1973-03-23

ROUTINE PROCEEDINGS


Hon. lack Davis (Minister of the Environment):: Mr. Speaker, I would like to table a copy of a progress report on the Great Lakes soil erosion studies being carried out by the staff of my department at the Canada Centre for Inland Waters.



ORAL QUESTION PERIOD


Hon. Robert L. Stanfield (Leader of the Opposition):: Mr. Speaker, I have a question for the Prime Minister regarding the criticism of DREE programs emanating from official United States circles. I should like to ask the Prime Minister who in the government has been responsible for explaining to the United States authorities that the DREE program is simply a legitimate Canadian measure to develop slow-growth areas and is not designed to attract industry to Canada but rather to attract industry to particular parts of Canada and therefore does not conflict with legitimate interests of the United States or of any other country? Who has been in charge of presenting this case on behalf of the government?


Right Hon. P. E. Trudeau (Prime Minister):: This very argument and others have been put to the United States administration by the Secretary of State for External Affairs, by the Minister of Industry, Trade and Commerce, by the Minister of Regional Economic Expansion and by myself. They are very valid arguments which we have tried to explain to the United States authorities in these ways and equally through our embassy in Washington.


Robert Lorne Stanfield: In view of the fact this criticism seems to have grown more acute following the Michelin decision, what has been done in recent times in addition to the Minister of Industry, Trade and Commerce presenting
some sort of submission to the United States with regard to Michelin? What procedure has the government followed in an orderly way to get our case across to the United States authorities?


Pierre Elliott Trudeau: Mr. Speaker, the Leader of the Opposition asks, what has been done in addition to what the Minister of Industry, Trade and Commerce has done in respect of the particular case of Michelin. Surely this is the most important type of submission that could be made.


Robert Lorne Stanfield: I should like to ask the Prime Minister whether he believes his government has discharged its responsibility to the Canadian people with regard to the DREE program and with regard to the whole fight against regional disparity simply by leaving it to the Minister of Industry, Trade and Commerce, fine gentleman that he is, to make that kind of submission with regard to Michelin? Does the Prime Minister really feel that his government is discharging its responsibility, and what does he propose to do?


Mr. Speaker:: Order, please. I do not think that a question asked in those terms is in order.


Robert Lorne Stanfield: In view of the apparent lack of success of anything done to date, I should like to ask the Prime Minister what he proposes to do to convince the United States authorities of the legitimacy of our position in Canada with regard to the DREE program?


Pierre Elliott Trudeau: Mr. Speaker, I would not concede what the pessimistic view of the Leader of the Opposition appears to be about the lack of success. We believe our arguments are getting through to the Americans. I must say that the process would not have been as long or as difficult if the opposition parties during the election had supported the DREE program rather than attacked it.


Mr. Speaker:: Order, please.


Mr. Elmer M. MacKay (Central Nova):: Mr. Speaker, I should like to ask the minister in charge of DREE this question. In view of the various economic irritants that affect this realm of our economic activity-Michelin, DISC and so on-is he going to show leadership in initiating a comprehensive Canadian position to put before the leaders of the United States to uphold Canadian interests vigorously and, if so, when does he intend to do this?


Hon. Donald C. Jamieson (Minister of Regional Economic Expansion):: Mr. Speaker, as the Prime Minister and the Minister of Industry, Trade and Commerce have indicated, the so-called irritants to which the hon. member has referred cut across several different departments and there is at the moment a concerted effort on the part of

March 23, 1973
Oral Questions
the government, of which DREE is a very important part, to devise precisely the kind of over-all representation to which he has referred. I might point out to the hon. member and to the House that in so far as the Department of Regional Economic Expansion is concerned there has only been a single case in which any kind of action has been taken or on which we have had any representations at all from the United States, and in that particular case we have taken the various steps that are laid down in the international agreement relating to GATT. Of course, there are many other countries which are as concerned as Canada with regard to getting a clarification of this because virtually every country now has some form of regional economic expansion. It is not simply a bilateral arrangement with regard to Canada and the United States.


Elmer MacIntosh MacKay: Mr. Speaker, I have a supplementary question for the Minister of Industry, Trade and Commerce. On the basis of his position and experience and keeping in mind that there have been other measures taken against Canadian pulp companies such as anti-dumping duties in the not too distant past, does the minister feel that the special relationship between Canada and the United States which has been so noticeable in the past still exists and, if so, when was the last time he spoke directly to his United States counterparts?


Mr. Speaker:: Order, please. A question asked in those terms is not in order. The hon. member asks for the opinion of the minister, whether the minister believes, feels or thinks something. That is seeking an opinion and in those terms the question is not in order. The hon. member might like to rephrase the question.


Elmer MacIntosh MacKay: Yes, Mr. Speaker, I will rephrase it briefly. When was the last time the minister had occasion to speak directly with his United States counterpart on matters of mutual interest? [DOT]


Hon. Alastair Gillespie (Minister of Industry. Trade and Commerce):: Mr. Speaker, as I have said in the past, I have had conversations with senior White House officials.


Mr. Hees:: You mean the White House janitor.


Alastair William Gillespie: I have been in communication with the Secretary of Commerce, and I would hope in the not too distant future to have an opportunity of discussing some of these questions and related multilateral questions with the Secretary of the Treasury.


George Harris Hees: You have not answered the question at all.


Elmer MacIntosh MacKay: On a point of order-


Mr. Speaker:: The Chair will hear the hon. member for Central Nova on a point of order, after which I will recognize the hon. member for Skeena to try to complete the first round of questioning and then return to hon. members who may have supplementary questions.


Elmer MacIntosh MacKay: With respect, may I say that I rephrased the question as simply as I could and I suggest the minister has not answered it. I asked him when he last saw his

United States counterpart. Surely he must remember the last time he spoke to such an important official.


Mr. Speaker:: That is not a point of order.


OIL AND GAS REGULATIONS APPLICABLE IN NORTHERN CANADA-REMARKS OF PROFESSOR THOMPSON- GOVERNMENT POLICY
Mr. Frank Howard (Skeena):: Mr. Speaker, I would like to direct a question to the right hon. Prime Minister which I would have directed to the Minister of Indian Affairs and Northern Development had he been here. Have the remarks of a Professor Thompson at the Arctic Resources Conference being held here in Ottawa regarding oil and gas regulations applicable in the northern parts of Canada been drawn to his attention, namely, that the program of issuing leases and permits under those regulations constitutes a resource give-away unparalleled in any country in modern times? Would the Prime Minister like to enunciate any government policy with respect to those matters?


Mr. Len Marchand (Parliamentary Secretary to Minister of Indian Affairs and Northern Development):: Mr. Speaker, I would like to take this question as notice. I know there has been a great deal of discussion on this topic by academics and others, and as soon as the minister comes back I am sure he will be able to give the hon. member a complete answer.


Frank Howard: Mr. Speaker, I would have thought that on a matter of this importance it would not be simply a question of taking notice but that either the minister would have been here or somebody would have been designated to respond for him in a direct way rather than postponing the question. Perhaps the Minister of Energy, Mines and Resources is in a position to do so.


Hon. Donald S. Macdonald (Minister of Energy, Mines and Resources):: Mr. Speaker, I should indicate that my responsibility relates to the offshore on Canada's various coasts rather than to the northwest, but the same regulations apply.


Mr. Lewis:: The same criticism was made.


Donald Stovel Macdonald: Yes, that is quite right. At least the hon. member is right in that.


Some hon. Members:: Oh, oh!


Donald Stovel Macdonald: Mr. Speaker, it was just a year and two days ago that I indicated that there would be no further permits issued either north of 60 or in the offshore areas.
In the interval, and in particular with regard to the offshore, we have entered into negotiations with the five eastern provinces looking toward a joint federal-provincial system of regulating and developing the oil and gas possibilities on the continental shelf and other offshore areas. We have made it clear to the licence applicants, as,
March 23, 1973

indeed, to the provincial governments, that no further permits would be issued until the legal regime there is clarified. I would just confirm that this is the kind of question, from the standpoint of my responsibilities and I am sure those of my colleague, that we would be happy to discuss in committee.


Frank Howard: Mr. Speaker, in effect that is the supplementary question I wanted to follow up with, to ask whether any drafts of the regulations would be submitted to an appropriate parliamentary committee so that the development of any changes thereto could take place in full public view.


Donald Stovel Macdonald: Mr. Speaker, because of the division of responsibilities I would like to discuss the best forum in which to deal with this with my colleague. I think it would be useful to discuss the same responsibilities in a single committee rather than in two.


OFFSHORE LEASE REGULATIONS-REQUEST FOR SPEEDING UP OF CONSULTATIONS WITH PROVINCES AND STATEMENT ON GOVERNMENT POSITION
Mr. David Orlikow (Winnipeg North):: I have a supplementary question, Mr. Speaker. In view of the statement made yesterday by the minister of mines, energy and resources of the province of Newfoundland, in which he said that the regulations for offshore leases are a scandal, will the minister speed up the consultations he says he is having with the provinces so that a policy to meet the needs of the Canadian people for the 70's will be developed as soon as possible?


Donald Stovel Macdonald: Mr. Speaker, I am glad that the Newfoundland minister has made up his mind on that question. I hope he will persuade his colleagues to make up their minds on the rest of the outstanding questions. We are quite pleased with the discussions to date, and we hope that the province of Newfoundland will reach an early decision on what it would like to do with regard to the offshore.


Mr. Speaker:: Order, please. The Chair will recognize the hon. member for Winnipeg North on a supplementary and then the hon. member for Vancouver South, but an attempt is going to be made by the Chair to complete the first round of questioning and then move to supplemen-taries that hon. members may have on the first and second questions. For the moment the Chair recognizes the hon. member for Winnipeg North.


David Orlikow: Would the minister consider making a statement in the House in the very near future, indicating the subjects that are being discussed with the provincial governments concerned, and also in general the principles that the federal government hopes to apply in regard to this very important question?


Donald Stovel Macdonald: Mr. Speaker, I would be glad to consider that.


Mr. John A. Fraser (Vancouver South):: Mr. Speaker, my supplementary is directed to the Minister of Energy, Mines and Resources. In view of the fact the Minister of
Oral Questions
Indian Affairs and Northern Development stated on May 24, 1972, that he would be ready to refer the Canadian oil and gas land regulations to the Standing Committee on Indian Affairs and Northern Development for study and recommendation so that both governments and the public could have the opportunity to appear before the committee, and since this has not yet taken place, can the minister say whether or not the public will be given this opportunity before the revised regulations are made known?


Donald Stovel Macdonald: Mr. Speaker, I just
answered that question.


FINANCE
Mr. Henry Latulippe (Compton):: Mr. Speaker, I would like to ask a question to the Minister of Finance, but since he is absent I shall direct it to the President of the Treasury Board.
In view of the decision by several countries to have a floating currency, would the minister tell the House what is the position of the member countries concerning drawing rights? In the affirmative, are drawing rights considered as incentives for discouraging member countries from devaluating their currency?


Hon. C. M. Drury (President of the Treasury Board):: Mr. Speaker, I could not answer this immediately, but I shall take it as notice.


CANADA-UNITED STATES-PLANS FOR DISCUSSIONS WITH AMERICANS
Mr. Lloyd R. Crouse (South Shore):: Mr. Speaker, my question is supplementary to the one asked by the Leader of the Opposition and I wish to direct it to the Minister of Industry, Trade and Commerce. On February 7 I asked the minister if he was "aware of indications in the United States that the United States government may resort to unilateral action to improve its trade position" and, "if so, can the minister tell the House whether the government has taken any direct action to ensure that Canada-United States trade relations will be adjusted by negotiation so that the Michelin case will not be a preview of things to come." The minister replied at that time that my question was hypothetical. Today my question is: in light of the growing momentum in the United-States to resolve their trade problems through unilateral and protectionist policies, has the government prepared plans for either multilateral or bilateral trade talks and, if so, has the government indicated to the United States that we are prepared to hold substantive trade talks with that country?


Alastair William Gillespie: Mr. Speaker, we are well advanced in the

March 23, 1973
Oral Questions
preparations for the multilateral talKS. As far as bilateral questions are concerned, discussions have been going on and the Prime Minister has already indicated government to government representations with respect to various outstanding matters.


PREPARATION OF POSITION PAPER ON EXPORTS OF MANUFACTURED AND RAW MATERIALS AND ENERGY RESOURCES
Hon. Paul Hellyer (Trinity):: Mr. Speaker, I have a supplementary question. Would the minister tell the House if the government has prepared a position paper on the relationship of the objectives of Canada in so far as our exports of manufactured and raw materials and energy resources are concerned before the United States makes the decision for us?


Alastair William Gillespie: Mr. Speaker, I am not sure what the hon. member is referring to when he speaks of a position paper. Is he referring to another white paper? As he must know, the government published a white paper with respect to various options in Canada-United States trade five or six months ago.


Paul Theodore Hellyer: Will the minister not agree that the time has come for the Prime Minister and himself to make personal representation to their opposite numbers in the United States?


Mr. Speaker:: Order, please. The hon. member for Trinity will appreciate that it is a representation or an argument when a question is asked in those terms.


HOUSING
Mr. Sinclair Stevens (York Simcoe):: Mr. Speaker, my question is for the Minister of State for Urban Affairs. With house lot prices more than doubling and in some cases quadrupling in the last ten years in such Canadian centres as Toronto, Vancouver, Ottawa, Edmonton and Hamilton and with home prices now the highest on the continent in many of our cities, would the minister tell the House what steps he intends to take to help municipalities and provinces relieve without delay the current shortage of serviced building lots, in addition to any announcement made by himself or the provinces to date or the passage of Bill C-133?


Mr. Speaker:: Order, please. The hon. member is asking for a very general statement from the minister. The minister will be recognized to reply to the hon. member's question briefly, if that can be done.


Hon. Ron Basford (Minister of State for Urban Affairs):: Mr. Speaker, I should like first to pass as quickly as possible the land assembly provisions of Bill C-133 which the hon. member's party has been opposing.


Sinclair McKnight Stevens: In view of predictions by leading realtors that house prices within the next two years may jump by another $10,000 in such cities as Toronto, has the minister discussed with his colleagues, particularly the right hon. Prime Minister and the Minister of Finance, emergency measures that might be taken to avert such increases?


Stanley Ronald Basford: Mr. Speaker, we have put together a very large budget for the purpose of land assembly in light of the cost of serviced land, particularly in the province of Ontario, which we have discusssed with the provincial governments but judging by the 18 Conservative speakers who spoke in the debate on the bill-


Mr. Speaker:: Order, please. The Chair recognizes the hon. member for Hamilton West on a supplementary.


COST OF SERVICED LOTS AND HOMES-SUGGESTED TRI-LEVEL CONFERENCE TO FIND SOLUTIONS
Mr. Lincoln M. Alexander (Hamilton West):: Notwithstanding what the minister says, Mr. Speaker, in view of the fact the cost of serviced lots in the Hamilton area has gone up by 177 per cent in the past ten years and detached homes 81 per cent and as the cost of a detached home is around $28,000 making it the third highest on the North American continent and as this seems to me to be a crisis-


Mr. Speaker:: Order, please. Would the hon. member ask his question. It seems to me he is giving information rather than asking a question. The hon. member might come to the question.


Lincoln MacCauley Alexander: Mr. Speaker, I was just giving the basis of the crisis. Would the minister at his earliest convenience convene a tri-level conference of the municipalities, the provinces and the federal government in order to deal with the crisis in housing and come up with solutions that will solve the problem?


Stanley Ronald Basford: Mr. Speaker, we are already working on that on a tri-level basis. I have legislation relating to that program before parliament. The legislation will be discussed in committee. But I listened to those 18 Conservative speeches for some ideas and got none.


Some hon. Members:: Oh, oh!


Mr. Baldwin:: On a point of order, Mr. Speaker, I am compelled to rise to tell the House that in the statement of business made by the government House leader yesterday the bill to which the minister referred was placed eighth out of nine bills that he suggested the House should deal with.


Some hon. Members:: Hear, hear!


Some hon. Members:: Oh, oh!


Stanley Ronald Basford: Mr. Speaker, on the point of order, I should like to inform the House leader of the opposition that the bill he referred to was given second reading last night. I thought he was paying attention to the business of the House.
March 23, 1973

Oral Questions TRADE


Mr. Speaker:: Order, please. I will recognize the hon. member for Hamilton West on a further supplementary and the hon. member for Broadview on a supplementary.


Lincoln MacCauley Alexander: Mr. Speaker, may I direct my supplementary question to the Minister of State for Urban Affairs, and I do not want any smart-aleck answers. Is the minister prepared, after having reviewed the effect of the 11 per cent sales tax on building materials on housing, to recommend that this tax be either reduced or removed in order to stimulate housing and, incidentally, employment?


Stanley Ronald Basford: Mr. Speaker, tax policy is formed by the government and announced from time to time by the Minister of Finance.


Mr. MacDonald (Egmont):: And changed from time to time.


RENT INCREASES FOR SENIOR CITIZENS-SUGGESTED REQUEST BY MINISTER TO PROVINCES TO IMPOSE RENT CONTROLS
Mr. John Gilbert (Broadview):: Mr. Speaker, my supplementary is addressed to the minister. In view of the high rents prevailing across the country, especially in the province of Ontario, and in view of recent pension increases for senior citizens, in order to protect senior citizens against rent increases would the minister contact his counterparts in the provinces and request them to impose rent controls in the same way as the province of Quebec has done to protect these people?


Stanley Ronald Basford: Mr. Speaker, the hon. member, I think, is familiar with the fact that I have written to my provincial colleagues with regard to those public housing units that are under the control of a provincial housing agency. Whether, of course, a province adopts a policy of rent control or not is purely within the jurisdiction of that province. The major Liberal provincial government in the country has already done so.


An hon. Member:: Where is that?


Stanley Ronald Basford: The Conservative and NDP provincial governments have not done so.


Some hon. Members:: Oh, oh!


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


Mr. Hales:: Mr. Speaker, I am sorry that the Minister of State to whom my question was to be addressed has left the chamber. I will give up my turn.


CANADA-UNITED STATES-REPRESENTATIONS BY MINISTER TO UNITED STATES SECRETARY OF COMMERCE
George Harris Hees: Mr. Speaker, my question is supplementary to a previous question addressed to the Minister of Industry, Trade and Commerce. Can the minister advise the House approximately when was the last time he spoke to the United States Secretary of Commerce on any subject?


Alastair William Gillespie: Mr. Speaker, I have already dealt with that question in answer to an earlier question.


George Harris Hees: On a point of order, Mr. Speaker-


Mr. Speaker:: Order, please. I have to hear the hon. member on his point of order, but I would hope that we would not again today spend most of the question period on points of order and questions of privilege. I will, of course, hear the hon. member on his point of order.


George Harris Hees: Mr. Speaker, this is a genuine point of order, because the minister has tried to imply that he has answered that question. He has made no attempt to answer that question today or any other day. I ask him to answer that question. Approximately when did he last speak to the American Secretary of Commerce?


Mr. Speaker:: Order, please. The hon. member may not be satisfied with the reply of the minister, or even if no reply is given, but that cannot be raised by way of a point of order.


George Harris Hees: You have not got the guts to talk to your counterpart about anything. This is a gutless government.


CANADA DEVELOPMENT CORPORATION
Mr. Mark Rose (Fraser Valley West):: Mr. Speaker, my question might better be directed to the Minister of Finance but in his absence either the Prime Minister or the President of the Treasury Board might respond. Did the Canada Development Corporation, shortly after its acquisition of Polymer last July, sell any Polymer shares or other assets to Monsanto Chemical Company of the United States or to any other corporation?


Charles Mills (Bud) Drury: Mr. Speaker, I cannot answer with certitude, but I would be very surprised if that had happened.


An hon. Member:: I would not.


Charles Mills (Bud) Drury: I would be prepared to ascertain from the Canada Development Corporation and advise the hon. member.

Oral Questions


POSSIBILITY OF SALE OF POLYMER AT LOWER PRICE TO AVOID EXCEEDING GOVERNMENT INVESTMENT IN CORPORATION
Mark Willson Rose: Mr. Speaker, I have a supplementary question. I can only assume that the government was not consulted about this. I wish to ask the minister whether the undervalued sale of Polymer to the Canada Development Corporation for $72 million instead of its book value of $108 million was agreed to by the Governor in Council to avoid exceeding the $250 million statutory limit of the government's investment in the Canada Development Corporation?


Charles Mills (Bud) Drury: Mr. Speaker, one cannot accept the premise of the question, namely that it was sold under value. There were a number of independent appraisals made of Polymer Corporation at the time of the sale. Consequently, the question is without foundation.


RECEIPT OF AUDITED STATEMENT FOR POLYMER PRIOR TO SALE TO CORPORATION
Alfred Dryden Hales: Mr. Speaker, I wish to direct a supplementary question to the President of the Treasury Board. Was this sale made before the audited statement of the company was received?


Charles Mills (Bud) Drury: Mr. Speaker, the sale was made in relation to an audited statement covering the period up to the date of sale. It was made prior to the subsequent audited statement.


Mr. Speaker:: The hon. member for Fraser Valley West has a further supplementary, after which I will recognize the hon. member for Yukon.


SALE OF POLYMER TO CORPORATION-REQUEST FOR TABLING OF INDEPENDENT APPRAISALS
Mark Willson Rose: Mr. Speaker, I wish to ask the President of the Treasury Board whether the independent appraisals about which he spoke a moment ago are public documents? If not, is the minister prepared to table them in the House?


Charles Mills (Bud) Drury: Mr. Speaker, in the normal course of events they are not public documents. I will make inquiries as to the appropriateness of tabling them.


SALE OF POLYMER TO CORPORATION-REQUEST FOR TABLING OF POLYMER ANNUAL REPORT
Mr. Erik Nielsen (Yukon):: Mr. Speaker, I wish to direct a question to the minister responsible for the living, breathing and still existing Polymer Corporation. Section 75(3) of the Financial Administration Act contains the following requirement:
-the appropriate Minister shall lay the report-
Meaning the annual report of the corporation.

-before Parliament within fifteen days after he receives it-
Since the minister received it on February 15 and since there appears to be no reason for concealing the financial information with respect to the operations of Polymer, will he now table that report in compliance with Section 75(3) of the Financial Administration Act?


Hon. lean-Pierre Goyer (Minister of Supply and Services):: Mr. Speaker, I have already informed the House that I have received the Auditor General's report but not the annual report of the Polymer Corporation, which means that I am unable to answer the question.
In any case, as I was the minister responsible to the House during the period prior to the sale, from January 1 to July 31, 1972, I shall be glad to table the Polymer Corporation report when I receive it.


Erik Nielsen: In view of the obvious interest in this matter and in view of the fact the minister knows as well as I that he received the audited financial statement of Polymer Corporation on February 15 of this year, will he now table it, giving hon. members full fiscal information in order to allay their fears that Polymer has indeed been thrown to the wolves?


Jean-Pierre Goyer: Mr. Speaker, the hon. member is very well informed, and I congratulate him; but if he will refer again to the act, he will see that section 77(3) does say, and I quote:
The annual report of the auditor shall be included in the annual report of the corporation.
Now, to repeat, I have not received the annual report of the corporation.


Erik Nielsen: Why don't you table the financial
statement?


INDUSTRY
[Stage Direction]
TROIS-RIVlilRES-ELIGIBILITY OF WABASSO EMPLOYEES FOR BENEFITS UNDER TEXTILE AND CLOTHING BOARD ACT
Mr. Rene Matte (Champlain):: Mr. Speaker, I wish to ask a question of the hon. Minister of Industry, Trade and Commerce.
Could he tell the House whether the employees of the Wabasso Company, at Trois-Rivieres, will benefit from the Textile and Clothing Board Act provisions following the fire which destroyed the equipment of that company the day before yesterday?


Alastair William Gillespie: Mr. Speaker, I will be pleased to take the question as notice and get an answer for the hon. member.
March 23, 1973


EXTERNAL AFFAIRS
Right Hon. J. G. Diefenbaker (Prince Albert):: Mr. Speaker, I wish to ask the Secretary of State for External Affairs whether a decision has yet been made by the government with regard to the continuance of the Canadian contingent in the International Commission for Control and Supervision?


Hon. Mitchell Sharp (Secretary of State for External Affairs):: No, Mr. Speaker.


John George Diefenbaker: Have representatives of the United States government or any of them pressed upon Canada the necessity of the force being continued, as reported in the press?


Mitchell William Sharp: Yes, Mr. Speaker.


John George Diefenbaker: Mr. Speaker, I wish to ask the minister a question concerning the safety of members of the Canadian contingent in view of shelling very close to them, 100 yards away, and also the setting up of missile bases in the south by the North Vietnamese. Have any directions been given to the commanding officer of this force to remove the members of the force, as they are virtually unarmed, to locations out of range of the very perilous position in which they have found themselves during the past few days?


Mitchell William Sharp: Mr. Speaker, the attitude of the United States toward the continuation of the International Control Commission and Canada's participation in it is well known publicly. The Americans have made no secret of their views. They have expressed these views publicly. They have expressed these views to us and, I am sure, to all other members of the International Control Commission. As to the second part of the question about the position of the commission, the Canadian contingent and the Poles, Hungarians and Indonesians are all together in the same place, so it does not only relate to the security of the Canadians. As I understand the position, the Canadian military commander in Viet Nam, General McAlpine, is well aware of the risks but has given no direction for any withdrawals. I have great confidence in his competence.


John George Diefenbaker: Mr. Speaker, does the minister not realize the very dangerous position in which these Canadians are because of the uncertainty that prevails today in Viet Nam? Does he not think that cautious precautions should be taken to remove them from the position they are now in, which apparently is within the ambit of artillery fire and has been for the past two days?


Mitchell William Sharp: Mr. Speaker, if our military commander in Viet Nam feels that it would be desirable for him to move any members of our team to a more secure place, that is within his discretion.


John George Diefenbaker: Isn't this a political decision?
Oral Questions


Mitchell William Sharp: If we intend to continue to serve, which 1 believe is the view of some members of the party on the other side, if not of the right hon. member, then I think we have to serve. If our military commander feels that some risks must be taken, I believe we should go along with his judgment. We certainly have given no instructions to him to continue in any place of risk or danger. This is something we must leave to his discretion.


John George Diefenbaker: Isn't the decision a political one?


VIET NAM-TIME OF ANNOUNCEMENT OF DECISION ON CONTINUING CANADIAN PARTICIPATION IN SUPERVISORY COMMISSION-OPPORTUNITY FOR DEBATE
Mr. Andrew Brewin (Greenwood):: Mr. Speaker, I have a supplementary question for the Secretary of State for External Affairs. In his answer to the first question of the right hon. member for Prince Albert I understood the minister to say the government was not yet ready to announce its decision about the continuation of our contribution to the control and supervision commission. I should like to ask a twofold supplementary. First, how soon does the government expect to be able to announce its decision? Second, will the minister see that an opportunity is provided for the decision, when announced, to be discussed by parliament as a whole?


Mitchell William Sharp: Yes, Mr. Speaker. Quite clearly we must make our decision early in the week. The matter has already been discussed in cabinet but we have not yet reached a conclusion. I have already said that as soon as the decision is made it will, as usual, be communicated to parliament, and an occasion will be provided for the decision to be debated.


John George Diefenbaker: Not "as usual"; it is unusual.


Mitchell William Sharp: No, it is not unusual.


TRANSPORT
Mr. Gordon Towers (Red Deer):: Mr. Speaker, my question is for the Minister of Transport. In view of the concern of the public generally with regard to continuous train derailments and in view of the grave concern expressed by my own constituents as a result of a recent major derailment within a hamlet there, would the Minister of Transport be prepared to table in the House of Commons the reports of investigations which he mentioned in answer to a question on derailments on March 20 to give assurance that required action is being taken to protect people across Canada?


Hon. lean Marchand (Minister of Transport):: Mr. Speaker, I think the inquiry was conducted by the Canadian
March 23, 1973

Oral Questions
Transport Commission and I will ask the commission whether they will agree to table the report.


EARLY INTRODUCTION OF LEGISLATION TO DEAL WITH RAILWAY RELOCATION
Mr. Stan Schellenberger (Wetaskiwin):: Mr. Speaker, my question is for the Minister of State for Urban Affairs. Would the minister indicate whether he intends to introduce as a matter of urgency the promised measures dealing with railway relocation before accidents or loss of life ensue in some cities, such as my own city of Wetaskiwin?


Stanley Ronald Basford: Mr. Speaker, my colleague the Minister of Transport and I are working on this as a matter of priority. There is a very complicated job of drafting to be done but we do hope to introduce the legislation as soon as possible. Meanwhile, of course, the operations of the Canadian Transport Commission and the grade crossing fund continue within the jurisdiction of my colleague, the Minister of Transport.


INDUSTRY
Mr. Edward Broadbent (Oshawa-Whitby):: Mr. Speaker, I have a question for the Minister of Industry, Trade and Commerce arising out of the correspondence that he tabled in the House the day before yesterday. From that correspondence it appears that the minister proposed to the automotive companies in Canada a suggestion made by myself, though it seems his proposal to the companies was earlier, to the effect that unless they agreed to reduce their prices for the 1974 model year, which will be coming along reasonably soon, he would remove the 15 per cent duty that the consumers of Canada must pay if they purchase a car in the United States. The correspondence that the minister tabled indicates that two of the companies, specifically the two which replied, categorically rejected that suggestion. Does he intend to enforce that proposal if the companies do not comply?


Alastair William Gillespie: Mr. Speaker, the two automobile companies gave a commitment witn respect to the 1973 year model that there would be a price freeze in Canada on 1973 models regardless of what increase there might be in the United States. I expect them to live up to that commitment and there is every indication that they will. As the correspondence that I tabled indicated, they also gave an undertaking with respect to pursuing the government's objective toward a reduction in the price differential of 1974 models, and I expect to hold them to that too.


Mr. Speaker:: I will recognize the hon. member on a supplementary, but I would point out to the House that there are only five minutes left before the end of the question period so we should have as few supplementar-ies as possible.


John Edward Broadbent: In view of the fact that the price freeze the minister referred to on 1973 models came after the companies had already increased their 1973 prices, and thus was rather ludicrous, and in view of the fact that the price differential that Canadians must pay compared witn United States consumers is in the neignDournooa of 10 per cent, or about $300, and is totally unwarranted, would the minister assure the House that the suggestion that he himself made to the companies will be adhered to or that otherwise he will take governmental action instead of just talking about enforcing the commitment they made?


Alastair William Gillespie: Mr. Speaker, I think it might be worth reminding the hon. member that this is the first action of this kind that has been taken by the government to bring about a narrowing of the price differential. The increase that the hon. member referred to covered mandatory emission and safety standards and had nothing to do with economics, as I have made clear on a previous occasion. The best evidence that the policy is working is that last week Chrysler announced a price increase in the United States but there was no price increase announced for Canadian models.


CANADA-UNITED STATES-REQUEST FOR PRODUCTION OF PAPERS
Mr. Allan Lawrence (Northumberland-Durham):: Mr. Speaker, I should like to get back to the Minister of Industry, Trade and Commerce regarding the rather dangerous and certainly disturbing implications of the report presented to the Congress of the United States yesterday. In view of the fact-I say this in as non-partisan a way as possible-it is essential that the world know Canada's position in respect of the continuing argumentation that is going on, and that it is essential that even the members of the House of Commons understand the position of the government of Canada on this matter, would the minister expedite production of the papers asked for on March 9 in the House in four separate notices so we would at least know what formal representations have been made and what notes have been sent to the government of the United States regarding the four main continuing arguments or concepts in relation to this situation?


Alastair William Gillespie: Mr. Speaker, I would be pleased to look at the particular point the hon. member has referred to, the questions that are outstanding. Again I think it is worth reminding the hon. member that we did table the formal protest note to the United States government respecting the Michelin countervailing duties. I might also take this opportunity of inviting the hon. member and others to read the speech that I gave in Toronto two nights ago, which clearly pointed out-


Some hon. Members:: Oh, oh!


Mr. Speaker:: Order, please.
March 23, 1973


CANADIAN COAST GUARD
Mr. Robert Muir (Cape Breton-The Sydneys):: Mr. Speaker, my question is for the Minister of Transport who is responsible for the Canadian Coastguard College. In view of the fact that the Canadian Coastguard College is a bilingual college, and in view of the fact it is my understanding that bilingualism is not being promoted at that college as well as it should so far as the French language is concerned, would the minister cause an inquiry to be carried out to ascertain just what problems may exist there in regard to this subject?


Jean Marchand: With regard to bilingualism?


Robert Muir: Yes.


Jean Marchand: I will surely inquire, Mr. Speaker. I do not know exactly to what the hon. member refers, but I will ask what is the status of the languages at the Canadian Coastguard College.


Robert Muir: Would the minister at the same time ascertain what has been the result of a complaint made to the Commissioner of Official Languages, and what has happened to the recommendations he made regarding the college?


Jean Marchand: Mr. Speaker, as I have stated in the House, I am going to have a meeting with Mr. Keith Spicer and this is one of the points I will discuss with him.


INDUSTRY
Mr. William C. Frank (Middlesex):: Mr. Speaker, I would have directed my question to the Minister of Finance but possibly the Minister of Industry, Trade and Commerce would answer it. Since there has been an abrupt increase in the cost of construction materials in Canada and in the export of these products both to the United States and Japanese markets, does the minister intend to implement stringent controls to protect our own industries?


Alastair William Gillespie: Mr. Speaker, I am aware of the situation to which the hon. member is referring. He may be aware that Canadian logs are under export permit and that indeed we are a net importer of logs rather than an exporter. I have met with industry representatives, particularly from the west coast, respecting the supply situation. While I expect the supply situation may remain tight for some months owing to the unprecedented levels of construction activity both in Canada and the United States, they have assured me that every effort will be made to free up the supply side.
Oral Questions HARBOURS


PRINCE EDWARD ISLAND-SUGGESTED ABANDONMENT OF DESIGNATED PORTS MAINTENANCE AND DEVELOPMENT PLAN
Mr. Heath Macquarrie (Hillsborough):: Mr. Speaker, I should like to direct a question to the genial and honourable Minister of Public Works. In light of the minister's recent comments about improving harbours in the Atlantic provinces, may I ask him whether he is giving consideration to abandoning the designated ports plan in Prince Edward Island and returning to a policy whereby all of our fishing harbours, and not just a few, will be properly maintained and developed?
Hon. jean-Eudes Dube (Minister of Public Works): Mr. Speaker, I will be very pleased to give all the consideration I can to this matter and reply to the hon. member.


NATIONAL DEFENCE
Mr. Peter C. Bawden (Calgary South):: Mr. Speaker, I have a question for the Minister of Transport. In view of the $3.7 million the government is spending to upgrade air navigation aids in the north to reduce the incidence of lost aircraft, will the minister tell the House whether the upgraded regulations that are to apply to civilian aircraft in the north will apply also to Canadian Armed Forces aircraft?


Jean Marchand: Is the hon. member asking about Canadian Armed Forces aircraft? This question will have to be put to the Minister of National Defence. I am in charge only of civil aviation.


Peter Colwell Bawden: Mr. Speaker, I have a supplementary for the Minister of National Defence. Is the minister aware that certain Canadian Armed Forces aircraft operating in the north are seriously under-equipped with navigation and radio aids, particularly modern crash position indicators, thus seriously and unnecessarily risking the lives of Canadian Armed Forces air crews?


Hon. lames Richardson (Minister of National Defence):: Mr. Speaker, all Canadian forces aircraft are equipped with personnel locator beacons. Most of the aircraft, the Hercules and the Twin Otters operating in the far north, are also equipped with crash position indicators. As I am sure the hon. member knows, there are the two types, but our aircraft are equipped with personnel locator beacons.
Oral Questions CONSUMER AFFAIRS

March 23, 1973


ACTION TO ASSIST OWNERS OF FIRENZA CARS RESPECTING COMPLAINTS
Mr. Barry Mather (Surrey-White Rock):: Mr. Speaker, I have a question I should like to direct to the Minister of Consumer and Corporate Affairs. It has to do with the large number of Firenza motorcars. I have myself seen this morning 100 such complaints in a file. Are the minister and officials of his department aware of these complaints, and what action is being taken to try to help the people who own these cars which have now been taken off the market by General Motors?


Hon. Herb Gray (Minister of Consumer and Corporate Affairs):: Mr. Speaker, on March 8 the department wrote the president of General Motors to inform him that it had received a substantial number of complaints from Firenza owners and to inform him of the department's concern about the matter and that it would be in touch with the company again once it had completed an analysis of the complaints. On Wednesday I wrote personally to the president of General Motors enclosing this analysis and telling him that I had instructed the staff of my department to be in touch with senior officials of the company to see what could be done to work out solutions to these consumer complaints.


Mr. Speaker:: Before calling orders of the day the Chair will recognize the hon. member for Kingston and the Islands.


TAXATION
Miss Flora MacDonald (Kingston and the Islands):: Thank you, Mr. Speaker. In the absence of the Minister of Finance I should like to direct my question to the Prime Minister. In view of the findings of a study by the Economic Council of Canada that the so-called tax reform bill of 1971 does not live up to its promise of relieving the tax burden on low income Canadians and leaves low income families paying a disproportionately high share of the country's taxes, does the government intend to introduce further tax measures over and above its proposed 2 per cent reduction to provide genuine equity in the tax system?


Pierre Elliott Trudeau: Mr. Speaker, we realize that the tax legislation of 1971 did not achieve perfect equity. We are rather proud that it took about one million people off the tax rolls and reduced the income taxes of another five million, which is no mean achievement, but we realize this is an ongoing problem. The other part of the problem, of course, can be solved only by looking at other aspects of taxation, such as indirect taxation. The government is concerned about this now, keeping in mind, of course, that the provinces have a lot of taxing powers themselves. Perhaps the final answer for this time is that the budget measures announced in the

speech of the Minister of Finance recognize some of these facts and bring in progressive tax cuts which would be very advantageous to the low income groups.


Flora Isabel MacDonald: Mr. Speaker, since the Economic Council of Canada has said that the budget does not recognize this, I should like to ask a further question. In light of the fact that increasing the exemption is considered least beneficial for low income groups and provides maximum assistance for those in the highest income groups, does the government now intend, as suggested by the province of Ontario and others, to introduce a tax credit system that will provide assistance to those who truly need it most?


Pierre Elliott Trudeau: No, Mr. Speaker, not at this time.


Mr. Speaker:: Orders of the day. Order, please. Perhaps hon. members would like to pursue their conversations behind the curtains so that the motion can be put.



GOVERNMENT ORDERS


David Lewis: That this House regrets the failure of the government to develop policies to create and operate Crown corporations for the benefit of the public, and condemns the government for divesting itself of its holdings and giving preferential treatment to private corporations in the field of public transportation to the detriment of corporations which belong to the people of Canada.
He said: Mr. Speaker, in the course of the years, this country, whatever may have been the government of the day, has found it necessary in some areas to establish publicly owned industries for the benefit of all the people of Canada. We are raising the subject today because there are ominous signs that successful Crown corporations are being dismantled or deliberately hobbled in respect of their further development. I want to emphasize that I am not placing this motion before the House in any doctrinaire sense or along doctrinaire lines, but because what is happening now to Air Canada and other corporations threatens to distort the development of the Canadian economy in key areas. That is the only reason we raise the matter today.
I wish to deal first with Air Canada. I want to address my remarks particularly to the Minister of Transport (Mr. Marchand), if he will do me the honour of paying attention to what I say. Someone had better poke him in the ribs. Perhaps the President of the Privy Council (Mr. MacEachen) could do that. I say to the Minister of Transport that what his department is doing to Air Canada and the preferences it is giving to CP Air are a scandal and a disservice to the people of Canada as well as to the future of the publicly-owned airline.
March 23, 1973

I refer first to the fact that he gave the route to Peking to CP Air. I heard someone on the other side say to me the other day that Air Canada was not particularly anxious to get the route to Peking. Let me inform the Minister of Transport that I have spoken to chief executives of Air Canada who have emphatically stated that they wanted and needed the route to Peking. They realized it might have been a losing route for a few years, which is always the case in such development, but they recognize that China and the area around it is an important area of growth, so for Air Canada that route would eventually have become a very important and profitable operation.
But what disturbs me more than I can say is that for a long time now the department has had before it the question of which one of Canada's carriers will be landing in Milan, Italy. I am worried about the length of time which the department is taking in making that decision, because it seems to me obvious that it ought to go without question to Air Canada.


Some hon. Members:: Hear, hear!


David Lewis: I say to the minister that if he yields to the advice he may be receiving from the privately oriented mandarins in his department and gives the route to Milan to CP Air, that will be a further betrayal of the importance of Air Canada and of its future as a publicly owned airline. The argument is made-at least I have heard it- that to give Air Canada Milan while CP Air has Rome, would create competition between those two airlines in the same country. May I remind the minister and members of the House that CP Air was given Amsterdam in a context to which I will refer in a minute, and although Amsterdam is in a different country from Brussels, or some other very close airport, the fact is that that is competition even closer to Air Canada competition than Milan would be to Rome.
What has happened in the history of our airlines in Canada is to me very significant and very revealing about both old parties in this blessed and great country of ours. We had established a publicly owned airline in line with most countries in the world. There are very few countries which have privately owned airlines, the biggest one among them being the United States. We have followed the Americans in many areas, not all of them beneficial to Canada may I underline.


Mr. Lambert (Edmonton West):: Oh, oh.


David Lewis: I wish the hon. member for Edmonton West (Mr. Lambert), who eats private enterprise for breakfast, regurgitates it at lunch, and does something even less elegant with it at dinnertime, would hold his seat, Mr. Speaker, and not jump every time we talk about a publicly owned airline.


Marcel Joseph Aimé Lambert: Your stuff is so sanctimonious anyway.


David Lewis: The thing is, we had a publicly owned airline which the people of Canada established as air transportation became of some importance. Then, the Conservative government in 1959 started the ball rolling for the private-
Crown Corporations
ly owned CP Air. It said to CP Air that it could have one or more airports in Canada, transcontinental routes. Then, in 1966 or 1967, the then minister of transport, the hon. Mr. Pickersgill, who did a great deal of good for Canada in that department, as he told me, but no matter how carefully I have looked I have not yet been able to find it, decided on a policy of dividing the world. Let us look at this policy and see how indefendable it is.
How did they divide the world between the two airlines? They gave Air Canada northern Europe-that is how Air Canada got Moscow-including the United Kingdom, and the Caribbean, and they allotted to CP Air southern Europe, the growing Pacific area, Mexico and Latin America. That was supposed to be an equal division. To me, it looks more like a rabbit and a horse. CP Air received all the growing areas of the world, with the exception of Africa which has not yet entered the picture. They have the whole of the Asian continent, which is growing and will be an important source for air transportation passengers and cargo, all of Latin America, which will be an important source also. Mexico is already a most profitable source of revenue for CP Air which at first got Mexico city and now has two or three more airports in Mexico. Air Canada cannot go there, yet Mexico is an important tourist country to which many Canadians go at different times in the year.
This scandalous division of the world is now being kept, and if the department continues along this course, CP Air will be the most powerful and most profitable Canadian air carrier while our own carrier, which is owned by the people of Canada, will have its growth stunted. What sense is there in that? Perhaps the ladies and gentlemen in the House may know that every time I think of CP Air I get a little apoplectic. We built the goldarned company with people's money, with people's land. They now have a huge empire, and as if that were not enough, when they are in competition with the publicly owned airline, we want to make certain that this large economic empire will have the opportunity for growth, development and profits while we stunt our own airline.


Some hon. Members:: Hear, hear!


David Lewis: That is totally indefensible. I hope that the present Minister of Transport is differently oriented from my friend, Mr. Pickersgill. I have said some unkind things about some other friends I had in the Bank of Canada whom I appear to have lost. I do not know whether Mr. Pickersgill will continue to be my friend. I certainly know that Mr. Pickersgill did a disservice to Canada in this policy which he established, and I also know that as chairman of the CTC, he did not do service to Canada by the way in which Bell Telephone got away with whatever it wanted and by the way in which the railways got away with whatever they wanted in rail line abandonment and everything that is contrary to the needs of the Canadian people. I know that the present Minister of Transport used to have a different kind of orientation and I think he still does. I appeal to him to stop this indefensible, conscienceless bending before CP Air and Canadian Pacific and give our own airline the opportunity which it ought to have for future growth and development in an era when transport is becoming daily more important for all the people of Canada.

March 23, 1973
Crown Corporations


An hon. Member:: They had better improve their service to Ottawa.


David Lewis: Here we go. Those are the usual stories. I have been on CP Air when I could not use Air Canada. I have been on CP Air and I say to these gentleman, and to their friends whose corporate rip-off they are determined to support no matter what their political position may be, that Air Canada is every bit as good as CP Air, if not better-


Some hon. Members:: Hear, hear!


David Lewis: -except that it is an airline owned by the people of Canada. Therefore, when it progresses, makes profits and has a surplus, it does so on behalf of the people of Canada, whereas CP Air's profits and surpluses are on behalf of the rich, investors of Canadian Pacific. God alone knows they have taken enough out of the flesh of the Canadian people, and they are not entitled to any more.


Some hon. Members:: Hear, hear!


David Lewis: It is really interesting to note some of the directors of CP Air. We have President Ian Sinclair, who is the head of it. They are little people, Mr. Speaker. You have always to remember that the directors of these large economic corporations are modest Canadians like Thomas Bata, the head of Bata shoes; Charles Bronfman, one of the heads of the liquor interests in this country; Hon. E. C. Manning, the modest ex-Premier of Alberta, and H. A. Martin, who is also at the same time a director of the Canada Development Corporation.
When you look at other subsidiaries of Canadian Pacific you find such little people as Duff Roblin, who is President of CP Investments, and J. V. Clyne, a Macmillan-Blo-edell executive; W. Earle McLaughlin, the unknown head of the Royal Bank and a director of the Power Corporation of Canada. These are the people who already have directorships in every important industry in this country, and have their hands on every important economic lever in this country. It is to these people that the ministry of transport hands over the best opportunities for development, from the point of view of the future, at the expense of Air Canada and the people of this country. If there are members of this House who are not eaten up by doctrinaire love for so-called private enterprise, which is not private at all any more, then they ought to tell the Minister of Transport that this parliament will not stand for any more erosion of the future prospects of the people's airline of this country.
At the same time, look at what has happened with the Canadian Development Corporation. That was, I suggest to you, Mr. Speaker, a valuable idea, an idea which, as we have pointed out to parliament on a number of occasions, our party suggested at its founding convention in 1961. We called it a Canadian Development Fund at that time. It was an idea for garnering large amounts of capital for investment so as to make sure that Canadian development is in Canadian hands, and that areas in Canada which cannot attract private capital will have a source of funds for their development. Its purpose as well was to make

sure that developments in new areas, in electronics and other new technology and scientific development in this country will not be in the hands of foreign corporations, or even of domestic private corporations, but will be in the hands of the people of Canada through some appropriate organizations.
One of my colleagues, the hon. member for Assiniboia (Mr. Knight), will deal with this subject in greater detail later today, but I want to deal with it as a whole for a moment. This was a good idea, an important idea for a country like Canada. It was an important idea for two very significant reasons. One is the extent to which our economy is now owned and controlled from outside. It was necessary to make certain that such a fund of investment capital was not in the hands of private investors who would just as soon, or sooner, sell to an American corporation for a fast buck than be concerned with Canada's economic independence. It was, therefore, important to have a publicly-managed fund of investment capital available for the purpose of retaining, at least in the future, the economic development of this country in Canadian hands. There is only one guaranteed way that anything will remain in Canadian hands, and that is if it is in the hands of the people of Canada instead of in the hands of a private corporation.
The second reason that was an important idea was that this country, like many countries in the world, has large underdeveloped areas that cannot be a place for private investment without public assistance. Those areas have never been profitable for private enterprise and are not likely ever to be profitable for private enterprise. That is recognized in the Department of Regional Economic Expansion where, in a way that I do not agree with but at least it underlines what I am saying, that department spends hundreds of millions of dollars of the people's money to build industry in these disadvantaged areas, so that even this government now recognizes these areas cannot develop without public intervention.
This was the other idea behind the Canadian Development Fund which we proposed in 1961. This was an important idea, and important for significant reasons. But what has happened to the Canada Development Corporation, as we foretold at the time would happen, and which was the reason we opposed it and why we moved numerous amendments which were defeated both by the Tories and Liberals in this House, is that it has become a mutual investment fund that takes no account at all of the needs in Canada, that does not appear to be concerned in the slightest with economic development in this country, and that is interested only in making itself into some kind of profitable organization. What other reason could there be for putting its hands on Polymer? In God's name, what other reason could there be for that? Here was an organization set up during the Second World War which has served Canada well, which has been a profitable undertaking, and which has operations outside Canada even now. What reason was there for the Canada Development Corporation to lay its hands on it, except that here was a profitable organization that it wanted to make part of its profit-seeking self?
The Canada Development Corporation has gone into partnership with Venturetek and West Venture-I think
March 23, 1973

that is its name, a similar operation on the west coast. The president of Venturetek is the son of a board member of the Canada Development Corporation, who himself had been head of that same corporation earlier, I think just before he became a member of the board of CDC. And I am informed that the west coast, so-called Venture organization, has hardly had any money put into it by private people. But now they will get part of the profits, if profits there be.
Of what value is this mutual investment fund now? A great important idea for the development of Canada in Canadian hands has been distorted and destroyed by the government, with the assistance and support of the Tory opposition, until it has been turned into a mutual investment fund that serves no purpose other than to try to attach existing investment corporations of this country. Indeed, Sir, the CDC-


Marcel Joseph Aimé Lambert: We did not support the CDC at all.


David Lewis: My hon. friend from Edmonton West tells me that he did not support the CDC. That is right. I said that he voted against our amendments, and that also is right. He did not support the CDC because even the aborted idea of the Liberals did not fit him. He did not want anything to do with any kind of Canada Development Corporation. He wanted to be certain that everything was held for his friends in Calgary and Edmonton, as if they did not already have enough of Canada and Canada's resources.


Marcel Joseph Aimé Lambert: Go on and moan somewhere else. Go and cry elsewhere.


David Lewis: Mr. Speaker, that is why he opposed the CDC. He and his colleagues will oppose anything until such time as the corporate tax cuts come before them, and then they will genuflect with great alacrity, just as they have always done in the past. Their hunger for throwing the government out suddenly recedes as their hunger for party campaign funds takes over, Mr. Speaker.


Erik Nielsen: Mr. Speaker-


David Lewis: The hon. member for Yukon (Mr. Nielsen) has something important to say I am sure.


Erik Nielsen: Mr. Speaker, I have been listening very carefully, as I usually do, to the hon. Leader of the New Democratic Party (Mr. Lewis). From what he has said it seemed that he was condemning the sale of Polymer to the Canadian Development Corporation. Do I understand that he actually condemns that sale?'


David Lewis: Yes, Mr. Speaker, the hon. member understands correctly. I condemn that sale-I condemn that sale with all the vigour I have. There was no excuse for it and there is no logic in CDC doing that. There is no good economic reason and I condemn it, Mr. Speaker. The Canadian Development Corporation has $250 million of the people's money to invest and I say to you, Mr. Speaker, that it is a waste of that money merely to buy up something that already functions efficiently. That is not
Crown Corporations
using the money properly and the government ought to tell the CDC to cut it out.
The President of the Treasury Board (Mr. Drury) ought to be ashamed of having agreed to the sale of Polymer to CDC. I ask him in all seriousness, what value there is in taking $60-odd million or $70-odd million of the $250 million capital of public money given to the CDC and using it to buy Polymer, an existing corporation, what addition to Canada's wealth does that represent? If that $60 million or $70 million had been used to set up some industry in Nova Scotia, New Brunswick, Newfoundland, Northern Ontario, Saskatchewan, or Quebec, there would have been an addition to the wealth of the country and additional opportunities for jobs for Canadian workers. This action of the CDC is a shameful grabbing along the lines of the usual economic empires which now throttle Canada and should not be permitted.
The CDC has become an extension of Power Corporation of Canada, which I find to be a nest of Liberal birds-


An hon. Member:: Vultures.


David Lewis: -or probably vultures, Mr. Speaker. There are people representing Power Corporation or who were earlier associated with it on the board of directors of CDC still acting in the only way they know; they never think in terms of the needs of the people or the needs of the country but think as directors of whichever corporations they headed in private enterprise. This is the kind of distortion which has been made of a good idea, Mr. Speaker.
The idea of CDC taking over Eldorado and the 45 per cent that the government of Canada owns in Panarctic is * a shuddering distortion of the needs in this country. The money is being used to take over existing situations without adding to the wealth of the country. It is asking that the government should consider selling the 45 per cent of Panarctic which ought to be at least 51 per cent because this parliament, not the private consortiums, ought to have a controlling interest in that Panarctic and the developments of Northern Canada. If there is wealth in the north it ought to be exploited on behalf of the people of Canada, not on behalf of the private corporations. Only if it is exploited that way will there be some concern with the rights of the native people and the environment of that area.
I want to underline, Mr. Speaker, that it is significant that they should even consider it because, if there is another area of probable growth in the future and probable profitability in the future, instead of coming back into the Treasury of Canada to be used for various programs on behalf of the people of Canada it will be added to the profits to attract investors in what is now a mutual investment fund.
As I have already said, Mr. Speaker, one of my colleagues will deal with the CDC in detail and another will deal with Polymer in detail. I want to conclude on this point, if I may. My colleagues and I do not claim that other members of this parliament and people who do not support us in Canada are any less concerned about the future of the country than we. I do say, however, Mr. Speaker, that there is a feeling in the youth of Canada

March 23, 1973
Crown Corporations
which parliament ought to share, that this country is being handed over recklessly.
I had the honour of being invited last night by the Student Council of the University of Western Ontario to participate in an exercise which they called "Confidence Canada." The well-known writer and broadcaster, Pierre Berton, and I were honoured in being invited to receive awards from the Student Council in relation to Canadian independence, both economic and cultural. I do not know exactly how many people were there, but I was told that the hall holds more than 2,000 people and it appeared to be full. That is not as important as the fact that the young people, at least 90 per cent of the audience, consisted of university students and some upper grade high school students. That audience of more than 2,000 young Canadians was enthusiastic about this country. The propositions which we put to them about the need for regaining control of Canada's economy and developing a Canadian culture of independence, beauty and strength, was received with warmth and enthusiasm. I told them at the end of the meeting that they moved and inspired me much more than I could possibly have hoped to move and inspire them.
Mr. Speaker, across this country there is a growing appreciation of the fact that our wealth is being exploited for private gain and not for public good; it is being exploited mainly for the gain of large multinational corporations and not for the objectives of this country. There is a growing realization of that and there is a growing demand that the sellout of Canada should stop, and that the riches that this country has be developed in this country for the welfare of its people and, in so far as we can %pare them, for the welfare of other peoples in the world who need them and not for those who are already rich and powerful.
What we are saying in this motion is that development of this country requires more and more public involvement and public investment. We are saying that the policies with regard to Air Canada, to the Canadian Development Corporation, to Polymer and to Panarctic on which . this government is now embarked is a reversal of progress in this country and must stop. We hope that this government will be persuaded to stop it.


Mr. Don Mazankowski (Vegreville):: Mr. Speaker, let me say at the outset that it is not very often I have the opportunity of following the distinguished member for York South (Mr. Lewis), who always speaks with such eloquence and conviction. We heard again today his usual rhetoric and his exposition of socialist philosophy. He seems to speak with more determination and conviction each day. It seems to me that power has gone to his head. He would sooner promote his own philosophy than meet the challenges inherent in any action that is necessary to meet the transportation needs of the Canadian people. It is obvious, from the drafting of the motion, that he is concerned about the government's failure to develop policies relating to corporations which belong to the people of Canada; yet he did not say anything about the need for improving the transportation network in Canada and overcoming some of the deficiencies. I hope that the Minister of Transport (Mr. Marchand), to whom the hon. member addressed a good portion of his speech, will not

be overly concerned with the appraoch taken by the hon. member for York South who preceded me.
Let me give a good example of how a private regional air carrier moved into a vacuum which was left by Air Canada. I am speaking about the service between Edmonton and Calgary. Some years ago, Air Canada gave up the route between Edmonton and Calgary because it was losing money. Pacific Western took on that route and provided an air bus service. On week days there are six flights each way between Calgary and Edmonton. You can fly from Calgary to Edmonton in 35 minutes. There is no waiting time. You walk into the air terminal, buy your ticket, get on the aircraft, and you can travel from Edmonton to Calgary in less than one hour, travelling time to and from the airport included. This has been a very successful venture.
One might ask this question: If that service is so successful and efficient between Edmonton and Calgary, why is it not feasible to set up the same kind of service to serve Toronto, Ottawa and Montreal?
The leader of the NDP referred to the awarding of the route to Milan. I, too, wish that the government would make a decision about the awarding of this particular route, because it seems to me that the delay will only add further confusion and frustration for the air carrier who will eventually be awarded it. It will make it more difficult for that air carrier to capitalize on the summer travel season this year, which will be the annual peak. I hope the government, in making any decision, will not be dictated to, and I hope it will not listen to any threats made by the President of Air Canada, Mr. Pratt, who has suggested that he would quit in disgust if the route is not awarded to Air Canada.
If the government awards that route to Air Canada, it must clarify its policy. Aviation policy was defined in 1965, and under it CP Air was designated to serve the whole Pacific area, including the whole of Asia, Australia, New Zealand, as well as southern and southeastern Europe and Latin America. Air Canada was designated to serve Britain, western, northern and eastern Europe, and the Caribbean, with this exception: CP Air was to continue to serve the Netherlands through Amsterdam. It seems to me that under established policy CP Air should rightfully be awarded access to this route, and I think the government owes it to the House to explain its new policy if it is contemplating a deviation from the existing policy.
When we look at the needs which confront us in transportation in this country, in the air, on land and on water, it will be seen, I think, that there is a need for both private and public investment if we are to be successful in developing a co-ordinated and integrated transport system in this country. Those of us who travel on the airlines know that competition is needed if we are to be given the kind of service to which people are entitled. Certainly, the federal government should encourage a great deal more research into many modes of transportation. I believe there is a great deal of work to be done on tracked air cushioned vehicles and intercity rapid transit. I believe those avenues should be explored. While this is being
March 23, 1973

done, it would be wise to improve and polish some of the facilities which we now possess.
The Canadian Transport Commission Research Branch, in its Intercity Passenger Transport Study of September, 1970, said in part:
-in the 1970's the greatest benefit would be derived from improvements in the existing modes, such as on-time reliability (and consequent reduction in waiting times), passenger processing procedures, and rail improvements using existing trackage.
-access to terminals and processing waiting times in terminals make up a large segment of total trip time and consequently improvements in this area will have significant payoffs.
The travelling public is not so much concerned with the amount of time that is spent in the air as with the frustration and confusion that is created on the ground. I am speaking of methods of handling passengers, of luggage handling methods and of how tickets are processed. The CNR, for example, is a Crown corporation, but I do not think it is a leader or an innovator in this field. I believe that the corporation should be addressing itself to shortcomings in these areas. Advances and improvements in rail passenger service have been few in the past years. I suggest that all this is not only a challenge to the private sector, but a challenge to the public sector as well, including existing Crown corporations. My main concern has not to do with the effect which private enterprise will have on government sponsored bodies. My biggest concern is to see that the Canadian public is given the kind of service it is entitled to, at reasonable prices. My remarks also apply to the transportation of goods.
There was a debate on Tuesday in which it was pointed out by many in this House that inequities and discriminations in the application of railway freight rates have had an unfortunate effect on the various regions of this country. It is imperative that we develop an effective and equitable freight rate structure which will apply to the transportation of goods from region to region. That structure must not work to the detriment of any region of Canada, particularly the Atlantic region and the western region. The CNR is more concerned about sprucing up its corporate image than addressing itself to the needs of transportation. Double page ads in the major magazines throughout Canada do not really refer to transportation, but real estate investment. I have here a double page ad which indicates the huge tracts of land they are utilizing to erect buildings and shopping centres. I notice that even the town of Vegreville is included in this particular ad.
There is an ad in Time magazine which boasts about the CNR operating so efficiently year after year. It asks "Why don't we end up in the black more often?" There are a lot of Canadians asking the same question. Rather than the CNR concerning itself with a public relations campaign, it would do much better to take a look at its rail passenger service and spruce it up a little so that Canadians who are desirous of travelling by rail will have the opportunity to do so comfortably and efficiently.
There is no question that we need improvements in our air service in this country. We have two major air carriers which basically provide trans-continental and international service. These airlines could be complemented to a much greater degree by an effective co-ordinated regional
Crown Corporations
air carrier policy. This whole system should devote itself to serving the passenger needs of all of Canada and particular regions, not when it suits the carrier but when it suits the passenger.
There are a number of regional air carriers in Canada which have done a very good job. However, a clear cut air transportation policy utilizing the two major air carriers, co-ordinated by the regional air carriers, is something we need in this country. Pacific Western Airlines, which filled a vacuum in the western part of Canada, Eastern Pacific Airlines and Transair are indeed carriers that we need in this country. They are efficient and effective. I do not believe they would do a better job if they were nationalized.
There is a lot of talk about the service received from Air Canada, particularly as it relates to western points. Some of the services leave much to be desired. The service between Ottawa, Toronto and Montreal is such that on any given day it is difficult to get a reservation to travel from city to city. If you do not book your flight a week in advance, you will be flying by the seat of your pants. If this national air carrier cannot put on more aircraft to supply the needs of the people, someone else should be allowed to do it.


Some hon. Members:: Hear, hear!


Donald Frank Mazankowski: You cannot have a monopoly and fail to provide the service which the public needs. Pacific Western Airlines, which serves the cities of Calgary and Edmonton, have filled the void created by Air Canada which felt it was not economical to serve those two cities. This is a profitable operation and renders the kind of service that is needed between those two cities. The carrier is happy and the public are happy.
The frustrations of passengers wanting to fly between Toronto, Ottawa and Montreal is obvious. I have experienced it many times. When I journey westward to Edmonton on a weekend, I must stop off in Toronto. I have waited as long as 10 hours to get my connecting flight. Flight 137 which travels from Saint John to Toronto and on to Edmonton has never been on time on a Friday night for the past two months. These are some of the things which frustrate Canadians.
The airlines and the passengers, particularly the passengers, find that Toronto is a huge bottleneck when travelling to Ottawa. Also, the citizens of Toronto do not appreciate having these extra flights around their city. Why can we not have a direct air link between the capital city of Canada and the capital city of Alberta? Surely, the city of Edmonton has matured to the stage where it deserves a direct link by Canada's national air carrier. You either have to go to Winnipeg and wait for an hour and a half or go to Toronto and wait for an hour and a half. There is a not a direct link by Canada's national airline between the city of Ottawa and the city of Calgary. There again there are stopovers, delays, frustrations and traffic jams in Toronto or an undue wait in Winnipeg.
There is something else that is needed in Alberta. It is high time the city of Edmonton was awarded a bilateral service to the United States. Edmonton is the only city in Canada that does not have a direct link to the United States. Bilateral talks have been going on, but nothing has

March 23, 1973
Crown Corporations
developed. They have been stalled. We would like to know what the future holds with respect to this application. I have a letter from the Edmonton Business Development Department which puts forth in a nutshell the reasons and the desirability for Edmonton gaining this access. I quote:
Edmonton is still the only city without bilateral service to the United States. Therefore, it is vital that Edmonton obtain the route from Twin Cities (Winnipeg), Edmonton-Anchorage daily jet service. Northwest Airlines, through president Nyrop, have agreed to fly this route if it is granted. This will give Edmonton connection to the central United States and give Canada its first connection to Alaska.
An air bridge between the state of California and the cities of Edmonton and Calgary is another desirable requirement. Calgary and Edmonton are the fourth and fifth largest sources of air passengers for Los Angeles and San Francisco in Canada. Los Angeles is Calgary's largest U.S. market with San Francisco its fourth largest. Los Angeles is Edmonton's second largest United States market while San Francisco is Edmonton's third largest market in the United States.


Mr. Speaker:: Order, please. I regret having to interrupt the hon. member, but his time has expired. He can pursue his remarks, of course, with the unanimous consent of the House. Is there agreement?


Some hon. Members:: Agreed.


Donald Frank Mazankowski: Thank you, Mr. Speaker, I also wish to thank the hon. members who have given me this opportunity to conclude my remarks. I reiterate the necessity of upgrading and improving air transportation service, particularly as it relates to western Canada. I also point out at this time that parliament has not had an opportunity of examining the 1971 annual report of Air Canada. I believe there are many areas both the committee and parliament could explore. Many questions remain to be answered, particularly those related to its sales and promotional charges.
I should like also to point out that the approach indicated in the recent policy enunciated by the minister respecting northern development and transportation by land, air and sea is sadly lacking in imagination, particularly with regard to air transport. I believe the policy blatantly disregards the relationship of the province of Alberta to the development of a uniform and effective northwestern transportation policy. The plan advances seven key recommendations. I believe that to disregard the province of Alberta, particularly the city of Edmonton, in this overall approach to overcoming some of our transportation problems in northern Canada is an error.
I do not think it is expounding any far-fetched dream to say that Edmonton will some day become the gateway to the north, for that is an established fact today. The province of Alberta accounts for about 27 per cent of western Canada's personal income, 28 per cent of its population, 33 per cent of its net value of production, 32 per cent of total private and public investment, and 49 per cent of its mineral production. In terms of future potential of resource development and industrialization, Edmonton is

indeed the hub of industrial activity. Edmonton is the fastest growing city in Canada. It is the provincial capital and the largest city in Alberta.
In assessing his transportation policy as it relates to northwestern Canada, I hope the Minister of Transport will reconsider the importance that the city of Edmonton and the province of Alberta will play in the development of an over-all policy. I know that we in the west are vitally concerned about the transportation needs of this country. We are very much aware of the need for improving our transportation services to the north. I hope that in the over-all assessment the minister is now undertaking, this matter will be taken into consideration, so that the north will grow in co-ordination with the facilities we presently have in Alberta, and in so doing create a much better system for all modes of transport.


Charles Mills (Bud) Drury: Mr. Speaker, I wonder, with the consent of the House, whether I could call it one o'clock?


Mr. Speaker:: Is it the wish of the House that the Chair call it one o'clock?


Some hon. Members:: Agreed.


Mr. Speaker:: It being one o'clock, I do now leave the chair until two p.m.
At one o'clock the House took recess.


[Stage Direction]
AFTER RECESS

The House resumed at 2 p.m.
Charles Mills (Bud) Drury: Mr. Speaker, in rising to respond to this motion I will be directing my remarks principally to the observations made by the hon. member for York South (Mr. Lewis), the mover of the motion. In listening to him, I was interested to hear an expose of the ultimate almost in pure socialist doctrine. It was pure in the sense that it was theoretically doctrinaire. However, it was inpure in that it was disguised. One heard none of the slogans or none rather of the usual terminology which is employed in putting forward these claims; but nevertheless the underlying philosophy was the same. It appears to be based on the premise that nobody can accomplish anything or more particularly that no one can do anything as well as governments. I shall say a few more words about this later on. But quite clearly, the criticisms as outlined in the motion itself of government policy and its record with regard to Crown corporations can have been made only because of lack of knowledge. The government has, in fact, been most creative in developing new Crown corporations and in modifying the purposes of existing corporations which have both economic and social purposes. If I may, I should like to lay before the House a brief outline of policy developments in recent years. Then, I wish to go on to give a few examples of the very considerable achievements of Crown corporations in recent years.
In part of his peroration the hon. member for York South called for "more public involvement and public
March 23, 1973

investment". One measure of this involvement, of course, is investment itself. Let us take a quick look at the record. The most recent published public accounts, those for the year 1971-72, showed the total of government advances, loans and investments in Crown corporations stood at $11,998 million on March 31, 1972, almost $12 billion in advances, loans and investments in Crown corporations. This compares with an amount of only $4,468 million of $41 billion ten years before and with about $8 billion as of March 31, 1968.
We thus have seen a 50 per cent increase in the government's net investment-I emphasize net investment-in the last five years and more than a 250 per cent investment in the last ten years. I stress that this is a net investment since each year the government receives repayments on earlier loans and each year makes new loans. Yet, over the years in question the investment has grown after repayment in this very striking way.
Another measure of such involvement is legislative activity. I would like now to spend a few moments on that topic. As hon. members will see, the government has been very active in establishing new corporations and in adapting existing ones to meet a wide range of special needs. In the period from 1963 to 1972, legislation was presented to create among others, the following new Crown corporations: in 1963, the Economic Council of Canada; in 1966, the Company of Young Canadians; in 1966, the National Arts Centre; in 1967, the Canada Deposit Insurance Corporation; in 1967, the Canadian Film Development Corporation; in 1967, the Cape Breton Development Corporation; in 1967, the National Museum of Canada; in 1969, the Freshwater Fish Marketing Corporation; in 1970, the Canadian Salt Fish Corporation; in 1972, the Pilotage Authorities, the Atlantic, Laurentian, Great Lakes and Pacific; and in 1972, Uranium Canada Limited.
I shall have time later to mention only some of the accomplishments of some of these new corporations in their early years, but I ask hon. members at this time to note the names on this list. They will then appreciate, I am sure, that the government has had the insight to see the Crown corporation not just as a device with application in the economic sphere. They will note that this list includes new ventures in the social and cultural spheres as well. I submit, Mr. Speaker, that the criticism contained in the resolution alleging a lack of public involvement has no foundation whatsoever in fact.
In addition to legislation establishing new corporations, there has been much legislation to expand and modify the powers of Crown corporations to fill the changing demands of the area they were set up to serve. For instance, in 1964, 1968, 1969 and 1972 legislation was brought in to affect the operations and powers of the Farm Credit Corporation, one of some age and reputation, to allow it to provide credit to groups of three or more farmers. The amendment to provide the Farm Machinery Syndicates Act and to raise the maximum on loans from $20,000 to $40,000 was brought in in 1964, to $80,000 in 1968, and to $100,000 in 1972. The amendment to allow loans to farming corporations and Indians farming on reserves was introduced in 1968.
Crown Corporations
No one could be unaware of the legislative initiatives which have so greatly increased the capabilities of CMHC in adding to and improving the housing stock available to Canadians. In 1964, long term, low interest loans to nonprofit organizations were made possible for the provision of low income rental accommodation, especially for elderly persons. In 1966, the National Housing Act was broadened to provide NHA financing for existing housing generally. In 1967, to stimulate private lenders support for housing, the formula was revised by which the maximum interest rate on NHA loans is established. Together with concurrent amendments to the Bank Act, this change spurred a return to the mortgage market by chartered banks. In 1973, extensive amendments to the NHA were introduced to the House of Commons in Bill C-135. These relate to government goals in the fields of low income housing, neighbourhood improvement, land assembly, new communities, and consumer protection, and also in 1973, the residential mortgage financing act was introduced to create the federal mortgage exchange corporation, a new Crown corporation, in order to provide additional financing mechanisms and institutions for the residential mortgage market in Canada.
The motion sponsored by the hon. member for York South (Mr. Lewis), in addition to dealing with Crown corporations in general, made allusions to two specific topics, namely, that the government had given preferential treatment to private corporations in the field of public transportation, and that the government had divested itself of certain holdings. I expect that my colleague, the Minister of Transport (Mr. Marchand), will examine specifically the alleged criticism in relation to the field of public transportation. I, myself, would like to deal briefly with the complaint made by the hon. member for York South that the government had, if not committed, at least aided and abetted in some general and sinister disservice to the public of Canada by setting up the Canada Development Corporation and then proceeding to encourage its growth and effectiveness.
The hon. member for York South in his peroration exhorted the House to take heed and to avoid a sell-out of Canada. He was rather eloquent on this and indicated that one of the tasks facing Canadians in general and the House in particular was to avoid a sell-out of Canada. He indicated in some way that the establishment of the Canada Development Corporation was such a sell-out. If one has reference to the purpose of the Canada Development Corporation, which does not seem to have been very well understood, it is to:
help develop and maintain strong Canadian controlled and managed corporations in the private sector of the economy and will give Canadians greater opportunities to invest and participate in the economic development of Canada.
So that the purpose for which the Canada Development Corporation was established clearly was to avoid a sellout of Canada or Canadian resources.


Mr. Knight:: You owned Polymer, why did you sell it?


Charles Mills (Bud) Drury: If the hon. gentleman would like to hear, let him hold his peace. The Corporation was formed to avoid such a sell-out, and this is not only stated in the articles of incorporation but it is also the way in which it is operating

March 23, 1973
Crown Corporations
and the purpose for which it is serving. I would suggest that perhaps the complaint cloaked under the guise of avoiding a sell-out of Canada, what the hon. member for York South and some of his vocal supporters object to, is that it is not a sell-out of Canada, it is a sale by the government-


Some hon. Members:: It's a sell-out.


Charles Mills (Bud) Drury: -to Canadians. What the hon. member is implying is that Canadians cannot be trusted with these matters; it is only the government which must own and control. Canadians as individuals cannot be trusted.


Some hon. Members:: Oh, oh.


Erik Nielsen: Rubbish.


Charles Mills (Bud) Drury: That we, the government, are the sole source of wisdom, the repository of all knowledge and sagacity. Now, Mr. Chairman-


William George Knight: Yes, Mr. Speaker, you are at the right meeting.


Charles Mills (Bud) Drury: -we are in a Canada where quite clearly the main engine of progress is private creativity, private initiative and private endeavour.


Mr. Knowles (Winnipeg North Centre):: I don't know why the Tories want to get rid of you.


Erik Nielsen: Because he does not believe in what he is saying.


Charles Mills (Bud) Drury: The task of government is not to take over the private sector and to run it, but to establish a framework in which Canadians as individuals can grow and flourish. The job of the government is to make it possible for Canadians as individuals-and I include as individuals all the hon. gentlemen sitting opposite me-to have the right to develop as individuals, I do not subscribe to the notion that Canadians should have their creativity, and intelligence, and initiative exercised for them by a government, however well intentioned, however benevolent, however high minded.
The purpose of the Canada Development Corporation was to enable Canadians to operate in an environment where, in the private sector, it would be possible for them to compete on more equal terms than has been the case in the past with the colossi known as multinational corporations. I think that in the past Canada has suffered the disadvantage, in corporate terms, of smallness, of lack of large, effective units.


An hon. Member:: You believe in big business, too.


Charles Mills (Bud) Drury: Mr. Speaker, when the hon. gentleman says "too" I assume he is referring to his own party. They believe in only one business, and that is government. That is all the business they want, the only business, and it is big business.


Erik Nielsen: That's funny business.


Charles Mills (Bud) Drury: Mr. Speaker, in the case of the Canada Development Corporation their object, as I say, is to create an environment, a framework in which Canadians can operate, can compete in the world of industrial organization in which we live, on more equal terms than has been possible in the past. For this, what is needed is a training ground for organizational and entrepreneurial talent in the private sector.
Hitherto the only training grounds, the only areas in which these kinds of skills could be obtained were the other multinational corporations, foreign owned and consequently foreign controlled. I think most Canadians would agree that the time was overdue when this kind of industrial organization should be not only possible for Canadians but practicable for Canadians. It would seem to be the case that the private sector neither had the resources nor the willingness to do this, so the stimulus was provided and the seeds were sown by the government through the agency of a Crown corporation, incidentally another Crown corporation, known as the Canada Development Corporation.
This is a corporation wholly owned by the Crown. All of its shares are owned by the Crown. All of its funding is derived from the Crown. The Crown already had under its control and ownership another corporation known as Polymer.


Erik Nielsen: Would the minister permit a question?


Charles Mills (Bud) Drury: The hon. member for York South-


Erik Nielsen: Would the minister permit a question?


Charles Mills (Bud) Drury: Yes.


Erik Nielsen: Thanks. He will not disagree with me when I suggest to him that the board of directors of Canada Development Corporation intend to offer a share of the CDC for sale to the public, will he?


Charles Mills (Bud) Drury: I would not dispute that such an intention may be in the minds of the directors of the corporation.


Erik Nielsen: It is; they have said so.


Charles Mills (Bud) Drury: At the moment, I am discussing the transfer of Polymer to the Canada Development Corporation. Polymer is a Crown corporation. CDC is a Crown corporation, and a physical operation of the sale by the Crown of one agency to another Crown agency is obviously entirely neutral in financial terms. And for the hon. member for York South to represent this as an unwise expenditure of money either means that he does not understand public finance at all, which I am quite ready to believe, or else he was endeavouring to mislead people, which is something I do not wish to accept. So, I am driven to the conclusion that he does not understand public finance.


An hon. Member:: You don't understand it.


Charles Mills (Bud) Drury: Mr. Speaker, I think I do understand it, and I deplore, I regret, and I sympathize with the ignorance opposite.
March 23, 1973

The object of the CDC is to develop the possibilities for a Canadian-owned, a Canadian-controlled corporation to acquire the size, the expertise, the technical know-how to compete effectively in a world dominated to a large degree by multinational corporations. In order to do this, to create such an instrument, it must have tools. Obviously, one of the tools is the Polymer Corporation. With a view to developing this, and to making it grow, it was transferred to the CDC.
There have been a number of suggestions made by the hon. member for York South that in his mind corporations are basically some form of ecclesiastical benefice which the government hands out to individuals or groups of individuals, with a view to making a profit. Apparently this is his vision of the airlines in Canada. According to the hon. member, one should not allocate an area or a route to Canadian Pacific Airlines rather than Air Canada because what is being allocated, to use the vernacular parlance, is gravy, or the gravy train, and if anybody is going to get the gravy train it should be the publicly owned rather than the privately owned airline.


Some hon. Members:: Hear, hear!


Charles Mills (Bud) Drury: I gather that this kind of distorted reasoning is held by others of his supporters.


Stanley Howard Knowles: And some of your own.


Charles Mills (Bud) Drury: I suggest that the purpose of Air Canada and Canadian Pacific Airlines is the provision of air services to the Canadian public, and the question in one's mind should be: How can this service be provided most effectively and most efficiently to the public, not an enquiry into who is being granted a favour?
And by looking at it in terms of regarding all corporate activity as a source of money and nothing else, I think the perception of business organization by some hon. members tends to get a little distorted. One must look at the purposes of the CDC. I have already outlined them. I repeat that the purpose of the CDC is to develop an environment in which Canadians, as Canadians, can acquire the skills and the abilities in a practical way to have Canadian control and ownership of our larger resources, in the form of a multinational corporation operating on the world scene. This is not merely an endeavour, as the hon. member for York South would represent, on the part of the government to confer public benefits on a particular group for their enrichment.
The purpose of the Canada Development Corporation has to be considered and one can question whether it is achieving this. If the sole purpose of the CDC is, as alleged, merely to make a profit, then a lot of confusion will result, as it has, in the mind of the hon. member for York South. If the CDC is successful, as I suggest it will be, then it will be possible for Canadians to participate directly not only in the control, which is perhaps partly more properly a function of government in a regulatory sense, but also in the benefits inherent in ownership in their national resources which all too frequently tend to be in the hands of non-Canadians. One should, therefore,
Crown Corporations
support the growth and the success and the future of the Canadian Development Corporation.
In the field of plastics and synthetics in which Polymer has been engaged with a high degree of success for a number of years, there is now the possibility of expansion with the existence of the larger resources of the Canadian Development Corporation. In order to get into the field of pharmacology, the Canadian Development Corporation has acquired Connaught Laboratories in Toronto, with a view to expanding and making it a Canadian controlled operation in the pharmaceutical field.
In the House this morning, the hon. member for York South raised the question of whether the Canadian Development Corporation was contemplating the acquisition of the government's share of Panarctic Oils. This is an organization which, under Canadian control, is engaged in the development of oil and gas deposits in the high Arctic. I am persuaded that most Canadian resources would be brought to assist in this peculiarly and almost unique Canadian endeavour in oil and gas exploration. Everyone, including the hon. member for York South, takes exception to the fact that the bulk of the exploration and development of oil and gas resources in Canada is being done by large corporations which are, in corporate terms, both owned and controlled by non-Canadians. Here is a possibility of an organization which by its charter is now and will be Canadian owned and controlled, moving into and establishing a unique and entirely Canadian presence in this field. This should be welcomed rather than decried.
I think that the hon. gentleman from York South would welcome a Crown corporation wholly owned by the government doing this, although I am not too sure that members of the other party feel that the government should be in anything, and that perhaps Panarctic should be allowed to continue on its own. I welcome the notion that it is possible to bring greater resources to bear on this development through the mechanism of a Canadian controlled operation such as the Canadian Development Corporation setting out to accomplish the very purpose for which it was set up. The criticism, if any, of this is that it must continue to be owned by the government. The hon. member for York South assumes that the government can run things better than the private sector. This is not a belief which I share, Mr. Speaker. There are some fields in which the government can do things better than private interests, and there are others where the private interests can do better than government.
In most of the fields in which government is involved, and which are peculiar to and appropriate for government, they are generally well looked after. Where, however, governments tend to venture into fields-and I do not see the ex-premier of Saskatchewan here nor the Leader of the Official Opposition (Mr. Stanfield) and I would have liked to recall to them the success some other forms of government have had in fields where the private sector has demonstrated well established ability to-


Mr. Deputy Speaker:: Order, please. I regret to interrupt the hon. President of the Treasury Board (Mr. Drury) but the time allotted to him has expired.


Stanley Howard Knowles: So has he.

March 23, 1973
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Mr. Don Blenkarn (Peel South):: Mr. Speaker, earlier today we heard from the hon. member for York South (Mr. Lewis) who was not very complimentary to the CPR. Frankly, many times members of this party are not too complimentary either, but I would say to him, through you, Mr. Speaker, that if we did not have Canadian Pacific Airlines flying into Ottawa, transportation to this city would become a horror show. Air Canada does not seem to want to look after people coming to the capital city unless it suits it.
Having talked to many people in the air travel business, I am well aware of the high-handed attitude of Air Canada. This has been brought out in questions addressed to the Minister of Transport (Mr. Marchand) in this House in connection with the price of air charters. In the travel field, it is necessary to have private competition in order to drive down and keep down prices, while at the same time giving the service that Canadians require.
In his speech, the President of the Treasury Board (Mr. Drury) has advised this House that the government now has $11.9 billion invested in Crown corporations. I wonder if any investor ever invested so much money and received so little return. A great deal has been said about Crown corporations, but surely the reason for the Canadian Development Corporation cannot be solely its use as an executive school to train people for executive jobs. If that corporation is to have any validity, surely it should be out developing Canada, making it possible for Canadians to own Canada and helping Canada to go forward as a nation.
Mr. Speaker, I want to apologize to you for a question I put to the right hon. Prime Minister (Mr. Trudeau) two days ago when I asked him whether there was any justification for the sale to the Canadian Development Corporation of Polymer at $42 million less than the book value. Since that time I have had occasion to examine the balance sheets of Polymer Corporation going back for a number of years, and I have determined that in the last balance sheet that is available to the members of the House the difference is not $42 million but $55 million. The book value of Polymer, at the close of business on December 31, was $117,801,000. This corporation was sold for $62 million. I intend to go into that matter later this afternoon.
I want to make it clear that my party is not opposed to Crown corporations or public corporations. Nevertheless, the activities involving CDC and Polymer Corporation are a sorry mess. This must be brought to the attention of the House and of the people of Canada. When I say that my party is not opposed to the development of Crown corporations, let me remind you, Sir, and the members of the House, that it was my party which created the Hydroelectric Power Commission of Ontario, and the Canadian Broadcasting Corporation. It is my party that is prepared to examine priorities in Canada and, if necessary, but only if necessary, to create a Crown corporation to do a job that Canadians think should be done. Let me say this, as well. It will be my party that will look every day at Crown corporations and make sure they are doing their jobs. If necessary, we will institute reforms, to make sure that the sorts of things which have happened in the last

little while between Polymer and Canadian Development Corporation do not continue to happen in the public service.
I referred earlier to the financial statement of Polymer Corporation and the consolidated balance sheet of December 31, 1971. I say that we should have available the December 31, 1972 statement. Perhaps, Mr. Speaker, you will realize why we have not received it. I intend to comment on that as well.
In the statement of February 11, 1972 for the period ending December 31, 1971, the shareholders' equity in the corporation, that being the value accruing to the people of Canada, as asserted by the Auditor General and by Peat, Marwick, Mitchell and Co., chartered accounts, was $117,801,000. This corporation, belonging to the people of Canada, was sold to Canada Development Corporation for $62 million. Normally when you look at a balance sheet, you look for the assets of a corporation. This corporation has been operating since the early 1950's.


An hon. Member:: It was operating before then.


Donald Alex Blenkarn: On looking at the corporation's balance sheet, you will find that the corporation owned lands and buildings that cost $254 million odd. The accumulated capital cost allowance or depreciation with respect to that item alone is listed at $92,372,000. Even if one allows for such capital cost allowances, or for depreciation to put it another way, and allows for the fact that this corporation owned land and buildings purchase way back I do not know when, one must be realistic. The market value of those lands and buildings, in view of the inflation that has taken place, must have been considerably more than that set out in the corporate balance sheet.
I am unhappy that the hon. member for York South sometimes referred to as the deputy leader of this government, is not here. He knows quite a bit about corporate balance sheets. Throughout the election campaign he talked about corporate bums, tax surpluses, and that sort of thing. He was looking into balance sheets and saying, "If you really wanted to look into this balance sheet, you would find that there is a big profit there that is not being taxed." In the normal course, if a company such as Polymer were put on the market, it would not be sold for its book value; it would be sold for many times book value. It would be sold on the basis of asset value, its prospects and productivity. But, the corporation in question was sold for $55 million less than its book value on December 31, 1971.
May I refer hon. members of the House to section 39 of the Canada Development Corporation Act, which provides that the governor in council may sell or cause to be sold a corporation at such fair and reasonable price as may be agreed upon. It lists Polymer Corporation and two or three other corporations. When we asked the President of the Treasury Board about this matter which was raised in the Miscellaneous Estimates Committee, we learned that a certain amount of departmental analysis had been done with respect to Polymer Corporation, and that the department had brought in a private appraiser. You may remember, Mr. Speaker, that when I asked the Prime Minister (Mr. Trudeau) about this the other day, he said that he would look into this private evaluation, and per-
March 23, 1973

haps he would table it but perhaps he would not. We have looked into this question and found that a profit analysis was done. We are wondering about this. What kind of game is being played?
Is this corporation worth only $62 million? Because, if this is all it is worth, then annual report after annual report filed in this House, audited reports, press releases and fancy annual returns which have indicated the great profitability of Polymer Corporation, are not correct. If this corporation, Mr. Speaker, was worth only $62 million, it is clear that this House, this country and all of us have been lied to for years and years. This is what the Prime Minister says; this is what the President of the Treasury Board now says. He says we have been lied to. It was only worth $62 million all along. The $92 million worth of fixed assets in lands and buildings which the corporation owned, according to the audited statement presented to this House, do not mean a thing. The fact that the shareholders' equity was $117,800,000 does not mean a thing. The corporation was only worth $62 million.
One begins to wonder at the figures connected with the alteration in the price of that corporation. This was a cute deal. It provides that the price can go up if the performance of Polymer in 1973 and 1974 is satisfactory. And how do the people involved measure that performance? First, those involved in this deal suggest that companies are now being valued at four times earnings. Everybody knows, Mr. Speaker, that every corporation, even a poorly organized corporation, even Bell Telephone, is valued at about ten times earnings. Corporations that are involved in research and development are usually valued at close to 20 times earnings. But this corporation sold for a fair and reasonable price in accordance with the statutes of this country, is valued at four times earnings. The price may go up $10 million if the company earns $2.5 million after taxes in the years mentioned. Mr. Speaker, there is something rotten here.
I wonder what this government has to hide. We know, Mr. Speaker, that the Minister of Supply and Services (Mr. Goyer) has had the financial statement of the Polymer Corporation since early February. What does he want to do with it? He wants to hide it. He does not want to show it. He is afraid to bring it forth.


Jean-Pierre Goyer: I rise on a question of privilege, Mr. Speaker.


Mr. Deputy Speaker:: The hon. minister on a question of privilege.


Jean-Pierre Goyer: I informed the House this morning that I have not received the annual report of the Polymer Corporation, and I would ask the hon. member to withdraw his allegations.
[Eng lish]


Donald Alex Blenkarn: Mr. Speaker, I will withdraw my allegations when the financial statement, audited by the Auditor General of Canada, is made available to members of this House of commons as required by the Financial Adminis-
Crown Corporations
tration Act. Allegations were made while the minister was looking after some penal institutions and other things for this government. Now, they have him looking after properties. This is most interesting.
I said that in 1969 the Polymer corporation made a profit of $13 million. Since then, the profitability of the corporation has declined. According to the financial statement presented for last year, the profitability was not that great. Surely, we on this side of the House and the people of Canada are entitled to know how the government is dealing with our assets. We are entitled to financial statements and reports.
We have to look into the game that is being played with the Canada Development Corporation. It is quite a game. The reason for the Canada Development Corporation is clear. It is a method of having a public corporation that does not have to report to parliament and, therefore, the people of Canada. That can be the only raison d'etre for this enormous fiasco.
What happened? We had a member of the board of the Canada Development Corporation buy another company, Venturetek. Did we worry about the price-earning ratios there? Did we worry about the asset values in the Venturetek deal? No. As a matter of fact, we put $4.5 million into Venturetek without any indication of possible profitability. Did we have proper appraisals of fair and reasonable prices for Venturetek or were they the same kind of fair and reasonable prices that were paid for Polymer? It does not appear that way to this side. Of course, the government may have the answers. The government should present those answers to this House. The government has all sorts of opportunities to do that, but they do not because this is a game. There is something hidden here and that is what we are concerned about.
I want to mention the Connaught Laboratory purchase. That was a good purchase, but after all, that lab was owned by the University of Toronto. Perhaps all we should have done was to have made a grant to the university for work. We just have the assimilation of another public corporation which has gone behind the Canada Development Corporation for perhaps no other purpose than to hide the activities of it.
If we are going to have public corporations, they must be accountable to parliament. We have had too much of this hanky-panky; too many buried statements and no answers. Possibly the idea was to sell Polymer to the Canada Development Corporation to sweeten the pot and bury some of their bad mistakes so that when the shares of the Canada Development Corporation are put on the market the corporation will have a balance sheet to talk about. Surely, public corporations must be accountable to parliament and parliament has to see what is there. I am sure my friends to the left will agree with that.
We have to develop a new industrial strategy for this country. That does not necessarily mean that the corporations which are part of that strategy must be public corporations. This party believes in private enterprise. This party believes it is the duty of the government to make the best possible climate for business, the growth of business and the growth of individuality within our nation.
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Mr. Deputy Speaker:: Order, please. I regret to interrupt the hon. member, but the time allotted to him has expired.


William George Knight: Mr. Speaker, I rise to take part in this debate on the motion introduced by the hon. member for York South (Mr. Lewis) with a great deal of pleasure, especially after hearing the remarks of the President of the Treasury Board (Mr. Drury). I had to think of his official title because, when I closed my eyes and listened to him, I thought he was addressing the members as though he was addressing a meeting of the board of directors of the Power Corporation of Canada. I never heard such an outlandish sell-out as we heard from the minister today. It was absolutely incredible the way he talked about what should happen to public corporations in their relations with the Canada Development Corporation. In fact, he said those corporations which are owned by the entire population of Canada would be turned over to the Canada Development Corporation, and a select few investors would then have de facto control over those corporations. That is what I wish to speak on today.
The bill establishing the Canada Development Corporation was discussed in the House in 1971. It was a notoriously bad bill from its inception. The Liberal majority pushed the legislation through. The New Democratic Party was opposed. During the proceedings, NDP members presented several amendments, but to no avail. Some of them were very interesting. For instance, the hon. member for Waterloo (Mr. Saltsman) wanted the corporation to be a crown corporation directly responsible to parliament through a ministry so that this corporation might serve the Canadian people. Needless to say, when the amendment came to a vote, the Tories joined their Liberal friends on this issue and defeated this sensible amendment. The old line parties again stuck together to make the Canada Development Corporation entirely ineffective.
The hon. member for Waterloo made one final pitch, proposing that the word "company" be replaced by "Canadian nation", signifying that this celebrated corporation should serve the Canadian people. And, of course, again the friends of the corporations, the Liberals and the Tories, joined hands to defeat the amendment. The immense difficulty with the present Canada Development Corporation lies in the fact that it proposes to use public funds without any control by the taxpayers of Canada, through a responsible federal minister to parliament. On top of that, the legislation establishing the corporation allows it to acquire control of already existing crown corporations. In other words, what is in public hands in Canada-and that is not very much-can pass to private profiteers disguised by the glorious name of the Canada Development Corporation. As the best outline of that methodology we had the speech by the President of the Treasury Board to this House today. In terms of the interests of the people of Canada, that speech was outrageous.
Who is running this so-called Canada Development Corporation? Again I refer to the NDP objections made in this House of Commons on December 29, 1971, by the hon. member for Winnipeg North Centre (Mr. Knowles) who
 moved a motion that the directors of the CDC divest themselves of their directorships in private corporations. Needless to say the hon. member's motion was defeated. Here are some of the reasons it was defeated. Who are the directors of the Canada Development Corporation? Let us begin with the chairman, Mr. H. A. Hampson, former director of Laurentide Corporation-some people call them "loan sharks"-of Capital Dynamics Management and of the Power Corporation of Canada; I repeat, the Power Corporation of Canada. Of course, Mr. Hampson divested himself of these interests, but let us remember that his friends remained behind to ensure that business would keep booming in case there should be an eventual return to his former position.
Another director is Mr. Louis Desmarais, who is also a director of Canada Steamship Lines, Davie Shipbuilding and Blue Bonnets Raceway. His brother of greater fame if the Desmarais who is a member of the board of directors of the Power Corporation of Canada. Lately little brother has joined big brother on the board of directors of the Power Corporation of Canada. Then we have Mr. F. H. Sherman, well connected with the Bank of Nova Scotia, Dofasco and Polymer. Dofasco is the corporation which lately has been running ads over the radio saying they have a wonderful relationship with the government, that they take one of their employees, show him how government works and then they take him back. I wonder what kind of information he takes back with him. Then there is Mr. H. H. McCain, chief owner of McCain Foods Limited and half a dozen subsidiaries struggling hard to replace the Irving family as the barons of New Brunswick. These are all members of the board of directors of the Canada Development Corporation.
There is one more, who may seem a relatively innocent member of the board of directors of the Canada Development Corporation, a Mrs. L. Thtir, vice-rector of the University of Quebec. You may assume that this is a sort of token representative from the academic community; but if you check into it, Mr. Speaker, you will find that she happens to be a director of Bell Canada, that profit-tapping corporation which profits from operating telephone lines in Canada. Let us not speak of her marital connection with Mr. Thtir, who is none other than a former member of the Economic Council of Canada and presently holds a senior position in the Department of Finance.
I will name one more individual, Douglas Kendall. He has had fairly good connections. He was once with Hermes Electronics and de Havilland Aircraft, but more remarkably is a former executive officer with Venturetek, now derected by his impoverished son. Last fall the Canada Development Corporation invested $4.5 million in Vanturetek. Legally speaking it was an investment by the CDC and, I am sure, not a family self-help project from a good father to a delighted son. There may have been some other assistance provided through this great venture by the board of directors of the CDC because Mr. Tony Hampson, chairman of the board, undoubtedly agreed to that transaction. He is a good friend of Mr. Kendall senior and has been from the time they served on the General Adjustment and Assistance Board.
When this issue arose during the election our leader, the hon. member for York South, raised hell, as he should.
March 23, 1973

Even the Leader of the Opposition (Mr. Stanfield) got into the act and said that CDC operations should be suspended. But he failed to remember that the Tory party joined with the old-line party across the way to defeat every substantive amendment moved by this party to put teeth into the CDC and turn it into a true Crown corporation that would buy Canada back. Hon. members seem to forget that.
Obviously, Mr. Speaker, the CDC needs capital. The $250 million given to it by the federal government would not go far enough. They need capital to invest in companies in which the CDC directors at least have a sentimental interest. Where do you get the capital that is needed? From the prosperous Crown corporations. CDC has already gulped up Polymer, though I hope parliament will have the last say on that matter, as well as on the CDC's intention to get the 45 per cent federal interest in Panarctic. We heard the President of the Treasury Board outline the method to be used, which I find outrageous. Then from Panarctic we can move to the idea of swallowing up Eldorado Mines and other public corporations. So we have the basic situation that companies are being taken from the people of Canada, turned over to the CDC and passed into the hands of vested interests; let there be no mistake about that.
We in the NDP are not interested in giving away the little public holdings that we do have to a dubious Canada Development Corporation where public interest may be reduced to a mere 10 mer cent of the shares. We want to keep the Crown corporations that we have, and indeed we want to see more of them. Let there be no mistaking where this party stands on that issue.
During my introductory remarks I mentioned several names and several corporations which are linked directly and sometimes indirectly, with the Canada Development Corporation. I wish I had time to establish a more complete picture, but to be brief all I have to say is that in the time of Caesar all roads led to Rome. In the time of Trudeau all roads lead to the Power Corporation of Canada.
What is the Power Corporation of Canada? It is a rather intimate club of Canadian businessmen who obviously decided to get some extra cash from a small investment. It is a holding corporation, so that they do not have to pay income tax. Let me restate that: They have to pay a little income tax. In 1966 they contributed to the welfare of Canada a total of $48,000 in the form of income tax on profits in the previous five years of $62.3 million. Mr. Speaker, if only the ordinary taxpayer of Canada could get such a favourable income tax rate!
There is nothing illegal about this; it is simply the fact that the present tax laws of Canada as passed by the Liberal party and supported by the Tory party as represented by the hon. member for Edmonton West (Mr. Lambert), the former financial critic of that party, allow a corporation such as the Power Corporation of Canada, that great friend of the Liberal party, to get a corporate rip-off the extent of which the Canadian people have never seen before.
Crown Corporations
Mr. Speaker, I assure the House that the corporation is a club of somebody's. It has its claws all over the place. It has related directorships with all kinds of federal bodies such as the Bank of Canada, the DREE advisory board, the advisory board to the Minister of Industry, Trade and Commerce, GATT, and of course the Canada Development Corporation. If I had more time I would reconstitute the cobweb in which the spider is the Power Corporation of Canada. Instead, I ask you, Mr. Speaker, to bear with me and allow me to table in this House of Commons a little chart which I drew up in my spare time after the general election. It is an outline of the corporate welfare state in Canada and all its complications in respect of that great protector, the Liberal party, with the Power Corporation in the middle and the advisory boards all around it. Mr. Speaker, perhaps you would give a ruling on whether I may table this chart.


The Acting Speaker (Mr. Boulanger):: Order. I do not think the hon. member really requires a ruling on that matter: he should know that there is no possibility of depositing this document on the table.


William George Knight: In view of that ruling, Mr. Speaker, I will ensure that this corporate welfare state map is hung up in the lobby, or at least distributed for the interest of the people of Canada. It is a very interesting map. I want to point out some of the things related to it. The chart contains several rather interesting names of former and not so former politicians, such as the Hon. Mitchell Sharp, Secretary of State for External Affairs, and that very interesting defender of corporations, the Hon. Bud Drury, President of the Treasury Board. And, Mr. Speaker, if we wanted to name Mr. Ross we might even wish to read into the chart the name of the Minister of Finance (Mr. Turner). We might also name the Hon. Jimmy Sinclair. I shall not draw any conclusions from that name but will leave it to your imagination, Mr. Speaker. There are well known western names, such as the Hon. E. C. Manning, Director of Canadian Pacific Investments and Canadian Imperial Bank of Commerce. There is also the Hon. Duff Roblin, director of Canadian Pacific Investments and Montreal Trust Company.


Some hon. Members:: Hear, hear!


William George Knight: There they are, applauding; the same old gang. On top of that we have the Hon. John Robarts, who is a director ot the Power Corporation of Canada; tnat good protector of the little man, Bell Canada, and the Imperial Bank of Commerce. Then there is Senator Molson, and many other senators. I could go on down the list of names.
In this chart there are the names of 44 corporations. These corporations, together with their subsidiaries, make a total of 383 corporate entities. This is not very many, I admit: it is less than one-fifth of a per cent of all corporations in Canada. However, in many respects their impor-taxes. for the years 1968-71 represent 13.1 per cent of all parties, is quite remarkable. Their book profits alter taxes, for the years 1968-71 represent 13.1 per cent of all corporate profits, a mere $3.1 billion! When it comes to deferred taxes, the select group around the Power Corpo-
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ration of Canada does even better. By the end of 1971 that group had accumulated $1.1 billion in deferred taxes, which are in fact interest-free loans compliments of the government of Canada, or a gift of the taxpayers of Canada. That is a corporate rip-off. It represents 30.7 per cent of deferred taxes in respect of all corporations in Canada.
This select group pays income tax, some of them more, some of them less and some of them not ar all. On the average they paid, between 1968 and 1971, a pitiful 17.3 per cent of net earnings, whereas the theoretical rate was then slightly over 50 per cent. Finally and more directly, the federal government favours this Power Corporation club by direct grants and subsidies. Between 1965 and 1971 it received a total of $151 million in grants, which represents 13.8 per cent of all federal grants to corporations-this to this cozy little group with its cozy relationship to the Canada Development Corporation which is defended to the bitter end by the President of the Treasury Board. In a strict scientific sense, these statistics do not give absolute proof of causality between being a corporate member of the Power Corporation family and receiving preferential treatment from the federal government. The absolute proof would be possible only if the elite corporations opened their books for public inspection and if the old parties did the same.
What we know for certain is that Mr. R. G. Renkin, Ontario provincial chairman for the Liberal party red carnation fund, said publicly on February 14, 1972, in Ottawa that the Liberal party has operated for many years on the support of 95 major Canadian corporations. That is quite a disclosure and is something we have been saying for a long time. The tie today between all the advisory boards and the Canada Development Corporation with the Power Corporation of Canada is an outline of the kind of tie we see between big business and big government regardless of which of the old-line parties sits to the right of the Speaker.
I do not have a single quote from the Tory bagman, but please not the press statement by the Leader of the Official Opposition a few days ago on the position of the Tory party in respect of the corporate rip-off. A few days ago he made a grandiose speech in Regina saying that those who voted for the New Democrats were sold out by the New Democrats. Then he comes back to Ottawa and makes another grandiose speech saying, "Well, we cannot really hurt our corporate friends, can we, now?" That is why the people of Saskatchewan voted for the New Democrats. I hope the Leader of the Official Opposition remembers that.
The official version of the happy association of the federal government with its corporate masters reads like a dream. It is a gentleman's agreement. On December 29, 1971, the then minister of finance, Mr. Benson, innocently told the House of Commons:
The fact that the gentlemen who are directors of the CDC have directorships in other corporations, and had them before they became directors of CDC, indicates that they are people of first-class quality and we want them to direct the CDC-
This is outrageous. The CDC ought to be disbanded.


The Acting Speaker (Mr. Boulanger):: Order. I must advise the hon. member that his time has expired.


Jean Marchand: Mr. Speaker, I am always sorry to see such important matters dealt with so quickly. I am not blaming anyone; I know that we are all under pressure and do not have enough time to prepare speeches that might be of great use in giving a direction to Canadian politics.
Mr. Speaker, the motion of the New Democratic Party reads as follows:

That this House regrets the failure of the government to develop policies to create and operate Crown corporations for the benefit of the public, and condemns the government for divesting itself of its holdings and giving preferential treatment to private corporations in the field of public transportation to the detriment of corporations which belong to the people of Canada.

There can be no doubt that this motion involves some extremely serious principles. There is a whole philosophy to be examined, but, unfortunately, I see this problem brought down to a few specific cases or incidents, or to matters that have nothing to do with Crown corporations.
I am sorry to have missed this morning's speech by my hon. colleague, the member for Vegreville (Mr. Mazan-kowski); unfortunately, I had a delegation in my office and was unable to be in the House. I am sorry because I should have liked to know the points of view of all the parties, although I suppose I shall hear them in due course.
I should therefore like to speak on this subject at a level that will, I hope, clarify the debate, and also to explain at least my position, if not necessarily that of the government on this basic problem of the relations of Crown corporations with the government and with private enterprise.
Why are Crown corporations created, Mr. Speaker? It is not because there were socialist governments in Canada, but simply because one day, for one reason or another, the state felt it had to set up an institution to safeguard the interest of the public at a time when no private corporation was interested in establishing that institution, or the nature or purpose of that institution was so closely related to public interest that we could not leave that institution in private hands.
Why, for example, was Air Canada created? The founder of Air Canada, if my memory serves me well, was the Right Hon. C. D. Howe and his socialist tendencies were very limited. He certainly did not do it because he felt aviation should be controlled by the state but undoubtedly because he saw that aviation was developing at a very rapid pace in the world and no private corporation wanted to run the risks; so a Crown corporation was created which was called Trans-Canada Air Lines.
Let us review the history of Crown corporations. Why was Polymer Corporation created? It is not because C. D. Howe had turned socialist but because nobody wanted to invest large amounts of money in a new product. If I remember well, it was synthetic rubber at the time of the war and that is how the government of Canada created Polymer Corporation.
March 23, 1973

I think it would be useful at this time to recall what some people had to say to remind us of the principles underlying the establishment of certain Crown corporations as well as some minor but very interesting contradictions in the history of our Crown corporation.
Lord Morrison of Lambeth gave this definition of a Crown corporation:
If we establish the public corporation, it must be for certain reasons. What are they? They are that we seek to combine the principle of public accountability, of a consciousness on the part of the undertaking that it is working for the nation and not for sectional interests, with the liveliness, initiative, and a considerable degree of the freedom of a quick moving and progressive business enterprise. Either that is the case for the public corporation, or there is no case at all.
A Conservative member said in the House in 1949, and this may be referred to by hon. gentlemen on the other side of the House:
The official opposition-
Which was Conservative at that time.
-does not believe in Crown corporations. We think that is one method of getting away from control by parliament.
This member was, a few years later, a member of the Diefenbaker cabinet which was responsible for the creation of an entirely new Crown corporation, the Canadian World Exhibition Corporation, and for a large increase in the operations of a number of Crown corporations, including the one that provoked the speech just quoted and was accused by the now official opposition of frustrating the efforts of parliament to exercise control. The same administration was accused of "doing its best to tear down the Crown corporations of the country".
Although the majority of Crown corporations were set up under Liberal governments, Canadian National Railways, the Canadian Broadcasting Corporation, the Bank of Canada and the Canadian Wheat Board were in origin creations of Conservative governments.

So there was no particular principle underlying the creation of those corporations. Indeed, if we consider their background, we will recognize that they are not based on any given philosophy. Their founders have acknowledged just the same that public interest was at stake and that some institutions had to be created to protect it.
Now, to deal a little closer with the subject which I want to discuss, I will say that if public interest was involved and that a corporation was developed thanks to the money of Canadian citizens who financed it, who made good its deficits and provided some capital, this corporation could not be considered as a private enterprise. It deserves special protection because it specifically exists to uphold and protect the public interest.
People may complain that we are using public funds, but why for example did private enterprise not provide the millions of dollars required when Air Canada was created? Because it was too risky as indeed it was to produce synthetic rubber.
Crown Corporations
We know that transportation, especially air transportation, is now vitally important for all countries, particularly for Canada. Why? Our country being so big and having so little population, it would be appreciably weakened if we did not have a rapid air transportation system. Furthermore, I think Canada could not exist today without fast communications in the east, west, north and south and the only way to achieve this end is to have aircraft- jet aircraft.
As it happens, there are more than two companies operating in this field, that is CP Air and Air Canada. We also have regional carriers which as private enterprise are operating simultaneously with government corporations.
From the domestic point of view, I would not be against regional carriers. I think we need companies of lesser importance and in a better position to look after the more remote regions, whereas the larger companies are operating on a wider scale on medium and long trips. Therefore, I do not intend to criticize regional carriers.
Can a government monopoly be dangerous on the international level? I would say since it cannot even exist. International competition is between countries and not necessarily between two national companies. For instance, if there were only one intercontinental airline in Canada, it still would have to compete with Air France, BOAC, Sabena, Lufthansa and other companies.
Now, it so happens in Canada, and this is born out by history, that there are two companies: Air Canada and CP Air. CP Air was supposed to serve western Canada, Asia, Australia, Japan, Hong Kong and extend to that part of the world west of the Vancouver coast. Air Canada was supposed to serve the other part of the world; up to 1960, it had absolute monopoly on the main air routes in Canada.
Some guidelines have been established. One of them concerns domestic transport and a good case can be made for it. It is said that Air Canada should have at least 75 per cent of the Canadian market, while CP Air should get no more than 25 per cent of it. Predominance was to be preserved for Air Canada. This is true of the Canadian market, but not of the international market. In fact, from an international point of view, there are no limits, and unless the policy is well defined, the situation could be reversed, that is Air Canada could become eventually less important than CP Air. For instance, if the 800 million people of China were to start travelling tomorrow, the company would become a really important one.
Mr. Speaker, I believe that on this point, we have to be careful. In my opinion, Air Canada should remain the important company in Canada, and not only from a Canadian standpoint, but also from an international standpoint. It should remain our most important company and, on the other hand, it should not tolerate competition from another company on the same routes; CP Air having been given the right to serve Japan and China, if Air Canada is given the right to serve Hong Kong, even if it is claimed that they are not the same countries, this is competition, because CP Air serves Amsterdam and Air Canada serves London and Paris.

March 23, 1973
Crown Corporations


Donald Frank Mazankowski: What are you going to do about Milan?


Jean Marchand: This is not the problem of Milan today. We are now talking about Crown corporations. I do not care about Milan or Peking. What 1 care about is that the share of the market for Air Canada should be a larger one; this is what is important.


Some hon. Members:: Hear, hear!


Jean Marchand: We may decide to rationalize all this and change a few things, but I think that Air Canada should remain the main international Canadian airline, just as Air France is the main French airline, just as BOAC is the main airline of Great Britain, just as Alitalia is the main Italian airline, and just as Lufthansa is the main German airline. This is the place that I personally want for Air Canada.


Some hon. Members:: Hear, hear!


Jean Marchand: This is why, when today we are restricted to Milan or Peking, I think that this is too restrictive. What we should have and what I hope we will have in the not too distant future is a general policy that will make it possible for everybody, even for CP Air, to know exactly where they stand and exactly what their markets are, a policy that will establish once and for all that the most important international airline for Canada is Air Canada. This is not new. We shall attempt to distribute routes according to these general principles.

Several Crown corporations are under my department. Nothing has been said about them at all. Corporate rip offs and representations of large corporations to the government consultative committees have been discussed. I could have mentioned several councils with worker and trade union representation.


Mr. Harney:: Mr. Speaker, could I ask the minister a question?


The Acting Speaker (Mr. Boulanger):: Does the minister agree to answer a question?


Jean Marchand: I have only 20 minutes. If the hon. member wants to ask it quickly, I will answer if I can; unless of course he wants me to make a second speech.


The Acting Speaker (Mr. Boulanger):: Whatever happens, somebody has to say yes or no.


Jean Marchand: Yes.


The Acting Speaker (Mr. Boulanger):: Order. This means that the minister has agreed to accept a question.


John Paul Harney: The minister was about to say, or suggest that there were vast numbers of advisory councils in the government on which a vast number of trade unionists sit.

Could he enlighten us by giving some enumeration of these advisory councils which contain vast numbers of trade unionists?


Jean Marchand: There are several, and very important ones at that!
I did not mention any "vast representation"; I referred to trade union representation and the member for Scarborough West should not make me waste one instant because he knows it is true. He knows that the trade unions are represented on the Economic Council of Canada. He also knows that the trade unions are represented on the Unemployment Insurance Commission Advisory Committee. He knows that the trade unions sit on all the advisory committees of the Department of Manpower and Immigration. The trade unions have been represented in all commercial delegations. A former vicepresident of the Labour Congress of Canada could supply the list.
I do not mean that capitalists have no influence in Canada, they do have influence and we agree on this but so have the trade unions. This was not my point. The point is to know whether the private sector wields sufficient influence to have the government decide in its favour regardless of the common good and this is the area to be discussed. Everyone knows that private enterprise has the upper hand in Canada. Everyone knows that, including the NDP governments elected in British Columbia, in Manitoba or in Saskatchewan. The premiers of those provinces have stated publicly that they are not against private enterprise. They fear they might lose a vote. The hon. leader of the NDP stated: I do not want to be a doctrinaire. I agree with him and I would have said the same thing. However, let nobody come and tell me that we created the capitalistic private enterprise. It was there! It is there as well for Mr. Schreyer, Mr. Barrett and Mr. Blakeney. Of course, "they play ball with them". However, these governments manage so that private decisions affect government decisions as little as possible. That is where the problem lies.
Instead of telling us that capitalists are represented on committees, perhaps it would be better to find out cases where decisions have been affected by the presence of these people, at the expense of public interest. That is the point which I am concerned about. Everything else is but "electoral chit-chat".
Mr. Speaker, I am not allergic to Crown corporations; I am rather for them. For instance, the Northern Transportation Company Ltd. has developed the Mackenzie area up to the Arctic; not one private business had dared to make investments in northern transportation, because it was not profitable. Therefore, a very efficient corporation was created which assists us in developing the Canadian North. This corporation belongs to the people of Canada and must be protected in order to meet its obligations. Of course, it must be efficient. Certainly it is so. When companies are not efficient, the government is not interested in protecting them and then, there is a very easy procedure: management must be changed.
For instance, the National Harbours Board has played and continues to play a very important part in the growth
March 23, 1973

of our country's economy. Harbours are institutions of public interest. There are private habours but they are of no public importance. Who has taken the necessary steps to move the grain? Who takes care of port facilities for containerized shipping? It's the National Harbours Board.
The St. Lawrence Seaway Authority is also a Crown corporation. Nobody would have paid hundreds of millions of dollars to open up that seaway, to promote trading with the Great Lakes area and the United States and to link central Canada with the Atlantic.
Mr. Speaker, a company set up in such circumstances deserves to be protected to the extent that it is efficient and performs its duties.
Now there is the whole field of railways: the Canadian National and the Canadian Pacific. That is probably the main subject of any debate dealing with transport. Here again, I believe the opposition should tell us about its policy positions. Should a company like the Canadian National, for instance, be exclusively profit-oriented? I say no, Mr. Speaker. I say that the Canadian National should be efficient, should conduct research, should try to be forward-looking in railway transportation. Only the Canadian National, like any Canadian railway company, has a public responsibility. Consequently, it often has to provide service at a loss in certain areas. And that is part of our concept of transportation in Canada and gives us an idea of what a Crown corporation should be.
If railway companies keep on abandoning so-called uneconomic services, a day will come when there will be trains only in Montreal and Toronto, because those are the only two cities with enough population to make railways economic, which makes no sense at all. Since certain institutions have a public duty to perform, they must assume directly or through the government financial responsibilities that a private company surely could not take on.
Mr. Speaker, I know that I will run out of time. It is that-


The Acting Speaker (Mr. Boulanger):: Order.


Jean Marchand: I knew that you were going to interrupt me.


The Acting Speaker (Mr. Boulanger):: I must point out to the hon. minister that I gave him two or three more minutes. Does the House agree to allow a few more minutes to the hon. minister?


Some hon. Members:: Agreed.


Jean Marchand: If only you had resisted the temptation two minutes more, I could have finished my remarks, Mr. Speaker.
I merely want to add that it is certainly not the opinion of most Canadians that our corporations should be nationalized just for the fun of it, that smoothly running corporations, not state-owned, making normal profits and developing normally should be transformed into Crown corporations. I believe no one, even those who claim to be socialists, would call for nationalization of all our corporations. I have never heard such a contention brought
Crown Corporations
forward, even by NDP members, since the CCC manifesto in Regina.
However, I feel that an economy such as ours calls for a certain number of government corporations, occupying a privileged place and, although they are functioning properly, allowed by the government to perform the tasks they were created for. They must be efficient. Obviously, if a bureaucracy forms in these corporations and cannot be dislodged, there must be means of changing it and renewing the management. We have our philosophy on this, Mr. Speaker. If private enterprise goes in where it thinks it can make money, it does so at its own risk. But in the government sector, we must safeguard the public interest.
There is, however, one slight distinction that remains to be made, and I shall finish on this, Mr. Speaker. I am not saying that private interest automatically and necessarily overlooks the public interest, but simply that that is not its prime concern. Its first concern is to make a profit, after which it can start to take account of other values such as the public interest. It is the other way round for a Crown corporation: its first concern is the public interest, but at the same time it must try to be efficient and economically viable, to show that people can act on motives other than profit. It can also act to be of service to the public. Such, Mr. Speaker, is the aim that I set myself with regard to the Crown corporations under my administration. I shall not try to weaken them. On the contrary, I am going to try to make them stronger and more efficient and to do what I can to make them give better service to the public of Canada.


Mr. Donald W. Munro (Esquimalt-Saanich):: Mr. Speaker, I should have preferred to speak before the Minister of Transport (Mr. Marchand) because I intend to deal with a question on which I should have liked to get some answers, but I bow to the requirements of protocol and ministerial priority.
I am nevertheless encouraged, because the minister has suggested that the Crown corporation I am going to criticize was created expressly to protect the interests of the Canadian public and to serve it.
I simply seek the protection of a certain sector of the public-that which I represent-and I want it to go on getting the service it needs.

I welcome this oDportunity, Mr. Sneaker, to address parliament about Crown corporations and service to the public because it gives me the means of registering a public protest against the failure of one of our Crown corporations to provide the full service expected by members of the community-


Jean Marchand: Excuse me, Mr. Speaker. There is nothing personal, but I have to leave and I want to be sure the hon. member does not think it is because he is speaking. I have an engagement in my office.


Donald W. Munro: As I was saying, it gives me the means to protest against the failure of one of our Crown corporations to provide the service expected by members of the community which I have the honour to represent in company with my colleague the hon. member for Victoria (Mr. McKinnon).

March 23, 1973
Crown Corporations
My argument is to the effect that just by being a public or a Crown corporation does not make the enterprise faultless or white and pure. However, before getting to that matter I should like to say a word or two about the motion itself. The initiators of this motion are taking aim at private corporations and are, I suggest, intent on promoting the notion that all corporate activity and enterprise in this country should be nationalized.
In the same breath that they use to advocate this socializing theory, they protest violently against big, monopolistic corporations. Monopolistic monoliths, Mr. Speaker, are creatures of man that all too readily can become monsters whether they be private or public, nationalized corporations. Nationalized monopolies can be just as great a menace and can disregard the public interest just as conclusively and effectively as a monopolistic private enterprise. They can be just as difficult to move.
It is my personal conviction, after examining all the evidence, that as a general proposition the public interest is best served by competition and that competition can be between private and public companies or between private and socialized companies, although I do not see competition between socialized companies and nationalized companies.
The hon. member for York South (Mr. Lewis) and his colleague in the New Democratic Party suggested that the nationalized corporation is the good guy and the private corporation the bad guy. Let me give the House just one instance of how the good guy can get at the throat of the bad guy, all in the knowledge that any shortfall the good guy may suffer will be made up by a generous parliament, which in the end means the generous public, the public of Canada.
Let me detail what is happening in my area. My colleague, the hon. member for Vegreville (Mr. Mazankowski), has spoken of the dangers of a monopoly public utility failing to give service. Here is an instance. An island people is heavily reliant on transport, not just to receive all it needs and to ship excess goods to market but also to maintain personal touch with the mainland. Our island, Vancouver Island, is no exception. We have our commercial and personal needs to be fulfilled. Developments are in train, however, that cause us grave misgivings. These developments are in the hands of the government, or a government agency, to control. I suggest, in fact, that too little is being done to safeguard the requirements of the population of Vancouver Island.
For over one month I have been trying to get satisfaction from one or other of the articulations of the minister's department. I am referring to a scheme I have heard about to reduce air service facilities between the island and the mainland. Let me give you the following by way of background, Mr. Speaker. The last ferry leaves the Saanich peninsula for the mainland at nine o'clock p.m. Travel time from shore to shore is one hour and 20 minutes. The last flight at present leaves Victoria airport for Vancouver airport at 23.35. Travel time, airport to airport, is 20 minutes. The first ferry leaves the island for the mainland at seven o'clock in the morning. The first air service now leaves Victoria airport for the mainland at
[Mr. Munro (Esquimalt-Saanich).J
five minutes after seven. That is Air Canada flight 170; and I am not making a commercial, as you will soon appreciate.
Thus, as things now stand, between half past eleven at night and seven in the morning there is no way of getting to the mainland. To parody the comment, "the continent is cut off," made in Britain whenever fog closes in and disrupts flights and sailings to France, Belgium and other places, we do not want to isolate the mainland, Mr. Speaker: we like to preserve contact with the mainland. Seriously, however, we may need, early any morning, to get to the mainland for reasons of business, family matters, illness, and so on.
The seven o'clock flight is a good one. It is operated by Air Canada, a publicly-owned corporation, and has been well patronized. I am told by a reliable informant that the flight carries on the average between 35 and 40 passengers daily and the aircraft has a full load seating capacity of about 48 passengers. As I say, it is a well patronized service. Now we hear that Air Canada is threatening to eliminate that service. This is the public utility so highly praised by hon. members to my left. As at the end of April, that service may well disappear, to the detriment of the inhabitants of the island who for one valid reason or another may want to go over early to the mainland.
I have been doing what I can to ensure that this service continues. At first I got in touch with Air Canada. The service is not being eliminated, I was told; it will be supplied by the flight of another airline scheduled to leave at 8.15, one hour and 15 minutes later. That service, moreover, at present is already well booked. However Air Canada might wish to describe it, that existing service will be dropped if present plans are carried through. As Air Canada now sees it, there will be no flight from Victoria to Vancouver until 8.15.
I next appealed to the Canadian Transport Commission. To this plea I have so far had no response, which makes me wonder how the CTC operates as a regulatory body. Is it responsible for ensuring that service to the public is maintained? I regret very much that the minister is no longer present. I hope he will read my questions in Hansard and will in due course reply. Has that commission any regulatory control over schedules? I feel I am entitled to know this and the population of the island is entitled to know it. And if it does not have this regulatory power, where do I turn to ensure that the mainland's isolation is not prolonged unduly each morning and does not extend beyond the present seven and a half to eight hours?
What are some of the other consequences of dropping this service? Many Vancouver islanders have business or even tourist's interests in the east and overseas. What results will they feel from the elimination of flight 170 from Victoria which leaves at seven o'clock? Well may I ask that question. I have looked at the air schedule. At present, if a passenger leaves on that flight from Victoria he can, should he so desire, catch the following eastbound flights from Vancouver to Toronto, Ottawa or Montreal.
There are two CPA flights leaving Vancouver at 8.35 and nine o'clock respectively, and an Air Canada flight leaving at 8.20. By being unable to leave Victoria on that early flight, the passenger would obviously miss the first of these; he could not get away from the island until 8.15
March 23, 1973

and he would miss the CPA flight leaving Vancouver at
8.35.	He might miss the second CPA flight at nine o'clock because of delays involved in transferring from one flight to another, in offloading luggage, and so on. He would miss the Air Canada flight that is most convenient for me, the one that comes straight to Ottawa. Having been made to miss two CPA flights and one Air Canada flight, he would be forced to wait for the Air Canada flight which does not leave until 9.15.
The Prime Minister (Mr. Trudeau) and the Minister of Transport (Mr. Marchand), in fact all ministers and most executives these days, claim that they want to maintain the widest possible range of options. Why should executives, even backbench executives in the opposition, have their options reduced? I say the flight at seven o'clock from the island ought to be maintained. If I, for example, were able to catch the flight at 8.35 operated by CP Air from Vancouver, I could be in Ottawa at half past four. Unless I spend the night, at some cost, in Vancouver waiting for the 8.15 flight from Victoria, I will be forced to catch the 9.15 flight leaving Vancouver and I would not get here until half past six, one hour and a half later. I like the options the way they were. Surely Air Canada should be required to serve the public need: it is a national, public utility as we heard eloquently expressed in this House today and it should not be permitted to eliminate a well patronized scheduled flight from the island.
But that is not all, Mr. Speaker. What about travellers going in other directions? Remember, arrival in Vancouver by the early flight is 7.25 at present. If that service is eliminated, it will not be possible to get to Vancouver until
8.35.	As well, there are departures for Mexico in the morning, by that villain CP Air. One flight leaves at 7.45. You might just catch it if you left Victoria at seven o'clock. Or you may have to wait until the next flight at 2.30 in the afternoon. You may wish to go to Hawaii or the South Pacific. If so, departure time is 8.30. If you leave the island at seven o'clock you can catch that flight. If you must wait until 8.15 you would miss it, and there is not another flight until the next day. Of course, the flights to the South Pacific are all operated by Canadian Pacific Air Lines.
I am wondering if it is not possible to draw certain inferences from these considerations. I submit that there is room in all this to infer that Canada's national public carrier is not serving the national interest-I hope the proponents of nationalization are listening-at my end of the country inasmuch as it is not fulfilling the requirement to provide a much needed service. The 8.15 service, incidentally, is not to be provided by a public service but by another private service, Pacific Western, the airline which was mentioned this morning by my colleague from Vegreville. The first Air Canada flight to Vancouver will not be in the air until 10.30. I think this is deplorable. If this is public service, I think I will opt for private service. That sort of performance is unacceptable to those whom I represent on southern Vancouver Island. If Air Canada is a public service in the true sense of the word, it ought to provide the service needed by the public in the area in which it is operating. It will be obvious from the foregoing, Mr. Speaker, that I disagree with the initiators of this motion on certain aspects of the matter which they are putting forward. Nationalized monopolies, as I think I
Crown Corporations
have shown, are not my bag. We are heading for trouble if we head in that direction, as has been suggested.
I share the misgivings that hon. members have expressed with respect to Polymer and with respect to the government's policies affecting that corporation. I am particularly disturbed to see Polymer disappear. I have a soft spot in my heart for Polymer, because Polymer gave me my Master's degree by providing me with an early model of Crown corporations on which I could base my Master's thesis. The concept was a good one, although it could be improved. However, it was an enterprise that ought to have been confined to specific areas of activity and allowed to occupy a monopolistic position only in special circumstances, such as the wartime emergency situation which gave birth to Polymer when the need for rubber was absolutely essential.
Many are the failures of this government which we on this side of the House regret. Many of its policies we condemn. Among them is its failure to bring forward to this House measures that will halt inflation and reduce unemployment. In the context of this motion, we condemn not only the government on these grounds but for having divested itself of its holdings in Polymer. Even more, Mr. Speaker, we condemn the government for the way in which they have done this, by refusing to give a proper accounting to this House which created Polymer in 1940 or 1941 and which was once headed by a frontbencher on the other side of the House. There was no annual report, no profit and loss statement and no statement of assets and liabilities at the time of sale. Talk about questionable practices, Mr. Speaker, when one public corporation ingests another without let or hindrance-by Your Honour's leave, I avoid some forms of language

and without a report after the event except by an entry in the estimates! We have reached the stage of monogopoly, where one monopoly gulps up another. We have come, indeed, to a sorry pass. I sometimes think of that concept of life when I try to work out what happens when a snake consumes itself from its tail. What happens when it starts to swallow its stomach?
I will go along the road of condemnation with the NDP that far, the road which we have been invited to take, the road of condemning the government on the manner of its handling Polymer.


Jean-Pierre Goyer: Mr. Speaker, I would like to inform the House of events that led to the sale of Polymer Corporation Limited to the Canada Development Corporation and summarize the role played by the Minister of Supply and Services in accordance with his responsibilities as the minister responsible for Polymer Corporation Limited up to the point of sale. Parliament approved in principle the sale of Polymer Corporation Limited to the Canada Development Corporation by virtue of section 39(1) of the Canada Development Corporation Act, which provides:
The Governor in Council may sell or cause to be sold to the company, at such fair and reasonable price as may be agreed upon by the Governor in Council and the company, the whole or any part of the capital stock of any or all of the following:
(a)	Polymer Corporation Limited;

March 23, 1973
Crown Corporations
(b)	Eldorado Nuclear Limited;
(c)	Panarctic Oils Ltd., and
(d)	Northern Transportation Company Limited but subject, in the case of the capital stock of Panarctic Oils Ltd., to any agreements relating to the sale of capital stock held by the Crown.
The Canada Development Corporation Act became effective November 18, 1971. Subsequently, the government authorized the Minister of Supply and Services to undertake negotiations with the Canada Development Corporation for the sale of Polymer Corporation. The following considerations were taken into account in pursuing the sale of the company. The original rationale for the existence of Polymer as a domestic producer of a strategic material in a national defence context no longer existed. We must remember that the government's objective in establishing Polymer Corporation in May of 1942 was to remedy a shortage of natural rubber as a strategic wartime material. However, for some years it has appeared that this need is no longer evident. In fact, Polymer evolved into a multinational producer-marketer. It had been profitable over the years, but profits had been subject to fairly wide swings and at the time of sale were on the decline.
To protect its earnings base, the company sought to diversify into non-rubber lines. This diversification and the large capital requirements that it entailed could best be met by a change in ownership which would provide for access to private financing and freedom of business choice. The vehicle best suited for providing immediate response to its capital needs and ensuring that the benefits of ownership continue to accrue to all Canadians had already been envisaged by parliament when the Canada Development Corporation was created.
On the other hand, if Polymer had not been sold and had continued as essentially a synthetic rubber business rather than allowed to diversify, it would likely have ceased to be a profitable business, being faced with an increasingly competitive situation and higher raw material costs. It would, therefore, have become a charge upon the public treasury, which would not have been in the best interest of Canadian taxpayers. Again, if Polymer had not been sold, but allowed to diversify, Polymer could have been placed in direct competition with a range of Canadian enterprises in the private sector; and the government did not feel that it should become involved in a host of varied enterprises such as building materials, soft drinks, snowmobiles or even underwear, for that matter.
Taking all of these factors into consideration, it then seemed desirable to proceed with the sale. The remaining question was one of arriving at a fair and reasonable price to both parties. The negotiated price which was agreed upon was arrived at with reference to several valuations, one of which had been provided by the firm of Wood Gundy Limited. Terms and conditions of the sale included the payment of $62 million in the form of Canada Development Corporation shares, and a formula whereby the government of Canada will share in 1973 and 1974 earnings over a certain level of rubber, latex and plastics up to an additional payment of $10 million.
The government approved the sale on July 27, 1972, which is contained in the relevant order in council PC 1972-1715 of that date. The sale became effective July 31,

1972, and subsequently the shares held by the Minister of Supply and Services were delivered to the Canada Development Corporation upon payment of $62 million in the form of Canada Development Corporation shares. Accordingly, the responsibilities of the Minister of Supply and Services as minister responsible for Polymer Corporation ceased as of July 31, 1972, the effective date of sale.
It is my considered opinion that the decision to sell Polymer is a valid one, that the price arrived at was fair and reasonable based on the best information available at the time, and that the method of conducting the sale was correct. Furthermore, I am convinced that with the active support of the Canadian Development Corporation, Polymer will be provided with a flexible and businesslike framework in the profitable pursuit of its objectives as a Canadian-based multinational company. It also seems to me that the acquisition of an experienced and reputable organization such as Polymer will provide the Canadian Development Corporation with a cornerstone to pursue its own investment strategy.


John Paul Harney: Mr. Speaker, I should like to begin by giving the House a little information that I have been able to gather since the Minister of Transport (Mr. Marchand) spoke just a few minutes ago on the question of labour representation on various advisory bodies or boards of directors of Crown corporations in this country. I do not want to try to put words into his mouth by suggesting he was saying that there were large numbers of labour people on these bodies, but at the same time he certainly left the impression that there were considerable numbers of labour people on them. I for one, as well as many other people in this country, would like to challenge this view, because it is very apparent that where there is labour representation it is very much of a token nature. I have before me this afternoon very few documents but I thought by reading from them I might help set part of the record straight. If the Minister of Transport wishes to complete the record at some other time, I invite him to do so.
I have a list of the directors of Polymer Corporation. There are ten directors. Of these ten directors there is one who comes from the labour movement. Indeed, broadly speaking we could say that there is only one person who comes from the community at large; the rest of the directors, of course, are from the corporate community.
With regard to the Canada Development Corporation, the list discloses 21 directors. The hon. member for Assiniboia (Mr. Knight) entertained the House a while ago with their background, so I shall not do the same. I simply say that of those 21 directors there is one from the labour movement. If this is representation, I call it token representation.
I have gone back over the list of directors of Polymer Corporation since 1948, and a few years ago the case was not the same at all. There were no representatives from the labour movement or community at large on the board of directors of such corporations, particularly this one. It is nice to know that there has been a change of heart. We realize that there are such things as legitimate labour unions in this country which have the right to be repre-
March 23, 1973

sented on boards of directors and advisory councils of various enterprises run directly or indirectly by this government and parliament.
Where before there were none, we now have one representative out of ten, one out of 20, one out of 18-token representation. It is highly reminiscent of what happened a number of years ago when we in North America watched television ads that in most cases were produced in the United States and failed to see at any time a black person taking part in a television commercial. Over the past three or four years there has been a change of heart and we have come to admit in North America that black people do live here. In order to bend to this change of heart, the commercial interests in this country now every once in a while play black people in commercials in recognition that they form part of our population.
The same approach of tokenism is used on boards of directors of publicly-owned corporations in this country. I am not talking at the moment about privately-owned corporations: I am sure it is a rare case indeed when a privately-owned corporation gets someone from the union to sit on its board. I am talking about publicly-owned corporations and advisory bodies set up by and for this parliament.
These remarks are not going to be the burden of my address this afternoon, if I can call it an address. I want to address myself to the whole question of the motion that is before the House, a motion that can be paraphrased in cruder language as the sell-out of the public of Canada's interests to the private corporate interests of this country.
In the past we have had reason to be proud of our crown corporations. Indeed, if you go back, Mr. Speaker, over the history of reports that have come to this parliament from, for example, Polymer Corporation, there is a note of constant and well deserved pride in the success, prosperity and usefulness of a Crown corporation such as Polymer. I have taken the time to go back over reports across the years but I will not read extensively from them. Let me simply say that we have in the Library of Parliament a bound volume of reports issued by Polymer Corporation.
It touches one's heart a little when one looks at some of the earlier reports. For example, the report to the minister of reconstruction and supply for the 12-month period ending March 31, 1948, is typewritten. How humble, how spartan; but at the same time, how complete! Reading through the report you get more than pictures; you get more than general statements. You get accurate descriptions of the goings on and procedures of the corporation. As a matter of fact, the more you move forward through the history of the corporation, the glossier the documents get and the vaguer they become. I do not want to be very conservative in my attitudes, but it is sometimes worth while to go back to a simpler, more direct world, a world where you can find information that is more complete than is the case now, with all the help and advice our various corporations receive from various PR flaks.
About two and a half years ago there was a sudden creation by fiat of a rather large category of persons in this country. Overnight, a large section of our population became the bleeding hearts of Canada. The bleeding hearts of Canada were said to have very little power, and
Crown Corporations
indeed they have very little power. But they have some power of comment. I am told by the National Association of Bleeding Hearts that some time last year they thought they would state their presence in this country by offering a medal, an order so to speak, which they called the Order of the Lily Liver. They were bound to offer the Order of the Lily Liver to the government of the day. It was awarded for its daring, perhaps what we would call its temerity, its bravery in taking an idea such as the idea of the Canada Development Corporation, which was supposed to be the medium through which the people of Canada would have gained, first of all, some control and power over the corporate processes of this country and begun to regain Canadian control over the industry and economy of Canada.
What is the first thing that the Canada Development Corporation does? It takes over a corporation that is already fully Canadian and fully owned by the people of Canada-Polymer Corporation. As a second step in its temerity and bravery, what does it do? It takes over Connaught Laboratories, another entity completely in the public realm owned by the University of Toronto, in effect owned by the public of Canada. It was a truly Canadian corporation. It was a very valuable corporation which had an international reputation. This laboratory provided a service not only to Canadians but to people throughout the world through its research in drugs and the provision of inexpensive drugs to hospitals and other institutions in this country. So after taking over Connaught Laboratories, the National Association of Bleeding Hearts decided to give the Order of the Lily Liver, with bar, to the Canada Development Corporation. What they were in effect trying to say was that the original idea had been completely reversed and that the Canada Development Corporation as set up in late 1971 was not the ideal which had been held up for the people of this country to watch and to hope for.
We have had some reference this afternoon to the past, to the days of C. D. Howe. I was walking behind the East Block today at noon when I happened to walk behind the bronze statute of our fifteenth prime minister, Mr. Mackenzie King. He has his hands stuck behind his back. I would almost swear that his fingers were crossed. I thought they were crossed because he was afraid the great spirit of C. D. Howe would storm this Hill today to tell Liberal members of the front benches that they were completely betraying his ideas and his work. In the past, the CCF were not necessarily the great friend of C. D. Howe, but certainly they admired his forthrightness, his energy and his dedication to building Canada. I am sure that if he were to come back today, Mackenzie King in bronze image would have a great deal of reason to cross his fingers, because there would be some mighty scolding of the people who now sit on the front benches.
The Canada Development Corporation can now extend its bravery and take over Panarctic. Perhaps it could take over Eldorado. But before this happens let us stop to consider what we are up to in the ventures of the Canada Development Corporation. The story behind the Crown corporation is that it was to give to the people of Canada some degree of control over their economic destiny. It was

March 23, 1973
Crown Corporations
not simply, as has been mentioned in the House this afternoon, to do a job where private interests could not do it: there was something positive in the idea of the Crown corporation which I believe has been completely lost from sight.
Rather than taking over Panarctic and putting it into the hands of CDC which would some day, I am sure, sell it to the private interests of our country, this parliament should take steps to instruct the government to have Panarctic become really and truly controlled by the Canadian people. At the very least we should have 51 per cent control of this enterprise. This enterprise will be a major factor in the exploitation and development of our oil resource in the northland. Surely when it comes to this very scarce and important resource, we want it completely under Canadian control.
When it comes to Eldorado, before we begin handing over Eldorado to the Canada Development Corporation perhaps we should begin by giving it the same treatment that was given to Denison Mines. A few years ago the owner, the president of Denison Mines, threatened to shut down the mine because he could not sell its uranium. An agreement was struck between Denison Mines and the Government of Canada on December 23, 1970, which in effect subsidized Denison Mines to the tune of $29.5 million to cover three-quarters of the cost of uranium stockpiling. The president of Denison Mines, Mr. Roman, had the ingratitude some time afterward to state that he was having a hard time because he had to pay out $6 million or $7 million in losses over the stockpiling. He had the further ingratitude of biting the hand that fed him, or of trying to bite the hand that fed him, by running in the following election.


Stanley Howard Knowles: How much did he spend on that?


John Paul Harney: A mere $90,000, a figure for which C. D. Howe would not have had a measurement. But if we can help Denison Mines to that extent, surely we should pay some concern to Eldorado which has received no such subsidy, is now working below capacity and over the past number of months has been forced to lay off workers.
In the time I have left I should like to talk about Polymer more specifically, because it has been the object of concern over the past few days, as it well ought to be. There is an old Latin saying-I do not know whether Latin is an official language in this House or in this country-caveat emptor, "Let the buyer beware". In this case the saying should be transformed so that it would be caveat vendor, "Let the seller beware". We, the people of Canada, are the people who are selling Polymer Corporation to the Canada Development Corporation and we should beware in respect of the details of the transaction.
This House has been informed this afternoon of certain figures relating to the value of Polymer. I would like to give some more figures of that value. We know that over the years the net assets of Polymer have far exceeded, year by year, the paltry sum which is being offered for it by the Canada Development Corporation. Net assets, less liabilities, for the year 1971 were $163 million. For the year 1970 they were $163 million, for 1969 they were $160 million, and for 1968 they were $155 million. Going away

back to the year 1962, the value of the net assets, less liabilities, was $90 million. So even in 1962 it was worth more than the sum now being offered for it in CDC shares. Note that it is in shares, and not dollars. Judging from some of the plans which are being put forward for CDC, we might have a right to question the value of these shares in the future. So we as the vendors certainly ought to beware.
Let us look at the book figures. We know that in the world of corporate transactions, book figures are only part of the picture. There are other ways to calculate the value of Polymer. I need not repeat now that the sale price is between $62 million and $72 million, depending upon the profitability and earnings of Polymer in the next while. But let us look at more effective estimates. There could be three methods of calculating the value of Polymer. We might take the estimated consolidated book value on December 31, 1972, which is $128 million. Then we could add to this the estimated excess depreciation because over the years, of course, Polymer has depreciated its machinery, stock, and so on, and some of this machinery in terms of book value has a zero value although the machinery is still working and is still being used. The machinery still has a value. Everybody in the industrial world knows that you can have a piece of machinery which is totally depreciated, in so far as tax purposes are concerned, while the machinery is still operating, still cranking away and still producing and making very good use of itself.
Method A is that you estimate the consolidated book value as at December 31, 1972, add the estimated excess depreciation and arrive at a figure of $163 million-a cool $101 million above the $62 million. Method B is more commonly used to evaluate corporations and companies. You take the company projection of average earnings, after taxes, for 1973-76, which would be about $16 million, and multiply it by the capitalization factor, discounting growth by 100 per cent, which yields roughly 7 per cent after tax. This is a very conservative set of figures and multipliers. Multiply the effect 14 times. I am striking a middle figure here because we know, as the hon. member for Peel South (Mr. Blenkarn) said a while ago, that ten times is the minimum factor and we know that in the petroleum and petrochemical industry 22 times is the more reasonable figure. So I will take 14 times. That gives you the method B valuation of $224 million. Subtract $62 million from that and you will see that the people of Canada might be losing.
To be even less conservative and go the full range of valuation as it might be carried on in the petrochemical industry, let us use a factor of 22, which is not common. You will have a figure which certainly skyrockets beyond the 14 times, giving you much more than the $224 million valuation for the company I mentioned earlier. So there is a very real and serious gap between the value of this company and the money that has been paid for it.
If it were the case that it was solely a book transfer between a Crown corporation and the Canada Development Corporation which was totally in public hands, then we could say that this is just a matter of a book entry. But it is not so. The Canada Development Corporation will be
March 23, 1973

putting out shares to the public. And let us not kid ourselves: when we talk about the public we do not talk about Mrs. MacGillivray with a few dollars in her socks; we are talking about people who have the money to invest in the stockmarkets of this country, and that is a limited number of people. We are not talking about people so much as about other corporations, other companies or other institutions. So here we have the possibility of a Canadian Crown corporation being effectively sold for peanuts to the private interests of this country. No wonder that the great spirit of C. D. Howe might shake itself a little on a day like this and come roaring up to this parliament to scold the Liberal frontbenchers.
There are other questions which are involved. They relate to the presentation of the financial report of Polymer. I have gone back over a few years to find out when the financial reports were presented, and I have the dates: 1971, February 11; 1970, February 12; 1965, February 11; |960, February 21; 1959, February 5. It is now March 23. Indeed, if I may quote the immortal words of the Prime Minister (Mr. Trudeau), "it's spring". Winter has gone by, the winter of our discontent has gone by, and according to the normal pattern we should have a report on this very large and important Crown corporation because there are questions at least, to be asked. Accusations have been made about the Crown corporations which ought to be cleared up fully.


Erik Nielsen: There are questions to be answered, too.


John Paul Harney: I should like to cite from an Associated Press report which originated in Geneva and reads as follows:
The International Federation of Chemical and General Workers ... said Polisar International SA-
That is the international trading company of Polymer.
-which has an agreement on technology exchange with the Soviet state committee for science and technology, also integrates international cash flows and profits "to minimize taxes and accumulate investment capital for further expansion overseas."
What could be behind this? We all have an idea of how multinational corporations can operate through processes of invoicing so that they can minimize their tax burden. A multinational corporation operating in Canada and producing goods in Canada could be, in effect, selling goods directly to Arkansas through Belgium and therefore, when it invoiced Belgium for a figure less than what they would be invoicing Arkansas, foresaw that the profit made in Canada was small but the profit made in Belgium was large; but it so happens that the tax grab in Belgium is smaller.
It is known that the tax levels in Switzerland are indeed modest; they run at approximately 8 per cent. They even beat us in this country when it comes to letting off the corporations. What we want to see in this parliament is the financial report so we can go into it thoroughly to see what the international trading practices of Polymer have been, because certainly it has been doing business with Polisar, its own subsidiary in Switzerland, and it would be very interesting to know how over the years Polymer has paid taxes effectively to Switzerland which could have been paid to the people of Canada.
Crown Corporations
Of course, in the past, we did not mind that the directors of Polymer used every legal means at their disposal to reduce the tax burden on Polymer because, after all, we the people of Canada were still the owners of Polymer; so whether we got it in taxes or profits, we still had it. But now the problem is that this company has been sold out and we will be losing out on the back taxes.


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


Sinclair McKnight Stevens: Mr. Speaker, I have been pleased in today's debate to hear the various arguments put forward-most of which, incidentally, I agree with-concerning the contemptuous action taken by the government with respect to the Polymer and CDC deal. The previous speaker stated in his final remarks how deplorable it was that we have not as yet been given the right to look at Polymer's last annual report.
I feel his comments are particularly appropriate when we bear in mind that up until yesterday we were debating in the House Bill C-133. During that debate I pointed out that I found it was strange that this government would come to parliament and request an increase in the ceiling for CMHC so that it could borrow up to $10 billion, and that they would request the ceiling with respect to the amount of mortgage investment they could insure should be increased to $19 billion; yet they had not given the House the courtesy of presenting to the House the most recent annual statement for CMHC which should have been presented for year ended December 31, 1972.1 pointed out that in both respects, the amount of mortgage investment that had been insured and the actual amount of loans advanced to that corporation were significantly lower than their existing ceilings.
I am indeed very surprised, startled and annoyed to be now presented, the day after the debate, with the annual statement for CMHC, bearing in mind that that statement, I suggest, had been deliberately withheld from the House until the bill was passed in principle last night. I would call the attention of the House to the fact that a review of the figures with respect to CMHC reveal all too well why the Trudeau government did not dare introduce that statement prior to the passage of the bill in principle. The fact is CMHC profits have again tumbled. This is the third year in a row that that corporation has borrowed more from the treasury, has increased their assets, has increased their number of employees, but has made less money.
Let me give you the figures, Mr. Speaker. Based on borrowings from the Government of Canada which we find total, as of the end of 1972, $6,166,000,000 compared with borrowings the previous year of $5,600,000,000, we now find that the corporation's after-tax income is $3,182,000 compared with $7,432,000 the year before. Surely that is a significant factor that the House should have been aware of prior to our being asked to give second reading to Bill C-133.
I would suggest, Mr. Speaker, that when we are considering the desirability of Crown corporations we should

March 23, 1973
Crown Corporations
keep in mind that, while it may be necessary to have certain Crown corporations for certain services, wherever possible Crown corporations should be divested and put back into the private sector. Let me contrast, for example, the picture in Canada with respect to Central Mortgage and Housing Corporation and the comparable company in the United States which, incidentally, used to be state-owned and which is referred to as the Federal National Mortgage Association. I would point out that that corporation, which is only three times the size of our Central Mortgage and Housing Corporation, has had a sensational growth in profits, 686 per cent in fact, which is due largely to the fact that the American authorities worked out an ingenious plan for returning that corporation back into the private sector.
At the present time on a board of 15, 10 of the board are nominated by the stockholders at large of the corporation. Those stockholders are made up largely of those who use the services of what is called Fannie Mae. I would point out that the company is, first of all, neither a purely private enterprise nor a purely governmental agency but, rather, is a combination of the two. It is ultimately controlled by the President of the United States and it is also charged with the major responsibilities of implementing U.S. housing policies. It is expected to seek profits for its stockholders-I would emphasize that because to me profit is simply the evidence of efficiency. If you do not make profit, in all likelihood it indicates bad, sloppy management.
Fannie Mae is oriented to make profit for the stockholders. It has been renamed once, it has been restructured three times and its mission has been refined and redefined twice. This is something that is long overdue with respect to CMHC. That is a corporation which was set up for one purpose, and rather than being redefined in order to be able to properly cope with the existing problems in Canada, it has been allowed to stay in a stratified, immobile condition; and judging from the current financial statement it is not even serving the government or the people of Canada properly.
In the United States, Fannie Mae has as a principal goal or mission the provision of money to builders and lenders at the most reasonable terms. It services, in short, the savings and loan associations, the banks and insurance companies in that country. I think it is interesting to note that it not only insures mortgages-and this is a recent diversion-but it has gone into the conventional mortgage field in an extremely aggressive way, becoming in effect a type of mortgage exchange where people can buy and sell mortgages of a conventional nature in the United States.
Fannie Mae has risen to her present pre-eminence among mortgage lenders because she managed, in some respects, to escape from federal authorities. In short, she escaped from Basford-type domination. As a government agency, created in 1938, that corporation naturally found it easy to borrow money in the private market to make mortgage loans. I would point out that in our stultified approach to CMHC our government has never, even to this date, allowed CMHC to go into the private sector and raise money.
It takes the easy way out, and that is simply to go to the Minister of Finance and ask for another $100 million or $1

billion, as we have been requested in this House, or perhaps $2 billion and we give them another $2 billion of loaning authority. I emphasize that the comparable company in the United States does not depend on the federal treasury to the extent that CMHC does in this country. The comparable company there is privately financed both as to equity and as to debt.
I would also mention that in order to keep its funds in the black, it has become completely free of government restraints with respect to debt limits. This has put it in the position where, unlike our CMHC which is included in the gross liabilities of Canada, it does not have to be included in calculating the gross liabilities of that country. I would also like to mention that in May, 1970, control of the company's board of directors moved into the hands of some 14,800 private stockholders. The stock, in fact, is now traded on the New York Stock Exchange and has been one of the sensations on that exchange. Its profit and its growth have been so sensational that the public have bought the stock and it has risen from about $5 in 1968 to a current price of over $20. In fact, at one time it went over $25, a fourfold to fivefold increase with respect to that stock.
The profits in that corporation at the present time are running at about $70 million. Imagine! Here is a corporation, privately oriented, that I would suggest is doing an even better job in its field than the comparable company in Canada. It is only three times the size of our corporation, yet it is earning in the area of $70 million compared with our corporation earning $3 million. This is something that those who have such a fondness for Crown corporations should bear in mind. The fact is, government ownership is not the most efficient way to get the proper efficiency in a corporation.
The stockholders in Fannie Mae elect ten of the directors and the President of the United States appoints the other five. The charter granted to the company by the U.S. Congress gives George Romney, as Secretary of Housing and Urban Development, "general regulatory powers" over Fannie Mae affairs, decisions involving dividends, stock issues, total debt and borrowing of money. But, and I would stress this, at all times the company is geared to a profit-making orientation.
I have drawn attention to these similarities or dissimilarities between the Canadian approach with respect to CMHC and the American approach with respect to Fannie Mae, not because I feel there is any particular merit in the U.S. corporation because it is American, but I am simply stating to this House that in considering the motion before us we should bear in mind that Crown corporations are not to be encouraged in further development or expansion. As this parliament progresses we will be able to demonstrate some completely irresponsible activities with respect to some of the Crown corporations that have been either administered, continued or in some cases spawned by the present government. This growth in Crown corporations is something that should be arrested at the earliest possible opportunity.
When we look at the returns produced by Crown corporations in this country, the results are startling. Their total
March 23, 1973

assets have grown from under $4 billion in 1962 to over $12 billion in 1972. Their earnings, if you pull out debt calculations and the earnings that they can make by the Bank of Canada, which is simply a bookkeeping entry, are something like $70 million. We are talking in some cases about the largest corporations in the land having assets in the aggregate of $12 billion, earning somewhere around $70 million in the aggregate. Some of these corporations in fact have been in a deficit position; yet we find that there is an encouragement, a propensity on the part of the government to inflict still more Crown corporations upon the nation.
Mr. Speaker, I rose only to make a few comments because I feel it is a tragic thing that this country has been so inflicted under the Trudeau government, and I sincerely hope that there will be a trend away from loving Crown corporations.


Mr. Cyril Symes (Sault Ste. Marie):: Mr. Speaker, I see by the clock that I have only five minutes, so I will not be able to go into the details of the speech that I had prepared. I was interested in the remarks of the hon. member for York-Simcoe (Mr. Stevens), who preceded me, in regard to the value of Crown corporations. I believe this typifies the mythology about free enterprise and how it has been the great salvation of the country in the past and will be in the future. Perhaps the hon. gentleman should look at Canadian history and realize that it is a myth to say that this country was developed solely by free enterprise. Let us remember that the great economic ventures in this country were joint ventures between government and the private sector. We find something that seems to be typical of the Canadian businessman, that he lacks the financial wherewithal and the audacity or courage to take risk ventures.
I refer the hon. gentleman to the development of the Canadian Pacific Railway, that great band of steel which united this country from east to west. Was that solely a private enterprise undertaking? We find out that the private enterprisers came crying to the government that they could not make it on their own and needed help, so the taxpayers provided the CPR, that private corporation, with $25 million-that was not peanuts in those days- with 25 million acres of land, and a guarantee that they would face no competition for 25 years. We begin, then, to see in the development of the Canadian economy a partnership between government and private enterprise.
Crown Corporations
The next great venture in the area of communications was Trans-Canada Airlines. No businessman was interested in developing a national airways, so the Canadian government undertook to develop it for the Canadian people. We have been served very well by Air Canada, despite this government's attempts to undermine it by giving lucrative routes to Canadian Pacific Air lines.
Many unprofitable, small railway systems in Canada were going out of business, which would have deprived the people of northern Ontario and other areas of service. The government decided that service should come before profit, so it took over the railways and amalgamated them with the Canadian National Railways' system, incurring a huge debt but not giving up. The CNR is running efficiently today and making a profit, notwithstanding the fact that it has the huge debt of the private system hanging over it.
Let us not be carried away by the myth that free enterprise alone developed this country. Free enterprise has caused a huge amount of foreign investment in this country to the point where over 60 per cent of the manufacturing is foreign-owned, over 82 per cent of oil and gas wells are foreign-owned, and 99.9 per cent of the petroleum industry is foreign-owned. If we rely solely on foreign private investment, this country will cease to exist in the near future. What we need is a Canadian Development Corporation, not of the sort the Liberal party has, but one that is truly owned by the public of Canada and truly designed to develop Canadian industry, to buy back some of the foreign-owned industry and not to buy up profitable public corporations such as Polymer, Eldorado, and so on.
I urge this House not to fall for this mythology propagated by many members of the Conservative party and many, but not all, of the Liberal party. We need a strong publicly-owned business system in this country. I am thinking of examples we have now. We need a very strong Canadian development corporation to keep Canada for the benefit of Canadians.


The Acting Speaker (Mr. Laniel):: Order, please. It is my duty to inform the House that pursuant to section 11 of Standing Order 58, the proceedings on the motion have expired. It being five o'clock, this House stands adjourned until two o'clock Monday afternoon.
At 5 p.m. the House adjourned, without question put, pursuant to Standing Order.

Monday. March 26, 1973