1974-05-07

ROUTINE PROCEEDINGS


Mr. Robert Muir (Cape Breton-The Sydneys):: Mr. Speaker, I rise at this time under the provisions of Standing Order 43 to move a motion. In view of the grave concern and deep unrest that now exists in Nova Scotia as a result of the recently announced commissioning by the Department of Regional Economic Expansion of a study to investigate the economic feasibility of a steel complex in Atlantic Canada, and in light of the fact that another steel operation in eastern Canada would definitely jeopardize the future of the operations of the steel plant at Sydney and the jobs of over 4,000 steelworkers, I move, seconded by the hon. member for Cape Breton-East Richmond (Mr. Maclnnis):
That the federal government immediately cancel the study undertaken to investigate a site for a possible steel complex in eastern Canada and instead solely concentrate on assisting the Nova Scotia government to modernize and diversify the present steel operation at Sydney.
Mr. Speaker, the future fate of the economy of Cape Breton could well hang in the balance as a result of the stupidity of the federal government in commissioning this study.


Some hon. Members:: Oh, oh!


Some hon. Members:: Hear, hear!


Mr. Speaker:: Is there unanimous consent?


Some hon. Members:: Agreed.


Some hon. Members:: No.


An hon. Member:: MacEachen's boys said no.


Mr. Speaker:: There is not unanimous consent.


PUBLIC SERVICE
Mr. Maurice Foster (Parliamentary Secretary to President of the Privy Council):: Mr. Speaker, pursuant to
Standing Order 41(2) I wish to table, on behalf of the President of the Privy Council (Mr. MacEachen), Part III of the report of Mr. Finkelman on employee-employer relations in the Public Service of Canada.


CANADA ELECTIONS ACT
Mr.   Sean@: for leave to introduce Bill C-284, to amend the Canada Elections Act.


Some hon. Members:: Explain.


Mr. O'Sullivan:: Mr. Speaker, the purpose of this bill is to compel the Chief Electoral Officer to place at the disposal of members of parliament the lists of military voters electing to be enumerated in their respective electoral districts, and thereby to permit members' communication with all their constituents.


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


Hon. Robert L. Stanfield (Leader of the Opposition):: Mr. Speaker, this question is directed to the Minister of Finance who has forecast a rate of growth of 5 per cent in real terms during 1974 and in his budget presentation last night accompanying figures indicated that the increase in income tax collections in the current fiscal year would be $1V4 billion. In making this calculation, what was the assumption as to the rate of inflation?


Hon. John N. Turner (Minister of Finance):: Mr. Speaker, the assumption was based on the inter-reaction between the progressive rate of tax and the expectation of receipts from that tax based on that progressive rate.


Robert Lorne Stanfield: Mr. Speaker, I understood the reluctance yesterday of the Minister of Finance to make a prediction as to what inflation will take place in the current calendar year, but I would like the minister to be frank with us and

May 7, 1974
Oral Questions
tell us quite frankly the basis upon which the calculation of income tax collections was made and a real rate of growth of 5 per cent. Would the minister please be frank and tell us what the rate of inflation was assumed to be for the purpose of the calculation?


John Napier Turner: Mr. Speaker, the rate of return on the tax is not only based on assumptions of inflation but on assumptions of the strength of the economy, assumptions of the strength of the economy in various income ranges. As I said last night I am not in a position to predict a rate of inflation for Canada in 1974 for the reasons I mentioned last night.


Robert Lorne Stanfield: Mr. Speaker, I am sorry the minister is being difficult about this. He just said this calculation was based on other assumptions besides an assumption of the rate of inflation, indicating there was some assumption made about the rate of inflation for the purpose of this calculation. I ask the minister to give us this information so that we can judge the value of the calculation. What was the rate of inflation upon which this calculation was based? There were other assumptions as to the rate of growth and other things the minister has mentioned, but what was the rate of inflation upon which this calculation was based?


John Napier Turner: There are so many interrelated factors. We went through this exercise last year on the budget and I give the Leader of the Opposition the same answer I gave him on the last occasion.


Mr. Speaker:: Order, please. There are three or four or more supplementaries. Hon. members, I am sure, will want to spend most of the question period on this matter which actually should be dealt with when we reach the budget debate, but I will recognize hon. members for these supplementaries in a moment after we have completed the first round of questioning. The hon. member for Brant.


SOCIAL SECURITY
Mr. Derek Blackburn (Brant):: Mr. Speaker, my question is also directed to the Minister of Finance. In view of the fact the government recently gave a $500 a year increase to certain members of the Public Service, specifically to cope with rising inflation, is it the minister's intention to do the same thing for those receiving old age security and, if not, why not?


John Napier Turner: Mr. Speaker, that question was put in similar terms yesterday. I am not in a position to respond to it in positive terms because they are two different types of situations,


CANADIAN BROADCASTING CORPORATION
Mr. Real Caouette (Temiscamingue):: Mr. Speaker, I should like to put a question to the Prime Minister.
Since the entire French network of the CBC was paralyzed last evening, so that the Canadian people were deprived of the national news due to a work stoppage ordered by stupid and irresponsible individuals, does the Prime Minister intend to ask a thorough cleaning of the CBC piggery contaminated by well-known separatists and leftists?


Mr. Grafftey:: Incredible!


Right Hon. P. E. Trudeau (Prime Minister):: Mr. Speaker, as the House no doubt knows, the work stoppage to which the Social Credit leader referred to comes under the Canadian Labour Code. We hope that the CBC authorities will act firmly in that illegal strike, as the House also hopes. For the moment, I think it would be premature for the government to intervene in that strike, but once again, I hope that the authorities will find a solution to that strike which is not only illegal but whose timing strangely seems to have been in contempt of Parliament representing the entire nation.


David Réal Caouette: Mr. Speaker, I would like to ask a supplementary.
I realize that it behooves the CBC to take decisions, but I would like to know if the Prime Minister and the government intend to recommend to the corporation that it deal severely with those responsible for this absolutely illegal strike?


Pierre Elliott Trudeau: Mr. Speaker, I suppose that the hon. member's question and the reply I just gave will be broadcast, if not on the CBC network at least on those of the other radio and television stations, and that the strikers will probably be informed of our views, mine and that of the hon. member.


FINANCE
Mr. Allan Lawrence (Northumberland-Durham):: Mr. Speaker, would the Minister of Finance clarify for Ontario citizens whether he is undercutting the provincial tax on land speculation by removing one of the bases of the tax, namely, the deductibility provision with regard to such tax?


John Napier Turner: Mr. Speaker, as I understand it, that bill is still before the Ontario legislature so there is no undercutting at all.


Some hon. Members:: Oh, oh!
May 7, 1974


Allan Frederick Lawrence: The suggestion I have had is that the legislation has been put in a freeze in the Ontario legislature pending clarification of what the minister is apparently doing. I think it is a fairly simple question: Is government policy going to continue to permit the deductibility of such a tax at the provincial level or not? A simple yes or no will be sufficient.


Some hon. Members:: Oh, oh!


John Napier Turner: It is my understanding that the bill has been put in a freeze in the Ontario legislature until they find out whether or not it works.


Mr. Speaker:: The hon. member for St. John's East.


Allan Frederick Lawrence: Mr. Speaker, I have a supplementary question.


Mr. Speaker:: Perhaps the hon. member for St. John's East, who has the next question, will allow me to recognize the hon. member for Northumberland-Durham on a supplementary.


Allan Frederick Lawrence: I am sorry, sir, to have to do this again, but obviously the question of the workability of the provincial legislation depends entirely on the attitude of the minister, and he will not give it. I ask him again, and a simple yes or no will be sufficient: is this tax going to be deductible or not?


Mr. Speaker:: Order, please. The hon. member is repeating the question he has already asked. The hon. member for St. John's East.


MONITORING OF CERTAIN BUDGET TAX CHANGES TO ENSURE THAT CONSUMERS ARE PROTECTED
Mr. James A. McGrath (St. John's East):: Mr. Speaker, my supplementary question is for the Minister of Consumer and Corporate Affairs who has been charged with monitoring responsibility in regard to the budget of the Minister of Finance. May I ask him what steps he intends to take in carrying out this monitoring responsibility to ensure that the excise tax is not used as an excuse to raise profits on existing stocks? I ask this in view of the fact that the decrease in the sales tax on clothing and footwear will not be effective until existing stocks are exhausted, probably in the fall, if ever.


Hon. Herb Gray (Minister of Consumer and Corporate Affairs):: Mr. Speaker, we carried out a successful monitoring program with respect to the excise tax and customs duty cuts in the last budget, and I hope to be announcing very shortly the details of the monitoring program with respect to the present measures. Obviously, as the hon. member suggests, it will have to be developed to take into account the very factors he has mentioned. I will be announcing the details later.


James Aloysius McGrath: Mr. Speaker, in view of the minister's outstanding failure to succeed in this regard with respect to the last budget, may I ask him what immediate steps he is taking to ensure that people are not taking advantage of
Oral Questions
the elimination of the excise tax on tobacco and certain other products as an excuse to make immediate windfall profits?


Herbert Eser (Herb) Gray: Mr. Speaker, I think that most people, perhaps with the exception of the hon. member and some of his colleagues, recognize the report on the monitoring of the cuts in the last budget as being a fair balanced and accurate statement of what actually took place and the actual benefit to the consumer. We are prepared to carry out the responsibility mentioned by the Minister of Finance in his statement last night to get the facts in order that the government can take any appropriate action that may be necessary.


THE BUDGET-GROWTH IN GROSS NATIONAL PRODUCT IN CURRENT DOLLAR TERMS USED IN ESTIMATING REVENUES
Hon. Paul Hellyer (Trinity):: Mr. Speaker, my question is supplementary to the first question asked of the Minister of Finance. Can the minister give the House the figure for growth in the gross national product in firm dollar terms which was used in the determination of his estimate of revenues for the future year?


John Napier Turner: Mr. Speaker, that is just another way of putting the same question.


Paul Theodore Hellyer: Does the minister not feel he has a solemn obligation to parliament and to the Canadian people to tell them the growth rate on which his forecasts are based, and that it is rather contemptuous of the House and the Canadian people to try to hide exactly what he predicts to be the case for the coming year? Will he not now change his mind and come clean with the Canadian people and with parliament and tell us what the basis is?


Some hon. Members:: Hear, hear!


John Napier Turner: Mr. Speaker, I came clean with the Canadian people last night.


Some hon. Members:: Hear, hear!


John Napier Turner: Yesterday afternoon, in reply to a question from one of the hon. gentleman's colleagues, I said in the current state of the worldwide factors at play no one could accurately predict the rate of inflation in Canada or in any other country of the world.


Mr. Speaker:: I will recognize the hon. member for Trinity for the sixth or seventh supplementary on this subject, after which I will see the hon. member for Y orkton-Melville.


Paul Theodore Hellyer: Mr. Speaker, my question is simple. How can anyone estimate income revenues based on the gross national product if at the same time he is totally incapable of estimating the compound of the real growth and the inflationary growth which is going to take place? It is a fraudulent prediction.


John Napier Turner: Mr. Speaker, I think the hon. gentleman recognizes, by the preamble to his question, how many interreacting assumptions there are.

May 7, 1974
Oral Questions


NET VALUE TO CORPORATIONS OF TAX CUT AND WRITE-OFFS LAST YEAR
Mr. Lome Nystrom (Yorkton-Melville):: Mr. Speaker, I wish to direct a question to the Minister of Finance. In view of the fact we have been unable to get from his officials the net value to corporations of the corporate tax cut last year as well as the tax write-offs, can the minister tell us today how much the tax cuts were worth last year, as well as for 1974?


John Napier Turner: Mr. Speaker, the reason the hon. gentleman was not able to get those figures is that you have to calculate the gross effect of the corporate tax cut as against increased activity in personal employment, expansion of capacity and expanded production, all of which will bring in renewed tax revenue. So the net figure is difficult to get at.


Lorne Edmund Nystrom: Can the Minister of Finance assure the House that the people of the country will have that figure in the next few weeks? Can he also tell the House when we may expect the complete answer to that question?


John Napier Turner: Mr. Speaker, I should like to assure the hon. gentleman that these measures have produced 430,000 new jobs in this country.


PENITENTIARIES
Right Hon. J. G. Diefenbaker (Prince Albert):: Mr. Speaker, my question is directed to the Solicitor General and concerns an event that took place in Prince Albert Penitentiary three days ago in which an inmate, Mervin Johnston, was stabbed to death, allegedly by another inmate. The press in Calgary has been very critical of the circumstances connected with the announcement to members of the family of the death of this young man. I spent yesterday trying to look into the matter and feel that it can be cleared up provided the minister will set up an independent inquiry, not an institutional one but an independent inquiry, into all the circumstances because the stories that are going around can only be detrimental to our penal institutions.


Hon. Warren Allmand (Solicitor General):: Mr. Speaker, I am advised that the penitentiary authorities tried to reach the wife of the man who was murdered in the penitentiary but were unable to do so. It seems that she was separated from her husband and there was no full address on file; consequently they could not reach her. I shall refer this matter to the penitentiary ombudsman who acts under the Inquiries Act and have her investigate this case for the right hon. gentleman. She is in an independent position and will provide a report.


John George Diefenbaker: Mr. Speaker, I take it that is an undertaking that there will be an independent investigation. If it is, I thank the minister for action which can only be beneficial if the facts are as alleged by officials in the penitentiary.


William Warren Allmand: Yes, Mr. Speaker. As I said, the correctional investigator or ombudsman acts under the Inquiries Act and I will refer this matter to her for an independent investigation.


FINANCE
Mr. Peter C. Bawden (Calgary South):: Mr. Speaker, my question is for the Minister of Finance. Last night the minister said that revenues derived by provincial governments in respect of production from petroleum or mineral resources should no longer be deductible in computing the income of the operator of the resources. Will the minister tell the House whether this statement in the budget will affect the special arrangements made and being made by the Alberta government with developers of the Alberta oil sands, which exempt the company from tax on the share of profit paid to the province?


John Napier Turner: Mr. Speaker, I want to see a competitive return for the development of oil, but that is going to take an interpretation of the provisions of ways and means motion tabled in the House and the contract between the province and the developers.


Peter Colwell Bawden: In view of the extreme importance to Canadians in their long range energy supplies that these developments proceed and proceed quickly, will the minister confirm that the arrangements he made with the company developing the tar sands last fall are no longer valid, that is, the commitment he gave?


John Napier Turner: No, Mr. Speaker, that is not what I was saying.


Peter Colwell Bawden: When the first ministers' conference concluded at the end of March it appeared that all matters relating to petroleum revenue sharing were settled. In view of this new and serious change in the sharing of revenues, will the minister say whether it is proposed to bring the first ministers together again to discuss this matter before the legislation is implemented?


John Napier Turner: No, Mr. Speaker, not at this time, but the Premier of Alberta has been made well aware of the concern of the federal government as to the availability of its own federal corporate tax base.


Mr. Speaker:: Order, please. There are a number of members seeking supplementaries. I will recognize the hon. member for Nipissing.


MEASURES TO EQUALIZE PRICE OF OIL, IF PETROLEUM ADMINISTRATION BILL NOT IMPLEMENTED
Mr.   J.-J. Blais@Nipissing: Mr. Speaker, my question is for the Minister of Energy, Mines and Resources. In view
May 7, 1974

Oral Questions VETERANS AFFAIRS
of the slow progress of Bill C-18, the oil administration bill, in committee, and in view of the indication by the leaders of the opposition parties that they may not let the government proceed with its administrative measures, would the minister indicate what measures would be available to the government to equalize the price of oil and maintain agreement in the event that Bill C-18 would not be implemented?


Hon. Donald S. Macdonald (Minister of Energy, Mines and Resources):: Mr. Speaker, if the bill is not made law there would, of course, be no legislative base to maintain the single price for Canadians. It would, of course, be possible if the House were dissolved to provide the cushion by way of Governor General's warrants. But there would be no authority for the collection of the export charge, and as a result approximately $4 per barrel would go to the industry-


Mr. Baldwin:: Nonsense!


Donald Stovel Macdonald: -and the cost of the payment of the cushion would have to be borne by the general taxpayer.


Gerald William Baldwin: Bribery!


Some hon. Members:: Oh, oh!


John George Diefenbaker: What a red herring!


Mr. Speaker:: Order, please. May we have order, please. The hon. member for Calgary North is recognized for the purpose of asking a supplementary.


OIL-PROVISION IN BUDGET THAT AMOUNTS PAID PROVINCES BY DEVELOPERS NOT DEDUCTIBLE IN COMPUTING INCOME-PRIOR CONSULTATION WITH PROVINCES
Mr. Eldon M. Woolliams (Calgary North):: Mr. Speaker, may I ask the Minister of Finance a question along the same lines as the one asked by the hon. member for Calgary South. The minister said last night, "I am proposing that revenues derived by provincial governments in respect of production from a petroleum or mineral resource should no longer be deductible in computing the income of the operator". Was there any consultation with the provinces prior to that statement in the budget? Did any consultation take place when the agreement was made with reference to the surtax and the compensation which will net eastern Canada $1 billion out of the resources of Alberta?


Hon.. John N. Turner (Minister of Finance):: Mr. Speaker, I do not accept the preamble to the question. There was no consultation before last night's budget statement, although the province of Alberta was well aware of the government of Canada's concern about the erosion of the federal tax base as a result of actions taken by provincial governments.


DISPOSITION OF GEORGE DERBY HOSPITAL LANDS-REQUEST FOR TRANSFER TO MUNICIPALITY OF BURNABY
Mr. Ed Nelson (Burnaby-Seymour):: Mr. Speaker, my question is for the Minister of Veterans Affairs. In view of the fact the disposition of the 28 acres on which the George Derby Hospital is located appears to be virtually settled, and in view of the increasing urgency of reaching a decision regarding the disposition of the remainder of this tract of land, can the minister give any assurance that the government is willing to transfer this land to the municipality of Burnaby?


Hon. Daniel J. MacDonald (Minister of Veterans Affairs):: Mr. Speaker, the answer is no.


FINANCE
Hon. W. G. Dinsdale (Brandon-Souris):: Mr. Speaker, my question is for the Minister of Finance. Is the hon. gentleman aware that a copy of his budget was in the hands of the leader of the Liberal opposition in the Manitoba Legislature before his reading of the budget and before it was available to members of this chamber? Can he inform the House how this budget leak took place?


John Napier Turner: Mr. Speaker, I am not aware of that but I will check it out.


Walter Gilbert Dinsdale: In view of the fact that this is a fundamental violation of the rights and privileges of every member of this House-


Some hon. Members:: Hear, hear!


Walter Gilbert Dinsdale: -would the hon. gentleman in his investigation inquire as to how many copies were released ahead of his budget address and to whom they were released, and report to the House in some detail on this matter?


John Napier Turner: Mr. Speaker, I doubt very much the allegation raised by the hon. member. The budget was sent under security guard in national defence aircraft right across the country, and copies were released in all provincial capitals simultaneously with my rising in the House. Allowing for time zones, and I will check the particular incident raised by the hon. gentleman, it is quite possible that at seven o'clock Winnipeg time the budget would have been available to anyone who approached the Bank of Canada office or the legislature in Manitoba.

May 7, 1974
Oral Questions


THE BUDGET-PROVISIONS RESPECTING MUNICIPALITIES AND ACCUMULATION OF FUNDS BY INDIVIDUALS TO BUY HOMES
Mr. Adrien Lambert (Bellechasse):: Mr. Speaker, I have a question for the Minister of Finance. It deals with the very important speech he made last night and is of interest to municipalities and persons of 18 or more. I should like to be very specific. Will the removal of the sales tax on building materials mentioned on page 22 of the speech which will apply to municipalities and water distribution systems also apply to municipal sewers? Secondly, will the fiscal advantages granted persons 18 or over through a registered home ownership savings plan apply not only to the purchase of homes but also to home construction?


Mr. Speaker:: Order. I shall allow the minister to reply briefly, but may I remind the hon. member for Bellechasse that in a few minutes we will be discussing the budget, in addition to which those questions should not really be put before we reach orders for the day. But the question having been put, the minister may want to answer it briefly.


John Napier Turner: Mr. Speaker, the answer can be found in the document I tabled last, night. The answer to the second part of the question is yes. With regard to the first part of his question, I must refer the hon. member to the document I tabled last night. In any event, I shall be in touch with him in this regard.


LOSS IN REVENUE RESULTING FROM CORPORATE TAX CUT AND FASTER WRITE-OFFS LAST YEAR
Robert Lorne Stanfield: Mr. Speaker, my question is to the Minister of Finance and has reference to the question put to him by the hon. member for Yorkton-Melville relating to the estimated loss of revenues flowing from the cut in corporate taxes for manufacturers and processors and the fast write-offs. In view of the fact the Deputy Minister of Finance promised an answer on that this morning at the latest, am I to take it from the Minister of Finance's response to the hon. member that he is refusing to give that information?


John Napier Turner: Mr. Speaker, I am saying to the hon. gentleman that in order to calculate the net tax effect of the corporate tax incentives to manufacturers and processors one has to take the gross tax receipts and set off against them taxation from increased activity in the construction industry and in capital investment, and what that means in terms of greater productivity and greater taxation, and also net out the greater personal taxation from the new jobs that are provided by that increase.


Robert Lorne Stanfield: How was it that the minister's officials were quite prepared to give us an estimate last year? In view of this, why is the minister going through all this elaborate cover-up which is creating suspicion in the minds of people that is exceedingly regrettable? I ask the minister, will he not do what his officials promised would

be done, give us this information, and prevent the suspicion developing that the minister is creating today?


John Napier Turner: Mr. Speaker, I am replying on my authority as minister and reporting to a fellow member of the House, and I have told him of the difficulty in supplying that answer.


PENITENTIARIES
Mr. A. D. Alkenbrack (Frontenac-Lennox and Addington):: Mr. Speaker, my question is to the Solicitor General and deals with permissiveness in our penal administration. Last week two convicts escaped from Millhaven Penitentiary, enjoyed a delightful day in the county town of Napanee in the luxury of spendid anonymity at the expense of the public, and are still at large because there was no communication from the prison to the police department of the town of Napanee. What reason can the Solicitor General give for the failure of his department for 14 hours to notify the Napanee police department of the escape of these men and of their description?


William Warren Allmand: Mr. Speaker, I will have to get the information on that question. I was expecting it a few days ago. I had the information here then but I do not have it today.


AGRICULTURE
Mr. S. J. Korchinski (Mackenzie):: Mr. Speaker, I have a question for the Minister of Agriculture with regard to the recent increases in fertilizer prices amounting to 30 per cent about which the minister has not satisfied me, and also with regard to other products involved in the production of agricultural products such as baler twine which has increased in price by at least 300 per cent. Has the minister had any inquiries conducted to see whether these increases are justified?


Hon. E. F. Whelan (Minister of Agriculture):: Mr. Speaker, the hon. member knows we have been checking on these prices. We know that the supply of baler twine is increasing. If there is a so-called shortage, this is one way in which unjustified price increases can be overcome. A cargo of baler twine was recently unloaded at Saint John, New Brunswick, and another is being unloaded at Toronto. If the supply becomes greater, that will have a controlling effect on prices. We know the increase will not be 300 per cent as the hon. member has suggested. According to our survey, fertilizer prices in western Canada have gone up by approximately 23 per cent. The big problem we are now facing is that some small dealers and farmers are
May 7, 1974

exporting fertilizer to the United States in order to make a rip-off.


Mr. Speaker:: The Chair will recognize the hon. member for Mackenzie on a supplementary and then the hon. member for Egmont.


Stanley James Korchinski: The minister may be dealing with the small problem of an increase of 40 per cent in the price of fertilizer, but the price of baler twine has gone up over 300 per cent, from $8 to at least $27 a bale. Can the minister indicate what justification there is for that in view of the fact that fuel oil and natural gas prices and transportation costs have not gone up at that rate? Why is this type of increase necessary?


Eugene Whelan: Mr. Speaker, baler twine is made out of sisal fibre which is imported from Mexico and other countries. There is not much we can do but pay the price for that product and get it to Canada as quickly as possible. In Mexico, for instance, it went up by $5 a bale. I think it should be made clear that when the hon. member suggests 300 per cent-


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


Stanley James Korchinski: On a point of order, Mr. Speaker-


Mr. Speaker:: The hon. member is rising on a point of order. I will allow the minister to reply to the point of order, but I am not sure it will settle very much.


Stanley James Korchinski: Mr. Speaker, what happens in Mexico does not have anything to do with the price of twine in Canada. I am not talking about sisal twine. I am talking about plastic twine which is entirely different from the sisal twine that comes from Mexico. The price of plastic twine-


Some hon. Members:: Order!


Mr. Speaker:: Order, please. Order, please. I have to be fair to the minister and allow him to speak to the alleged point of order. I hope hon. members will appreciate there are only a few minutes left before the end of the question period.


Eugene Whelan: For your information, Mr. Speaker, plastic twine is used by less than 10 per cent of those who use baler twine in Canada. Its main source is petroleum products. In the case of sisal fibre, it is all imported.


Some hon. Members:: Hear, hear!


Some hon. Members:: Oh, oh!


Mr. Speaker:: Order, please. This shouting is not very helpful. In the circumstances hon. members can expect that orders of the day will be called promptly when we reach the end of the question period. If we have to go, I wish we would go in peace.


Some hon. Members:: Hear, hear!


Stanley James Korchinski: Mr. Speaker, I would go in peace if the minister would admit he has not done a darn thing about
Oral Questions
the price of baler twine which has increased by 300 per cent. That is exactly what this government intends to live with.


Some hon. Members:: Hear, hear!


Some hon. Members:: Oh, oh!


Mr. Speaker:: Order, please. I call on the Minister of Agriculture to give the Chair an opportunity to recognize another two or three questioners before we reach the end of the question period. I recognize the hon. member for Saint-Hyacinthe. I hope it will not be a supplementary.


AIR CANADA
Mr. Claude Wagner (Saint-Hyacinthe):: Mr. Speaker, in the absence of the Minister of Transport to whom we wish a quick return, I address my question to the head of government.
In view of the statement made in this House by the minister on March 22, as recorded on page 774 of Hansard, to the effect that, and I quote:
"Air Canada is the one that will decide where the base will be located ..."
Can the Prime Minister tell the House whether he agrees with this point of view and intends to confirm this decision already taken by Air Canada?


Pierre Elliott Trudeau: Mr. Speaker, if the hon. member will refer to what I said to the House two days ago, he will realize that I indicated indeed this question was before the Cabinet.
The hon. member should know that the government's and Parliament's policy is to leave as much freedom as possible to Crown corporations, but that the government, by appointing the directors of various boards and through contacts with the main administrators, can certainly influence this kind of decision.


ENVIRONMENTAL AFFAIRS
Mr. Randolph Harding (Kootenay West):: Mr. Speaker, my question is for the Minister of the Environment. In view of the reported grounding of a Canadian National cruise ship off the northern tip of Vancouver Island with a resulting oil spill, will the minister advise the House whether he has information as to the extent of the oil spill, the cause of the accident and what action is being taken to contain the oil?


Hon. Jack Davis (Minister of the Environment):: Mr. Speaker, I can tell the House that the spill is not serious. I
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May 7, 1974
Oral Questions
do not know the cause of the accident. Staff of several departments are on the spot and oil containment efforts are under way.


Randolph Harding: Who will be responsible for the clean-up costs of this spill and for the clean-up costs of a similar grounding in the St. Lawrence River recently which I understand resulted in a very costly clean-up operation?


John (Jack) Davis: In the first case, Mr. Speaker, Canadian National Railways; in the second case, Imperial Oil.


FINANCE
Mr. David MacDonald (Egmont):: Mr. Speaker, I wish to direct a question to the Minister of Finance. In light of the fact that Canada's areas of regional disparity, particularly the Atlantic region, have had high unemployment rates together with an increasingly tight money situation, has the minister assessed the impact his budget will have on these regional economies, particularly in lignt of the forecast downturn for the latter part of this year?


John Napier Turner: Mr. Speaker, I tried to make it clear last night when I referred to the policies to eliminate regional disparity or to enhance equality of economic opportunity in Canada that the budgetary thrust of the government would continue to try to spread expansion of the economy into the Atlantic and western provir ces. I took some encouragement last night, as I hope the hon. gentleman did, from the fact that despite the high unemployment figures, which I regret as much as he, the rate of growth in the Atlantic provinces and Quebec in 1973 exceeded the rate of growth for the country as a whole.
'


David Samuel Horne MacDonald: Since the minister referred to the fact that he expected the banks would continue giving preference with regard to loans to small businesses, mortgage financing for housing and other borrowers, is the minister now prepared to indicate the exact capital targets that have been arrived at? Is the minister prepared to report to the House the extent to which the banks will enter into some arrangement, in view of the fact that unemployment is in fact increasing on an over-all basis in the Atlantic provinces and that often inflation is greater there than in the more affluent parts of the country?


John Napier Turner: Mr. Speaker, I recognize that while monetary policy has a uniform national rate which may have different effects, depending on the strengths of different parts of the economy, our fiscal policy has a regional differentiation. I have asked the governor of the Bank of Canada, through the Canadian Banking Association, to arrange to have figures compiled on a more regular basis indicating the rate of authorization of loans of $200,000 and under and $200,000 and over, regionally differentiated. I will see what I can get for the hon. gentleman.


LABOUR RELATIONS
Mr. Jacques Olivier (Longueuil):: Mr. Speaker, I wish to direct a question to the Minister of Industry, Trade and Commerce concerning the strike of United Aircraft employees, in the constituency of Longueuil. Since this strike has been going on for 19 weeks now, can the minister tell the House whether he was assured by United Aircraft officials that all subcontracts given in the United States will cease as soon as the strike is over?


Hon. Alastair Gillespie (Minister of Industry, Trade and Commerce):: Mr. Speaker, I am very concerned about the prolongation of this strike, its effects on employment and its effects, both present and future, on supplying our customers throughout the world. My department has registered our concern and we are monitoring the situation very closely. We have received written assurances from the company that, immediately following the end of the strike, any work which has been shifted temporarily from the plant will be returned immediately to United Aircraft Limited.


AIR CANADA
Mr. Elmer M. MacKay (Central Nova):: Mr. Speaker, I have a question for the Acting Minister of Transport, of which notice was given the minister's office this morning. Can the acting minister say whether or not the recently appointed president of Air Canada has the same duties and functions as his predecessor, or have his responsibilities and duties been lessened or diminished in any way?


Hon. Donald C. Jamieson (Acting Minister of Transport):: Mr. Speaker, I regret that I did not get the notice ahead of time. I am sure it is my own fault, but I did not get an opportunity to read this question. I will make inquiries. I think a written answer would probably be the most appropriate because the answer would be fairly lengthy.


Mr. Speaker:: The Chair will recognize the hon. member for a supplementary and will then recognize the hon. member for Lisgar before calling orders of the day.


Elmer MacIntosh MacKay: Very briefly, Mr. Speaker, may I thank the minister and ask him whether, when he is investigating this matter, he will also determine if fewer vice-presidents or departments within Air Canada report directly to the president than was formerly the case?


Donald Campbell Jamieson: Mr. Speaker, I will do my very best to have that included in the answer.
May 7, 1974


FINANCE
Mr. Jack Murta (Lisgar):: Mr. Speaker, may I direct my question to the Minister of Finance. On April 30 last I asked him whether or not he would undertake discussions with officials of the banks with a view to ensuring that under the Farm Improvement Loans Act money would be available to farmers for use this spring. At that time he said he would do so. Would the minister now tell the House what has now transpired since his discussions with the banks?


John Napier Turner: Mr. Speaker, I transmitted my undertaking to my officials and I hope to report to the hon. member shortly. In the last few days I have been distracted somewhat by other matters.


AVAILABILITY OF FISHERIES IMPROVEMENT AND SMALL BUSINESS LOANS IN NEWFOUNDLAND
Mr. Jack Marshall (Humber-St. George's-St. Barbe):: Mr. Speaker, may I ask the Minister of Finance a supplementary question. The minister also indicated two or three weeks ago that he would look into the fact that fisheries improvement loans and small business loans were not being directed to the Atlantic region, particularly to the province of Newfoundland. Can the minister report on the investigation that he directed the chairman of the financial administration to carry out?


John Napier Turner: Mr. Speaker, as I undertook to the hon. gentleman when we were sitting in committee, I sent the director of the bank down to St. John's, Newfoundland. I have not had an opportunity of receiving a report from him, not because he has not been ready to report but because I have not had an opportunity to talk to him.


Mr. Speaker:: Order, please. I believe all hon. members are anxious to hear the continuation of the address by the hon. member for Edmonton West. I am prepared to call orders of the day, but I see a number of members rising on points of order, beginning with the Solicitor General.


PENITENTIARIES
William Warren Allmand: Mr. Speaker, I have had my office send me the answer to the question asked by the hon. member for Frontenac-Lennox and Addington.


Mr. Speaker:: Order, please. I am not sure that is a point of order, but with the consent of the House the minister will be allowed to reply to the hon. member's question.


Some hon. Members:: Agreed.
Oral Questions


William Warren Allmand: Mr. Speaker, when there is an escape from a penitentiary in Ontario we have an arrangement to notify the Ontario Provincial Police. In this case we did notify the Ontario Provincial Police within one hour of the escape and provided them with photos and identification. I might say that these men did not escape from the Millhaven maximum security institution but were walkaways from the minimum security institution and are in no way dangerous.


Mr. Speaker:: Order, please. The hon. member for Frontenac-Lennox and Addington is rising on a point of order. Again I appeal to hon. members to allow the Chair to call orders of the day since I gather there is important business to be considered this afternoon. The hon. member rises on a point of order.


Almonte Douglas Alkenbrack: Mr. Speaker, I rise on a question of privilege to explain to the House why the answer given by the minister is not satisfactory. There are other autonomous police departments in the district besides the provincial police. These smaller autonomous police departments were not notified, and I ask the minister why.


Mr. Speaker:: Order, please. I hope this intervention will not go on the record of the House as a question of privilege. The hon. member for Peace River.


Gerald William Baldwin: Mr. Speaker, I did not rise on a point of order at the time the hon. member for Nipissing asked his question because I did not want to intervene while the question period was under way. My point of order is this. The hon. member for Nipissing dealt in his question with matters that were the subject of discussion before the Standing Committee on National Resources and Public Works this morning, and the facts given before the committee were contrary to what the hon. member suggested. It was made quite plain that there was machinery in place by which the provisions of that bill could in fact be covered. The representative of the province of Alberta, the Attorney General, made it quite plain that the province would honour its commitment to maintain the price at $6.50, and we would, of course, agree with him. I think that fact should have been made known by the hon. member when he asked his question.


Mr. Blais:: Mr. Speaker, on the same point of order, the Attorney General also indicated before the committee that he was not concerned about whether that bill would be passed by the committee. He indicated that, in his view, there were already measures that could be implemented by the minister. That is why the question was asked of the Minister of Energy, Mines and Resources.
27451-69.',

May 7, 1974
The Budget-Hon. Marcel Lambert



GOVERNMENT ORDERS


[Stage Direction]
The House resumed, from Monday, May 6, consideration of the motion of Mr. Turner (Ottawa-Carleton) that this House approves in general the budgetary policy of the government.
Horv. Marcel Lambert (Edmonton West): Mr. Speaker, some time ago there were written these following words: "Inflation mocks the idea of a just society". I am just wondering whether the author of those words would stand up and take a bow, because that man was the Prime Minister (Mr. Trudeau), who said that in October of 1969. But strangely enough, notwithstanding that his pet theory of a just society is not only mocked but destroyed by inflation, in his own words, but this administration has been most lax and reluctant to deal with inflation in a meaningful way. This administration stands indicted before the Canadian public on the ground of its inability to deal with inflation. Thousands upon thousands of senior citizens accuse the government. They accuse the government and they use the traditional term "j'accuse". They accuse this government when they see their hard earned lifesavings frittered away, to the extent of 10 per cent last year alone.
Some hon. Members:: Oh, oh!


Mr. Lambert (Edmonton West):: The hon. member for Sherbrooke (Mr. Pelletier) can consult the Bank of Canada tables if he wants, or go to any records beyond his own knowledge and memory and he will find that in one year, from the last budget in February 1973 to this present budget, the cost-price index moved upward over 15 points. In other words, it was in excess of 10 per cent. In view of that situation how can anyone look any senior citizen, a person on fixed income, anyone who holds insurance or government bonds or who has any investment, in the eye and say that the situation can and must continue? This government has been in power-


An hon. Member:: Too long.


Marcel Joseph Aimé Lambert: -since October 1972, and it has been singularly unconcerned about inflation. We have had bandaid after bandaid measures here and there. Even the move by the Minister of Finance (Mr. Turner) at the time of the last budget in indexing personal income was a bandaid measure, and how he crawled in order to do that. The indexing at 6.6 per cent left the income earners of Canada some four points in arrears on the basis of inflation in Canada during the past 12 months. How can he give any assurance to the people of Canada with equanimity?
Possibly some bachelor members do not appreciate the situation, but any housewife could tell them what has happened in respect of shopping in the grocery stores.

Bachelors do not notice the change as much, but I want to ask each and every individual member:

How much was the provider or the housewife spending on food, last week for instance, as compared to a year ago? It is the same thing everywhere, Mr. Speaker. Those people do not care about Canadians facing inflation. They definitely do not care, they believe everything is right; put one band-aid here, another there, this will cure everything. They should indeed put some tape across the lips of the hon. member for Sherbrooke (Mr. Pelletier), this would eliminate a good deal of noise in the House, because all he says is nonsense.


Mr. Pelletier (Sherbrooke):: I rise on a point of order, Mr. Speaker.


Mr. Speaker:: May I interrupt the hon. member for Edmonton West, the hon. member for Sherbrooke rose on a point of order.


Irénée Pelletier: I have a question for the hon. member, Mr. Speaker.


Mr. Speaker:: The hon. member for Sherbrooke rose on a point of order, but it now appears he has a question for the hon. member for Edmonton West, who has the floor.


Marcel Joseph Aimé Lambert: Mr. Speaker, I understood nothing of what the hon. member said. It would be nonsense, as usual.

Mr. Speaker, I think it is quite understood that the minister-


Mr. Speaker:: Order, please. I apologize to the hon. member, but I believe I should try to make this clear by indicating that the hon. member for Sherbrooke (Mr. Pelletier) rose a moment ago with the intention of asking a question of the hon. member for Edmonton West (Mr. Lambert). I reminded the House that the hon. member for Edmonton West has the floor and the hon. member can rise only with the consent of that hon. member.


Marcel Joseph Aimé Lambert: Mr. Speaker, I will certainly let the hon. member ask his questions when I finish my speech. I understood that he had risen on a point of order in order to ask the question.
I am sure that my good friend the Minister of Finance will agree with me that he is the one who has to provide economic leadership to the country.


Some hon. Members:: Hear, hear!


Marcel Joseph Aimé Lambert: That is the nature of his job. He is supposed to be the captain of the ship.


Robert Muir: She has gone aground.


Some hon. Members:: Oh, oh!


Marcel Joseph Aimé Lambert: The Minister of Finance can control only 35 per cent of government expenditure through the estimates and the rest of it is statutory. In spite of the fact the take of the GNP in 1972 and all
May 7, 1974

levels of government was 37.9 per cent, only 18.7 per cent fell to the federal government. This is something the Minister of Finance did not put on the record, but these are the latest correct figures as published in the National Finances of the Canadian Tax Foundation. I doubt that the minister would doubt the veracity of those figures.
Revenues of government and hospitals at all levels in the country amounted to some $39 billion at market value. I have been studying some other tables which are very interesting. Does anyone appreciate how far inflation has gone in this country? In 1972 the GNP in market dollars was close to $104 billion. The Minister of Finance was really spraining his shoulder patting himself on the back over the strength of the Canadian economy because it had gone up to $104 billion. Let us compare that with 1961 constant dollars. In those terms the GNP was only $70 billion to $71 billion. That indicates the nature of the disparity because of inflation since 1961.
The other day the minister talked about the records of capital investment in Canada and suggested this shows there will be a great deal of investment, but it only takes a little bit of figuring, and the Minister of Finance is not able or does not want to do this, to realize that investment in 1974-75 will not, in purchases in constant dollars, amount to as much as in 1966, and 1966 was a pretty good year. Canada has presumably advanced since then, but purchasing power in 1974-75 will be less in respect of equipment and plants than in 1966.
I would ask you: Does that mean we are making progress? It does not mean that at all. I suggest there has been a standstill or a reversion back to something less than the figures of eight years ago in so far as capital investment is concerned. I do not care what kind of dollars you are talking about because that does not mean a thing. What is important is how many machines, how many plants and how many productive facilities are actually being put into place, that is what counts.
Yesterday the minister said, and I think we all agree with him, that Canada's number one economic and social problem is inflation. I suggest to the minister that that should have been the one and only thrust of his budgetary proposals. But, does this budget go to the root of the problem of inflation or does it do anything to reduce the inflationary expectations? Not at all. In fact, on the contrary, it feeds and nurses those inflationary expectations. What do you think this bonus in respect of Canada savings bonds is but a cushion seven or ten years down the way telling people that they need not worry about inflation because they will be paid a bonus so that the Canada savings bonds will be worth roughly the same as they are at the date of purchase. Is that not nursing inflationary expectations, because that offer is open-ended. There is no limitation concerning amount. It simply says that if inflation goes up at the rate of 12 per cent the bonus will be paid at the rate of 12 per cent. This is rather ridiculous. The same minds using the same tools and the same philosophy as last year designed the 1974 budget.
In the same way, the budget of February 1973 failed to adequately cope with inflation.


Irénée Pelletier: It did not.
The Budget-Hon. Marcel Lambert


Marcel Joseph Aimé Lambert: It did. There is that brilliant member for Sherbrooke. The present day situation is bad enough. Since February 1973, the last budget, the Canadian cost-price index has gone from 145.3 to 160.8 in March 1974. I invite hon. members to get hold of this publication and read it so that they will be instructed.

Those who seek enlightenment should definitely read what the Bank of Canada report for the month of April says about the consumer price index on page 58. The food prices index, which was 151.6 before, reached 180.5 in March 1974. The overall index for food products, February excluded, was 142.9 and for the rest, 153.7. Do you need anymore? Surely not. The Liberals are too ashamed about it, Mr. Speaker.

As I said, Mr. Speaker, the same minds are at work with the same disappointing results. Canadians are to be afforded some more small cushion against inflation. There will be some transfers of income by tax increases here and there in the corporate sector and minor decreases in personal income tax. Last year there was an elimination of sales tax on children's clothing and shoes, not forgetting chocolate bars and soft drinks, but that benefit has been more than overtaken and lost by spiralling inflation. If one goes to the shelf to buy those same clothes one will find that they are more expensive now than they were with the sales tax. Now, it is to be wearing apparel and shoes. Some people will benefit. I share their satisfaction. Certainly, it is a step in the right direction. On this point I shall not quarrel with the minister, but it is only one small item. This is not an all-out attack on inflation. After all some months ago the Leader of the Opposition (Mr. Stanfield) proposed that the sales tax be removed on clothing.
The minister shakes his head. Last year he borrowed and stole ideas for his budget and this year he also dipped. The only difference between this year and the previous year is that the minister did not have a political campaign this year in which to go around deriding the ideas of the Leader of the Opposition and then putting them into practice. Let us have a look at some of the tax proposals the minister has made. First let me say without reservation that I think the interest exemption of up to $1,000 from whatever sources for the benefit primarily of senior citizens is a move in the right direction. It has always been difficult for these people to determine what was the purpose in saving. They wondered why they had scrimped and put aside savings so that they would have a more enjoyable and more honourable age of retirement when they saw their bank accounts whittled away by reason of the decrease in purchasing power. They also see their mortgages being whittled away in value. These people honestly earned their money. They are not Scrooges trying to grind out money from the poor. They are trying to live honestly.
That is a step part way toward alleviating the situation. However, if inflation is to continue during 1974-75 at the rate of 10 per cent or 12 per cent, which it is now in the cards it will do, then this measure itself will be seriously eroded. The minister has accelerated corporate tax payments. This is a windfall. I remember when his seatmate of the moment brought in acceleration of corporate tax

May 7, 1974
The Budget-Hon. Marcel Lambert
payments he sort of puffed out his chest. The minister might ask me what chest, but I will not embarrass him. In any event, it was a windfall once in a lifetime operation. The only trouble is that the minister knows the string has now reached the last quarter inch because almost the next thing is that the corporations will be asked to pay their tax instantly on the completion of a transaction. The profit will be payable at that time.
The minister said he was helping housing by putting on a tax and by providing that carrying charges could not be levied against other income with regard to undeveloped land and that these would have to be capitalized. He thinks he will make some more money on this. I say, yes, he will make more money right now but every penny that is collected from the land holders under this proposal will be loaded on the back of the ultimate purchaser. There is no escaping that. The minister knows this. If carrying charges are allowed to be capitalized and are put on at the end of the road at the time of the disposition of the property, of course the purchaser will pay for it. Anyone who dares suggest otherwise is either being mentally dishonest or mentally incompetent on that particular point.
With regard to the tax upon high energy consuming vehicles, this is a return to a luxury tax. As to the tax on tobacco and alcohol, there will be some grumbling but it will be paid. I would much rather see an honest tax such as this one on liquor than the one imposed by many provincial liquor boards which, on the instruction of some cabinet minister in the province, merely jack up the price of their commodities. That tax is imposed without any representation, without any "yea" or "nay" by the legislature. I have always thought that that was the wrong way to proceed. To that extent at least, the federal Minister of Finance is honest with regard to the excise tax on liquor and tobacco. It is above board, while in the provincial field it is not. I have often said that.
The addition of the $50 allowance to the personal income tax will certainly help some people. The minister mentioned those several hundred thousand people who had been taken off the tax rolls by a previous tax cut, and he stood them alongside another 300,000 who he says will be relieved of any income tax at this time. As a result of two years of inflation, many people who formerly were not taxpayers, thank goodness, have reached the level of becoming taxpayers, so there will be a duplication. But I will tell you this much, to the person who does not pay any income tax this type of proposal means absolutely nothing. If you are not going to pay income tax, to give you $150 credit or greater exemption is of course quite meaningless.
The registered home ownership savings plan was thrown out as something novel, as though it were going to do something big. My colleagues who are primarily concerned with urban affairs will look at this in greater detail, but I will comment on it briefly. The limit is $1,000 per taxpayer. This means that persons over the age of 18, both male and female, can avail themselves of this. If they are married, they must continue to remain taxpayers. Each one contributes $1,000 to the pot for five years, and then they have this money available to purchase a house. At the price of houses today, this $10,000 will be practically meaningless. This is the big problem. I have a relative who

is getting married this fall. Some three weeks ago he and his fiancee went out to look for a house in the Toronto area. These two youngsters are out of luck. Both of them have good jobs but they are both out of luck because all they can find are houses between $45,000 and $55,000.


Mr. Gillies:: That is lucky in Toronto.


Marcel Joseph Aimé Lambert: Yes, my colleague is right. The price of housing is absolutely ludicrous. I know of a house that was built in 1967 in this city. I think it cost $42,000 at that time and about $1,000 was spent on landscaping, general painting, and so forth. It is on the market right now for $90,000. Who on earth can begin to look even for a new house?


Derek Nigel Ernest Blackburn: Will you be getting that house?


Marcel Joseph Aimé Lambert: No, in no way, and it is not my house, either. I can tell you that a house five doors away from that one sold last week for $90,000. This is just an indication of how nonsensical the situation is. In some areas in Toronto, in Ottawa and in other major cities in Canada you can pay up to $55,000 and $65,000 for a lot. These lots are not hard to find, they are numerous at that price. What does it mean? All I am saying is that this is the result of inflation. This is a hedge. People buy lots not merely to make a speculative profit. For many people the holding of land acts as a hedge against inflation. Yet, this administration seems to feel that the best they can do is act like the ostrich, shove its head in the sand, bare its backside to the breeze and hope for the best. This is what I find so incomprehensible.
I remember seeing the Prime Minister (Mr. Trudeau) on television in 1969-he had just discovered inflation at that time-saying that this and that had to be done. The point I am making is that in so far as the public service of Canada is concerned since that time-and there was a freeze put on it-it has gone up to over 60,000. Even this year I asked the President of the Treasury Board (Mr. Drury) at a meeting of the Miscellaneous Estimates Committee when we were considering supplementary estimates what was the purpose of these supplementary estimates, and he said that this would take care of the increases in staff. I asked him what size of an increase there was going to be in the federal civil service this year, and he said that, provided we can get sufficient inspectors for unemployment insurance and provided we can get some more people in some other department, the increase in 1974-75 will be 13,000 persons in the public service of Canada. Now, we wonder what was the resolve of this administration in trying to contain inflation.
We have here certain sales tax deductions. I will come to those when I compare revenues. We also have the tourist exemption. That is a curious one. It is very nice, but the funny point is that it allows Canadians who already have a most massive deficit on the tourist account to increase their permitted expenditures abroad by some 50 per cent. They will be purchasing foreign goods to bring them back into Canada, not for the employment of Canadians, and they will be spending money abroad, thus increasing the problem of our international trade deficit. I cannot honestly find any rationale in this. It may be that there is some undertaking with the United States government, or per-
May 7, 1974

haps the government thinks they can butter up the U.S. so that pressures will come off the auto pact. I do not know what it is but in so far as Canada is concerned that proposal does not help. My colleague, the hon. member for Perth-Wilmot (Mr. Jarvis) will be discussing in this debate later the changes in small business deductions. There will be also those with regard to the resource industries.
I should like to make one final remark about the customs changes. There are always some funny things that come up in a budget when one refers to customs changes. There are not many of them this year, with the exception of the one on facilities for orthopaedic casts, splints and other similar supports for handicapped persons. That is fine, but there is something else to do with veterinary medicine which relates to the bovine intranasal vaccines which will be admitted free. What is the particular purpose of this change leading to free admission into Canada of "amusement riding devices of the kinds used at exhibitions or fairs, ancillary equipment imported therewith; parts of the foregoing"? Hitherto there used to be some duty on this. Now, amusement ground equipment will benefit the most.
There are other things to which I am not going to refer, ranging from handicraft goods which are "designated by Order of the Governor in Council" and which are now to be entitled to the benefits of the general preferential tariff. That is a move in the right direction, but there are many other changes outside of those, which provide for the tourist returning from abroad, as well as limited changes in the customs tariff.
The minister has said that domestically one of the reasons for inflation is that industry and productive capacity are stretched to the limit, and we are feeling the effects of demand-pull. Yet one of the reasons for the limited capacity of the economy, as put by the Governor of the Bank of Canada in his last review, is "the relatively sluggish pace of investment for several years prior to 1973." In other words, the under-investment in previous years under the present administration is now responsible for the bottleneck in industrial production capacity. I cannot see the minister taking some comfort in saying that Canadian industrial capacity is right up to the collar in utilization when the only reason for that is that there was underinvestment in previous years. But in any event, Mr. Speaker, historically investment follows increases in demand.
It is important to note that business fixed capital formation in 1973 as a percentage of gross national expenditure had not yet attained the level of 1965, and was considerably lower than the percentage of gross national expenditure achieved by business investment in the previous cycle of large business expansion from 1964 to 1967. The level of investment must become a source of concern for government planners if better price and employment performance are to be expected from the Canadian economy.
Concern for investment should be directed to particular sectors and regions of Canada. The minister was pretty solemn about regional disparities. There were a great number of areas in which the budget speech was rather solemn. Very little was said about the worsening trend in
The Budget-Hon. Marcel Lambert the international trade commodity section for the remaining quarters of 1974, if we look at this on a constant dollar basis. There is also the question of banking. It was not mentioned at all. I think the minister should have attended to Canadian banking facilities, and what have you, in his budget speech, There were many areas in which the writers were overly long in preparing the material, and I contend they could have concerned themselves with rather more pertinent facts dealing with the Canadian economy.
Here is one of the things that the minister will not tell us. Investment in new capacity, in equipment in manufacturing in 1972 was lower than in 1966, measured in current dollars. Even investment planned for 1974 in new capital equipment for manufacturing, once deflated by the change in the gross national expenditure implicit price index from 1966 to 1973, is less in terms of purchasing power than it was in 1966.
In the Atlantic region planned corporation investment for 1974 ranges from a low of roughly a 2 per cent increase in Newfoundland to a high of 28 per cent in New Brunswick. These increases will do nothing to lessen the regional disparities between provinces, and the level of investment in the Atlantic region is a cause of grave concern for the continued economic viability of the area.
Now dealing, with the budget itself we must look at the cables which were presented with it, and about which the minister did not speak. If we look at pages 31 and 32, for instance, we see that in 1973-74 the revenues under budgetary transaction were some $19 billion, and the minister expects to collect some $23,950,000,000 under his 1974-75 budget. In other words, government revenues are going to go up 26 per cent.
On the basis of expenditures there was an over-reach of more than $1 billion as contrasted with what was forecast for last year, and there will be an increase this year to $24 billion, which is an increase of 22 per cent. It is amazing when you think that the economy can withstand an increase in government revenues and expenditures at a rate of 24 per cent and 22 per cent per year.


James McPhail Gillies: It cannot stand it, and that is why you have 12 per cent inflation.


Marcel Joseph Aimé Lambert: Right. Just look at the last Bank of Canada weekly statement which indicates that in just one year, from April, 1973, to April, 1974, there - was a 20 per cent increase in the money supply, putting aside government deposits. How can this possibly continue?
The minister says that his deputy minister was at pains to explain that it was the policy of the government and of the Bank of Canada to maintain a control on the total money supply which is enough to ease an increasing economy and, of course, increased population consumption. All of us would accept that natural increase but, Mr. Speaker, there is no way that the Canadian economy can countenance an increase of 20 per cent in its money supply in one year. That is one of the reasons why we have inflation, but the minister did not talk about that.
In the same way the cash requirements of the government are going to go up about $2 billion. Again we see reasons why the coming year will not be too different

May 7, 1974
The Budget-Hon. Marcel Lambert
from the past year, with the money supply having to be increased by some 20 per cent. I base this on the minister's own figures. This is something that absolutely shakes us. It is impossible to understand how the minister, his advisers and the cabinet can go along in this sort of smooth, unconcerned way with regard to inflation. Oh, they make polite noises, and they cluck like a bunch of old hens about inflation.


James McPhail Gillies: Old roosters.


Marcel Joseph Aimé Lambert: The hon. member for Don Valley (Mr. Gillies) suggests that instead of hens they are a bunch of old roosters. That may be more accurate. At the moment the members of the administration act like a bunch of tired old roosters.
The minister prided himself on taking $440 million off personal income tax, but yet if we look at the tables on page 32, the government of Canada's budgetary revenues under personal income tax are increasing to $9,500 million, up 18 per cent. Some $400 million will be saved by some people, but the total system for personal income tax is going to pay $1,600 million more during the coming year.
There is to be an increase in the tax on corporate profits. There is to be an increase in the yield of some $1,500 million, up 46 per cent.
Mr. Speaker, corporate income tax comes home in your pocket and in my pocket on the second run. Who is going to pay? Not the corporations, but John Q. Citizen. That is the impact of the tax increase or tax yield. It all goes back to that most infamous and unjust tax system that was foisted on the Canadian public in 1971, the notorious tax reform. The minister's predecessor, now Chairman of the CTC, said he was going to put an increase in yield in this new tax system. The Canadian public has been turned into a Holstein cow of championship calibre to provide all the milk in the way of tax money under this new system. It is almost as if the Canadian public had inexhaustible resources to pay taxes to an insatiable government.
There used to be a minister here by the name of Walter Gordon. He had just taken over when the present minister came to this House.


John Napier Turner: And you were Speaker.


Marcel Joseph Aimé Lambert: Yes, I was occupying your chair, Mr. Speaker, and was therefore able to observe the hon. minister. At that time the budget barely exceeded $6 billion, and now we see total expenditures of $24 XA billion, more than four time as much.
Sales tax is an example of how the Canadian public is taxed and of how inflation works. I suggest to the hon. member for Sarnia-Lambton (Mr. Cullen), who is interjecting, that he look at those tables and see how much money he is being soaked, then he will complain about the inadequacy of his salary because his wife has long ago told him that it is inadequate. The deductions in the sales tax that the minister proposes amount to $390 million in his figures, mostly on clothing, shoes and other items. The funniest thing is that, because of inflation, the yield will be precisely $15 million more. This is like the old shell

game and is a consequence of inflation, because unfortunately sales tax is fixed on price levels. These ad valorem taxes go on yielding and they become an embarrassment; then the minister has to give them away.
Then, there is a $1,400 million bonanza known as the oil export tax. The minister is trying to move in on the resources with this budget, particularly in a couple of provinces. I would be interested to know the minister's reaction had he been a member from the province of Alberta or even had his deputy minister come from there. I have said it before and I will say it here, that I think he has a knife in the back of the province of Alberta.
Some time ago the minister and his colleagues voted for a foreign investment review agency which was to require very few people to run it. I was interested to receive a news release the other day about the appointment of a deputy commissioner who had at one time worked in the government and was now a consultant. I was interested in what they were doing to control expenditure. We have been told about their niggardly attitude and slow progress with the lower ranks of the public service, particularly nurses in government hospitals who waited 18 months or two years to negotiate a new agreement. But here we see what happens when it is something for the boys. The other day members opposite were asking us to support the trade practices commission, another vast bureaucracy, and we have seen legislation for the introduction of Petro-Can, legislation for other commissions, boards, Crown corporations and God knows what.
I would like to read into the record an example of how this government spends public funds to set up the foreign investment review agency. This shows a commissioner in the salary range of $35,750 to $43,750; deputy commissioner, $32,500 to $41,500; director, registration branch, and there are three of them, $28,500 to $36,500; director assessment group, $25,000 to $32,000 and two assistant directors somewhat lower; three chiefs of assessment groups, $22,371 to $27,966, and then there are a couple of assistant directors. There are 14 positions altogether, Mr. Speaker, in the top level of the foreign investment review agency, and the median salary is $416,000 per annum without considering support staff.
We were to get a new trade practices commission which was going to duplicate, triplicate, refer back, refer forward, all sorts of reports and at the end of about 18 months consideration they would consider whether there had been any price gouging or improper price consideration. Then, there was to be Petro-Can, and what a refuge for jobs for the boys that was going to be and at what salaries.
If this government wants to show where it can cut expenditures, let them trim some of these agencies. For every executive in the $40,000 range there has to be a couple at $30,000, some at $25,000 and so down the line. There may be 20 or 30 people below, all the way down to junior typists. I say, Mr. Speaker, that this government has failed miserably to counter the effects of inflation. It has failed to protect the Canadian public against inflation. It has failed to go to the root of the problem in dealing with inflation, simply because it wants to buy popularity. In these circumstances, I can only say that I have lost complete confidence in this administration's ability to handle the problem of inflation.
May 7, 1974


An hon. Member:: Are you not going to speak on the budget?


Marcel Joseph Aimé Lambert: Mr. Speaker, I see that the "crow" from Sherbrooke has not left its post on the fence, doing nothing but croaking-


Mr. Deputy Speaker:: Order, please. The hon. member for Sherbrooke rises on a point of order.


Irénée Pelletier: Mr. Speaker, I rise on a point of order. May I invite the "crow" on the other side of the House to come and make the same speech in my riding?


Mr. Deputy Speaker:: Order, please. That sounds more like an invitation than a point of order or a question of privilege.


Marcel Joseph Aimé Lambert: Mr. Speaker, I enjoy these exchanges with the hon. member. They show why he is sitting in the back row.


Some hon. Members:: Oh, oh!


Marcel Joseph Aimé Lambert: At least the hon. member does not crawl away, as some of his colleagues do. He had a brief question he wanted to ask at the beginning of my remarks. Perhaps he might ask it now, and I will deal with it.


Irénée Pelletier: Mr. Speaker, I have no question. I would have had one at the end of his speech, but as he said nothing, I do not have any-


Marcel Joseph Aimé Lambert: That is what I thought. In any event, I now move, seconded by the hon. member for Saint John-Lancaster (Mr. Bell) the following motion:

That all the words after "That" be deleted and the following substituted therefor:
"this House does not have confidence in the government by reason of its failure to propose effective budgetary measures to contain and reduce inflation".


Mr. David Lewis (York South):: Mr. Speaker, when I listened to the Minister of Finance (Mr. Turner), I understood why he had delayed so long in presenting his budget. Even he was ashamed of it. To suggest that the budget attacks the problem of the rising cost of living is the height of hypocrisy. To suggest that the budget helps those most hurt by the burden of rising prices is the depth of cruelty.
I have said often in this House on behalf of the New Democratic Party, as have other members of my party, that we reject the idea of over-all wage and price controls. In this we agree with the minister, so far as his budget is concerned, although I am somewhat worried about the
The Budget

Mr. Lewis
contingency plan about which the Prime Minister (Mr. Trudeau) has spoken.
We disagree with the idea of wage and price controls for reasons we have often given. Let me summarize them in one sentence. I suggest that such policy would either freeze high prices and low wages or would have to be so modified that it would cease to be an over-all plan and would become what the NDP has proposed, a selective price control system. Indeed, the members of the Conservative Party themselves have edited their proposal. First, it was to be a 90-day freeze; then it was to be for 120 days; then they were to institute controls for 18 months. Then, there were to be controls for two years. Then, there would be no freeze or control at the farm gate; then low paid workers were to have their wages lifted. I think the proponents of the idea of over-all price and wage controls have condemned it themselves, because they cannot stick with it.
But equally, we will not accept the proposition that nothing can be done for the people of Canada with respect to the rising cost of living. We reject the notion that you can let the corporations control the market at the expense of the consumer, and slap them on the wrist for so doing, as the minister did yesterday. The redistribution of income in Canada that has taken place in the last year or two has been redistribution in reverse, Mr. Speaker.


James McPhail Gillies: That is absolutely right.


David Lewis: Wages in the 12-month period between February, 1973 and February, 1974 rose by only 8 per cent, but the cost of living index rose by 9.6 per cent, leaving the worker worse off than he had been one year earlier. In 1971, sir, profits as a proportion of the Gross National Product were at 9.6 per cent; but, in 1973 they rose to 13.7 per cent of the Gross National Product. That was an increase of 42.7 per cent in the proportion that profits in our economy gouged out of the people of this country. At the same time the proportion that went to wages in 1971 was 55 per cent; in 1973, it was down to 53.2 per cent. Everywhere you look, Mr. Speaker, redistribution of income in this country has taken place in reverse. Wealth has been redistributed; it has gone in ever larger, stronger and more powerful concentrations to the centre of this country, at the expense of the average Canadian.
Just listen to the logic of the Minister of Finance in two or three places in his budget address. In comparing him with his colleagues, at least I respect him for his honesty and straightforwardness. Just listen to his logic. He said that if we have a two-price system for some of our basic commodities, we will need some kind of control over exports. That, he said with self-conscious pomposity, would be the height of folly. Let me remind the Minister of Finance that we now have a two-price system for oil, for wheat and for copper. I would like to understand the logic which suggests that if you also have it for steel, lumber and cement, it becomes the height of folly.


Some hon. Members:: Hear, hear!


David Lewis: What utter, unmitigated rubbish. Of course, you would need to have some export controls if you hold
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May 7, 1974
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the price down in Canada to a fair price and sell commodities outside at the international price outside. If you do not have some kind of control of the exports, the commodities would flow out of this country. Why should the minister worry about retaliation? Why is it that Washington can do anything it wishes to protect the interests of Americans and the Canadian government gets down on its knees every time it has to do something to protect the interest of Canadians?


Some hon. Members:: Hear, hear!


David Lewis: No one suggests that export controls would be intended to interfere with normal export trade. All that would be required would be to make sure that the portion of production to stay in Canada would remain in Canada. These gentlemen are always afraid of taking steps that require courage.
The proposal we made for a national price control board with power to roll back and hold back unjustifiable price increases in areas where that control could be made with effectiveness and in a practical way would be an immense good for the people of Canada in this difficult period.
I agree with the minister that a large part of the inflation is international. Let no one suggest, here or elsewhere, in the next number of weeks that they have a wand which they will wave and the inflation will disappear. I hope that neither the Leader of the Opposition (Mr. Stanfield) nor any of his colleagues will descend to that kind of dishonesty because no one in Canada, or anywhere else for that matter, can wave a wand and get rid of all the inflationary pressures in the world.
We are a fortunate country in that we produce many of the things we consume. We have a wealth of resources and a well developed manufacturing industry, although it is not very rational because of the foreign control of manufacturing in many areas. However, it is a well developed manufacturing industry and we do have a well developed processing industry. The population of farmers across this country is second to none in productivity and in its ability and dedication to production.


Some hon. Members:: Hear, hear!


David Lewis: We have the minerals, food, fisheries, processing and manufacturing capacity. We have a people that are educated and trained. Because we have these riches, it is possible for Canadians, the Canadian government and parliament to do a great deal to reduce the burden of the high cost of living on ordinary Canadians.


Some hon. Members:: Hear, hear!


David Lewis: In order to do any good or accomplish anything, it is not gimmicks that are needed. The minister referred to other people suggesting gimmicks. I will have something to say about some of his gimmicks in a moment. In order to do any of these things in an effective way, what is required in a modern society is the will, courage and imagination to intervene in the market place, instead of leaving the market place in the hands of the corporations.


Some hon. Members:: Hear, hear!


David Lewis: The reason the Minister of Finance did not do that is he is a Liberal. Because he is a Liberal, he is still governed by the old fashioned notion that the market place is free. Like hell it is, Mr. Speaker.


Some hon. Members:: Oh, oh!


David Lewis: I use that word with deliberate intention. It is not a free market place. The large corporations of this country control the market. With their advertising campaigns and funds, they persuade Canadians to want what they do not need, to need what they do not want and to pay the sky for it.


Some hon. Members:: Hear, hear!


David Lewis: It is because the minister is wedded to the old fashioned notion that the market place is free that he wants the free market to continue. Obviously, it is not free. Because it is not free, it continues at the expense of the Canadian people.
He then threw out the idea of a 6 per cent interest rate on mortgages. I never thought an intelligent Minister of Finance, and the Minister of Finance has intelligence-


Some hon. Members:: Oh, oh!


David Lewis: I am not going to withdraw that. It is the truth. If it is damning him with feint praise, I cannot help it. The minister has intelligence. I never thought an intelligent Minister of Finance would give the reason he did. He said he cannot support the 6 per cent mortgage interest rate because that would push up the demand for houses and put prices up higher at a time when we in Canada have over a half a million unemployed men and women to produce the homes that are needed. We have all the materials in Canada to build the houses and housing units that are required. It is necessary to build more homes. Certainly, the 6 per cent interest rate or any other provision that would assist the purchaser of the home would not produce the houses that are needed by the Canadian people.
What did the minister say with regard to producing homes in Canada? He said he had no gimmicks. He was not using cosmetic policies. He was not using draconian policies. He was not using draconian policies as far as the corporations are concerned, but he was using cosmetic policies when he said his solution to the home ownership problem in Canada would be to allow people who can save up to $1,000 a year to a maximum of $10,000 in their lifetime to deduct that saving from their income tax.
The first question to ask is how many young Canadian couples make the kind of income that would enable them to save $1,000 a year? The minister ought to have looked into that. To save $1,000 a year on top of taxes and everything else is very difficult. I suggest the minister would be lucky if 20 per cent of young married couples could save $1,000 a year for this purpose, in addition to everything else.
The second question to ask is, what does this deduction mean? It will help the wealthier young couple a great deal more than the poorer couple. The young couple who can only save $200 a year and who pay an income tax rate of 25 per cent will only save $50 in taxes. However, a young

couple who can save the total $1,000 a year and who pay a tax rate of 40 per cent will save $400 in taxes that year. The poorer couple save $50, the richer couple $400. That is exactly characteristic of the budget of the Minister of
Finance.
What is more, Mr. Speaker, the minister does nothing in his budget to lower the cost of a house. If hon. members have followed what has happened during the last year or two, they will know what this means. By tne time the young couple have saved $4,000 or $5,000, if they can afford to, over a period of five, seven or eight years, that sum is inadequate even for a downpayment. In addition, the increased price of the house will have eaten up their total savings probably two or three time over. We never suggested that 6 per cent interest is a complete solution to the housing problem.
On behalf of my party, I say that what is needed is a buying up or banking of urban land in Canada today. Indeed, Mr. Speaker, I suggest to you that the time has come to put this kind of land under public ownership, whether under the ownership of the municipality, province or federal government, instead of letting it remain in the hands of the speculative developer. Urban development land should no longer be left in the private market for the price to be pushed up so it becomes unavailable to the ordinary Canadian family. A public agency of this kind, be it federal, provincial or municipal, should take over. We also suggest, if the provinces will not do this, that we need in Canada a national construction corporation, a Crown company, to fill in the gaps left by private builders, so as to build homes for the people of Canada which are made available to the purchaser or renter at reasonable cost.
What does the Minister of Finance do by way of assistance in this regard? He produces this gimmick of a $1,000 deduction, and then removes the carrying charges on land held for future development as a deductible expense. I agree that this is a good proposal, one that is long overdue. But we noted with chagrin and distress that there is no meaningful tax on speculative profits in the land development area.
There is no doubt that there are some goodies in this budget. I have never known a budget that did not contain favourable items with which everybody could agree, particularly a budget that it is expected might come before an election. But I must say that the niggardliness of the minister is such that even in a pre-election budget he could not let himself go. For example, Mr. Speaker, take the tax cut for individual taxpayers: an additional $50 a year. That amounts to 96 cents a week, or two cents for every hour worked by the average worker in this country. That is the kind of tax cut they are going to get. This is the extent of the relief that the minister boasted about last night, the extent of the relief to people whom, he said, were hurt by rising prices. He has given them relief from income tax to the tune of 96 cents a week.
Within a few days, Mr. Speaker, the price of gasoline will be increased by eight to 10 cents per gallon. I suggest this $50 a year will be eaten up within a few months by the increase in the price of gasoline alone, so far as the
The Budget-Mr. Lewis
average Canadian is concerned, and not a penny will be left for anything else. The farmers of this country, as a group, are the largest consumers of petroleum products. The farmer uses gasoline not only for his car, but for his trucks, his tractors and all his other farm equipment. For him, this $50 will be eaten up within a week. That is the relief that the farmers of Canada are given from the rising cost of living. I should like to understand what kind of psychology makes a government produce this sort of niggardly, mean and cruel hoax on the individual taxpayer.


Some hon. Members:: Hear, hear!


David Lewis: Then, the minister removes sales tax on shoes and clothing, something obviously desirable. I could not help but notice last night, when the Minister of Finance read his speech, the plaintive tone in his voice when he read a particular paragraph. I am not going to take the time to read the paragraph word for word, but I can mentally visualize the minister's speaking to them and pointing his finger at them. The minister said: "I say to the manufacturers, the wholesalers and the retailers that this elimination of the 12 per cent sales tax should get to the consumers, please; and if it does not, I am going to do something about it". By the time the consumer has been had, Mr. Speaker, this Minister of Finance will have forgotten his undertaking to do something about it.
Having removed the 12 per cent sales tax on clothing and shoes, something which should have been done long ago in this period of inflation, surely one should have put a limit on it so that the people who can afford three suits a year, three pairs of shoes a year and three fancy dresses for their wives are not the ones to receive the greatest benefit from the elimination of this sales tax. The fellow who can afford only one suit a year is not going to get much benefit from this elimination of the sales tax.


Some hon. Members:: Oh, oh!


Mr. Dupras:: Be serious for a minute.


David Lewis: I am being serious. The Liberals may make a noise about this, but it is another kind of tax cut that will be of much greater benefit to the wealthy in this country than to the poor.
Then the minister introduced another provision that is supposed to help people. The minister said it is designed to help in particular people in the older age brackets-if they are rich enough, he should have added. This is the deduction of up to $1,000 of income from interest from various sources. Whom is this provision going to help, Mr. Speaker? I asked our research advisers to make a careful study and analysis of the interest income of various income groups in this country. I have looked at the working papers and I am satisfied that the results of this study are accurate. The results show that all those in Canada with incomes of $25,000 or more have an average interest income per year of about $2,100. That is the average income from interest of those Canadians who have an income of $25,000 or more a year? The tax abatement which the Minister of Finance is offering under this heading would give that group of Canadians, small but powerful, an average annual tax cut of $500, but the Canadians
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May 7, 1974
The Budget-Mr. Lewis
who make between $10,000 and $11,000 a year have an average income from interest per year of $196.


John Napier Turner: That is pretty selective.


David Lewis: The minister says it is selective, but it is not.


John Napier Turner: Damn right it is.


David Lewis: It includes those who make incomes such as some of us in this House, and selects the relatively high average in cities like Oshawa, Windsor, Toronto, Vancouver and Hamilton, and it is a perfectly legitimate comparison, Mr. Speaker. The average interest income of people earning between $10,000 and $11,000 is $196 a year, and their tax saving would be $50 or one-tenth of the tax saving to wealthy Canadians.
Who will this provision really help, Mr. Speaker? I do not deny that it is of some value to some people, but to say that this is the way to help the ordinary Canadian against inflation surely is the kind of statement that can only be made by a person who indulges in hyperbole, which is as incomprehensible as it is intolerable.


Some hon. Members:: Hear, hear!


David Lewis: Then, the Minister of Finance boasts about what he is doing for small business in this country. He has redefined small businesses from $50,000 to $100,000, and increased the amount from $400,000 to $500,000, if I remember correctly. It is true that there is some improvement for some small businessmen, but I think the small business people in this country ought to realize that those of them who make profits of $50,000 or less will, in 1974, pay higher profit taxes than they paid in 1973, excluding those in manufacturing and processing which have their own tax rate.


Some hon. Members:: Shame.


David Lewis: Those small businesses which are not manufacturing or processing making $50,000 or less in profits in 1974 will pay 25 per cent tax on their profits whereas in 1973 they paid 21 per cent tax on their profits. Even in that area of small business the minister gives a much bigger break to the guys who make more than he does to the corner grocer and the other small businessmen in this country who are struggling for their lives.


Some hon. Members:: Hear, hear!


David Lewis: The really-I said I was going to use strong language, and I hope Your Honour will not mind-dastardly thing about this budget is that it-


An hon. Member:: Do you spell that with a "b"?


David Lewis: Someone asks me how I spell that. I spell it with a "d", in spite of what is suggested. What is really dastardly about this budget is that it offers nothing to the senior citizens of this country. It offers nothing to the working poor, and it offers nothing to the people on low fixed incomes in this country.


Some hon. Members:: Shame, shame!


David Lewis: It offers nothing to those people, unless they are living on low incomes but have an income from interest of $1,000 a year. Then, of course, the budget will help them. One of my assistants suggested that the person who will really benefit from this budget is the corpulant corporate executive who neither smokes nor drinks and rides a bicycle.


Some hon. Members:: Hear, hear!


David Lewis: The minister dares to say that his budget was designed to help those who suffer and need help the most. I say to you, Mr. Speaker, and to all hon. members in this House, that at this stage in Canada's history when our country is developing a very large economy, well based and well developed, what a budget ought to be doing, every year and everytime it is presented, is progressively redistributing income from the wealthy and strong to the ordinary worker and the low paid people of this country.


Some hon. Members:: Hear, hear!


David Lewis: That must be one of the major objectives of every budget presented by the government at this time in our history, and when a budget fails to do that it fails to serve the needs of Canada and Canada's people both now and in the future. The opposite is what will result from this budget.
The tax cuts in respect of manufacturing and processing corporations, which the Conservatives helped the government put into effect, are to continue. Most of the tax concessions to the resource industries are to continue in the tax system. As for the fast writeoffs the Minister of Finance persuaded the Leader of the Official Opposition (Mr. Stanfield) to accept last July, they apparently are to continue. The minister, in his speech, was very careful not to say that they were going to end on December 31, 1974, even though it was intended that they would end, but that he was going to review them or reassess them after the final review which is now taking place in his department is completed. He has given a very strong suggestion to me that he is going to continue the fast writeoffs beyond December 31, 1974, because I cannot imagine any review by his department giving him any other advice than they gave last July.
We asked during the briefing that members of parliament had with officials of the minister yesterday, and even though this was in private I am sure I am not being improper when I mention this, what they estimated the cost of these concessions to the manufacturing and processing corporations was going to be in 1974. They said they did not have the figures but they were going to work on them and, if my memory serves me right and anyone who was there can correct me, they hoped to have them this morning and would provide them to the leader of the opposition and to me. We did not get them this morning. I do not know whether the leader of the opposition got them, but I certainly did not. The leader of the opposition indicates he did not get them. Then, during the question period, although I was not here at the time, I understand the Minister of Finance was asked for those figures. He did not give them either. He just said he could not give them, or would not give them.
May 7, 1974

In the absence of any accurate figures from the Department of Finance I am going to give you a figure, Mr. Speaker. I will give you a figure based on estimates made by the Minister of Finance last July for 1973 when he said that for the two concessions together it would cost about $500 million. Based on the increase in profits which is taking place in Canada now, and based on the fact that fast writeoffs are for two years instead of only one year, meaning that a piece of equipment bought in 1973 was written off to the extent of 50 per cent in 1973 and 50 per cent in 1974, and a piece of equipment bought in 1974 will be subject to the same thing; taking all those elements into account, I am confident that the loss to the federal treasury as a result of these concessions in 1974-75 will be well over $1 billion.


Some hon. Members:: Shame, shame!


David Lewis: What does that mean in human terms? It means that over $1 billion would be enough to increase old age pensions for every old age pensioner $45 and more a month.


Some hon. Members:: Hear, hear!


David Lewis: An amount of $1 billion a year in 1974-75 is more than double what it costs the treasury to give this measly $50 income tax cut to the individual taxpayer in Canada. These things are happening at a time of enormous profits in this country.
The minister said, and some of the writings I have seen since indicate that some people have swallowed it, that $450 million would be taken out of the petroleum and mining coprorations in 1974-75. May I say first that is not true. What the minister was talking about was a liability on behalf of these corporations, and when you remember the concessions to mining and petroleum are still there, God alone knows how much of the $450 million will in fact be paid into the treasury, both federal and provincial. But we have this thing at a time of immense profits.
Imperial Oil in the first quarter of this year over the first quarter of 1973 had an increase of 101.5 per cent, and in 1972 their profits were high enough. Gulf Oil in the same period had an increase of 100 per cent. Shell Oil had an increase of 78 per cent. Noranda Mines had an increase of 67 per cent. Rio Algom Mines had an increase of 74 per cent, not to mention the 700 per cent increase in 1973 over 1972 for Falconbridge or the 107 per cent increase in 1973 over 1972 for Inco. In this kind of situation I suggest that the small tax adjustments which the minister made last night in respect of these corporations are a laugh. Sure, the corporations will complain publicly. Surely, they will object to the loss of some of their gains, but I am certain that when their presidents and directors went to bed last night they included John Turner in their prayers.


Mr. Deputy Speaker:: I hope, however, that they referred to him as the Minister of Finance since we usually do not designate each other by names in this chamber.


David Lewis: Mr. Speaker, I know that of course, but I had a notion that the Minister of Finance knows these people so well that in their prayers they would simply say
The Budget-Mr. Lewis
"John". I have not said all that I would like to say, and if hon. members would give me a little extra time I would be glad to use it.


Mr. Deputy Speaker:: Perhaps the Chair could put the request in the name of the hon. member for York South, since he has approximately 45 seconds remaining. Is it agreed that he have an extension of time.


Some hon. Members:: Agreed.


David Lewis: Thank you very much, Mr. Speaker. I express my gratitude to the members of this House. The minister rejected the excess profits tax mainly because he said they could not technically define what is desirable and what is excess profit. There was not sufficient ingenuity in his department to be able to solve the technical problem. I have seen the work of his department before. The people in his department have ingenuity enough when they want to do their own thing. The only time they lack ingenuity is when we want them to do the right thing. But the minister says to the people of Canada and to this House, not in these words but to this effect, that he will not bring in an excess profit tax but that he has a new one, a 10 per cent surtax on corporate taxes. That sounded pretty good until I read the entire paragraph and found that he had excluded a number of areas of the economy.
He excluded, let me say quickly so that he will not have to remind me, small businesses and I agree with him that they should be excluded. I have no argument with that. There is no end to my generosity. However, from the 10 per cent surtax the minister excludes processing, mining, petroleum, investment corporations, mortgage investment corporations, mutual fund corporations and non-resident owned investment corporations. Let us be fair-he leaves the banking and financial institutions and they ought to be kicked a great deal more than in the past, I agree. He leaves some other industries. The point I want to make is that the areas of the economy which made the largest profits in 1973-74, which had the largest increases in profits in 1973-74, are excluded from the 10 per cent surtax. The suggestion that that is an alternative to the excess profits tax is really an unacceptable thing. Then, there is the half tax on capital gains which remains.
Now, Mr. Speaker, I have come to my concluding paragraph or two.


Some hon. Members:: Hear, hear!


David Lewis: Mr. Speaker, I had hoped that I would be sufficiently sharp in my remarks that the Liberals would not have any energy left in their arms to applaud when I told them I was about to conclude. I am glad to see they are still there. Seriously, Mr. Speaker, when this parliament began in January, 1973, the New Democratic members of this House said to parliament and to the country that we would do our best to help parliament work; that so long as the government and parliament produced things that in our judgment-and it is only our judgment we can use, not anyone else's-were for the benefit of Canada and Canadians we would continue to help make parliament work. We did so during the last session. The session was productive and useful for the people of Canada. We in the New Democratic Party in this House of Commons are

May 7, 1974
The Budget-Mr. Lewis
proud of the part we played in the last session of parliament.
However, in this second session of parliament we could not help but notice that a paralysis has set in in this government. In fact, Sir, the ignoble so-called antiprofiteering bill and the budget pronounced by the Minister of Finance last night are clear proof that the right wing has taken over again in the Liberal Party. There are some people in this country who suggest that the time has come for a Tory government.


Some hon. Members:: Hear, hear!


David Lewis: I want to say to the members of this parliament and to the people of Canada that a Tory government has already arrived. I want to add that the people of Canada are so intelligent that they are not likely to change one Tory government for another.


Mr. Reid:: Why have an election?


David Lewis: So that they may elect an NDP government.


Some hon. Members:: Oh, oh!


David Lewis: These people who have misgoverned this country for over 100 years are so determined that they will do everything possible to prevent Canada from making progress, but the people will see to that. I say, sir-


An hon. Member:: With humility?


Some hon. Members:: Oh, oh!


David Lewis: -with regret and distress that in my view, and in the view of my colleagues, no progressive person could support this budget and live with himself.


Some hon. Members:: Hear, hear!


David Lewis: It does little if anything to combat the cost of living. No wonder the Minister of Finance keeps on repeating that he is certain things will get worse. He knows it, and he is making certain that that will happen. The budget does nothing for pensioners and low income people; it does nothing to solve the housing crisis; it does nothing to introduce real equity in our tax system; it does nothing to regain control of the Canadian economy; it does nothing to remove the regional inequalities from which this country suffers.
Because the budget fails in all these important areas, I move, seconded by the hon. member for Winnipeg North Centre (Mr. Knowles):
That the amendment be amended by changing the period at the end thereof to a comma, and by adding immediately thereafter the following words: "and its failure to propose any measures to assist pensioners and other Canadians on low and fixed incomes, to deal with the housing crisis, or to remove the glaring inequities in the taxation system".


Some hon. Members:: Hear, hear!


An hon. Member:: Goodbye, Pierre.


David Lewis: So that the amendment as amended would read:

This House does not have confidence in the government by reason of its failure to propose effective budgetary measures to contain and reduce inflation and its failure to propose any measures to assist pensioners and other Canadians on low and fixed incomes, to deal with the housing crisis or to remove the glaring inequities in the taxation system.


Some hon. Members:: Question.



THE ROYAL ASSENT

Mr. Speaker:: I have the honour to inform the House that a communication has been received which is as follows:
Government House,
Ottawa 7 May, 1974
Sir,
I have the honour to inform you that the Right Honourable Bora Laskin, P.C., Chief Justice of Canada, in his capacity as Deputy Governor General, will proceed to the Senate Chamber today, the 7th day of May, at 5.45 p.m. for the purpose of giving Royal Assent to certain Bills.
I have the honour to be, Sir,
Your obedient servant, Andre Garneau Brigadier General Administrative Secretary to the Governor General



PROCEEDINGS ON ADJOURNMENT MOTION


Mr. Deputy Speaker:: Order. It is my duty, pursuant to Standing Order 40, to inform the House that the questions to be raised tonight at the time of adjournment are as follows: the hon. member for Egmont (Mr. MacDonald) - Energy-Electricity-Suggested need for formula to equalize cost in Prince Edward Island and Nova Scotia; the hon. member for Fraser Valley West (Mr. Rose) - Public Service-Request that $500 salary increase granted employees be given to those now retired; the hon. member for Vegreville (Mr. Mazankowski)-Grain-Suggested relief of producers from additional charges because of transportation and contract difficulties.
May 7, 1974



GOVERNMENT ORDERS


[Stage Direction]
The House resumed consideration of the motion of hon. John N. Turner (Minister of Finance) that this House approves in general the budgetary policy of the government.
David Réal Caouette: Mr. Speaker, having heard the speeches of the Progressive Conservatives and the Leader of the New Democratic Party (Mr. Lewis), I venture to say that we have seen it all. I never thought that one day I would see a socialist and conservative coalition in the Canadian Parliament. It is the most disgracious spectacle that I have seen in this House.
The Progressive Conservative Party which doesn't care a damn about the consideration that must be given to legislation is solely concerned about coming into power since October 1972. Mr. Speaker, the NDP members have been constantly repeating that a minority government is healthy for the Canadian people. We now have one, but they are not satisfied. Mr. Speaker, the New Democratic Party is now more powerful that it will ever be in Parliament. I hear them saying: "Old age pensions have not been raised, income tax has not been lowered, social measures have not been increased, this or that has not been done." Mr. Speaker, when we Social Crediters introduced in this House some motions aimed at raising pensions and granting them at age 60, the New Democratic Party voted against us. When we proposed the establishment of an annual guaranteed income to be added to earnings, the News Democratic Party voted against us. Mr. Speaker, when we urged granting interest-free loans to the Canadian provinces, the New Democratic Party voted against us, and, let us not forget it, the Liberals did also.
Mr. Speaker, when we suggested a compensated discount on retail prices to fight inflation, the members of the New Democratic Party once again voted against us. And today, the leader of the New Democratic Party said that the Minister of Finance (Mr. Turner) is a hypocrite because of last night's budget. Mr. Speaker, since 1972, the true hypocrites of Parliament have been the members of the New Democratic Party. There is not one of them who did not tell his constituents: Look, old age security pensions are now $190 a month because of us, the New Democrats. However, the Social Crediters have been asking for improvements in the social field for 35 years. The New Democrats are showing themselves as hypocrites and liars throughout Canada. This is so true that if their ideas were good, tne New Democratic administrations of Western Canada, in British Columbia, in Saskatchewan and in Manitoba would do something, at least in these areas. On the contrary, it is worse there than elsewhere. There is now a general strike in British Columbia where there is a New Democratic government. What is done to settle it? Nothing. This is where I say to the New Democrats:
The Budget-Mr. R. Caouette
"Defeat the government, you have the balance of power." Mr. Speaker, they can defeat the government tomorrow night, but I warn them who have only 31 members in Parliament now that if the present minority government, which is doing more for the population than any other majority government before it, is defeated, they will not be more than 10 after the next election.


Mr. Knowles (Winnipeg North Centre):: You may not
come back either!


David Réal Caouette: I will tell the hon. member which ones will not come back. Listen carefully, I am going to be frank. Obviously, in the event of an election, we Social Crediters do not expect to be in power, but I think we shall have the balance of power since, in my opinion, another minority government will be elected. Then, why another election? To have another minority government? We have one. We are going to spend $50 million to hold an election when the Canadian people are asking for action and not election.
Mr. Speaker, I said I would be frank: at this time, an election will settle nothing. I am going to be frank; it is the third time I have said this. In the western provinces, in British Columbia, where some NDP members are coming from, one NDP member will probably be elected, and note this, the other NDP candidates will be defeated by Progressive Conservatives.
Mr. Speaker, let the NDP members join together to be cleaned out in British Columbia. That is good. In Ontario, it is the opposite. Some ridings represented by NDP members in Toronto will go to the Liberals.
Mr. Speaker, I met with some York South constituents, workers who are members of the NDP and have never been Social Crediters in their lives. They told me that they would vote against the leader of the NDP, the hon. member for York South (Mr. Lewis), who will not return here after the next election.


Some hon. Members:: What about Quebec?


David Réal Caouette: Some NDP members are asking what will happen in Quebec. They have no need to worry, none of them will be elected in Quebec. It is not a problem in Quebec, and they know it, their own leader put it straight: There is no way in Quebec.
I am asked:


An hon. Member:: How many will you get in Quebec?


David Réal Caouette: I can't say but we will be more than 15 for sure.

In the province of Quebec, they tried everything to infiltrate the unions, for instance, with "Big" Pepin, "Big" Laberge and "Little" Charbonneau. They thought: The workers will certainly follow us! So they sent nearly all their elected members into the province of Quebec, but these all came back saying: "Our scheme did not work!"
Come election time, none of the New Democratic Party candidates ever succeed in recovering his deposit in the

May 7, 1974
The Budget-Mr. R. Caouette
province of Quebec. This situation will happen over and over because the people there are in their right senses.
A moment ago, Mr. Speaker, I said that the New Democratic Party are using hypocritical means. Let us consider the gist of their amendment to the amendment. There is nothing in there which is part of their own platform.

-its failure to propose any measures to assist pensioners and other Canadians on low and fixed incomes, to deal with the housing crisis, or to remove the glaring inequities in the taxation system.

Mr. Speaker, I have been saying that all along for the past 35 years. I need not be a socialist for that, but why should their system-Yesterday, in my remarks to the English television network on the budget speech made by the hon. Minister of Finance, I said:

It is another budget just like the others-take away from the have's to give to the have-not's, so that in the end you will have all kinds of have-not's and no more have's.
The leader of the NDP said it does not go far enough, and, a while ago, the Progressive Conservatives, who represent big business, applauded while being robbed. How is one to understand such reasoning?
Mr. Speaker, the amendment of the NDP means nothing. One can say one is not pleased with the budget. I am not either. But instead of provoking an election which will be costly for the Canadian people, it would probably be better to wait for legislation, propose amendments and fight to get results.
In 1963, we of the Social Credit Party of Canada had the balance of power; in 1965 I was accused of having supported the Liberals of Mr. Pearson. I therefore put the following questions to the voters of Quebec and other areas of Canada: With a minority government, as holders of the balance of power is our role merely to bring about an election or to get results? What should we do? The important thing is to obtain good results for the people, to think of one's country before thinking of one's party.
I shall probably be blamed again for not wanting an election and be accused of playing politics. Mr. Speaker, whether there is an election or not I fear nothing in my riding nor in that of my colleagues. I am convinced we are up to facing an election. But for the time being, I think it would be unwise to call an election after only one and a half year of this minority government. The Canadian people can understand this.
I have one thing to say to the Progressive Conservatives. They have been demanding a budget for at least six months and they say: The government is afraid to bring down its budget, the government fears this or that; the government does not fight inflation. Would the Progressive Conservatives do any better?
Mr. Speaker, let me give one example: last week, I went shopping in Hull to buy Stanfield underwear, and I had to pay three times as much as last year.

Mr. Speaker, I see the hon. member for Saint-Hyacinthe (Mr. Wagner) smiling. Let him conduct surveys in his own riding so as to know the price of Stanfield underwear in Saint-Hyacinthe. He should know, for they are speaking against inflation. What would he do to deal with inflation? He does not say.
They have been clamouring for a budget for the last six months. I see the hon. member for Saint-Hyacinthe fairly often on television. He is a very good friend of the CBC people. Indeed, he likes that, he is always the first in line in front of room 130-S, waiting to be invited to speak on television. Moreover, he is a smart dresser.
In 1963, the Conservatives were sitting on this side of the House. The right hon. member for Prince Albert (Mr. Diefenbaker), the then Prime Minister, was leading a minority government. On the night of February 4, if my memory serves me well, the government was defeated because it did not have the courage to bring down a budget. One year without bringing down a budget! Today, the Conservatives are blaming the government. Yet, in 1963, on the night of the vote, the Prime Minister rose and promised to bring down a budget within 30 days in order to save his skin. They were overthrown just the same. So, Mr. Speaker, why play that kind of politics? The Tories should at least he honest enough to recognize that all is not perfect. That is true, but all is not bad either. There were some improvements. Family allowances and old age pensions were increased. Even though the New Democratic Party voted against proposed increases, there was some improvement in the social, economic and agricultural fields.
For example, producers were asking some years ago for $5 per hundredweight of milk and the government said, it is impossible. Now, the Minister of Agriculture (Mr. Whelan) will have to give farmers at least $11 per hundredweight for industrial milk. It will come to this, but under a government watched by an alert and careful opposition, we stand a better chance of getting results instead of having elections all the time.
If the New Democratic Party involves Parliament and the people of this country in an election campaign, I am convinced that they will be held fully responsible. The Tories want an election since 1972 because they can see themselves in power. But I have seen them in power here with 208 members out of 264. Mr. Speaker, that was no picnic! Yet they did no lack strength. There were one million unemployed in 1961 under a government with 208 members.


An hon. Member:: With a runaway inflation!


David Réal Caouette: Mr. Speaker, there was unemployment, of course. There were one million unemployed and the cost of living was starting to climb. Did that government so powerful at that time curb increasing prices? Not at all. Now, Progressive Conservatives want to freeze prices and salaries. Everyone knows that the leader of the New Democratic Party is right about that. The freeze would be mostly on salaries.
With respect to prices, the black market would be rampant here in Canada as it was in the United States under similar circumstances. But they do not say so because they are not concerned with the well-being of the people of this
May 7, 1974

country; they only want an election at all costs because they already see themselves in power.
Mr. Speaker, what we of the Social Credit Party of Canada are interested in is not to have someone coming into power, but to get from those who are already in power the results the people are expecting, and this for the whole of the population. Here is what we are interested in too. We agree that the pensions must be increased, and that the eligible age must be lowered to 60.
Mr. Speaker, as for the selective price controls, what is the selection put forward by the New Democratic Party? Nobody knows, nobody cares to explain anything. In my opinion, there are four major areas where we can fight efficiently against inflation.
First of all, we advocate the establishment of a guaranteed annual income for each and all Canadian citizens, irrespective of their social status or their present income; second, a 25 per cent compensated discount on the retail prices; third, a $200 monthly old age security pension at 60, and we claim-


Mr. Peters:: We will vote for that.


David Réal Caouette: My hon. friend from Timiskaming (Mr. Peters) says:

"We will vote for that." But they voted against that when we presented it just a few months ago.


William Arnold Peters: Yes, because you were trying to bring down the government.


David Réal Caouette: Now, with nothing at all to gain they are willing to bring down the government. You see how intelligent they are? That is the way it is.

Mr. Speaker, we ask for interest-free loans to provinces. The government may say this is nonsense. But look at what the budget provides for underdeveloped countries around the world. I would stress to the House that we approve of this measure, far from opposing it. But further, in its budgetary statement, the government seeks from the House authority for the advance commitment of Canada's contribution to the Fourth Replenishment of the International Bank for Reconstruction and Development, a subsidiary of the World Bank, specializing in the provision of low-interest and interest-free loans to the most needy countries. Mr. Speaker, we believe provinces, as much as any country in the world, have a need for those interest-free loans provided to foreign countries. We demand this and shall keep on fighting for it.
The budget has interesting features, and less interesting ones. My sole purpose was to place the House before its responsibilities. Let not the NDP believe it will preserve its identity by voting with the Progressive Conservatives, and vice versa.
So, Mr. Speaker, what we hope for is a positive approach from members, in order that they may give the Canadian
The Budget-Mr. Trudeau
people what it strives for, namely security with personal freedom.


Pierre Elliott Trudeau: Mr. Speaker, I rise at a time when it can truly be said that a threat of a general election is hanging over this House. If I was not afraid to arouse the suspicions of the right hon. member for Prince Albert (Mr. Diefenbaker) about my readings, I would say that a ghost haunts Parliament, the ghost of an election.
Mr. Speaker, I should like to present some arguments to the House to show not only the hon. members opposite but also the whole Canadian people that the time they have chosen to provoke the dissolution of this 29th Parliament is particularly inappropriate and truly shows their complete irresponsibility.
What has brought this about, Mr. Speaker? What has brought about this threat of a general election which has been hanging over the House, not only for a few weeks but practically since the beginning of this Parliament? What has brought about this situation of a Parliament of which it might be said that it was born to be short-lived, if we remember the speeches that the hon. member for Saint-Hyacinthe (Mr. Wagner) was making repeatedly at the beginning of 1973. Time and time again, he stated that the government was going to fall, that it would be for the following week. When the following week came, he made other speeches to say that it would be for the week after. And the week after, it was supposed to be for the week after that. He was always busy preparing our epitaph. I think that if he had poetic talents in addition to his other talents, he would have prepared our epitaph 18 months ago: "They are here today and gone tomorrow."
In January 1973, it was said that the government would fall on the occasion of the Speech from the Throne. And I am not speaking only of the hon. member for Saint-Hya-cinthe. I must say that this was the general attitude, not only among the hon. members opposite, but also among many of the people who watch us from above your head, Mr. Chairman. The Speech from the Throne was supposed to be the crucial moment.
After the Speech from the Throne, it was supposed to be on supply days. There were some at the end of January, there were others in March. Something was really going to happen, Mr. Speaker, Parliament was through.
Unfortunately those gloomy predictions did not materialize and then the budget became the final and cut-throat moment. The budget which the government was to introduce would be the end of this 29th Parliament.
Mr. Speaker, Parliament survived that budget and afterwards, we were to be defeated on corporate taxes. It was really useless then to try to obtain the support of the New Democratic Party. The Progressive Conservatives and the New Democrats were going to defeat the government on corporate taxes.
I do not know what happened at the Conservative caucus, but they decided that it was not yet the time to defeat the government. The threat was hanging over us, but it was not the proper time. Then there were all the days for the consideration of the estimates. In June last year, on the resolution on Viet Nam introduced by the Secretary of State for External Affairs (Mr. Sharp) we

May 7, 1974
The Budget-Mr. Trudeau
were to be defeated and finally, summer came, still no elections.
Then summer came and with the end of summer, the rail strike, the return of Parliament, inflation. There, it was finished, Mr. Speaker. Things had come to an end, Parliament was going to fall on the inflation issue.
One may recall that that crisis was also overcome, and that the government survived. But there was the oil situation, war in the Middle East and prices skyrocketing at a bewildering rate. Oil was to be the question on which the government would not be able to stand any more. The oil problem was to mark the end of the government.
In December, Mr. Speaker, the government introduced an energy policy which was endorsed not only by members in this House but by the country as a whole.
Mr. Speaker, I could go on with a detailed account of the days when the life of my government was threatened. Then we had a new session, a new Speech from the Throne, and budget estimates. In March, we voted on the Veterans' Land Act, and last week, we had an act on profiteering practices.
At last, we have come to it, Mr. Speaker, again, we are told that the government will fall, that a general election is a settled matter once and for all.
May I be allowed, Mr. Speaker, after so many false alarms, to show some skepticism. May I be allowed to wait until tomorrow evening to see whether members opposite are not going to hedge once more in order to extend the life of this government. May I be allowed to wait until then to summon the troops to victory.
With your permission, Mr. Speaker, I want to insist in case they would finally have a reason to cry wolf 5, 10, 15 times, should their threats so often repeated prove at last jusitified for once and should we indeed have a general election. I would like to tell the House and the whole country that it will be them, hon. members opposite, not the Liberals or the Social Crediters who will have called for a general election after all these threats and all these subterfuges.
Why am I reciting this series of threats and events which were always going to weigh in on us to provoke a general election? Why? Because I want to remind this House that the attitude of this government after the election of October 1972 was one of accepting the verdict of the electorate. It was one of saying to the people of Canada "Sure, you did not give us as many members as we hoped to have. Sure, we would have liked to have a majority government, but we know we did some things wrong. We know you were telling us by voting against many of our members that you wanted to change some things." That has been the attitude of the government.
We have taken the attitude that we did not have a majority. We had a plurality. We had an obligation to try to make parliament work, to try to make the voice of the people a significant event in Canadian electoral history. We knew we could not do it alone. We knew that, in some cases, we would have to depend on the Creditistes; in other cases, the NDP; and, in other cases the Conservative

party, to support our proposals and policies. We knew that because of that we would have to accept amendments to certain of our policies and legislation. We said there would be many cases where certain government proposals would not be deemed to go to the roots of our policy and we would accept defeats on them. We said that the opposition always had opportunities, if they wanted, through supply days and non-confidence motions to provoke a general election. However, in the meantime we were dedicated to make this parliament work for the good of the people.
I accept the attitude of the hon. member for Temis-camingue (Mr. Caouette) who said he saw it as the duty of his party, not to destroy the government day by day, but to make sure the government brought in amendments, changes or concessions to its policy which in its view would be for the good of the people.


Some hon. Members:: Hear, hear!


David Lewis: They voted against the government every time. They knew the government would not fall.


Pierre Elliott Trudeau: The leader of the New Democratic Party says they voted against the government every time. Quite a few times the New Democratic Party voted for the government.


David Lewis: That's right.


Pierre Elliott Trudeau: I think somewhere around 1962-63, the NDP decided that in a minority parliament it might be able to play a role. I remember the speeches made by the hon. member for York South (Mr. Lewis) and the hon. member for Winnipeg North (Mr. Orlikow). I was sometimes in the audience when they were speaking.


An hon. Member:: And once on the platform.


Pierre Elliott Trudeau: I was wise enough in those days never to take a membership in that party because I saw very soon how doctrinaire they were.


Some hon. Members:: Hear, hear!


Pierre Elliott Trudeau: I saw in those days that the so-called consciences of the Canadian people were prepared in Quebec to flirt with anyone, with separatism, with nationalism-


Some hon. Members:: Hear, hear!


Pierre Elliott Trudeau: Had I had a membership in the NDP, which I never had-I don't know what light was shining on me then-I would have done like Eugene Forsey, now Senator Forsey. I would have torn up my membership card when they adopted a two-nation policy.
[Editor's Note: At this point there was a disturbance in the gallery.]


Pierre Elliott Trudeau: Mr. Speaker, if I am going to have trouble with the people in the gallery, I think I had better go back to reading my notes.
May 7, 1974


Some hon. Members:: Hear, hear!


Pierre Elliott Trudeau: Those were the days when the NDP was arguing, in the early and middle-sixties, that minority governments were the best government for Canada, that minority parliaments could work and that minority parties had a role to play. Let me just read something, Mr. Speaker, that indicates that in fact, in the view of one impartial observer, this parliament has accomplished something. I am not going to read from the prorogation debate and other material that I have to give the record of this government; I am going to read something which was published in the Globe and Mail on April 23, 1974.


An hon. Member:: The Globe and Mail?


Pierre Elliott Trudeau: Yes, the Globe and Mail, which is not always this government's greatest friend, which is why I read from it. This is what this impartial observer had to say about this parliament:
It may be useful to remind Canadians of what the first session of this parliament was able to accomplish-
Then it goes on to enumerate.
-a substantial increase in basic old age security pensions and the assurance of automatic future increases every three months in line with the rising cost of living; the expansion of benefits under the Canada Pension Plan; major improvements in veterans allowances and pensions, including the recent extension of the Veterans Land Act; substantial increases in family allowance payments; a 5 per cent cut in personal income taxes with a minimum reduction of $100 and a maximum reduction of $500 to ensure that low and middle-income Canadians received most of the benefits; subsidies to offset increases in the cost of milk and bread; changes in the National Housing Act to provide funds for land banking and home purchase assistance for low-income families; a Foreign Investment Review Act that could help stop the takeover of our industry and keep Canadian jobs in Canada-an export tax on oil to ensure better returns for Canadians and to make possible substantial subsidies for eastern consumers while a pipeline is built to Montreal; and finally, the Election Expenses Act, which marked an important beginning in controlling election spending by parties and candidates, in forcing disclosure of political contributions and in checking the influence of powerful vested interests.
The author of this article, Mr. Speaker, is none other than the hon. member for York South.


Some hon. Members:: Oh, oh!


Pierre Elliott Trudeau: Just a fortnight ago the leader of the NDP was making great speeches and giving great enumerations indicating the achievements of this minority government. Let me quote the following paragraph:
Taken together as a package of legislative achievements, I have no hesitation in saying that they are greater accomplishments achieved in 18 months than any obtained by recent majority governments over four years.
If they want an election on that, then we will have an election on that, Mr. Speaker.


Some hon. Members:: Hear, hear!


Pierre Elliott Trudeau: The NDP leader probably had limited time and space, because there are many other items he could have listed, many of them of interest to him and his party. For example, the policy of this government to produce self-reliance in oil before the end of the decade; the agreement reached with all ten provinces in order to
The Budget-Mr. Trudeau
ensure the best possible protection for Canadians in areas of pricing and supply; the total reorganization of social security programs that was put forward last session by the Minister of National Health and Welfare (Mr. Lalonde); improving housing for native people; elimination of capital gains taxes on family farms passing from generation to generation; increased feed freight assistance in eastern Canada and British Columbia; the five year period of restriction on capital punishment; the privacy and wiretap legislation; the green paper on conflicts of interest for which that party in particular had been asking for so long and about which they are completely silent as to what parliament should be doing now we have put the policy before them.
I could add the items that have been brought in in this short session of parliament thus far, Mr. Speaker: the act to amend the Fisheries Development Act; an act, to which royal assent will be given in a few minutes, to amend the Export and Import Permits Act, legislation that is so important in controlling the price of food in this country and in keeping away the effects of inflation; the act to amend the National Parks Act; the act to amend the Farm Improvement Loans Act, the Small Businesses Loans Act and the Fisheries Improvement Loans Act; and the Railway Relocation and Crossing Act.
There is something that has to be explained here Mr. Speaker. According to the NDP today, and perhaps for the past few days, this is the session that has been paralysed, that has not been doing anything. We have sat only 48 days this session. Sixteen of those days were controlled by the opposition and 32 were government days. These are the bills that have been brought forward. I shall be referring later to the bills that are still on the order paper and which will disappear if this House provokes a general election.
Why the change, Mr. Speaker? What has happened? This parliament, which 15 days ago was so productive, has suddenly become paralysed. In spite of the items on the order paper and the legislation promised in the Speech from the Throne, legislation that would be introduced very soon, suddenly we discover that the NDP is withdrawing its support. The NDP has discovered that this is a paralysed government. The NDP leader is now the fastest gun on TV: he is claiming a shoot-out with every channel that wishes to focus its cameras upon him. From a former self-righteous teacher of a religion to be called "making parliament work," suddenly-overnight-what has happened? For 18 months the NDP has prospered by loudly demanding things that the Liberal government was doing anyway.


Some hon. Members:: Hear, hear!


Pierre Elliott Trudeau: The NDP was loudly proclaiming that these things were happening, thanks to the NDP, and that the outstanding productions of this parliament were due to the actions of the NDP.


An hon. Member:: Right on.


Pierre Elliott Trudeau: Now, Mr. Speaker, the leader of that party is popping up on television, tilting toward a forest of

May 7, 1974
The Budget-Mr. Trudeau
microphones, launching the secret weapon of his House leader which is going to destroy this government at some unknown time.


Some hon. Members:: Oh, oh!


Pierre Elliott Trudeau: Maybe we will not have the chance of ever knowing what this knock-out power was, and for that reason alone I am sure you, Mr. Speaker, and experts in parliamentary procedure will be wondering till their dying days what the secret knock-out power was.


Some hon. Members:: Hear, hear!


Stanley Howard Knowles: We will save it for the Tories.


Pierre Elliott Trudeau: So we have, if I can change my metaphor, David the daisy, plucking his petals one by one: Will we have an election, will we not have an election; will we, will we not-a game which he has played on television.


Some hon. Members:: Hear, hear!


Marcel Joseph Aimé Lambert: Oh, come on; you are
in the House of Commons.


Some hon. Members:: Oh, oh!


Pierre Elliott Trudeau: Mr. Speaker, I know you were not in the chair a moment ago, but I think if you had been you would smile at the hon. member for Edmonton West (Mr. Lambert) coming to the defence of the leader of the NDP who, I think from the smiles in this House, was referring to the Minister of Finance (Mr. Turner) by his first name just a few minutes ago. The hon. member for Edmonton West was here and I did not see him express shock. He has suddenly found friends to his left and he thinks he had better be nice to them in case they might change their minds.


Some hon. Members:: Hear, hear!


Pierre Elliott Trudeau: Mr. Speaker, I believe there is a tone of "just under the surface desperation" about the attitude of the NDP in these circumstances. I think with this game they have been playing, of giving power and withdrawing power, with the differences with the government being reconcilable one day, another day the differences with the government being irreconcilable and the next day the differences with the government being almost irreconcilable, it must be tiring to try to be reconciling and urecon-ciling all the time.


Some hon. Members:: Oh, oh!


Pierre Elliott Trudeau: Why now, at this irresponsible time, on a budget which even though it is not perfect and might not go far enough still does reduce taxes, still does give benefits to the veterans and still does take $800 million away from the giant corporations they do not like?


Some hon. Members:: Hear, hear!


Pierre Elliott Trudeau: I believe the explanation is that in this exercise of being able, as they think, to extend power or to withdraw power they have suddenly begun to feel the

strain. They have suddenly realized-I am not sure if the axiom should be that power corrupts, or the lack of power corrupts; but whichever way you take it, I am not referring to any moral vicissitudes-


Some hon. Members:: Oh, oh!


David Lewis: You are bad enough as the Prime Minister; don't try to be a psychiatrist.


Some hon. Members:: Oh, oh!


An hon. Member:: You are thin-skinned.


Pierre Elliott Trudeau: I must admit that I am not attacking the moral principles of the hon. member for York South.


David Lewis: Just don't try to be a psychiatrist.


Pierre Elliott Trudeau: I assure you, Mr. Speaker, that when I used the word "corrupt" it had nothing to do with moral virtue or lack of it. Mr. Speaker, I can assure you that in my eyes he is still as white as a seagull.


Some hon. Members:: Hear, hear!


Pierre Elliott Trudeau: What is being corrupted, Mr. Speaker, is his equanimity, his sense of balance and his ability to remain cool, as we just saw a few moments ago.


An hon. Member:: Some marriages just don't last.


Pierre Elliott Trudeau: Mr. Speaker, power weighs heavily on someone who is doctrinaire. Power is difficult to exercise for one who thinks one can only have absolute truths, absolute virtues and absolute actions.


Some hon. Members:: Hear, hear!


Pierre Elliott Trudeau: In the period of time when the NDP was sitting in this parliament and did not quite hold the balance of power, or when the government could survive with other minority parties, this was an enjoyable time for them. Of course, the period from 1968 to 1972 was a perfect time for them because then they could state truths to their hearts content; they could go to the end of every one of their principles and demand and have rejected the most outlandish requests they had made at any time upon the budget of this nation, because they knew they would not have to face the electorate as a result. What the NDP has demonstrated today is that the best parliament for them is a parliament in which we are the majority and they are a small minority, unable to influence the power and the life of that parliament.


Some hon. Members:: Hear, hear!



ROYAL ASSENT

[Stage Direction]
A message was delivered by the Gentleman Usher of the Black Rod, as follows:
May 7, 1974
[Stage Direction]
Mr. Speaker, the Right Honourable the Deputy Governor General desires the immediate attendance of this honourable House in the chamber of the honourable Senate.
Accordingly, Mr. Speaker with the House went up to the Senate chamber.
And being returned:
Mr. Speaker informed the House that the Deputy Governor General had been pleased to give in Her Majesty's name the Royal Assent to the following bills:
Bill C-4, an act to amend the Export and Import Permits Act- Chapter 9
Bill C-6, an act to amend the National Parks Act-Chapter 11
Bill C-14, an act to amend the Farm Improvement Loans Act, the Small Businesses Loans Act and the Fisheries Improvement Loans Act-Chapter 10
Bill C-27, Railway Relocation and Crossing Act-Chapter 12
Bill C-277, an act respecting the Electoral Boundaries Readjustment Act-Chapter 7
Bill C-281, an act respecting the Electoral Boundaries Readjustment Act-Chapter 8
Mr. Speaker:: It being six o'clock, I do now leave the chair until eight o'clock.
At six o'clock the House took recess.


[Stage Direction]
AFTER RECESS

The House resumed at 8 p.m.


[Stage Direction]
The House resumed consideration of the motion of Hon. John N. Turner (Minister of Finance) that this House approves in general the budgetary policy of the government; the amendment of Mr. Lambert (Edmonton West) and the amendment to the amendment of Mr. Lewis.
Pierre Elliott Trudeau: Mr. Speaker, when Black Rod entered the chamber I was just about finishing off the NDP. The only thing I wanted to add was that they were suffering from the acute discomfort of responsibility; I think that is a milder and perhaps more gentle way of putting it. [Translation]
And I would like to add that this is nothing to disgrace the Leader of the New Democratic Party. He is not a government man, he is an opposition man, a theorizer.
I wish only to express my sympathy for the embarrassment he must feel when his party comes into power in some provinces and I can give only two examples, so as not to delay our proceedings, to show what happens when the New Democratic Party comes into power.
You remember that in this House the New Democratic Party was scandalized during the last Parliament because
The Budget-Mr. Trudeau
we had raised the salaries of members. One of the first things done by NDP government in British Columbia when coming into power was to raise the salaries of members, more especially that of the Prime Minister.
Here is the second example, Mr. Speaker; it is very revealing about theoreticians who have become practitioners; when the minority NDP party was protesting here in this House against higher oil and gas prices, their brothers in Saskatchewan and British Columbia lost no time in increasing gas and oil prices.
Mr. Speaker, I wish now to turn to the other opposition party. While the NDP's position changed considerably in the last two weeks, as I said before, I must be fair to the Leader of the Opposition and admit that he never changed. Ever since we have know him in this House he has had only one goal and this is his job, that is to defeat the government. It is his task to do so and as fast as possible.
You will recall that following the last elections, when he came back to Ottawa with his somewhat too enthusiastic troops, the poor man had his picture taken-and I know he was rather the victim than the instigator of this in view of the situation-his picture was taken while he was receiving the keys of 24 Sussex Drive.
Mr. Speaker, I should tell you that I did not hasten to change the locks. As the hon. member for Saint-Hyacinthe (Mr. Wagner) would say if he was here: It was not true about the keys, Mr. Speaker.
Mr. Speaker, there is a very simple reason for this change of attitude; at the beginning, power was taken without any elections. It was at that time-


An hon. Member:: -the only way-


Pierre Elliott Trudeau: -yes, the only way. Today, the constitution does not seem to allow it. Therefore they ask for elections and immediately. This is the reason, it is very simple. I will quote only two members of his party, as reported in the Toronto Star of April 30, 1974. Here is what the hon. member for Palliser (Mr. Schumacher) said:
If there's no election this summer, you might see something develop along the lines of a new party.
Another Conservative, who was described as a Conservative from southern Alberta, is quoted as saying he is unhappy with his party. He says:
But I can't say anything about that now ... I wouldn't want to be a part of any movement to be caught in the middle of an election. By the middle of May I should know better.
Mr. Speaker, he has seven days to go. By tomorrow night he may know better-we will all know better-why the Leader of the Opposition (Mr. Stanfield) is in so much of a hurry to call an election.


Robert Lorne Stanfield: It will save the country.


Some hon. Members:: Hear, hear!


Pierre Elliott Trudeau: Mr. Speaker, for once we are in agreement, the Leader of the Opposition and I. We think an election will indeed save the country; it will save it from

May 7, 1974
The Budget-Mr. Trudeau
those people opposite. What we do not know, Mr. Speaker, is if it is going to save the Leader of the Opposition from the hon. member for Joliette (Mr. La Salle) who sits two seats behind him and who two years ago left the Tory Party saying there was no place for Quebeckers in it. I do not know whether it is going to save him from the hon. member for Crowfoot (Mr. Horner) who says there is no place for a westerner in that party. The hon. member for Hamilton-Wentworth (Mr. O'Sullivan) did not go so far. He just said that he thought the party should resist control by the experts in Ottawa and in Toronto.
Mr. Speaker, this mention of control is a rather interesting one because this is one of the central promises of the Tory Party. They would freeze prices and wages. They would put controls on our country. They would bring in a system of controls so complex that they have always told us they would take 90 days to think about what they would be. They have been telling us this for a year. They would control this country, Mr. Speaker, yet they cannot control their own party.


Some hon. Members:: Hear, hear!


Pierre Elliott Trudeau: They would control wages. This solution, we know, was hotly debated at the Tory convention a few months ago and rejected by an eminent Tory member of parliament as, to use his words, "leading straight to chaos". They would control prices and wages across the country, but they could not control their own convention too well. They cannot control government expenses, because if we look at that convention, while they were talking about controlling expenditures the same Tory convention was proposing the creation of four new departments and a host of new agencies. They would control expenses, but the first thing they would do is create a lot of new jobs for a lot of new civil servants.
They would control prices and wages across the country. But when it came to the concrete problem of how they would control oil prices in this country, at what level would they impose their controls-a subject which was very hotly debated in the country for several months; and we know, of course, the Tories of Ontario wanted it controlled around $5 or $6 and the Tories of Alberta wanted it controlled at around $8 or $9-from the Tories in this chamber who were going to control the country with a prices and wages freeze for 90 days, Mr. Speaker, we heard not a peep. You are aware, Mr. Speaker, during those fateful days which preceded what I think is an historic agreement between ten provinces and the federal government, they were busy controlling the Minister of Supply and Services (Mr. Goyer) about the tar sands. They cannot control their own party, so they try and control members over here.
There are minor subjects. I can recall last year when they could not even decide, this united Tory Party-united in the desire to have an election and get it over with- whether they were going to vote together on the first reading of some bill proposed by a member of parliament. When we were discussing football, the line was that this was not important and the country should be dealing with other things; so they put up a dozen speakers or more to tell us that.


Some hon. Members:: Hear, hear!


Pierre Elliott Trudeau: What kind of control is this, Mr. Speaker, when the Leader of the Opposition cannot even control his own members and they put up 18 speakers on a subject of no importance?


Some hon. Members:: Hear, hear!


Pierre Elliott Trudeau: There is another subject on which the lack of control was evident, and it is one I hardly dare speak of in polite company. I will just mention it and go on to other things. It is the Official Languages Act, Mr. Speaker.

I mention it, Mr. Speaker, merely to point out that it is a topic of crucial importance to many Canadians, and if some wonder why the Tory convention held in Trois-Rivieres a few weeks ago was such an abject failure, it is probably that the Quebecers are fed up with being had. They want to know what the Tories think about the matter. They were told about organization, attempts were made to lure them with all sorts of promises, but the main topic was not broached because the Tories do not agree amongst themselves on that topic. But let us see-


Mr.   La Salle@: Mention was made of it.


Pierre Elliott Trudeau: The member for Joliette (Mr. La Salle) is back with us. I greet him on his return to the House. He will be happy-the member for Joliette cut a sorry figure according to the press clippings I read on the convention. As I can see, he has almost disappeared-


Mr.   La Salle@: You did not read the right papers.


Pierre Elliott Trudeau: No, I don't read he Jour, Mr. Speaker.
Mr. Speaker, I should like to read more excerpts from a Toronto newspaper, the Globe and Mail, because the reporter, William Johnson, is probably quite detached from Quebec problems. Rather than quote journalists from the newspaper I have just mentioned, who probably are prejudiced, biased, I shall read excerpts from Mr. Johnson's article. He is speaking of facts and not expressing opinions. I quote the Globe and Mail of April 30.
He speaks of the organizer of the Progressive Conservative party in Quebec, Mr. Daviault, and this is what he has to say:
Mr. Daviault is not a Conservative. He was a campaign manager in the 1970 Quebec election for Jacques-Yvan Morin, now Parti Quebecois House leader. Mr. Morin was narrowly defeated in 1970 but won last October. In the recent election, according to Mr. Daviault-
The chief Conservative organizer.
-he was a special counsellor to Mr. Morin.
Mr. Daviault gives his opinions on organizations, and I quote again from the Globe and Mail:
If I find a good man who is called Joe Blow, I don't care if he is Pequiste, Liberal or Creditiste, as long as he tells me: Rene, I'm going to build you an organization.

Mr. Speaker, the article goes on and on. Reference is made to a certain Mr. Toutant, one of the six men appoint-
May 7, 1974

ed by the Leader of the Opposition to manage the organization. It is explained that the organization is different from the association. Well, the six men appointed by the Leader of the Opposition make up what is known as a strategy committee, and they meet every Friday to coordinate their efforts in trying to win Quebec to the Progressive Conservative party. The said Mr. Toutant emphasizes the importance of bringing people of all political creeds into the Progressive Conservative party, in order to create an anti-Liberal coalition, and once again I quote:

The Progressive Conservative Party is open to people of different parties and we welcome people of all political hues because to win we have to increase our vote, and it isn't by frowning on those of other political persuasion that we'll succeed.
That is nice: that is visionary spirit, Mr. Speaker.

Among the names of those who make up this committee of six, except Mr. Toutant, there are Messrs. Andre Robert and Richard LeHir. In fact, as it is explained in the article, Messrs. Robert and LeHir are not even Progressive Conservatives. When questioned on his political opinions, Mr. Robert stated, and I quote again:

I rather define myself as a sovereignist.

I am rather a sovereignist. I expect Quebecers know what a sovereignist is, Mr. Speaker, that is the label put on by those too shy to call themselves separatists. And Mr. LeHir is only nationalist, but the depth of his convictions may be seen, and I quote again:

-I consider that, as long as Quebec remains within confederation, we must be concerned about federal politics-

Brave ones, Mr. Speaker, brave ones indeed! One would use the old cliche about an army of mercenaries, although "army" is too large indeed, one might call it a platoon of mercenaries, Mr. Speaker. Mercenaries without much in the nature of decent affiliations, and worse still not seeking any. They wish to work for the Progressive Conservatives in Quebec; it would seem the reason for the failure in Trois-Rivieres is that the party on the other side has taken the attitude that anything is good for Quebecers, anything at all, lay it on thick, pick anybody. One visualizes the leader of the opposition coming down main street in Trois-Rivieres. He looked like a cowboy, coming down the main street as in the movies. Completely alone in the street. It is probably one of the only instances where it may be said that one is a crowd, Mr. Speaker.


An hon. Member:: What's wrong with cowboys? [Translation]


Pierre Elliott Trudeau: Mr. Speaker, in the Globe and Mail of April 29 last there is a priceless quotation from the Leader of the Opposition, and here again this is between quotation marks:
The Budget-Mr. Trudeau

-a Stanfield Government-
In the words of the Leader of the Opposition.
-would show "imagination, daring, promptness, effectiveness, openmindedness, frankness and humanity."


Some hon. Members:: Hear, hear!


Pierre Elliott Trudeau: Well, Mr. Speaker, in a sense we know what the Leader of the Opposition (Mr. Stanfield) means when he talks of open-mindedness. The kind of openmindedness he means is open-arms for any who want to help to build the Tory Party. But the interesting adjectives are the ones which follow. How does that party show daring and imagination? I read again from the Globe and Mail. There had been a question and answer session, Mr. Speaker.
-the questioners had been picked beforehand by Richard LeHir- About whom we talked a moment ago.
The questions and answers had been prepared by several people, notably Andre Robert, a sociologist who is an adviser to Mr. Stanfield.
The leader spent much of Saturday afternoon before the session being coached on answers by his special assistant, Richard Lelay. While Mr. Stanfield worked on the answers in a third-floor suite, Mr. LeHir was coaching the questioners in a fourth-floor room.
So much for the daring and imagination. I say there is more imagination than daring in that procedure. [Translation]
Mr. Speaker, they were feeling so lonely in Trois-Rivieres that some jokers suggested that the name of the city be changed to that ot "Une-Kiviere". That would make one river, two leaders or two nations-I am not too sure-three financial critics, four Horsemen of the Apocalypse and several raccoons.
We know the whole Quebec Tory caucus would easily fit in a Volkswagen. After the next election they will have to go and look for a chauffeur somewhere.


Allan Frederick Lawrence: Tell us about the Liberal caucus of Alberta.


Pierre Elliott Trudeau: Mr. Speaker, even when I was in Alberta I was never as lonely as the Leader of the Opposition was in Three Rivers; I can tell you that. I never tried to fool the people of Alberta, Mr. Speaker. They might not always like our policies, but they know what they are and we do not fool around trying to kid them.
I spent some time, perhaps too much, describing the origin and the development of this feeling of an impending election. I would like to spend the remainder of my time trying to describe where it is leading us.


An hon. Member:: What about the budget?


Pierre Elliott Trudeau: Yes, I will be talking about the budget, Mr. Speaker. I think it is extremely important that we understand the effects of the vote which will be taken tomorrow night. If we are to believe the opposition, the effect will be to put an end to this parliament and have a general election.

May 7, 1974
The Budget-Mr. Trudeau


Some hon. Members:: Hear, hear!


Pierre Elliott Trudeau: It is extremely important, I repeat, for the people of this country to understand now, before the vote is put, what the effects of dissolution will be. I talked earlier about the small number of days the government has had in this session of parliament to present its legislation. I indicated the number of bills which have already received royal assent. I would now like to talk about the things that are still on the order paper. There is the budget, for one, and several other important measures which are on the order paper, all of which will disappear if this House is dissolved.


An hon. Member:: Good riddance to bad rubbish!


Pierre Elliott Trudeau: I think the gentleman over there has just coined a phrase. He looked around and coined a phrase.


Some hon. Members:: Hear, hear!


Pierre Elliott Trudeau: In his budget speech last night, the Minister of Finance went into great detail on many of the subjects covered by him. Other speakers on this side will talk at some length, as much as the rules allow, on certain aspects of that budget. Tonight I want to pinpoint a small number of measures, those which will disappear if, in fact, the government and parliament are rejected tomorrow, so that the people of Canada keep in mind what they are losing by this election in terms of budgetary measures and other measures on the order paper.
As the Minister of Finance explained last night, the reduction in personal income tax will leave more money in the hands of people so they can better defend themselves against the higher cost of living. The reduction in personal income tax will take 300,000 Canadians off the tax rolls.


Some hon. Members:: Hear, hear!


Some hon. Members:: Oh, oh!


Pierre Elliott Trudeau: This may be unimportant to the opposition, but we consider it of some importance to those 300,000 Canadians.


Some hon. Members:: Hear, hear!


Pierre Elliott Trudeau: The budget will remove the 12 per cent federal sales tax on clothing, footwear and other articles, to act directly against high prices.


Mr. Basford:: They are opposed to that.


Pierre Elliott Trudeau: Of course they are opposed to that. It was interesting to hear why the leader of the New Democratic Party was opposed to that. He was in favour of some kind of reduction of sales tax provided it did not apply to those lucky men whose wives were able to buy, I think he said, three party dresses, or something like that. I wonder what the leader of the NDP has in mind as a reduction in sales tax that he would apply only to those whose wives have less than three party dresses. How would he administer that? However, I will not go into that, Mr. Speaker. I just want to remind this House that in the last parliament the NDP were against the family allowances that we were proposing.


Some hon. Members:: Hear, hear!


Pierre Elliott Trudeau: There are a lot of new men over there. Perhaps some of them do not remember that. They said it would be administratively complicated, "Let's give it to everybody." With regard to the sales tax, however, they say, "Let's make sure we only cut sales tax on the articles sold to those people in the store who can presumably pass an incomes test in front of the storekeeper."
This budget would make it easier to save for the purchase of a home through tax-free savings up to $10,000. This budget would protect Canadian savings against inflation, just as personal income taxes were protected by this government against rising because of inflation. This budget would raise the war veterans allowance.


Some hon. Members:: Oh, oh!


Pierre Elliott Trudeau: I have trouble reading my own writing. I must confess it is even more difficult reading someone else's. More important to some people in this chamber, Mr. Speaker, this budget would have shifted the burden of taxation, for example, through the 10 per cent surtax to those corporate sectors most able to carry the burden while pushing ahead with expansion for increased supplies. I was rather intrigued by the expression used by the leader of the New Democratic Party to describe these corporate tax increases. The Minister of Finance indicated yesterday that, according to his estimate, this would bring in just short of $800 million for the year. That is one quarter of the $3.2 billion which was brought in through corporate taxes in the year 1973-74. In other words, this is a 25 per cent increase over last year's corporate taxes.


Some hon. Members:: Hear, hear!


Pierre Elliott Trudeau: I understand that the NDP does not think that is enough, but I am at this point in my speech trying to indicate what will happen if the government goes down with the budget: even this modest 25 per cent increase over last year's corporate taxes does not get back. Who is giving the companies of rip-off as a result of that?


Some hon. Members:: Hear, hear!


Pierre Elliott Trudeau: This budget does not take the easy way. It was not designed to do that. If any proof is needed to show that we do not want an election, Mr. Speaker, I think the judgment has been that this is not an election budget because we do not want an election. We want responsible economic policies. We want, not the easy way that the doctrinaire NDP or the controllers of wages on the Tory side want, but one which will keep the economy operating as the number one economy in the world, Mr. Speaker.


Some hon. Members:: Hear, hear!


Pierre Elliott Trudeau: I must now ask the House to follow me into the order paper of today's date and to look at some of the measures at various stages of legislation in the House which will be disappearing if this parliament is indeed brought to an end tomorrow or this week. Let me take a few examples in various areas, beginning with food and agriculture. First is a bill of which we are proud and
May 7, 1974

which we want to talk about a great deal during an election, Bill C-29, an act to amend the Combines Investigation Act. We are looking forward to joining issue with those who make an easy debate on gouging and profiteering and who have easy solutions. We have a bill here that we are prepared to stand on and to put before the country at any time.


Some hon. Members:: Hear, hear!


Pierre Elliott Trudeau: The results of the non-passage of this bill will be that the power to roll back prices is lost. If the bill is lost, Mr. Speaker, the government will be denied at this time the ability to deal effectively with foodstuffs such as meat, canned fruit, vegetables, bread, and so on. I am just talking about food, but this also applies to other sectors where gouging exists. It would deny the government the means to apply strong pressure on those who profit unreasonably in the marketplace when competition is lacking.
Then we have Bill C-7, amendments to the Combines Investigation Act. This bill is based on the belief that a vigorous competition policy is fundamental to any antiinflation program. Countries all over the world have been tightening up their laws on competition in recent years to ensure the lowest possible prices to the consumer. The government, as the House knows, has been pressing for amendments to this law since 1970. The amendments to the Combines Investigation Act now before parliament go a long way toward remedying defects and are an important part of the government's anti-inflation program. The results of non-passage of this bill would be that a powerful antidote to inflation would be lost. Failure to pass the bill would be irresponsible on the part of parliament. Failure to act on these amendments can only favour unacceptable business acts that daily harm the consumer.
Then what about the act to amend the Agricultural Products Co-operative Marketing Act? The present act provides, essentially, to producers of other crops and producers of wheat grain outside the designated areas under the Canadian Wheat Board Act what the Canadian Wheat Board Act provides for western wheat producers. Results of non-passage would be that it might hinder production because of the greater need for cash flow by producers at the present time. It would also prevent the Ontario wheat producers from having some of the advantages now received by western producers.
Then there is Bill C-25, an act to amend the Prairie Grain Advance Payments Act. The results of non-passage would mean less stable marketing of grain and would create a jam in transportation, since the farmers would not be inclined to hold grain on their farms until acceptance and delivery, thus affecting 50,000 producers.


Some hon. Members:: Oh, oh!


Pierre Elliott Trudeau: Then in the area of social policy I should just mention Bill C-35 which was given first reading, I believe, only yesterday. This is the omnibus bill on equal rights for women. We on this side are proud of that bill and we will tell the country that the women of this country are equal.


Mr. Nowlan:: You have had 11 years to do that.


Mr. Baker:: Even the girls don't like it.
The Budget-Mr. Trudeau


Pierre Elliott Trudeau: Then there is Bill C-19, an act to amend the Canada Pension Plan. What are the results of non-passage of this measure? First, there would be the loss of increased benefits for survivors of women contributors who have died. That embraces about 30,000 people. Second, there will be the loss, through failure to remove the earnings test, of increased benefits for about 500,000 persons now retired.


Some hon. Members:: Shame.


Pierre Elliott Trudeau: Then Bill C-34, the National Housing Act amendments to continue and to broaden existing federal assistance for municipal sewage treatment facilities and to make trunk sewer systems eligible for assistance. The results of non-approval of this measure would mean that a major new initiative would be delayed. It is conceivable that the legislation could have had considerable impact on the availability of serviced land for home construction.
I have several more bills I wish to mention, Mr. Speaker, and I apologize for taking the time of the House. I know most hon. members are aware of the subject matter of the bills, but I just repeat that it is important to put these matters on the record so the people of Canada will know that this House has been warned, and warned very clearly, about the effects of dissolution now.


Some hon. Members:: Hear, hear!


Pierre Elliott Trudeau: In the area of industrial and regional policy we have Bill C-13, an act to amend the Bank Act. I think the attitude of the opposition is that if this bill is not passed it will only frustrate the wishes of the western provinces which want this amendment to the Bank Act so they can set up banking institutions in their provinces.
Then there is Bill C-20, the Federal Business Development Bank Act. Results of non-passage of this bill, which can be viewed as complementary to the budget statements, relating to small businesses, would mean that an extremely important service to small business would be delayed, to the detriment of an important economic sector. This is of importance to us, Mr. Speaker.
Then there is Bill C-10, to amend the Export Development Act. I am sure many members read the statements in Monday's papers about the effect of the non-passage of this bill, statements made by the Canadian Export Association of Montreal, headed by the president, Mr. J. M. McAvity. At the present time there are a number of major projects totalling $300 million being negotiated. It will not be possible to sustain these negotiations for lack of authority to make financial commitments. These projects involve manufacturers, a number of suppliers and service industries, and should these projects not proceed there is a possibility of loss of customers and of jobs for Canadians. Once again I repeat, Mr. Speaker, and I quote from Monday's papers wherein the president of the Canadian Exporters Association states-
If the amendment to the act does not go through in the next few months, or if it is postponed by an election, then Canadian exporters would lose business.


Some hon. Members:: Shame.

May 7, 1974
The Budget-Mr. Trudeau


Pierre Elliott Trudeau: The order paper contains many more things, and I should like to talk about two additional bills in the area of energy.


An hon. Member:: Talk about football.


Pierre Elliott Trudeau: The hon. member asks me to talk about football. I think for the first time since I have been in the House of Commons I am using the privilege of speaking without any limit on time, which is a privilege accorded the Prime Minister and the Leader of the Opposition.


An hon. Member:: It is your maiden speech.


Some hon. Members:: Oh, oh!


Pierre Elliott Trudeau: Let us look at Bill C-32, an act to establish a national petroleum company. If this bill to establish Petro-Can is not passed, it means the government's program will be delayed several months and this will create needless uncertainty in the industry and leave the government without an instrument to deal with the constantly changing international situation. There is Bill C-18, the Petroleum Administration Act. The results of non-passage of this legislation are that the oil export charge would cease and no authority would exist to pay subsidies to eastern refiners. The federal-provincial agreement of March could be destroyed, and critical policy decisions to cover the interim period from dissolution to the recall of parliament would be required.
I see the hon. member for Peace River (Mr. Baldwin) shaking his head.


An hon. Member:: He's trying to find his marbles.


Some hon. Members:: Oh, oh!


Pierre Elliott Trudeau: Perhaps he will be good enough to indicate what will happen to oil export charges. He recalls the story of this charge which was brought in by the government at the end of last year in order to make sure that the great windfall would not accrue to the petroleum companies but would accrue to the benefit of Canadians. In the month of January we tried to bring in legislation which would have permitted the government to collect this export charge.
The House will remember that the opposition consented to permitting the government to collect this export charge only for two months, the months of February and March. For every month following March, this will be lost, that is, for April, May, June and July. And if there is an election, I suppose it is fair to presume it will be held early in July, and by the time the writs are returned, even at great haste parliament could not meet before the middle of August. So it means that for April, May, June, July and much of August this oil export charge will not be authorized for collection by parliament.


Paul Theodore Hellyer: Nonsense. You can collect it under the Export and Import Permits Act.


Some hon. Members:: Hear, hear!


An hon. Member:: Go back to Action Canada.


Pierre Elliott Trudeau: Yes, the hon. member had better go back to Action Canada. Let me just put the figures in respect of this matter before the House. The tax is now $4 a barrel, and it probably should and probably will go up to cover appreciation and oil prices. Never mind what that increase will be, as we do not know what it will be-the tax is now $4 per barrel. Just calculating the amount on that basis, the volume of oil involved is about one million barrels a day, which would work out to between 27 million and 30 million per month. At $4 a barrel, the tax which would be forgone to the federal government if the Petroleum Administration Act is not passed would amount to about $115 million per month, for five months. That would amount to something more than half a billion dollars.


Some hon. Members:: Shame.


An hon. Member:: Let it rip off for the oil companies, David.


Mr. Bell:: Be careful what you say about David.


Pierre Elliott Trudeau: It is true that we have heard a lot about robber barons from the NDP, but the consequence of this more than half a billion dollars which it would not be in the power of the government to collect under the law, if it is not passed, would go to the oil companies. Some 47 per cent of the oil in Canada is produced by five major companies, and we assume that the exports would be in that same area. This production is divided up in the following manner: Imperial Oil, 18 per cent; Texaco, 11 per cent; Mobil, 8 per cent; Gulf, 7 per cent; Shell, 6 per cent. That is just a rough calculation, but these are the percentages and these are the figures in respect of which the NDP and the Tories would see the government put in a situation in which it was impossible to collect as a result of the non-passage of this bill.


Some hon. Members:: Hear, hear!


An hon. Member:: You fellows ought to be in the funny papers.


Pierre Elliott Trudeau: Those are only matters which are on the order paper, but there are many other measures mentioned in the Speech from the Throne which are ready for imminent introduction. I will mention just three which have to deal with the increase in food supply and stabilization of food production. One would be the amendments to the Farm Credit Act, to provide greater assistance to young farmers; another would be amendments to the Agricultural Stabilization Act, to broaden its scope; and the third would be grain marketing stabilization legislation based on cash advance payments on crops.


Mr. Hales:: Tell us about the Unemployment Insurance Act.


Pierre Elliott Trudeau: Yes, Mr. Speaker, amendments to that act would be brought in very soon, as the hon. member suggests.


Some hon. Members:: Promises, promises.


Pierre Elliott Trudeau: That was an attempt, perhaps a lengthy one, to put on the record one very simple fact. That is, that
May 7, 1974

parliament is doing its job and this government would like to see this parliament continue doing its job.


Some hon. Members:: Hear, hear!


Pierre Elliott Trudeau: Mr. Speaker, this record of achievement which the government has put before you tonight is an effective record. It is an effective record by a minority government that has been successful in making this minority parliament produce. It is simply not good enough for the leader of either party who wishes to destroy this parliament to say that the first session was productive but that this session was not. I have already cited legislation of vital importance to farmers, fishermen, small businessmen and consumers, legislation important to increasing Canadian activity and control in key sectors of our society, vital legislation that would die on the order paper and legislation that would have to wait, if an election were held, until a new Liberal government returns to provide it.


Some hon. Members:: Hear, hear!


Pierre Elliott Trudeau: Consistently since this parliament began, this government has attacked inflation by a severalpronged approach. The Minister of Finance was true yesterday to that approach. In legislation, in administrative action and in two budgets the government has shown its attack on inflation. It has consistently sought to increase supply, to get the farmers, the fishermen and the factories producing more. We sought to go after extremes of profit. On the one hand we have consistently sought to stop gouging. For all Canadians we sought to bring down prices, on the other hand, by subsidies and by other measures. We cut taxes, and finally, for the Canadians who are hurt most by inflation, we brought in an array of measures which increased and indexed their pensions and other sources of income.


Some hon. Members:: Hear, hear!


Pierre Elliott Trudeau: Mr. Speaker, that was an attack on inflation. It is an attack increasingly understood by farmers, by fishermen, by consumers and by producers. Very recently, even small businessmen across Canada who for a time had embraced price and wage controls reversed their opinion and stated that they were against price and wage controls. They dislike wage and price controls because they have seen the shortages that develop as a result of controls and because they know they will have to pay an inflated price for the materials in short supply. They have observed the experience of Great Britain and the United States and have said to the Leader of the Opposition, "No thanks. Not for us".
It is true that our attack on inflation is not a simple one. It is a complex one. It is a complex solution to a complex problem. We certainly reject the simple, and perhaps simple-minded, approach that has been brought to bear by the opposition on this question. These Tory controls would control the wages of the workingman. Prices have already risen very high, and controls will not bring them down. If you freeze high prices, there are still high prices; but if you freeze wages, there are still low wages.


Some hon. Members:: Hear, hear!
The Budget-Mr. Trudeau


Pierre Elliott Trudeau: I am sure many of us on this side of the House will want to explain this at some length to the country if we become involved in an election campaign. We have explained before, and will explain again, that these simplistic solutions in reality are Conservative solutions, ones which a Liberal Party would not want to place on the workingman and the fisherman. I think perhaps the slogan I would suggest to the Tory Party for its measure would be: The price is right; let us freeze the wages.
Mr. Speaker, I was attempting to show that this parliament has been doing a relatively good job-an admission of some of the opposition parties until now. I want to conclude by asking all members of this House, including myself, to try to put aside for a moment any partisan spirit. I would ask the members of this House, as we will ask the citizens of this country if we are forced to ask them for a renewed mandate, to reflect upon the troubled world in which Canadians are living. I do not think that anyone who looks at other parts of the world would be unaware of the economic and political instability which exists in many countries. I would appeal to Canadians to consider, not that everything is fine and dandy but that Canada is doing, shall we say, relatively well in this troubled world.


Some hon. Members:: Hear, hear!


An hon. Member:: The land is relatively strong.


Pierre Elliott Trudeau: Yes, Mr. Speaker, I suppose that would be a better slogan. One might look at the economic performance of Canada viewed by people outside the country. I shall not bore the House by quoting again the opinions of the OECD, the IMF, the Wall Street Journal or the Financial Times in respect of Canada's economy. I shall not even invoke the Canada Year Book, which is something of an authority, for the hon. member for Peace River. But, Mr. Speaker, I think if anyone looks impartially at the various reports they will have to admit that in a troubled economic world, Canada is doing relatively well.
In a troubled political world, particularly if we call to mind the comparisons that were made after October, 1972, respecting a stable Canada and its minority government, and the great majority of the President of the United States and the successful elections of the President of France and the Chancellor of Germany, it is interesting to look back 18 months later and to see how Canada fared in political terms and that Canadians are also doing relatively well and there has been pretty sensible political stability in the past 18 months.


Some hon. Members:: Hear, hear!


Pierre Elliott Trudeau: As I was saying at the beginning of my speech, essentially I should like to show the consequences of dissolving parliament now and try to impress on the opposition and the country the effects of interrupting the business of the nation to have this expensive election of which the leader of the Creditistes spoke-interrupting the economic momentum which is making Canada a more successful economic country than other countries. And

May 7, 1974
The Budget-Mr. Gillies
interrupting all this for what reason? For the manoeuvr-ings of the opposition.
This creating of uncertainty for political reasons, the deprivation of the relief that the budget would provide to the needy, this renunciation of the tax on huge corporations is all brought forward for political motives. As I indicated in the earlier part of my speech, this has been motivated by the well defined reasons of the NDP and of the Tories. My final word on this-


Some hon. Members:: Hear, hear!


Pierre Elliott Trudeau: -is that the least we can say about this timing is that it is irresponsible. There will be other occasions later in the spring when the government can be defeated. We know that there are more opposition days coming with no-confidence votes.


Thomas Miller Bell: You had your chance.


Pierre Elliott Trudeau: It is very unusual to defeat a government on its budget. I can understand why, because even though the budget may not go as far as the expectations of the various parties, yet it does bring relief to people, it does redistribute in one way wealth from the rich to the poor; and that is why we believe this particular timing, with these pieces of legislation on the order paper, is particularly irresponsible.
There is one final effect which I neglected to mention, and that is that the election expenses legislation, which has been demanded for so long by the leader of the NDP (Mr. Lewis), has not yet been passed. Finally, when they have a chance to have an election under this new legislation, they prefer to pull the plug before we are caught up in that legislation.

Mr. Speaker, may I say in concluding in a very clear and final way that the Liberal government-and I think I said it often enough-does not want a general election at this time. We want to serve the mandate we were elected for by the people of this country and we share the opinion of the Social Credit Party in that respect.
Having said that, Mr. Speaker, I would like to add that we will look forward to the vote on the proposed amendments. We are ready for the vote on the budget. If the Tories and the NDPs want to put an end to this 29th Parliament we will make it a point to see that they answer for it before the people of this country. Not only do we undertake to show the Canadian people that the Liberal party was ready to have all measures on the order adopted, but we promise them that they will see a Liberal party ready and able to fight in an election and to lead to victory all its candidates across the country whose heart is beating, whose brains are thinking and whose hands are working for freedom and justice.


James McPhail Gillies: Mr. Speaker, I did not realize, when I first got to my feet, that I had so many friends on the other side of the House, nor did I realize that I would be making the second speech in a political campaign. At any rate, I am delighted that the Prime

Minister (Mr. Trudeau) joined in the debate this afternoon, although he did not have much to say about the budget. His participation explains a great deal about what has been going on and what has not been going on in the government. For the first half hour this afternoon the Prime Minister asked, why an election now? He said, "We have done this, we have done that. Why now?" The answer, of course, is quite clear. It is now, because the Canadian people really want something done about inflation.


Some hon. Members:: Hear, hear!


James McPhail Gillies: Having seen the budget that was brought down on Monday night, they realize that the government has neither the heart, will, courage nor the ideas to tackle the inflation problem in this country. Like hundreds of thousands of other Canadians on Monday, I waited to see what the government would do about the inflation problem. Through my mind went a variety of scenarios of things the government might try to do or suggest. Differential pricing was a possibility. Some sort of selective price controls, backed by high subsidies, such as the government has been trying in past months, might work for a time. But the one scenario that did not occur to me was that the government would come forth for another year with the same old policies and ideas and suggest that these were a modern, contemporary approach to dealing with inflation in Canada.


Some hon. Members:: Hear, hear!


James McPhail Gillies: It never occurred to me that we would again be in a budget debate in the House of Commons, after a year in which we had one of the most rapid increases in prices in the history of Canada, still trying to get the government to recognize that not all inflation comes from abroad, that we do have domestic inflation and that it is indeed a pervasive, significant, almost destructive force in Canada at the present time. The report of the Department of Finance which was tabled before the budget shows that with respect to the OECD figures which the government likes to quote, using a price deflator which the report indicates is the best measure of inflation, only one other industrialized country in the world, Japan, had more inflation last year than Canada. I certainly hope that the Prime Minister and the Minister of Finance (Mr. Turner) will not be wandering around the country saying we have had a great record in this respect. We have had a terrible record. The statistics in the government's own report, at page 31, show without doubt that the rate of increase in inflation in Canada in 1973 was higher than in England, higher than in the United States, higher than in France, and that the only country which had a higher rate was Japan, which had its problem with oil.
I used to try to figure out why the cost of living increase was about the same in the United States and Canada. I would call my friends in the United States and ask how much of their inflation came from oil price changes. They would tell me it was 22 per cent to 24 per cent. Mr. Speaker, we did not have to cope with that problem in this country. It is clear that we have inflation throughout the entire economy. It is a mistake to suggest to the Canadian people that we cannot do anything about inflation. For

some time the Economic Council of Canada has said that our goal should be to have an inflation rate not more than that of our trading partners. I have never accepted that. It is an absolute surrender to accept that sort of proposition. But the fact now is that our inflation rate is much higher than that of our trading partners.
However, the real issue is not what our inflation rate is compared with Japan, the United States or Great Britain: the real issue is what inflation is doing to hundreds of thousands of Canadians right now. They are seeing their savings destroyed because of the amount of inflation, 10 per cent this year, 10 per cent last year, and no one yet knows how much it will be this year. Hundreds of thousands of people are finding it hard to live on fixed incomes when faced with the rapid rises in the cost of living. The escalation in social security payments does not begin to compensate for increased price levels. Since last July the average hourly increase in wages has been less than the rate of increase in prices. For the first time in recent Canadian history, the average Canadian workman is falling behind because of inflation.
The Minister of Finance likes to talk about disposable income. Of course he knows it includes profits, dividends and other things. Real income is what concerns the man who is working and it is being wiped out by what is happening in our economy at the present time. The Prime Minister likes to say he is worried about what might happen to the low-income group because of some type of incomes policy. Yet he is presiding over a government that has allowed a massive redistribution of income against low-income groups because of inflation. This is a situation that is really intolerable.
Not only are individuals being badly hurt, but we are reaching a stage in this country where many of our institutions, many of the things that are fundamental for the well-being of the country are beginning to break down and be destroyed. Has there ever been a time before when industries such as the steel industry have had to open up their collective bargaining agreements in the middle of a contract to pay their employees more because inflation was so great? What will become of general collective bargaining agreements if this continues? Have we ever been in a situation in this country where the government has had to pay a bonus to people to get them to buy Canada Savings Bonds? At traditional interest rates the government has not been able to sell these bonds.
We are in a situation in which one of the most important institutions in the country, the whole institution for the channelling of savings into the investment market, is gone. Today in the stock market, price earnings ratios are as attractive, if you can imagine it, in terms of investment as at any time since the thirties, yet nobody is buying common stocks. Why? It is because no one has any faith that the government can get inflation controlled.
Clearly, we cannot ask people to pay ll'A per cent for housing loans and 14 or 15 per cent for consumer loans. Yet last night the Minister of Finance brought down a budget which, in its basic policy prescriptions, in its basic approach to inflation is precisely the same as the budget brought down a year ago; and that budget is one of the
The Budget-Mr. Gillies
massive failures in economic policy implementation in Canadian history. It was a budget that failed in any way to halt the increase in inflation in the last year.
The minister is correct when he says that the solution to inflation has to be an increase in supply. Everyone realizes that is the critical problem, although we sometimes forget that prices are set by supply and demand and excessive demand in an economy can create problems as well as can shortage of supply. But even here the logic is somewhat mixed. The minister says that our inflation all comes from abroad and we will solve it by increasing domestic supply in Canada. I do not believe we can increase our domestic supply sufficiently, Mr. Speaker, to solve the inflation problems of the world, and I am sure the minister would agree.
The critical problem, the reason that we are in difficulty in regard to inflation in this country today and the reason the policies put forth by this government will not work, is simply that the policy for increasing supply involves placing demand into the system. What we have now is an increase in aggregate demand, but the supply it is expected to generate will not be for some time. The problem is, how do you bridge the gap? Everyone knows that if supply improves, the inflationary situation will improve. But what happens in the meantime? That is why you need a policy for the short run.
It is foolish to deny that is the situation. Examine housing. In the city of Toronto prices are increasing 20 per cent to 30 per cent and the amount of new housing being constructed is equivalent to new family formations. There is no way you need increases of 20 per cent or 30 per cent to stimulate housing supply. Prices are escalating because of the decline of investment opportunities in other areas, and particularly with the rise in inflationary expectations people are investing in the real estate market. You cannot advance any reason why housing is rising as it is, except for inflationary speculation. Such price increases do little to generate more supply in the economy, and unless you are willing to deal with the problem of inflationary expectations now, no policy will work. This country is full of inflationary expectations today, creating one of the major problems of the economy. Why else is the price of gold at $200, if it is not for inflationary expectations?
The second thing that is equally true is that once you have inflationary expectations, all kinds of imperfections develop in the market. The basic premise under which the budget was brought down a year ago and under which the budget was brought down last night is that we have normal expectations and we have perfect competition in our markets. Neither is true, Mr. Speaker. As long as neither is true we will not be able to solve the inflationary problem in the economy unless we deal with the two things directly and completely. If we had perfect competition in the marketplace, one could easily see that rates of increases in profits would be equivalent to rates of increases in sales, times past profit margins, plus increasing costs and productivity changes. The present rate of increase in profits is an indication of the imperfections in the marketplace and of groups being able to capitalize on the basis of the situation as it exists now.
What is the government going to do about the situation? Ignore it? Something must be done to prevent non-com-

May 7, 1974
The Budget-Mr. Gillies
petitive situations from creating abnormal increases in prices which Eire not justified by any sort of competitive situation in the market. That is why we suggest an incomes policy-an incomes policy designed first to work against inflationary expectations and second to protect people from prices that result from the market because of lack of competition. You may say that there is a better way of dealing with this problem. I doubt it. I do not know what it is. But you cannot ignore the problem. If you are serious about solving the inflationary problem in this country, not by moderating demand but by increasing supply, you simply have to have policies to deal with the transitional phase, otherwise there will be as much inflation as we have already-10 per cent last year and 10 per cent this year. The tragedy in this budget is that it does not recognize this fundamental proposition.
I am sure no one in this House is more dedicated than my party to the proposition that the way in which we get maximum use of our resources is through a free competitive market operating under normal expectations. But we do not have that, Mr. Speaker. The real question is, how can we get to such a situation? I am desperately frightened that as long as we continue to have inflation at the rate we have we will be involved with 12 per cent interest rates and 15 per cent interest rates, the equity market not working and the decline of all confidence in the economy. It seems to me that we are going to be in for some difficult times that cannot and will not be solved by the temporary kind of band-aid or cosmetic-although I do not like those words-that the minister is advancing. We cannot solve the problems of poverty in Canada, the problems of housing, the problems of income redistribution and the problems of regional disparity until we do something about inflation. And, Mr. Speaker, we cannot do something about the inflation problem under the present policies being followed by this government. We must have a totally new approach if this problem is to be brought under control.
In this party we have never suggested-and I say this for the leader of the New Democratic Party (Mr. Lewis)- that there is any simple, easy solution to inflation. Of course there is not. It is a most difficult problem and it is not going to go away. But it is not going to be solved by the sort of policies that we have used in the past, because traditional policies do not work. For example it has been suggested that one of the ways to slow down the rate of inflation is to raise interest rates. But that does not now slow down inflation, at least not with the level of expectations that we have at the present time. Who would have thought that mortgages in Canada would command 12 per cent? Who would have thought that we would have a plethora of consumer lending at over 15 per cent, 18 per cent and up? Who would have thought that with interest rates at current levels for prime loans we would have as much capital investment as we have?
High interest rates today are not anti-inflationary; they are inflationary because they are looked on as a cost and are passed on in the price people pay for the products. The fact is, the traditional policy tools are not working. I would hate to try to speculate on what level you would have to put interest rates in this country to start an anti-inflationary movement. The government is caught in a trap. It is suggested that the rate of inflation can be

slowed down by slowing down the rate of increase in the money supply. But how can you slow down the rate of increase in the money supply when inventories, for example, have to be financed at very high prices and with money borrowed at very high rates of interest? We are caught in a very difficult situation, one which can only be solved, I suggest, by adopting substantially new approaches.


John Napier Turner: The hon. member is saying that there has to be a better way. That is the sort of speech one hears all the time.


James McPhail Gillies: I do not subcribe to the theory that inflation has been caused because, suddenly, all over the world there is a shortage of supply and suddenly the world is not producing as many goods and services as it produced in the past. If one examines the historical perspectives of inflation-the Minister of Finance mentioned this in the early part of his speech last night-one will see that inflation has come about from the great increase in world liquidity. The fact of the matter is that ever since the 1930s, and certainly since the 1940s, all governments have been willing to spend much more than they are taking in from tax revenues and other sources. They have been financing programs by printing paper money. It is as simple as that. We have seen this rate of increase in inflation and the decline in the value of currency all over the world as a result of such policies. The only way, generally speaking, to curb inflation all over the world is to bring some discipline back to government spending.
I find it incredible that in Canada, in the year in which we have inflation rates at 10 per cent, the government has increased spending by the dimensions we have witnessed. According to the budget this year, the government is to increase the tax take by 25 per cent. Yet, while taking that amount out of the economy, we are to operate with a modest deficit. One would think that if there were ever a time when expenditures might be kept down and revenues might be in surplus, that time might be the present.
The Liberal government has been operating its economic policy in the last 25 years under the modern Keynesian theory under which there is a budget deficit with slower economic activity and a surplus with higher economic activity. The fact is that the government has made no attempt at all to slow down the rate of government expenditure. Actually, never before in peacetime has Canadian government spending been growing so fast. It seems incredible to me that the government has not made a major effort to attempt to control government spending. How long can you continue to take as much out of the economy as is being taken by this government and applied to the sorts of activities which are being carried on at present, without diminishing the true productive capacity of the economy?
Surely, if there was ever a time to practice discipline in government spending, considering the rate of inflation that time is now. Governments do not exist for the purpose of collecting taxes and spending money. Governments exist to provide services for the people in an efficient and effective way. The fact is we face a very critical economic situation. There has never been as much peace-

time inflation as we are seeing at present. The government is still trying to attack it with budgetary policies which are singularly unimaginative, and is afraid to tackle the problem in any direct way. It has done nothing in terms of income policy, nothing in terms of a two-price system and nothing about controlling expenditure. Unless we do this, we will see much more inflation during the coming year than we saw during the past.


Mr. Sharp:: Mr. Speaker, may I ask the hon. gentleman a question?


An hon. Member:: Sit down.


Some hon. Members:: Oh, oh!


Mr. Deputy Speaker:: Order, please.


James McPhail Gillies: You cannot expect the Canadian people to believe or accept-nor should they-that in this country, considering our resources and energy, we must experience a rate of inflation comparable to that of other countries. The moment any government in Canada says that our rate of inflation is comparable to that of other countries, it is admitting failure. Considering the resources we have, the industrial base we have and one of the most productive agricultural communities in the world, not being able to keep our inflation rate down is totally unacceptable.
We have not seen, and I say this with great care, any imaginative approach to the problem of inflation. The government seems to believe that the economy today is operating in the same way as economies were operating in the early 1950s. Economies today are totally different. There is a change in terms of inflationary expectations in the economy. There is a change in market structures. But we are still tinkering around, thinking we can solve our problems by raising interest rates, which in themselves are inflationary, and by changing the tax structure, which can add to inflation and then wondering why inflation should be increasing and suggesting that it comes from somewhere else in the world.
If this problem is to be solved, there must be policies which recognize that if you are to use the supply increase approach and are not prepared to moderate consumer demand, you must introduce some kind of incomes policy or some policy to move the economy over the gap between the time when demand is stimulated and supply rises. If you do not bring in such programs, inflation booms, as we witnessed last year and this year. Because we lack such policies we are building all-pervasive inflation into this economy which will make ours one of the highest cost economies in the world. We are selling our products today because there is demand for our natural resources. But unless our rate of inflation is slowed down we will end up with a substantially higher cost economy than almost any of our trading partners. Will this not be tragic?
I know that government members do not believe the problem is as serious as some of us think. At least, they do not appear to believe the problem is that serious. You see, when some of our institutions are disappearing, such as the equity market, when government bonds cannot be sold because the rate of inflation is higher than the interest rate, when hundreds of thousands of people are fearful about what will happen, when people are concerned about
The Budget-Mr. Sharp
their insurance policies and about their pension programs, the country is facing a situation which needs action to bring it under control. The Canadian people have shown today, through their representatives in parliament, that they are no longer confident that the government has the imagination or the will to deal with inflation.
I listened to the budget speech last night more in sorrow than in anger because it is inconceivable that after following a policy for one year which led to our highest peacetime inflation rate, the government has come back with exactly the same sort of policy. It is absolutely incredible. The issue in this country today is inflation. It is an issue that affects everybody and is the one on which the campaign will be fought. This country needs confidence that it has a government that cares, which has imagination and which is willing to deal with inflation in a bold fashion. This government has lost the confidence of the people. It is using higher interest rates, changes in the money supply in the short run, putting a band-aid here or there to deal with inflation. The Canadian people are absolutely right in thinking such an approach will not work. What we need is a strong, new government to tackle the problem.


Some hon. Members:: Hear, hear!


James McPhail Gillies: The one thing that can give every Canadian encouragement tonight is that very soon they are going to have it.


Some hon. Members:: Hear, hear!


Mr. Deputy Speaker:: There is approximately a minute left of the time of the hon. member for Don Valley (Mr. Gillies). The Secretary of State for External Affairs (Mr. Sharp) wishes to ask a question.


Mitchell William Sharp: Mr. Speaker, I am seeking the floor.


Mr. Deputy Speaker:: For what purpose?


Mitchell William Sharp: For continuing the debate.


Mr.   Speaker-Mr. Deputy Speaker@: Order, please. The hon. member for Yorkton-Melville (Mr. Nystrom) rises on a point of order.


Lorne Edmund Nystrom: On a point of order, Mr. Speaker, I was under the impression that in rotation I was supposed to have been recognized next. Of course, I bow to Your Honour's discretion.


Mr. Deputy Speaker:: May I have about ten seconds to deal with this problem: I would like to do this properly. On reflection, the Chair will recognize the Secretary of State for External Affairs.


Mitchell William Sharp: Mr. Speaker, I listened very carefully this evening to the speech of the hon. member for Don Valley (Mr. Gillies), as did my colleagues the Minister of Finance (Mr. Turner) and the President of the Treasury Board (Mr. Drury). I was reminded of the movie "The Candi-

May 7, 1974
Adjournment Debate
date". The candidate got himself elected to office simply by saying there must be a better way.


An hon. Member:: There's got to be a better way.


Mitchell William Sharp: Yes, there's got to be a better way. I listened very carefully to the hon. member talking about the serious inflationary problems that exist in this country and around the world. I agree entirely with all those statements. In his budgetary address, the Minister of Finance looked upon inflation as the most serious problem facing this country and the world. So let us agree upon this issue. The issue is how best to deal with the problem of inflation.
We take this problem as seriously as the opposition. We have the responsibility of office. We have the necessity of bringing in workable solutions to this problem. We are not talking theoretically about the effect.


Some hon. Members:: Oh, oh!


Mitchell William Sharp: The hon. member for Don Valley said there has to be a better way. This problem is very serious. It requires some answers. I listened carefully to the hon. member for Don Valley putting forward the revised version of the Tory platform.


John Napier Turner: The current one.


Mitchell William Sharp: The current one; today's version. I have been reviewing the position taken by the hon. member for Don Valley, the Leader of the Opposition (Mr. Stanfield), the hon. member for Edmonton West (Mr. Lambert) and sundry speakers for the Conservative Party. They are characterized by one thing, their inconsistency. I looked particularly at the question of controls. It started about a year ago, with the Leader of the Opposition, persuaded by the hon. member for Don Valley, adopting the idea of over-all wage and price controls, starting with a freeze for 90 days, then maybe 120 days-


Some hon. Members:: Hear, hear!


Some hon. Members:: Ten o'clock.


Mitchell William Sharp: Mr. Speaker, I am very happy to end this part of my speech because I would like to take it up where the hon. member for Don Valley began to change the mind of the Leader of the Opposition and come back to the position put before us tonight, that of complete vagueness, inconsistency and incoherence.
May I call it ten o'clock, Mr. Speaker?



PROCEEDINGS ON ADJOURNMENT MOTION

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

Mr. Deputy Speaker:: I will give the hon. member about 30 seconds, because of the prevailing excitement, while the House clears.


David Samuel Horne MacDonald: Thank you, Mr. Speaker, for your kindness in allowing the dust to settle before we move into what can be called the last show of the late show or the late, late show. I am not quite sure who will be answering this question, but I want again to come back to the need for assistance with regard to the increasing difficulties and burden of electrical costs for the province of Prince Edward Island. I am glad I have this final opportunity, before this twenty-ninth parliament disappears into the mists of time, to raise what is a very important issue having to do with the same subject matter that, hopefully, has been the subject of discussion during this day namely, the cost of living.
Since the latter part of 1973, Prince Edward Islanders have experienced a very rapid rise in electricity prices based almost totally on the alarming rise in the cost of oil, in particular that of bunker C which is used totally for the generation of electricity on Prince Edward Island. The reason I have raised this matter on a number of occasions in this House and elsewhere relates both to the fact that there have been increases of well over 40 per cent in a six-month period, and the fact that Prince Edward Island is the only province in the Dominion of Canada that is totally dependent upon thermal-generated electricity. Indeed, if you look at the statistics for the various provinces and territories, hon. members will realize how unusual and difficult a situation the province of Prince Edward Island now finds itself in. As a matter of fact, in the whole of Canada on a percentage basis only about 2 or 3 per cent of the total amount of electricity consumed is generated by the use of fuel oil, whereas in Prince Edward Island the figure comes to 100 per cent.
Hon. members may recall that on March 28 I asked the Prime Minister (Mr. Trudeau) whether or not, following the recent meeting at Sussex Street and the agreement arrived at on a one-price system for oil, there had been any formula reached so that some equalization could occur for high-cost areas in provinces that are dependent on thermal-generated electricity. I also raised with the Prime Minister at that time the need for a long-term solution through the construction of a submarine power cable to Prince Edward Island.
I waited for some time, and again raised the matter almost a month later, on April 25, when I asked whether in fact any agreement has been reached with the provinces by way of assistance to meet rapidly rising electricity costs, or whether any decision had been arrived at regarding the proposed construction of the submarine power cable. I did receive some hint at that time from the Prime Minister that there would be an announcement with respect to some aspects of studying the question. Sure enough, Mr. Speaker, on the following day, April 26, the Minister of Energy, Mines and Resources (Mr. Macdonald) issued a press release announcing that the province of
[Mr. Sharp.}
May 7, 1974

Prince Edward Island is to receive a federal grant of $260,000 for a study which has been made on the feasibility of an electrical interconnection between P.E.I. and the Canadian mainland. He went on to say:
The Prince Edward Island study has established the technical feasibility and economic viability of a proposed submarine cable electrical interconnection from P.E.I. to either New Brunswick or Nova Scotia.
What is not stated, however, in light of the conclusion of that study, is when we might expect to have some decision as to action. If the Prime Minister wonders, as he did in his long soliloquy of despair today, why it is that this government deserves to be defeated, here is just one other example of the kind of inaction that has existed for far too many years-because the proposal for a submarine power cable did not suddenly spring fully formed out of the first ministers' conference in January; it was a long-term consideration dating back to the sixties. When in 1969 the proposed P.E.I. crossing project was scuttled, so also was scuttled the proposed submarine power cable.
If the decision is to be taken in the near future, such cable could in fact be in operation by the end of next year at a cost, I think, of not too much more than $10 million. The importance of this power cable, tying in, hopefully, to the maritime power grid, is hard to overestimate, because not only are we thinking here in terms of consumer costs, which of course are basic in this day and age of rapidly mounting inflation, but there is the hoped for expansion of secondary industry related to our primary industries of farming and fishing.
It is unfortunate that some of the electricity that may be generated either from the new nuclear power station in New Brunswick or from developing hydro possibilities either in New Brunswick or Labrador is talked of in terms of commitment elsewhere, particularly to the United States. It would seem to me to make much greater sense if the power that is generated could be available, by use of a submarine power cable, both to the residents and to the industry of Prince Edward Island.
I want in particular to point to the effect that has already occurred as a result of power costs. First of all, in comparison terms, residential electrical costs in Nova Scotia were around $13 a month. Up till December of last year they were around $15.80, or close to $16 a month, but have since jumped to $19, $19.50 and show signs of approaching well over $20, up to $25 a month, on an average basis. This gives some idea of the double hardship that exists for people on Prince Edward Island.
When the Minister of Finance (Mr. Turner) talks about alleviating the impact of inflation, he has certainly not given much consideration, nor unfortunately has the Minister of Regional Economic Expansion (Mr. Jamieson), to the continued impact of high electrical costs for the province of P.E.I. I hope that we have some answer this evening from the parliamentary secretary, both with regard to an interim formula of adjustment to equalize power costs in Prince Edward Island and, more particularly, regarding a long-term solution through the building of a submarine power cable that will satisfy the long-term electrical needs of that province.


Mr. Herb Breau (Parliamentary Secretary to Minister of Energy, Mines and. Resources):: Mr. Speaker, the hon.
Adjournment Debate
member's question relates to the possibility of subsidizing oil used for generation of power, equalizing the cost of electrical energy in Prince Edward Island, presumably with mainland New Brunswick and Nova Scotia costs, and the proposed interconnection of P.E.I. with the mainland via a submarine power cable installation.
In regard to the subsidization of oil, it is fair to say that the government has carefully considered representations by Premier Campbell submitted at the first ministers' conference in January, 1974, but is not inclined to adopt such a proposal in view of the financial burden it would impose. If such a program were to be adopted, it would be manifestly impossible to confine it to P.E.I., notwithstanding the fact that P.E.I. is 100 per cent dependent upon imported oil for power generation.
While the cost in respect of P.E.I. might be considered to be relatively modest, lying in the range of $3 million to $7 million per annum to maintain oil at $3 a barrel, versus a national or pegged price in the range of $6.50 to $8 a barrel, hence a subsidy of $3.50 to $5, the total national cost would range between $50 million and $200 million per annum. The provinces of New Brunswick and Nova Scotia would each become eligible for subsidy, New Brunswick about twice that of P.E.I. and Nova Scotia about eight to ten times that of P.E.I., and by 1976 Ontario will have an oil-fired plant in service that would command a subsidy of some $80 million on the basis of $5 a barrel.
Concerning the proposed submarine power cable, this project has been under active study over the past year and there seems little doubt that there will be a decision at an early date to proceed with the project for commissioning in 1975. This project is eligible for federal financial support to the extent of a federal loan for 50 per cent of the capital cost of the project, plus a grant of 50 per cent of the investigation study costs, a portion of which-$188,852- has already been paid to P.E.I. The possibility of additional federal financial assistance through the Department of Regional Economic Expansion is under consideration.
There is no program designed to equalize the cost of electricity in P.E.I. with the cost in New Brunswick or Nova Scotia. However, interconnection with the mainland via the proposed cable will give P.E.I. access to a source of electrical energy, including nuclear generation, that has a degree of economy, stability and security considerably greater than is likely to prevail if the island were to remain dependent upon isolated on-island generation and imported oil.


PUBLIC SERVICE-REQUEST THAT $500 SALARY INCREASE GRANTED EMPLOYEES BE GIVEN TO THOSE NOW RETIRED
Mr. Mark Rose (Fraser Valley West):: Mr. Speaker, I am pleased to be speaking tonight on what probably will amount to the coda of this parliament. I have a great nose for news, as I always come along to make my speeches when the old pundits have left the gallery, those loyal representatives of the Canadian press. If it were not for the Canadian press I do not think many speeches in this House would be recorded. I just had a small conversation with the Minister of Finance (Mr Turner) who said he could not be here but tomorrow he would read every word
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of my deathly prose. He had to excuse himself because he was up rather late last night.


An hon. Member:: Praying.


Mark Willson Rose: No, not praying. I should never want to accuse the Minister of Finance of prayer. I think probably he was receiving the accolades of the very grateful members of his party for this budget of last night. I am sure a great number of defeated Liberals in Canada were equally grateful for his budget just before the 1972 election. If he has to be at home tonight early, I understand that completely and I wish him pleasant dreams.
If we are on the eve of an election, I think in many ways it is an unnecessary one because all the government had to do was indicate it was interested in even a minor way in relieving the kind of distress that has plagued so many of the senior citizens, one might even say pioneers, of my riding. Had the government last evening indicated it was prepared to increase the old age pension and begin a scheme of lowering the retirement age from 65, this would have placed my party at least in a very difficult situation in terms of our decision vis-a-vis the budget. This, of course, has not been the case because we cannot see anything in this budget to assist the people we purport to represent. Therefore, our problem is relatively minor this evening.
Aside from this preamble, the reason I am appearing here this evening concerns a question I asked the President of the Treasury Board (Mr. Drury) yesterday. Mr. Speaker, perhaps you will permit me to quote myself. My question, which appears at page 2056 of Hansard, was directed to the President of the Treasury Board. It concerns the public servants and the government's capitulation in the anti-inflation fight which was confirmed later in the evening.
I asked whether the minister had reconsidered his position with a view to awarding this $500, which incidentally he gave to the employed public servants, equally to the retired public servants and all armed forces personnel who are also faced with the problem of inflation. If I might paraphrase the minister's remarks, he said he was sure the hon. member would recognize that the salaries and wages of public servants are not indexed, whereas the pensions of those who are retired are indexed under the Supplementary Retirement Benefits Act. I went on to say:
In spite of the swarm of gnats in the minister's words, I wonder whether the minister's answer is a flat 'no'.
I do not think the minister's answer was a deliberate attempt to mislead the House, but he said:
The answer is not a flat 'no'. It is that this is already being done.
I am grateful to the muscular member for Winnipeg North Centre (Mr. Knowles) who supplied statistics on the situation which prevails in respect of pensions applying to the people with whom I am particularly concerned, the retired members of the RCMP, the armed forces and public service. On April 1, as recorded at page 1020 of Hansard, there is a response to a question which appeared on the order paper. It is a response from the Solicitor

General (Mr. Allmand) dealing with the number of Canadian armed forces personnel in receipt of pensions.
Then on April 15, as recorded at page 1406 of Hansard, there is an answer which indicates that public servants have magnificent and generous pensions awarded to them by this government. This is dealt with in a fair amount of detail. What I would say about the public service and RCMP I think also applies to members of the armed forces. On page 1016 of Hansard it is indicated that there are nearly 42,000 retired members of the Department of National Defence. There are 42 in receipt of less than $20. I think the crucial point is that of the 42,000, 16,000 have an income by way of pension of $300 per month, which means that 26,000 retired members of the armed forces receive less than $300 a month.
I think this applies equally to the public service and to the RCMP. What I am suggesting is that when the minister says he is taking care of this through indexing, he ignores the fact that the members of the public service who are working now have, in a large measure, bargaining rights. But in addition he has given them $500 to help in the anti-inflation battle.


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


Herb Breau: Mr. Speaker, I am glad the hon. member spoke about the subject raised in his question. As the President of the Treasury Board (Mr. Drury) stated yesterday when this question was raised in the House, provision has already been made for the full escalation of pensions of retired public servants as well as retired armed forces and RCMP personnel through the amendments to the Supplementary Retirement Benefits Act which were passed by parliament last September. Previously, as hon. members will recall, the rate at which pensions were increased under that act were subject to the same ceiling of 2 per cent each year as had applied until then under the Canada Pension Plan.
The amendments introduced by this government and approved by parliament in September of 1973 provide that any increase in the consumer price index would be fully reflected in the escalation of benefits under that act in the future. In addition, the increases authorized by these amendments reflected the full change in the consumer price index since the Supplementary Retirement Benefits Act was passed in 1970, or the year in which the pensioner concerned ceased to be employed, whichever is the later. As a result of this, the new pension increases which became payable in January of 1974 ranged from 6.7 per cent for those who retired at any time in 1973 to 11.9 per cent for those who retired in 1970 or earlier.
This action by the government was the forerunner of a number of similar increases in pension made by various federal agencies with separate pension plans. At about the same time, the regulations under the Income Tax Act which have effectively limited the escalation on most private pension plans to the old 2 per cent ceiling were also amended to permit similar action by private employers. While I am not aware of many private employers who have seen their way clear to make corresponding increases

in the pensions of their former employees, it is quite clear that the government is the one that took the lead in providing for the regular annual escalation of pensions under employee pension plans in Canada in line with the cost of living.
These pensions which were increased in January will be subject to a further increase in January of next year in accordance with the change in the cost of living up to September 30, 1974. The same percentage increase will apply to those who retire this year and qualify for the pension escalation for the first time on January 1 next, while those who may have retired in previous years and who qualify for the first time next January will receive pension increases at a rate commensurate with the change in the consumer price index since the year in which they retired. The same applies, of course, to the increases provided for pensions payable to surviving widows and children of former employees and of members of the other groups as well as to former members of parliament and the judiciary, their widows and children.


GRAIN-SUGGESTED RELIEF OF PRODUCERS FROM ADDITIONAL CHARGES BECAUSE OF TRANSPORTATION AND CONTRACT DIFFICULTIES
Mr. Don Mazankowski (Vegreville):: Mr. Speaker, on April 22 I raised with the minister in charge of the Wheat Board some questions in connection with the serious charges which were levelled against Canada's transportation system by the chairman of the Canadian Wheat Board, Mr. Vogel, at the national transportation conference which was held in Ottawa on April 10. I refer specifically to the section of the chairman's statement which suggests that the farmers of western Canada, through the board, will face some exorbitant charges in costs caused by contractual default in the Wheat Board failing to meet its sales commitments caused by an insufficient supply of grain at export positions.
I want to know if this was an accurate assessment of the situation and if the minister thinks that farmers should be asked to foot the additional costs which have been incurred as a result of the failure of Canada's transportation system to meet its responsibilities. Moreover, it is fair to assume that in view of the statements which have been made by the Minister of Transport (Mr. Marchand), who admitted that the government has failed to implement an effective transportation policy, and in view of the government's failure to compel the railways to discharge their responsibility in the field of grain movement, the additional costs, and indeed the reputation of Canada as a supplier of grain on the world markets, is seriously jeopardized.
I do not believe that the farmers should be asked to meet these additional costs. Therefore, my question was put to the minister with a view to recommending or suggesting that the government seriously consider the advisability and feasibility of offsetting these additional charges in some way, shape or form.
The second point of my question was the fact that Mr. Vogel had stated that farmers are facing additional costs,
Adjournment Debate
running into hundreds of thousands if not millions of dollars, in vessel demurrage. At the time of this statement on April 10, 1974, it was indicated that 15 vessels were waiting at the port of Vancouver, with another 11 due. Today I find there are 11 ships waiting, 12 are loading and six more are due within the next week. It would be interesting to know what the story is on the additional cargo costs and whether any consideration is being given by the government to meeting these additional costs, or at least to offsetting them in some manner, particularly since the failure of Canada's transportation system, here again, has the result of insufficient supplies of grain to meet our export commitments.
To the present time, according to the latest James Richardson letter, something in the order of 120 million bushels less wheat have been exported this year compared with last year. The statement Mr. Vogel made indicates that during the railway strike last fall, 45,000 boxcars, representing 90,000 bushels, were lost. As of April 10, he indicated there were an additional 26,515 boxcars, representing approximately 56 million bushels, behind the railways' own minimum targets since January. The new targets of 10,300 cars per week will not be met until some time in May, if at all. He went on to indicate that even if the targets set by the railways are met, starting immediately, the west coast backlog will not be cleared away until the end of July.
The chairman of the board also indicates that this is costing producers untold millions of dollars in lost sales and, above all, the board has had to withdraw from future sales commitments. In addition, as I indicated earlier, Canada is rapidly losing its reputation as a dependable grain supplier. This is surely because of failure on the part of the government and Canada's transportation system to meet their obligations.
In surveying freight movements during the past year it is interesting to note that grain car loadings for 1973 were 20 per cent below the previous year. Looking at this year, we note that all rail car loadings are running at something in the order of 3 per cent less than during the corresponding period last year. This is a situation that simply has to be resolved, and until such time as it is resolved it seems to me fair to call on the government to take some measures to alleviate it, to offset the additional costs that have been incurred as a result of the transportation system's failure but certainly not through any fault of the farmers themselves. I do not believe it is fair to ask the farmers to pay for mistakes that have been made by the government and by the transportation system. Above all, they should not be asked to pay for government inaction and government irresponsibility.


Hon. Otto E. Lang (Minister of Justice):: Mr. Speaker, the suggestion of inaction or any lack in the field of transportation is a strange one and falls to the ground completely. The Canadian government has taken very vigorous action to analyse and develop programs for the transportation system in the grain handling field and has been taking the time to implement them, but only because of our view that producers and the industry must be fully consulted. We have purchased 2,000 hopper cars and have arranged to acquire another 4,000 because we know that is

May 7, 1974
Adjournment Debate
consistent with any kind of transportation system that we require.
To put the matter in perspective, it should be recognized that the railway system for four years in a row has managed to move more grain out of the country than has been produced and I am confident that it will do so this year as well. In the past three years, 200 million bushels more than the amount produced in those years has been disposed of, with the transportation system carrying the grain. In this year I am confident that we will move and transport more grain than producers have available, and the crop last year was the largest on prairie record.
It is quite clear that there were difficulties and we did not move as much grain in the middle of the winter as we had hoped. The difficulties were basically in three parts, as I have indicated. First of all, there was the strike which caused harm to a lot of innocent people-and I do not think the government could get into the position of picking up loose ends-and the problems that resulted from that. Secondly, I believe there was some neglect on the
part of the railways in not putting cars into the grain industry. It was only when the government requested them to put in the proper number of cars that we obtained action. Following that, winter conditions came upon us and snow and weather were the third cause of some delay and difficulty.
I am happy to say that at the present time, as a result of the action we took to set up an emergency committee to examine the situation, the railways are in fact putting a lot of equipment into the movement of grain and are trying to turn trains around as fast as possible, and they are catching up. We will probably again see farmers having tremendous opportunities to deliver grain between now and the end of the crop year. If there is a lot of space and delivery opportunity for farmers, then the system is working to their advantage. And now, of course, it is working to their advantage with prices at record levels. Mr Speaker, there is a very impressive record of action, not of neglect.
Motion agreed to and the House adjourned at 10.30 p.m.

Wednesday, May 8, 1974