr. Speaker, my question is for the Minister of Consumer and Corporate Affairs and refers to the fact that the National Hockey League and the World Hockey Association are discussing merger. Does the government intend to take any steps so that the franchises of WHA clubs in Canada will remain in Canada and not go to the United States, as I am informed will happen when the merger takes place?


Hon. Herb Gray (Minister of Consumer and Corporate Affairs):: Mr. Speaker, the present combines law does not cover services. I hope my hon. friend will support the new policy in due course that may cover services. In any event, I would be happy to discuss this matter with the Minister of National Health and Welfare. If I am not mistaken, his predecessor did take some initiatives in this regard.


Steve Eugene Paproski: Mr. Speaker, my supplementary question is for the Prime Minister. In view of the fact the 11 WHA clubs plan to merge with the NHL, and in view of the fact that only one of the 11 plans to remain in Canada, would the Prime Minister use his good offices to see that the franchises that are Canadian remain in Canada?



AIR TRANSPORT


Mr. Lloyd R. Crouse (South Shore):: Mr. Speaker, I have a question for the Minister of Transport. In view of the fact that federal plans requiring emergency locator transmitters in aircraft are running into opposition from the aviation community owing to their cost, what positive action does the government contemplate to ensure that all airplanes will now be equipped with this safety device?


Jean Marchand: Mr. Speaker, I think I announced a few months ago that some devices will be compulsory from January 1, 1974. In the meantime, we are in consultation with the industry, with the aviation clubs and those who are interested in aviation. We have received this kind of comment and we are

April 3, 1973
Oral Questions
going to receive others. After that, we will see if we will leave the regulations as they are or modify them.



MANPOWER


Mr. John Harney (Scarborough West):: Mr. Speaker, my question is for the Minister of Manpower and Immigration. In view of the fact that work permits have been issued to some German workers to instal machinery at Atlantic Packaging in Scarborough, and considering the painful fact that there are now about 80 qualified mill-rights out of work in Toronto, will the minister have these permits revoked so that skilled Canadian workers can have access to these jobs they have full right to?


Robert Knight Andras: Mr. Speaker, I am informed that these tradesmen came to Canada for a short time to instal a particular piece of specialized equipment which had been purchased overseas. In fact, their part in the installation was contained in the contract price and because of this they were exempt from the requirement of manpower clearance. They did, however, require and receive employment visas.


John Paul Harney: In view of the fact I have the same information from the pages of the Globe and Mail, can the minister assure the House that he will cause an inquiry to be made into this situation on the grounds that a contractual basis between a private company in Canada and a private company in Germany should not be cause enough to ignore the rights of workers who are skilled and competent?


Robert Knight Andras: Mr. Speaker, I will be glad to give the representation consideration.



IMMIGRATION


Mr. Lincoln M. Alexander (Hamilton West):: Mr. Speaker, I have a supplementary question. It is more or less a related question. It is still in the same area.


Some hon. Members:: Oh, oh!


Mr. Speaker:: Order, please.


Lincoln MacCauley Alexander: It is a supplementary.


Mr. Speaker:: Order, please. The Chair will recognize the hon. member for a supplementary question, a related question or, if he wishes, one that is not related at all. After that, we will then have to call orders of the day.


Lincoln MacCauley Alexander: Can the minister now bring us up to date with regard to the arrests in terms of numbers as of now and, further, can he give some indication as to the numbers who have registered to date pursuant to the new regulations?


Robert Knight Andras: Mr. Speaker, 34 persons were arrested and detained in Toronto last week, all of whom had not been considered bona fide non-immigrants at the time they sought admission to Canada. All had been released previously under bond which carried the requirement and condition they would appear at a specified later date for a special inquiry, but all of those arrested had failed to so appear. They were arrested while attempting to register for employment visas and detained under Section 17(2) of the act. Inquiries will be held this week.
One person was arrested in Montreal. This man had previously been ordered deported and had appealed unsuccessfully to the Immigration Appeal Board. He said he would take voluntary departure but failed to do so. That is the sum total of the number of arrests to date that my information now indicates. I do not have full details on the number who have registered, but during the period February 26 to March 31 it was slightly under 10,000 people.



PUBLIC SERVICE


Mr. James A. McGrath (St. John's East):: Mr. Speaker, my question is supplementary to the one raised by the hon. member for Dartmouth-Halifax East. It is a very important question. I direct it to the President of the Treasury Board. In the interest of settling the dispute which is under the jurisdiction of the minister and could very seriously curtail activities on both coasts and in the interest of equality of opportunity for all Canadians, especially those in the federal jurisdiction, is the minister prepared to announce that it is government policy to pay Canadians under federal jurisdiction equal pay for equal work regardless of the part of Canada in which they may be located?


Charles Mills (Bud) Drury: Mr. Speaker, the quick answer is no. What the hon. member has suggested is, I think, producing local dislocations in pursuit of some unattainable objective.


Mr. Elmer M. MacKay (Central Nova):: Mr. Speaker, I wish to direct a supplementary question to the Minister of Regional Economic Expansion. In view of the fact the minister is responsible for problems in areas of regional disparity, what has his advice to the government been in areas under Treasury Board jurisdiction where the issue of inequality of pay for equal work in different parts of the country is involved?


Mr. Speaker:: Order, please. I would not think a question in those terms is in order. Before calling orders of the day,

April 3, 1973

the Chair will recognize the hon. member for Prince Edward-Hastings.


Some hon. Members:: Oh, oh!



AIR TRANSPORT


George Harris Hees: That was certainly well worth waiting for, Mr. Speaker. I wish to direct my question to the Minister of Industry, Trade and Commerce. As customs preclearance at airports is of great assistance to the large number of Canadian businessmen who go to the United States every day to sell Canadian products and the large number of American businessmen coming to Canada to buy Canadian products, will the minister speak to his colleague, the Minister of Transport, and ask him to get the lead out and get this matter straightened out so that this very necessary service can be maintained to assist those who want to build Canadian trade?


Some hon. Members:: Hear, hear!


Mr. Speaker:: Orders of the day.


Mr. O'Sullivan:: Mr. Speaker, I hesitate to rise on a question of privilege, but I do so to make a very serious appeal to Your Honour as the protector of all members of the House. Perhaps no members know this more than those of us who grace the back rows. Your Honour has heard many representations, complaints and suggestions about the question period. Your Honour has undertaken to ensure that there will soon be changes made so that the question period will make parliament what it should be.
Again today we have seen that the question period is not working. I have personally experienced this. There were a number of serious questions of national and urgent importance to be posed to the Solicitor General. They could not be put because the time limit forced Your Honour to move on to other subjects and legitimate questions of other hon. members.
My question of privilege is simply an appeal. While we appreciate Your Honour's undertaking that a review is being made of the question period, on behalf of all hon. members I urge Your Honour to speed up that process because we are in serious straits under the present situation.


Some hon. Members:: Hear, hear!


Mr. Speaker:: The reference to the question period made earlier by the Chair was to the effect that the matter would be studied by the Standing Committee on Procedure and Organization. I believe that the matter will be looked into by that committee. If hon. members wish to make representations in this regard, they should make them to the chairman and members of the committee. I suggest to all hon. members that one reform that could easily be adopted would be for members asking questions to exercise more self-discipline-
Oral Questions


Some hon. Members:: Hear, hear!


Mr. Speaker:: -by limiting the length of the questions posed to ministers and by limiting the number of supple-mentaries. When we have as many supplementaries as we had today on practically every question that was asked, it is unfortunate that some members, usually those in the back rows, are penalized. In such circumstances it is unfortunate that members in the third, fourth and fifth rows are penalized from day to day when there are too many supplementaries.


Mr. Lundrigan:: Mr. Speaker, I wonder if it would be possible for the chairman of the Standing Committee on Procedure and Organization to make a report, either later today or tomorrow, in order to give us some idea of what progress has been made. The question raised today by the hon. member for Hamilton-Wentworth was brought to the attention of Your Honour and the House five or six weeks ago. I think at that time all hon. members agreed that something had to be done, perhaps along the lines suggested by Your Honour, to make the question period more workable. I think this would be an appropriate time to have a report on the work being done to see if there is some way of lengthening the question period or some other modification that is appropriate.



GOVERNMENT ORDERS


[Stage Direction]
The House proceeded to the consideration of a ways and means motion to amend the Income Tax Act.
John Napier Turner: That a Ways and Means motion to amend the Income Tax Act, laid upon the table Thursday, March 29, 1973, be concurred in.


[Stage Direction]
Motion agreed to.

[Stage Direction]
The House proceeded to the consideration of a ways and means motion to amend the Income Tax Act.
John Napier Turner: That a Ways and Means motion to amend the Income Tax Application Rules, 1971, laid upon the table Thursday, March 29, 1973, be concurred in.


[Stage Direction]
Motion agreed to.
[Stage Direction]
April 3, 1973
Proposed Legislation

[Stage Direction]
The House proceeded to a consideration of a ways and means motion to amend chapter 63 of the statutes of 1970-71-72.
John Napier Turner: That a Ways and Means motion laid upon the table Thursday, March 29, 1970, to amend part IV of chapter 63 of the statutes of 1970-71-72 be concurred in.


[Stage Direction]
Motion agreed to.

John Napier Turner: That Bill No. C-170 to amend the Income Tax Act be read the first time and printed.


[Stage Direction]
Motion agreed to, bill read the first time and ordered to be printed.

[Stage Direction]
The House proceeded to a consideration of a ways and means motion to amend the Excise Tax Act.
John Napier Turner: That a Ways and Means motion to amend the Excise Tax Act laid upon the table Thursday, March 29,1973, be concurred in.


[Stage Direction]
Motion agreed to.

John Napier Turner: that Bill No. C-171 to amend the Excise Tax Act be read the first time and printed.


[Stage Direction]
Motion agreed to, bill read the first time and ordered to be printed.

[Stage Direction]
The House proceeded to a consideration of a ways and means motion to amend the Customs tariff.
John Napier Turner: That a ways and means motion to amend the Customs Tariff laid upon the table Thursday, March 29, 1973, be concurred in.


[Stage Direction]
Motion agreed to.

John Napier Turner: that Bill No. C-172, to amend the Customs Tariff be read the first time and printed.


[Stage Direction]
Motion agreed to, bill read the first time and ordered to be printed.

[Stage Direction]
The House resumed, from Monday, April 2, consideration of the motion of Mr. Gillespie that 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, be read the second time and referred to the Standing Committee on Finance, Trade and Economic Affairs.
Mr. Mark MacGuigan (Windsor-Walkerville):: Mr. Speaker, when I spoke in this House on May 31 last year on Bill C-201, the foreign takeovers review bill, which was the predecessor of the bill now before us, I was not enthusiastic about the government's response in that bill to the problem of foreign ownership in Canada. I said, if I may quote from page 2738 of Hansard:
If this bill were intended to be a complete solution to the problem of foreign investment in Canada it would be completely inadequate. Fortunately, it is not being presented in this light by the government, but rather is one in a continuing series of steps, and focusses on the particular problem of takeovers.
While I did expect further steps even in the short run, I must admit I did not expect a bill which would supersede the bill we were debating at that time before it had even passed into law. But I welcome the bill now before us, Bill C-132. It reveals a marked advance in government response and comes much closer to my own perception of what the situation requires.
I realize the hon. member for York South (Mr. Lewis) has already taken credit for this marked advance. Without wanting to be a spoilsport, Mr. Speaker, I suggest there are two other factors which have had greater impact on the change; first, the pressure of members like myself within the government caucus, and second, the pressure of public opinion. I would like to refer briefly to two gallup polls taken last year which dealt with this subject matter. The first of these was reported on August 26 of last year. The question posed was: "Do you think dependence on the United States is a good thing for Canada or not?" The poll revealed that, whereas in 1963, 48 per cent of Canadians polled thought that dependence on the United States was a good thing for Canada, only 34 per cent thought so in 1972 and whereas 44 per cent thought it was not as good in 1963, 53 per cent shared this view in 1972.
Even more to the point is the result of a poll which was released on September 23 of last year. The question asked was: "On the whole, do you approve or disapprove of the
April 3, 1973

way in which the federal government is responding to United States control of our industry and natural resources?" The result of the poll, taken nationally, revealed that only 34 per cent of Canadians approved. Forty per cent disapproved, and 26 per cent were undecided. Of course, disapproval could come from either side, but these were figures which could hardly give comfort to the government. The election results may also have been a factor, though neither of the parties opposite, because of dissention within their own ranks, dared to make an issue of foreign ownership in the campaign.


Some hon. Members:: Oh!


Mark R. MacGuigan: Perhaps we can all agree that there is a concordance between the direction the government is moving and the direction in which the public is thinking, and that this is a happy situation.
I should like to draw the attention of the House briefly to the principal differences between this bill and that of last year. The first and most important of the changes is the inclusion in the scrutiny process of entirely new businesses established in Canada by foreign capital. The second is provision for scrutiny of expansion of existing United States firms or foreign-owned firms in Canada where it is unrelated to their existing business activity. The third is the inclusion in the criteria of specific reference to provincial interests, and the fourth is the establishment of an agency, the foreign investment review board, to play a large role in the scrutiny process.
I do not propose to say very much about the first two of these changes, those which deal with new businesses and unrelated expansion. The fact is that without provisions of this kind the attempt to restrict foreign investment in Canada might very well have failed completely. There were so many ways of getting around the proposals announced last spring that they might have been ineffective in dealing with this problem.
The question of the change in the criteria is worth slightly more emphasis, especially since the hon. member for Trinity (Mr. Hellyer) has made the point that there was no consultation between the federal government and the provinces. Of course, the hon. member was wrong. The present Minister of Consumer and Corporate Affairs (Mr. Gray) went across the country last year to consult with all the provincial governments very specifically in connection with the proposals the government was making.


Mr. Hellyer:: Were they aware of it?


Mark R. MacGuigan: Since then, the provinces have not been shy about making their views on the proposals put forward both last year and this year known to the public.
In clause 2(2)(e) of the bill, the fifth of the criteria is:
__the compatibility of the acquisition or establishment with
national industrial and economic policy.
These words are common to last year's bill and to this year's, but this year's bill contains the additional words:
__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.
Foreign Investment Review
It seems to me that while it was previously understood that this was the way in which that criterion would be applied, it marks a useful step forward in our approach to the subject to have it spelled out specifically in the bill. There were legitimate fears on the part of many provinces both in the east and in the west that not enough attention would be given to provincial priorities, and that the federal government might be imposing upon the provinces industrial policies that they would not wish to see take effect in their part of the country. To have this stated as an express concern of the review process is, I think, a very useful addition indeed.
The fourth addition to the earlier bill, the proposed establishment of a foreign investment review agency under a commissioner, is also of interest. It does not change the basic thrust of the review process. The House will recall that last year it was argued by members of the NDP that the scrutiny body should be either independent or at least some branch of the government other than the Department of Industry, Trade and Commerce. I recall having a dialogue during my own speech on the subject with the hon. member for Selkirk (Mr. Rowland). I rejected the point of view that was expressed at that time by the NDP, since I believe that this department does have the expertise necessary to make this kind of review and that the government must assume responsibility for the decisions that are made.
An independent agency would simply not do because it would not be sufficiently responsible to the public and to parliament. The provisions of the bill do not change the fact that the government does bear ultimate responsibility. The words of the act clearly state that the decision to be made is still the minister's. Therefore, he is still completely responsible, though he will have the help of the foreign investment review agency. It would seem that in this way the agency will be of great assistance in expanding the scope of the bill.
The hon. member for Trinity (Mr. Hellyer) has also made a charge with respect to this proposal. Forgive me if I pause for a moment to find the reference in Hansard so that I do not misquote the hon. member. The hon. member argued that the determination that will be made in the scrutiny process will be largely subjective, and will depend to a considerable extent on the attitude and approach of the commissioner, the minister and the Governor in Council. According to the hon. member, the latter will reflect the opinion of the key members of cabinet or "in group" in control at the time. He went on to say that the extent of the inevitable subjectivity concerned him. If he means that the administrators will not impartially administer the criteria, then I think he is impugning the public service of this country.
I understand him rather to mean that there was some margin for discretion in the process, and that the government-in this case-will bear full responsibility for the decision that is taken. This is indeed exactly what the bill proposes. The position is exactly that it is the government that will be responsible for the administration of this policy. It is not that some unknown civil servant will be responsible; the government itself will bear responsibility for this, just as it has to bear responsibility for the over-all
April 3, 1973

Foreign Investment Review
industrial policy of the country and for its over-all wellbeing at any particular time, a matter that the opposition parties are always drawing to our attention.
In general, members of opposition parties seem to be agreed with what is in the bill, at least so far as I can interpret the position that they have taken. In some cases their speeches have been sufficiently beside the point that it is hard to tell how they are going to vote on the measure. But to the extent that their speeches have been specific, it seems that their objection is not so much to what is in the bill as to what they feel is not in the bill. We, therefore, come to consider those other steps that might be taken by the government in the future, either along with or in replacement of this bill.
We have heard a good deal about Mexico, perhaps as a result of the interesting coincidence that occurred between the opening of this debate last Friday and the address on the same day of the honourable President of Mexico, who of course spoke to us of his country's concern with the protection of its political sovereignty through protecting its economic sovereignty, a sentiment with which I think most members of this House are firmly in accord. But that should not blind us to the fact that experience with the particular measures that Mexico has taken has not been an entirely happy one.
I should just like to quote from a source which I believe is both reputable and impartial. I refer to a small pamphlet called "Foreign Investment in Mexico: Some Lessons for Canada" by I. A. Litvak and C. J. Maule and published by the Canadian Institute of International Affairs, which may be presumed, as I say, to be impartial.
I should like to quote from page 14 of this pamphlet:
The most obvious lesson to be drawn for Canada from the Mexican experience with foreign investment is that limiting foreign equity participation to a minority position does not necessarily result in a transfer of effective control to the domestic partner. So long as there is a need for the transfer of technology from the foreign investor, there exists numerous ways by which the investor can set the conditions under which the domestic enterprise will have to operate. These conditions may include limiting export opportunities, tying import purchases, and determining manufacturing, personnel, and marketing policies. In addition, there will be a tendency to dissuade the domestic enterprise from doing any research and development work of its own . ..
The foreign partner, while owning less than 50 per cent of the enterprise, will still try to maximize his return on investment through higher charges for technology, management services, and the pricing of intermediate products purchased from the foreign parent...
A second observation based on the Mexican experience is that the "buy-back" strategy can be extremely costly. If local savings are inadequate or not forthcoming to purchase the foreign equity holdings, then resort has to be made to foreign loans with definite commitments as to repayment. The profitability of the purchased sector will affect the ease of repayment, so that sectors with industries in decline should not be the target of buy-back strategies . ..
Thirdly, the administration of policies towards foreign investment in Mexico is an example of an approach which is overly bureaucratic, inconsistent, and poorly integrated with the country's over-all strategy of industrialization. Too many government departments and officials are involved in overseeing too many aspects of foreign investment. Too many guidelines are used to assess each case of foreign investment with too many exceptions granted.


Donald Alex Blenkarn: Just like this bill.


Mark R. MacGuigan: I think that comment of the hon. member for Peel South is helpful as an indication of the way the hon. member's party will vote on the bill, because we have been in suspense.
Finally, failure to appreciate the ways in which foreign investment can contribute to the country's industrialization strategy can result in a situation in which the country is more heavily dependent economically on foreigners, although not necessarily in the form of direct foreign investment.
I think this rather lengthy quotation illustrates the fact that there are pitfalls in the way of the type of approach that has been taken by Mexico. We have the advantage of looking at their experience and profiting from it. Without any further reflections on the Mexican experience, I think I can say that the approach which is being proposed by the government in this bill is one that is soundly based and which should work out very effectively in the future.


Paul Theodore Hellyer: That is a hypothetical assumption if ever there was one.


Mark R. MacGuigan: The hon. member for York South (Mr. Lewis), who I regret is not in the House at the moment, has enlightened us with some of his additional proposals and entertained us with others. On the side of entertainment, there was the proposal that our foreign exchange reserves should be used to buy back foreign-held corporations. I have often heard it said that there is a point at which the extreme left and the extreme right come together, and I thought indeed that this was a proposal worthy of the hon. gentlemen to my right. Certainly, I must admit I had not expected to hear it from the hon. member for York South. This is a theory which might be called "the pot of gold at the end of the rainbow" theory. I had thought the Socialist mythology was made of sterner stuff, and I hate to be the one to tell the hon. member for York South that Santa Claus no longer exists, that the pot of gold is not there. It seems to me that someone ought to tell him if no one in his party will do so.
Let me remind that hon. member that our foreign exchange reserves are only something like $400 million.


An hon. Member:: How much?


Mark R. MacGuigan: I am sorry, $4 billion. Whatever the figure may be, the fact is that Germany recently found that a reserve of $8 billion was not sufficient to halt the monetary problems it was experiencing. What the hon. member for York South has suggested would put us in the position of having difficulty in dealing with foreign exchange policy. Last year I recall his arguing against a fixed exchange rate, and for a flexible exchange rate. But his present proposal would put us in a position of extreme rigidity. Under these circumstances we would have no options at all if we ran into a currency difficulty. Suppose that we did use our reserves to purchase, say the Chrysler Corporation. Then, if an exchange problem arose, we would have to sell the shares again in order to obtain funds to save our currency. This is hardly a good position for Canada to put herself in.
There is in fact no easy solution to obtaining money to buy back that part of our industry which is under foreign
April 3, 1973

control. The only way to do so is by raising taxes, and the NDP ought to face this fact.
Some of the language used by the hon. member for York South reflects his well-known prejudices against business. We on this side do not share this unreasoned hostility to business, and I do not propose to deal with this subject from that point of view. Some of his concrete proposals are worth looking at seriously.
The first proposal he made was in respect of the screening of imports of parts and components. His second proposal was in respect of the screening of exports of raw materials to be certain they have enough processing in this country before exportation. His third proposal was in respect of the screening of export agreements by multinational corporations. All of these would fall under the criteria this bill proposes.
To return to these criteria, which I did not read in full before, the first of the five proposed is the effect of the acquisition or establishment on the level or nature of economic activity in Canada, including employment. The second is the degree and significance of participation by Canadians in new business enterprise, new business in Canada or new industry of which new business enterprise forms a part or might form a part. The third is the effect of the acquisition or arrangement of productivity, industrial efficiency, technological development, product innovation and product variety in Canada. The fourth is the effect of the acquisition or establishment of competition within any industry or industries in Canada.
It seems to me that at least the first three of these would cover the type of concern the hon. member for York South has expressed. I hope that there will be bargaining in respect of some of these criteria when the minister has to make a decision to approve an expansion of foreign investment.
The fourth proposal by the hon. member for York South was for the screening of expansion of a foreign corporation into related areas. This proposal is expressed in such general terms it is hard to know what the hon. member meant and therefore hard to know what attitude to take toward it. So many questions come to light that one does not know in which way to proceed.
How would one define "expansion"? Is an increase in sales an expansion, even if there is no expansion in the plant itself? An increase in sales could be an expansion because the company may be under-using its existing productive capacity. Does expansion include new buildings, does it include extension of existing buildings or does it mean only when there is an expansion on a piece of land which has not been previously used or on a piece of land that has recently been purchased? It would seem to me that however you define this type of expansion you are likely to find yourself in an administrative nightmare in which all major business decisions are being made by the government. That is not our notion of a mixed economy on this side of the House. Even with considerable qualification of these proposals by the hon. member I think that we cannot find ourselves in sympathy with his ideas.
However, it seems to me there are areas in which we should consider further governmental review, and we
Foreign Investment Review
should undertake to see whether or not these areas require future review. One of these areas is the drawing on the Canadian capital market of foreign-owned businesses. A review procedure would ensure that a foreign-controlled firm would not use Canadian capital markets at the expense of displacing Canadian users of these funds.
It is hard to get exact statistics in respect of this matter, but it may be that a large part of the foreign investment in this country is financed by money from our own capital market. I am sure we would all like to have exact statistics. If it were proved to be a fact it would seem to me that this is an area in which we would want to impose some control of a negative nature along the same lines as this bill. We would want to control the investment of our own capital by foreign interests. We might also want to limit borrowing by Canadians in foreign capital markets, but that goes beyond the scope of the present bill.
Our greatest industrial need, Mr. Speaker, is for a viable and innovative secondary industry. We require a dynamic secondary manufacturing industry which would both maintain and generate an expansion of the present level of employment in the resource and service sectors. In this context we need, as several hon. members have said, a further rationalization of our industries and a concentration on technological innovation. This is one of the recommendations which has been made to us by the science committee of the other place. The Gray Report has also revealed that technological innovation is one of the casualties of foreign ownership in Canada.
In relation to technological innovation the minister made an important announcement towards the beginning of his speech on last Friday at page 2777 where he said:
My department is preparing a bill as well, which I hope to introduce very shortly, to provide for the registration of technology transfer agreements. There will also be legislation providing that a majority of the board of directors of federally incorporated companies be Canadian. Measures to increase Canadian participation in the ownership and control of resource projects are under consideration.
The suggestion in this announcement on which I wish to focus at the moment is that in respect of the registration of technology transfer agreements. As the Gray Report states on Page 44:
Licensing as a vehicle for the transference of a manufacturer's distinctiveness can have many of the same costs and benefits associated with foreign direct investment. The granting of a licence may be used by a manufacturer to spread his market power if he cannot afford direct investment in all markets. It may be used to foreclose entry of a potential competitor by granting him a licence. On the other hand, a licensing arrangement may allow a host economy to acquire a distinctive capacity without the necessity of bringing in other unneeded inputs, e.g., capital. A licensing arrangement can also lead to a more rapid diffusion of distinctiveness through the training it gives a potential competitor. Because of the similarities between foreign direct investment and licensing and other forms of contractual arrangements, much of the analysis which applies to direct investment is also appropriate to licensing arrangements.
While the minister has not spoken of the form which this legislation will take, it would seem to me appropriate that it might be carried on by the same minister with the assistance of the same agency suggested in this bill. I think there would be an advantage in having this done

April 3, 1973
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that way, but we will be looking forward to the proposals of the minister in this respect.
As the constitution committee pointed out in the last chapter of its report to parliament last March, there is a definite need in Canada for the development and indeed the deliberate cultivation of a positive nationalism. We can so easily change into a country which is fragmented in spirit. We need to make special efforts to overcome our regionalism. Such regionalism is indigenous to our country by reason of its geography, its distances, its languages, its culture and its variety. The variety is something I think all of us in this House would like to see preserved. At the same time, because of the very fact that it exists, with a potential for divisiveness, we must be especially conscious of the need to cultivate a positive nationalism. As I see it, a positive nationalism is vital to our future and this bill is vital to the development of a positive nationalism.


Donald Alex Blenkarn: Mr. Speaker, we were told after the October 30 general election that this government had learned some lessons. It surprises me therefore that the government should have the nerve to introduce the same poor bill, with minor alterations-changes which merely add to the preamble in respect of the establishment of new businesses in Canada by certain persons. All I can say about this is fiddle-de-dee. It is the same inept bill. It was inept then and it is inept now. It is amazing to realize, in view of the fact the party to the left of us was so anti-Bill C-201 last year what the bedroom can do to change a party's attitudes and principles. What was considered bad last year is now praised by the party to the left. No one may criticize the preamble to this piece of legislation. The problem is that this bill embodies a philosophy which does nothing for business and does nothing for Canadians. It is a bill which starts off by saying "thou shalt not."
Clause 2 of the bill still contains the same subjective analysis problems. There are no real criteria concerning what will be good for the development of Canada. It still refers to percentages of shareholdings. Indeed truly real Canadian companies are suddenly deemed to be foreign companies just because 25 per cent of their shares lie in other countries, or because in some cases one foreign shareholder holds 5 per cent of the shares. This is no way to deal with Canadians. In many cases, the companies now deemed by this bill to be foreign are really Canadian companies.
I was surprised that the minister, having mentioned the positive steps he intended to take, did not completely rehash this measure and provide as a minimum requirement that at least the majority of the directors be Canadians and that at least Canadian talent be represented in senior management. We still see the incension of the 90-day review. We still see the possibility of the review carrying on forever. We still have the provision under which, should the minister think I intend to sell a business or that perhaps you, Mr. Speaker, intend to sell a business to foreigners, he can send in his troops to investigate us just because he has reasonable grounds to believe such a sale is contemplated. That is the kind of thing we object

to. It is not necessary. It is not the kind of thing which develops a positive Canadian nationalism.
This bill will develop a huge bureaucracy to inquire into investment decisions which people make. The whole question of foreign review has been investigated by some provinces. In the province of Ontario a standing committee of the legislature has been sitting since this time last year looking into the whole problem of foreign ownership and the way in which it affects our culture and our business activities, as well as the development of our nation. That committee has held several hearings, including hearings held right here in Ottawa. When Bill C-201 came before this House and the standing committee last year, nine days were devoted to hearings-they were not nine full days because each session lasts for only an hour and a half.
I suggest that if this bill passes second reading-and there are grave doubts about that-the whole issue of foreign ownership should be reviewed by a House committee. We must call in experts from industry and the market. We must call in people from the provinces, We must hear from the banks, the life insurance companies and the pension funds. We must go to specific industries and find out whether the activities undertaken as a result of this bill will hurt rather than help in the development of Canada particularly with respect to oil and gas, mining, the auto industry, transportation, printing, publications and communications. It is important that we look at these things because the bill means that if a company has gross assets or $250,000 or if a small-town auto dealer has help from Motor Holdings, even though he lives in that small town and is a Canadian, his company is deemed by this bill to be a foreign corporation. This is the type of thing which must be studied to determine whether it contributes to a better Canada, contributes to the development of the country and as well provides for Canadian ownership.
The practice of my party in debates this session has been for individual speakers to concentrate on parts of the Progressive Conservative program and so present our program to the people of Canada and to the members of the House. Today I want to talk about taxes, the tax policies of this government and how those tax policies affect foreign ownership and the development of Canada and prevent, in many cases, Canadians becoming masters in their own house. The other day the hon. member for York South (Mr. Lewis) said that all the Tories want to do is talk about taxes, because if taxes are reduced the wealthy and the privileged will be better off. Perhaps he is right to some extent. But his party is worried that some one will make some money, that some Canadian will become wealthy, that some Canadian will all of a sudden be successful in Canada and will take advantage of his opportunities. That party would have us in the blue uniforms of China. That party would have us in the strait-jacket of Bolchevism. That party does not give a darn about Canadians. That party wants to stifle enterprise, stifle initiative, and stifle progress, and that is why they stand condemned.


Mr. Knight:: Same old gang.
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Donald Alex Blenkarn: What danger is there in giving Canadians some money? This party talks about the amount of money that goes to foreigners. For the sake of the hon. member for York South-and I am sorry he is not here-I could say that in 1972 well over a billion and a half dollars in Canadian money went across to some other country in the form of dividends, remittances or allowances to pay for the foreign investment we have in this country. By 1982 it will be at least $2.6 billion per annum, and something radical must be done because this country must be owned by Canadians. This is our country, and we are not going to build a better country with negativism, backward talk, and socialism.


Some hon. Members:: Hear, hear!


Donald Alex Blenkarn: There is nothing wrong with people becoming rich, and I hope many Canadians become rich. I hope they make a profit. That is the kind of thing we on this side of the House are talking about. We are talking about opportunities for young people and older people. We are talking about equality and about the improvement of Canada.
Dealing with tax problems, I said during the election campaign that it was a miracle that Canadians would even bother investing in Canada at all. We have probably one of the highest graduated tax rates on personal income in almost any country in the world. Our tax rates rise to 45 per cent when someone makes $15,000 of taxable income. This tax level does not just affect those fortunate few who are managers of corporations and the like, but it affects auto workers, teachers, and construction machine operators. These people are not highly paid people in the inflationary economy which we now have; they are ordinary Canadians who want to have opportunities in Canada. These Canadians are taxed at such a high rate that they are prevented from saving. They are taxed on their savings and they are taxed higher possibly than people in any other country in the world except Sweden. We have to supply Canadians with the incentive to invest, to acquire, to save and to build, and we will not do that for Canadians with this enormously high tax rate.
Speaking further on the question of personal tax matters, there are provisions in the Income Tax Act with regard to registered retirement savings plans. Unfortunately, those plans are bound up in red tape. They really prevent the investment of funds in pension plans and venture activities. I am sorry the Minister of National Revenue (Mr. Stanbury) is not here, but I suggest to him that we need to liberalize the investment requirements in registered retirement savings plans so that Canadians will be able to acquire to some extent risk equity in planning for their future. These are changes that need to be made.
I want to speak next with respect to the policy of taxing dividends. It became apparent at one time that if a company earned a profit, it paid a corporate tax. Then, when the dividend is passed on to the shareholder, that dividend bears a tax again. In the amendments to the Income Tax Act, the advantages of the dividend tax credit to many Canadian investors was seriously limited. I do not know whether the minister has looked into this, but I have had an economist do this and I understand that the cost of removing any tax on dividends to Canadians from
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Canadian corporations would cost the national revenue less than half the cost of last year's LIP. That would be of great advantage to Canadians investing in stock in Canadian companies. The dividends you receive would not bear any further income tax. That would be an incentive and a positive program.
We have a series of problems in connection with remittances that go from one foreign-eontrolled corporation to another. Somewhere along the line it is necessary for a government to monitor what I would call inter-office charges. International companies have considerable latitude in evading fiscal and monetary policies. They can be obviated through the taxes on retained earnings, in one subsidiary of the parent company. They can be obviated by transfer prices for goods and services exchanged in inter-company transactions. If a country does not get its share of taxes from the profits of international pricing procedures, then it loses almost all of the benefits of direct foreign investment. Customs officials have difficulty in determining duty valuations for inter-company transfers, especially when unique products are concerned such as computer tapes of technological information. These are the kinds of things that I thought this minister would introduce as positive measures when he was talking about foreign controlled corporations and the way they do business in Canada.
Then, there is the matter of the withholding tax. It is amazing that our major trading partners are still able to invest money in Canada, take it home with them and pay only a 15 per cent withholding tax on their income. No effort has been made by this government to renegotiate the tax treaties in connection with the withholding tax. A Canadian pays up to 60 per cent tax on his income: a foreigner comes to Canada, invests in a mortgage or in a building, takes his profits home with him, and leaves Canada 15 per cent in tax. That is what Liberals called encouraging Canadians. That is the policy of this government, and they have done nothing about this matter. These are positive measures in connection with taxation. Of course, speaking of the withholding tax, while Canadians pay capital gains taxes, foreigners in this country are not required to pay such a tax to the government of Canada on the capital gains they make in Canada. The hon. member for Trinity (Mr. Hellyer) said that this government has done more to sell out Canada than any other government in the history of Canada. Certainly it has never introduced a positive measure in respect of foreign control to assist Canadians in owning their own country.
We must also index the cost on capital gains taxes because capital gains, to some extent and in many cases, are not really a gain but an inflationary increase in price. So what we have to do in the capital gains tax portion of our tax legislation is to provide that increases in the cost of living are added to the base costs as determined at valuation date in determining the capital gain made on a sale. At present this is not the case, and this should be done in all fairness to Canadians.
One of the problems with respect to capital gain is the deemed realization of the gain on death. This has been mentioned with respect to the family farm. I should like to say something about it with respect to the family business.

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The private entrepreneur often has all his eggs in one basket. They may be all in his private company. If he dies there is a deemed realization of his assets. You go back to valuation day, and even with the indexing I am talking about, there can well be a gain. That gain is immediately taxable, and the tax becomes instantly payable. We must make positive recommendations for allowances to Canadians so that if this occurs they will have at least ten years, at low interest rates, to pay back the tax chargeable as a result of this death or of a sale.
Efforts must be made to allow investment credits to persons who invest in small Canadian business. This whole matter will be dealt with later by members on this side, but the proposals made by the Leader of the Opposition (Mr. Stanfield), during the election and since, in connection with allowing at least $5,000 per annum for those who invest in small business, must be given serious consideration as a positive incentive to Canadians to invest in Canada. We must attack the restrictions on business. We must make a conscious effort in this parliament to eliminate as much red tape as possible, as well as other things that adversely affect Canadian business.
The other day a businessman came to see me. He said, "Look, why Should I have to file a bond for the sales tax department? After all I have been in business for 15 years, but they still won't trust me." It is about time the government started trusting Canadian businessmen. It is time it said, "You have been a good customer and paid sales tax regularly for 15 years, so we can trust you to remit your tax once a month. We don't require this additional red tape."
We ought to eliminate some of the needless statistics required for Statistics Canada reports. These cost money. They are a disincentive to Canadian business. We must do something, as I said earler in this session in connection with the Income Tax Act, to make it easier for business to file the returns required on T4 slips, T5 slips, T2 slips, and information in respect of deductions required weekly for employee UIC contributions, the Canada Pension Plan, hospital insurance and the like.
Lastly, we must look into the corporate tax rate. The government has proposed a reduction to 40 per cent of the corporate tax rate for manufacturing corporations. But we find that in the aggregate 58 per cent of manufacturing corporations are owned by foreigners. So, really this particular tax reduction was aimed primarily at assisting foreign corporations by giving them a tax break. This is the policy of the government. That is not the answer. What we should explore is a method whereby Canadian corporations are given a lower tax rate than corporations owned by foreigners. This would encourage Canadians to own corporations in Canada. Our present tax laws are in fact forcing the few multinational corporations owned by Canadians, and operating around the world, to think about leaving Canada.
The publication Business Week of March 17 last reported that Massey-Ferguson is seriously considering not retaining its head office location in Canada any longer because of the way in which the Income Tax Act affects foreign investment by our multinational corporations. Several corporations that were Canadian are no longer Canadian. They found that doing business in Canada as

Canadian corporations was not profitable. That is no way in which to build Canada, but that is the policy of the Liberal government. The principle "Thou shalt not" upon which this bill operates, is one which should not be encouraged.
This is a bill which provides for penalties, which provides for bureaucrats, which provides for investigations, and which provides for reviews. It is a bill that says, "Give us more policemen." It is not a bill which does anything to encourage anybody. Indeed, it does the opposite. I am sure that is why the NDP and the Liberal party are together here, because they both believe in Big Brother. They both believe that business in itself is bad. They both believe that free enterprise must be controlled and hamstrung. They both believe Canadians cannot be trusted.
Our approach to this bill clearly demonstrates the philosophical difference between our party and what I am going to refer to from now on as the New Liberal Democratic Party. Our party believes in Canadians. Our party will trust Canadians. Our party will give Canadians incentives to build Canada, not just more controls.
Before I sit down, Mr. Speaker, I want to remind you of this minister's record. Look at the Export Development Bank. There is a pile of money there, but where does it go? He makes sure that the foreign owned corporations get their share. Look at the advances to Michelin, Gulf Oil, Douglas Aircraft and IBM. This is the approach of the government with respect to handouts. It will not be the approach of this party when we form the government shortly.
We believe a government of Canada should do everything to ensure that Canadians own their own homes and are able to own shares in Canadian business. We believe in personal, private stakes in Canada, in taxes, in bank borrowing, in development policies and in resource utilization. This party, Mr. Speaker, is the "Canada first" party. This party has been the Canada first party since the days of Macdonald, and this party will continue to be the Canada first party. This party is not the party of big bureaucracy and big control. That is the philosophy of the New Liberal Democratic Party.


Mr. B. Keith Penner (Thunder Bay):: Mr. Speaker, I am one of those on this side of the House who felt that the foreign takeovers review bill which was presented in the last parliament did not go really far enough. It did not go far enough toward what I consider to be the most important national goal, that is having a Canada which is master in its own house; having a Canada which is in control of its own economy. I mean having control of its own economy, Mr. Speaker, to the maximum extent that is possible in a world which is becoming increasingly interdependent.
The government's response so far to problems involving foreign ownership and control of industry in Canada and of our natural resources, has found only very limited favour with the people of this country. According to one Gallup Poll that was released last September, only 34 per cent indicated satisfaction with the record of action so far. Another 40 per cent were critical of it, and it is the views
April 3, 1973

of those persons that I should like to consider for a moment.
Those who said they were critical of the government's handling of the problem of foreign ownership and control were asked to explain why they felt as they did. Almost half of them answered in terms of general dislike of foreign economic domination of this country. Most of them, by the way, felt that this foreign domination meant U.S. domination. "We should run our own country", they said and, "the U.S. is taking advantage of us". A labourer from Ontario put it this way "We are becoming a little America". Well, Mr. Speaker, there seems to be ample evidence to support those feelings. It is certainly not part of my dream for Canada that we become nothing more than an economic appendage to the powerful American republic.
In the past few years, the Canadian public has become increasingly aware of the extensive nature of foreign ownership and control in our country. A growing percentage of people in Canada are coming to regard foreign ownership and control of our industry as undesirable. An examination of the reasons on which this opposition to foreign ownership is based indicates a concern on two predominant issues. The first of these is the loss of control in making decisions strictly in the interest and to the benefit of Canadians; the second is the economic loss, the loss incurred when profits and dividends leave the country.
There was a time during our quite recent history when it could be said that in Canada there was a conflict between two national aspirations, the desire for rapid economic development on the one hand, and the desire for cultural and political autonomy on the other hand. Even in the midst of such a conflict, however, Mr. Speaker, there were always those who pointed to that which has now become quite obvious, namely, that economic domination and political domination are inextricably bound together.
In the past, too much attention has been paid to the assumed benefits of foreign investment and not enough was said about the drawbacks. In recent years as the evidence accumulated concerning the extent of foreign ownership and control in this country, more and more Canadians have come to realize that the penalties substantially outweigh the benefits. What penalties? Certainly, one is the loss of control in making decisions strictly in the interest of and to the benefit of Canadians. How can we effectively make economic plans with any degree of confidence if a board of directors meeting thousands of miles away in another country is making major decisions about industries which it owns and operates in Canada and which directly affect our economic life? Those are economic decisions.
Political decisions as well can be affected by a high degree of foreign ownership and control. The Wahn Report put it this way:
The danger which Canada must guard against is that it will drift into such a position of dependency in relation to the United States that it will be unable, in practice, to adopt policies displeasing to the United States because of the fear of American reaction which would involve consequences unacceptable to Canadians.
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Probably the most critical aspect of this relationship of dependency is the fact that it makes it increasingly difficult for Canada to establish its own regional development objectives. Large companies invest in Canada to extract resources for the American domestic market. Their investment decisions quite naturally reflect the industrial priorities of their economy, not ours. In the resources sector, one of the major reasons for American control is to ensure a stable source of raw materials for the parent company in the United States.
I have heard it argued, Mr. Speaker, that a vigorous, truly effective foreign ownership policy would work against the less developed regions of Canada and that only the more advanced regions of this country would benefit. In my view, such an argument is a fallacious one because I firmly believe that Canadian ownership and control allows for the possibility of a more rational and more long-term development policy. I believe it allows for a much greater opportunity to eliminate the chances for undue exploitation of people, of communities and of resources. The Canada for Canadians policy must, of course, be introduced in conjunction with a vastly improved program of regional economic development on the part of the federal and the provincial governments working in closer harmony. It is sometimes said that capital from the United States or some other country is needed to help our economic well-being. There are others who are quite convinced, and have statistics to back up their belief, that extensive foreign ownership and control means an economic drain rather than a benefit-a drain whereby profits and dividends leave the country.
Recent studies have shown that there is no actual shortage of capital in Canada and that new American capital which comes into our country is far exceeded by the export of capital to the United States by Canadians. Professor H. G. Aitken in his study of 1961 entitled "American Capital and Canadian Resources", showed that over 75 per cent of American investment was financed by Canadians through retained earnings of foreign branch plants operating in Canada, depreciation and depletion allowances granted those corporations by the Canadian government, and by funds raised abroad by issuing stocks and bonds on the Canadian money market. A more recent study has confirmed Professor Aitken's findings and has shown that the trend is increasing. In the areas surveyed, new funds from the United States amounted to 10 per cent-and I am talking about actual new funds, not recirculated funds-in 1963 and only 4.8 per cent in 1968.
Do we have enough domestic capital in Canada? The Gray Report answered that question. It suggests that Canadian savings are already large enough to sustain both greater growth and fuller employment than we have at the present time. So, despite a smaller percentage of actual new capital coming into Canada from the United States and despite the availability of adequate Canadian capital, foreign ownership and control is still increasing and it is increasing, Mr. Speaker, at a very alarming rate. According to the Gray report, in 1948, 43 per cent of our industry was foreign owned and in 1968, it was 58 per cent. This fact has led one distinguished economic nationalist to state that the problem in Canada is not foreign investment as such, but rather foreign ownership and

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control. He went on to say that our high degree of nonresident ownership and control produces an emasculated country without the characteristics of a sovereign nation.
It is said that the foreign investment and review bill now before us is a response by the government to the fact that non-Canadian control of Canadian industry, trade and commerce, and its effect on the ability of Canadians to maintain desirable control over their economic environment, is a matter of national concern. It is said that the measures contained in the bill will help Canadians develop an expanding economy for the benefit of Canada. These measures are to form part of the government's efforts to put in place a clear set of industrial policies to encourage national objectives. It is said that this legislation complements a whole range of positive measures to build strong Canadian entrepreneurship, to encourage a high level of economic activity and to provide incentives for Canadians to invest in their own country. I want to be optimistic enough to believe that this bill will do all these things, but I must say that I regard this bill as a rather cautious proposal, one which I trust will move us in the right direction, but cautiously.
In considering foreign takeovers and the establishment of new businesses by foreigners, the government will examine carefully the effect of economic activity, particularly employment, the degree of significant participation by Canadians in the business or the industry that is going to be examined by the review process, the effect of the proposed investment on productivity and competition in Canada and, finally, the compatability of the proposed investment with national, industrial and economic policy objectives. One would certainly be hard pressed to see in this approach any suggestion of narrow nationalism, but those who see it as a bit too timid may be on firmer ground. That we need a review process, there can be no doubt. That we will need more in the future seems obvious. The issue of foreign ownership and control is of deep concern to Canadians and it will continue to be more so in the years ahead. This is a problem and an issue facing Canadians that is not going to go away. It is going to be with us for a long time.
I suspect that Canadians are going to demand that their federal and provincial governments continue to take steps to deal with this issue. At this time, I would say that Canadians and their governments are still somewhat uncertain about what the optimal answer may be, but the people of Canada do expect us to take firm, all-embracing steps to curtail the growth of foreign ownership in this country. There can be no doubt about that. They expect us to do this while at the same time taking steps to ensure that the potential growth of Canadian business is realized. Bearing those things in mind, I suspect that this government is trying to find a safe and workable middle road.
Our citizens demand of their governments effective measures which will result in a stronger economy for the full benefit of all Canadians. They want, and will want more so in the future, a restoration of control over their own economic destiny. I strongly suggest to this government and to parliament the wisdom of providing continuous leadership in these directions. We should do that

rather than follow far behind the aspirations of the Canadian people we have been called upon to lead.


Some hon. Members:: Hear, hear!


Mr. Sinclair Stevens (York-Simcoe):: That is the Finance Committee of the United States Senate speaking. It is speaking as of February, 1973 in reference to the actions of the Trudeau Liberal government with respect to the problem the government feels will be lessened as a result of the bill before us today. The report goes on at page 97 to set out a chart on which is recorded the growth of direct investment by United States multinational corporations around the world. The figures compare the situation in 1960 with that in 1970 and they show that direct investment in Canada rose from $11.2 billion to $22.8 billion in that period. I think it is significant to note that those are mainly the years of Liberal government in Canada. The U.S. Senate committee mentions for example, that, by deliberate choice, Japan, in contrast to Canada, has successfully restricted foreign direct investment in productive facilities. Again, I remind the House that this is a committee of the U.S. Senate commenting on our performance as far as the United States investment around the world is concerned. I think it is fair to say that, in general, the tone of this committee report is one of utter amazement at the inactivity of the government in Ottawa faced with th problem hon. gentlemen opposite feel they are coping with in the bill before us today.
I do not wish to take up the time of the House unduly by discussing all the various points made in this report, but it is of particular interest to find the committee mentioning, specifically, that research and development tends to favour parent corporations at the expense of subsidiaries. I shall touch on this matter later.
I feel that when we discuss the problems which face Canada in this field at the present time we should bear in mind that the problems have been well spelled out. What we need are the answers, and I suggest that the minister, in his address to the House, has failed to provide those answers. I do not feel that the bill he has proposed is, in itself, an answer.
Allow me to return, for a few moments, to the subject of the "pillars of Gillespie". I would remind the House that he said they constitute a positive support for the development of Canadian-owned and controlled corporations and positive measures to maximize the benefit to Canada of foreign investment. Let us examine two or three of the areas which the minister has under his jurisdiction. I refer particularly to the anti-dumping legislation and to the activities of the Export Development Corporation. We find that this government, which speaks so righteously on this bill, has not maintained in practise the pillars of Gillespie. Its actions with respect to anti-dumping measures and the Export Development Corporation do not bear out the minister's words. Here is a minister who says the government stands for small business, that it stands for the proper development of Canadian-owned and controlled corporations.
Let me tell hon. members the tale of the tanning and shoe industry in Canada. This industry has been inundated by imports of goods from all over the world. Its representatives have made numerous trips to Ottawa pleading for something to be done to set a quota so that they might be able to carry on as an industry. Part of the answer by the government was to refer the plight of the industry to the anti-dumping tribunal. Appearing before a committee
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of this House, the chairman of that tribunal confirmed that the reference to them had been made in November, 1971 but he said that to date the committee had not reported on its findings concerning the industry. The industry has now stated that unless something is done on an emergency basis it will literally be out of business by 1975. In the last five years, 3,000 employees have lost jobs in this industry because of the failure of the federal government to do something about the importation of foreign goods.
What I am suggesting, Mr. Speaker, is that if this is an example of the type of agency or tribunal the minister proposes to set up to solve the foreign ownership problem facing this country it is a sorry precedent. Such an agency would be a totally inept vehicle for coping with the problem we are considering today. I would point out that the chairman of this anti-dumping tribunal, who receives a salary of $34,000 a year, and his two assistants who between them get another $60,000, operate on a budget in excess of $300,000. They have dealt with six references in the current year. The average number of references since the tribunal was set up in 1969 have been five or six a year. I take it this is what the minister calls action. He can slough off a problem without worry that something will be done for 16 months or so in the case of the tanning and shoe industry. The tribunal to which I have referred has sat on the matter while a 100 per cent Canadian-owned industry dies.
Consider the question from another aspect. How can the government actively assist Canadian business? Take the Export Development Corporation, for example. In this case we find that the No. 1 multinational corporation in the world, General Motors Corporation, has been very fortunate in Canada. In 1973, it recorded sales in this country worth approximately $2.5 billion. The corporation's net income was approximately $80 million. But I wonder whether the minister realizes this: in the years 1970 and 1971, the net income tax paid by General Motors of Canada Limited amount to approximately $35 million. Here is a corporation with net sales, if we join the two years, amounting to almost $4 billion, which pays approximately $35 million in Canadian income tax. To put this into a world perspective, the parent company recorded sales of $28 billion around the world in 1971 and paid $1,900,000,000 around the world in taxation. I suggest that our tax program certainly has not been unfavourable to this corporation.
Most surprisingly, though, the Export Development Corporation has extended credit in the past year or so, mainly to Yugoslavia, in a total amount of $57 million for the benefit of General Motors. As at the end of December 1972, almost $50 million of that amount was still outstanding. It represented almost 6 per cent of the total ceiling that parliament granted to the Export Development Corporation for such assistance. In the two years 1970 and 1971, General Motors paid through it Canadian subsidiary $35 million, but it reaped the benefit of financing through the Export Development Corporation of some $50 million as at the end of last year.
As mentioned earlier in the House, the financings of the Export Development Corporation are generally around the high 6 per cent or the low 7 per cent a year level.

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Those financings as a rule are on a 10 to 15 year basis. So, how nice it is, Mr. Speaker, to be such a corporation in Canada!
I should not, of course, stop at the General Motors of Canada, Limited example since eight corporations shared half of the one billion, some odd million dollars worth of financing that was arranged by the Export Development Corporation. Of that number, over half were foreign controlled. So, we have the odd situation where the minister comes into the House and, with a few words, spells out a beautiful picture showing how effectively the government is dealing with the problem of multinational corporations in Canada. On the other hand, the actions of his department's Crown corporation and of his anti-dumping tribunal spell out a totally different picture of what the Trudeau Liberal government is in fact doing for Canadian businesses and how they are not solving the problems created by foreign multinational corporations in Canada.
There is a total lack of vision and courage on the part of this government is projecting ahead on a five or ten year basis. It would be a great accomplishment for this parliament to get the present Liberal government to think past their next press release. Press releases seem to be the best thing this government has been able to do during the last four to five years.
Having said that, I believe it is extremely important that my party's position be reiterated on the subject we are discussing today. The hon. member for Trinity pointed out in his initial speech many of the problems that have not been dealt with in the bill. But most importantly, he outlined what the Progressive Conservative party believes would be a sound, positive approach to help Canada in its present position. First, I wish to reiterate that our full employment proposals include a more expansionary budget, coupled with wage and price controls.


An hon. Member:: That is five times you have said that.


Sinclair McKnight Stevens: Just on that point, in reply to the hon. member, may I say that we should say it one hundred times, because hon. members opposite have not started to listen to us. I suggest that this point is no better demonstrated than by what the Minister of Finance (Mr. Turner) said last evening when he was before the-


Mr. Roy (Timmins):: A point of order, Mr. Speaker.


Mr. Deputy Speaker:: The hon. member for Timmins on a point of order.


Jean Robert Roy: Would the hon. member permit a question?


Sinclair McKnight Stevens: I would be more than pleased to take a question later, Mr. Speaker. If I may continue, I point out that the Minister of Finance appeared last night before the finance committee and he and his assistants showed a complete lack of knowledge of the operation of the wage and price controls that have now been instituted in the United States. Theirs was an unbelievable performance. Yet hon. members opposite have the audacity to carry on and govern this country.
Our second point is that we believe our tax laws should be changed so as to encourage greater savings, investment

and risk-taking by Canadians. At the present time, tax-wise an American is in a more opportune position to invest in Canada in many fields than is a Canadian. This situation must be changed to ensure that a Canadian has an advantage if he wishes to invest in such fields in his own country.
Third, we say that Canadian business in general has fallen behind the world in the last few years in research and development. Federal leadership is required to allow us to regain our momentum in this important field, and we intend to outline certain proposals to allow our businesses, especially those Canadian controlled, to regain their ascendancy in the world.
Let me underline our party's position. Research and development are the forerunners of business development. During the last ten years Canada, with all its resources, and potential has fallen into the bottom third of the first 25 countries listed in the World Atlas for 1972 in terms of rate of growth per capita. For a country with the potential of Canada, I think this is a disgrace. It is time that that trend was changed, but it will not change until the government is changed.
Fourth, the Progressive Conservatives believe that our financial institutions should be redirected and structured to ensure that Canadian entrepreneurship can be properly financed within Canada, including a proper financing of regional activities of companies in our five main regions. I think it is interesting that in the speech of the Minister of Industry, Trade and Commerce no reference was made to the fundamental question of competition in Canada. I believe that is a serious oversight and that the government should look into the lending pattern and policies of the Canadian chartered banks. Certainly, our party will do so when we form the government. Surely, at least the question should be asked whether our banks should be allowed to continue to lend literally hundreds of millions of dollars as they see fit, irrespective of the impact on Canadian ownership.
Fifth, we believe that through a more aggressive export policy a positive trade balance in current account can be achieved exclusive of whatever resources are sold. Such a positive balance will create a cash pool which could then be directed to acquire substantial or controlling interests in Canadian institutions now foreign controlled. In many fields, we believe Canadians could buy sufficient equity to ensure control of many of the multinational corporations themselves, and in this regard we are suggesting it is high time that Canada started to live as part of the world.
To summarize, most Canadians are in favour of economic nationalism, but the question is: What is economic nationalism? To some, it is the taking of positive economic steps to strengthen Canada's position at home and abroad, and that is the Progressive Conservative policy. To others, it is the welcoming of foreign or Canadian investment funds and technology to achieve these ends with the proper safeguards to protect Canadian industry. To others, however, economic nationalism means being insular and defensive in outlook. They would tend to discourage or restrict the investment of foreign funds and technology, even if it meant a lowering of the standard of
April 3, 1973

living of the average Canadian. There are, therefore, positive nationalists and negative nationalists.
In a world of economic change and challenge where Canada has much to gain but even more to lose, it would be unfortunate if this nation embraced a form of negative nationalism. The exponents of negative nationalism have one thing in common; they are anti-foreign and, in particular, anti-U.S. They link this attitude with being proCanadian in most cases. Within this group there are Socialists, such as we have to my left, and so-called free enterprisers, although I doubt this very much, in front of us. The Socialists see an opportunity to mobilize grass roots sentimental nationalism to help promote their new radicalism. Their goal is a socialist Canada.
The non-Socialists speak of an independent Canada in terms of minimizing international involvement, but they are parochial minded. The challenge of today's multinational commerce, which so many Canadians are meeting successfully, is not for them. In rather emotional arguments these negative nationalists take statistics on foreign ownership and use them out of context in an alarming way. They allege that various types of ownership are harmful without meaningful proof. They fail to appreciate Canada's involvement in today's multinational world economy and they put forth no creditable alternatives to replace what they would destroy.
I am a positive nationalist I am proud of Canada and what we have done in the business world, but I believe that we can do much better. We are in a world of opportunity but we have a coalition government which does not understand the economic world of today. Most importantly, this government is giving no leadership to our businessmen to assist them in coping with today's world economy,___	__ ___
Let there be no mistake; Canada's multinational corporate activity throughout the world is impressive. We are the second largest foreign investor in United States industry, Great Britain being the first. Canadian multinational corporations with sales over $20 billion per year transact business throughout the world in a manner similar to foreign multinational company activity here. These companies include the Moore Corporation, Limited, which does approximately 88 per cent of its $450 million business in the United States, with less than 10 per cent of its business in Canada. Hiram Walker-Gooderham & Worts, Ltd. and Distillers Corporation-Seagrams Limited, with a combined sales volume of over $2.2 billion has 90 per cent of its business outside Canada, mainly in the United States. Alcan, with total sales of $1.4 billion, does most of its business outside of Canada, with only 12 per cent conducted here.
In the merchandising field, the 15th largest retailing concern in the United States, National Tea of Chicago, with sales of $1.6 billion, is controlled by George Weston Limited of Toronto. There are at least 100 such multinational Canadian manufacturing, retailing or other corporations active around the world, including our airlines, shipping concerns, mining companies and banks.
Our banks, for example, have 286 branches in some 35 foreign countries, including the United States, Great Britain and France. Currently, approximately 25 per cent of their total assets, of some $63 billion, are involved in
Foreign Investment Review
foreign banking activity, and five of our banks are among the 50 largest in the world.
Our life insurance companies are also active internationally. In 1970 over 32 per cent of their business in force, which totalled $119 billion, was in countries outside Canada. Such Canadian life companies held $5.1 billion in foreign investment in 1970. Canada's position in the multinational world economy is also reflected in Fortune directory. Of the 300 largest industries outside the United States, Canada ranks fifth behind Japan, the United Kingdom, France and West Germany. Each of these countries, of course, has substantially larger gross national products than we have in Canada. We now stand fifth, but we Progressive Conservatives believe that we can improve our position in relation to this large multinational corporation activity in the world.
At the present time we have 17 corporations listed among the top 300 outside the United States. If we had a pro rata share we would have 30, and I would like to see this country top that goal instead of allowing negative nationalism to take hold. That has been the case put forth by our Minister of Industry, Trade and Commerce.
Multinational corporate activity is reciprocal. We cannot expect to remain active in foreign lands if we choose to become more and more restrictive at home. With foresight, Canadians can continue to tap the world market and, in particular, the OECD countries with their combined $2,000 billion GNP. Unfortunately, this government, which has been in existence since 1963, has not seen fit to cope adequately with this important issue in Canada. In 1963 they brought in legislation which was subsequently taken advantage of by Union Carbide Canada Limited. This legislation provided that if 25 per cent or more of the stock of a foreign-owned subsidiary was sold to Canadi-
The sad fact is that $60 million in stock was sold by Union Carbide at $24 per share in 1964. Today that stock sells for $17.50 per share. That is what happens to Canadian investors under the leadership of this Liberal government. I sincerely hope that the present trend of this government will not result in further losses to Canadians, either directly or indirectly.
Encouraging multinational companies to sell and Canadians to purchase minority interests in foreign subsidiaries does not put any important power into the hands of Canadians and, in fact, may cause the foreign parent to divert attention and business from the Canadian subsidiary which is no longer 100 per cent wholly owned.
If we were interested in doing something more effective, and if we use the 5 per cent reference in the bill now before us, we could take $150 million, and buy equity in the parent Union Carbide Corporation of the United States and that amount would probably give us effective control of that foreign multinational corporation. Surely that would be more constructive than buying a minority interest in their subsidiary. We would have ownership in Canada of the 25th largest multinational corporation of the United States. That is the kind of vision and the type of thrust which I believe we in Canada are capable of if given the leadership. Canada historically has been an internationally oriented country. We have done well with such orientation. We can do better. Multinationalism is an

April 3, 1973
Foreign Investment Review
integral part of our past success and an essential ingredient for our future success in achieving a rising standard of living. There are new opportunities opening up for us such as the leisure time field and oceanography. Canada could become a pioneer in the new frontiers of business.


Paul Theodore Hellyer: And urbanology.


Sinclair McKnight Stevens: Urbanology is suggested. I quite agree. This is the type of forward thinking we would like to see from the government of Canada. Unfortunately, this has not been done by the Trudeau Liberal government. Canadian government and industry will be judged in future, not on how it has resisted the tide of world events, but on how they have capitalized on that tide.


Jean Robert Roy: Mr. Speaker, I wonder whether the hon. member would entertain a question?


Sinclair McKnight Stevens: Yes.


Jean Robert Roy: Mr. Speaker, as I recall it the hon. member was once involved in obtaining some capital to flow out to a bank in western Canada and that movement failed. I wonder whether he could now encourage his boardroom friends in Toronto who are hogging the capital there to distribute it to western Canada, and at that time we might be more interested in his concern about foreign capital.


Sinclair McKnight Stevens: What was the question, Mr. Speaker?


The Deputy Speaker:: The hon. member may repeat the question until it is understood or perhaps put in a way in which it can be answered, but the Chair will not repeat the question.


Jean Robert Roy: Mr. Speaker, would the hon. member consider encouraging his boardroom friends in Toronto who are hogging the Canadian capital on Bay Street to disperse that capital to the regions in Canada where it is needed?


Sinclair McKnight Stevens: Mr. Speaker, one of the points I raised was that it is not only myself who would take such a course but my party believes our financial institutions should have redirection and restructuring to ensure the regional type of involvement that the hon. member is suggesting.


Mr. Knowles (Winnipeg North Centre):: I guess that was a draw.


Mr. Lome Nystrom (Yorkton-Melville):: Mr. Speaker, in the four or five minutes remaining, I should like to open my remarks in respect of Bill C-132, the foreign ownership bill. Before doing so, however, may I say I was very amused by the comments made by the members of the Conservative party about the role of the NDP. They must think our position on foreign ownership in this country has a great deal of credence because they constantly refer to us and to the solutions we propose to the government in terms of reforming or amending the legislation which is before us today. The hon. member for York-Simcoe (Mr. Stevens) was talking about positive nationalism and creating Canadian based multinational corporations. This is

the old theory of what is good for General Motors is good for the country." The old fashioned free enterprise in a corporate enterprise system is what the Conservative party is offering us here today. That seems to contradict some of the other Conservatives, such as the hon. member for Egmont (Mr. MacDonald), the hon. member for Fundy-Royal (Mr. Fairweather), who last year thought that the bill presented by the minister did not go far enough.
Then we have the hon. member for Peel South (Mr. Blenkarn) who today compared our party to the blue uniformed people in China and said that this is vShat the NDP really wants. We also have the hon. member for Edmonton West (Mr. Lambert), the great economic neanderthal, who last year was concerned about the foreign takeover bill being too radical, too progressive. So, I wonder what the position of the Conservative party really is. When it comes right down to it, I think what they want to do is speak the rhetoric of an economic nationalist and cash in on a bit of the feeling about repatriating our economy. At the same time, the only solutions they have are in hand-outs and more tax concessions as outlined by the hon. member for Trinity (Mr. Hellyer) when he spoke in the debate on Friday. So, I will be very interested in following the position of members of the Conservative party in this debate, in committee and on third reading of this bill. I think this bill will probably reveal who are the true friends of the Conservatives and what are their true intentions when it comes to foreign ownership and an industrial strategy for this country.
Now, Mr. Speaker, in the few minutes remaining I would like to say that, perhaps more than any other western industrial country, Canada is really dominated by foreign economic control and by foreign-based multinational corporations. As a result of that-and we are all very much aware of that fact-Canada has become a net exporter of jobs, of wealth, of political autonomy and indeed in some cases of military autonomy as well. Culturally we have been assimilated to a large degree by the Americans to the south of us with one notable exception, French Canada. I think that is to their credit. The people in French Canada have their own language, their own singers, their own playrights, their own musicians and their own cultural entity. We do not have that in English Canada and have been largely assimilated into the North American cultural mainstream. Foreign ownership also contributes to the problems of national unity, regional disparity across this country, unemployment and inflation.
We know about these things in Canada all too well. In the last five or six years we have had three major reports concerning the incidence of foreign ownership and control of our economy. We had the Watkins Report, a very exhaustive study commissioned and carried out under the guidance of the former Minister of Finance, Mr. Gordon. We had a parliamentary committee of this House, the Committee on External Affairs, which presented a report about a year or two ago again raising the same concern about our economy. Then, we had the Gray Report presented last year which reiterated the same facts, that Canada's economy is controlled by foreigners to too great an extent, that we are losing a degree of sovereignty and that we must act very soon.
April 3, 1973

Before five o'clock, Mr. Speaker, if I may I would like to make one more point. When our party speaks about Canadian nationalism, in reply to the hon. member for York-Simcoe, we are not being anti-American. I do not blame the United States for this situation. If I were the president of a huge United States multinational corporation I would come into Canada today. I would come here to invest if I could make a few thousand dollars and walk away with a profit without having a capital gains tax and so on. It is only a natural phenomena. It is Canadians, and the government of this country, which bear the full blame for having our economy eroded from us without rules or regulations and foreseeing our decision-making ability taken away. Mr. Speaker, since it is five o'clock, I shall come back at eight o'clock to finish my remarks.



PROCEEDINGS ON ADJOURNMENT MOTION


The Acting Speaker (Mr. Laniel):: Order, please. 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 Vancouver South (Mr. Fraser)-External Affairs-Representations to United States against proposed flooding of Skagit River Valley in Canada for power project; the hon. member for Selkirk (Mr. Rowland)-Fisheries-Freshwater Fish Marketing Corporation-investigation by Standing Committee of operations and dismissal of employees; the hon. member for Lambton-Kent (Mr. Holmes)- Drugs-Availability of QUAD program date to bulk purchasers, physicians and other health professionals.
It being five o'clock, the House will now proceed to the consideration of private members' business as listed on today's Order Paper, namely, public bills, private bills and notices of motions.



PRIVATE MEMBERS' PUBLIC BILLS


Mr. Arnold Peters (Timiskaming) moved: that Bill C-15, concerning the exportation of the growth and produce of Canada, be read the second time and referred to the Standing Committee on Finance, Trade and Economic Affairs:
He said: Mr. Speaker, this is a very simple bill but its impact would be very great on the economy of Canada. This bill has been introduced on a number of occasions. The last time it was discussed was in 1967, at which time members from all parties, most of whom are not here
Export of Primary Products
now, took part in that debate. The purpose of this bill is outlined in the explanatory note which reads as follows:
The purpose of this bill is to limit, licence and regulate the exportation of basic and primary resources. No licence will be granted until the authority has ascertained that the national interest of Canada now and in the foreseeable future can best be served by such export permit.
No primary product can be exported until every effort is expended to ensure the growth of its secondary manufacturing potential in Canada.
The reason I bring this bill forward is not in the expectation of it being passed, but in the hope that members will give some consideration to the problem that has developed over the years because of the fact that Canada has to a great degree become the hewer of wood and drawer of water instead of developing a separate identity in the manufacturing and natural resources fields. Canada is rich in natural resources, and I think that in the next few years we will see a total change in the economy of our country.
In an earlier debate today we have referred to the problem of control over foreign ownership of the economy of this country. But the problem, in my opinion, is larger than that. It involves the control by Canadians of much of the development of our own products. I see Canada, within the next few years, making great inroads into the European Common Market with many of our products. Again, we are going to find that our agricultural products are in great demand across the world. There will be a shortage of food in Canada and, rather than discouraging farmers, we should be fostering our agricultural production so that it can be increased not only to fill Canadian needs but to provide for the needs of the peoples of the world who will be suffering from protein deficiency, which can only be remedied by countries such as Canada.

This gives us an opportunity to break away from the past and to adopt a new outlook with regard to the development in Canada of our agricultural commodities which will be exported. These should form a basis for a large portion of the development of our secondary industries and in many cases of our natural resources which should be further processed before being exported. Our agricultural products, in the main, will probably be exported in the semi-finished state, but our resource products have often only been superfically treated before being exported. I am particularly concerned with iron ore, forest products, the petroleum industry and industries that revolve around the production of copper and nickel. These are primary industries that provide little employment. It takes very few men to operate a modern, up-to-date open pit glory hole mining operation in iron, zinc or copper, but it takes a large number of men to develop products from that iron ore to finished state.
Every store in every city has a multitude of products from countries all across the world. It seems to me that in developing the export of our agricultural produce, particularly for the European Common Market, we will have to emphasize employment by providing for the orderly development of industry in this country. As well, we shall have to restrict or prohibit the export from this country of our raw materials when they could be processed here and exported in a finished state. Iron ore is an example.

April 3, 1973
Exports of Primary Products Northern Ontario and northern Quebec are rich in iron ore. We have there large low grade deposits that can be developed. Yet, all we do is to pelletize the product and ship it out of the area for further processing. We are shipping raw iron ore to Japan, to the United States and to Germany. It seems to me that we should limit the export of this product in that form and develop a secondary industry to process it.
One of our largest secondary industries is the petroleum industry. I think that the difficulties that are developing in the United States now have made us suddenly realize that petroleum will not last much longer if we continue to use it for fuel, and that we will have to develop other byproducts instead of only burning it in the form of fuel. There are thousands and thousands of products made from petroleum, such as synthetic clothing, drugs and dyes. Yet, we are exporting large quantities of petroleum in its raw state to our neighbour to the south who is then developing thousands of by-products from it from aspirin to clothing. We are exporting the raw material and buying back the finished product.
A long time ago we passed legislation in the province of Ontario-and I understand this also took place in the province of Quebec-to prohibit the export of lumber. It is true that a small amount of raw wood is exported. These amounts have to be approved under the provincial legislation. What I am suggesting is that we do this with all our natural resources in Canada, and I am suggesting that we should develop our products in Canada before we allow them to be exported in the raw form. I am sure there are many members of the House who have not r alized the potential which we have in Canada.
As I stated previously, we are going to find that instead of having surpluses of our agricultural products, there will be shortages. Probably the price of those commodities will rise to such an extent that it will be both economic and feasible to increase production on lands that have not yet been developed. This is all within the foreseeable future. This is also true of other commodities, and if we tie them in with our agricultural commodities we, the people of Canada, will receive a considerable bonus.
When we in Northern Ontario adopted the concept that wood was not to be exported any longer as pulp in box cars, or as sawn logs, we developed in our area pulp and paper mills, plywood mills, and flake board mills. We are now developing secondary industries based on those mills that are manufacturing such commodities as kleenex, kotex, and plasticized fibre boards of various kinds. We have reached a stage of development in furniture making, but the amount of possible diversification in these fields has been touched on only slightly.
It was always maintained that there was a danger in producing manufactured products at a great distance from the market. I talked to one company manager the other day and I was surprised to find that he was using the flake board product produced by the mill in my community, putting a plasticized surface on it, and shipping that finished product to a large radio and electronic company in the city of New York. He has no difficulty in making a profit, even though he had to ship the product 
over a great distance. In fact, he found he could not get enough of the fibre board from my area and had to import some from the Kapuskasing-Hearst area. In fact, he even has to buy carload lots of fibre board and ship them from Portland, Oregon, to Ontario.
We could undertake secondary manufacturing if we had a mind to do it. Many people say that if there is a buck to be made the entrepreneur will come into any area and make it. But that is not always true. Certainly, it was a lot cheaper to drive logs down the rivers to Ottawa, to the Gatineau, to the Eddy mill, than it was to build pulp and paper mills in Northern Ontario. I am sure we could have driven logs down from the head of the lakes to some American pulp and paper mill had we wished to do so, and it would have been a fairly cheap operation. But we decided to process the logs at home, and when we made that decision we created the basis for many of the towns and communities in that area. The finding of copper and zinc in the Timmins area offered the people there an opportunity of processing it in that area or of processing it somewhere else. I believe that the American headquarters of the company concerned decided to export the raw ore in concentrate form, and it was only after it was offered assistance by the federal government and threatened with legislation by the Ontario government, that the company decided secondary development of that product was possible in the Timmins area. Thus has taken place there since then.
We, in Canada, control the world's supply of nickel, yet Sudbury is almost totally dependent on the mining of that ore and on the primary refining of it into ingots which are then shipped all over the world. This is also true to a large extent of copper mining in Canada. We are exporting copper in a primarily refined state to most of the countries in the world. We are doing the same with cobalt and many other minerals. I think most hon. members will agree that if we are to end the concentration of secondary industry in urban communities, in probably less than 15 centres in Canada, we will have to spread secondary industry into other parts of the country. One of the best ways to do that would be to place a restriction on base material and raw products leaving their areas of production in an unfinished state.
In northern Ontario and northern Quebec we are producing fodder for mills in Montreal, for mills in Toronto, for mills in Germany, and for mills in the United States. The main employment is to be found in those mills. Take the example of copper coming from the refinery in Noran-da. About 4,000 to 5,000 men are employed in the production of that copper, with only about a third of them working at the refinery. The copper goes to plants in Montreal, and I understand that about 10,000 people find employment in the further processing of that copper which comes from Noranda. I am sure that if 10,000 people living in the area around Noranda could get that employment it would result in improved conditions in that area. I also suggest that Montreal would be the better for it, as would other cities such as Toronto, because the mills there have difficulty in disposing of waste material. There is the problem of pollution. There are the problems of transportation for mill employees, of housing for mill employees, and all the other problems associated with
April 3, 1973

major cities. These are not present to the same extent in the areas where primary production takes place.
I do not suppose that this bill will be passed, Mr. Speaker. However, if the Canadian people do not soon give some consideration to developing the resources of this country to as highly a finished state as possible before allowing the exportation of them, we will lose considerable industrial development in Canada, and the country will be the worse for it. In my opinion, Canada is in the beautiful position of being able to get into the Common Market through the agricultural door, and at the same time to take large quantities of finished products as part of the price for directing our agricultural products to that area.
If the government had the foresight to introduce legislation of the very simple nature outlined in this bill, we in Canada would have a much greater development of secondary industry, not entirely confined to the urban centres but spread across the mid-Canada corridor. It is in this area that real wealth of Canada still lies, where the unemployment picture is the darkest, and where secondary industry would be a distinct asset and not a liability. I heartily commend this idea to the members of the House.


B. Keith Penner: The hon. member for Timiskaming (Mr. Peters) has presented us with a bill which certainly embodies a sentiment well accepted throughout Northern Ontario, namely, that our region should be something more than a producer of raw materials and that we need more secondary industry. We need more secondary industry requiring highly skilled employees because one of the things that disturbs and distresses us in this vast geographic part of Ontario is that we are losing our young people. We are unable to retain them because we do not offer a wide enough variety of highly skilled jobs which will keep them there following their training or attract them back following studies in other parts of the country. In addition, if we had a higher degree of secondary industry in Northern Ontario it would give many of our communities a long-term future instead of the short-term future some of them have at the present time, particularly those communities which are based on the extraction of non-renewable resources.
I can tell you, Mr. Speaker, how depressing and disturbing it is to see those non-renewable resources running out and to witness the anxiety which goes through a community as the years fall away, when they know that each year brings them one step closer to the time when they will have to go to another mining town and start all over again.
The purpose of the bill introduced by the hon. member is, as indicated in the explanatory note, to ensure that primary resource exports are in the Canadian interest now and in the foreseeable future, and that opportunities for further processing in Canada are not overlooked. This sentiment is fine and no doubt the hon. member will receive the applause which he is seeking back home. That we should have a more effective resource upgrading policy there can be no doubt, but Bill C-15 has a number of weaknesses which I do not think commend it as a serious proposal.
Exports of Primary Products
One of the major defects of Bill C-15 is that it does not sufficiently define for us a "primary product". First, it is not clear whether the bill is intended to apply only to agricultural products or to mineral, forest and fishery products as well. The hon. member elaborated on this in his speech, but it is not in the bill. The title of the bill refers to the "growth and produce of Canada" while the explanatory note refers to "basic and primary resources". If the bill is intended to apply to the products of all resource industries, then I think there are a number of observations that can be made. The bill could presumably apply to some products which are already subject to government regulation for export such as oil, natural gas and uranium ores which are now so governed.
It may be appropriate to ask whether Bill C-15 would apply to livestock or only to feed grains and forage crops. Would it apply to pelletized iron or only iron ore, to other mineral concentrates or only to mineral ores in their most crude form? Would it apply to crude forms of minerals obtained as a byproduct in the processing of other ores? In the case of forest products, is it intended that Bill C-15 apply to wood chips and pulp or only to logs? The hon. member for Timiskaming was quite correct in pointing out that in Northern Ontario the export of pulp logs is prohibited by provincial law and he spoke extremely well of the benefits of that prohibition. We all know that it fostered a number of mills along the north shore of Lake Superior and that gives testimony to the kind of action that the hon. member is suggesting.
The nature of the problem that the hon. member is seeking to solve concerns many Canadians, and I do not think we should let it pass without saying that it concerns the government as well. The government is well aware of the desirability of obtaining the optimum benefits from the production of primary materials in Canada, such as minerals. I might say, and perhaps this may be thought of as a commercial, that Canada is fortunate in having a substantial stock of deposits of ore which are either in production or proven. Northern Ontario particularly is a region of Canada which is richly blessed by having large areas of potential mineral-bearing lands. There is so much, particularly iron ore, that it has lulled some people into thinking that the reserves are so vast as to be practically inexhaustible. This is a dangerous dream because such is not the case. We know from studies related to resource depletion that these reserves are not inexhaustible.
Many people at the present time fear that these ores are being sold much too cheaply. As time goes on they are going to become more and more valuable, and more and more expensive to buy. Although many people in Northern Ontario want to see a rapid development of those resource areas, there is something to be said for conservation, leaving something to benefit those who will follow us and perhaps benefit them in a much more extensive way than is the case now.
It is right to suggest, as the hon. member has, that there must be more processing and manufacturing in Canada. We do want more processing, more manufacturing, to do more with this raw material and to reap the benefits. If the hon. member believes that, surely he is telling us in his own way that he is going to support those measures which
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April 3, 1973
Exports of Primary Products
the government will shortly introduce designed to stimulate the growth of manufacturing in Canada so that more and more raw materials can be processed and exported in a finished form. This is going to result in higher profits, more jobs, improved technology and, generally, a more buoyant and vigorous economy for Canadians. If the hon. member is saying that he is going to support those measures designed to give the manufacturing and processing industries of Canada a boost, then I take delight in the ray of light that has suddenly been cast upon him. That is welcome news from the hon. member for Timiskaming, which he has communicated to the House.
At the present time and probably in the immediate future, the rate of production of minerals in Canada is in excess of Canadian requirements. Those minerals which are produced in excess of our requirements are sold abroad as exports. The hon. member for Timiskaming would have us introduce legislation to limit dr restrict that movement of minerals. Of course, I do not totally disagree with him, but I have a few reservations. I have reservations when I think of those communities now dependent on mining; I have reservations when I think of those small Northern Ontario communities which know that they are situated near vast mineral deposits and have looked forward to the day when the deposits will be developed and some benefits will accrue to them.
Rather than specifically restrict exports, I would favour policies which would permit a much greater use of those excess minerals which are now on hand. Two points should be borne in mind with respect to the sale of minerals abroad. First, the employment and revenue derived from the export of minerals is an important element in sustaining the present level of the Canadian economy. I am aware that this is an element often played down by spokesmen in Canada; nevertheless, it is an important element in sustaining our economy. Any precipitous action to reduce the export of minerals would indeed have an unfortunate effect on employment in this country, not only in the mining industry but in industries which supply materials, machinery and equipment for mining and sectors which process minerals into higher value products.
The second point concerns the price at which our minerals are sold. This price is determined by international market conditions and by competition. We do not decide what price we will receive; this is decided by the supply available on the international market. We always endeavour, of course, to get the best possible price for the minerals we export. It is clear that any immediate change in the level of export of minerals would produce undesirable results for Canada. It would certainly produce undesirable results in northern Ontario, an area which the hon. member for Timiskaming and I represent. It is equally clear that in the long term, the adequacy of supply for Canada's own requirements is a matter of the greatest importance. The hon. member for Timiskaming has recognized the potential dislocation which might be inherent in any immediate action to control the rate or price of minerals exported. This is evident from his inclusion of paragraph (c) of clause 3 of the proposed bill, where it is to be determined that-
-upon the balance of convenience and necessity, the exportation is in the public interest.
He has, of course, quite properly taken that matter into account. In conclusion, Mr. Speaker, I commend the hon. member for introducing this bill. He has brought before us for debate a very legitimate concern. It is a concern not only of individual Canadians but, more specifically, of many developing regions of this country. There is no doubt about the concern expressed in the hon. member's bill, but in my view there is doubt with regard to the specifics of the modus operandi which he proposed. While it is right that we should debate the bill I do not think it is one we could properly vote for because of the many deficiencies in its details.


Mr. Harvie Andre (Calgary Centre):: Mr. Speaker, I will begin where the hon. member for Thunder Bay (Mr. Penner) left off. I agree completely that this bill has a great many weaknesses and shortcomings that would preclude our giving it support, although there is no question of the validity of the motivation which caused the hon. member for Timiskaming (Mr. Peters) to introduce it.
Certainly, the question of our natural resources and the use we make of them is fundamental to the vitality of Canada now and in the future. We as parliamentarians must be vitally concerned about this question. We cannot, and should not, put up with a policy or procedure that is tantamount to direct exploitation with no consideration for maximizing the national good or for future prospects. It is questionable what the limits are, but there are limits to the natural resources that Canada has now, thank goodness, in apparently abundant supply. We must be aware of these limits.
The hon. member for Timiskaming quite accurately implied in his speech that the economy of Canada is in a sense distorted in structure from the economy of most other developed nations. We have in our economy a very large primary sector, to which a great deal of our wealth and our standard of living is attributable. We have a well developed, substantial tertiary sector of our economy, the service industries.
When it comes to the question of secondary industry, the hon. member is correct; we are in a pathetically weak situation. However, I differ radically from the hon. member for Timiskaming in how we reached this situation and what the cure is. The important question is, how can we develop a larger secondary or manufacturing component in our economy, since it is universally recognized that this is the component which will generate the jobs we need right now and will need more of in the future? Our apparently weak secondary manufacturing component was not caused by our export policies with regard to primary materials. There is absolutely no basis for assuming that if we cut off the export of raw materials, our secondary manufacturing industry would automatically grow. It is not true that a large primary industry is the main cause of a small secondary industry. The reason Canada has a small secondary component in its total economy is wholly and directly attributable to Canadian government policies. In this regard I point to members across the way.
For the past four years under the Trudeau government, the position of secondary manufacturing in Canada, in
[Mr. Penner.l
April 3, 1973

terms of number of jobs, profits, growth and so on, has deteriorated drastically. This is a direct result of economic policies introduced by the Trudeau government. It is not the result of having a healthy primary industry. If we are to encourage the growth of secondary manufacturing-and I hope there is unanimity in the House for doing so-we must address ourselves to the fundamental reason for our being in this state, namely, the economic policies of this government. We must provide, and this word may cause some difficulty for the hon. member for Timiskam-ing, incentives to Canadians in the way of taxation policies, fiscal policies; and we must aggressively seek export markets for our manufactured goods.
We should provide incentives in the way of economic policies, as outlined by my colleagues, specifically the hon. member for Don Valley (Mr. Gillies) during the budget debate. This would do more for promoting the growth of secondary industry in Canada than any negative policy of limiting the export of our natural resources. As the hon. member for Thunder Bay pointed out, implementation of this bill at this time would directly result in a great deal more unemployment and economic hardship. For that reason alone it should be defeated, as I am sure it will. Anyone who looks at this approach in a careful, unbiased manner will see that it is totally negative and totally at odds with the desires and abilities of the Canadian people. As I have stated, we should implement aggressive policies to expand our manufacturing and supportive industries. The hon. member for Timiskaming indicated that he expected Canada to benefit through increased trade with the Common Market in the near future. I sincerely hope he is correct, but I question how this expansion will be achieved by government action which is basically out of our hands.
What worries me about Canada's long-term trading prospects is that we may become increasingly isolated as a result of the policies of a protectionist United States and a protectionist European Common Market, while the Pacific market is increasingly taken over by the Japanese with very little competition from ourselves. I do not think we can succeed in breaking down these barriers by adopting a policy of not exporting our primary products. This will do no good because there are alternative sources of supply. We are blessed by a bountiful supply of natural resources, thank goodness, but this does not mean we have a corner on the world market-not by a long shot.
The hon. member for Timiskaming told us a genuine success story about the processing of wood products in northern Ontario. He implied that since certain methods worked in this case, they would work in other cases where raw materials are abundant. For instance, he told us that because of the tremendous variety of products which could be made from oil, we should require that many more of these products be manufactured in Canada. But the analogy does not hold; I feel I must repudiate the arguments put forward by the hon. member. He was correct in saying that an enormous variety of products can be produced from the raw material, but if they were all produced here, delivering them to the markets which required them would be a task of enormous complexity.
Exports of Primary Products
Then there is the question of scale of production. Like it or not, our domestic market is limited. This situation has good points and bad points. It means there is more of Canada for each Canadian to enjoy-and I like that. It also means there is a smaller market, and the unit cost of producing goods is greater. When one talks about petrochemical products, scale is everything. It is simply not economically feasible to require that all petroleum products which end up as consumer products should be processed to consumer product level within Canada. The volume of production required in the processing plant in order to bring the product within the economic reach of the consumer is simply too great.
Our fundamental criterion, when we consider the question of our raw material resources and the extent to which we should limit their export and require reserves to be kept for the use of future generations, must be the maximization of the national good. Licensing provisions governing the export of oil came into effect on March 1, so this bill is redundant in this respect. Two extreme positions could be taken. For example, we could allow export without restriction. This would be irresponsible, and nobody has advocated such a course: I include most of the people engaged in the oil industry in Calgary. The other extreme point of view is that no exports should be allowed. Members of the NDP have expressed themselves in favour of such a stand. Their justification is that figures produced by the National Energy Board indicate that Canada has proven continental reserves sufficient to last for about 15 years. The thinking goes that if we have only 15 years' supply left, we should halt exports and keep the oil for Canada.
Mr. Speaker, this would guarantee that in 15 years we would run out of oil. If we were to stop all exports it would mean that all exploration, all drilling activities, all the industry's activities in Alberta would come to an end, incidentally throwing thousands and thousands of Albertans out of work, not to mention the fact that the government of Alberta would lose millions of dollars in revenue. The fact is that such action would prevent the discovery of the millions of barrels of oil which still exist somewhere in Alberta but which have to be discovered through exploration programs.
If, instead, we adopt a reasonable policy of allowing exports while protecting Canada's needs, this will guarantee the continuance of an exploration program which will ensure that reserves will continue to build up, and at the end of 15 years we shall be able to rely, in terms of reserves, upon at least as much as we are counting on today. It is an on-going process. It cannot be viewed in the simplistic manner some have adopted. I hope the government appreciates all these factors and will take them into account when implementing the regulations which accompany the licensing procedure.
In conclusion, let me say that the motivation of the hon. member in introducing this bill is highly commendable. I agree we must conserve our resources for the benefit of future generations, and prevent irresponsible exploitation. We must also do something about the position of secondary industry in this country if we are to cure our unemployment problem. I agree with the hon. member in this regard. However, I believe that to limit the export of
26087-39J

April 3, 1973
Exports of Primary Products
primary products by means of a tribunal, without taking account of positive factors, is a wrong-headed approach and one which will simply create more unemployment and weaken the primary sector of our economy. I, for one, cannot see how weakening the primary sector can do anything to advance the secondary sector. I hesitate to conclude on a partisan note, but what we need is Progressive Conservative policy.


Mr. Herb Breau (Parliamentary Secretary to Minister of Industry, Trade and Commerce):: Mr. Speaker, the hon. member for Calgary Centre (Mr. Andre) says he is hesitant about concluding on a partisan note. I am happy he did. I am happy that at least one member on that side of the House will support the corporate tax measures sponsored by the Minister of Finance (Mr. Turner).
The hon. member said we should have more positive and aggressive policies that would encourage secondary manufacturing in Canada. The budget measures of May, 1972, introduced by the Minister of Finance do exactly that, and I am happy to see that the hon. member for Calgary Centre will support those measures. I hope they will be passed by the House, since they are necessary for the economic well-being of Canadians in the future.


Harvie Andre: When will they come before the House?


Herb Breau: They will come in due course, and I am happy that the hon. member will support them. His colleague from Saint John-Lancaster (Mr. Bell) will also support them in view of their importance to manufacturing, not only in his constituency but in his province. The hon. member mentioned that in the last four years secondary manufacturing industry in Canada has deteriorated. I notice he used the word "deteriore" and did not say there was "less" manufacturing. I suppose he wants to be on safe ground. I am sure he is an honest member and he would not say things that were not accurate.


Stanley Howard Knowles: All members are honest.


Herb Breau: That is right. So I do not want to impute motives. But he used the word "deteriore"-I have difficulty saying it in English-rather than saying it had diminished. I do not think it is a fact there has been less manufacturing in Canada in the last four years. I do not have the figures in front of me-


Harvie Andre: I have.


Herb Breau: Then I should like to see them. I have figures in my files prepared by the Department of Industry, Trade and Commerce that prove the contrary, that in fact Canada has improved its manufacturing position a great deal. The hon. member spoke about the Liberal government's record. Let me remind him it was this government that brought in the corporate tax measures, which I hope his party will support. Obviously he will support them because he wants strong secondary industry. It is the Liberal party that brought in the Regional Development Incentives Act which is applicable only to the manufacturing and processing industries. This measure was
[Mr. Andre.l
brought in in 1969 by the then minister of regional economic expansion for the purpose of encouraging strong secondary industry in slow growth areas of Canada. As a matter of fact, in the hon. member's own wealthy province this act has benefited many people by creating longterm manufacturing jobs.
So I cannot accept the fact that secondary industry has been worse off since the Liberal government took office four and a half years ago. Neither can I accept the fact that we do not have aggressive policies. My difficulty with the Progressive Conservative policies which were referred to by the hon. member is that I cannot find out what they are, in many instances. Perhaps if we saw them we might support them; you never know. Certainly I should like to see some clearcut policies emanate from that party. Last night on the national news I heard the leader of that party speak about the corporate tax measures, and again he tried to confuse the issue. He tried to capitalize on the sentiment that exists in this country against corporate tax cuts. We must realize that some people in this country see no benefit in these tax cuts. I do not agree with these people. But last night the Leader of the Opposition (Mr. Stanfield) tried to fan those sentiments by saying the measures were not enough to meet the problem.
What the hon. gentleman wants to do is to extend them to the service industries and primary resource industries, which I think is totally illogical if we are to develop a strong secondary manufacturing industry that can compete with other countries. He mentioned the protectionist attitudes of the EEC and, I will not say the protectionist attitudes of the United States but certainly the different attitudes in the United States from what we have witnessed in the past.
I think this government has done a great deal to encourage secondary manufacturing. As a matter of fact, we have done so well that the government of the United States is very concerned about it. It is so concerned that it is trying to divert production from Canada to the United States. President Nixon expressed concern in a recent report to Congress about the matter. So there is no question that we have done very well out of the auto pact and in other ways.
May I now deal with the bill before us. Secondary manufacturing is referred to in the bill, and I have to deal with it since the hon. member raised it. I would also commend the hon. member for Timiskaming (Mr. Peters) for having brought the bill forward, because it is certainly a subject that interests me. While the export of these products is not prohibited, I think that management of the resource is of greater importance. In practically all cases, non-renewable resources are in the hands of the province. For example, in my own province too many minerals and other resources are being exported in a raw state without any processing. This is the case with minerals in my constituency in northeastern New Brunswick.
As the result of action taken by the very active Robi-chaud government of New Brunswick some time ago, these mines were developed. The government of the day forced the company to build a smelter to process the minerals. The company did so, even through it said it would not make a profit until 1975,1 believe. Nevertheless,
April 3, 1973

the government said that was tough; they had to build it anyway. I believe that 300 to 400 people work at this smelter. The only problem now is that there is a Conservative government in New Brunswick that is not ready to follow the progressive policies of the previous Liberal government; as a result, the province is now exporting some raw minerals.


An hon. Member:: Shame.


Herb Breau: It is a shame. Some hon. members might think it is a joke, but it is very important to an area such as northeastern New Brunswick which has a high level of unemployment. Raw minerals should not be exported, especially in a case such as this. Even if the hon. member said that export controls were negative, I would not agree with his rationale. I am sure he will admit that an extracting operation must be viable, and to be viable there must be a certain volume of extraction. If the company is forced to process the minerals, they would not be able to close down because of their investment in processing plant and equipment.


Harvie Andre: So you twist their arm?


Herb Breau: The Liberal government twists the arm of business in this country so that the people can benefit. If the present government of New Brunswick would do that, the company would have to keep the mine open and continue to process the raw material in my riding, which perhaps would create a thousand new jobs in the area.


The Acting Speaker (Mr. Laniel):: Order, please. I regret to interrupt the hon. member, but the hour appointed for the consideration of private members' business has expired. I do now leave the chair until eight o'clock tonight.
At six o'clock the House took recess.


[Stage Direction]
AFTER RECESS

The House resumed at 8 p.m.


[Stage Direction]
The House resumed consideration of the motion of Mr. Gillespie that 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, be read the second time and referred to the Standing Committee on Finance, Trade and Economic Affairs.
Foreign Investment Review
Lorne Edmund Nystrom: Mr. Speaker,
before we adjourned this debate for private members' hour I was suggesting that Canada, perhaps more than any other country in the western industrialized world, is dominated and controlled by foreign economic concerns, mainly foreign-based multinational corporations. As a result, we find ourselves in the position of being a net exporter of jobs and wealth as well as political, economic and, to some extent, military decisions. We also find we are culturally assimilated as part of the North American continent. This also adds to the problems of national unity, regional disparity, unemployment and inflation.
I suggest that we in this country are well aware of these problems having had two reports dealing with foreign ownership, the Watkins report and the Grey report, as well as a third report by the external affairs committee saying about the same thing as the other two. At five o'clock, before I was interrupted, I had suggested that when we are discussing foreign ownership it should be made clear, in answer to some Conservative speakers during this debate and the debate last year, that we are not being anti-American; we are being very much pro-Canadian.
We in this party have talked about repatriating the Canadian economy and putting more Canadians in control of our own destiny. If I were the head of a United States multinational corporation, I would be doing the same thing they are doing: I would locate and invest in Canada. I do not blame the heads of U.S. corporations, but I do blame Canadian governments which during the past 20 or 30 years have allowed this type of activity in Canada without regulation or rule and without any guidelines for the protection of Canadian people. The situation is entirely our own fault.
Other countries have set down guidelines and regulations. The one which comes to mind first is Mexico, whose President addressed this chamber last Friday. Sweden set down guidelines in 1935. Norway and other countries have done the same. Indeed, in the United States at one time there was a great deal of foreign ownership and foreign capital, but it was able to develop its own economy which is now extremely viable. After the Second World War, Germany and Japan were practically destroyed, at least many sectors of their economies were, but they developed an industrial strategy and today are viable and forging ahead rapidly. We must do the same thing here in Canada. We must repatriate our economy and develop an industrial strategy that will start this country moving economically again.
In 1958, a Canadian academic writing in a Canadian magazine said:
Shall we suffer passively our situation and economic domination? ... It could be better to be annexed outright by the United States than be exploited without limits.
That academic is fairly well known here: his name is Pierre Elliott Trudeau, and he wrote those words in Cite-Libre in 1958. Last year when the government brought forth its foreign ownership bill, the Prime Minister (Mr. Trudeau) and the liberal government betrayed those words: they produced a foreign takeover bill which covered only 5 per cent, 10 per cent or 15 per cent, at the most, of foreign activity in the economy of our country.

Foreign Investment Review
That bill was stalled in the House and our party was able to kill it.
The bill itself was a big zero and an absolute farce. If it had passed, I suggest it would have had the effect of creating an economic eunuch in a bordello of foreign-based, multinational corporations. In other words, it would have been absolutely useless and would have done very little to reverse or even hold back the trend toward foreign domination of our economy. The members of this party are proud to have killed that bill and forced the government to come to us with the improved legislation we are debating today.
The bill now before us is one result of the October 30 election which returned a minority government to parliament. The government could not ignore the wishes of the people, as it did last year. Therefore, it expanded the bill to take in not only takeovers but also the screening of new investment in Canada and, in addition, the screening of the expansion of existing firms in new or unrelated areas. I suggest this goes a considerable distance from the bill that was previously debated.
I have mixed feelings about the bill. I am not perfectly happy with it. I do not suggest it will solve all our problems. Much of the effect of the bill will be determined by whether it will be administered by people who are really determined to do something about Canadian ownership or whether it will be administered by the people like those who administer the CDC, which has become a farce and nothing but another investment or mutual fund. So much of the impact of this legislation will depend upon how it is administered and who it is administered by, because many of the decisions these people will make will be very subjective. They will have a tremendous amount of discretionary power.
If the bill is well administered, it could go a considerable distance toward regulating, in the future, the incidence of foreign ownership in our community. For that reason I suggest this House should deal with the bill on second reading and refer it to the committee, at which point we will try to move several amendments. As the minister himself has said, this is only one step in the area of foreign ownership of our economy. The bill is not retroactive; it will not buy back the Canadian economy that is now in foreign hands. It does not really establish priorities concerning which industry or sector is important. It cannot set provincial priorities. It can only be part of an industrial economic strategy for Canada. That is the context in which we must treat the bill which is before us.
As I said a minute ago, our party feels this bill will go part of the way and that we should move several amendments. I think there are five or six which are very important and which I should like the minister to think about seriously. I would also hope members of the House would think about them seriously. The bill covers three areas: takeovers, new investments and expansion of existing firms into unrelated or new areas.
I suggest, as many others have already suggested in newspapers such as the Toronto Star, that this House should look at a fourth area very seriously, that is, the expansion of existing firms in the same area of produc-
[Mr. Nystrom.l
tion. I realize, after listening to the hon. member for Windsor-Walkerville (Mr. MacGuigan), that we would have to word an amendment in such a way that we would not be interfering with a small firm wishing to expand its plant a little and add 10 or 15 jobs. I believe we could come to a consensus on that so that a large firm, for example, which is doubling in size could be screened. This is a large part of foreign ownership activity in our economy, and if we do not add this sector to the bill we will be missing a considerable degree of economic expansion in our country by foreign concerns. Again, we can elaborate on that question at the committee stage and move amendments.
The second area which I believe must be broadened considerably involves the factors to be screened or taken into consideration by the screening agency as outlined in the bill. Again, the hon. member for Windsor-Walkerville said that many of these factors are covered in the first part of the bill, but I suggest, with great respect, that they are vague. I think some of these factors should be stipulated in the bill. I think there should be a clause in respect of screening imported parts and components to see whether alternative sources exist in Canada and, if not, whether they could be developed here. I think this is one area in which the Canadian economy has not been as active as it could be. Again, parts and components are labour-intensive and I believe this should be a natural part of the screening mechanism as outlined in the bill.
The second addition in respect of factors to be screened, I suggest, would be the export of raw materials from our country, to determine whether some of the processing, developing, packaging and manufacturing could take place prior to export. This would seem to be a very important point to stress. This country is an exporter or raw materials and unfinished products, and an importer of finished goods and manufactured products. I remember very well the former member for Duvernay, Mr. Kierans, speaking in this House about a year ago on this very point of placing more emphasis on manufacturing and processing. At that time he said that for every $100 invested in resource development or the extraction industries, we provided only about $6.50 worth of wages; but that for every dollar invested in manufacturing we could provide about $30 or $35 worth of wages.
When we have such a heavy emphasis on the resource industry in this country, what we are doing is exporting jobs. If we export $100 worth of raw materials to the United States, we in turn import $100 worth of manufactured goods and probably export $25 or $30 worth of wages in the process. I suggest the minister consider this as the second area which should be added to the factors taken into consideration by the screening agency.
The third factor which should be taken into consideration would involve the screening of any export restrictions which may exist by agreement or, indeed, export restrictions which may exist in practice which prevent the expansion of export markets for this country. There are many export agreements which could be looked at which are established by the government through tariffs, and so on. Even more important, however, is the practice of multinational corporations which develop a product in one country and another in Canada.
April 3, 1973

A third area which I believe should be added to the bill-this perhaps will be more controversial for some members of the House-is the prohibition in certain areas of our economy of any new equity investment that would place effective control in the hands of a foreign individual or foreign concern. I suggest areas which should be considered include mineral resources, energy, water and power. I think all these things, and perhaps a few others, are. vital to the future development of the Canadian economy. I feel these are areas in which there should be massive public ownership and certainly public control, because the resources are here for the Canadian people and not here for any profiteering by foreigners or multinational corporations based outside this country. That is another factor we will have to study.
There are a number of other items which I hope the minister and members of this House will consider. One is the provision of more information on the activities of the screening agency. There should be a regular report to the House within two or three weeks after a decision is made, whether it be a positive or a negative decision. There should be an amendment respecting fines as outlined in the bill. There should be a major amendment as to when this act shall come into effect. As it is now spelled out, the only part which comes into effect after royal assent is that which concerns takeovers. The other two portions of the act come into effect upon proclamation.
What does this mean? It may mean we will wait five months, six months, a year, two or three years before the act takes effect. The government may delay it indefinitely for five or six years. That is something I do not want to happen. I believe the act should take effect after royal assent providing, of course 50 or 60 days for the drafting of the regulations. I think parliament should make that decision and should be supreme, rather than the minister, the cabinet or the government.
There are a number of other amendments which I believe should be considered by this House. There is the one outlined by my leader yesterday concerning the definition of an eligible or non-eligible person. I believe we should revert to the definition in the legislation of last year, instead of selling out to some of the Conservative members, by increasing the number of non-eligible persons. More legislation is needed. I realize many other members have said the same thing. I hope that we will introduce very soon more bills to reverse the trend in this country toward foreign domination of our economy.
All one need do to recognize the problem is to look at a few of the statistics. We find that 57 per cent of our manufacturing, and 99.9 per cent of our petroleum and coal industries are in the hands of foreign concerns. In the extraction industries as a whole, in 1969 70.6 per cent was in the hands of foreign concerns. We lose jobs, we lose wealth and we lose some of the power to make important political and economic decisions for this country.
I should like to dwell for a few minutes on some of the consequences of foreign ownership in Canada and suggest five or six steps that I believe parliament and this government should be taking. First of all, in this situation we lose jobs and we lose the ability to plan our country
Foreign Investment Review
industrially and economically. I have referred already to the fact that we export raw materials and import manufactured goods and thereby lose jobs. We should be doing more processing in this country and more manufacturing. We should keep the jobs right here at home for Canadians. We should also be doing more specializing in our economy. Canadians do not specialize in anything. We are not like the Germans, or the Japanese in particular who since the Second World War have specialized in the electronics industry, in automobile manufacturing and in other industries that are labour-intensive.
This is what Canada should be doing. One way of doing it is by regaining control of our economy. Unless we do this, we will continue losing jobs in Canada because the parent company has to close a plant here, because of more and more protectionism in the United States, and because world competition for trade is becoming tougher. This is why we must repatriate our economy.
I remember very well two or three examples of our losing jobs directly because we have branch plants in this country. Last year, when the DISC plan was introduced by President Nixon of the United States, I remember very well an article in the paper saying that a branch plant of a U.S. corporation in Ontario that was producing toboggans was closing down, while the parent company in California was expanding because of trade restrictions here and incentives in the DISC plan for expansion of the U.S. economy. This was a direct transfer of jobs from the toboggan factory in Ontario to the toboggan factory in California.
There is an example in my own riding where there is the largest potash mine if the world, the International minerals Company of New Mexico. It is at Esterhazy. As we all know, there has been an oversupply of potash in the world and there is now more competition among the suppliers. What has happened? The mine must cut back on its production. It has two plants, one in New Mexico and one in Saskatchewan. In New Mexico they cut back to 90 per cent capacity, and in Saskatchewan to less than 50 per cent capacity; so it is we in Saskatchewan who lost jobs. If the mine had been Canadian owned, perhaps we would not have had to cut back to 50 per cent capacity and we would have had more jobs for Canadians.
There are examples of this in the field of research and development. Naturally, our scientists, our young people and our technicians are going abroad to where the parent plant is located, rather than doing research and development in one of the branch plants in our country. This situation could be changed if we had stronger legislation concerning foreign ownership in our country.
The second point I want to mention regarding the consequences of foreign ownership is that we are now losing more, in terms of exporting wealth and dollars, than we are gaining in new investment in Canada. I believe two years ago, or perhaps it was last year, the U.S. department of commerce issued a report saying that 94 per cent of the money invested by foreign and American-based corporations in Canada was Canadian money-in other words, 94 per cent of the funds that they invested in our economy was Canadian money-and only 6 per cent consisted of new funds that came in from the United States or elsewhere.

April 3, 1973
Foreign Investment Review
Therefore, what the corporations are doing is reinvesting their own profits, their own dividends, or they borrow money from Canadian banks and financial institutions and invest it for themselves in our country. They are taking your savings and mine, Mr. Speaker, and investing them to expand their enterprises in our country. I think some of these funds could be put to use by Canadian companies or through more public ownership of our economy, and more government leadership. We would have a much better economy as a result.
The other fact that came to my attention the other day was that between 1960 and 1969 we had in this country $5.5 billion worth of investment from the United States. Meanwhile, we paid out of this country to financial concern in the United States in terms of dividends, profits, interest rates, royalties, fees, and so on, $8 billion. We paid out $2.5 billion more to U.S. companies and concerns than came back in terms of new investment from the United States. I think it is ample evidence that something is wrong when we export more money and more jobs than are coming into our country.
Some people have said that our party is being hypocritical, that indeed the NDP governments themselves go to the United States to borrow foreign funds. That is true; some of our governments have. But the point I want to make is that there is a real difference between loan capital and equity capital, in terms of investment. I remember that when the hon. member for Nanaimo-Cowichan-The Islands (Mr. Douglas) was premier of Saskatchewan, the province developed the Saskatchewan Power Corporation which is publicly owned. If I am not mistaken, millions of dollars for the development of the corporation were borrowed in the U.S. money market. This was not equity investment; it was debt capital which is being repaid by the people of Saskatchewan. They have ownership and control of the Saskatchewan Power Corporation.
That is the type of thing we should be doing when it comes to foreign investment in our country. Every country in the world has a degree of foreign investment, but most countries have debt or loan capital rather than equity capital. It is as if you pay off a mortgage on a house and eventually own it. You certainly have control over the decisions that have to be made. Now I see that the Power Corporation in our province is making several million dollars a year in profit besides providing the Saskatchewan people with some of the lowest power rates in the Dominion of Canada. I think this is the direction in which we must go. This corporation is run on its own; it is not run out of the tax revenues of the province. It is a viable and profitable corporation.
I suggest that another source of revenue for Canadian investment would be some of the funds that are now invested by Canadians in other countries. Canada itself is somewhat imperialistic in economic terms. If you go down to Latin America, or countries such as Trinidad, Tobago and Jamaica, you see a high incidence of Canadian ownership and investment. I remember being in Jamaica two years ago, picking up a newspaper and seeing a headline reading "Jamaicanize the economy. Get rid of Canadian ownership." I remember being in Britain, standing on a street corner and seeing two or three Canadian-based multinational corporations.
[Mr Nystrom.]
Indeed, a great amount of money is going out of this country into other countries. Much of this money could be channelled into the development of Canada. We could also make better use of the Canadian Development Corporation, but that is an argument I will not get into tonight. We should also do more to control Canadian chartered banks, finance companies and insurance companies and use their huge pools of capital to develop our country.
One hon. member earlier in this debate said that the Canadian chartered banks have assets of $63 billion in this country and in other countries around the world, and that the Canadian insurance companies have $117 billion in assets in Canada and elsewhere around the world. Much of this huge source of capital could be put to work right here in Canada in order to help the country develop and control its own economy.
I believe that we have lost a certain degree of our political autonomy. There have been times when a degree of foreign ownership has affected political decisions in this country. We can recall the time when we were not allowed to sell flour to Cuba and trucks to China, thanks largely to the fact that the headquarters of certain companies were in the United States. A few years ago there was the question of potash sales from my province to China. I am informed that American ownership barred that sale as well. Foreign ownership has an impact on the decisionmaking process in this country. These are some of the reasons why I and the people in my party are very concerned about foreign ownership in Canada. I believe this bill will go part way to remedy some of these problems, if it is properly administered.
In the few minutes remaining to me I would like to outline a number of other things that the government should be doing. First, Mr. Speaker, there should be investment controls regarding foreign ownership. Most other countries in the world have them-countries such as Mexico, Japan, the United Kingdom, France, Denmark and Sweden. In some areas they entirely prohibit foreign investment, and in others they set a certain limit on the degree of foreign investment allowed in a particular industry. Canada should be doing the same thing. We should have regulations whereby the majority on the boards of directors must be composed of Canadians, and whereby the management of companies must be by residents of this country. These are some of the basics, or preliminaries that this country should have taken action on years ago in terms of controlling our economy.
I also believe-and this is where some of the Conservatives will disagree with me-that there should be a great deal more public ownership of our economy in key areas such as resources, financial institutions, transportation and public utilities. These are some of the basics in our economy that should be owned and controlled by the people of Canada. These areas should not be exploited by others, and our people should not be exploited when they use the services provided. I believe that Bell telephone should be owned by the people of Canada because it provides a service. Organizations like Bell telephone should be prevented from exploiting the people of this country.
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I believe we must reform the taxation system. Again I go back to the remarks of Eric Kierans when he was a member of this House, talking about the horrendous loopholes of which some of the corporate welfare bums in the extraction industries take advantage. I have before me some figures that were prepared about a year ago by the provincial department of finance in Manitoba. They show how the extraction industries take advantage of tax loopholes. They show the proportion of profits on which companies have paid taxes during the last ten years.
From these statistics we find that retail merchants pay taxes on about 90 per cent of their profits. Like workers and farmers, they are taxed on almost everything they make. Wholesalers pay taxes on 87 per cent of their profits. The construction industry pays taxes on 77 per cent of its profits. Manufacturing industries pay taxes on about 65 per cent of their profits. Then we get down to the mining companies, which paid taxes on only about 13 per cent of their profits in the last ten years. The gas and oil companies paid taxes on only about 5.7 per cent of their profits in the same period. From these statistics one can see the tremendous incentive there is for capital to go into the extraction industries, into mining resources and the development of gas and oil resources. All these industries are capital-intensive. They do not provide many jobs for Canadian people and they do not help to develop our country. The taxation system should be rearranged so that the extraction industries engaged in the development of oil, gas and mining would have to pay much higher taxes. This would encourage more funds to go into the service industries and into manufacturing.
I believe there should be a tax on the export of raw materials from Canada to the United States and from Canada to any other country. There should be more coordination between the provinces and Ottawa regarding the development and processing of raw materials in our country. Another suggestion I would like to make to the government-again, the hon. member for Windsor-Walk-erville shrugged this aside earlier today-is that we use some of our foreign exchange reserves in order to buy back from foreign concerns some of the key areas that will be important to the development of Canada in the future. If I am not mistaken, we have about $5 billion in American currency and gold sitting in the vaults of the Bank of Canada. A part of this, say $2 billion, $3 billion or more, could be earmarked to buy back part of our economy.
Another suggestion the government should take seriously is that it should cease giving government grants and aid to foreign corporations in Canada. One of the Conservative members referred to this question earlier today. The government hands out millions of dollars of tax concessions, depletion allowances and grants to foreign companies in Canada each year, to the detriment of the Canadian economy and the Canadian people. I would like to quote a few statistics to show the seriousness of this problem. We find that since the inception of the DREE program, over 50 per cent of the grants made by the Department of Regional Economic Expansion have gone to foreign companies. We find a large proportion of the activity of the Canada Development Corporation devoted to assisting huge, foreign, multinational corporations. We find that under the Industrial Research and Development
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Incentives Act, known as IRDIA, 39 per cent of the grants have gone to foreign companies. Under the advancement of industrial technology program, known as PAIT, 45 per cent of the grants have gone to foreign firms and foreign companies. Under the defence industry productivity program, 86 per cent of the grants have gone to foreign companies and foreign concerns. This type of activity should stop: we should cease to give grants and handouts to foreign-based companies.
There is another area on which I want to comment briefly, that is, the field of culture. I believe this is very important in terms of developing a country that is truly Canadian. We have had some leadership from the government of Canada, in terms of Canadian content in broadcasting and regulations specifying 80 per cent or more Canadian ownership of radio and television. Measures like this can be taken in other areas of importance, both in the cultural and the economic fields.
I believe that the book publishing industry is one that should be totally controlled by Canadians. There should be more encouragement given to Canadian writers, artists and magazine publishers. This is the area in which the cultural identity of a country is developed. It is an area that is very important to the development of students and young people. I remember as a child in elementary school that I knew more about Lincoln and Jefferson than I knew about former prime ministers of Canada such as Macdonald and Laurier. I remember students finding American history more exciting, more dramatic than the dull Canadian history they had to memorize for examinations. A lot of this could be changed if we put more emphasis on areas such as book publishing and writing. In this way we could develop a Canadian society with a distinct culture separate from that of the United States.
Earlier today I mentioned that French Canada is a great exception in this respect. There they have their own language, their own culture, their own writers, their own singers, performers and artists. All of this is a tremendous credit to Canada and to French Canadians. There are many other areas in the social and cultural fields that Canada should act on soon. Today in the House a question was asked by an hon. member about the degree of foreign ownership of hockey teams in the National Hockey League and the WHA. That is another area being exploited by big American business to the detriment of Canadian hockey players and Canadian hockey in general.
I should like to conclude by saying that if we act positively, Canada will be much better off in terms of jobs provided, in terms of planning our economy and the country, and in terms of the wealth we will keep in Canada. We have the funds to develop this country. Any foreign investment that comes in should be debt or loan capital, so that we control all facets of our economy and develop it for the benefit of this country. Only then will we be able to tackle some of the problems of national unity and regional disparity. Only then will we be able to face the problems of unemployment and inflation.


Mr. Deputy Speaker:: Order. I regret to interrupt the hon. member, but the time allotted to him has expired. The hon. member for York Centre (Mr. Walker).
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Mr. I. E. Walker (York Centre):: Mr. Speaker, this subject is one of great importance to all Canadians. It has been talked about for 50 years or more in successive Canadian parliaments. I am very grateful to the various associations and individuals who is the last few years have generated some public opinion to the extent that the government of the day has now produced what has been called a first step toward what I hope will be the eventual ownership of our own country and political destiny.
I do not propose to quote statistics tonight, Mr. Speaker; we all know them. I have been interested in this matter for many years and I know there have been cries of alarm in the past about the statistics that have been given. I have here an article from Maclean's magazine of 1962. At that time we were given 40 months to make or break Canada. The 40 months are up, another 40 months have passed and we are still here. I do not think we are ever going to have as much time again to make this great national decision that we must make.
I should like to congratulate the minister and the government who have faced this matter and brought it before parliament. For the last 50 or 60 years, successive governments of all political stripes have turned their backs on this subject. I am very pleased to support a government that has brought in this measure, although in my opinion it could be strengthened and made more purposeful and it should not be too long before some of the action provided in the legislation is taken.
Many good speeches have been made on the subject in this House, and there has been a great deal of reference to the visit of the President of Mexico. I do not know whether it was coincidental or by design that on the very day this bill was presented for second reading, the President of that great and courageous country gave us some good advice about the subject we are tackling now.
In a few days it will be the seventh anniversary of one of my speeches in the House on this very subject. I thought I could do no better than refresh my memory and perhaps the memory of some members who were in the House at that time. I am sure this is an emotional issue if we are to make the national decision that must be made. The pros and cons on both sides of the subject have some emotional content, and I do not think we are ever going to arrive at a national consensus if the decision is made only on the basis of emotion. There are many more practical things to say.
I see my friend the hon. member for Gander-Twillingate (Mr. Lundrigan) wishes to rise on a point of order. Or does he just wish me to carry on, Mr. Speaker?


John Howard Lundrigan: Make a new speech; don't read the old one.


James Edgar Walker: The hon. member for Gander-Twillingate will enjoy this because he is a very intelligent person and usually listens very carefully to anything said from this side of the House. Just to show how ageless and yet how timely this whole subject is, I should like to refer to the speech I made in 1966. It could well have been made by any member who spoke today and be totally relevant to the bill before us. At page 3993 of Hansard of April 19, 1966,1 said:
The issue I bring before the House, Mr. Speaker, is the whole

question of the extent of foreign ownership and control of Canadian resources and industry in 1966, one year before the celebration of our hundredth birthday. Are we quietly strolling down the road to national oblivion? Is there an inherently dangerous relationship between massive foreign ownership and economic and then political sovereignty?
I spoke earlier, Mr. Speaker, of the desirability of communication and public discussion of national goals and projects. If ever a question of the greatest public concern cried out for the broadest public discussion right now it is this one.
As an aside, Mr. Speaker, I again point out that the public discussion that has taken place in the last few years through associations such as the Committee for an Independent Canada and through the work of some individuals, is what some of us were calling for seven years ago. I continue:
I should like to see the Canadian people committed one way or the other by the time of our one hundredth anniversary a little over a year from now. What will we be saying as a nation on July 1, 1967-"We wonder what is going to happen to us by 2000 A.D." or "We know what we will make of Canada by 2000 A.D.?"
I believe this is the major issue of the day.
I believed it then and I believe it now, seven years later, Mr. Speaker. I went on:
Really it is the only issue because, until it is faced and settled for generations to come, discussions of other matters including budgets, are academic. We may be spending money for nothing. The moment of truth has arrived for us as a nation and as individual Canadians.
I said when I commenced these remarks that I was not going to speak about statistics. Everyone knows the statistics. I want to talk in broader, philosophical terms on this subject. I then said:
The conscious settlement and decision of this issue in our heads and hearts could prove to be our salvation as a united country. It could lift us out of our introspection and destructive self-criticism, this pulling up the flower to see if the roots are growing. I am convinced that the spiritual resources of most Canadians in every province are more than equal to the challenge and responsibility of owning Canada. This is a big enough challenge to stir their loyalty; this is a great enough goal to enlist their devotion. It is though enough to use all their muscles and energy and creativeness; it could be the moral equivalent of war for a peace-loving people.
Then later:
The first question to decide is whether economic and political domination follow large foreign equity ownership of a country's economy. Where is the danger point? The second question is: In this interdependent world how do we handle this problem without becoming selfish national isolationists, without giving ideological comfort to the enemies of freedom and individual liberty, without making enemies of traditional friends and allies whose friendship is valued and unquestioned?
Our aim should be clear: under our own ownership and control to make the greatest contribution our talents allow to the awakening of the sleeping Canadian giant and then, in full co-operation with all nations, to work for equality of opportunity with all nations, to work for equality of opportunity and justice through the rule of law for all human beings, black, yellow or white.
There are those, Mr. Speaker, who believe that Canada can accomplish these aims by becoming economically integrated in the North American complex. By submerging or erasing borders we become part of a larger unit. This thinking, which is represented on both sides of the forty-ninth parallel, has come to be known as continentalism. Those who see more good than evil in foreign ownership penetration into Canada's economy have been called
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continentalists. For want of a better word those who take the opposite view have been called nationalists-economic nationalists or political nationalists. I prefer the word "Canadians."
Fundamentally-and I hope I am not simplifying this to much- a continentalist seems to think, consciously or otherwise, that whatever is good for North America is good for Canada. He sees no direct relationship between national self-determination, economically, politically or culturally, and the eventual total integration of Canadian and United States economies. If figures mean anything, then the present rate of takeover of Canadian resources, business and industry can lead only to that end. If there is no danger to Canadian nationhood in such an intertwining, we are very fortunate people. However, if there are unknown contingent liabilities involved in such an arrangement which affect all living Canadians and those yet to come, then we are embarked on a hazardous adventure. Those who have done any thinking at all about Canada's future must surely ask themselves: What are we getting into?
It is time, Mr. Speaker, for the fullest and widest public discussion from coast to coast about this whole matter.
I again congratulate the minister and the government for giving all Canadians the opportunity to discuss this subject. I would like to see seminars and public meetings across the country so that a consensus can develop. Otherwise, even the small measures in this legislation could prove to be divisive. I want to say something later about that in terms of the Canadian east and west. To continue, Mr. Speaker:
I ask my generation to answer these questions: Are we giving away our past which we did not earn, and our future which does not belong to us? As temporary custodians of this entity called Canada, have we the right to sell the family assets without reference to our heirs?
If we Canadians can have the best of both worlds, economic and political control of our country plus unprecedented prosperity through foreign equity investment, then everything is coming up roses. I do not believe we can. The hard, cold fact of financial equity investment is that political power is always used eventually to protect that investment.
That has been the history of equity investment in every country in the world when the investment has been made on the part of other countries. As a former speaker mentioned, Canada is not without blame in this whole question of foreign ownership. If we are not careful we will, quite rightly, be coming under the same scrutiny in other countries, particularly those in the Caribbean, as foreign investors in Canada are now coming under. More wars than enough, under the guise of battles for freedom, have been fought to protect the interests of nations who have an equity investment in smaller nations. I again quote:
We are naive to think otherwise. All the weeping and wailing and gnashing of teeth will be to no avail if we wake up some morning and find we have lost the right to make our economic and political decisions for all time. And we will have no one to blame but ourselves-not the Americans, not the Japanese, not the Germans, just ourselves. It makes much more sense to me to ask individual nationals of other countries to come here and help us develop our nation from within as Canadians than to import dollars and have them develop and control it from without as non-Canadians.
In terms of labels, it is already clear I am an economic nationalist. I believe that whatever is good for Canada is good for North America and the world. I want Canada to be able to speak forever with all the power and freedom of a nation in full control of its future. This does not preclude collaboration and the fullest cooperation with other nations whose aims are compatible with ours. It does mean that we are under economic obligation to no one to compromise our convictions or destroy our destiny. Who is going to develop and own Canada? Other people or Canadians?
Foreign Investment Review
When I spoke on this matter in 1966 I quoted statistics which, seven years ago, were very alarming. I quoted 1959 figures. The rubber industry was 90 per cent foreign owned, and the pulp and paper industry 38 per cent foreign owned. The figures quoted tonight by an earlier speaker point out that because nothing has been done in the intervening years, the figures have increased alarmingly.
I again say that I am glad the government has given us this opportunity to focus our attention on this problem. It is now time for Canadians to decide, because a decision will have to be made for their future. I personally believe that this legislation is as far as we can go at the moment without being divisive. The legislation before us can be a forum for the kind of public discussion which should lead to a national decision.
I completely understand the feelings of western Canada and the Maritimes in this matter. These parts of Canada do not have a pool of capital for their development. They have had to go outside their borders for the simple reason that the great province of Ontario, where I now live after having lived in the province of Alberta for 28 years, with all its wealth has seen fit to use its money for other purposes than to encourage and assist other parts of the country in their development. That is why I say that only a very small step can be taken at this time because of the necessity for capital in the west that is not forthcoming from Ontario. I believe the maritimes are in the same position. Therefore, certain parts of Canada are opposed to any type of control that will stop foreign capital from coming in to assist them to develop to the point where they will become as rich and powerful as the province of Ontario.
I would like to see something done, possibly through taxation measures, to assist in achieving this type of broader national prosperity across the country. Frankly, I do not know what can be done without changing the political system under which we operate. Do we want a government that has the full authority to say to all Canadian people that all the money we need to develop our country is now in Canada? Do we want an authoritarian government that will say to Canadians they must not ship their money out of the country, even though they can get a better deal by buying American stocks and bonds rather than Canadian bonds? Surely there could be some small incentive for buying Canadian bonds. Tax-free interest on Canadian bonds would be some incentive, with no great loss to the treasury. I believe that some of these things will have to be done in order to back up the type of legislation now before us.
I believe that the extreme parts of the country might then be more amenable in understanding the problems involved in the loss of political sovereignty. If those other parts of Canada assent, then at least the central provinces should assist them financially in bringing about development which is needed. These are some of the aspects I should like to see the government look into and, maybe, do something about.
One other point. I believe legislation along these lines can only be successful in this country if it has the support
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of Canadians in all geographic regions. A national will must emerge, and the first small but reasonable steps taken in this bill might provide the spark necessary for the debate which should take place right across the country. Since this issue affects us all, action must be taken in a way which will not disturb national unity. We should bear in mind that there are two types of criticism of this bill. Some say it goes too far and others say it does not go far enough. This illustrates the lack of consensus about what needs to be done now and in the future. If agreement is reached some day that we must place ourselves in a position to exercise our sovereignty, action must be taken in a way which would bring all Canadians together in a great national adventure of true nationhood. Then we could be of help to other nations to a far greater extent than at present.
Again, I congratulate the government. I want to congratulate all the speakers I have heard and read in this debate so far. We are all very concerned about this question and I hope the principle of what we are trying to do in this bill will be accepted. There may, of course, be disagreement as to the method and the tactics employed, but I very much hope that everyone will understand the basic reason for bringing the bill forward-the strengthening of our country so that it can fulfil the promise we all predict for it. This is why I hope there will not be too much criticism of the measure on political grounds merely because it happens to be a bill brought down by the present government. It might just as well have been brought in under the government of the right hon. member for Prince Albert (Mr. Diefenbaker), or it might have been introduced back in the days of Laurier or St. Laurent. It was not.
The time has come when the Canadian conscience wants this type of debate to take place so that all the facts can be brought out in connection with a national consensus or decision as to where we are going.


Some hon. Members:: Hear, hear!


Mr. Bill larvis (Perth-Wilmot):: Mr. Speaker, the minister, when introducing Bill C-132 on foreign investment last Friday, seemed so overly preoccupied with the Conservative position on the matters raised in this legislation that I feel compelled to spend a few minutes at least in trying to soothe his sensitivities. The minister will not find us quarrelling with the general purpose of this bill as set out in clause 2(1) thereof. Who, indeed, is not vitally concerned with the ability of Canadians to maintain effective control over their economic environment? The hon. member for Trinity (Mr. Hellyer) has reflected our concern and has said that the bill should be sent to committee for study.
I would suggest through you, Mr. Speaker, that the Minister would have had much less to apologize for last Friday had he made some attempt, however meagre, to admit that this bill is but a part of a very small short-term answer to a very large, long-term problem. I assure him that all concerned Canadians have looked to him for a range of programs to achieve the solution to these problems, and I hope he will appreciate the disappointment we must feel when all we hear from him is an ad hoc reaction which cannot be, and is not, a satisfactory substitute for long-term, forward planning.

When business in this country looks for positive economic incentives, the minister surely cannot be surprised with their disappointment at finding penal measures. We are a positive and industrious people, Mr. Speaker, and if there need be a Criminal Code for foreign-controlled business, let it play but a minor role in our total federal program; let it merely support the fundamental thrust of positive encouragement of Canadian business.
Let it also be a hallmark of this thrust that the federal government can no longer continue to operate in a vacuum. Surely the minister must agree with the Conservative position that this type of legislation dictates federal-provincial consultation and co-operation. Some could say that to bring Bill C-132 forward without having consulted the provinces is bad manners, Mr. Speaker. It is more than that-it is bad business. Therefore, I say to the minister that he need not have been so preoccupied with our position had he given us some reason to believe that he subscribed to but three basic fundamentals: First, that this legislation is but a minor part of a comprehensive business program, which the minister should be obliged to outline in detail; second, that the over-all program will be one which embodies a positive encouragement for Canadians; That he will retreat from his unilateral position and consult immediately with the provinces.
In my riding, Mr. Speaker, there are many companies which are foreign owned and I, for one, am happy to see that the government has not succumbed to pressures from some quarters to embark upon a corporate witch-hunt. A test which we have used in our communities with some success could be classified by some as a moral test. We have said to all members of our business community: Are you a good corporate citizen? Are you discharging thf responsibility which inevitably accompanies the freedom you enjoy to be a part of this community? The test, Mr. Speaker, has been one of responsibility rather than nationality.
I can appreciate and share the concern of all Canadians when they hear of takeovers, forced sales and similar transactions. Of equal concern, though, is this government's apparent willingness to react in patchword fashion to these economic pressures. This indeed, Mr. Speaker, gives business, regardless of where control lies, lack of confidence in government. Business is saying to itself: What will be the next step in this Liberal-NDP alliance? In finding itself in such a vulnerable position, should any business, especially Canadian-owned business, engage in long-term expansion plans? Surely it is not unreasonable for all business to ask whether in future we shall continue to engage in an adversary system of business/government relations.
The hon. member for Trinity has called for an imaginative and dynamic economic structure. I am proud to subscribe to his presentation enthusiastically and with confidence, and I wish to speak today for a group of Canadians who are anxious to participate in this structure. I wish to emphasize the forgotten Canadian businessman who until I came to Ottawa I knew as the small businessman but who, for clarity's sake, I will describe as the very small Canadian businessman-the proprietorship, the partnership, the very small incorporated company. These people do not have $250,000 in gross assets. Their revenues do not
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exceed $3 million, and quite likely never will in my lifetime, even given our present rate of inflation.
They employ, on the average, much less than 100 employees; indeed some of them only employ the husband, his wife, and the kids when they get home from school and on weekends. They are in every phase of our business community-retail, wholesale, manufacturing. They are people who work 12 and 14 hours a day, six and seven days a week, and take so little out of their business that many months provide them with less than the minimum wage. They reinvest their profits daily so they can buy a more efficient piece of machinery or a second delivery truck; and, Mr. Speaker, whether this government believes it or not, they are willing to continue to do so provided they can see a ray of light or a hint of encouragement from this government.
So they look to the Minister of Industry, Trade and Commerce (Mr. Gillespie) and what he had to say to and for them in this House last Friday. He said, Mr. Speaker, a grand total of six lines out of the hundreds and hundreds of lines of his speech in the official report of last Friday's debates. What were the minister's words? Let me quote from page 2780 of Hansard:
In closing the catalogue, I should like to refer to new proposals which I am preparing in order to provide additional special assistance to small business. This is the sector which employs most of our work force. In my view it is the sector which generates most of our new products and services.
This apologetic afterthought is all the minister can offer to those whom he calls the sector that employs most of our work force, the sector which generates most of our new products and services.
The leader of the New Democratic Party has accused those in this party of selling out "to the wealthy, the rich and the powerful corporation". The people for whom I speak are apparently unknown to the hon. member. These people and the companies for whom I speak are not the wealthy, the rich and the powerful; they are the overtaxed, the discouraged, and the bureaucratically controlled Canadians who are buried in government inspectors, government forms, government reports and government regulations, who are finding it hard to find the time to be good Canadians, let alone good businessmen, because of government pressure and because of neither government encouragement nor understanding.
The leader of the New Democratic Party says that all the hon. member for Trinity proposed last Friday will be at the expense of the Canadian people. Mr. Speaker, those for whom I speak are that part of the Canadian people which the hon. member for York South (Mr. Lewis) will doggedly and blindly crush if he continues to exert his control in his alliance with this government. These small business people look to this government to be pro-Canadian, not anti-foreign. However, they would likely support Bill C-132 if it was evident that it was but a minor part in a total, positive economic program.
Not one of these vital citizens in my riding of Perth-Wil-mot, be he personal or corporate, is looking for a government hand-out, although most would agree that the $1 billion this government spent to bail out the unemploy-
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ment insurance fund was the result of economic mismanagement, and that had that amount been spent over a period of time in economic incentives a few years ago, the UIC fund never would have become overdrawn.
So when these people, who are the heart, the soul and the backbone of many Canadian communities, see this foreign investment review bill presented to the House without any indication of other positive incentives to Canadians, they must wonder if this government has any idea of their position, where they are overtaxed, have limited access to capital and are being destroyed by high interest rates.
Small business wants and deserves the opportunity to play its role in expanding the economy and providing employment, and I suggest that any government which denies them this role is doomed. Surely, Mr. Speaker, we cannot accept a business climate where the business failure rate in Canada last year was the highest since 1932. This year brings no better news, for in January there were 217 failures, compared with 177 a year ago-an increase of 17 per cent. And this government must assume its share of the blame for this unacceptable situation. As the leader of my party said last fall:
It is characteristic of the government today that its preoccupation with its own size and power leads it to ignore those it considers of relative inconsequence. Attempts at tax reform led big government to ignore the total interests of small business. And yet, small business in this country generates more employment, more real growth, and more tax revenue, and bears more of the cost burden of government than does the so-called big business.
The minister, with some justification, may accuse me of enjoying the luxury of opposition which provides me with this opportunity of telling the House that this ad hoc, penal bill is inadequate in face of the demands for positive, economic incentives. Therefore, I wish to itemize only three areas in which a Conservative government would meet these demands. I hasten to point out that there is no reason why the minister should not imitate his colleague, the Minister of Finance (Mr. Turner), in adopting Conservative programs, although I would hope he would be inclined to be more courteous than the Minister of Finance and acknowledge their source.
In any event, the first program would involve the orderly transfer of ownership of the small family business within the family. We should investigate the elimination or changing of capital gains tax for this transfer, since I suggest to the House that the capital gains tax produced in these family transfers would not be sufficient to pay for the bureaucracy costs in having inspectors, accountants and others running around the country trying to figure out the necessary valuations and making them stick, any more than these costs can be met by the capital gains tax revenues resulting from the transfer of family farms.
Therefore, if the minister chooses to take advantage of our suggestion of considering the elimination of capital gains tax for the transfer of the small family business to a son or daughter, I wish him more success with the Minister of Finance than that enjoyed by the Minister of Agriculture (Mr. Whelan) who wound up with the incredible situation of telling this country's farmers that they have to die before an orderly transfer of the family farm to their children can be affected. It would also be a Conservative government's responsibility to consult with the

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provinces regarding the effect of death duties in this area. I suggest to the House that we simply cannot sit here and justify, on any logical basis, a forced sale of a family business because of capital gains tax and death duties.
Our second program would be small business services and incentives. Under this program we would emphasize managerial and technical assistance, as well as assistance through research and development, where present government programs, no matter how well intended, are simply not reaching, let alone assisting, our small businessman. In most cases, not only are they not available to him; he has never been told of them and is not likely to be. Also within this second set of programs, we in the Conservative party are committed to the procurement of government contracts for the supply of goods and services by small businesses so that they receive a fair share of such contracts.
Finally, under this second area of our programs we would introduce the Canadian investment credit incentive, a tax incentive for small business. We acknowledge immediately that the cost to government in the first year would be from $100 million to $300 million, but again I emphasize that this is preferable to having to spend $1 billion in rescue money for unemployment insurance. As the House knows, Mr. Speaker, this program is designed to encourage Canadians to invest in small business risk ventures and, by doing so, to create jobs. It will be available to any Canadian who makes a direct investment in the equity of Canadian-owned small business. The credit, which is 50 per cent of the investment, with an annual maximum of $5,000, will be offset against the investor's income tax or rebated directly to him. This means that if a Canadian invests $1,000, for example, in a qualified business, he will receive a credit of $500 against his income. The credit is repayable only if and when the Canadian realizes on his investment.
The third and final set of programs deals with borrowing. When presenting Bill C-132, had the minister even hinted that a substantial portion of our problem of foreign ownership was the direct result of a banking policy which encouraged foreign investment, while at the same time discouraged Canadians from expanding, he would have received a more sympathetic hearing.
I submit to the minister that as long as Canadian lending institutions are eager to provide funds for the foreign takeover of a business, while at the same time the same institution denies the same funds to the Canadian owner of the same business, fifty bills of the ilk of Bill C-132 will not solve the problem for him. If the minister is of the opinion that these are isolated cases, I urge him to consider the speech in this House by the hon. member for High Park-Humber Valley (Mr. Jelinek) on January 16 of this year.
Also under the heading of borrowing, I would suggest that while prime lending rates are around 61 per cent, this government's one and only answer to Canadian small business is its Industrial Development Bank, with interest rates at 11 per cent and 12 per cent. This, Sir, is no answer at all. A Conservative government would have no hesitation in exercising moral persuasion or even stronger mea-
sures, including revisions to the Bank Act, when dealing with our chartered banks, and we are committed to making the Industrial Development Bank play a more meaningful role in our economy.
These, Mr. Speaker, are but three of the programs we would undertake to assist the small businessmen I am pleased to represent. They are positive measures of incentive and assistance. We will send Bill C-132 to the committee for its careful examination, but we in the Conservative party consider that this negative reaction to a serious economic problem is no substitute for strong, imaginative and positive measures of incentive and assistance. [Translation]


Mr. Henry Latulippe (Compton):: Mr. Speaker, I am pleased to say a word about bills such as the one now before us which, to be quite candid, is very important.
Mr. Speaker, if Canadians all had the opportunity to be here we would hear much comment and would find out more about the bill and the economy in general.
We are wondering, Mr. Speaker, what the real economic trend is. Economy nationalism as mentioned by the minister and hon. members of other parties, is impossible without economic reform under the label of the present monetary economic dictature unless we can buy back the control of our economy.
The purpose of the bill before us, Mr. Speaker, is not to prohibit, but merely to examine and recommend certain measures, to control certain facts according to certain criteria. As a screening agency has been set up to this end, it will be authorized to submit recommendations as to whether a certain course of action is to be authorized or prohibited. It will certainly not be very efficient and I do not believe we can rely on such an agency to solve our problem, which is Canadian rather than international.
The bill, Mr. Speaker, deals with take-overs through new investments and control of expansion of existing foreign companies into unrelated areas. Finally the bill is a screening agency for authorization or prohibition of investments, foreign or otherwise.
I consider that the bill should provide for injection of the capital required for our companies to obtain exclusively Canadian funds for the development of Canadian economic resources.
In this way, Mr. Speaker, our raw materials could be processed here by Canadians with Canadian capital. We all know that we are exploited at 80 to 90 per cent by foreigners, but we do nothing to provide the capital as it is needed by funding our economic development credits on the same Canadian values as foreign and international financiers do for their credit.
Economic common sense, Mr. Speaker, calls for our capital to be based upon our own actual values. If a well integrated economy is to succeed, any new project requires new reimbursable credits at depreciation costs only. It is the only extreme and efficient means that will allow Canadians to gain control over their country.
The New Democratic Party is justified in saying that foreigners develop our resources to profit from our own assets by issuing credits for that purpose. We have only to do likewise through our financial institutions which are
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well established, well structured to do the job. We need only give them the necessary orders and to take action.
Mr. Speaker, our technology should be an instrument of progress at our disposal. The economic clock should not be short of figures.
The economic clock, Mr. Speaker, has all the necessary figures. It operates and figures are added, multiplied, divided and subtracted.
If the clock has all the figures required to give us the correct time, our economy-which is a clock-must absolutely not be short of figures to let us have the capital we need for our economic development so that we may become our own masters.
Mr. Speaker, from the point of view of foreign investment, the world today is split into two groups, because of the different monetary systems which are mutually exclusive. Each group is controlled by a dictatorship working through a monopoly.
In the western countries, this is a financial dicatatorship that works through the monopoly of capital. We come under this domination.
In the communist countries, it is the dictatorship of the state, working through the monopoly of property and of all material assets; each group fears the other, and the reaction in each case is intensive research and development of highly secret and highly terrifying tools of destruction, in the name of liberty and patriotism.
Mr. Speaker, we must abolish this dictatorship in both systems and make money democratic, a tool to serve us rather than a dictatorial god. The New Democratic Party wants to reverse this monetary decentralization. If this is not done, the two dictatorships will soon be at war, and will thereby destroy all the civilization that man has built so arduously and so slowly.
We must bring the politicians of western countries together, to take steps to set up an honest financial system, in which money will retain its value, and both businessmen and the man in the street will be able to look forward to the future confidently, without fear of a depression or of a financial crisis, without having the sword of Damocles hanging over their heads; for at the moment, governments have a stranglehold on them through income tax and all other kinds of taxation.
We must build a society with sufficient capital for all Canadian developments to adapt to prevailing conditions using capital that is truly Canadian. In this way, we will become masters in our own house.
Mr. Speaker, as the average industrialist, the small industrialist is being entirely exploited by all sorts of tyrants. Interest rates are too high; our industrialists are dishonourably and I would even say dishonestly exploited. The government itself through its taxes and also IDB's financing at excessive interest rates is also exploiting small and medium business by its dictatorial financial means always to fatten the same institutions at the detriment of workers and small businesses which find it so hard to survive.
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Our industries are still standing up because they are indebted right up to the nose, because they resort to loans at extremely high interest rates and because if they also want to finance the storage of goods they must under formula 88 of chartered banks pay 10 to 12 per cent interest for the storage of goods they often have to sell at a loss to pay the advances they received from financiers and the interest on those amounts.
Those small and middle businesses are thoroughly exploited and if they cannot be successful now it is because the prices of their products are too high and they cannot produce at a cheaper cost. But it is mainly because they do not find buyers for their products as the limited purchasing power of Canadians does not enable them to pay for them. Manufacturers have to store their products at great cost, with the help of finance, which requires an 8, 10 or 12 per cent interest. All that adds to the cost of living and small and middle industries find it increasingly difficult to keep their business and be masters in their own house.
As for international affairs, finance is certainly based on actual credit, on the real values we have to offer. If foreign concerns come here to develop our natural resources, it is because they are the ones who guarantee credit issues made for that purpose, mainly and exactly on the credits we have and which they are going to exploit for us. Therefore, if foreigners are able to develop our natural resources in that way, we Canadians can certainly take advantage of existing institutions to finance our businesses and base our credits on our country's same values, so as to enable the Canadian people to develop more, to regain control over their economy, for it was because of that despicable finance that we lost the control of our economy.
If indeed foreign corporations have made inroads into 80 and 90 per cent of our economy, it is because we let them do so. We only have to regain control over our business and follow their example to become again our own masters. Gradually, we could develop anything in our country. We could enable any industry to operate inasmuch as we provide the necessary capital with reasonable rates of interest and as long as the citizens have the necessary purchasing power. We could then develop our resources and become real Canadians controlling our natural wealth.
If we have to import capital, it should be technological capital. If there is a lack of technological means for our future development, we should be in a position to import some and pay proper salaries to technicians in order to ensure our expansion.
We can resort to foreign technicians, if we are short of technicians. We would then import the human resources that we might need. We have the necessary means to import such capital, to pay the technicians; in so doing, we shall be able to keep ownership of our assets and to safeguard our legal and fiscal rights.
The point is to put that same human capital at our service. The Minister of Finance (Mr. Turner) has only to so decide, jointly with the Right Hon. Prime Minister (Mr. Trudeau) and the leaders of the other parties. We can take any decision. Provided something is materially possible, we must make it feasible by way of a well-balanced,

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well-synchronized, well-controlled and well-adjusted economy.
Mr. Speaker, in order to produce heat, a furnace must be well-adjusted and equiped with thermostats designed to ensure comfortable living for the community.
Such is the way we can grow and develop, because we have got everything we need. Therefore, Mr. Speaker, there is no use wasting our time, blaming foreigners and adopting legislation to prevent them from coming and investing here. Let us settle down to work and let us use our economic tools for the good of our economy; each and every Canadian will fare better from it and will eventually become master of his own destiny.


Mr. Paul Yewchuk (Athabasca):: Mr. Speaker, the stated intention of Bill C-132 is to keep effective control of the Canadian economy in Canadian hands. Taken by itself, this principle is something with which I think we all agree. But it seems to me the bill does not do that; it does not contain a mechanism to achieve this goal. The main thrust of this bill is typical of NDP and Liberal philosophy, namely, that the economy can be regulated through restriction in the negative sense.
The previous bill which was presented by this government a year ago was essentially of the same nature. It was designed to stop something from happening, namely, to stop the takeover of existing businesses by foreign enterprises, rather than to encourage something more desirable to happen. I think that puts in a nutshell the basic difference between the Liberal and NDP philosophy and the Conservative philosophy. They believe in restriction, and we believe in encouragement. That is a very significant difference.
The new bill, however, contains an innovation to deal with the establishment of new businesses. In general, one can easily say that this bill does not come to grips with the problem of foreign ownership in this country. It does not propose to do anything about the major portions of our economy that are already in foreign hands. In addition, the Gray report in 1969 showed that massive increases in foreign ownership within this country occurred as a result of the expansion of existing, foreign-controlled enterprises. This expansion, of course, is untouched by Bill C-132 except in the case where a foreign-controlled company may be expanding into a new and unrelated business. The present bill, therefore, is no substantial improvement over the previous one, since it is obvious that a policy ignoring this kind of expansion of existing, foreign-owned companies, which is in fact the largest contributor to the growth of foreign ownership in this country, obviously touches only the periphery of the foreign ownership problem.
Few issues before the Canadian public in the past ten years have aroused so much interest as the question of foreign ownership, and as well few issues have been treated with as little effort to resolve it by the government as that of foreign investment. To say the least, the approach so far has been one of ad hoc reaction. A review of the figures shows that in the production and manufacturing sectors, 99.7 per cent of petroleum and coal products, 81.3

per cent of chemical products, 93 per cent of rubber products, 87 per cent of transport equipment and 72 per cent of machinery manufacturing are owned by foreign enterprises; and many others are 50 per cent or more foreign owned.
Public opinion research has shown a steady increase in the feeling among Canadians that foreign investment is a bad thing, and there has been a simultaneous decrease over the past few years in the number of people who feel that foreign investment in this country is a good thing. It would appear that rejection of foreign investment has been the least pronounced in the maritimes but varies somewhat in other regions of the country. Because of this, the policy must be developed in close consultation with the provinces, to ensure that the provinces are consulted and that regional differences are taken into account. While there is a clause which provides that industrial and economic policy objectives enunciated by the provinces would be taken into consideration, the bill sets up no guidelines by which the provinces will be consulted. It makes it possible for provincial issues to be taken into account, but any provincial consultation that could occur will be inconsequential to the bill itself.
If one looks at the unemployment figures in the various parts of the country, it becomes obvious why the concern for foreign investment varies. If it is a choice between having no job at all or having a job created by foreign investment, obviously Canadians would go for the job created by foreign investment. With that in mind, many factors have to be taken into consideration besides the emotion of economic nationalism. At best, the present proposal is a piecemeal approach which falls far short of the kind of decisive action that would be required to put Canada's economic future in Canadian hands.
This new bill suggests that government policy in this area is foggy, to say the least. The Prime Minister (Mr. Trudeau) once indicated that a foreign ownership policy would be complete enough to be an immediate guide for business decisions once it was announced, and that people would know how to conduct themselves from the day the statement was made. On reading the bill, can one really say that this kind of guide to business is being offered in it? I would say the answer is no. The uncertainty is still as great as ever.
The government is only playing games with nationalism by using vague phrases such as "significant benefit to Canada" which strike me as faint echoes of "the just society" and "the land is strong". I wonder if the Prime Minister is just making a few token gestures for the benefit of the nationalist voters in the same way as he plans economic conferences, to soothe one part of the country or another, or sets up the food prices committee to dispel the anger of the housewife. Or could it be that he is just making a token effort to appease the token party to my left, normally referred to as NDP but now having new initials, the NLR which is the "New Liberal Rump"?


Some hon. Members:: Hear, hear!


Paul Yewchuk: The hon. member for York South (Mr. Lewis) in a recent speech cited this government's new Bill C-132 as an example of the kind of good effect there has been on the Trudeau government from the NDP holding
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the balance of power. I wonder whether he was really serious when he made that statement, because when he spoke in the House of Commons on March 30 he was critical of my party and of the Liberal party on some of their proposals, and said that the Liberals and Conservatives were clearly one in their proposals. He followed it up by saying:
We reject that kind of approach to Canada's economy and Canadian economic independence.
How can he say, on one hand, that a bill is an example of the effect of his influence, and on the other reject that kind of approach to Canada's economy and Canadian economic independence? It leads one to wonder what the hon. member really does mean or what he really believes in. But we are becoming accustomed to the leader of the NDP reversing his position from one day to the next and contradicting remarks one day that he made the day before. He said in his comments that his respect for us as a party has decreased because of some of our policy statements.
Mr. Speaker, at least we have been consistent in promoting policies which we believe to be good for the country. We can hardly say that the hon. member for York South has been consistent. If we review the voting pattern of his party since January of this year, we find that on several occasions they voted in complete contradiction to what they said a short time before. We can go back to January, for example, when we put a motion before the House asking that the throne speech debate be set aside so that old age pensions legislation could be brought forward. The NDP, who had very sanctimoniously on many occasions promoted the idea of increasing old age pensions, voted against that motion, thus causing an unwarranted delay in increasing old age pensions from January to April 1.
We also had the spectacle of the NDP crictizing the government's economic policies. But when it came to the crunch when there was a vote of confidence in the government's economic policies, their vote was with the government, contrary to their remarks. We even had a motion about corporate welfare bums. They, of course, voted against that too. It was no longer important enough for them to discontinue their support of the government.
One day not too long ago they talked against the sale of Polymer. But when it came to a vote, they voted in favour of the sale of Polymer. How does the hon. member expect us or the people of Canada to increase our respect for him if he cannot put his vote where his mouth is? How can he expect us to believe anything he says if over and over he has shown that what he says is wrong one day, he says is right the next day? I do not want to suggest that the hon. member is dishonest by intent, but it certainly appears that his methods are tortuous, if not devious.
If we look for a moment at the debate on the old bill back in May, 1972, as recorded at page 2639 of Hansard, when speaking about the bill the leader of the NDP said it was "a policy which has very little meaning for Canada." In another place he said: "I believe this bill must be opposed." Finally he said: "We do not intend to support such a useless step as the minister has proposed." But
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today he and all his members have been speaking in favour of essentially the same measure.


Mr. Gleave:: What is your policy?


Paul Yewchuk: The hon. member wants to know about my policy.


Alfred Pullen Gleave: Why don't you tell us about your 60-day freeze?


The Acting Speaker (Mr. Boulanger):: Order. If the hon. member wants the floor, he can seek it later in the debate.


Paul Yewchuk: Mr. Speaker, I see that the hon. member for Saskatoon-Biggar (Mr. Gleave) has wakened up. I am very glad to see that. He wanted to know what our policy is. The first thing I would say about our policy is that at least we vote according to our principles and in accordance with what we say. I think that is a prime essential in politics. It is obvious to me that the conscience of hon. friends to my left is bothering them-if they have one- and it is obvious that the conscience of their leader is bothering him.


Gerald William Baldwin: It isn't that; it's his figure.


Paul Yewchuk: No doubt as a result of having given up his principles. I think this guilty conscience of his is reflected in the fact that he dedicates most of his speeches to attacking the Conservative party and in particular to attacking our leader. We can only conclude from this that he wishes he had the courage and the fortitude to stand up for what he believes in, the way the Conservative party has been doing during the past weeks.
For example, he was critical of our policy, stating that we want to make the wealthy wealthier and want to make the powerful more powerful at the expense of the ordinary Canadian worker and of the small Canadian businessman. But after a careful review of his speech I failed to find any evidence of what he would do for the Canadian worker, and in particular for the private Canadian, small businessman, except to conclude that he would probably abolish him.
The statement I am referring to is recorded at page 2789 of Hansard for March 30, where he is reported as saying that "the objectives of a corporation"-he does not differentiate between big and small-"whatever its ownership, are the same. The interest in profit and power is the same. The public interest takes second place whether the corporation is privately owned by Canadians, owned by Americans or owned by nationals of any other country." From this we can conclude that his position is that any corporation of business privately owned is not in the best interests of the Canadian public. It is an obvious promotion of the old doctrine in the Regina manifesto, suggesting that only government knows how to run your business; that no private individual has any humanity, social honour or any sense of loyalty to the country, but is strictly motivated by greed and the desire to abuse everybody.
It seems to me that is a rather distorted view of private enterprise, which in fact has shown all around the world that it can do more for countries and their development

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and for their peoples than any other system, including dictatorial socialism which the hon. member and his party seem to admire so much. Let us look at the results of socialism in our own country. Let us take Saskatchewan, a shining example of socialism. According to the last census, that is the only province where the population had actually gone down. People are still leaving there, scurrying in all directions to get away from that great NDP government.


Mr. Orlikow:: Why did they vote in an NDP government?


Paul Yewchuk: I hear the hon. member for Winnipeg North (Mr. Orlikow) making some noises. Let us look at Manitoba, the province that has the highest taxes of any province in Canada, which is also scaring away people as well as industry. They have one company there-I do not need to mention its name-which produces tractors that are sold at a good price to Canadians. This company is on the verge of moving out in order to get away from that greedy socialist government. Look at the province of British Columbia, another example of NDP peace and quiet, where the people are in the greatest turmoil they have ever experienced since they entered confederation.


David Orlikow: Why did the people elect an NDP government?


Paul Yewchuk: If we want to look at the facts, we see that the have provinces are those that have been built up over many years of Conservative government.


David Orlikow: Like Nova Scotia? Tell us about the heavy water plant at Glace Bay.


Paul Yewchuk: One example is the province of Ontario; others are Alberta and British Columbia which have grown up under the private enterprise system. If we look at the have-not provinces-


David Orlikow: Tell us about the heavy water plant.


Paul Yewchuk: My hon. friends do not like to listen to this. They do not want to listen to the truth. If we look at the have-not provinces, they are the ones that have been under Liberal control for a long time; and if we look at those that are rapidly becoming have-not provinces, they are those that hon. friends to my left control.
We have a different approach to this whole question. We feel that the negative approach of the Liberals and the New Democrats is not what Canadians are looking for. Canadians are looking for a positive approach based on growth and development of the country. A foreign ownership policy which proposes to lead to Canadian control of the economy must be tied in with the country's total economic strategy. Conversely, this total economic strategy must be developed in such a way that greater encouragement is offered to Canadian participation in development than to foreign participation.
Mr. Speaker, I see you are sitting on the edge of your chair. I am not sure whether you are getting sleepy, but if Your Honour wishes, I will call it ten o'clock.



PROCEEDINGS ON ADJOURNMENT MOTION

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

John Allen Fraser: Mr. Speaker, a long time ago I asked a question in connection with the Skagit valley and it is now coming before you in the "late show". I have spoken to the hon. Minister of the Environment (Mr. Davis) and I think he has a pretty good idea of the questions I am going to put to him this evening.
As hon. members know, some time ago the minister assured the House that the flooding of the Skagit valley would not take place. He said, as did the Secretary of State for External Affairs (Mr. Sharp), that the flooding of the Skagit valley was a dead issue. We are, of course, glad to hear this and we hope the two ministers are correct. That assurance was given some time ago, however, and the fact is that the Seattle City Light Company is proceeding with its application before the United States Federal Power Commission seeking the right to raise the level of the Ross dam below the Canadian border. If granted, this will result in the flooding of the Skagit valley.
I know that to a considerable extent the assurances given in this House by the Minister of the Environment to the Ross committee, which is the citizens' group in Vancouver which is fighting the flooding of the valley, have caused the committee to take the position that it is in fact safe to withdraw from the Federal Power Commission hearings. As a consequence, on March 6, 1973, Mr. Ken Farquharson, secretary of the Ross committee, wrote a letter to the Hon. R. A. Williams, Minister of Lands and Forest for the province of British Columbia. In that letter he said, in part:
Following the announcement by the federal and provincial governments that they will co-operate to prevent the flooding of the valley the committee has considered its position and has decided that its aims have been fulfilled and as a result the committee will not prepare evidence for submission to the FPC.
Further oh in the letter he wrote:
The committee wishes to advise you that, if the FPC hearings do take place, and if the federal and provincial governments desire a Canadian intervention to correct misleading testimony, and if they are not prepared to intervene themselves, then the Ross committee will prepare testimony provided that it is given notice of this requirement prior to 1 May, 1973, and that adequate funds, information and manpower are made available by the federal and provincial governments to the committee. The cost of such an intervention by the Ross committee would of course be much less than the extra compensation that Seattle might expect to receive if their application to the FPC was successful.
Arising out of this, I would appreciate the Minister of the Environment bringing the House up to date on the situation. I should like to know what the response of the United States government has been to the note of January 9, 1973, which was apparently sent to them by the Canadian government. My authority for this is a statement to that effect in the House on February 6, 1973, by the
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Secretary of State for External Affairs. As reported at page 1000 of Hansard, he said:
Mr. Speaker, on January 9, a note was sent to the United States authorities requesting discussions on this question. This is the procedure that has been approved by both the government of the province of British Columbia and of course by this government. It seems to us the most effective way of getting action.
I would like to know what the response to that note has been, Mr. Speaker. I think most hon. members of this House, and certainly the public, want to know whether the Canadian government has in fact said to the American government that there will be no flooding, and whether the American government has agreed, either by implication or directly, with representatives of the Canadian government that the flooding will not take place.
While I do not doubt the sincerity of the assurances given in this House, I would hope that our proper acceptance of the sincerity of this statement does not lead us on this side of the House, or any member of the government, into a position where the wishful thinking of several months ago is leading us into a situation where we may not be as secure as we thought we were. Through you, Mr. Speaker, I ask the Minister of the Environment to advise us tonight of the real situation of the agreement between Canada and the United States that this flooding will not proceed.
I would also like to know whether the government of Canada has received a copy of the letter that I quoted or a similar letter, or whether the government of the province of British Columbia has communicated the contents of that letter to the federal government. With regard to whether the federal government has received it, I think it would be beneficial to know whether the federal government would be prepared to assist financially if it should occur that the Ross group had to make representations at the hearing. I think my time is up, Mr. Speaker. I would appreciate the minister dealing with the matters raised.


John (Jack) Davis: Mr. Speaker, in answer to the questions raised by the hon. member for Vancouver South (Mr. Fraser), I would say the following. The Canadian government and the government of British Columbia, both separately and jointly, have said that the flooding of the Skagit valley in British Columbia will not take place. This message, loud and clear, has been transmitted to Washington. It is a message which has been received there with concern.
We have now had a reply from the United States State Department officials. They agree, in principle, to the convening of a meeting or a series of meetings with the two principle parties with a view to terminating a long-standing contract. The two principal parties are the Seattle City Light Company, owned by the people of the city of Seattle, in the United States, and the government of the province of British Columbia, in Canada.
The date of the meeting between the four parties, the two principal parties, Seattle City Light and the government of British Columbia, and the United States Department of State, and External Affairs, supported by the Department of the Environment for Canada, has not been set. It is expected, however, that it will be some time within the next month. This is a matter which I will be taking up on Monday, April 9, with Mr. Russell Train,
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chairman of President Nixon's environmental council, when he comes to Ottawa to discuss this and other matters.
The United States State Department raised the matter with Premier Barrett when he was in Washington recently. He agreed, to explore several possibilities originating with Seattle City Light, one of which was the supply of power from British Columbia in lieu of the power that would have otherwise have been generated by the Ross dam in the United States, the reservoir of which would have flooded back into Canada.
As I understand it, Mr. Barrett's response was one of interest but not of final commitment. I understand Seattle City Light has since been in touch with the British Columbia hydro authority with a view to negotiating an export of power from Canada in lieu of power which would otherwise have been generated in the United States from Canadian water flowing down the Skagit valley.
The hon. member for Vancouver South asked about the Ross group. I think the Ross group is right in not spending too much time and money preparing a brief in opposition to the flooding. It should nevertheless continue its watching brief. As I understand it, Seattle City Light is scheduled to appear before the U.S. Federal Power Commission. The date has been put off an additional number of months to December, 1973. Hopefully, long before those hearings begin and long before it would be necessary for Canada and British Columbia otherwise to intervene in those hearings, there will be meaningful negotiation between Seattle City Light and British Columbia which will terminate this threat of flooding in the Skagit valley forever.


FISHERIES-FRESHWATER FISH MARKETING CORPORATION-INVESTIGATION BY STANDING COMMITTEE OF OPERATIONS AND DISMISSAL OF EMPLOYEES
Mr. Doug Rowland (Selkirk):: Mr. Speaker, perhaps I can begin by presenting some background. On January 11, 1973, I learned of large lay-offs at the Freshwater Fish Marketing Corporation's new Transcona plant. Accordingly on January 12, under the provisions of Standing Order 43, I asked the unanimous consent of the House to move a motion on the grounds of urgent and pressing necessity, and as an explanation I provided the following information:
Yesterday the Freshwater Fish Marketing Corporation announced large lay-offs of personnel in their Winnipeg and Selkirk plants. This action follows radical alterations in the marketing procedures pursued by the Corporation, the dismissal or resignation of significant numbers of the Corporation's most senior staff, allegations that the Corporation is running a huge deficit and allegations that a part of the inventory of fish of the Corporation cannot be accounted for ... I therefore move:
That the Standing Committee on Fisheries and Forestry be immediately established and that the entire matter of the administration and operations of the Freshwater Fish Marketing Corporation be referred to it for investigation and report.
Unanimous consent was not granted. Therefore, on January 19 I asked the Minister of Fisheries (Mr. Davis) the following question in the House:
In the light of recent events associated with the Freshwater Fish

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Marketing Corporation, including the resignation and dismissal of a large number of senior staff and the unfavourable profit and loss picture of that corporation, does the minister intend to refer the matter of the administration and operation of the corporation to the Standing Committee on Fisheries and Forestry for investigation and report?
The minister's reply was as follows:
Mr. Speaker, the answer is yes. As hon. members know, we have encountered management problems in the operations of that joint federal-provincial Crown company. This matter must be referred to the committee because of the financial losses involved.
By February 2 no action had been taken with respect to an inquiry, so I put a further question to the minister as follows:
A couple of weeks ago the minister gave an undertaking to the House that there would be an inquiry by the Standing Committee on Fisheries and Forestry into the operations of the Freshwater Fish Marketing Corporation. Is he now in a position to indicate to the House when he expects this inquiry to begin, and when he expects the committee to be set up, and would he also give some indication of the terms of reference to be given to the committee?
The minister's answer was:
I hope to be able to make a statement to the House in this connection shortly.
Mr. Speaker, it is now April 3, two months later, and an inquiry has yet to be held. There has still been no reference to the committee with respect to the affairs of the corporation. Each day of delay in referring the matter to the committee ensures that the committee will encounter increased difficulty in getting to the bottom of the questions which are currently the source of rumours and discontent with the corporation. Each day's delay means it will be more difficult for the committee to call key witnesses before it as they become dispersed and involved in other employment, in some cases.
I realize that the standing committee is presently examining the minister's estimates and that during this examination the committee is free to make inquiries about the corporation. However, examination of the estimates does not provide the committee with the time or the scope for the undivided attention this subject demands. The FWFMC is the key to the livelihood of virtually every commercial fishermen in northwestern Ontario, the prairie provinces and the Northwest Territories. It is a Crown corporation and it has been the instrument of introducing radical changes into the fishing industry in the regions mentioned. Because of its importance to a key sector of the western economy, and because the livelihood of large numbers of Canadians is totally dependent upon its efficient operation, the subject demands a full inquiry based upon terms of reference permitting a complete examination of the corporation's operations and administration.
There are many questions to be answered. For example, did the Auditor General refuse to endorse the corporation's books and, if so, why? Has the corporation suffered losses? If so, did they amount to $1 million, $1.5 million, $3 million or $5 million? I have heard all those figures cited. Then again, is part of the corporation's inventory of fish unaccounted for? If so, how much, and why?
Have purchasers of fish from the corporation defaulted on payment for goods received? If so, how many and in what amounts? Why have large numbers of senior staff of the corporation been dismissed or resigned, and what is their side of the story? Has adequate compensation been

granted to fish buyers, processors and distributors displaced by the corporation? Are there large amounts of expensive fish processing equipment lying unused and deteriorating in the new Transcona plant? Has the new plant proved to be inadequate for the task of handling the volumes of fish reaching it for processing, with resultant wastage? Are other new plants being contemplated? Have attempts at new marketing procedures and the development of new fish products been abandoned? If so, why and with what result?
Why are there large fluctuations in the labour force associated with the processing of fish by the corporation, and can these fluctuations be controlled? Why have fishermen in northwestern Ontario elected to cease operating under the auspices of the corporation? Why has the Saskatchewan Fishermen's Co-operative voted to do the same? What are the grievances of fishermen in The Pas, Manitoba, and are they justified? Was the new plant located in Transcona rather than in Selkirk because of cold, hard, economic fact, or because of political patronage of the worst sort, as claimed by Liberal candidates during the last election would seem to indicate?
All these questions and many, many more require answers. In posing these questions, I in no way wish to imply anything beyond the fact that those are questions that are being asked, and because they are being asked they demand to be answered. If half of these problems exist, then a public inquiry is necessary. Answers to these questions can only be obtained through a full public inquiry. Thus, I wish to know when this House may be presented with the terms of reference for such an inquiry by the minister, and when the standing committee can get down to that job. I hope the minister will be able to supply us with that answer this evening.


John (Jack) Davis: Mr. Speaker, the hon. member for Selkirk (Mr. Rowland) has asked a number of questions, such a large number that I shall be able to answer only a few of them this evening.
I should like to inform him that the estimates of my department have been before the fisheries committee of the House on three separate occasions and will be before members of this House for another ten days. I will be in attendance at all times and would be glad to try and answer these questions there. The chairman of the Freshwater Fish Marketing Corporation is scheduled to be there next week and for as long as the committee wants to keep him there. So I suggest to the hon. member for Selkirk that either he get himself on the committee or that he arrange for somebody else to ask these and other questions on his behalf.
This is a serious matter. Unlike the Saltfish Corporation, the Freshwater Fish Corporation has run into financial difficulty. This is a corporation that was set up originally at the request of the three prairie provinces. It is a corporation which is a joint enterprise between the prairies provinces and the federal government, with Ontario included and the Northwest Territories. It was created to deal with a very difficult, I would say messy, fish marketing situation. Its main purpose was to create a single selling desk instead of dozens of local operators operating mainly from telephone booths. The single desk was an
April 3, 1973

attempt to deal effectively from a position of strength with fish buyers from the United States.
For the first year it managed to increase the price of fish to fishermen at the lakes materially-somewhere between one-third and 50 per cent. By contrast, the last two years have been years of difficulty. First, we had the mercury problem; second, there was the change in value of the Canadian dollar which effectively reduced the price by 10 per cent. Serious overfishing, particularly in Lake Winnipeg, has resulted in a marked reduction in the quantity of fish which the province will allow to be taken from that very important lake. As a result of that, in the case of the start of the difficulties poor design of some equipment in the new plant at Transcona resulted in serious miscalculations about inventory, with a serious loss of fish. There was a shortfall run amounting to several millions of dollars over a period of two years.
The federal government has agreed to meet half of that loss as an exceptional measure and has asked the provinces to do likewise. If the provinces match the federal government, the fishermen on the lakes will not suffer in terms of price. We have had difficulties in respect of management as well as problems in respect of marketing in the United States. Hopefully, these are challenges that the corporation will be able to overcome in the long run.


DRUGS-AVAILABILITY OF QUAD PROGRAM DATE TO BULK PURCHASERS, PHYSICIANS AND OTHER HEALTH PROFESSIONALS
Mr. J. R. Holmes (Lambton-Kent):: Mr. Speaker, I had hoped that because of the importance of this matter the Minister of National Health and Welfare (Mr. Lalonde) would be in the House this evening. However, I am glad to see that his parliamentary secretary is here.
On February 28 I asked the Minister of National Health and Welfare the question which appears on page 1757 of Hansard, namely, if he would table in the House the various investigative studies, including those relating to bioavailability, which would substantiate the claims presented in the QUAD' 72 publication.
Again on March 8 I raised the question in the House which appears on page 2020 of Hansard. On that occasion I pointed out the necessity of presenting the scientific data supporting the claims of the QUAD publication to the professionals responsible for prescribing drugs, in order to allay the apprehension which had developed between the minister and his top departmental officials concerning the therapeutic equivalents of drugs.
It may be that I did receive a portion of this information last Monday. Although I will not attempt to comment on how to summarize the analytical data, as suggested by the minister in his accompanying letter, I would like to comment on the program itself because of the possibilities it offers to the professions, the industry and, above all, the consumer, particularly if it can be developed in the proper atmosphere, an atmosphere which must be devoid of political overtones such as those in the minister's statement of March 13. If I may, Sir, I should like to quote the
Adjournment Debate
last paragraph of that statement as an example of what I refer to as political overtones. The statement is as follows: The government feels that QUAD is sufficiently valuable that we are prepared to take whatever action is necessary to ensure that achievement of its goals is not thwarted.
I think that is a classic example of this attitude on the part of the government. I can assure the House that a program which is scientifically oriented and so closely related to the expanding field of biopharmacology must be nurtured and allowed to grow without intervention by political decisions.
I concur, also, with the initial concern of the government to evolve a plan which would reduce the cost of drugs to the Canadian public. Indeed, we should pursue that goal. I also assure Your Honour, from personal experience, that the fundamental question which must always be answered is: Does the patient have an effective drug? In clinical practice the problem is one of effectiveness, and it may be a difficult decision to determine whether chemical assay percentages of plasma concentrations are the best indicator of drug effectiveness. Clinical evaluation of a drug must be an important component of investigation. The government should join with the industry and the academic community to establish this setting and promote research in areas such as improving drug monitoring techniques, encouraging additional pharmacological research and ensuring optimum drug utilization and rational prescribing. I could give a classical example of the introduction of L-Dopa in the treatment of Parkinson's disease in the United States, in which there was a definite correlation between industry, the government and the academic community.
The government also has the responsibility to reduce the cost of drugs, and an equal responsibility to ensure that they are effective and safe, which implies that the information must be made available to prescribers, as well as patients, on their use and efficacy. In the report the minister indicates that the program was built upon four cornerstones; chemical analysis, comprehensive evaluation of manufacturing capability, measurement of clinical effectiveness, which is equated with bioavailability, and publication of the data.
Unfortunately, as one peruses the statement it has taken on an aura analogous to the scriptures, where truths are presented throughout the 17 pages and one has the impression he would be branded as a heretic if he questioned the conclusion. I would suggest, Sir, that in an area which is exploding with knowledge the minister should welcome the critics with their searching questions, their doubts and concern for improving drug quality.
As an example, Dr. R. J. Withey, when he was with the food and drug directorate, reported at the fifth annual symposium of the Canadian Association for Research in Toxicology that the matter of bioavailability was not yet settled. Following studies of administration of chlorom-phenical, by different doses and different routes, to pigs, he concluded there was no difference between the dosage formulations or the selected routes of administration based solely on bioavailability and suggested at that time the performance of a drug be assessed in terms of its pharmacoid activity rather than in terms of bioavailability.

April 3, 1973
Adjournment Debate
Let me suggest possible areas of responsibility for government action relative to drugs. I recognize there has been a meagre beginning. First, they should ensure all drugs in general use are reasonably effective and safe. Second, they should be concerned with drug research, not only those prescribed by doctors but self-medication and abuse of drugs by society. In addition, research in clinical pharmacology should be expanded. Third, government should take responsibility for research in important areas such as cancer research and cardiovascular disease, which frequently are commercially unrewarding. Finally, government should see that patients get value for their money.


Mr. Norman A. Cafik (Parliamentary Secretary to Minister of National Health and Welfare):: Mr. Speaker, the series of questions originally raised by the hon. member for Lambton-Kent (Mr. Holmes), I believe have been responded to in the letter from the minister to the member dated March 30 to which he referred. It deals with the difficulty involved in the processing of analytical data which form the bases of the QUAD program itself. It is an extremely complex subject and one which involves volumes and volumes of material. It is extremely difficult to be able to examine these in the way they should be examined by doctors and others who are concerned about the question.
The next point I would like to make is that the hon. member, not only in his original questions but again tonight, indicated that there is some conflict between the minister and his officials in respect of equivalents of the
drugs that are covered in the QUAD program. This simply is not true. There is no disagreement whatever between the officials and the minister in respect of this. The member talked about the importance of reducing the cost of drugs to consumers, and at the same time ensuring that they are effective and safe. That is precisely the reason for the QUAD program.
It seems rather difficult to understand the hon. member, when you marry that particular idea with another one which came forward in his remarks when he indicated that this kind of thing should be free of any kind of political interference or political overtones. He quoted from a release which I do not have in front of me, but I challenge what he said basically. He talked about the minister stating that he would make sure that the goals of the QUAD program would not be thwarted.
Surely that is a kind of political interference which is very good and which shows the determination that the government has, not only that the drugs taken by Canadians be safe, but also that information is available so that they can have those drugs at the lowest possible cost. Surely there is a role for government in this respect. I would be surprised if the hon. member for Lambton-Kent would not agree with me that we must make sure that drugs are analysed and that the information is presented to the Canadian public so that they will know that the drugs they can choose are clinically equivalent and can be bought for the cheapest possible price. That is the purpose of the program, and I think all hon. members would subscribe to it.
Motion agreed to and the House adjourned at 10.32 p.m.

Wednesday, April 4, 1973