1974-11-18

ROUTINE PROCEEDINGS


Hon. Otto E. Lang (Minister of Justice):: Mr. Speaker, I should like to table, pursuant to Standing Order 41(2), an announcement in both official languages of higher initial prices, being recommended effective Monday, November 25, for the basic grades of wheat, oats and barley purchased by the Canadian Wheat Board.


VETERANS AFFAIRS
Hon. Daniel J. MacDonald (Minister of Veterans Affairs):: Mr. Speaker, pursuant to Standing Order 41(2) I wish at this time to table in both official languages a report of a study on Canadians who were prisoners of war in Europe during World War II. I hope it will be possible in the near future to refer this report to the Standing Committee on Veterans Affairs for consideration.
Hon. members may recall that in June, 1972, the standing committee recommended that the government should arrange to have a study made to identify any physiological and psychological long-terms effects which incarceration might have had on these veterans. The government accepted this recommendation, and on January 31 of last year I announced that the study was being undertaken by Dr. J. Douglas Hermann of Ottawa. This work has now been completed. The author of the report not only offered his conclusions on the medical effects of imprisonment but also volunteered a number of recommendations. On the whole, the government considers that these recommendations should not be accepted, but is withholding its final decision until its receives the report of the standing committee.


Mr. Jack Marshall (Humber-St. George's-St. Barbe):: Mr. Speaker, I thank the minister for sending me a copy of the Hermann report following a study on Canadians who were prisoners of war in Europe. While it is quite complex and will require extensive deliberation by the Standing Committee on Veterans Affairs, we welcome it and commend Dr. Hermann for producing the facts which will
enlighten those who are concerned with the effect on the lives of Canadian veterans who suffered health defects as a result of treatment in prisoner of war camps.
I am disappointed, though, that the minister indicated in his statement that the government considers these recommendations should not be accepted but is withholding its final decision until it receives the report of the standing committee. This is the kind of promise that is not a promise. I hope that in the standing committee we can change the government's mind in view of the recommendations we will bring before parliament as a result of our deliberations.
It is significant, Mr. Speaker, that after so many years we are only finally determining, with facts, that the Dieppe prisoners of war have experienced a higher mortality rate from cardiovascular disease and other heart diseases than others, and identifying the psychological and physiological long-term effects. This emphasizes, to me, our continued responsibility toward our war veterans as long as they live.


Some hon. Members:: Hear, hear!


Jack Marshall: It is our responsibility on a continuing basis because most prisoners of war have aged prematurely and will continue to have a shorter life span than those who were lucky enough to return unharmed or who were lucky enough to remain at home. The details of the group study points out the high percentage of survivors who were forced to resort to pensions, comparative low standards of earnings and low standards of homes, with a resulting number of premature deaths.
Finally, we have a responsibility for those who returned maimed and disabled and continue to struggle to maintain a normal, reasonable standard of existence. I hope that this report will be referred to the standing committee as soon as possible so that we in parliament can continue to recommend legislation in order to fulfil our commitments to the veterans of Canada.


Mr. Stanley Knowles (Winnipeg North Centre):: Mr. Speaker, I join the hon. member for Humber-St. George's-St. Barbe (Mr. Marshall) in commending Dr. Hermann on a thorough study and an excellent report on Canadians who were prisoners of war in Europe during World War II. The study deals in particular with those who were prisoners of war following the Dieppe engagement but it also covers other prisoners of war in Europe.
However, sir, like my colleague from Newfoundland, I am deeply disappointed that the Minister of Veterans Affairs (Mr. MacDonald), even before most members have seen the report, has announced that the government considers that these recommendations should not be accepted.
November 18, 1974

Indian Affairs
For the past two years, veterans who were prisoners of war in Europe have dared to hope that because a study of their case was being made, recommendations meeting their needs would come forth and that the government and parliament would act on those recommendations.
The recommendations are very few. In the main, it is recommended that there be appropriate compensation on a continuing basis over and above all disability pensions already awarded to Dieppe prisoners of war. There is a recommendation that appropriate compensation also be granted to prisoners of war in other parts of Europe. The third and very important recommendation-it reminds me of one that was in the Woods report-calls for widows whose husbands were on less than 48 per cent pension at the time of death to be awarded pensions prorated, rather than nothing at all as is the present case. The other recommendation has to do with continued study.
It seems to me that these are excellent and appropriate recommendations. I believe they will commend themselves to members on all sides of the House. I believe they will commend themselves to veterans and veterans' organizations and that the Canadian public would want these recommendations to be accepted, and I regret that the minister has said no right off the bat. I trust that when this matter is referred to the Standing Committee on Veterans Affairs, the whips will be off, and that the committee will be free to make its own recommendations back to parliament on what is to be done as a result of this report. If this is the case, I believe the recommendation will be that the Hermann report be implemented.


Mr. Eudore Allard (Rimouski):: Mr. Speaker, I join the previous speakers in extending my thanks to the minister for having sent us the report published by Dr. J. Douglas Hermann on the facts concerning the prisoners of war.
I am convinced it is never tod late to do well and I am very happy that, at long last, some attention is being paid to the fate of those prisoners who left behind part of themselves in enemy prison camps. Once again, I am very happy to join my colleagues in working, in committee, on a bill that will allow us to alleviate the hardships of those prisoners.


INDIAN AFFAIRS
Hon. Judd Buchanan (Minister of Indian Affairs and Northern Development):: Mr. Speaker, I rise under the provisions of Standing Order 41(2) to ask your permission to lay on the table of the House in both official languages certain documents relating to the James Bay Agreement in principle which I signed on behalf of the Government of Canada last week.


INFORMATION CANADA
Mr. Mark MacGuigan (Parliamentary Secretary to the Minister of Labour):: Mr. Speaker, pursuant to Standing Order 41 (2) I should like to lay on the table two copies of the annual report of Information Canada, 1973-74 in both official languages.



NATIONAL DEFENCE


Mr. J. P. Nowlan (Annapolis Valley):: Mr. Speaker, pursuant to Standing Order 43 I should like to ask the unanimous consent of the House to move a motion of urgent and pressing necessity. This is the first such motion I have ever moved. I have an opinion about how dubious this procedure is from time to time. However, because of the subject matter I am presenting the motion at this time. I am asking for unanimous consent to move this motion of urgent and pressing necessity in \ iew of the pathetic statement made to this House by the Minister of National Defence (Mr. Richardson) on November 13, and his statement on Friday last, that surveillance of our coasts was taking place. Since sovereignty of our shores is supposed to be the top priority of our forces and present restrictions in the operations of Maritime Command have reduced our surveillance in the north to one flight every six months, next to no effective coastal patrol and no joint exercises whatsoever with our NATO allies, I move, seconded by the hon. member for Dartmouth-Halifax East (Mr. Forrestall):
That the Minister of National Defence forthwith make a statement outlining what we are not doing now, which we were doing before present financial restrictions affected defence operations, and what plans the minister has for the future, so that some purpose and commitment can replace the present mood of despair and depression which presently permeates our forces.


Mr. Speaker:: Order, please. The House has heard the terms of the motion. It being proposed pursuant to Standing Order 43 it cannot be debated without the unanimous consent of the House. Is there unanimous consent?


Some hon. Members:: Agreed.


Some hon. Members:: No.


Mr. Speaker:: There not being unanimous consent the motion cannot be debated at this time.
 * *



AGRICULTURE


Mr. Edward Broadbent (Oshawa-Whitby):: Mr. Speaker, I, too, rise under the provisions of Standing Order 43. Considering the recent severe and disproportionate action

November 18, 1974

taken by the United States government in restricting exports of beef and pork products to the United States with probable major negative effect on our producers and this coming at a time when our beef producers in particular are already undergoing severe difficulty, I move, seconded by the hon. member for Yorkton-Melville (Mr. Nystrom):
That this House instructs the Minister of Agriculture to embark forthwith on a full scale inquiry into the beef industry and to take steps immediately to set up a national beef marketing agency.


Mr. Speaker:: Order, please. The house has heard the terms of the motion. It being proposed pursuant to Standing Order 43 it cannot be debated without the unanimous consent of the House. Is there unanimous consent?


Some hon. Members:: No.


Mr. Speaker:: The motion cannot be debated at this time.



THE STATISTICS ACT


Hon. Alastair Gillespie (Minister of Industry, Trade and Commerce) moved: for leave to introduce Bill C-35, to amend the Statistics Act.


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

[Stage Direction]
(Questions answered orally are indicated by an asterisk.)

Mr. Allard: Does the government subsidize the Canadian Council of Resources Ministers and, if so (a) for how many years (b) through what department (c) what amounts were granted in 1971, 1972 and 1973 (d) did the government make a grant as capital for the Council at the time it was created or at some later stage of its development?


Mr. Len Marchand (Parliamentary Secretary to the Minister of the Environment):: The federal and provincial governments share the cost of operation incurred by the Canadian Council of Resources and Environment Ministers. The cost-sharing formula established at the time the council was created, and still in effect, requires the federal government to pay 33.3 per cent of the total annual costs, (a) Payments have been made since the council was established in 1962; (b) The payments are made through the Department of Environment; (c) 1971/72, $83,916; 1972/73, $162,504; 1973/74, $136,530; (d) No capital grants have been made to the council as such, however, additional contributions have been made toward the cost of CCREM spon-
Order Paper Questions
sored conferences. The same cost-sharing formula between federal and provincial governments was used and the following federal contributions have been made: 1965/66, Pollution Conference, $28,638; 1970/74, Man and Resources Conference, $133,200.
Note: The latter payments were made in four annual installments of $33,300 each.


VETERANS LAND ACT
Mr. Marshall: 1.	Is it the intention of the government to extend the Veterans' Land Act beyond the March 31, 1975 deadline and, if not, for what reason?
2.	Is it the intention of the government to repeal the October 31, 1968 deadline for certification under the Veterans' Land Act and, if not, for what reason?
3.	Is it the intention of the government to (a) increase the mortgage loan ceiling (b) reduce the minimum lot requirements (c) reduce the down payment (d) expand the programme to allow veterans to purchase condominiums or mobile homes (e) introduce programmes to allow veterans to improve their homes?


Daniel Joseph MacDonald: 1, 2 and 3. For the reasons indicated in my speech in the House on November 5, 1974, it is not the intention of the Government to make the changes referred to in this question.


POST OFFICE DEPARTMENT PERSONNEL IN RECEIPT OF REMUNERATION IN EXCESS OF $20,000
Mr. Herbert: How many public servants in the Post Office Department received T4 slips for 1973 showing gross remuneration in excess of (a) $20,000 (b) $30,000 (c) $40,000?


Hon. Bryce Mackasey (Postmaster General):: (a) 133; (b) Eight, (c) One.


DEPARTMENT OF ENERGY, MINES AND RESOURCES PERSONNEL IN RECEIPT OF REMUNERATION IN EXCESS OF $20,000
Mr. Herbert: How many public servants in the Department of Energy, Mines and Resources received T4 slips for 1973 showing gross remuneration in excess of (a) $20,000 (b) $30,000 (c) $40,000?


Mr. Maurice Foster (Parliamentary Secretary to Minister of Energy, Mines and Resources):: The Department of Energy, Mines and Resources reports as follows: (a) 360; (b) 31; (c) 1.


STUDY OF WEEKLY NEWSPAPERS IN CANADA
Mr. Clark (Rocky Mountain): Is the government considering the funding of a study designed to gather data about readership and advertising effectiveness of weekly and community newspapers in Canada and, if so, what will be (a) the terms of reference (b) the projected cost (c) the projected date of commencement (d) the projected date of completion?


Mr. Gaston Clermont (Parliamentary Secretary to Minister of Industry, Trade and Commerce):: The Gov-

November 18, 1974
Order Paper Questions
ernment is not considering the funding of a study of the weekly newspaper industry in Canada at the present time.


PROPOSED CHANGES IN NATIONAL ANTHEM
Mr. Schumacher: 1.	Are any changes proposed to the wording of (a) the English version (b) the French version of our National Anthem "O Canada"?
2.	In each case, what changes are proposed?
3.	Has consideration been given to restructuring the Anthem so that the meaning is the same in both English and French versions and (a) if so, what is the nature of such consideration and proposals resulting therefrom (b) if not, for what reason?
4.	Are any changes being considered in the French version to include references to our North and to our unity from East to Western seas, as are included in the English version but not in the French version at present and (a) if so, what form will such changes take in each case (b) if not, for what reason?


Hon. James Hugh Faulkner (Secretary of State):: 1. (a)
Yes. (b) No.
2.	Changes to 1 (a) are reflected in Bill C-ll tabled on October 4, 1974.
3.	Many proposals were considered by the Special Joint Committee of the Senate and House of Commons on the National and Royal Anthems. In their final report to Parliament dated February 19, 1968, it was unanimously recommended that the government be authorized to adopt the two versions as presented in Bill C-ll. For further information see "Minutes of Proceedings No. 3, dated December 8, 1967, to February 15, 1968".
4.	Answered in 3.


LETTER CARRIER SERVICE IN YELLOWKNIFE, N.W.T.
Mr. Firth: 1.	How long a delay has been granted by the Post Office Department in connection with conversion to letter carrier service in Yellowknife, N.W.T.?
2.	What, if any, would be the problems encountered by the Post Office Department if the present service were continued?
3.	What is the estimated cost of (a) implementation of letter carrier service (b) annual salaries for the necessary manpower (c) expanding the present postal facility in Yellowknife?


Mr. Raynald Guay (Parliamentary Secretary to Postmaster General):: 1. Inauguration of letter carrier service is tentatively set for May 1975.
2.	Insufficient space due to increased demands for lock boxes and inadequate space in the working area of the post office.
3.	(a) $51,776; (b) $175,168; (c) $270,000.


POST OFFICE DEPARTMENT-ASSURED MAIL SERVICE
Mr. Reynolds: Does Surrey, Richmond and New Westminster have a new assured mail service and, if so, can the Postmaster General advise when the Municipality of Delta will be going on this service?


Raynald Joseph Albert Guay: Yes. Our original plans called for assured mail service for Delta in late fall of 1974. However, during the final planning stages, it became evident that

the inauguration of this service would not be possible prior to spring 1975.


FINANCIAL ASSISTANCE TO INSTITUTE BARILOCHE IN ARGENTINA
Mr. Hamilton (Qu'Appelle-Moose Mountain): 1.	Did the International Development Research Centre provide financial assistance to the Institute Bariloche in Argentina and, if so, what were the terms, conditions and amount of that financial assistance?
2.	Will any studies, led by Mr. Amilcar Herrera, arising out of assistance referred to in Part 1 be tabled?


Mr. John M. Reid (Parliamentary Secretary to President of the Privy Council):: Mr. Speaker, the answer to the question is as follows:
1.	The International Development Research Centre made a grant of $81,000 in July, 1972 to the Fundacion Bariloche in Buenos Aires, to help a team of Latin American scientists design a mathematical world model as an alternative to the Massachusetts Institute of Technology model that was popularized in the book "The Limits of Growth". A supplemental grant of $31,500 was made in November 1973 to allow the group to complete their project and to pay, among other items, the cost of extra computer time. The funds were paid in three instalments, and a condition of the grant is the requirement that the Fundacion make a financial reporting of the expenditures incurred during each instalment period.
2.	A first progress report of the early results of the group's work was presented at a Club of Rome meeting in Tokyo in December, 1973. The work was further elaborated during 1974, and a more complete presentation made in Vienna in September, 1974. A draft report, about 80 pages long, summarizing the work and conclusions of the Bariloche group is now being revised by its Latin American authors in the light of comments from the Vienna meeting and elsewhere. The International Development Research Centre hopes to publish this document as soon as possible after its revision and, if so, it will certainly be available to members of parliament.


POST OFFICE-DUTIES ASSIGNED TO SECTION HEADS OF CORPORATE PLANNING BRANCH
Mr. Paproski: 1.	What are the (a) present salary ranges (b) official duties assigned to each of the following Section Heads in the Corporate Planning Branch of the Post Office (i) Director (ii) Planning Advisor (iii) Corporate Advisor (iv) Legislative Planning (v) Planning Research?
2.	(a) What was the actual written output produced by each of the above sections from August 1, 1973 to August 1, 1974 (b) how many of these publications (per section) were used by (i) that division (ii) other departmental divisions (iii) the public?
3.	(a) What was the overall budget for the Corporate Planning Branch of the Post Office for the fiscal year 1973 (b) what percentage of this budget was used to pay salaries for the Corporate Planning Branch of the Post Office?


Raynald Joseph Albert Guay: 1. Salary Range: (i) Director (SX-1) $25,000-$32,500. Official Duties: Directs functions of Corporate Planning Branch to ensure the development implementation and ongoing effectiveness of the corporate
November 18, 1974

planning process; coordinates the development of Post Office legislative programs; directs special assignments on behalf of the Deputy Postmaster General. Salary Range: (ii) Planning Advisor (AS-7) $23,000-$27,900. Official Duties: Makes recommendations relevant to long range plans covering all aspects of postal activities and functions; evaluates the effects of future conditions, events and changes on Departmental objectives and policies; advises senior management on action plans relevant to corporate goals and policies. Salary Range: (iii) Corporate Advisor (AS-5) $17,847-$20,245. Official Duties: Provides senior administration assistance to planning advisors; prepares analyses and evaluations of new operational concepts and courses of action; establishes and maintains an appraisal system to monitor achievement in relation to goals and plans. Salary Range: (iv) Legislative Planning: AS-5, $17,847-$20,245. Official Duties: Develops and manages a system to ensure the identification of needed new or amended statutory authority implicit in corporate plans and programs; co-ordinates the legislative research activity of Branches and Directorates; conducts special projects and studies on a wide variety of postal activities for the Deputy Postmaster General. Salary Range: (v) Planning Research (AS-1): $11,395-$13,516. Official Duties: Provides administrative services to Corporate Planning Branch; conducts studies research, review and evaluation of long-range plans; develops and maintains a book of general postal administrative information for senior postal management.
2.	The Corporate Planning Branch is a small group, whose primary responsibility is to promote, stimulate and co-ordinate the planning activities of the Canada Post Office. The documents it prepares are for the internal use of Post Office senior management, (a) Corporate Long-Range Plan; proposals for the amendment of the Post Office Act; consolidated Post Office regulations; various reports, studies and analyses of plans, programs and projects affecting different aspects of postal operations and activities, (b) (i) all; (ii) all; (iii) not applicable.
3.	Fiscal 1973-74 (a) $241,652; (b) 75 per cent.


GOVERNMENT ADVERTISING POLICY
Mr. Herbert: Will the government give consideration to a broader use of weekly and community newspapers when allocating its advertising expenditures?
Order Paper Questions


Hon. Jean Chretien (President of Treasury Board):: The allocation of advertising expenditures to various types of media is primarily a departmental program responsibility. The involvement of Treasury Board relates only to the approval of contracts if they exceed the authority granted to departments as set out in the Government Contracts Regulations. When Treasury Board approval is required, such contracts are reviewed on the basis of sound procurement practices and the attainment of best value.


OVERHAULING OF VICKERS VISCOUNT AIRPLANES
Mr. McKenzie: 1.	How many Vickers Viscount airplanes did CAE in Winnipeg overhaul for Air Canada?
2.	What was the cost to Air Canada for each Viscount overhauled at CAE in Winnipeg?
3.	What was the total amount Air Canada received from the sale to United Aviation Services Ltd. and Beaver Enterprises Ltd. (a) for the Viscounts overhauled by CAE (b) from the sale of the remaining Viscounts to these two firms?


Mr. Cliff Mclsaac (Parliamentary Secretary to the Minister of Transport):: Mr. Speaker, the management of Air Canada advises as follows: 1. Eight.
2.	These Viscount aircraft were overhauled as part of 1.3 million manhours of work performed by CAE for Air Canada since 1969. Much of this work was of a highly competitive nature and it represents a commercial agreement with a private corporation which must be considered proprietary information.
3.	Air Canada sold 24 Viscount aircraft as a total package to two private corporations which, for competitive reasons, have asked Air Canada not to divulge the purchase price.


NUMBERS OF WORKING POPULATION ORGANIZED
Mr. Lambert (Bellechasse): 1.	On June 30, 1974, what part of the working population in Canada (a) was organized (b) was not organized?
2.	At the same date, what part of the working population in each province (a) was organized (b) was not organized?


Gaston Clermont: Statistics Canada reports that: The required information is not available as at June 30, 1974; however, the following information is submitted showing the situation as at December 31, 1972.
Total	Organized2	Not Organized	Persons	Per	PerEmployed	Number	cent	Number	centTOTAL	8,345,000	2,3 77,201	28.5	5,967,799	71.5Newfoundland	149,000	34,997	23.5	114,033	76.5Prince Edward Island	33,000	4,108	12.5	28,892	87.6Noval Scotia	244,000	71,402	29.3	172,598	70.7New Brunswick	203,000	59,594	29.4	143,406	70.6Quebec	2,235,000	675,371	30.2	1,559,629	69.8Ontario	3,254,000	9 20,984	28.3	2,353,016	71.7Manitoba	372,000	97,194	26.1	714,805	73.9Saskatchewan	329,000	56,000	17.1	272,700	82.9
1390

Order Paper Questions
Total
Organized2
Not Organized
Persons	Per	PerEmployed	Number	cent	Number	centAlberta	636,000	39,758	21.8	516,242	76.7British Columbia	870,000	3 13,181	36.0	556,819	64.0Other Regions	4,312	figures not available	figures not appropriate	or not available	Source: Labour Force Survey	Source: Corporations and Labour Unions	R eturns	Act Annual Report,	Part II-1972


PASSPORTS-REQUIREMENT OF PAST MARRIAGE INFORMATION ON FEMALE APPLICANTS
Mr. Elzinga: 1.	On what occasions is a female who is making application for a passport, required to give information regarding past marriages?
2.	Is the government planning any changes to these regulations?


Hon. Allan J. MacEachen (Secretary of State for External Affairs):: 1. A married female passport applicant is required to give information regarding all marriages in order to establish: (a) citizenship, in accordance with Canadian citizenship legislation; (b) identity since the present married name could differ from the evidence of citizenship and; (c) custody and identity of children included in the application.
2. No.


RECIPIENTS OF GRANTS UNDER THE DEVELOPMENT OF MANAGEMENT COURSES
Mr. Rodriguez: What were the names of the recipients of grants under the Development of Management Courses program (DMC) in the fiscal year 1973-74, and what were the amounts paid out in each case?


Gaston Clermont: Grants	Amount
University of British Columbia	$28,000.00
Contributions
Ontario General Contractors Association	6,225.00
Atlantic Building Supply Dealers Association	7,992.35
Automotive Industries Association of Canada	5,764.66
Canadian Institute of Management	12,165.59
Canadian Industrial Communications
Assembly	18,633.45
Montreal Dress & Sportswear Manufacturers
Guild	6,089.00
Society of Industrial Accountants of Canada	21,808.00
Royal Architectural Institute of Canada	551.61
Canadian Securities Institute	11,625.00
Ontario Road Builders Association	5,062.51


$95,914.16 DREE-ASSISTANCE FOR A SAWMILL, PROCTOR, B.C.
Mr. Brisco: 1.	Has the Minister of Regional Economic Expansion received any application for assistance under the DREE program for a sawmill or wood products mill located at Proctor, British Columbia?
2.	(a) Has there been any formal application either from the Government of the Province of British Columbia or from a private firm for the establishment of such a mill (b) has the Minister received any correspondence which would indicate that the Government of British Columbia or a private firm is interested in establishing a sawmill or wood products mill at Proctor, British Columbia?


Mr. Joseph-Philippe Guay (Parliamentary Secretary to the Minister of Regional Economic Expansion):: The
answer for the Department of Regional Economic Expansion is as follows: 1. No.
2. (a) No; (b) no.


CENSUS TRACT BULLETIN, 1971
Mr. Forrestall: 1.	For what reason is the Census tract bulletin, 1971, catalogue number 95-732(CT-2B) June 1974 entitled "Halifax", when it encompasses the two Cities of Halifax, Nova Scotia and Dartmouth, Nova Scotia?
2.	Will consideration be given to naming subsequent editions "Hali-fax-Dartmouth", following the precedents of the editions titled "Ottawa-Hull" and "St. Catharines-Niagara"?


Gaston Clermont: Statistics Canada reports that: 1. For the sake of brevity, the front covers of the census tract reports of the 1971 census simply stated "Halifax", "Saint John", etc., instead of the full title "Census Metropolitan Area of Halifax" or "Census Metropolitan Area of Saint John", etc. However, the tables and maps inside the reports immediately make it clear that the figures refer to the metropolitan area as defined for census purposes.
2. When the Metropolitan Area of Halifax was first delineated for census purposes, the town of Dartmouth represented only a very small part of the total population of this metropolitan area. Its recent growth, together with annexations, is such that it now forms a significant proportion of the total, and consideration will be given to naming it the Metropolitan Area of Halifax-Dartmouth in the forthcoming 1976 census and the reports examining therefrom.
November 18, 1974


DEPARTMENT OF TRANSPORT-INDEPENDENT TRANSPORTATION ACCIDENT INVESTIGATION BOARD
Mr. Forrestall: 1.	With respect to the intention of the government to establish an internal study group to investigate the need for an independent transportation accident investigation body, indicated in answer to Question No. 2,761 of the First Session of the 29th Parliament, who are the members of this group?
2.	Are any members of this study group members of the Public Service and, if so, what positions do they hold and in what departmental administrations?
3.	Will this group consider the representations made by the Canadian Air Line Pilots Association and the Canadian Owners and Pilots Association, representing the vast bulk of Canadian pilots and owners?
4.	Will this group seek the views of the international interests involved with Canadian transportation accident investigation?
5.	Will the report of this group be made public or will it be held in secrecy and, if made public, at what time might it be expected?
6.	What are the precise terms of reference of this group?


Hon. Jean Marchand (Minister of Transport):: 1. The
independent study was conducted by Brigadier General (Retired) H. A. McLearn, Q.C., under assignment by the Justice Department.
2.	No.
3.	Brigadier General McLearn considered representations received from the Canadian Air Line Pilots Association and the Canadian Owners and Pilots Association.
4.	Brigadier General McLearn discussed the subject with international interests.
5.	The report will be released after the recommendations have been studied.
6.	To identify the respects in which existing arrangements in all modes of transport for investigations, findings, recommendations and decisions are, or appear to be, open to allegations of conflict of interest on the part of persons exercising those functions, and to examine alternative types of organization that would not be exposed to conflict of interest.


NURSES AT CAMP HILL HOSPITAL, HALIFAX, N.S.
Mr. Forrestall: 1.	As of December 1, 1973, January 1, March 1, June 1 and September 1, 1974, what was the number of vacancies for nurses at Camp Hill Hospital in Halifax?
2.	How many nurses joined the staff of Camp Hill, by month, since December 1, 1973?
3.	What was the total complement of nurses on full-time staff of Camp Hill as of each of the dates mentioned in Part 1?
4.	What is the government's official explanation for the continuing understaffing?
5.	Does this understaffing have any effect of a beneficial nature on the welfare of those persons in Camp Hill being hospitalized?
6.	What steps has the government taken to rectify this situation?
7.	What are (a) the rates of pay presently being offered nurses at Camp Hill by classification (b) the rates of pay being offered by hospitals run by the province of Nova Scotia in the Halifax area for similarly qualified nurses?


Daniel Joseph MacDonald: 1. December 1, 1973, 13; January 1, 1974, 19; March 1, 1974, 19; June 1, 1974, 22; September 1, 1974, 33.
Order Paper Questions
2.	December 1973, 0; January 1974, 6 and 4 part-time; February 1974, 1; March 1974, 2; April 1974, 2; May 1974, 2; June 1974, 4; July 1974, 5; August 1974, 7; September 1974, 29;
3.	December 1, 1973, 112; January 1, 1974, 106; March 1, 1974, 106; June 1, 1974, 103; September 1, 1974; 92.
4.	A general shortage of nurses in the Halifax area.
5.	The situation is being closely monitored to ensure that there is no deterioration in the care being provided to persons hospitalized in Camp Hill Hospital.
6.	(1) There are continuing efforts to recruit Canadian registered nurses for Camp Hill Hospital. (2) The department has hired a number of nurses from the United Kingdom for a term of four months to alleviate the shortage of Canadian nurses. (3) The Treasury Board has commenced consultation with the Professional Institute with a view to an early settlement of a new collective agreement for the nurse group.
7.	(a) Nurse 1, $8,201-$9,716; Nurse 2, $9,488-$ll,676; Nurse 3, $10,252-$12,918; Nurse 4, $11,557-$14,498; (b) To be answered alsewhere.


NEW HORIZONS PROGRAM-ASSISTANCE TO THE AJAX SENIOR CITIZENS RADIO PROGRAM
Mr. Orlikow: 1.	What was the total amount of money allocated under the New Horizons Program to the Ajax Senior Citizens Radio Program, Ajax, Ontario?
2.	What were the names of individuals associated with this project who received moneys in excess of $100?


Miss Coline Campbell (Parliamentary Secretary to the Minister of National Health and Welfare):: 1. $10,377.
2. No payments in excess of $100.00 were made by the group to any individual among the participants or directors of the project.


CATALOGUE NUMBERS-INFORMATION CANADA PUBLICATIONS
Mr. Herbert: For what reason are unilingual French or partly bilingual publications of Information Canada identified by a catalogue number ending in "F" while there is no corresponding identification letter "E" for those in the English language?


Hon. John C. Munro (Minister of Labour):: In so far as Information Canada is concerned, the answer is as follows; The letter "F" following the alpha-numeric catalogue number on the publications of the Government of Canada is added to differentiate the French edition from the English edition of the same work, both bearing the same catalogue number.


TARIFF CHARGES BETWEEN UNITED STATES AND CANADA ON FARM MACHINERY
Mr. Schellenberger: Are there any tariff charges presently existing between the United States and Canada on farm machinery and farm machinery parts and, if not, will the Minister of National Revenue launch an investigation in
28543-20)4

November 18, 1974
Order Paper Questions
order to determine for what reason indentical farm machinery and farm machinery parts cost more in Canada than in the United States even when discounted transportation charges are considered?


Hon.   Ron. Basford@Minister of National Revenue: Imported farm machinery and parts thereof, designed for use in the pursuit of agriculture, are admissible free of duty. Discrepancy in costs of farm machinery and parts in Canadian and foreign markets was one of the points examined by the Royal Commission on Farm Machinery. The final report of the Commission was submitted in March 1971.


NATIONAL ENERGY BOARD-PUBLICITY AND INFORMATION EXPENDITURES
Mr. Symes: 1.	What were the amounts of money spent by the National Energy Board on publicity and/or information in each of the fiscal years 1972-73 and 1973-74?
2.	What were the names and addresses of firms and individuals who received these contracts, what amounts of money were spent in each case and what was the purpose of each contract?
3.	In the case of expenditures for publicity and/or information made within the Department by its publicity or information division, what was the amount in each case and the purpose of the expenditure?


Maurice Brydon Foster: 1. 1972-73: Publicity and Information, $4,073.03; 1973-74: Publicity and Information, $24,039.92.
2.	1972-73: John Doherty & Co. Ltd., 46 Elgin Street, Ottawa, received $466.52 for handling the printing of notices of hearings. 1973-74: John Doherty & Co. Ltd., 46 Elgin Street, Ottawa, received $10,748.26 for handling the printing of notices of hearings. Ardiel Advertising Agency Limited, 4 Lawton Blvd., Toronto 7, received $5,745.20 for handling the printing of notices of hearings.
3.	1972-73, $3,606.51; 1973-74, $7,546.46.
Purposes: Annual Report-English and French: Interprovincial Pipeline maps: Reasons for Decision Trans-Canada Pipelines: Westcoast Transmission maps: Wascana and Dome maps: Interprovincial Pipeline report: Trans-Canada Pipelines maps: Report to Governor in Council- Dome: Maps-Cochin.


FRENCH TEXT BOOKS FOR STUDENTS
Mr. Gauthier (Ottawa-Vanier): In what location and on what date will the meeting of the Secretary of State with provincial ministers of education be held on the preparation, publication and distribution of French text boods for primary and secondary school students belonging to official linguistic minorities?


James Hugh Faulkner: The
Department of the Secretary of State is convening a one-day meeting of officials of provincial departments of education on Monday, November 25, 1974 at the Government Conference Centre in Ottawa.


DEPARTMENT OF TRANSPORT-CONTRACTS WITH LAPOINTE TRANSPORT LTD.
Mr. Grafftey: 1.	What transport contracts have been awarded by the Department of Transport to Lapointe Transport Ltd., 105 Industriel Blvd., Longueuil, Quebec, since January 1, 1972?
2.	What was the amount of the contract in each case?
3.	Were public tenders called in each case and, if not, for what reason?


Jean Marchand: 1. None.
2.	Not applicable.
3.	Not applicable.


DEPARTMENT OF VETERANS AFFAIRS-CONTRACTS WITH LAPOINTE TRANSPORT LTD.
Mr. Grafftey: 1.	What transport contracts have been awarded by the Department of Veterans Affairs to Lapointe Transport Ltd., 105 Industriel Blvd., Longueuil, Quebec, since January 1, 1972?
2.	What was the amount of the contract in each case?
3.	Were public tenders called in each case and, if not, for what reason?


Daniel Joseph MacDonald: 1. None.
2.	Not applicable.
3.	Not applicable.


MINISTRY OF STATE FOR URBAN AFFAIRS-CONTRACTS WITH LAPOINTE TRANSPORT LTD.
Mr. Grafftey: 1.	What transport contracts have been awarded by the Ministry of State for Urban Affairs to Lapointe Transport Ltd., 105 Industriel Blvd., Longueuil, Quebec, since January 1, 1972?
2.	What was the amount of the contract in each case?
3.	Were public tenders called in each case and, if not, for what reason?


Hon. Barney Danson (Minister of State for Urban Affairs):: 1. None.
2.	Does not apply.
3.	Does not apply.


DEPARTMENT OF NATIONAL REVENUE-CONTRACTS WITH LAPOINTE TRANSPORT LTD.
Mr. Grafftey: 1.	What transport contracts have been awarded by the Department of National Revenue to Lapointe Transport Ltd., 105 Industriel Blvd., Longueuil, Quebec, since January 1, 1972?
2.	What was the amount of contract in each case?
3.	Were public tenders called in each case and, if not, for what reason?


Hon. Ron Basford (Minister of National Revenue):: 1.
None.
2.	Not applicable.
3.	Not applicable.

November 18, 1974


QUESTIONS PASSED AS ORDERS FOR RETURNS
Mr. Howie: 1.	Since January 1, 1973, what persons were permitted to cut wood on lands under the control of CFB Gagetown?
2.	How much wopd did each person cut and how much money was paid to the Crown for such cutting rights?
Return tabled.


NATIONAL MUSEUMS AND NATIONAL GALLERY EXHIBITIONS IN NORTHERN ONTARIO SINCE 1968
Mr. Symes: 1.	Since 1968, what federal funds have been expanded in Northern Ontario on the subsidizing or construction of (a) art galleries (b) museums (c) exhibition centres and in what places?
2.	Since 1968, what exhibits have been circulated in Northern Ontario by the National Museums of Canada and in what places?
3.	Since 1968, what archaeological digs have been sponsored in Northern Ontario by the National Museums of Canada?
4.	Since 1968, what exhibits have been circulated in Northern Ontario by the National Gallery and in what places?
5.	What publications relating to art or artists in Northern Ontario have been published by the National Gallery?
6.	What historic sites or restoration projects have been funded or subsidized by the government in Northern Ontario since 1968?
Return tabled.


PROFESSIONAL SERVICES TO CANADIAN INTERNATIONAL DEVELOPMENT AGENCY
Mr. Murtro (Esquimalt-Saanich): With reference to the answer to Question No. 224 of the Second Session of the 29th Parliament which of the companies figuring in the list of consultants provided, were awarded consulting contracts during the fiscal years 1968-69, 1969-70, 1970-71, 1971-72 and 1972-73, whether for capital projects or by way of technical assistance contracts?
Return tabled.


Right Hon. J. G. Diefenbaker (Prince Albert):: Mr. Speaker, I placed a question on the order paper, starred question No. 760, on November 5. It is a very simple question. What is the total strength of the armed forces, how many are engaged in office or administrative duties, and how many hold the rank of corporal. A period of 13 days has gone by, and I wonder whether the minister has forgotten the armed forces or does not have this information. I suggest that starred questions should be answered more expeditiously. This delay indicates the attitude of the department.


Mr. Heath Macquarrie (Hillsborough):: Mr. Speaker, I have a question regarding my question No. 39 dated September 30 regarding the sale of munitions from this country. An identical question was raised on April 8 in the last parliament. I am appalled at the possibility that we are selling so much abroad that it takes seven months even to get an invoice.


Mr. John Reynolds (Burnaby-Richmond-Delta):: Mr. Speaker, I should like to bring to your attention question No. 2 on the order paper regarding the seizure of 20 pounds
Oral Questions
of heroin. It appeared on the order paper on September 30 and it was also asked in the last parliament. I should like also to refer to question No. 4 regarding Tofino Fisheries Limited and the ARDA program which was also brought up in the last parliament. I hope that the government will see fit to answer those questions quickly.


Mr. Cossitt:: A point of order, Mr. Speaker. I should like again to draw the attention of the hon. parliamentary secretary to questions Nos. 53 to 61 asking for information pertaining to local initiatives programs grants in the ridings of nine cabinet ministers. I raised this question a few days ago and I wonder if the parliamentary secretary is now in a position to say exactly when the information will be forthcoming.


An hon. Member:: Never!


Mr. Horner:: Mr. Speaker, I rise on a question of privilege which affects all members of the House and the work of the House. This afternoon the minister in charge of the Canadian Wheat Board, the Minister of Justice (Mr. Lang) tabled a price list outlining the increase in the initial price for wheat, oats and barley in a brief statement which I think should have been made on motions. It has been the practice in the past to make such statements on motions so that the House and the whole country may know exactly the amount of the increase in the initial payment. This gives an opportunity to members of all parties in this House to comment on the increase and to ascertain whether the government will be able to get the wheat needed to fill sales commitments as a result of the price increase. I think this practice of just tabling a statement like this should be brought to your attention and to the attention of the House; it should not pass unnoticed. In the past such statements have been made on motions and members of the various parties have had the opportunity to reply.


Some hon. Members:: Hear, hear!


Otto Emil Lang: Mr. Speaker, I shall be glad to check this for the hon. member but it is my memory that this is exactly the procedure that has been followed previously.


John (Jack) Henry Horner: No, it is not, only by you, Otto.


Mr. Speaker:: Oral questions.



ORAL QUESTION PERIOD


Hon. Robert L. Stanfield (Leader of the Opposition):: Mr. Speaker, my question is directed to the right hon. Prime Minister and arises out of the announcement made by the United States government of quotas on beef and

Oral Questions
pork. Can the Prime Minister inform the House what his government's response will be and whether it intends to make a protest?


Right Hon. P. E. Trudeau (Prime Minister):: Mr. Speaker, we envisage raising the matter in the forum of the GATT, but at this time no specific decision has been taken. The Minister of Agriculture returned from Rome only over the weekend. The matter is before a group of my colleagues and this afternoon we will study the situation and advise what action should be taken.


Robert Lorne Stanfield: A supplementary question, Mr. Speaker. Since the action was telegraphed to some extent I thought perhaps the government would have prepared itself to take action. In view of the length of time that a GATT would presumably take, can the Prime Minister tell the House if the government intends to take any action in the meantime to ease the position of the pork and beef industries, particularly in view of the difficulties already faced by certain aspects of our beef industry. Is it the government's intention to provide any help to the livestock industry immediately in view of the difficulties it faces?


Pierre Elliott Trudeau: Mr. Speaker, it is because of the concern of the government for this and other aspects of the matter that we are studying it most urgently. If I had an announcement to make today it would have been made but I repeat, we are looking at it and will take whatever action is best for the Canadian people.


Robert Lorne Stanfield: A further supplementary, Mr. Speaker. Is it the intention of the government to establish an independent inquiry into the beef industry as has been suggested from time to time by the Minister of Agriculture and would it be the government's intention to delay any decision on interim aid at least to the beef industry and the livestock industry in general until such inquiry is completed?


Pierre Elliott Trudeau: Mr. Speaker, the matter of the inquiry was discussed on the eve of the departure of the Minister of Agriculture. Now that he has returned we will be looking at the work that has been done in his absence and will decide what action should be taken.


UNITED STATES QUOTAS ON BEEF AND PORK-LINKING OF CATTLE WITH TRADE IN OIL
Mr. Gordon Towers (Red Deer):: Mr. Speaker, my question is for the Minister of Energy, Mines and Resources. Is the minister prepared to tie in a certain number of livestock with a certain amount of oil in trade with the United States?


Hon. Donald S. Macdonald (Minister of Energy, Mines and Resources):: Mr. Speaker, that is a very novel and interesting suggestion which I shall consider.


UNITED STATES QUOTAS ON BEEF AND PORK-REPRESENTATIONS BY MINISTER TO UNITED STATES
Mr. Bert Hargrave (Medicine Hat):: Mr. Speaker, my question to the Minister of Agriculture is supplemental to

that asked by the Leader of the Opposition. In view of President Ford's week-end Washington announcement of retroactive United States quotas on Canadian cattle, beef, hogs and pork, which are based on a single 12-month period from March 31, 1973 to March 31, 1974, a period which clearly distorts our traditional trading pattern with the United States, and in view of Canada's quota policy applying to the average of the last five-year period, will the minister indicate if he intends to advise Washington of the facts of the total U.S.-Canadian cattle picture as indicated by Canadian cattlemen at the Washington hearing a short time ago; and, in particular, will the minister suggest, hopefully in his own special way, that while our Canadian cattle industry can be hurt by this new quota policy, we will not be intimidated.


Mr. Speaker:: Order, please. The hon. member ought to know that he has the right to pose a question, but when he goes on to tell the minister what the answer must be, I think he is in the area of argumentative questioning. In any case, as the question was addressed to the minister, the minister may want to answer.


Hon. E. F. Whelan (Minister of Agriculture):: Mr. Speaker-


Some hon. Members:: Hear, hear!


Eugene Whelan: -we have not had time to analyse fully the action which the United States of America has taken. I am fully aware of what the Canadian cattlemen said in their presentation at the hearing and I agree with them. The government delivered a statement to the United States government telling it what we thought about these proceedings, etc. Mr. Speaker, I will be in a better position, possibly tomorrow, to answer the hon. member's question in a more detailed form. I should be able to say what action this government intends to take.


UNITED STATES QUOTAS ON BEEF AND PORK-EFFECT ON CANADIAN MARKET
Herbert Thomas (Bert) Hargrave: Mr. Speaker, may I direct a supplementary question to the Minister of Agriculture. In view of the 10 to one ratio of the respective cattle and human populations of the United States and Canada, and in view of the current oversupply situation of fat cattle in the United States, our Canadian position being very current, does the minister not agree that under present conditions the lifting of the Canadian quota and DES regulation will not resolve the current United States market price problems but that this could have a disastrous effect on our own cattle market structure.


Eugene Whelan: Mr. Speaker, I have said before that I think our quota system and our actions concerning DES were both responsible and fair, and I stand by that statement.
November 18, 1974


UNITED STATES QUOTAS ON BEEF AND PORK-REPRESENTATIONS TO UNITED STATES ON EFFECTS ON INDUSTRIES IN BOTH COUNTRIES
John Edward Broadbent: Mr. Speaker, may I direct a question to the Prime Minister. Does the government intend to communicate with the United States government on the subject of beef, and make clear that the United States government's policy of dollar for dollar retaliation, of limiting imports to inflict a $100 million damage in retaliation to our $100 million quota, will have disproportionate effects on the industries of both countries in view of the relevant strengths of the industries in the two countries and, therefore, as meaningful counteraction the American action is entirely unfair, especially if that country wants to maintain good trading relationships with a neighbouring country?


Pierre Elliott Trudeau: Mr. Speaker, as the House knows, we hoped that the United States would take no counteraction at all. As to the figures put forth by the hon. member, of course they will be pointed out to the United States.


UNITED STATES QUOTAS ON BEEF AND PORK-SUGGESTED REVIEW OF OIL AND GAS EXPORTS TO UNITED STATES
John Edward Broadbent: Mr. Speaker, may I direct a question to the Minister of Industry, Trade and Commerce along lines of one asked earlier. His reply seemed to be facetious. I will direct it to him, and hope that he considers it in the sense in which it is asked. Assuming that the reaction of the American government in limiting beef and pork exports to that country is unjustified, in view of the relevant scales operation of those industries in the two countries, can the minister inform the House whether our government will seriously take into consideration the review of our oil and gas export commitments to the United States.


Alastair William Gillespie: Mr. Speaker, I made no reference to oil and gas, or cattle and oil and gas. I think the hon. member is referring to another question put to another minister.


John Edward Broadbent: Mr. Speaker, I inadvertently referred to the Minister of Industry, Trade and Commerce. I, of course, meant to direct my question to the Minister of Energy, Mines and Resources. I wonder if he would answer that question.


Donald Stovel Macdonald: Mr. Speaker, I must apologize to the hon. member. I thought he was directing the question to my colleague and I did not follow it.


John Edward Broadbent: Mr. Speaker, as usual, one member of cabinet does not know what another member is doing.


Some hon. Members:: Oh, oh!


John Edward Broadbent: May I ask the minister if his department will react to this unfair action by the United States by reviewing our current policy for exporting gas and oil to the United States and giving serious consideration to reducing that commitment.
Oral Questions


Donald Stovel Macdonald: Mr. Speaker, I am confident that the reaction will be a total government reaction, after close and intimate consultation on this question in the cabinet.


INDUSTRY
Mr. Adrien Lambert (Bellechasse):: Mr. Speaker, I should like to put a question to the Minister of Industry, Trade and Commerce.
In view of the difficulties experienced in the Quebec lumber industry, and especially in my area, may I ask the minister whether or not he has received representations from sawmill operators concerning those difficulties and ensuing lays-offs? If so, will the minister introduce measures to help that industry and protect the workers?


Alastair William Gillespie: Mr. Speaker, we have had representations from sawmill operators from both sides and the centre of Canada. At present this matter is under discussion between myself and my cabinet colleagues. When I have further information to give the House, of course I will give it.


MANPOWER
Joseph Adrien Henri Lambert: Mr. Speaker, I should like to put a supplementary question to the Prime Minister.
Concerning the great number of dismissals in the sawmill industry, he answered last week to my colleague from Richmond who asked him if supplementary estimates would be granted to the Local Initiatives Program for the creation of jobs during the winter that he would discuss the matter with the Minister of Manpower and Immigration. I would like to ask the Prime Minister today whether he is in a position to tell the House if supplementary estimates will be granted to LIP?


Pierre Elliott Trudeau: No decision has been taken to that effect, Mr. Speaker. If we must take a decision, we will announce it to the House in the usual manner.

November 18, 1974
Oral Questions


AGRICULTURE
John George Diefenbaker: Mr. Speaker, my question really is supplementary to some already asked, and is directed to the Minister of Agriculture, whom I welcome back to this House. I join with others in that. When he was in Rome he spoke in a way Canadians understood, and I appreciate that.


Some hon. Members:: Hear, hear!


John George Diefenbaker: I am not speaking about the actual embargo, because this government has known for weeks that it would happen, and it did not come as a surprise. During the last month or so, with cattle prices plummeting and production costs rising, farmers in some parts of our country have become virtually desperate. I have been to Alberta and found everywhere this feeling. Will the minister, in his desire to give agriculture a fair deal, do his part in having declared at the earliest possible date a minimum, basic price for beef, after which the government should pay to the farmers an allowance equal to the difference between that basic price and the price that today is being received, a price which is far below the cost of production. The consumer, of course, is receiving none of the benefit of these low prices. Will he do that and preserve the beef industry which, today, is in an even greater panic than it has been during the past two weeks as a result of the action by the United States, the danger of which can be overdrawn in its effect. I believe that action will add little to the price situation, or otherwise. I ask, what will the minister, under such government action, do to assure farmers who are producing beef of a fair and proper return?


Eugene Whelan: Mr. Speaker, I am sure the right hon. gentleman knows that I cannot tell the House exactly what the government intends to do. But I can tell him this: We shall be discussing this later this afternoon, as well as several propositions I have to bring forward.


UNITED STATES QUOTAS ON BEEF AND PORK-PRIOR REPRESENTATIONS TO UNITED STATES ON IMPORTATION OF PORK-GOVERNMENT ACTION
Mr. Bill Jarvis (Perth-Wilmot):: Mr. Speaker, my question, too, is directed to the Minister of Agriculture. It is related to the beef and pork issue. In the light of events which took place in Washington at the United States trading policy conference, on October 25, which clearly indicated that the United States government was being persuaded to take action with respect to the importation of hogs, not just beef, would the minister tell us what representations he or his departmental officials have made to their counterparts in the United States subsequent to that meeting on October 25 and prior to last week's announcement with regard to the United States position on the importation of Canadian pork products?


Eugene Whelan: The
action the Canadian government took concerning quotas was within our trading agreement-within GATT. We never suspected, or, at least, I did not, that any action taken by the United States would be outside the GATT, but from what I know now it appears they have taken such action. We were under no impression that the United States would take this action. We knew they would be requested to take it but we did not think they were going to take it.


William Herbert Jarvis: In the light of the minister's answers to previous questions today, would he tell the HoUse whether he proposes to take immediate steps to protect the hog industry as well as the beef industry, since the hog industry will be particularly hurt unless appropriate steps are taken?


Eugene Whelan: The actual damage is now being assessed. We shall be getting a full report from our officials later today. Our action will be determined by that information; we shall have to go on from there. There could be further consultations with the United States on the matter. As the hon. member knows, we had several consultations in Rome with the United States Secretary of State and, though it may amaze some people, we are still on speaking terms.


UNITED STATES QUOTAS ON BEEF AND PORK-REQUEST FOR ACTION TO PROTECT CONSUMERS AND PRODUCERS
Mr. James A. McGrath (St. John's East):: Is it the minister's intention to meet immediately with his United States counterpart on this matter in view of the short term consequences of the U.S. decision to Canadian cattle producers and in view of the long term consequences to Canadian consumers.


Eugene Whelan: My concern has been, and always will be, both for the consumers and for producers, whether cattle producers or producers of other food products. This is the very thing we have in mind when presenting legislation to the House designed to stabilize the livelihood of food producers so as to give them a reasonable return for their efforts and enable them to provide food at reasonable prices. Our officials will be in touch with United States officials tomorrow. I know that some of them are making inquiries today to clarify points in the document the President of the United States has signed. They are asking these questions and I am meeting with them later on this afternoon. I cannot tell the hon. member for sure what I shall do.


ALLEGED DROP IN EXPORTS-GOVERNMENT ACTION TO COUNTERACT
Hon. George Hees (Prince Edward-Hastings):: Mr. Speaker, my question is addressed to the Minister of Industry, Trade and Commerce. Does the minister intend to treat as a serious matter the 6 per cent drop in the volume of Canadian exports during the first nine months
November 18, 1974

of this year as compared with the 10 per cent real growth in industrial world exports as reported by GATT recently? Does he intend to do something constructive to correct this situation? Or does he intend to treat it in the same light-hearted manner as shocked the annual meeting of the Canadian Exporters' Association recently?


Alastair William Gillespie: I have tried on various occasions to describe the various ways in which we are supporting the Canadian export effort. I have personally led three trade missions to various markets of the world; the Prime Minister has visited half a dozen countries. Clearly, the government is doing everything it can, through trade missions, through amendments to the Export Development Corporation Act and through the program for export market development, to assist Canadian exporters to find new markets and compete internationally.


George Harris Hees: Since it is very obvious from the minister's performance that Canada is not measuring up to the record of other industrial nations, and since the trade missions are not producing the results intended, will he get on with the job which should be done, and which he is paid to do, instead of running around the world and accomplishing nothing?


AGRICULTURE
Mr. Don Mazankowski (Vegreville):: A question to the Minister of Agriculture supplementary to previous questions which have been posed with respect to the beef industry. In the light of the warning issued by the Food Prices Review Board to the effect that Canadians could experience a serious beef shortage next year unless action is taken to encourage producers to withhold breeding stock from slaughter, is the minister actively considering a program of incentive payments which will encourage producers to maintain adequate breeding stock by ensuring them that at least a portion of the costs incurred by them will be covered?


Eugene Whelan: I can only give the hon. member the same answer as I gave to the right hon. member for Prince Albert. We are considering several different programs at the present time.


INDIAN AFFAIRS
Mr. Wally Firth (Northwest Territories):: Mr. Speaker, I wish to direct a question to the Minister of Indian Affairs and Northern Development arising from the recent James Bay settlement. Since the position of the native people of Northern Quebec with regard to land claims is
Oral Questions
vastly different from the claims of those in the Northwest Territories, and taking into account the hydro-electric project being carried out, can the minister assure the House that the Northern Quebec settlement will not be used as a precedent or model for settling land claims in the Northwest Territories?


J. Judd Buchanan: I do not think there is any doubt that the agreement is, in fact, a precedent, dealing, as it does, with the first large, modern, comprehensive land claim. However, I have frequently endeavoured to stress that each region is different, each situation is different as the hon. member indicated, and that settlements will accordingly vary from region to region; and that the interests of the people concerned will also vary.


JAMES BAY SETTLEMENT-PROTECTION OF INTERESTS OF METIS AND NON-STATUS INDIANS
Walter (Wally) Firth: Mr. Speaker, have the interests of Metis and non-status people in Northern Quebec been protected under the terms of the announced settlement?


J. Judd Buchanan: I believe there are, roughly, 200 non-status people involved in the area concerned in northern Quebec.


FINANCE
Hon. Marcel Lambert (Edmonton West):: Mr. Speaker, I should like to direct my question to the Minister of Finance. Would the minister advise the House whether the reduction in the bank rate announced by the Bank of Canada on Friday was made after consultation with the minister, and, if so, will he say whether this is part of the climate for the budget which is to come tonight?


Hon. John N. Turner (Minister of Finance):: The Governor of the Bank usually consults me about movements in the bank rate. He consulted me on this occasion; of course, he has the prime responsibility for the movement of monetary policy. He stated clearly in his release explaining the decision that it was responsive to market forces and to the movement of short term interest in the United States in the last two or three weeks. It also had particular relevance to the termination of the Canadian Savings Bond issue.


AGRICULTURE
Mr. Paul Yewchuk (Athabasca):: Mr. Speaker, I have a supplementary question for the Minister of Agriculture.

Oral Questions
Since the hon. gentleman appears to regard himself as the Messiah of Canadian agriculture, can he tell the House what he is advising beef producers to do at this time? Should they increase their production or cut back?


Mr. Speaker:: Order, please. The hon. member for Dart-mouth-Halifax East.


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


Mr. Speaker:: The hon. member for Athabasca is rising on a point of order.


Paul Yewchuk: The minister wanted to answer the question I asked, which is a very important question to the beef producers of this country.


Mr. Speaker:: Whether the minister wanted to answer it or not, and regardless of the importance, it is not in order.


NATIONAL DEFENCE
Mr. J. M. Forrestall (Dartmouth-Halifax East):: Mr. Speaker, I want to ask the Minister of National Defence, first of all, whether or not we have any contingency plans in place to remove troops from the Middle East, including Cyprus, though separating the two, and is it the view of the government that given the nature of our supporting role, any premature removal of our troops prior to renewed open hostilities might not constitute a negative contribution to further stability in that area?


Hon. James Richardson (Minister of National Defence):: Mr. Speaker, in answer to the first question, we do have contingency plans for evacuation from all places where we have peacekeeping personnel-Cyprus, Egypt, Syria and Israel. In reply to the second question, I would agree that a premature withdrawal from the peacekeeping role would be disadvantageous, but that is really hypothetical.


Paul Yewchuk: Mr. Speaker, I rise on a question of privilege.


Mr. Speaker:: The hon. member for Athabasca is rising on a question of privilege.


Paul Yewchuk: I am sorry to be interrupting the question period once again, but I fail to understand why the question that I have put to the minister, which dealt with a matter of basic government policy, is not in order. I think we are entitled to know why.


Mr. Speaker:: I am sure that the hon. member realized that is not a valid question of privilege. However, I may add that the reason for holding the question out of order was that, as I recall, the hon. member asked the minister not only for an opinion, which itself is out of order, but in addition asked what the minister would advise farmers to
[Mr. Yewchuk.)
do at the present time. This would call for a very lengthy answer and, in addition, would call for an expression of opinion. His question was specifically: Would the Minister of Agriculture tell the House what he would advise western farmers to do at this time? In those circumstances, it called both for an opinion and for something other than a specific point of information from the minister.


IMMIGRATION
Mr. Claude Wagner (Saint-Hyacinthe):: Mr. Speaker, I would like to direct a question to the hon. Minister of Communications.
Following his weekend promise to intervene with his colleagues and the Prime Minister, in respect of the Haitians problem, in order that legalism give way to humanitarian sentiment, could the minister report to the House on the success of his eleventh hour representations?


Hon. Gerard Pelletier (Minister of Communications):: Mr. Speaker, I do not believe that the premises of the hon. member's question are consistent with the facts. I do not believe either that the situation is at the eleventh hour, and finally I do not believe it is appropriate to answer the House to questions dealing with internal discussions held within the Cabinet.


Claude Wagner: Mr. Speaker, I have a supplementary question.
Considering the negative answer he has given would the Minister of Communications advise the House whether he feels bound by the decision taken by his colleague the Minister of Manpower and Immigration?


Gérard Pelletier: Mr. Speaker, I don't know what decision the hon. member is referring to, since several have been taken on that problem. However, if the hon. member for Saint-Hyacinthe wants to refer to the statements I made, he will see they are within the spirit of the law, the spirit of the government's action and the compassionate position the government has tried to adopt in respect of Haitians and will endeavour to find better means of incarnation, if possible.


ENVIRONMENTAL AFFAIRS
Mr. John A. Fraser (Vancouver South):: Mr. Speaker, my question is directed to the Minister of the Environment. Can the minister confirm whether the deputy minister of the environment is retiring shortly and will be engaged in a private consulting business specializing in northern pipelines?
November 18, 1974


Hon. Jeanne Sauve (Minister of the Environment):: Yes, Mr. Speaker, the Deputy Minister of the Environment will reach retiring age at the end of December. I am not aware of the type of work he will undertake after retiring.


John Allen Fraser: A supplementary question, Mr. Speaker. On November 1, the Minister of Energy, Mines and Resources said in the House, with regard to the Berger commission, as reported at page 966 of Hansard for that day, that:
-there are other documents, for example cabinet proceedings and other proceedings of that kind, which while not covered by statute, have traditionally been regarded as confidential to the executive.
Would the minister tell the House what is being done to ensure that that sort of information is not, directly or indirectly, made available by the retiring deputy minister, in his future private business, to those parties interested in the proceedings before the Berger commission or, ultimately, before the National Energy Board?


Jeanne Sauvé: Mr. Speaker, I suggest that, although he will have left the Public Service, the Deputy Minister of the Environment, who may have had knowledge of certain documents during his tenure, will feel that he is still bound by his oath of secrecy.


EFFECT OF PROPOSED PLANT TO SUPPLY ENRICHED
Miss Flora MacDonald (Kingston and the Islands):: Mr. Speaker, my question is for the Minister of Energy, Mines and Resources. In view of the Prime Minister's remarks in Paris last month that an enriched uranium plant, to be built in conjunction with the French government, is under discussion for the James Bay area, can the minister say whether any assessment has been made of the impact that a Canadian project to supply enriched uranium to western Europe could have on the sale of our CANDU reactors that utilize a competing system and to which the government has already devoted so much financing?


Donald Stovel Macdonald: Mr. Speaker, we have to recognize that all but a small percentage of the reactors now in operation in the world today, and which will be in operation for many years to come, are ones using enriched uranium, are light water reactors, rather that the CANDU system. In this sense Canada has an opportunity if we choose to be, as we are, both a major exporter of uranium and an exporter of technology in the form of CANDU.
With regard to the question of an enrichment facility, the government by no means has accepted the concept that such a facility should be established in Canada. The hon. member may recall that we set out an elaborate set of guidelines which any applicant for such facility-at that time it was Brinco-should meet in terms of bringing an
Oral Questions
application before the government. I think we would want to make an assessment, in this case with the province of Quebec, whether over $1 billion and 2,000 megawatts of power are best used for uranium enrichment or, rather, put to better use in other activities in Canada.


Flora Isabel MacDonald: A supplementary question, Mr. Speaker. In light of the fact that discussion is now going on with regard to the establishment of an enriched uranium plant, and in light of our previous experience of exporting nuclear fuel and technology, would the minister say what safeguards and restrictions on the use of a nuclear component are being planned with regard to the export of enriched uranium?


Donald Stovel Macdonald: Mr. Speaker, as I said to the hon. lady, there is no commitment of any kind that there will be enriched uranium for export from Canada. In general terms, whether we are talking of natural uranium, enriched uranium-if indeed we should have that in due course-or nuclear technology, either in research form or in the form of nuclear reactors, we are following the standards set internationally by the International Atomic Energy Agency, though certainly there are more rigid standards which we would on a bilateral basis impose upon the contracting parties who buy any one of these commodities. Perhaps this is not the time to talk about this in detail, but I would be glad on another occasion, and perhaps in a committee of the House, to go into this question at some length.


CONSUMER AFFAIRS
Mr. Andrew Brewin (Greenwood):: Mr. Speaker, I have a question which I want to address to the Minister of Consumer and Corporate Affairs. The minister is quoted as having said outside the House that talk on future sugar supplies had been held with the Cuban ambassador, but, the Cuban embassy has issued the statement that up to this point no negotiations whatsoever have been started or conducted. Would the minister explain to the House the apparent discrepancy between these two statements and say whether in fact talks have been held on the subject of reaching an agreement regarding sugar imports from Cuba, or whether in fact they have not been held.


Hon. Andre Ouellet (Minister of Consumer and Corporate Affairs):: Mr. Speaker, I am grateful to the hon. member for giving me the opportunity to clarify this point. It is clear that my statement has been greatly expanded; all I said in reply to a question is that I had had talks with the Cuban ambassador. I was seeking the information I needed to better intervene with my colleagues.


Francis Andrew Brewin: Mr. Speaker, in view of the great importance to Canada of expanding its exports to Cuba and the

November 18, 1974
Oral Questions
necessity of Cuba being able to expand its exports to Canada so that it will be in a position to import more from Canada, will the minister see that these talks referred to are in fact expedited and take place as quickly as possible?


André Ouellet: Mr. Speaker, it is clear that if such discussions are to take place, they will be held with the minister in charge and not with me. Which does not prevent me, however, from looking further into this and obtaining as much information as possible.


SUGAR-DATE OF STATEMENT ON POLICY RELATED TO PRICE INCREASES
Mr. J. R. Ellis (Hastings):: Mr. Speaker, I should like to ask the Minister of Consumer and Corporate Affairs this question. In view of what he has told the House perhaps he would like to clear up a statement he made to me two weeks ago that we would have to wait for a policy with regard to the increasing price of sugar, which is still going up in price, and indicate when may we expect that statement on policy?


André Ouellet: Very shortly.


VETERANS AFFAIRS
Jack Marshall: Mr. Speaker, in view of the fact there will be great disappointment resulting from the statement that the government does not accept most of the recommendations of the Hermann Report, does the Minister of Veterans Affairs intend to rectify some of those inequities by introducing amendments to the disability pensions as we have done with war veterans allowances?


Daniel Joseph MacDonald: Mr. Speaker, this involves a matter of policy, and if it is decided that this should be done it will be announced in due course.


Jack Marshall: Mr. Speaker, in view of the fact that one of the recommendations denies to widows of prisoners of war the right to have their pensions increased to 48 per cent in order that widows would qualify for death benefits, would the minister indicate to the House if he is considering the recommendation of the committee on the question of Hong Kong veterans, to bring those pensions of veterans who were forced out of the labour force to 100 per cent?


Daniel Joseph MacDonald: Mr. Speaker, this is now under scrutiny by our department and we will have some information on it at a later date.


NORTHERN AFFAIRS
Mr. Erik Nielsen (Yukon):: Mr. Speaker, I have a question for the Minister of Indian Affairs and Northern Development in connection with the application of revenues from fuel export tax which benefit the federal government, and which are being applied in the reduction of fuel costs to other Canadian consumers. Are any discussions now underway between the minister and officials of the territorial government in respect of the application of some of these moneys to the reduction of fuel costs, particularly home heating fuels north of the 60th parallel in the Yukon and Northwest Territories? If there are such discussions underway, when can northerners expect some relief from the extraordinary high cost of home heating and other fuels being imposed upon them now?


J. Judd Buchanan: Mr. Speaker, there are discussions going on in this area, and I have had discussions with the Commissioner of the Yukon, but as yet there is no determination as to how we can find an effective method of reducing their fuel costs.


EXTERNAL AFFAIRS
Mr. Sinclair Stevens (York-Simcoe):: Mr. Speaker, in light of the fact that the Canadian delegate is expected to speak during the United Nations Palestine debate this week, and possibly within 48 hours, is the Prime Minister now in a position to inform the House what will be the official Canadian position taken at the United Nations regarding the Palestinian Liberation Organization proposal for a Palestinian state?


Pierre Elliott Trudeau: Mr. Speaker, no official position on whether we would speak has as yet been made, but if we are to speak at the United Nations during this debate I can assure the House that the House will be informed of the substance of that statement.


Sinclair McKnight Stevens: Mr. Speaker, is the Prime Minister aware that at the time of Mr. Yasser Arafat's gun-toting arrival at the United Nations assembly one of the government supporters, the hon. member for St. Denis, found it necessary to join other member nations delegates in a standing ovation and, if he is aware of that, does he agree with this representative from Canada who chose to so endorse Mr. Arafat?


Pierre Elliott Trudeau: Mr. Speaker, if the hon. member will refer to Hansard of a few days ago he will see that the Secretary of State for External Affairs was asked a question along similar lines and gave an answer which I believe had to do with applause meters.

November 18, 1974


ADMINISTRATION OF JUSTICE
Mr. Dan McKenzie (Winnipeg South Centre):: Mr. Speaker, my question is directed to the Solicitor General, and I might say that I have given him notice. As the RCMP has begun an investigation of a suspected embezzlement at the Fort Garry Hotel in Winnipeg, will the minister report on the investigation and indicate if any charges have been laid?


Hon. Warren Allmand (Solicitor General):: Mr. Speaker, that investigation is under the jurisdiction of the province of Manitoba.


A. Daniel McKenzie: Mr. Speaker, as the hotel is under the jurisdiction of the minister, has the Minister of Transport launched an investigation int^ the charge that there are poor accounting procedures at the Fort Garry, and other CNR hotels, and has he investigated the charges made by a former hotel employee which I have forwarded to him?


Jean Marchand: Mr. Speaker, I would like to hear the argument which would justify the assertion that hotels are under my jurisdiction. I am not aware that they are.


John Allen Fraser: Mr. Speaker, I rise on a question of privilege concerning an answer given to the House a moment or two ago by the right hon. Prime Minister wherein he said that no decision had been made to speak during the Middle East debate. Through you, Mr. Speaker, on behalf of members of this House I suggest there seems to be some inconsistency between the remarks of the right hon. Prime Minister today and the answer given to me on Thursday, November 14, when the Secretary of State for External Affairs said in response to my question as to whether Canada would take part in this debate:
Yes, Mr. Speaker. I think it is certain there will be a statement by a Canadian representative before the close of the debate.
In view of that, I ask the right hon. gentleman to clarify for this House what the position really is.


Mr. Speaker:: Order, please. As the hon. member well knows, questions about inconsistencies or comments on the quality of answers received which may be the subject of debate have scarcely any precedents whatsoever as grounds for a question of privilege. However, the House having heard the hon. member, I feel that before finally coming to a decision on the matter it may be appropriate to hear a comment from the opposite side.


Pierre Elliott Trudeau: Mr. Speaker, I would gladly attempt to clarify the matter. It appears that it had been the intention of the Secretary of State for External Affairs to have a statement made on behalf of the Canadian delegation, but it was not certain whether he would make it himself or have someone make it on his behalf. If the latter is to be the case, the minister proposes to make his statement in the House around the same time. These were the plans which were laid but they were not absolutely decided upon and it would depend on the nature of the statement
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itself. The intention was as the minister indicated, but I am not saying there will be no change.


ENVIRONMENTAL AFFAIRS
Mr. J. R. Holmes (Lambton-Kent):: Mr. Speaker, my question is for the Minister of the Environment and relates to recent studies originating in the United States and the Netherlands which suggest a link between the use of chlorinated drinking water and various forms of cancer. I should like to ask whether similar studies have been conducted in Canada, particularly in our industrial areas and, if so, what are the results of these studies? Will the minister also indicate if she will undertake with her Canadian counterparts in the provinces a thorough review of the present standard of water for human consumption and report the findings to this House?


Jeanne Sauvé: Mr. Speaker, the quality of drinking water is a matter of very great concern around the world and we are conducting a number of different studies in respect of this particular subject. I cannot say at this particular point if the aspect the hon. member has mentioned is the subject of any particular study, but I will inquire.


INDUSTRY
Mr. Yvon Pinard (Drummond):: Mr. Speaker, I have a supplementary for the hon. Minister of Trade and Commerce.
In view of the difficulties being experienced by the textile industry, particularly in my region, where more than 150 workers have been dismissed these last few days by two companies, can the minister tell us whether he intends to take special measures to correct the situation and improve that sector of the industry?


Alastair William Gillespie: Mr. Speaker, I met with the labour-management committee of the textile industry on Friday last week. At that time I indicated to them I was going to refer, I think perhaps 8 or 9 textile products, to the textile and clothing board for urgent examination.


Mr. Speaker:: Order, please. Orders of the Day.


John Patrick (Pat) Nowlan: I rise on a point of order, Mr. Speaker. I have two points of order. The first applies to myself directly and also the business of this House. The second refers to my colleague the hon. member for Athabasca (Mr. Yewchuk). Taking that question first, Mr. Speaker, I

Oral Questions
would ask Your Honour since when are general questions of a government policy as to whether it is government policy to change its policy out of order. In other words, as I understood it the hon. member for Athabasca asked the Minister of Agriculture whether it was government policy to still stimulate and increase beef production or to cut it back. I think that question must be seriously considered by all members of the House and by Your Honour so that the time during the question period is not complicated and confused in respect of deliberations between members and the Chair. I think this is a very serious point.
The question was very specific and dealt with government policy. The whole election campaign was fought on the basis of increasing production in all facets of the agricultural economy and here we have a situation where a specific question is put to the minister and Your Honour rules it out of order. That is my first point of order.


Mr. Speaker:: Order, please. I do not know how I can construe the hon. member's intervention except by way of some sort of suggestion that further consideration ought to be given to a decision that the Chair has already taken or that the position somehow ought to be reconsidered or reversed. In the light of the change in the regulations of the House which abandons appeals from the Speaker's rulings I do not know how I could possibly consider the hon. member's remarks as being in order.


Some hon. Members:: Hear, hear!


John Patrick (Pat) Nowlan: Mr. Speaker, I am just as aware, if not more aware, than members opposite of the rules of the House. I fully appreciate, and I am not challenging, the ruling of the Chair on this particular issue, except that for future questions on orders of the day I think we need some clarification concerning how far members on this side can go in asking direct specific questions of ministers on government policy. I think the question of my friend from Athabasca fell within the ambit of whether there is to be a change in government policy because of the changes which occurred in Washington over the weekend. Mr. Speaker, if we cannot explore that type of question, then the question period is even more castrated than a lot of members feel it is at the present time. That is my only question on that point. I have felt this way for some time.


Some hon. Members:: Oh, oh!


John Patrick (Pat) Nowlan: Any member opposite who groans, if he would open his eyes as wide as his mouth, would know that the Committee on Procedure and Organization for the last eight years has been trying to review the procedures of the House, and the question period, in order to make the question period more relevant and a heck of a lot more constructive than perhaps it is at the present time. At any rate, Mr. Speaker, that is my first point of order. I sincerely and seriously ask the Chair to say why a specific question relating to government policy-whether it is still government policy to increase or decrease production- falls flat before the Chair.
My second question of privilege is not as fundamental. It is a little more personal. The Minister of National defence gave a statement on defence on motions on Wednesday, November 13, in this House. I tried to get your

Honour's eye on November 13, and again on November 14. Today, because of the gravity of the situation which is affecting the armed forces of this land and because of the apologist for defence who happens to have the clothes of the Minister of National Defence, I moved, for the first time in my life in this Parliament after nine years, a motion under the terms of Standing Order 43. I stated at the time to Your Honour that frankly I thought motions under Standing Order 43 should be reviewed and substantially altered if they are to make any sense in this House. My direct question to Your Honour on my second point of order is: is it now Your Honour's direction from the Chair that a member who moves a motion under Standing Order 43 will not be recognized by the Chair, because up until now almost every member-


Mr. Speaker:: Order, please. I find a great difficulty in taking the hon. member's point seriously in respect of being recognized during the question period. To be specific with regard to a reply to the hon. member's remarks, which I find difficulty to put in conformity with any point of order, it seems to me that it was only Thursday or Friday of last week that the hon. member was recognized on a supplementary question on the subject of national defence and declined to pursue the matter.
Under the circumstances I find great difficulty in taking the hon. member's point seriously.
Orders of the day.


John Patrick (Pat) Nowlan: Mr. Speaker, I rise on a point of privilege and demand to be recognized.


Mr. Speaker:: The hon. member for Annapolis Valley rises on a question of privilege.


John Patrick (Pat) Nowlan: Mr. Speaker, I have been as reasonable as any member of this House but I must say there is something wrong with the auditory system between this chair and Your Honour's chair when on my second point of order I was asking specifically if in the future Your Honour was not going to recognize members who moved motions under Standing Order 43 which might have an expeditious result in respect of the business of this House so that many members who wish to move motions under Standing Order 43 in abundance will know they will not have a chance to be recognized by Your Honour from the Chair.
That is the reason I am asking as a second point of order whether it was just an accident or coincidence that three days elapsed before I was able to get Your Honour's eye or whether it is to be a future policy of Your Honour not to recognize members who move motions under Standing Order 43 on the basis-as has been argued before the Committee on Procedure and Organization-that if a member has the floor of the House under Standing Order 43 he is taking up perhaps too much of the time of the House under Standing Order 43. That is another argument which I sometimes recall.


Mr. Speaker:: For the benefit of the hon. members who may be interested in the point, I am sure an examination of the record will amply demonstrate that on several days in this session members who have risen in their places to put motions under Standing Order 43 have also been
November 18, 1974

recognized in the same question period. Some days they have and some days they have not. The Chair has absolutely no firm and fast policy in any respect by way of a connection between motions under Standing Order 43 and the question period.


A. Daniel McKenzie: Mr. Speaker, I rise on a question of privilege with regard to the question I put to the Minister of Transport (Mr. Marchand). I am sorry he has left, but I see that his parliamentary secretary is here. He recognized my question on October 18 with regard to the embezzlement charges at the Fort Garry Hotel. As the Solicitor General (Mr. Allmand) has pointed out today this has been put in the hands of the Attorney General of Manitoba. I understood the Minister of Transport today to say that this is not under his jurisdiction. I should like to point out that the Fort Garry Hotel is part of the CN chain and is the direct responsibility of the Minister of Transport. When public charges are being made I challenge the Minister of Transport to make the statement that this is not in his jurisdiction. I should like the parliamentary secretary to bring this to his attention and I would appreciate an answer just as soon as possible concerning what he is doing in respect of the embezzlement charges at the Fort Garry Hotel.


Mr. Speaker:: Order, please. Orders of the day.



GOVERNMENT ORDERS


Hon. Mitchell Sharp (for the Minister of Finance) moved: that Bill S-7, to authorize federal trust companies and loan companies to increase the monetary limit of their borrowing power and to issue subordinated notes, as reported (without amendment) from the Standing Committee on Finance, Trade and Economic Affairs, be concurred in.


Marcel Joseph Aimé Lambert: Mr. Speaker, I do not wish to delay this item of business but I should like to draw to the attention of the House the fact that there is one provision in the bill which I think should be drawn to the attention of the public.


Mr. Speaker:: Perhaps the hon. member would wait until we proceed to third reading. Is it the pleasure of the House to adopt the said motion?


Some hon. Members:: Agreed.


Mr. Peters:: On division.


[Stage Direction]
Motion agreed to.
Mitchell William Sharp: that the bill be read the third time and do pass.
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Marcel Joseph Aimé Lambert: Mr. Speaker, I should like to read the following clause from page 7 of the bill. It is merely to emphasize what I think is advertised time and time again with regard to trust companies. It reads:
(16) Notwithstanding the Canada Deposit Insurance Corporation Act or any bylaw made thereunder, money received by a company Irom the issue of a subordinated note or by way of a subordinated shareholder loan shall be deemed not to be a deposit for purposes of that act.
There are far too many people in this country who, when they see an advertisement with regard to a guaranteed deposit of a trust or loan company, believe that the investment is guaranteed as to repayment. We have had some unfortunate incidents in the past where that has not been so. The only guarantee is that the obligation is guaranteed as to the rate of interest that will be paid. I am glad to see this provision in the bill, and I hope that trust companies will emphasize that any investment under a guaranteed certificate is not guaranteed as to payment under the Canada Deposit Insurance Corporation Act. That is all I have to say on this bill.


Mr. Speaker:: Is it the pleasure of the House to adopt the said motion?
Motion agreed to and bill read the third time and passed. [DOT] * *


PRAIRIE GRAIN ADVANCE PAYMENTS ACT
Otto Emil Lang: that Bill C-10, to amend the Prairie Grain Advance Payments Act, be read the second time and referred to the Standing Committee on Agriculture.
He said: Mr. Speaker, the cash advance legislation has been an important part of the available means for farmers to obtain cash in the prairies apart from actual delivery opportunities. At the time the legislation was first introduced there were long delays in the delivering of the farmer's crop to the Canadian Wheat Board. We were in a situation for a number of years where the whole of the farmer's crop could not be delivered during the course of the crop year. The situation has changed considerably and in that regard we have been going through a period of years, including this year, when quotas have opened rather rapidly and indeed to very high levels during the course of the crop year. At this point, for instance, although we are only several months into the crop year there is not only a significant quota on all grades of wheat but the quota for the top grade is in fact open, so that farmers have a tremendous delivery opportunity.
Notwithstanding this, the cash advance legislation should not be neglected, and in our view should be kept in tune with the possible needs for important cash early in the season in advance of delivery opportunities. Indeed, it should be noted by the House that the commitment to increase the maximum in the cash advance legislation from $6,000 to $15,000 was part of the over-all review of our feed grain policy and the introduction of the opportunity for farmers to deliver their feed grains and wheat,

November 18, 1974
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oats and barley to the domestic market without delivering them to the Canadian Wheat Board. At that point we wanted to emphasize that while the farmer should have that opportunity-the choice to deliver domestically outside of the board or, particularly for export purposes, to the board-we wanted him to make a judgment on the basis of the merits of the two opportunities and not on the basis of cash pressure in the event he wanted to deliver to the Canadian Wheat Board.
In the case of deliveries to the board, the farmer receives an initial price for his wheat which does not represent its total value. In the case of the open market, he normally receives the full value that he would receive for the grain and he must compare an immediate, full cash price with another price which may well be greater but which will be partly cash and partly a payment to be made in due course when the various circumstances which affect the market have had their play and the Wheat Board is able to determine the total balance of the pool and make a distribution to the farmers. It may be noted that on occasion the initial price and the total receipts of farmers have differed fairly widely, although ordinarily final payments have been fairly modest. Just today I indicated in a notice to the House that initial prices were being increased effective Monday, November 25, to recognize the current buoyant circumstances of prices for wheat, oats and barley. We are increasing the levels of these initial prices to those in effect in the last crop year from March 1 until July 31.
In the case of No. 1 CW, and in the case of barley, we are raising the prices specifically to those levels. In the case of oats, we are introducing a 10 cent increase in the initial price, which will make it 10 cents higher than was the case in the latter part of the last crop year, in recognition of market conditions in regard to oats. I should emphasize, in passing, that the prices announced today are for the basic grades only. The actual prices for the other grades, the differential for Durum, the differential for grades in tough and damp condition, and all the differentials for other grades except these base grades will be announced within the week as determined on the recommendation of the Canadian Wheat Board, having regard to all the circumstances that affect these various grades and conditions. They may well vary in degree in the increase in those initial prices from the increase in the base grades that have been announced.
This bill is relevant to the feed grain policy because it will assist the farmer by providing cash advances, thus allowing him to receive a portion of the cash he will be entitled to when he delivers his grain later to the Canadian Wheat Board and to receive the cash advance without at that point having a quota to deliver on. To the extent that need for cash would otherwise be a pressure upon him to deliver to the open market, whether his judgment leads him there or not, that pressure is removed by these cash advances. It was with this in view that we thought the level of the advances should be raised in terms of the maximum per producer. When the program was introduced, the maximum was $3,000 for producers. Several years later it was doubled to $6,000, and now we propose to increase it to $15,000.
These are simply advances on the amount of money that farmers would otherwise receive upon delivery of their

grain, but they are made as though they are payments in advance and for that reason they are, generally speaking, interest-free. The cash, therefore, is in the hands of the farmer as though he had a delivery opportunity early in the season, rather than later. Cash advances will always be less useful or necessary, I suppose, when the farmer's cash receipts are higher and therefore he has cash available and is in a better position to meet his needs. The current cash position in the grain producing area is extremely favourable. Hon. members will have recently noticed figures for the whole of Canada which show that farmers' cash receipts are up to more than 43 per cent in the first nine-month period of 1974.
They will have noticed, too, that in the province by province analysis the greatest increases have taken place in the prairie provinces. Saskatchewan leads the way with cash receipts which have moved to $1.93 billion for the nine-month period, from $1.02 billion for the corresponding period a year earlier. That is an increase of approximately 90 per cent for Saskatchewan, over what I believe was itself a record. If one were to take grain figures alone, this situation would be further emphasized. Indeed, it is demonstrated by the way in which the Saskatchewan- and, to a lesser degree, Alberta and Manitoba-figures of cash receipts for farmers perform during the same period. Farmers may, nonetheless, require cash earlier in the delivery year because of the necessity to obtain supplies, such as fertilizer, for the fall and the following season. Even in such a buoyant year, cash advances may be an element in the over-all farm picture. This increase is therefore proceeded with at this time notwithstanding the buoyant position.
On at least one occasion in the past, cash advances were used as a form of stabilization. Several years ago, when delivery opportunities fell to their lowest ebb, cash advances were allowed to exceed the actual amounts that could be recovered on them. Our decision to proceed with a logical and full-scale stabilization program for grains in the prairie region means that this will no longer be necessary. The increase is desirable, however, for other reasons, particularly to allow the farmer to have his cash in advance of delivery opportunity and therefore to balance the fact that this cash is available to him in full in the open market.
The bill increases the maximum available for an individual farmer from $6,000 to $15,000. It also permits recognition of the fact that in certain circumstances more than one person per permit is engaged in full-time farming. The new limit of $15,000 will, therefore, be multiplied by two or by three, as the case may be, where there are two or more real farmers represented by the permit book.
Cash advances have had an extraordinarily good record of repayment by farmers who have benefited from them. In many past years, 99.99 per cent of cash advances were repaid in due course by farmers in the prairie region. This is an outstanding record and I know it will not surprise those hon. members who are conscious of the attitude of the farmers in question and know their willingness to co-operate in plans which they can see are for their benefit.
November 18, 1974

This legislation was proposed in the last part of the previous session of parliament before dissolution. At that time it would have been possible to introduce the higher maximum for the current crop year. The dissolution of parliament and the ensuing election rendered that impossible, but we hope the legislation will be passed now and will be in operation for the next crop year. I think it is an important part of our over-all endeavour to protect the prairie farmer and to give him a total system of cash and returns to meet his needs, not only in terms of the amount of that remuneration but in terms of the time period in which he will receive it.
Mr. Speaker, I therefore commend Bill C-10 to the House and invite hon. members to refer it to the Standing Committee on Agriculture with dispatch for examination in detail. I think this has been recognized on all sides of the House as an extremely useful program for prairie farmers.


John (Jack) Henry Horner: Mr. Speaker, in rising to take part in the debate on Bill C-10, I must say that I was interested to hear the minister explain the reason for the bill. It should first be pointed out that cash advance legislation was introduced by the government of the right hon. member for Prince Albert (Mr. Diefenbaker) some 15 or 16 years ago. The hon. member for Qu'Appelle-Moose Mountain (Mr. Hamilton) suggests it was 17 years ago, and I believe that is correct. It is interesting to note that the Liberal Party has had a change of heart in the interim period.
At the time the legislation was introduced they said this could not be done, they would not do it, and if it was ever done it would cost the companies huge sums of money, the farmers would not pay it back, and so on. They violently opposed this legislation at first. Now they are enlarging it and the minister gave two reasons for this. I will paraphrase what he said, Mr. Speaker. First of all the minister said that cash advance legislation must be updated. Well, it must keep up with inflation. The cost of production has been going up, and I am pleased to see the government recognizes that. By increasing the cash advance limit from $6,000 to $15,000, the government acknowledges that inflation plays a part.
The minister said that the other purpose of this legislation was the cash pressure on the farmer to sell his grain on the open market. I have come to the conclusion that this is the main reason the legislation is before the House today. Last year the government introduced a feed grains policy which allows the farmer to sell grain to either the Canadian Wheat Board or to the elevator companies. That grain is kept on the open market; it is bought at whatever the going price is and sold at the going price. The minister says this legislation is necessary in order to avert the cash pressure on the farmer to sell on the open market. It is my understanding that grain companies are to keep 10 per cent of their storage capacity open for feed grains on the open market.
The minister also spoke about the increase in the initial price. Members on this side of the House have long advocated the setting of the initial price based on a formula related to the expected price. I have used the figures of 75 per cent to 80 per cent. In other words, the initial price should be 75 per cent of the final price. The minister has played around with the figures for the beginning of
Grain
this crop year, but in fact at the end of the 1972-73 crop year the initial price received was $3.75 per bushel of wheat, basis Fort William; $2.25 per bushel of barley, basis Fort William; and $1.10 per bushel of oats, basis Fort William. The announcement made by the minister today merely reinstates the initial price for wheat and barley and adds ten cents per bushel to the price of oats.
The minister has not followed any formula in setting initial prices, and this bill does not guide farmers. The original intent of the cash advance legislation was to provide cash to farmers who had about one billion bushels stored on the farm. The farmer who operated under the acreage or permit book system could go to the elevator company and receive a cash advance of up to $3,000. Subsequently, the amount was raised to $6,000 but the basic principle of the legislation was not changed. The cash advance program eased the pressure on the farmer who was short of cash. Under this bill, the government wishes to encourage farmers to sell through the Wheat Board and not on the open market. The government is saying, "We do not want you to sell on the open market. Sell through the Wheat Board and we will give you a cash advance."
Cash advance legislation was introduced 17 years ago for justifiable reasons. It is to be reinstated on the statute books, but this time it is designed to offset the weak feed grains policy which the minister introduced about one year ago. So let's not kid the troops. This is not the same old cash advance legislation, and the minister knows it. The amount of grain in storage on farms at the end of the 1973 crop year does not compare with the amount in storage 17 years ago. Today, farmers are not worried if they can sell grain or get cash for it. The minister has told the House about the number of farmers who deferred collecting money due to them from grain sales made this fall. He did not tell us how much money the Wheat Board is holding back in deferred payments. I suggest that the board is holding back about $500 million in deferred payments which farmers could collect if they wanted to. But the minister did not mention that. The announcement made today reads:
With the higher initial payments, Mr. Lang also announced that an adjustment payment will be made to all those producers who have already delivered wheat, barley and oats to the Canadian Wheat Board since the beginning of the current crop year on August 1, 1974-
Mr. Lang said that these payments from the Canadian Wheat Board will be in the mail to producers after the processing required, probably after the mailing of the cheques for the 1973-74 pool accounts in January.
The minister said he would not make final payments on 1973-74 pool accounts before January 1. Two years ago, when the minister found it politically expedient to do the opposite, he did so. At one time, final payments were never made before January or February. In the year of the October 30 election the minister said that the pool accounting system could be speeded up and payments made on August 1, before the end of the crop year. Now the minister has changed his mind and has said no final payment will be made on the 1973-74 pool account until January next because farmers are worried about income tax; that is, the payment on grain already delivered will not be made until January.

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Even those who know absolutely nothing about farming should realize that if the final payment on the 1973-74 crop year is not made until the 1974-75 crop year, it may look as if initial payments have been increased. Actually, all that will have happened is that certain payments have been deferred; farmers will receive deferred payments for crops they have sold. Quite conceivably, such deferred payments could amount to between $400 million and $500 million next year. So one can see what happens when farmers do not pick up all their money. The question is, why is the minister pretending that this new legislation merely updates the former cash advance legislation, when he knows that we need to correct the situation created by his feed grain policy? I think the minister is worried about that policy. I ask the minister to consider the fact that the companies are buying feed grains at an alarming rate on the open market and this is undermining the government's policy of encouraging farmers to hold their grain and sell it through the Wheat Board in return for the privilege of cash advances.
When he introduced the legislation this afternoon the minister did not say if the amount per bushel advanced is to be increased, or how cash advances are to be paid back. When the minister introduced his first proposal covering cash advances, I prophesied that farmers would draw money out more quickly than they could pay it back. I said that the fund would not work. A year of so later the minister adjusted the program. I gather that under the present program there is to be no change in how much a farmer may have advanced to him. There is to be no change in the amount a farmer can receive as an advance and there is no change in the manner in which it is to be paid back. Therefore, we must examine the concept of the policy the minister is introducing.
For many years, if a family farm corporation worked under one permit book it was entitled to a cash advance as a single entity. Now, each member of the corporation, if it is a partnership or co-op, can borrow up to $15,000. This means that two shareholders, or farmers, can receive up to $30,000 in cash advances. Three or more shareholders, or partners, can receive up to $45,000. Clearly, a corresponding amount of grain must be sold. Thus, the minister has changed the permit book system substantially and the practice followed over the years is to be changed. I suggest that the minister has brought forward this legislation as a result of faults which have developed in his feed grains policy.
We have experienced many difficulties in grain production and in agriculture and the minister has done little to help. He made a great speech to the Grains Council a month ago suggesting that the Crowsnest pass rates should be done away with. Doing this, he said, would facilitate the movement of feed grain at a cheaper rate. How he arrives at that conclusion would be difficult to explain. In any case, it is now well established that farmers are not delivering their grain to the Wheat Board. They are withholding it for a variety of reasons: one has to do with income tax; and another is that they want to determine what they are likely to get for it on the open market as feed.
Recently a number of farmers asked me how best they could sell their barley, whether to sell it on the open market or through the Wheat Board. They wanted to know where they would get the best return. In announcing today that the initial price is to be increased, the minister did not tell us by how much. We understand that demurrage charges with respect to the crop year 1973-74 are to be carried over the crop year 1974-75. This may well affect the final payment for that crop year.
Some months ago there was a great deal of discussion about hopper cars and the Wheat Board suggested that producers would be in the business of buying and building hopper cars. The question that occurs to me is this: would the cost be charged against the Wheat Board account but not against grain moving under the feed grains policy? Some months ago, prior to an election, I think, the minister went to great lengths to suggest that the government would pay for repairing box cars. Are we to learn that this money will come out of the Wheat Board account and not out of receipts from grain sold on the open market for feed in Canada?
I believe it may well come out of the Wheat Board capital account. Why? Some months ago I asked the minister a question in this House about the demurrage charges incurred at Vancouver because grain was not being loaded. It was not being loaded through any fault of the farmer or of the grain companies; it was the fault of the government-the government had intervened to bring about a situation which lasted for some three months. The minister replied unequivocally that demurrage charges would come out of the Wheat Board account. I said at the time that this would mean more than $10 million coming out of that account because of the failure of the government to act with regard to the grain handlers strike. If the minister can tell us that the demurrage charges should come out of the Wheat Board account, why should he not tell us also that the money for the repair of boxcars would come from that account; that is, if one follows the minister's logic? I cannot do so: it is very difficult because the minister works in mysterious ways.


Otto Emil Lang: The hon. member knows perfectly well that the treasury is paying for these repairs.


Mr.   Homer@: The minister wants farmers to believe that this cash advance legislation is needed for the same purpose as similar legislation 17 years ago. He told us that some kind of subsidy would be devised in connection with ending the Crowsnest pass rates. Farmers were told, in effect, "Don't despair. Instead of giving money to the railroads, we will give it directly to you." Of course, that was before the election. I often think the farmer may get something periodically, two months or so before an election. On one occasion, before the election which was held on October 30, 1972, the minister was a little late with the payment; he announced it 15 days before the election. Farmers resented that open bribery and rejected the minister on that occasion.
However, the minister moves in mysterious ways and he wants to convince us that this legislation is necessary for the same reason as the cash advances of 17 years ago. It is not. Why, then, is he bringing this measure forward? The

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answer is that he wants it to offset a weakness in his feed grain policy: he is afraid that too much will be sold on the open market rather than through the Wheat Board. Anybody who has grown grain on the prairies realizes the strength of the Wheat Board. A number of people find fault with the board. It has not always worked well, but by and large most farmers support it.


Mr. Benjamin:: As long as it is left alone.


John (Jack) Henry Horner: The hon. member for Regina-Lake Centre (Mr. Benjamin) says, "As long as the government will let it alone." I recall a speech in which I pointed out that the minister had intervened in the affairs of the board more often than any of his predecessors. I listed all the hon. gentleman's Liberal predecessors: he had tinkered more and caused more concern than all of them put together. Yet at times he does not tinker enough. We saw a railway strike last something like 60 days. The chairman of the Wheat Board was almost in despair over loss of shipments. Then we saw the grain handlers' strike prolonged because of the minister's intervention and the intervention of the Minister of Labour (Mr. Munro). We saw that strike go on for two or three months longer than it should have.
Even after the railway strike, terminal workers in some parts of the CN system took part in what is commonly called a slow-wheel movement, at the port of Vancouver. The Saskatchewan Wheat Pool contacted the Minister of Labour and the Prime Minister (Mr. Trudeau) to ask for assistance in ending that slow-wheel movement which lasted nearly a year-from February, 1973, almost to February, 1974. The president of the Saskatchewan Wheat Pool says the sale of 16 million bushels was just purely because of that situation.
The minister now comes forward with a small piece of legislation that will have no real effect on the financial and economic climate on the prairies. The last crop year was a relatively good year for grain sales and grain marketings and farmers borrowed $20 million under the cash advance legislation. In 1969, some $272 million was borrowed under the same legislation; but this was the year of operation LIFT, and that and a number of other circumstances made farmers short of cash at a time when there was plenty of grain still in the bins. Each year from 1969 until today the farmers have paid back more than they have borrowed and now net borrowings are down to a low figure.
I suggest the minister would be unable to make any member of the House believe that this cash advance legislation is any cure-all for the difficult marketing situation that may arise this fall, especially with grain that is unsuitable as milling grain. This bill will offer no particular assistance in this regard. Perhaps the minister is attempting to build up for some large, wealthy corporate undertaking cash advances interest-free. For example, $45,000 borrowed at today's interest rates would mean $4,500 in interest alone. This is the largest amount that any corporation, company, partnership, or father-son operation can borrow under this legislation, provided they have the necessary grain. So I would not be at all surprised to see some grain farmers in parts of Saskatchewan borrowing
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$45,000 from the elevator companies, putting the money in the bank and collecting the interest on it.


Leslie Gordon Benjamin: What an awful thing to say!


Mr.   Homer@: The hon. member suggests that that is an awful thing to say. I readily admit that the truth sometimes hurts. The point I am making is that if the minister wants to enable the farmers to set aside money which they can reinvest at the opportune time-in other words, to set aside a fund to smooth over some of the ups and downs in their operation-then he should do so by greatly changing the system, by introducing something similar to what I might call a registered retirement Savings plan, in which farmers can build up a nest-egg to help them over difficult periods. This kind of system would be helpful to the agricultural industry, particularly the livestock breeders.
The members of the agriculture committee will have to take a very close look at this bill and the whole question of cash pressure exerted on farmers today due to the change in feed grains policy. The committee must determine whether this cash pressure is encouraging farmers to sell grain on the open market which normally would have gone to the Canadian Wheat Board. If that in fact is the case, surely we require legislation that more directly deals with this question, rather than using legislation that is already on the statue books.
I would be remiss if I did not bring another matter to the attention of the minister. When he introduced the new feed grains policy he also assured the livestock industry that their cost of transportation would be comparable to the cost of transporting grain via the railroads to eastern Canada. If the minister regards this bill as being part and parcel of his feed grains policy, then we on this side of the House will be waiting anxiously for the other part of his feed grains policy. I wonder why the minister has not introduced that part this year, at a time when the price of Stocker cattle in western Canada is so low. Why has he not lived up to the obligation he undertook?
For example, he could have increased the price of calves a cent or two per pound, which would have meant a great deal, particularly at a time when farmers have been asking the federal government to assist the cattle industry, whether in the Peace River area, in northern or southern Saskatchewan, Manitoba or, for that matter, in the Cariboo in British Columbia. The cattle industry has been looking to the federal government for some over-all recognition that the price of feeder cattle today is not what it should be, and they are also looking for freight rates comparable to the rate for moving feed grains.
Having said that, I will watch with interest the progress of this legislation, since I think its purpose has strayed a long way from its original purpose 17 years ago. One wonders whether the minister is doing all he can to live up to his feed grains policy, and whether his feed grains policy will do all he and many others thought it would do when it was announced in the first part of August.


Leslie Gordon Benjamin: Mr. Speaker, there is no question that all members of the House will support this legislation in principle. This has been the case since it was first brought before parliament in 1957, after many years of requests for the legislation from farm

November 18, 1974
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organizations, certainly from my own party and, I believe, from the party to my right during the late 1940s and 1950. Since there is no argument about the principle of the legislation, there is no need for the debate to go on at any length; but there are some questions that I hope the minister and his colleagues will consider and do something about when the bill goes to the committee on agriculture.
I have a few points to make and I pass them to the minister for consideration; he may already be aware of them. I understand there is concern among the grain companies over the administration of the cash advance legislation. They are somewhat anxiously waiting to see what agreement the Wheat Board will be submitting to them, since the agreement requires the grain companies, and subsequently the grain elevator agents, to be liable for the loss of any cash advances. I readily agree with the minister that there has been little or no problem since the legislation was first introduced. In fact, if the government were as reliable as the farmers in respect of cash advances, we would be much better off. I would remind the minister that the elevator agent can only take the word of the farmer regarding how much grain the farmer has, when issuing a cash advance. It is not practical or feasible for the elevator agent to go around inspecting every farmyard and granary to see whether farmers have the grain for delivery in order to repay cash advances.
The other point I want to make, on behalf of the elevator agents, is that while they have a liability in respect of the recovery of cash advances, they receive no compensation for handling what is probably half the administration involved in the cash advance legislation. These agents do a great deal of paperwork. This relieves the government and the Canadian Wheat Board from at least this administrative aspect, yet the elevator agent receives no compensation. It should be incumbent upon the government to see that when agreement in respect of the administration of this legislation is arrived at between the grain companies and the Canadian Wheat Board, some measure of compensation is made available to the elevator agents who administer the legislation and are faced with some liability under it.
Regarding the new limits in the legislation, I should like to ask the minister whether he would consider some change in respect of co-operative farms which may have anywhere from 5 to 20 members, in view of the fact that the $45,000 maximum is often insufficient. I have already spoken to a member of the Matador co-op farm, of which I believe there are presently 19 members, who said that in periods when there are many deliveries the $45,000 cash advance maximum is entirely insufficient. I appreciate that this does not involve a large number of farmers, but the minister and 1 know there are a number of co-operative farms with from three to a dozen or more members, and the maximum cash advance will not be very useful to them. I hope he will consider making exceptions in the case of co-operative farms with a large number of members, thereby providing higher maximum cash advances.
I was pleased to hear the minister announce today an increase in initial prices, as this has been demanded by members on this side, as well as farmers and farm organi-

zations, for many months. There is no question in my mind that the low initial payments being made were nothing more than coercion on the farmer to get him to deliver grain on the open market. As long as the initial prices were below open market prices and the farmer needed cash to meet his harvest expenses, and so on, he had to sell his grain on the open market and most of the time he was not inclined to do so. I hope the new initial price structure the minister has announced will bring the price into line with the open market price.
Having regard to the argument that has been going on between the minister and myself and between the minister and farmers and farm organizations, let me say that it will continue. The whole policy in respect of feed grains is something the farmers thought they got rid of once and for all after the world war. When the minister brought in this feed grains program he told the farmers it was a good program and said he was fully in support of the Canadian Wheat Board and orderly marketing. Although he said the feed grains program was good, he hoped farmers would not deliver grain on the open market but would sell it to the Canadian Wheat Board. For many months the initial price was so low that many farmers had no real choice but to sell on the open market.
I hope that this increase in the initial price will do a great deal to encourage farmers not to deliver grain on the open market. I suppose in this one area the minister and I agree, in that we both hope his feed grain policy will collapse, with no deliveries being made on the open market. This whole policy can do nothing but cause deterioration in orderly marketing and the effectiveness of the Canadian Wheat Board. It seems there was no reason for bringing in that policy other than to detract from the principle of orderly marketing. The farmers did not ask for this feed grains policy, and I am sure neither the grain companies nor the wheat pools asked for it. Farmers' organizations and others still do not know why the minister was moved to bring in this policy or why he felt it was necessary. As far as I am concerned, there was only one reason for it; that was, to try to restore some degree of strength in the Winnipeg commodity exchange to the benefit of speculators and others who like to make a living off the backs of others without doing very much themselves.
The announced increase in initial payments will be welcomed by the farmers and the grain companies. In fact, the minister's announcement today in this regard effectively cut my speech in half, because I intended to say a lot more but now find it unnecessary. In any event, I should like to make a couple of other points on the issue raised by the hon. member for Crowfoot (Mr. Horner). For some time now, successive governments in Canada have played off grain growers against livestock growers, and vice-versa. For years the livestock growers had things pretty good and the grain growers had things pretty bad. Now, with higher grain prices, the situation is reversed, with the result that grain growers are better off and cattle prices are in a mess. These two Canadian groups are almost at each other's throats because of the inadequacy of national policies in this area.
Here again I should like to put forward the suggestion that the two-price system which applies to feed grains is
November 18, 1974

just as logical in respect of grain for human consumption. There is no reason why the Wheat Board's world asking price cannot be put in place, with a second price being in place for domestic consumption whether it be for human consumption or livestock feeding. That price should have some relation to the farmer's cost of production, and the world price would be of benefit to the producer. This would mean that the price of feed grain would be such as to take into consideration the needs of the livestock industry. I hope the minister and his colleagues will move in this direction.
Such a system with two prices would work a disadvantage to the private grain operators and speculators on the Winnipeg commodity exchange, but I am hopeful that the minister and this government are prepared to move in this direction. I can assure the minister that my colleagues and I will continue to promote this idea. Such legislation is urgently required by farmers in times of high grain deliveries. It would offset the situation which often occurs when we have a winter such as the last one. I might add that the situation is aggravated by the fact that the railroad companies have done nothing to improve the standard of hundreds of miles of their trackage: this will mean that many farmers in a number of areas will not receive rail service and will not be able to deliver their grain.
These advances will be welcomed and will be used particularly by the growers located on what the minister and his experts call low-density lines. They are low-density because the railways do not run trains over them. This is another way of coercing farmers to deliver grain over longer distances to secondary or main line points. The farmers must either do this, at higher cost, or take advantage of the cash advances.
This is another reason I hope farmers will take advantage of the cash advances when they find themselves in this kind of situation and will refuse to deliver grain over longer distances to suit the policies of the government regarding branch line abandonment, designed for the convenience of the railways and the grain companies rather than for the convenience of the farmers and the public.
As I have said, we support this legislation in principle. I hope the minister will consider the two points I have made. The first is that there should be some measure of compensation for the elevator agents, who have to do most of the administering of the program and receive nothing in return, while being subject to some liability under it. Second, I hope the minister will consider an exception to the legislation in respect of the $45,000 maximum in the case of co-operative farms with more than three members, so they may have use of cash advances in proportion to the use that may be made by one, two or three farmers. I am pleased to say that we will support the legislation, and hope it will pass quickly.


Mr.   C.-A. Gauthier@Roberval: Mr. Speaker, I would like to say a few words on Bill C-10. First of all I would like to congratualte the minister responsible for the Canadian Wheat Board (Mr. Lang) for the help extended to western grain producers. I listened earlier to the Tory spokesman who said that farmers had been waiting for
Grain
this bill for a long time. A few moments ago the NDP spokesman asked the minister who had prompted him to introduce this bill because he said it seemed co-ops had not asked for this bill. We have here one of the minor inconsistencies that may crop up in this House.
That bill was introduced by the Tories nearly 17 years ago. We note ironically that the Liberals of that time had voted against that bill. Today, they are the ones who want to strengthen it, recognizing the need for such a bill after 17 years.
I am quite happy for the western grain producers because the recommendations read as follows, and I quote:
-to amend the Prairie Grain Advance Payments Act to increase from six thousand dollars to fifteen thousand dollars the maximum amount that may be paid to a producer as advance payments in respect of grain to be delivered under a permit book, and under the circumstances prescribed, to privide where a producer is a multi-farmer unit of two shareholders for the maximum amount of thirty thousand dollars, and where the producer is a multi-farmer unti of three or more shareholders for the maximum amount of forty-five thousand dollars.
I think it is simply normal. After 17 years it is time to get in line with today's prices, keep pace with the economy, in view of the spiralling increase in grain prices in recent years.
I think it was simple logic. It is not a favour that the minister is presently doing directly to western producers, he is only following a logical line of thought for the purpose of giving more freedom to western farmers. I think it is the only way for western farmers to go on the open market without always being a little bit of a victim of the Canadian Wheat Board, even though the latter has always done a great job in western Canada. I believe that is the option of competition and it gives western producers another ace in the hole so that they can go to the open market without always being faced with a financial problem.
All that is very nice for the West, we are very happy about it and we also would wish-and I have said this several times since I have been sitting here,-to have an association so that we may obtain federal aid. We too would like to have an association responsible to a minister just like today's Canadian Wheat Board. We, in Quebec, would like to have feed grains organization responsible to a minister. So that the three western provinces could at last trade directly, on equal footing, with the eastern provinces.
I think that is the root of the problem and the origin of all those skirmishes going on between Eastern and Western Canada. We never agree. Why? Because there is always some middleman who is interested in provoking these skirmishes and that middleman is the marketing agent. As long as we are not ridden of those marketing agents we will always be faced with problems. Such is the situation in Quebec these days. After so many years, we still must go through marketing agents to get our wheat from the Prairie provinces. There will be justice in the Eastern provinces only when we have a similar agency in the East to bargain directly with the Western provinces. That organization, for example, an eastern Board responsible to a minister. Why not?
The West has a minister who is responsible for the Canadian Wheat Board. To be fair, let us put a minister in

November 18, 1974
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charge of it and get rid of those financial agencies that gobble up the profits of western producers and eastern consumers. That is the problem, Mr. Speaker. As long as we hang on to those agencies, as long as we refuse to grab the bull by the horns and say: The East is going to be responsible for its purchases from the West, and the two groups will negotiate and come to an agreement without the financiers keeping the better part of the pie, the situation will remain the same.
That is the point I particularly wanted to put before the minister, Mr. Speaker. I am happy that bill has been introduced because it gives us the opportunity to discuss a problem that has been denounced in this House for 10 years but that no one wants to deal with. Neither Quebec nor the other eastern provinces dare make a move to discuss things with the western provinces. The Easterners criticize the Westerners, and vice versa. Everyone seems to be wearing dark glasses that keep them from locating the problem.
I therefore urge the minister to reflect on this problem and I point out to the members of the committee that while I agree with that increase other remedies are indicated which might mean prosperity for the eastern provinces and peace between East and West.


Hon. Alvin Hamilton (Qu'Appelle-Moose Mountain):: Mr. Speaker, I had not intended to enter this debate on Bill C-10 until the minister aroused me from my lethargy by putting on record the income that farmers in western Canada are earning. If any person has to be straightened out on this issue, it is the minister. First, I would like to say, for the sake of clarification, that the cash advance legislation of 1957-and this holds true in 1974-is not a hand-out by the federal taxpayer to the western farmer. The farmer pays it back. It is a moral acceptance that when a man earns wages during a calendar year, he has the right to some of them in the year in which he earned them and should not have to wait for that income for two or three years, as was the case in the 1950s.
I was the minister who drafted the legislation in the fall of 1957 as a member of the Diefenbaker administration. I well recall the time when advisers to the government said it was impossible to bring in this type of legislation. It had been put forward in the previous administration on two separate occasions, and for the several reasons advanced by the advisers to the government the previous administration had turned it down. That shows us the great power in the early 1950s of the advisers to take over the minds and souls of the Liberal Party. Nothing has changed. I mentioned the year 1957 for another reason, that is, that at that time farmers all across the country were in a desperate position; hunger was growing in the world and we were sitting on our reserves in Canada. Now that the clock has turned full-cycle and the country is becoming aware that we are in another cycle of great food shortages in the world, suddenly this government becomes interested in the world food program.
I go back in my mind to the years 1973 and 1974 and find the record shows that only one member of this House was asking questions about the shortage of food in the world.

Now everyone is on to the thing and I am stepping out as the one member letting all these people carry it forward. But the problem has been there for 25 years and it will be there longer than 25 years. I am glad to see other people taking up the cudgel.
Let me return to what the minister said. When he said that cash receipts over the first nine months of this year were 90 per cent higher than they were last year, he left the impression that he wanted to carry across this country-that western farmers were rolling in dough. I know something about the income of western farmers. The difficulties they have had since the 1930s have been told over and over again in the House. Believe me when I say that the first year the western farmer broke even so that his operating expenses and interest on the money invested equalled his income was 1972. In 1973 in Saskatchewan, when all these high prices were in effect, he not only paid his expenses, paid himself the interest he had never paid himself before, but made the tremendous amount of $2,200 per family for a whole year's work! That is a fact of life. The year 1973 was the best income year in history for the Saskatchewan farmer, who produces 60 per cent of the grain for export, but he made only $2,200 per family.
I had the impression, from listening to the minister, that now that our income is up so much we are rolling in dough. I would like to see most Canadians across this country trying to live on $2,200 a year. The minister did not mention that in the last three years the average expense of operating a western farm had increased at the rate of 20 per cent, plus, a year. We do not have the figures yet and will not have them until next June for the year 1974, but it seems that the expense increase will hit 25 per cent. As a person who comes from one of the prairie provinces, I know that these expenses will go up. While the average expenses of Canadians have gone up 3 per cent a year, the farmer's costs have gone up 7 per cent. Now that the cost for the rest of Canada is going up by 10 per cent and 11 per cent, farm costs are going up by 20 per cent to 25 per cent. All I know is that when prices go down, costs do not go down but keep on going up.
That brings me to the main point I wanted to make to the minister in all seriousness. He and I have fought across the west on this issue for many years. I hold to the belief that the minister followed the wrong policy from 1968 until 1972 when the government sold western grain on the export market at a price below the cost of production. He argues that that was the right course to follow. That is his view; I have mine. I well remember the election campaign of 1972 when I believe I spoke on behalf of all the farmers who knew how much grain they had in their granaries and on behalf of all those who believed in the organized selling of our grain through a marketing agency which sells grain rather than imposes controls and restrictions. I remember very well saying that we had run out of grain. The price should have gone up in the fall of 1971, on the basis of the information before the government. But the minister, during that hot summer of 1972 said, "There is lots of grain". When the election was over and the price was up to $3 or $5, he was very quiet because there was no grain.
The minister has made horrible blunders in his assessment of the international grain market and that cost has
November 18, 1974

been met by the farmer. In all the years 1968, 1969, 1970, 1971 and 1972 the minister and the government kept grain prices down deliberately on the basis that this was competing. The minister said, "We must remain competitive." That is one point. The second point is that the minister and this government brought in a program in 1970 to take the western grain farmers out of wheat. This minister not only told them to get out of growing wheat, and gave them the inducement of $6 an acre to move into other crops or to summer fallow and hold the land idle, but said, "If you do not do what you are told, you will not be allowed to sell on quota and"-by inference-"you will not be allowed to pay back your cash advances." That was the first time a government of this country had ever forbidden a man to grow food-and it was done by this minister. Now he comes here today and has the gall to say that income in 1974 is 90 per cent higher than it was in 1973.


Otto Emil Lang: Cash receipts in Saskatchewan, in the first three quarters.


Francis Alvin George Hamilton: He says that cash receipts in Saskatchewan, for the first three quarters, are 90 per cent higher. He has the colossal gall to bring that figure to the attention of this House and leave the impression that farmers are rolling in dough. I am saying that when you take off the expenses of operation and interest charges, the farmer has barely enough to pay minimum wages. Let us compare the situation with that of 1973. In 1973, all the Saskatchewan farmer received in the full calendar year, after expenses and interest, was approximately $2,200 per family. This is the type of living condition that the minister calls rolling in dough.
Mr. Speaker, the western farmer, rightly or wrongly- but certainly of his own free will-has entered into a socialist system of marketing. He has put his fate into the hands of the Canadian Wheat Board, and quite willingly, but he expects that in return it will endeavour to get him the highest average price possible. Generally speaking, the Wheat Board has an excellent record. But having put his fate in the hands of a socialist agency over which parliament or the minister has no control, or should not have, he expects in return that this government will protect him against rises and falls in world prices.
From 1932 to 1949, farmers fought for some form of international rule of law on prices and the allocation of wheat. That was achieved in 1949 by agreement among some 50 nations, and from 1949 to 1967 wheat farmers in Australia, Canada, Argentina and the United States had the protection of an international agreement that set a floor and a ceiling on prices for a three-year period. If the price rose too high, then supply had to be guaranteed. If the price dropped to the bottom, then the demand had to be met by recipient countries on a quota basis.
This rule of law on price and allocation gave farmers a stable, though not large, income from 1949 to 1967. That held until this government, along with others, destroyed the International Wheat Agreement and replaced it with an International Grains Agreement which never took hold. All that remains is the shell of an administration framework in London, England. For the first time in a
Grain
generation, wheat farmers of the world are without an international agreement on price and allocation of supply in case of emergency.
I have sat in this House during 1972, 1973 and 1974 and have heard all about a two-price system for the little 50 million or 60 million bushels that go into domestic supply, but not one speech have I heard from the government about the billion bushels that go for export each year. Today, the grain farmers of the world who grow coarse grains and feed grains are as naked as a jay bird. The farmer in the wheat growing areas of the world, without any protection as to world price, is a streaker and does not know it. He worries about how long prices will last, because he knows that if there is a surplus of grain in the world the $5 price will drop to nothing. How will he then meet his expenses, his heavy interest rates, and so on?
The minister's talk of getting rid of the Crowsnest pass agreement has been worrying farmers. That agreement was made some 70 years ago. With 300 million bushels of grain going to export positions, the railways broke even, and now with putting a billion bushels a year into export position, the railways are making money on the Crowsnest rates. Why should the minister stir things up by saying this rate should be looked at? Two years ago he said he was going to look at the open market, and now we find ourselves in it so we must assume the minister is serious when he says he is going to do something. I did not take him seriously when he said he was going to bring us into the open market, but he did it. If he is serious about the Crowsnest base rate, we have no choice but to fight every inch of the way.
When we start talking about branch line abandonment and inland terminals, they will be tied up in our minds with the minister's new concept of western Canada. Our elevator system is 50 years out of date and our transportation system is 25 years out of date and should be replaced. We need to spend $3 billion or $4 billion on port facilities for the west coast-and goodness knows how much on the east coast. We need all these things now, and we have the technology. But all the minister does is brag about how much the farmer makes. It makes him look like one of these Montreal organized-crime types. Really, the farmer is barely earning a wage.
Mr. Speaker, I have a few words to say to members of the Social Credit Party. No farmer in Canada suffers more than the farmer in eastern Ontario, Quebec and the mari-times. We in the west talk about how we were just getting proper wages in 1973, but even in the good years of 1973-74 the eastern farmer was not making enough money to pay the interest on what he invested in his operation. He therefore has no income at all as far as wages are concerned. In February, 1962, a bill called the eastern feed grains assistance act was introduced in this House by this party, but was not passed because our government was defeated. There has been no indication since that successive governments have been aware that we need every eastern farmers in order to help feed a hungry world. They produce commodities that we cannot produce in western Canada because we are a desert. They can produce trees. Some hon. members will remember when a forestry act was introduced setting up a department of forestry because of the desperate need for fibre.

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I do not see any sign of eastern farmers shifting into a combination of beef and tree production. All I see is a comedy of blunders in the beef industry this past year and a half. Canada does not produce enough beef to feed her own people and has to import 15 per cent of her needs. We draw on the protein supplies of the world for 15 per cent of our needs. By unilaterally removing our tariff in 1973 and encouraging farmers to flood our market with a few thousand head of cattle, the government destroyed the price base and has played ping-pong with beef ever since.
Madam Speaker, I think this legislation, regardless of its apparent function-and it is there, obviously, to carry out a firm moral principle-is sound legislation. The $15,000 ceiling now is the same as the $6,000 ceiling in earlier days. The purpose of the legislation is fundamentally sound, that is, to keep the farmer from going too deeply into the open market system at the present time. In the main, I think the legislation should be supported.
I conclude with this fundamental position. I ask the minister to take his mind off the Crowsnest rates for a while and to re-establish the International Wheat Agreement so that farmers who produce grain will be governed by a stable rule of law which will take care of prices and allocation of supplies for the next 10 or 15 years. If he does that, he can make his next four years in parliament worth while.


Mr. Frank Hamilton (Swift Current-Maple Creek):: Madam Speaker, Bill C-10 amends the Prairie Grain Advance Payments Act, an act that has been well accepted across the prairies and was brought in by the government headed by the right hon. member for Prince Albert (Mr. Diefenbaker), as previously stated. It was introduced during the 1957-58 crop year. Back in those days the advance was paid at the rate of 50 cents per bushel for wheat, 20 cents per bushel for oats and 35 cents per bushel for barley, the maximum of $3,000 being paid to any one producer.
The amendment before the House shows the dramatic increase in operating expenses for western grain agriculture. The act was amended in 1968 and payments were increased to $1 per bushel for wheat, 40 cents per bushel for oats and 70 cents per bushel for barley. The maximum for any producer was increased to $6,000. These cash advances are based on wheat, oats and barley harvested and in storage in the farmer's bins. The farmer, of course, must await quota levels which will allow him to deliver his grain to the Wheat Board and he pledges to deliver the committed grain as the quotas open. As has been said, the cash advance is not a hand-out by the federal government; it is actually the farmer's own money, paid to him while he is awaiting delivery quotas. If the producer is in default, appropriate action is taken even up to prosecution.
The present legislation places an additional administrative burden on the Canadian Wheat Board and country grain elevators. In 1972-73, the number of accounts in default totalled 3,538. Altogether, 1,468 accounts were taken to the Federal Court of Canada. Overdue accounts tend to create bad feeling between the grain buyer and the grain producer. Over the years, more than $1 billion has been taken by the producers in cash advances and the

repayment record has been very good, only a small fraction-less than 1 per cent of accounts owing-remaining unpaid. This year, already $28 million in cash advances has been taken out by producers, clearly establishing the need for this legislation.
As I said previously, the Canadian Wheat Board has been assigned the responsibility of administering this act which has been in existence now for about 17 years. The effects of grain companies being agents of the Wheat Board have filtered down to the country grain buyer. Thus we see the government continually sloughing off its responsibilities to grain companies. They are forced to act as agents of the government, with all the political implications involved. When the producer gets a cash advance, he goes straight to the bank or credit union with it. That is where the transaction should take place. Initially the forms might be held by the country elevator and, if necessary, signed by the grain buyer or a commissioner for oaths, as happens at present. Nevertheless, the entire administration of cash advances is properly the business of our banking system which should be responsible for the collection of this money.
We have piled far too much work on our country elevator operators. I have talked to these people, and it is apparent that unless the system is changed we shall experience real difficulty in recruiting men to fulfil this function. Only in the last two years have country grain buyers in Saskatchewan been relieved of the responsibility of collecting overdue municipal taxes. That was an unjust responsibility. The federal government is still piling responsibilities on these companies and involving them in this greatly expanded cash advance legislation.
The fact that advances are to increase to $15,000 per individual, $30,000 for two people and $45,000 for three, shows the extent to which farm production costs have escalated. Although $15,000 may sound like a lot of money, it represents two truckloads of flax or, in other words, 1,500 bushels of flax or one hopper car of wheat. The producer is to pay full income tax on the advance in the year in which it is taken out. He may exercise the other option, of course, and take out a bank loan; in that case he will pay the tax in the year in which it is repaid. I should think the government could give the producer a break by deferring payment: it could require him to pay tax in the year he repays his cash advance.
I support this legislation, with two reservations. This is just one more law which tends to isolate the producer from the marketplace. For instance, during the west coast grain tie-up producers were not affected directly because so many laws come between them and their actual pay cheque. This is another such law. Finally, I ask the minister not to overload grain buyers with paper work. Let him be careful to avoid that in this and in future legislation.


Thomas Gordon Towers: Madam Speaker, may I call it five o'clock?


The Acting Speaker (Mrs. Morin):: As the House will be considering different business at eight o'clock, the hon. member might wish to move the adjournment of the debate.
November 18, 1974


Thomas Gordon Towers: I so move.
On motion of Mr. Towers the debate was adjourned.


The Acting Speaker (Mrs. Morin):: It being five o'clock, the House will now proceed to the consideration of private members' business as listed on today's order paper, namely, notices of motions and public bills.



PRIVATE MEMBERS' MOTIONS


John Douglas Reynolds: That, in the opinion of this House, the government should consider the advisability of amending the Income Tax Act to provide for deductions for volunteer services provided by a taxpayer on behalf of either a charitable organization or a federal, provincial or municipal agency.

He said: Madam Speaker, volunteer workers comprise one of the main groups in this country who keep certain activities alive in our communities. I know the Secretary of State (Mr. Faulkner) has great concern in this respect. During the last election campaign he mentioned across the country that he was going to set up a committee or a council on voluntarism. Two weeks ago the minister was speaking before the advisory council on voluntarism, and I should like to read into the record a report by the Canadian Press calling attention to some of his statements:
The advisory council on voluntarism should suggest ways in which the federal government and voluntary organizations can co-operate to improve the quality of life in Canada, Secretary of State Hugh Faulkner said Sunday.
Faulkner, speaking at a conference of national voluntary organizations, announced the appointment of 15 members to the council.
Establishment of the council, which has a two-year mandate, was announced during the election campaign in June.
The minister suggested that the problems of recruiting members and financing volunteer organizations be studied by the advisory council.
He said: "There is a great need for more collaboration between the federal government, the voluntary organizations, the foundations, and the corporations to avoid duplication and to encourage a more rational use of limited resources. The council's advice in this area would be particularly welcome."
The minister also suggested that further study be made into the government policy of subsidizing organizations which oppose its policies. He added: "I believe it is a sign of healthy and vital democracy if governments feel able to subsidize constructive dissent".
He mentioned as examples of this policy grants to women's groups and native organizations which often criticize government.
The possibility of subsidizing intervention by voluntary organizations before regulatory bodies such as the National Energy Board or the Canadian Transport Commission should also be studied by the council, he said.
The conference has gathered for the first time leaders of about 60 national voluntary groups such as the Red Cross, the Boy Scouts of Canada and La Federation des Femmes Canadiennes Francises to discuss matters of mutual concern.
Volunteers in this country are doing a great job: I do not think anybody would deny that. We have cases of people
Income Tax Act
throughout this country driving their cars once a week from, for example, my constituency which is 20 miles from a major hospital where a great deal of work is done. People use their cars to drive others who cannot walk and are in wheelchairs to hospitals every morning. This costs them a great deal of money for which they are receiving no compensation whatsoever. We have people coaching soccer teams, football teams and hockey teams. They go to great expense. I know in my own case, as a member of parliament often away from home during the week, the coach of my three sons soccer teams has to come to my house to pick up my children because there isn't a bus service in the area, this involves his driving an extra 20 miles every time they play soccer, which is six time a week for the three of them.
These are expenses being met out of people's pockets, sometimes people who cannot really afford it. Yet they look around and they see OFY grants and LIP grants that are not always meeting the needs of various areas. I do not want to be too critical in this area because many of us have set up advisory groups for these programs and they are much improved over what they were a couple of years ago. But I still think there is a bad taste left in many people's mouths over some of the grants that have been handed out in the past.
These volunteers are seeing a society that seems to be spending more money on welfare than they think should be spent. They are seeing waste by government. I think a good case of waste is the government's funding of this volunteer organization to the tune of $10,000. Is this the type of money we want the government to be spending? The volunteer organization which the government is supporting and setting up may come up with many useful ideas; but one of its main points, we hear from the minister, is that it is to recommend to various volunteer organizations just where they should go in government to obtain money. I thought Information Canada was set up for that purpose. Why do we need another bureaucracy to tell people where they should go to get funds from government? Information Canada was set up for that purpose and it should be used for that purpose, as should the minister's offices.
I do not intend to speak very long on this subject because I think it is straightforward. It is explained in the motion. We are asking the government to consider the feasibility of allowing volunteer workers to get a tax deduction for the amount of money they spend out of their own pockets on volunteer work. This is being done in many countries. I do not think it is too much to ask the government to consider this suggestion. I know, in a motion of this type and in a major financial area such as this, the government will want time to study the proposal and determine whether it is feasible. I am not an economic specialist and I do not know whether it is totally feasible, but I think at least we should bring the subject before a committee so it can be discussed. That is where full discussion should take place, in committees of the House and not in organizations outside the House of Commons.
I have spoken to many volunteer organizations that are having a hard time getting volunteers to work for them. They are getting a throwback from these people who are saying, "I would love very much to take Mr. Jones down to
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November 18, 1974
Income Tax Act
the hospital twice a week in my car, but with the cost of gasoline today and the cost of everything else, I can't afford to do it." Let us not stand here for an hour and talk about this, Madam Speaker: let us put it into a committee and discuss it. I think we can discuss it in committee on a non-partisan basis because I do not think it is a partisan subject. I hope the government will not take up the 47 minutes that are left. I am going to sit down, and I hope we can agree to send this subject to committee so that we can discuss it, examine the pros and cons and come up with a solution in the long run.


Mr. Alan Martin (Scarborough West):: Madam Speaker, in proposing that the government consider the advisability of amending the Income Tax Act to provide for deductions for volunteer services provided by a taxpayer, in addition to the normal deduction already provided in respect of monetary contributions, the hon. member for Burnaby-Richmond-Delta (Mr. Reynolds) touches an area which at first sight does seem to give rise to an inequity in the Income Tax Act as it now stands. On the surface, it would seem reasonable and fair that a taxpayer who devotes considerable portions of his or her personal time and energy-


John Douglas Reynolds: And services.


Alan Gray Martin: -and services to a worthy cause should receive some form of tax benefit in the same manner as benefit is provided for those who donate cash or kind to the same worthy cause. The proposal further tends to appeal to one's sense of equity because very often these devoted individuals in the final analysis are responsible for the existence of many worthy charitable organizations, whereas the donor of cash or kind is able to make his or her donation without the need for further personal followup or involvement.
Assuming that we were to proceed with the motion as put forward by the hon. member, we would have to make some attempt to examine the feasibility of the proposal from both the administrative and the revenue aspect. Let us consider for a few moments the administrative factor alone. Only in comparatively recent times has adequate control been implemented in the approved methods of handling books, accounts and receipts for cash donations to charitable institutions. For many years there was some question whether receipts in a number of instances were legitimate in terms of the nature of the charitable undertaking or, indeed, whether the organization was substantial enough to warrant the granting of valid receipts for donations for income tax purposes.
Recent tightening-up has introduced certain new administative ramifications in respect of the operation of numerous charitable organizations throughout the country. But on the whole I think the new procedures have been generally well accepted as a necessary move by the government to ensure equity and fair play in all instances. However, a move to enlarge the scope of donations so as to entitle one to a receipt in return for services rendered, would serve to introduce new administrative procedures of a scope which would tend to bury many of our voluntary organizations in a deluge of paperwork and office arrangements with which, in all likelihood, they would be unable to cope in normal circumstances.

A few illustrative examples come to mind, Let us consider the church workers who spends many hours each week and each month on projects associated with his or her church which are most important to the individual concerned and which, indeed, rank high in the list of priorities for the use of personal time available over and above that associated with the normal course of employment. To operate the system proposed by the hon. member with any sense of equity it would be necessary for each church across the nation to maintain careful records of the time devoted by the individual, and then ensure that a value was placed on his or her time in order to determine the appropriate amount for a charitable receipt that would presumably be issued at year-end. I select this example of a church worker because it seems to me it is one that could be multiplied thousands of times across this nation. It could be repeated for the volunteer in Scout or Guide work or in scores of other philanthropic and essential Canadian institutions.
The two more obvious questions that immediately arise relate to the appropriate value to be placed upon the services of such an individual and the procedural methods by which the time that such individuals devoted to the charitable organization would be logged. I do not think I need go further to illustrate the potential difficulties involved.
Next we might take the example of two individuals of substantially differing income brackets who volunteer their services with the same charitable organization. How would the value of the respective services of these two persons be determined? Would it be fair to determine, in one case, a value for services that is considerably higher than in the other case because of their differing income situations? Alternatively, would it be fair to equate the time they both spent at the same value? I think that either method would produce a degree of inequity that would tend to make the proposal, from this aspect alone, extremely difficult to justify and administer. If we were to accept that differing values should be allotted to people of differing income brackets engaged in the same type of volunteer social work, the question then becomes one of determining who should make such judgments and how extensive would be their authority in this regard. This, in turn, leads to all sorts of speculation as to how this particular aspect of the question would be resolved.
I would like to return for a moment to the matter of equity as it relates to the proposal put forward by the hon. member. I mentioned at the outset that the proposal would initially seem to provide more equity under the Income Tax Act if, indeed, donations for services rendered were to be permitted as a deduction in accordance with the treatment given to donations of cash or kind. I do not think however, that we should accept this argument at face value without examining it a little more deeply. Such examination, I believe, tends to dilute the equity argument somewhat, as may be seen in the following example. Mr. A., who works a standard 40-hour week and earns $5 per hour, is a devoted subscriber to the cause of the mentally retarted in Canada-I use this only as an example-and donates four hours of his time every weekend to assisting the recognized group in his area on various
November 18, 1974

projects associated with the cause of the mentally retarded. In this straightforward and probably unusual type of example, Mr. A. clearly donates a value of time that could be calculated at $20 per week to this particular volunteer organization.
A neighbour of his, Mr. B., who also works a standard work week and earns $5 per hour, is also interested in the cause of the mentally retarded in his area. Rather than taking Mr. A's approach, however, Mr. B. feel? that his particular contribution would be more valuable in the form of cash. Accordingly, Mr. B. takes on a part-time job each week end at which he works for a period of four hours and earns an additional $5 an hour for this extra work. Mr. B. then proceeds to turn over the $20 so earned to the cause for the mentally retarded and makes his donation to the association with whom Mr. A. is engaged on a volunteer-time basis.
In this way, the approximately $1,000 per annum that Mr. B. earns over and above his normal salary is turned over to a charitable organization and he is issued a receipt for $1,000 in recognition to this donation. The $1,000 earned, however-this is the important point-is added to his taxable income and reported on his T-4 slip at the end of the year. The charitable donation receipt simply allows him to revert to his normal salary for income tax purposes. It becomes a deduction. In other words, the additional $1,000 of income is offset by the $1,000 charitable receipt. His position for income tax purposes, vis-a-vis that of Mr. A., is thus identical.
Were Mr. B. not provided this taxable benefit for $1,000 of additional income turned over the charitable organization, he would indeed be in an inferior position to Mr. A. for income tax purposes. Alternatively, if Mr. A. were given special recognition for his four hours of time donated to the charitable organization each week, he would accrue a $1,000 charitable receipt benefit which would have the effect-this, too, is an important point-of putting him in a more favourable position than Mr. B. who has donated his substance to the charitable cause by way of tax donation.
In other words, the proposal of the hon. member would, in the instance covered by this illustration, serve to introduce an inequity into the tax system that would favour the individual who was donating time rather than cash. I think this is an important point in that it does tend to dilute the equity argument that seemed in the first instance to be relatively strong in relation to the proposal put forward by the hon. member. Only when one comes to look into this question does that particular equity argument tend to diminish.
Finally, I would like to make reference to what I think might be interpreted as a philosophical approach to the question at hand. The selection of priorities against which an individual will devote portions of the 24 hours available to him or her in any one day is a very personal matter that frequently relates to the basic make-up of the individual, as well as to the situation in which he or she may find themselves in relation to the simple matter of time available for worthy causes of a non-income producing nature. I am not at all sure in my own mind that it would be desirable for the income tax laws of the country to attempt to influence these priorities. I believe this is
Income Tax Act
particularly worthy of consideration when one considers, as one must, that such influence in favour of encouraging more time to be devoted to volunteer organizations would be accompanied by a substantial drain on the public purse that would have to be made up by the imposition of additional taxes at some other level.
For example, it seems to me that the pensioner who elects to donate some of his or her experience gained over the working years to a charitable organization by way of free provision of his or her services for a portion of each week, would be making such a decision based on his or her own philosophical approach to how they wished to spend some portion of the free time available to them. I do not believe the Income Tax Act should attempt to reward such individuals, however, for this particular selection of priorities. The income earning individual who has not yet reached retirement age might wish to make a similar choice of priorities as to how to spend his or her time, but is simply unable to do so by virtue of the continuing necessity to spend most of this time earning a weekly salary or wage.
The same argument could be made, probably more tangibly, in the case of the wealthier individual whose high rate of income is not dependent upon the need to work for a living in the normal way. I simply do not think it would be just for the Income Tax Act to provide a benefit for such persons because of their ability to devote so much more time than their neighbours to their favourite charitable cause.
I think the motion put forward by the hon. member has merit. However, I would suggest that the arguments against it are sufficiently strong to justify continuing the provisions under the Income Tax Act by which no recognition by way of a tax benefit is given in the case of services rendered on behalf of a charitable organization or a federal, provincial or municipal agency.


Mr. Cyril Symes (Sault Ste. Marie):: I had not intended to participate in this debate and I will be very brief, but I become somewhat disturbed by government backbenchers playing the role of talking out motions such as this one, which I think has considerable merit, and by the way they do it-by setting up straw men in anticipation of the legislation and knocking them down with all kinds of arguments. The motion before us merely asks the government to consider the advisability of allowing tax deductions for taxpayers who contribute volunteer services to charitable organizations. The hon. member for Burnaby-Richmond-Delta (Mr. Reynolds), whose motion this is, merely asks that it be sent to committee for further study. I think that is a perfectly reasonable and legitimate request.
It is my belief that all Canadians, and certainly members of this House, are cognizant of the important role volunteers play in our society; they are aware of the need for dedicated people to help the less fortunate. The human touch a volunteer organization gives cannot be replaced by any kind of government agency or bureaucracy which tends to be very legalistic and removed from people's everyday needs.
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It seems to me the motion is even more advisable in this day and age of increasing inflation, when it is all the more difficult for a person to donate the level of volunteer service he may have donated in the past. Let me give one example of a volunteer driver who is driving, say, pensioners or disabled persons to an administrative office in town, to a civic function, a shopping centre or to the doctor. Today this has become even more expensive because of huge increases in the cost of gasoline. This puts an extra burden on the person who is already willing to devote time and his own money in the form of driving his car and paying for the fuel. Therefore, it seems to me that if a volunteer could be given some kind of relief or some kind of cushion by being able to deduct some of this expense, it would at least maintain the high level of volunteer participation we have today, and would perhaps even encourage a higher level in the days ahead.
The hon. member for Scarborough West (Mr. Martin) raised a number of objections on behalf of the government. His first point was that to implement the idea of a tax reduction for voluntary services would cause great administrative problems for the government. I do not know the degree to which this would be complicated, because already we have travelling salesmen who are able to deduct car expenses and a portion of the expenses of maintaining their residence used for business. This is a simple procedure already provided for in the Income Tax Act and I do not see that it would make it much more complicated if we added another section to our income tax forms allowing for deductions for volunteer services.
The hon. member also raised the problem, as he stated it, of extra paperwork for volunteer organizations in that they would have to place a value on volunteer services. I think a set of tariffs could be produced in the regulations that would make it very easy to decide which services were justified for tax deduction and the amount to be allowed.
The hon. member on the government side also raised the problem of the inequities that would exist, in that one income group could take advantage of a deduction not available to somebody else. He assumes that the deductions would bear some relation to income. Why could there not be a set rate for tax reduction for different services provided, with a maximum amount of money deductible, and on top of that a total maximum deductible for volunteer services for all taxpayers no matter what their income level, as is now the case with charitable tax deductions?
If we allow this matter to go to committee, we can look at the so-called problems, alternatives and merits of the motion. Surely it is a reasonable request by the hon. member for Burnaby-Richmond-Delta that we look into his motion in order to bolster the role of volunteer agencies and volunteers themselves in our society. Unfortunately, I know that these comments will fall on deaf ears because several government backbenchers will rise during the next 35 minutes to talk out this commendable motion.


Mr. A. C. Abbott (Mississauga):: Madam Speaker, speaking on the motion introduced by the hon. member for Burnaby-Richmond-Delta (Mr. Reynolds), let me say that I think it is particularly appropriate that hon. members in this private members' hour should be dealing with a taxation measure, considering that tonight the Minister of

Finance (Mr. Turner) will be introducing his budget. All of us are looking forward to this great evening, especially those of us who are in the House for the first time.


Stanley Howard Knowles: You are due
for a let-down.


Anthony Chisholm Abbott: The hon. member suggests that we are due for a let-down. But, of course, the great let-down was for the opposition when it proceeded last spring to defeat the Minister of Finance's previous attempt to introduce a budget. The consequences of this ill-advised procedure were many. First, Canadians were temporarily deprived of some beneficent tax measures which the minister was attempting to make into law; second, certain members of the opposition were unfortunately, from their point of view, unable to return to join the thirtieth parliament. Of course, every cloud has a silver lining and the result of that defeat, unfortunate as it seemed at the time to so many Canadians, resulted in the return of a majority government in which Canadians take such pride and pleasure today.
The hon. member for Sault Ste. Marie (Mr. Symes) has cast a skeptical eye on this debate and the response of government backbenchers, characterized by the scholarly and fulsome comments of the hon. member for Scarborough West (Mr. Martin), in which he attempted, with a very high degree of success, to elucidate the complications and complexities this ill-considered motion contemplates. To simply suggest that the purpose of the thoughtful remarks of that hon. member was merely an attempt to talk out the bill is absurd. I think, also, it was an unfair characterization of the words of the hon. member for Scarborough West who was able to show the House with great precision and skill the pitfalls of any such contemplated measure.
The illustrations used by the hon. member for Burnaby-Richmond-Delta were somewhat personal in character. They referred to the importance of his position in this House of Commons and his absence from home, which resulted in his being unable to fulfil his fatherly obligation of conveying his children to hockey games. The question which must be asked is whether the charitable gesture of the coach or friend was a donation to the people of Canada the better to enable the hon. member for Burnaby-Richmond-Delta to deal with his important responsibilities, or whether it was a donation to a charitable cause represented by the athletic endeavours in his community.
I should like to refer to the Commercial Clearing House Report, CCH Canada Limited. The comment at page 2513-3, dated 1973, states:
The Minister of National Revenue made the following statement in the House of Commons with respect to amateur athletics (Hansard, 7423): 'Organizations formed for the purpose of furthering or promoting amateur athletics are not considered to be charitable organizations within the legal meaning of that term as used in the Income Tax Act. Contributions by business and industry to any branch of amateur athletics are not deductible as charitable donations for income tax purposes. The only exceptions to this general rule are for national organizations, donations to which have been allowed for many years.'
In supporting his contention in respect of this motion the hon. member has selected, I believe ill advisedly, a
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form of activity which in itself is not charitable in nature as defined by the Income Tax Act. Therefore even a financial donation would be ineligible if made in respect of this particular form of activity. This characterizes and demonstrates the difficulty of attempting to appraise what would be the form of service rendered by an individual in carrying out an activity for a supposed charity which is not, in the circumstances, indeed a charitable endeavour.
It can readily be seen by the chosen example of the hon. member that he would not be able to deduct the expense of his automobile. He would not be able to donate a cash contribution which he might properly make in light of the fact that he is absent from his community and unable to fulfil, on a voluntary basis, the support which I am sure he would normally give to this kind of worthy athletic endeavour. In any event it demonstrates that the tax apparatus which we must follow defines the limits of the donation and the type of organization in respect of which the charitable donation might be made.
Hon. members might think me remiss if I did not quote again from the CCH in respect of the meaning of a gift, which is what we are considering, that is now permitted by the act. It states:
The accepted meaning of a 'gift' is that it is something parted with for no consideration. If the donor expects some benefit or enjoyment in return, it is not a true gift. 'Gifts' are sometimes made by corporations to charities for business reasons and may be deductible in full-that is, not subject to the 20% limitation as business expenses. However, a gift to a foundation for the advancement of knowledge in a field closely related to the taxpayer's business was held to be a charitable donation ... The Department has stated in its Information Circular... that the following payments are not eligible for deduction: private benevolence; payments for membership and tuition fees where a benefit may accrue to the donor; amounts paid in 'loose' collections where a donor cannot be identified; the value of services rendered;-
That is what we are discussing this afternoon.
-donations of merchandise where the cost has been charged as a business expense; donations of old clothes, furniture, etc.; and amounts paid for tickets for card parties, bingos, lotteries, etc. even where the events are held for charity. There are exceptions to this last prohibition, however, as already stated, where there is a clear intention to make a gift over the normal value of the entertainment.
In considering once again the matter of the friendly constituent, no doubt of the hon. member driving his children to a hockey game, it is a question of whether this act is done purely out of charitable instincts, or whether it is done in an effort to give the hon. member a comfortable knowledge that everything is being looked after on the home front, and that a feeling of appreciation is engendered on the part of the hon. member to which he may respond in some forni at another time. So again the question is whether the value of the service could properly be termed charitable. I shall not labour this.
I believe I have made clear the point that in an attempt to define charitable donations, even if they should be proper charitable donations under the present act, there are real difficulties created which I believe have been elucidated by the hon. member for Scarborough West.
Another question arises in the case where the contribution may be deemed to be a valid one, not taking into consideration a service such as driving children to a hockey game but perhaps the provision of voluntary services for a clearly demonstrable charitable purpose. In this case there are administrative problems for the depart-
Income Tax Act
ment. For example, let us assume that two people volunteer to drive a car for the Red Cross, one of whom is a doctor whose time is worth perhaps $150 an hour or more, and another who is perhaps a wife, who does not earn.


J. Michael Forrestall: A tax consultant like you probably gets $250.


Anthony Chisholm Abbott: At the moment I am earning considerably less than that.


J. Michael Forrestall: Why don't you have them do something about that?


Anthony Chisholm Abbott: Surely that is a question for another day on another subject.
One driver might receive $2 an hour if he were paid the minimum wage. However, because the minimum wage in British Columbia is higher, in that province he probably would be paid $3 or $4 an hour. The question is: should the volunteer driver receive $150 an hour, or $2 an hour, or some other figure? If we say $150 an hour, then obviously the housewife receives a huge windfall, and if we say it should be $2 an hour obviously the doctor would not volunteer his services.
In addition there is the problem of determining what is the fair value of the service rendered. Revenue Canada can verify these contributions by going to the charitable organization and auditing its books with a cross-reference to the return of the taxpayer. However, this would require massive bookkeeping operations on the part of the charity in question in respect to the records of volunteers for the purposes of Revenue Canada.

I suggest that the hon. member for Burnaby-Richmond-Delta, while putting for the consideration of the House what appears to be a laudable measure, is in actual fact suggesting something that will create problems, confusion, inequities, and a whole host of other difficulties. In fact, it will have a negative effect even on the charities that might legitimately qualify. Almost certainly if a person's services, which previously could be rendered on a voluntary basis, could now be deductible from his income tax, the likelihood is that cash contributions would decrease to that charity while services, voluntary in the past, would be rendered in lieu of cash so that the charity would suffer.
I suggest also that all those who live in communities are more than aware that the whole foundation stone of charities that are truly meaningful is support by voluntary effort. I suggest that even the election of a member of parliament is a worthy project, and it is made more worthy by the fact that thousands and thousands of Canadians of all political stripes are ready to work voluntarily for this purpose without later trying to claim it as a tax deduction.
I suggest that so often these casually, ill conceived motions which seem to contain laudable and equitable purposes, when a stern and qualified eye is cast upon them, such as that of the hon. member for Scarborough West reveal their true colour, which is that they are inadequate, frequently inequitable and frequently hope-

November 18, 1974
Income Tax Act
less in their practical enactment. So, when the hon. member for Sault Ste. Marie (Mr. Symes) suggests that we are simply talking out this measure, I suggest to him that perhaps these measures are not passed due to the fact that there is determination on the other side to see that they do not get passed, and this has happened even in my limited experience. I also suggest that if a list were compiled of worthy measures that did not see the light of day as a result of being talked out, this measure would be very far down on the list of worthiness.


Reginald Cyril Symes: So you are the judge and jury.


Anthony Chisholm Abbott: We will deal with this measure in a democratic fashion. I am simply putting forward my own humble view on this important matter. As I said, it is important because tonight we will hear from the Minister of Finance some real tax measures, some sensible reiterations of the measures that the minister attempted to introduce in the House last May. I am sure that all of us will be stirred positively by the message he will give us tonight, perhaps with the exception of one or two members on the other side. But even though they might be filled with grudging admiration for the minister, in their heart of hearts they will hope that all these measures will be rapidly passed and enacted into law.


Reginald Cyril Symes: You have 15 more minutes.


Anthony Chisholm Abbott: I wish that the subject of the motion proposed by the hon. member had more merit; I wish it contained more meat and more thought so I could speak on it for 15 more minutes.


Stanley Howard Knowles: You are
allowed a total of only 20 minutes.


Anthony Chisholm Abbott: If the motion had more content I may have come to the point of exhausting my time, if not the patience of the members of the House. I want to say that while I know that the instincts of the hon. member are laudable, and that his purpose is not simply to provide a tax deduction for the person who drives his children to a hockey game-I know he has wider concerns for Canadians-I want to urge him and other members who propose tax measures to contain themselves, listen to what the Minister of Finance says tonight, and then frame motions which contain more substance and are of more benefit to the people of this country than the one proposed this evening.


Stanley Howard Knowles: Madam Speaker, since it appears that this motion will be talked out I might as well take two or three minutes. I do not intend to get into the back and forth argument that has been taking place with regard to the workability of the proposal made by the hon. member for Burnaby-Rich-mond-Delta (Mr. Reynolds), but I think he is to be commended for presenting the House with a motion that emphasizes the importance of the work done by volunteer groups. I should like to say to hon. members opposite that, instead of just turning down this proposal and finding all sorts of faults with it, they would render a service if they would urge their government to do something which they might regard as better.

Earlier today in the question period one of the hon. members to the left of us raised the question about there being additional money for LIP grants. I know that LIP and OFY grants have been the target of a fair amount of criticism and abuse, but I think that in the main these grants have found their way to groups and organizations that have done a great deal to help older people and others.


Some hon. Members:: Hear, hear!


Stanley Howard Knowles: They have seen to it that snow gets shovelled, they have helped people to clean up their homes, they have repaired their electrical appliances, they have provided day care, they have organized drama groups, and so on. I think that in the main the money that has been spent in these ways has been well spent, and I suggest to my friends opposite that, instead of just criticizing the suggestion that has come from the Tory benches today, they should go to the government and say that there is a need for more federal funding of volunteer groups that are trying to make life a little better for many of the people of this country.


Mr. Jack Cullen (Parliamentary Secretary to Minister of Finance):: Madam Speaker, frankly it was not my intention to participate in this debate. I had assumed that the mover of the motion would have more to say on the positive side rather than simply to indicate that anybody who speaks against it, or suggests that it might be lacking in some areas, is denigrating the work that might be done by volunteers.
As is known, parliamentary secretaries from time to time are called upon to speak on motions as they affect their particular departments, and the approach I have adopted is that rather than indicate to the people I ask to speak that they should simply fill up the time speaking against a particular motion, I have tried to adopt the approach of giving them the motion and asking them to do some research work on it, and to reach their own conclusions as to whether it has merit or not. If the hon. member will check he will see that members on this side did not speak the full 20 minutes allotted to them but spoke just long enough to put their particular positions forward.
I was very pleased with the research work that was obviously done by the two members on this side who preceded me. They could not find merit in moving the motion to a committee. It seems to me that the mover of the motion has the obligation of indicating the positive aspect, and of telling us why he feels that this motion should go to committee or why it should be studied and considered by the government.
I think the hon. member should be commended for focussing the spotlight of the House of Commons on the people who do volunteer work in this country. If members on this side had found merit in the motion I think it is something they could have talked about with the Minister of Finance (Mr. Turner), or the Secretary of State (Mr. Faulkner), as the hon. member has done. I think the hon. member, at least in part, was commending the minister for setting up a council which was giving recognition to volunteers. I was with him for a while, but then he lost me
November 18, 1974

when he said this commission was not worthwhile. I think it is worthwhile, Madam Speaker.
From the little research I have done on the hon. member's concept I find it interesting. I am sure there is hardly a member of parliament who has not done voluntary work for some church or organization, or even for some political party or government. It seems to me that if we feel this kind of voluntary effort should be recognized through a tax exemption, we are really taking away from the individual part of the contribution that has been made.
Long before the Province of Ontario moved to do anything for retarded children I worked with people in Sarnia who devoted thousands of hours trying to help return such children to the community, have them educated, given workshops and placed in homes. I believe I would have felt it wrong if I had been compensated for the time that I donated as a lawyer compared to the taxi driver who worked beside me. He was doing the same work, and probably doing it better. I would have felt somehow that a shadow had been cast on my efforts had I been able to claim a tax exemption. Rather than encouraging people to volunteer, just the opposite might result.
I think the hon. member for Sault Ste. Marie (Mr. Symes) and the hon. member for Winnipeg North Centre (Mr. Knowles) must both be aware of the administrative nightmare that could be created if this motion went into effect. I believe it is a good idea that the bills and motions proposed in private members' hour go to committees. One of my motions went to committee and I was pleased to have the opportunity of presenting it and hearing some excellent criticism of it. But surely, Madam Speaker, before we send a motion to a committee we should be certain that it warrants the time that would be spent on it.
There are other ways that volunteers might be given credit or assistance, Madam Speaker. I think we would be wasting the time of a committee to refer the subject matter of this motion to it when we do not feel it would be feasible to administer the funds from such a complicated source.
I heard some snickers from the other side when the hon. member for Scarborough West (Mr. Martin) was speaking of volunteers A and B working on the same job, one making a financial contribution, the other a contribution of his time. That illustrated just how extremely difficult this would be to administer.
We hear many complaints about the number of documents and forms that have to be filled out in order to help the government do its work, whether it be tax collecting or gathering information. Just to take churches as an example, a frightening amount of paperwork would be required from them for their voluntary workers. The lady who cooks for the potluck supper might sit down and eat when she is through. Would she then be considered a part time volunteer or a full time volunteer? Imagine the work entailed in preparing T-4 slips for volunteers within a church alone.
The same thing can be envisaged with respect to service clubs. There is the volunteer who spends 2 V4 hours a week to help run the bingo game. Is he contributing more than the individual who spends 2 'A hours every Saturday
The Budget-Hon. John N. Turner
coaching the hockey team? Who makes the decision? Obviously it has to go to the board of directors.
I think the time of the House and the committee can be better served by dealing with matters that have some merit and some possibility of being administered for the benefit of all Canadians. It is correct that there are inequities at the present time. The man who makes a lot of money and gives cash donations is allowed credit on his income tax and the individual who gives time and effort is not, but I do not think the inequity can be corrected this way.


The Acting Speaker (Mrs. Morin):: Order, please. The hour appointed for the consideration of private members' business having expired, I do now leave the chair until eight p.m.
At six o'clock the House took recess.


[Stage Direction]
AFTER RECESS

The House resumed at 8 p.m.


John Napier Turner: That this House approves in general the budgetary policy of the government.
He said: Mr. Speaker, on May 6 of this year I introduced a budget. It was the first budget in our history to be defeated in this House of Commons. It was also the first budget to be reinstated by the Canadian people.
The essential purpose of the May budget was to maintain healthy economic growth and reinforce the attack against inflation. I proposed to do so by a series of measures aimed at increasing the supply of goods and services, moderating the prices of certain products of importance to Canadian family budgets, maintaining the real income of those Canadians least able to protect themselves against the rising cost of living, and aimed at helping to stem the erosion in the value of savings. These continue to be my objectives.
Two of the measures proposed in that budget have already been implemented. The average yield of outstanding Canada Savings Bonds has been increased and the sales tax on clothing and footwear has been removed. The government believes that all of the remaining proposals included in the last budget are required to deal with current economic conditions and it is my intention to reintroduce them, modified as necessary to meet the requirements of today.
These broad measures need, however, to be supplemented and extended because economic conditions and prospects have changed significantly both at home and abroad.

November 18, 1974
The Budget-Hon. John N. Turner

The widespread expectation six months ago that the tide of world inflation would begin to recede this year has been frustrated. Poor grain harvests in Canada, the United States and elsewhere foreshadow a resurgence of food price increases. The decline in prices of a number of industrial materials has been less than forecast. Wage and salary costs are accelerating sharply in Canada and other countries. Interest rates climbed from already high levels because of the continued surge of global inflation, the disturbance to international financial markets, and restrictive monetary policies in some key countries. The slowdown of economic growth in the major industrial nations has been more pronounced and persistent than predicted. Massive balance of payments deficits and surpluses resulting from the fourfold increase in world oil prices are imposing serious strains on the entire world system. For many developing countries the shortage and high cost of food and fertilizers and the drastically increased prices of energy have raised the spectre of disaster.
Canada has participated actively in efforts to strengthen international institutions and in the arrangements they are making to help deal with these problems. Since these issues have crucial implications for every country in the world, their ultimate solution depends heavily on international co-operation. I have had lengthy discussions on these developments during the past few months with my counterparts from every major industrial nation and from the Commonwealth.
But we have a duty as a nation to keep our own house in order. We must also try to offset the impact on our economy of adverse developments abroad to the extent that is possible without compounding the difficulties of others. Constructive discussions were held among First Ministers in Ottawa late last month and I was given an opportunity to brief them on international developments and the economic situation in Canada. Over the past several weeks, as members are aware, I have had extensive meetings and consultations with my provincial colleagues.

We in this country are confronted by two major economic challenges-dealing with persistent, deep-seated inflation and at the same time maintaining a good level of production and employment. This will require us to steer a narrow course if we are to avoid more inflation on the one hand and the risk of a recession on the other. And in doing so, we must also do everything we reasonably can to protect Canadians who are least able to protect themselves from the ravages of both. That is what this budget is all about.
International Developments I
I should like to turn my attention first to developments on the international scene.
You will recall that strong inflationary forces had emerged even before the energy crisis of late 1973. An enormous build-up of international liquidity arising from U.S. balance of payments deficits and concurrent economic expansion among industrial countries had created demands that could not be physically satisfied. Crop failures added to the problem of inflation. Then, in December

of last year, came the cutbacks in the supply of oil and the explosion in its price. The full consequences of the quadrupling of oil prices, coming on top of these underlying problems, cannot even yet be known with certainty. But it is clear that they have precipitated a combination of economic and financial difficulties without precedent. In these circumstances, it would be unwise for any of us to underestimate the threat to world economic and social stability.
Let me outline the nature and dimensions of this predicament. Consumer prices in the major industrial nations may average about 14 per cent higher in 1974 than in 1973, with Japan suffering a 24-per-cent increase. The view now is that in 1975 the average rate of inflation for these countries may not be much lower than 12 per cent.
At the same time, there has been a pervasive slowdown in economic activity. Last year member countries of the Organization for Economic Co-operation and Development achieved average real growth of 6.3 per cent. In 1974 they will show virtually no growth. Next year it is expected that expansion, if any, will be marginal.
Associated with these developments is the emergence of huge balance of payments deficits of oil-importing countries. OECD nations had a current account surplus of about $2 billion in 1973. In 1974 they will have a deficit of around $40 billion, and this may be repeated in 1975. When the deficits of other oil importers are taken into account, including developing countries, this figure will be upwards of $60 billion this year and could be of the same magnitude next year.
The speed with which these problems have emerged and spread to virtually all countries is a measure of their high degrees of economic and financial interdependence. It underlines the need for close and effective international consultation and joint international action. These problems demand continuing surveillance by world organizations that can take a comprehensive view and muster concerted action. Canada is playing a very active role in the development of international initiatives.
We assisted in the establishment of the new Interim Committee of the Board of Governors of the International Monetary Fund and the Development Committee of the Fund and World Bank. Canada sees these committees as important instruments for bringing the collective political will of the member countries to bear on solutions. I intend to give these efforts all the time I can.
When it next meets in January, the Interim Committee will address itself to the monumental problem of recycling oil money. This is urgent because not all countries in deficit will, on their own, be able to find the funds they need. There is real doubt that the private financial system will be able to transfer the huge surpluses of oil producers to oil importers without severe financial strains. We hope that the Interim Committee will be able to make positive recommendations so as to ensure that the recycling process goes forward without seriously disrupting international trade and payments.



But recycling will only tide us over the immediate problem. It will not provide a long-term solution. In time, many countries will have to reduce the rate at which they are accumulating debts. This means that they will have to bring their external payments into better balance. Many approaches will be needed-perhaps lower oil prices, conservation in the use of energy, increased exports and the sale of equities and real property to the oil producers, more aid from them to less-developed countries, and other measures. Our ability to co-operate internationally will be severely tested, but we see nothing to be gained from policies of confrontation.
There is the danger that balance of payments difficulties will lead countries to resort to restrictions on trade. Such measures cannot solve the world's difficulties. They can only make them worse. It is for this reason that the Canadian government has strongly supported international pledges against the use of trade restrictions to deal with payments problems.
I hope that we will soon be able to proceed to the active stage of the Multilateral Trade Negotiations initiated last year at the GATT Ministerial Meeting in Tokyo. We must carry forward the attack on unnecessary barriers to trade and contain the pressures of protectionism. We must also examine the international trading rules to ensure that they meet the needs of our times and that they assist the over-all process of adjustment in the world economy.
It is critically important that the United States administration get the legislative authority it needs to play its full part in these negotiations.
I am deeply troubled by the potential disaster facing many of the poor countries of the world. A number of them can no longer pay for food, fertilizer, fuel and many other essentials. All countries, including Canada, must review their foreign aid programs in the light of these tragic developments.
Canada must, at a minimum, help these countries meet the most urgent and basic need of their people-food. My colleague, the Secretary of State for External Affairs (Mr. MacEachen), announced at the World Food Conference in Rome that Canada would increase its contribution under the Food Aid Convention to provide three million tons of grain over the next three years. We intend to expand our contributions of other forms of food aid just as quickly as we can. We attach a particularly high priority to helping developing countries increase their own food production. These are moral commitments. We intend to fulfill them. [English]
The Canadian Economy I
I turn now to the economic picture in Canada and our own prospects for the future. I have already noted that world economic trends have shifted toward slower real growth, more protracted inflation and deeper payments imbalances. Consequently, the outlook for the Canadian economy is less bright than when I brought down my budget last May. Output, employment and income will all continue to grow in 1975, but at rates below potential. The disappointing harvests in North America and elsewhere, continuing high prices of some commodities, and cost
The Budget-Hon. John N. Turner
escalation in Canada have all combined to postpone the expected relief from high rates of inflation.
The Canadian economy began 1974 with the momentum from last year which had carried it to peak of productive capacity. This momentum was maintained until the late spring. There were widespread scarcities of materials and many kinds of labour. Since early summer, however, signs of slowing down have appeared. One of the principal causes was the deteriorating economic performance of the countries to which we export. Another was the decline in new housing starts-especially in rental housing, where construction was curtailed by the increasing squeeze of costs against rental income. We also suffered from a very serious loss of production as a result of extensive work stoppages caused by indpstrial disputes.
Our economy, however, has firm underpinnings. The volume of consumer buying is keeping pace with the continued increase in real income of Canadians. Capital investment by business is growing strongly.
When the record is all in, the Canadian economy will probably show a real increase in Gross National Product this year of 4 to 414 per cent.
In the May budget I forecast that employment would increase in 1974 by more than 300,000. In fact, it has increased in the last 12 months, by some 390,000 and over the last two years by some 870,000-a phenomenal achievement by any standard. The unemployment rate is now lower than it was a year ago.
During the strong economic expansion in Canada since 1970, unemployment did not dip below 5.2 per cent in any quarter. Yet there was evidence of widespread tightness of labour markets, particularly in late 1973 and early 1974. There was a sharp increase in job vacancies and help-wanted advertising. Frequent complaints of scarcities of labour, particularly of skilled workers, were heard in many parts of the country. Our economy now seems to reach a condition of widespread scarcity and strain in labour markets at somewhat higher unemployment levels than in earlier postwar cycles. The explanation would appear to lie in changes in composition of the labour force, together with changes in our social policies and improvements in family incomes which enable people to take more time to search for the jobs they want.
Canada, like other countries, has had a continuing upsurge of inflation. Some commodity prices have fallen in the last several months. As I noted before, there had been hope earlier that good harvests around the world would ease the rise in food prices. This hope has faded for the present. In addition, the response to earlier international price increases has provoked domestic forces of cost-push inflation in Canada. Profits have risen strongly this year. Wage-rate increases have accelerated. [Translation]
Many private forecasts of Canada's economic prospects through 1975 have been made recently. In respect of real growth they range from 1 per cent to over 4 per cent. Their views on inflation range from a little more to a little less than we are experiencing this year. Their projections for unemployment are from 6 per cent to nearly 8 per cent.
1422

November 18, 1974
The Budget-Hon. John N. Turner
Our own view of the prospects for real growth in production and employment next year-in the absence of any policy changes-was not nearly as pessimistic as the low forecasts, but less optimistic than the high ones. Here is how the situation looked to us as we started to plan the budget. The poorer outlook for the economies of the United States and other major industrial nations indicated that Canadian exports would not be a source of strength. The prospects for Canadian housing activity in 1975 looked to be substantially poorer than this year. We expected that the volume of goods and services bought by consumers would continue to increase because of the underlying strength and stability of the real income at their disposal. But we did not expect that consumer spending would lead economic growth, as it did earlier in the business upswing. We considered that the strongest element in the picture would continue to be private capital investment in new plant, machinery and equipment. For 1975, the latest readings on investment intentions, building permits, contracts awarded, new orders and work in the hands of architects and designers indicated continued strong real expansion in business investment. But the uncertainties of the situation, particularly with respect to costs, sales and financing still raised the possibility that some projects would be postponed or cancelled.
Given the weaker outlook for exports and continued strong imports because of relatively stronger growth in Canada than in other countries, we expected some increase in the deficit of the current account of our balance of payments.
We believed that the increase in prices could be more moderate in 1975, since the easing in world non-food commodity prices already underway would work through the Canadian price structure in the next few months. We expected that the easing of interest rates then beginning would also contribute to lower costs. Energy prices would certainly not be the engine of inflation that they were during the past year. Taken over-all, however, the prospects depended heavily on food prices. If grain harvests were good and the output of other farm products rose, there would be a slower increase in food costs. But we felt that a slowing of inflation in 1975 would also depend on moderation in the setting of prices and incomes in Canada. [English]


THE THRUST OF POLICY
[Stage Direction]
Mr. Speaker, I turn now to the thrust of policy that I believe to be appropriate in the light of this appraisal of the pre-budget prospects. We are confronted by the twin problems of inflation and slower growth. They are very closely related, since inflation-if allowed to get out of hand-threatens the continued growth of real income, production and employment. Inflation creates major uncertainty and undermines that intangible element of confidence that is so important to the maintenance of continued healthy growth. It erodes savings and distorts and disrupts financial markets so vital to the smooth functioning of our economy. Inflation can also jeopardize our international competitive position.
We must solve these twin problems together. We cannot choose to deal with one and neglect the other.
There are some who say: "Let us live with inflation; it's not too bad as long as we ensure full employment and

protect the weak." There are others who say: "Inflation is so great a menace to our economic, social and political life that it must be rooted out, even at the risk of a serious recession and massive unemployment."
I reject both extremes. The first is unrealistic; the second is inhuman. The only objective which is acceptable to me, to this government and, I believe, to this House, is good economic performance in every respect.
What does this objective call for in terms of policy? No single approach can do the whole job. A combination of policies is needed. Let me outline my broad approach before describing specific measures.
The first essential is action to sustain demand. In the light of the present outlook for the next 12 to 18 months, this is imperative if we are to achieve a rate of growth of production and employment that more closely approaches our potential. This will be a major goal of our fiscal and monetary policies. It must be remembered that much of what we propose tonight will not bite in economic terms until well into next year. Politicians, journalists, even some economists, are often inclined to underestimate the time lags in the impact of economic policy.
Second, the fiscal stimulus should come primarily from a further cut in taxes, rather than an additional increase in expenditures. I believe that tax cuts can help to reduce prices and costs directly or indirectly and thus slow down the upward momentum of inflation. An indiscriminate or excessive increase in expenditures would exacerbate the pace of inflation.
Third, we must do all that we can in these circumstances to restrain the growth of governmental expenditures, particularly those that do not contribute directly to an increased supply of goods and services, that do not help those Canadians least able to protect themselves, or that do not directly moderate price increases. We have sought and shall continue to seek to cut out waste, to place limits on the growth of the public service and to approve only the most essential new programs. A tough line has been taken in the planning of expenditures for 1975-76. In present circumstances, we must do all we can to ensure that outlays grow no faster than the economy as a whole. For the year 1975-76, the rate of growth of our expenditures will be significantly lower than it has been in recent years.
Fourth, we should apply stimulus selectively where we can help to buttress weak points in the economy. Similarly, we should constrain governmental capital projects in those parts of the country where conditions continue to be tight. This selective approach as well as our regional development policies, is especially important when the economic situation is so mixed, with shortages continuing in many sectors and regions and surpluses developing in others.
Fifth, we must ensure that private capital investment remains strong. This is a key factor in terms of maintaining demand now, generating new productive capacity and employment, and moderating the rise of prices in the future. I have stressed consistently the importance of encouraging the growth of supply as an essential part of any effective anti-inflationary strategy. The outlook for capital investment remains good, but there are potential
November 18, 1974
[Stage Direction]
difficulties arising from the slowdown in the demand for exports and the problems of financing. We want to make sure our efforts to modernize and expand our industry do not falter.
Sixth, continued attention must be given to mitigating the effects of inflation on the more vulnerable members of our society. I have said before that I do not intend to fight inflation on the backs of the poor, the weak, the unorganized or the unemployed.
The final element in our over-all approach is a comprehensive series of consultations with all sectors of the economy to seek to develop a co-operative national effort to slow down increases in costs and prices. This can make a key contribution to success in solving inflation and slow growth.
I have referred earlier in my remarks to the changing character of recent inflation. The difficulty now is to be found not in general excess demand, but in other factors. I have already spoken of the absolute and relative increases in prices of food and energy throughout the world. We must recognize that these increases reflect a fundamental change in the supply of cheap resources in the face of constantly increasing demands. Consumers cannot escape the impact of these structural price changes on their standard of living. Much higher prices for food and energy have made more difficult the task of reconciling the efforts of the various social and economic groups to maintain or increase their shares of the national income. Given the inflation which has occurred, no one group is willing to exercise restraint unless it knows that others will also exercise restraint. Rather each group feels compelled to seek protection against the highest rate of inflation which it thinks might occur.
The hard truth remains, however, that in this struggle the sum total of all the claims on the nation's resources- however justified they may seem to be-clearly exceeds what is in fact available to be shared. No group is likely to succeed is getting the full share of the real national pie to which it feels entitled. So long as each continues to attempt to enforce its claim by pushing up its price, its wage, its interest rate or tax rate, the outcome can only be further inflation. We have to find a better way of reconciling the competing interests of the various groups which make up our society. No group need lose in this search. Indeed, if we succeed, all can gain because the over-all performance of the economy will be enhanced by controlling inflation.
This is why we need a national consensus about what the various groups can safely take from the economy over the next few years. Co-operation must be the watchword. We will give leadership, but we will not try to impose solutions. The common objective must be to bring the rate of inflation down, year by year, to acceptable levels.
As a result of the extraordinary progress made over the last several decades in developing food and energy, we came to regard them as relatively cheap and abundant. That has all changed in the space of a few short years. We have become painfully aware that our capacity to produce both these essentials is not unlimited. The growing scarcity of these resources compels us to husband them wisely.
The Budget-Hon. John N. Turner
On a world scale, it is not just an economic problem. It is a moral issue, because for many people and for many countries it is survival which is at stake. Many countries haven't enough energy to meet the basic needs of their people. Millions of people haven't enough to eat. For Canadians this is not a question of economics; it is a matter of conscience.
Should we live as high as we do?
Should we waste as much as we do?
Do we not have a duty to conserve energy? Do we not have an even greater duty to conserve food in a starving world?
These are not properly matters for a budget. But I do believe they are matters for the conscience and private conduct of 23 million Canadians.
Governments can, of course give a lead. Canada has pledged more food aid. The more we save, the more we can pledge.
As far as energy is concerned, my colleague, the Minister of Energy, Mines and Resources, will shortly be bringing forward important conservation proposals.

[Stage Direction]
Resource Taxation * I
Mr. Speaker, before I turn to new budgetary measures I wish to address myself to the taxation of our natural resource industries.
When I introduced the federal government's new proposals for resource taxation last May, I said that in developing our policy we had the following objectives in mind;
"First, it is essential that this sector bears a burden of tax on profits that is reasonable relative to the share borne by other sectors of the economy. Second, it is essential to ensure that all the people of Canada derive a fair share of the substantially increased revenues that flow from the higher value placed by the world on these resources. Third, the federal government should recognize the special position of the provinces with respect to the taxation and charges on resources within their boundaries. Fourth, the federal government must ensure that provincial royalties, provincial mining taxes and other arrangements having similar effects do not unreasonably erode the corporate income tax base. Finally, over-all Canadian tax policy must have regard for the position of these industries in terms of international competition and in terms of the financial resources they require to bring forward the supplies needed in the years ahead."
I stand behind these objectives. And, more than ever, I recognize and respect the aspiration of our Western provinces to use the proceeds of their resources to diversify their industries and to broaden the base of their economies. Western Canada wants, and is entitled to, its place in the sun.
The May proposals have been criticized principally from two sources, industry and provinces.
The petroleum and mining industries argue that they are being overtaxed. In some parts of this country, that
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November 18, 1974
The Budget-Hon. John N. Turner
charge may well be true. But I believe that it is not the federal government which is overtaxing. Surely all Canadians would agree that the Canadian people as a whole are entitled to a reasonable share of the profits earned by these industries. In fact, many industry representatives to whom I have spoken agree that the federal share, as proposed in the May budget, is not excessive. Rather, they contend, it is the combined effect of federal and provincial levies that is excessive.
From my many conversations with industry representatives during the last six months, I have obtained a better understanding of their problems, and their investment needs. I think that those in industry have also obtained a good understanding of my position. Let me repeat my conviction that Canada must have strong private resource industries if we are to obtain the supplies needed in the years to come. They need a sufficient cash flow to undertake further exploration and expansion and provide a fair return to their shareholders.
Although the provinces are by no means unanimous, the core of their criticism is that the disallowance of provincial royalties, taxes and other similar payments is somehow an attack by the federal government on provincial ownership and jurisdiction over natural resources. I have talked with provincial ministers from all 10 provinces and I have tried to reassure them that this is not so. No one is questioning the provinces' ownership or jurisdiction. But it is abundantly clear that the British North America Act gives the federal Parliament the right to tax profits derived from these resources.
Obviously, only part of the solution lies within the federal domain. The other part is clearly a responsibility of the provinces. Each level of government is sovereign in its own sphere. Yet a knowledge and understanding of what the other level of government is doing and an effort to harmonize objectives should contribute to reasonable policies. I have reviewed the May 6 proposals and concluded, in a spirit of accommodation, that I should propose some changes which would be helpful to both industry and to the provinces.
Before discussing them, I would like to outline those proposals which I made last May that I believe should not be changed.
First, I proposed that the national rate of tax on resource production profits should be set at 50 per cent.
Second, I proposed that the special abatement of 15 points of federal Tax in respect of mining production profits, which had been scheduled to come into effect in 1977, be applied immediately. The result of this special abatement was to reduce the federal rate of tax on mineral production profits to 25 per cent.
Third, I proposed that automatic depletion be terminated immediately and be replaced by the new system whereby depletion had to be earned. Furthermore, I proposed that depletion be permitted only up to 25 per cent of production profits as a deduction from taxable income; the previous limit was 33 'A per cent.
Fourth, I proposed that royalties, taxes and other like payments to governments should no longer be recognized as a deduction in computing income for tax purposes. My reasons for this action were described in the May 6 budget

and I have elaborated upon them since. I am satisfied that this is a necessary step in order to avoid the erosion of the federal tax base.
I have considered carefully permitting deductibility of royalties and I have concluded that this approach does not offer a practical solution.
I acknowledge that royalties in respect of property rights have traditionally been deductible as a business expense. However, in tax reform, we began the process of disallowing certain income royalties in the mineral field and substituting federal tax abatements. Today, it is evident that a royalty is no longer a royalty in the traditional meaning of the word. There have emerged various provincial charges which are thinly disguised income taxes.
Today provincial charges take many forms. They are no longer limited to flat charges against a unit of production. Now there are provincial charges that are determined by price, profit and volume. In addition, there are provincial claims exercised through joint ventures and marketing boards. In fact, there are so many kinds of provincial charges and claims that it would be virtually impossible to draft workable legislation which could distinguish between bona fide royalties, traditionally deductible, and other taxes and charges.
That being so, we have chosen to disallow the deduction of all these levies and to make room for the provinces by giving additional tax abatement. In this way, the provincial taxes and charges and the federal taxes will each be discrete, and visible decisions, which each can take in the light of what they know the other is doing, giving full recognition to the needs of the industries.
Surely the goal is to find a compromise which gives reasonable results in financial terms to the provinces, to the industries and to the federal government. This is what my proposals aim to do.
I would like now to take up the May proposals in which I am making major changes.
First, in respect of oil and gas production profits, I proposed in May a new abatement of 10 points of federal tax, resulting in a federal rate of 30 per cent. I believe that a 30 per-cent rate of federal tax is reasonable for the year 1974, given the current strong profitability and the healthy cash flow of the petroleum industry.
I have tried, however, to look ahead and the picture is changing. Our demand for energy is rising and our known reserves are declining. New sources of supply, given their nature and location, will be expensive to find, develop and bring on stream. Our reading of the situation is that the industry's need for funds as they carry out this program will build up over the next two or three years. Clearly, if industry is to do the job that must be done, it will need adequate financial resources and a prospect of a reasonable return on its investment. For these compelling reasons, I propose that the federal rate of tax on petroleum production profits be reduced from 30 per cent in 1974 to 28 per cent in 1975 and to 25 per cent in 1976 and subsequent years. By 1976, the federal rate on oil and gas production profits will be 25 per cent, the same as on mineral production profits.
November 18, 1974
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Second, Mr. Speaker, in the May 6 budget, I proposed that the rate of write-off for expenditures on exploration and development for both petroleum and minerals be reduced from 100 per cent to 30 per cent. At that time, I felt that such a lower rate was more appropriate in the light of the existing circumstances of the natural resource industries. However, I have been persuaded by the arguments presented to me over the past several months by both large and small companies that exploration in Canada is becoming ever more expensive and risky. It is difficult, particularly for smaller companies, to borrow exploration capital and, therefore, there is a heavy reliance on internally-generated funds. On the other hand, expenditures on development are more similar to the capital expenditures incurred by other industries. Hence, for both petroleum and minerals, I am proposing to restore the 100 per cent write-off for exploration expenditures, but to retain the proposed 30 per cent rate of write-off for development outlays.
For the year 1974, I estimate that the changes I am proposing tonight will improve the position of the oil and gas companies by about $100 million and of mining companies by about $15 million as compared with my May proposals. This saving for the resource companies affected is a full 25 per cent improvement over the May position. It is more difficult to estimate the value to the companies of the tax reductions I am proposing tonight for subsequent years because of the many uncertainties about price, volume and other factors. Nonetheless, I can say that the saving will be at least $185 million for these companies in 1975 on any reasonable assumptions as compared to the May proposals. For the petroleum companies, the benefit in 1976 will be even greater because of the further reduction in the federal tax rate.
Mr. Speaker, both for the current period and for the decade ahead, I believe that this modified series of measures represents fair and reasonable federal taxation of these natural resource industries. Moreover, the effect of the modifications to the original May proposals will be to improve significantly the financial position of these industries both in the short and long term.
We have pulled back from our original proposals. We want resource industries adequately taxed; but we want to see their financial position sufficiently strong to enable them to develop and to deliver the supplies needed in the years ahead. We have done our part. I now appeal to the provinces, which also have a responsibility to these industries and to the Canadian people, to do their part. I have no doubt that if the provinces respond to the needs of the industries and the nation as I have tonight, the problem for those industries will be resolved.
[Stage Direction]
Equalization Payments
Closely related to taxation and other developments in oil and gas is the matter of federal equalization payments to the provinces. Hon. members know that the rapid escalation in oil and natural gas prices has caused the revenues of the oil and gas producing provinces to grow enormously. If all of the new revenues were to be equalized, the additional cost to the Canadian taxpayer within the next few years could approach $2 billion annually-and that is on top of current payments of about $1.7 billion.
The Budget-Hon. John N. Turner
Under certain circumstances, even the province of Ontario could be receiving equalization. This would not make sense.
In the face of the extraordinary situation brought on by the world oil crisis, we have sought three things. First, to protect the basic equalization formula. Second, to ensure that total provincial revenues from this program continue to meet the needs of the provinces receiving equalization. Third, to ensure that the Canadian taxpayer is not heavily over-burdened. In short, I believe in the principle of equalization and I want to preserve the viability and credibility of that system.
When this problem emerged last winter, I expressed my great concern about the threat posed to the equalization program. During the First Ministers' meeting last January I said we would prefer to find some way to shield this program from the consequences of the oil crisis, without attempting a fundamental restructuring of the entire system.
When First Ministers met for a second time in March, a solution was sought under which producing provinces would set aside a portion of their increased revenues from oil for energy development rather than use these funds for general purpose spending. The revenues so set aside would not be equalized. The remaining oil revenues would be, however, adding at least $100 million to the equalization program on account of oil.
We have been making payments to the provinces on the basis of our understanding of the amounts that would be set aside by the producing provinces. As a result, payments are currently some $163 million higher than our original estimates for this year, of which oil royalties account for $126 million. The necessary legislative changes to give effect to this understanding have awaited the establishment of the capital funds by the provinces. All of these funds, however, have not yet been set up. Alberta is enjoying an increase in its revenues from oil and gas of a magnitude unprecedented for any government in Canada. It is not surprising that Alberta has experienced difficulty in deciding how its new revenues should be allocated. Nonetheless, in the absence of such a fund all Alberta oil and gas revenues would, technically, be subject to equalization. And the amount of equalization payments for which the federal government would be liable could be drastically affected, by the unilateral decision of one or two provinces. For all the reasons I have stated, we simply could not put this enormous additional burden on the Canadian taxpayer. Rather than restructure the entire equalization program now, I have chosen to protect the basic formula and give effect to the intent of the understanding reached last March in a simple way.
This new proposal will relate both to oil and natural gas revenues. When the international oil situation was discussed by First Ministers last March, the crisis had not yet reflected itself in significantly higher natural gas prices. Consequently, natural gas did not figure in the discussions at that time. We now know that natural gas prices are also rising sharply. It is possible that within the next few years increased provincial revenues from natural gas could add another $1 billion annually to the burden the Canadian taxpayer would have to bear if these revenues were to be equalized in full. We would then be faced with
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November 18, 1974
The Budget-Hon. John N. Turner a further threat to the viability of this program. The reasons for limiting the equalization of oil revenues are equally applicable to revenues from natural gas.
According to the understanding reached by First Ministers last March, the establishment of capital funds by producing provinces would have taken up in total about two-thirds of additional oil revenues, and left about one-third for general purposes. What I am proposing now is a change in the equalization formula which will have the effect of including all of the oil and gas revenues related to the pre-crisis situation, plus one-third of the additional oil and gas revenues related to the subsequent tax and price changes.
Before bringing this new formula into effect, I will consult the provinces at the next meeting of Ministers of Finance and Provincial Treasurers in a few weeks.
I come now to the specific new measures to give effect to the budgetary policy as I described it earlier.
I have already referred to the short-term prospects for construction of new housing. The projected weakness in this sector of our economy troubles me a good deal. It threatens to reduce employment, raise production costs and increase housing prices and rents. Even more important, a reduction in the supply of new housing could lead to a lower standard of accommodation than Canadians deserve.
The government is determined not to let housing construction drop to unduly low levels. Measures proposed in the May budget should make an effective contribution to this end, and will be reintroduced. Additional programs by the Central Mortgage and Housing Corporation have recently been announced. This budget contains further major new initiatives.
Before I turn to a discussion of new responses, let me recall to Members the measures announced last May. First, I proposed that the carrying costs on land awaiting development would not be chargeable against other income, but could be taken into account only when the land was sold. My colleague, the Minister of State for Urban Affairs, and I have both listened carefully to the debate on the merits of this proposal. We are both persuaded that this measure will indeed assist in bringing more land on to the market more quickly. Hence, I propose to reintroduce this measure as originally announced.
Second, in my last budget I proposed to eliminate the sales tax on construction equipment and on materials used in municipal water distribution systems. These sales tax reductions will become effective tonight.
Finally, in order to assist young people in accumulating the capital required for a down payment on a house, I announced last May, and I want to reaffirm tonight, the introduction of a new savings vehicle to be known as the Registered Home Ownership Savings Plan. I hope and expect that the bulk of the savings flowing into this plan will provide an important new source of mortgage funds to finance the construction of the new housing we require in this country.

I believe, Mr. Speaker, that the foregoing is of itself a formidable and effective range of programs, but I am not content to rest there. Still more thrust is needed.
The issue of the sales tax on building materials has long been the subject matter of debate in this House. Up to now I have resisted reduction of this tax for two principal reasons. First, it is a costly step and governments are always confronted with hard choices among competing priorities. Second, I was concerned that such a step would overstimulate an already strong demand. The housing picture, however, has altered significantly in the last few months. As a result of these changed prospects, I propose that, effective tonight, the rate of sales tax on building and construction materials be more than cut in half to 5 per cent. This measure will cost the federal government in a full year $450 million. I am confident that this measure will add stimulus to the industry and will, at the same time, contribute to a moderation of prices for housing.
For reasons already discussed, I am particularly anxious to provide a quick and strong incentive to the construction of new rental housing units. I therefore propose to relax for a period the rule whereby capital cost allowances on rental construction could not be charged against income from other sources.
Specifically, in respect of new, multiple-unit residential buildings for rent, started between tonight and December 31, 1975, the capital cost allowance rule will not apply. This means that an owner of an eligible rental unit will be permitted to deduct capital cost allowance against any source of income at any time. I am confident that this measure will attract a significant amount of private equity capital into the construction of new rental housing.
In my budget of last May, I proposed steps to assure the fullest possible allocation of mortgage funds to housing of more moderate cost. They included a request to the principal lenders to confine high-ratio loans to middle and lower-priced housing. When labour, materials and money were in short supply, it was desirable to direct them in this way in order to benefit the greatest number of people. But the situation has now changed to the point where all demands for new housing can be met. I am therefore withdrawing this request for the time being.
Hon. members will not need to be reminded of the $500 grants to be provided by CMHC for one year to those purchasing new, moderately-priced housing units for the first time. This time limit will increase its effectiveness as an immediate stimulus to housing construction.
Moreover, I am assured by the Secretary of State for Urban Affairs (Mr. Danson) that the policies of the Central Mortgage and Housing Corporation will be adapted to the changing needs of the economic situation. The Assisted Home Ownership scheme has proved its value and will be extended. Much greater emphasis will be placed on stimulating new construction of rental units for persons of moderate income. Moreover, these programs will be a very effective use of government funds because they will provide the incentive that will attract capital funds from the private mortgage market. Legislation to give effect to these new approaches will be introduced at an early date.
I am confident that the combination of measures which I have announced tonight and those originally proposed
November 18, 1974
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last May will provide the impetus necessary to increase the housing stock in this country at a healthy pace and fulfill our commitment to place decent accommodation within the reach of every Canadian.
[Stage Direction]
Measures to Sustain Capital Investment
Mr. Speaker, I have referred often tonight to the two main issues we must confront. First is the need to moderate price increases. Second is the necessity in the year ahead to ensure that our economy continues strong, and that our capacity to expand supply keeps growing. In addition to providing stimulus to demand and having a moderating effect on price in the housing sector, the reduction in the sales tax on building materials will help to sustain investment in non-residential structures and to exercise a similar moderating influence on prices in this sector. In a longer perspective, the economy should benefit from an enlarged industrial capacity and lower overhead costs.
The transportation industry is a vital part of the infrastructure with which our economy must operate. But it is being exposed to cost pressures which are both weakening its vitality and forcing it to translate these cost pressures into price increases. These increases in turn pyramid into cost increases throughout the economy. In an effort to bring some relief to this situation, I am proposing to eliminate the federal sales tax on transportation equipment effective tonight. The equipment covered by this reduction includes railway cars, large trucks and buses and commercial aircraft. It has an estimated annual market value of approximately $1 billion and the cost of the tax reduction to the federal government for a full year will be about $100 million.
Finally, in the area of business investment, I wish to announce the extension of a measure which has made a major contribution to the strong investment performance, which is improving our productivity, enhancing supply, creating new jobs and helping to sustain the Canadian economy at a time when the economies of many other nations are faltering. This measure is the two-year writeoff of expenditures on new machinery and equipment for manufacturing and processing in Canada, which is scheduled to expire at the end of this year. I am now proposing that it be extended without a terminal date. This measure will reduce the federal tax liabilities of manufacturers and processors in 1975 by $150 million.
In addition, I wish to announce that I am renewing the fast write-off for pollution equipment, now scheduled to expire at the end of this year, for a further two years. [English]
Personal Income Tax
Mr. Speaker, I now wish to discuss in detail major proposals affecting the personal income tax. I have in mind the need to sustain the growth of purchasing power over the period ahead. Just as important, I want to protect Canadians as much as possible from what is happening to their own family budgets because of inflation.
Under the existing law-as a result of my budget of February, 1973-taxpayers are entitled to reduce their federal tax liability by 5 per cent, subject to a minimum of $100 and a maximum of $500. Last May, I proposed that,
The Budget-Hon. John N. Turner commencing in 1974, the minimum cut would be increased from $100 to $150. This proposal, which is of most benefit to the lower income groups, will of course be reintroduced.
Let me now turn to 1975. First, members will recall that provision was made in tax reform for successive reductions in the rate for tax applicable to the first $500 of taxable income. For 1975, this will mean that the first bracket rate will be reduced from 12 per cent to 9 per cent. Second, indexing will bring about major tax reductions for all taxpayers. Just a few weeks ago, I informed the Canadian people about the tax decreases that will occur in 1975 as a result of the automatic indexing of the personal income tax system. Indexing will reduce the tax liability of Canadian taxpayers by $950 million in 1975.
Robert Lorne Stanfield: That is not an honest statement.


John Napier Turner: That is an honest statement. I now propose new personal tax measures for 1975. In view of the need to add some stimulus to the economy by reducing taxes, I propose to ask parliament to approve another major extension of the tax cut for 1975. Specifically, I propose:
First, that the basic reduction be increased from 5 per cent cent to 8 per cent of federal income tax otherwise payable,
Second, that the maximum be increased from $500 to $750,
Third, an most importantly, that the minimum reduction be increased to $200.
This measure assists every taxpayer in the country. But the foremost consideration is that the benefits are concentrated among the more moderate income groups. For 1975, this means a reduction in taxpayer liability to the federal government of $615 million and of this amount two-thirds or more will accrue to those earning less than $12,000.
It should be noted that a married wage-earner with two children under 16 would pay no federal tax in 1975 on income up to $5,871. This compared with $4,830 in 1974.
Tax deductions at source will be adjusted next January to give effect to this new measure. Taxpayers will thus start to enjoy early next year an increase in their take-home pay resulting from the combination of four factors: the reduction in the rate of tax on the first bracket of taxable income; indexing; the increase first announced in my May 6 budget speech in the minimum tax cut to $150; and this further increase in the tax cut which I have just announced. As a result of these reductions, the take-home pay of a married taxpayer with two dependent children will rise in 1975 by $214 if he is earning $6,000 per year. If he is earning $10,000 his take-home pay will rise by $250 in 1975.
This $250 is a large part of the increase in the cost of that family's food over the past 12 months. It is apparent, therefore, that these reductions will make a significant contribution to the support of people's real incomes this coming year. I would urge all Canadians to bear this fact in mind when making their demands through their union officers or to their employers concerning their wages. For the average worker this contribution through the tax

November 18, 1974
The Budget-Hon. John N. Turner
system is worth a good deal more than an increase of the same amount in wages, which would be taxable. This same message is relevant for Canadians who get their incomes in forms other than wages and salaries. And I ask them to take into account the benefit of these tax reductions to them when setting their fees, their prices, their rents or other charges.

The Protection of Savings
The House will recall that in my budget of last May, I proposed several measures to protect people's savings agains the eroding effects of inflation. One measure was the introduction of an exemption for the first $1,000 of interest income received by individuals. This amendment will be reintroduced for 1974. In addition, for 1975, I propose to expand the scope of this exception to include Canadian dividend income similar in character to the types of interest income which qualify for that exemption. This should encourage the purchase of Canadian stocks and thereby assist Canadian companies in financing their investment projects through the equity route. It should also provide some welcome support to the market.
I am also proposing to introduce an amendment to the Income Tax Act which will permit recipients of cash bonuses on Canada Savings Bonds to treat the cash bonuses as interest, thus qualifying for the exemption, or as capital gains.
The problem of protecting savings against the erosion of inflation is particularly acute for older people. Generally our senior citizens rely on pension incomes as their main source of support and, for many of them, the real value of those pensions has been shrinking. I have in mind, for example, a person who retired 5 to 10 years ago on a pension which, at that time, appeared to permit him or her to live in modest comfort. Simply stated, for many people the recent spate of inflation has turned the prospect of a secure retirement into a struggle to make ends meet.
The federal government has already taken certain steps to remedy this unsatisfactory condition. First, we have raised the special exemption for those 65 and over. Second, we raised Old Age Security payments and the Guaranteed Income Supplement and indexed them along with the Canada Pension Plan to offset increases in the cost of living.
Third, we have cut taxes within the past two years, and the further substantial tax cuts I have announced tonight will benefit the elderly along with other Canadians.
The $1,000 exemption for interest and dividends to which I have just made reference will also help those who have saved privately, but it still leaves unprotected the future of people who have saved through private pension plans. Therefore, I wish to propose a further measure which will be of direct assistance to people receiving private pensions, by which I mean pensions other than those provided universally through OAS and GIS, the Canada Pension Plan and its counterpart, the Quebec Pension Plan. I propose to exempt from tax the first $1,000 of pension income effective January 1, 1975. This new exemption will be available to anyone in receipt of a private pension and to people over the age of 65 in receipt
[Mr. Turner (Ottawa-Carleton).l
of an annuity from a Registered Retirement Savings Plan or a payment from a Deferred Profit Sharing Plan.
There is another measure of direct assistance to older couples that I am also happy to announce. Under the present Income Tax Act, each person 65 years or older is entitled to a special exemption. As a result of indexing, this exemption will be $1,174 in 1975. Consider the case of an elderly couple. If each has sufficient income to be taxable, then each spouse can take advantage of the old age exemption. However, it is often the case that only one spouse is in receipt of income-for example, a pension. In this case, the old age exemption of the spouse without income is wasted. As another step to relieve the plight of many older couples, I am proposing that to the extent one spouse cannot take advantage of the special old age deduction, then the other spouse will be able to make use of it. This measure will be effective January 1, 1975.
The combined impact of these various measures will bring significant relief to older people. Take the example of a couple both over 65 and retired where one partner has some private savings and is collecting a private pension. Both are receiving Old Age Security pensions. As a combined result of their basic exemptions, the transferable old age exemptions, the interest and dividend deduction, the pension deduction, and the tax cut, the person in this example could receive up to $8,258 in income next year before becoming liable for federal tax.
Other Tax Measures of the May Budget * 1
Mr. Speaker, as I mentioned briefly at the beginning of my remarks tonight, it is my intention to reintroduce the May 6 budget measures unchanged to the extend possible. I have already made reference tonight to a number of these measures, confirmed that they would be reintroduced for 1974, indicated where they would be modified, and described how they would be enriched and extended for 1975.
For clarity, let me state the situation with regard to those measures to which I have not yet made reference:
First, the 10-per-cent surtax on corporate profits earned from May 1, 1974, to April 30, 1975, will be reintroduced substantially as originally proposed.
However, corporations will not be required to adjust their monthly tax instalments to reflect this surtax, since almost seven months have now elapsed since the commencement date of this measure.
Second, the proposal to advance the timing of the final payment of a corporation's tax to the end of the second month, rather than the third month after the end of the corporation's fiscal period, will be reintroduced.
Third, the proposal to reduce the level of the tax-free reserves of large financial institutions from 1 Vz per cent to
1 per cent on eligible assets of over $2 billion will be reintroduced effective for 1974.
Fourth, the general increase in excise levies on spirits, wines and tobacco products proposed last May will be reintroduced effective tonight.
Fifth, the special excise taxes on high energy consuming vehicles are again being proposed in this budget, effective tonight, but subject to some important modifications. I have already spoken about the need to conserve energy.
November 18, 1974

Hence, I propose to reinforce these measures by increasing the applicable rate. For motor cars, the rate over a base weight will be $20 for the first 100 pounds, $25 on the next 100 pounds and $30 for each subsequent 100 pounds. For all but small motor-driven pleasure craft and for all privately-owned aircraft, the special rate will be 10 per cent. For heavy motorcycles, the rate will be 5 per cent.
I have now commented on the revenue-raising measures announced last May. I should also like to make reference to other tax cuts proposed in that budget which have not yet been discussed.
First, members will recall the proposal to eliminate the sales tax on clothing and footwear. In mid-July of this year, the government gave immediate effect to this sales tax reduction under the Financial Administration Act. I wish now to deal with this in a more formal manner by including it in the Ways and Means Motions to be tabled tonight.
Second, the other sales tax reductions announced last May will all be reintroduced effective tonight. In addition to those items already mentioned, such as construction equipment and municipal water distribution equipment, this measure includes the elimination of sales tax on bicycles and municipal transit systems, certain purchases by day-care centres and clinics, and certain aids for the handicapped.
Third, I want to reaffirm the proposal to increase the incentives available to incorporated small businesses. As previously announced, for 1974 and subsequent years the annual limit of $50,000 to which the lower rate of tax applied will be raised to $100,000 and the cumulative limit will be increased from $400,000 to $500,000. This provides up to $11,500 in additional cash flow to every eligible small businessman in the country. For example, he can use it to expand his business, finance inventory, meet his bank charges, or to build up his working capital. Under current circumstances, I have no doubt that he will be able to make good use of the money.
Fourth, in my budget of last May I announced an important change in the rules concerning registered retirement savings plans. The new proposal would permit a person to contribute not just to his or her own plan, but also to that of his or her spouse. In addition, I announced a number of changes relating to the treatment of medical expenses for tax purposes. All of these measures will be reintroduced effective 1974.
A large number of improvements of a technical nature were put forward in the ways and means motions of last May. Since then I have received representations and suggestions on not just the major policy proposals of the last budget, but also on many of the detailed measures. These have led to a large number of technical improvements and additions, details of which will be found in the ways and means motions. The remaining technical motions proposed last May are being reintroduced as originally announced.

Tariff Changes
The Budget-Hon. John N. Turner
There were two sets of tariff measures included in the May budget. The first would have continued from July 1 until December 31 of this year the temporary tariff reductions on a wide range of consumer goods in order to moderate the upward pressure on prices.
I am reintroducing these tariff reductions, but with some changes. I said last May that when they were reintroduced they would not be made retroactive. I have reviewed this group of tariff reductions with the object of proposing a significant group of tariff cuts that can be put in effect for a longer period than was proposed last May. I am proposing that these reductions, which become effective tonight, remain in force until June 30, 1976. Because of the longer period the items of this group will be in effect, because of the introduction on July 1 of the General Preferential Tariff for imports from developing countries, and because of changed price and supply circumstances about which I have received representations, I have made a number of exclusions from the May list of reductions. A reduction of the tariff on refined sugar, as recommended some time ago by the Tariff Board and recently by the Food Prices Review Board, has been added to the list of reductions.
The trade covered by those items on the revised list covered by tonight's proposal was valued at $1 billion in 1973.
Authority is again being sought to withdraw any tariff reduction by Order in Council if it results in adverse effects on employment and production in Canada.
It is my view that these tariff reductions as now proposed will not prejudice our negotiating position in the GATT negotiations.
The other tariff changes in the May budget included the important proposal to increase substantially the exemptions from duties and taxes on goods brought back by Canadian residents from trips abroad. Let me remind Members what the proposed changes were. The quarterly exemption available after an absence of 48 hours will be doubled to $50 from $25. The annual exemption, now available after an absence from Canada of 12 days or more, will be increased to $150 from $100. Moreover, the minimum period of absence required to qualify for the annual exemption will be reduced from 12 days to 7 days. These changes will be of considerable value to the vast number of Canadians who travel outside the country each year and will also be welcomed by our trading partners.
Provision is being made to permit the operation of duty and tax-free shops at border points, in addition to those that already operate at airports.
My May budget also proposed the extension of the dutyfree entry for aircraft and aircraft engines of types or sizes not made in Canada, and a few other amendments. The only change I am proposing is that the free entry for aircraft and aircraft engines run to June 30, 1975, rather than June 30, 1976. Details of all these tariff changes, which come into effect tonight, will be found in the Ways and Means Motions.

The Economic Outlook and Fiscal Position
With the benefit of the measures I have announced tonight, I expect the economy to grow at a rate of about 4

November 18, 1974
The Budget-Hon. John N. Turner
per cent in 1975 and that about a quarter of a million new jobs will be created. These projections are based on the assumption, of course, that there will be no unforeseen deterioration in the international economic environment next year and that we experience no unforeseen shocks here at home. Such a rate of growth will be much stronger than that expected in most other countries. Given the weakness of foreign demand for our exports, it would be extremely difficult to achieve more. To attempt more would intensify the rate of inflation. To attempt less would increase unemployment.
The housing component of this outlook is of special interest to hon. members and to the country. It is my expectation that the combination of measures I have announced, together with some ease in interest rates and borrowing conditions, will lead to a recovery of housing starts from the most recent levels. For 1975, I hope it will be possible to achieve a level of 200,000 starts or better.
We cannot expect to eliminate inflation overnight. It will be a prolonged and tough fight. But we are striving to get the rate of inflation down below the two-digit level next year. It will take a determined effort on the part of all sectors of our society. Self-discipline and a good measure of political courage to get it down to 5 per cent over the next few years.
Mr. Speaker, may I now briefly sum up the fiscal position of the government, taking into account tonight's proposals. I estimate that total financial requirements excluding foreign exchange transactions will amount to $1 billion in the fiscal year 1974-75. This estimate represents a 50-per-cent reduction from the $2 billion that I forecast last May. This reduction reflects the effect that a higher-than-expected inflation rate has been having on our revenues. The inflation has also increased our expenditures, though in lesser degree. Our expenditures would have been higher but for the efforts of the government to restrain their growth.
The total financial requirements, excluding foreign exchange transactions, will build up steadily to reach a figure of $3 billion in fiscal year 1975-76. This does not reflect any relaxation of the government's policy of restraining spending. In fact, our outlays, that is to say budgetary expenditures, payments under OAS and GIS, and our loans, investments and advances, are expected to increase in 1975-76 by 15 per cent as compared with 25 per cent in 1974-75. This financial outcome is the result of the deliberate change in fiscal policy I am introducing in this budget for the express purpose of dealing with economic developments as we see them evolving over the next 12 to 18 months.
Current estimates imply a surplus on a National Accounts basis in 1974-75 of $250 million and a deficit in 1975-76 of $1.5 billion.
Relative to the size of the economy, the financial requirements of $3 billion expected for 1975-76 are no larger than they were in similar circumstances in the past. Our cash balances are high as a result of the buoyancy of revenues this fiscal year and the success of the Canada Savings Bond campaign. The expansion of the capital market-including the banking system-involved in the

expected nominal growth of the economy will be adequate to finance these cash requirements without undue pressure on other borrowers or on interest rates.
I believe that the large cash requirement for the next fiscal year is appropriate to meet the risks of a weaker economy and an uncertain world. This posture is not a relaxation of spending discipline, as I said, but is dictated by my view of the proper response to the state of the economy over the next year or so.
I must remind hon. members that the figures I have presented tonight on the outcome of our accounts are estimates. The actual outcome will reflect the decisions of this House respecting legislation which is now before it or which will be placed before it during the course of this session. All estimates, Members will recognize, are subject to particular uncertainties in the circumstances of today.
With the permission of the House, I should like now to include in today's Hansard supplementary tables showing estimates of Government of Canada cash requirements, details of the budgetary revenues, federal government revenues and expenditures on a National Accounts basis and reconciliations of these figures with those compiled on a Public Accounts basis. The information in these tables applies to the fiscal years 1973-74, 1974-75 and 1975-76.
I should also like to table several notices of ways and means motions setting out the changes I have proposed tonight, and I would ask that they be appended to today's Votes and Proceedings.


Mr. Speaker:: The minister seeks leave to table certain documents. Is it so agreed and ordered by the House?


Some hon. Members:: Agreed.
[Editor's Note: For notices of ways and means motions, see today's Votes and Proceedings.]
[The tables referred to above are as follows:]


GOVERNMENT OF CANADA FINANCIAL
[Stage Direction]
REQUIREMENTS			
	1973-74 Actual	1974-75 Forecast1	1975-76 Forecast1
	(Millions of Dollars)		
Budgetary Transactions	19,367	25,100	27,750Expenditures	
Surplus (+) or Deficit ( -)	-20,040 - 673	-24,850 250	-28,750 - 1,000Net Non-Budgetary Transactions Excluding Foreign Exchange Transactions Loans, Investments and Advances. Other	
Total	-1,712 695 -1,017	-2,350 1,100 -1,250	-2,650 650 -2,000Total Financial Requirements Excluding Foreign Exchange Transactions	-1,690	-1,000	-3,000Foreign Exchange Transactions. . . .	296	4502	Total Financial Requirements	-1,394	- 550	
'Numbers in these columns should be interpreted as mid-points of ranges of estimates.
2This amount reflects transactions to the end of October.
November 18, 1974

[Stage Direction]
1973-74	1974-75	1975-76
Actual	Forecast1 Forecast1
(Millions of Dollars)
Personal Income Tax	. 7,926	10,100	11,350Corporation Income Tax	. 3,411	4,850	5,600Non-Resident Tax	. 324	350	375Customs Duties	. 1,385	1,750	2,150Sales Tax	2,693	2,750	2,850Other Duties and Taxes	1,394	2,850	2,675Total Tax Revenues	17,133	22,650	25,000Non-Tax Revenues	. 2,234	2,450	2,750Total Budgetary Revenues	. 19,367	25,100	27,750
lNumbers in this column should be interpreted as mid-points of ranges of estimates.

[Stage Direction]
1973-74	1974-75	1975-76
Actual	Forecast1 Forecast1
(Millions of Dollars)
Budgetary Expenditures		20,040	24,850	28,750
Deduct			
Transfers to Funds and Agencies2	-1,825	-1,840	-1,920Post Office Expenditures	
Deficit of Government Business	-591	-690	-810Enterprises1	
Add Expenditures of Funds and Agen-	-125	-175	-140cies2	
Government Pension and Social	931	1,145	1,170Security Disbursements4	5,540	6,415	7,560( apital Consumption Allowance.	316	360	410Miscellaneous Adjustments5. . ..	-560	110	-120Total Expenditures, National Ac-	counts Basis	23,726	30,175	34,900
'Numbers in these columns should be interpreted as mid-points of ranges of estimates.
2In the National Accounts, budgetary appropriations to various funds and agencies are replaced by the expenditure actually made by these funds and agencies.
3In the Public Accounts, deficits of government business enterprises are a charge to budgetary expenditures whereas in the National Accounts, these deficits are deducted from remitted profits of other government business enterprises.
'In the Public Accounts, the government pension and social security receipts and disbursements are treated as non-budgetary transactions whereas in the National Accounts, these transactions are reflected in the determination of government revenue and expenditure.
5As in the case of revenues, the miscellaneous adjustments arise as a result of conceptual differences between the two forms of presentation. T hese items represent, for example, reserves and write-offs; purchase of existing capital assets; budgetary revenue items offset against budgetary expenditure; expenditures of reserve accounts and revolving funds; imputed items; and, an adjustment for the treatment of expenditures in the supplementary period.
The Budget-Hon. John N. Turner

[Stage Direction]
1973-74	1974-75	1975-76
Actual Forecast1 Forecast1
(Millions of Dollars)
Revenues
Direct Taxes, Persons	11,028	14,075	15,900Direct Taxes, Corporations	3,627	5,175	5,600Direct Taxes, Non-Residents	322	350	375Indirect Taxes	6,485	8,325	8,600Other Current Transfers from Persons	7	10	10Investment Income	1,783	2,155	2,455Capital Consumption Allowances..	316	360	410Total Revenues	23,568	30,450	33,350Expenditures	Current Goods and Services	6,318	7,350	8,650Transfer Payments to Persons	7,467	9,300	10,925Subsidies	1,005	2,600	2,625Capital Assistance	178	225	350Current Transfers to Non-Residents	336	400	475Interest on the Public Debt	2,547	3,050	3,525Transfers to Provinces	4,954	6,150	7,025Transfers to Local Governments. .	123	150	175Gross Capital Formation	798	950	1,150Total Expenditures	23,726	30,175	34,900Surplus (+) or Deficit ( -)	-158	275	- 1,550
'Numbers in these columns should be interpreted as mid-points of ranges of estimates.

[Stage Direction]
1973-74	1974-75	1975-76
Actual Forecast1 Forecast1
(Millions of Dollars)
Budgetary Revenues		19,367	25,100	27,750
Deduct			
Post Office Revenues and Deficit..	-591	-690	-810Deficit of Government Business Enterprises2	-125	-175	-140Excess of Accruals (+) over Collections (-) Corporate Income Tax	-11	-365Oil Export Tax	224	-55	-25Add Government Pension and Social Security Receipts1	4,888	5,940	6,670Capital Consumption Allowance...	316	360	410Miscellaneous Adjustments4	-500	-30	-140Total Revenues, National Account	Basis	23,568	30,450	33,350
'Numbers in these columns should be interpreted as mid-points of ranges of estimates.
[Stage Direction]
November 18, 1974
The Budget-Hon. John N. Turner
2In the Public Accounts, deficits of government business enterprises are a charge to budgetary expenditures whereas in the National Accounts, these deficits are deducted from remitted profits of other government business enterprises.
"In the Public Accounts, the government pension and social security receipts and disbursements are treated as non-budgetary transactions whereas in the National Accounts, these transactions are reflected in the determination of government revenue and expenditure.
[DOT]'These miscellaneous adjust merit s arise as a result of conceptual differences between the two forms of presentation. These items represent, for example, the proceeds from the sales of existing capital assets; budgetary revenue items offset against budgetary expenditures; imputed items; and an adjustment for the treatment of revenue in the supplementary period.
John Napier Turner: Mr. Speaker, may I now sum up briefly what we see to be the problems ahead of us and how we intend to deal with them.
We believe that the principal threat to the growth of our production and employment comes to us from abroad. The world economy is in a fragile and precarious state, suffering from severe inflation and the gathering forces of recession. If the efforts to deal with the unprecedented balance of payments deficits on oil account are unsuccessful and some governments are unable to carry on with the policies required, the economic results for the world could in those circumstances be severe.
Canada in the past year or so has outperformed most of its trading partners, and the prospect is that with continued good fortune and sound economic management, it will continue to do so. But given our heavy dependence on trade, and our close financial and investment links with the rest of the world, we will not be able to escape unscathed should the international situation deteriorate even more. Therefore, Canada's first line of defence in economic affairs lies, as it has for years, in international co-operation.
It will take all the wisdom, courage and effort that human beings can muster to forge co-operative endeavours of an unprecedented nature, to put aside narrow national self-interest, and to respond generously to the needs of the weaker nations. But that is what is required if we are to come through the next few years whole. Let me assure you that by deeds, by good counsel, by leadership where such opportunities are given to us, and by generosity within our means, we will do what we can to help resolve the dangers which confront us.
Nor will we ignore the problems right here at home. Two-digit inflation, whatever its origin or nature, and regardless of however favourably our situation compares with others, is simply not acceptable to this government. Nor is growing slack in our industries and the threat of rising unemployment for our people. We shall not try to stem inflation by deliberately inducing slack in our economy. Nor will we give fresh impetus to the forces of inflation by driving the economy to excess. We shall need to steer a prudent course.
I have tried to set such a course in this budget.
In our present circumstances, we should moderate government expenditures so as not to add to the pressure on available resources. But while doing this, we must continue to look after the needs of our less fortunate citizens and to enhance the supply of essential goods and services which government is called upon to provide. Governmental expenditure during the year ahead is planned to grow at a considerably slower pace than during the past few years.

Through our taxation system, and in other ways, we are encouraging the private sector to maintain a healthy level of activity now and to build new capacity to increase the supply of goods and services for the future. I am more persuaded now than ever that this is a prerequisite for moderating prices in a lasting way. The taxation measures I have announced tonight in respect of housing and resources and for the processing and manufacturing industries, have been designed with this goal in mind.
We have acted directly on prices, reduced federal taxation on building materials and transportation equipment, and supplemented the measures proposed in my May budget to put downward pressure on the prices of goods that figure importantly in the cost of living or in the cost of putting essential capital stock in place.
Personal income taxes have been reduced further. Taken together with the measures of last May and the automatic reductions through indexation, these steps will boost the take-home pay of Canadians, help to maintain the level of production and, I trust, ease the pressures at the bargaining table.
The special measures to assist Canadians of modest means in receipt of investment and pension income are further steps in a policy I have been pursuing since I became Minister of Finance to protect those of our citizens hurt by inflation who are least able to protect themselves.
Our twin goals are to moderate inflation and to achieve sound growth of production and employment. These are goals which I believe every Canadian supports. But in today's circumstances, the achievement of one depends on the attainment of the other. Inflation is the enemy of sustained good economic performance. This is why we will pursue, with vigour and perseverance, efforts to achieve a national consensus-to proceed not by edict but by consultation-on ways to moderate the inflation. I know this will not be easy. But I have confidence in the Canadian people and in their sense of justice and fair play. I am convinced that if we can be shown that the other fellow is pulling his weight-and not getting away with anything at our expense-each of us will be willing to make a full contribution to the national effort.
I have always been frank with the Canadian people. I have not tried to understate the challenges which face us. I have not claimed that we can be sure of success, no matter what happens elsewhere. Nor have I pressed any panic buttons, because I am confident that, working together at home and abroad, we can overcome our difficulties.
The situation may change. If so, I will not hesitate to recommend a change in course. But this is how I see the issues today-and these are the policies I believe to be suitable today, the policies I recommend to this House.


Some hon. Members:: Hear, hear!


Robert Lorne Stanfield: Mr. Speaker, I dare say there are some who came to this House tonight expecting to witness the grand climax of the Prime Minister's (Mr. Trudeau's) wrestling of inflation to the ground. We have just listened to the Minister of Finance (Mr. Turner) for about an hour and a half in a
November 18, 1974

demonstration of verbal wrestling, and I got the feeling half way through, in fact before half way through, that he would have been very pleased indeed to settle for a draw. I just want to say to those who came here to see inflation wrestled to the ground that I am very pleased they did not have to pay to get in!
The Minister of Finance keeps telling us that he does not propose any cure-alls for inflation. Well, I agree with that. He does not propose any cures at all. He safys he is not going to propose any cosmetic cures for inflation. I would agree with that too. Obviously his view is that a little dab will do, but that is not cosmetic. He says to us that the cure is not going to come quickly. Under this government and this minister you can sure bet on that.


Some hon. Members:: Hear, hear!


Robert Lorne Stanfield: An official from a European country recently visiting Canada asked me how we in this country managed to achieve an inflation rate of 11 per cent when we are self-sufficient in oil and petroleum and buy it at $6.50 a barrel. He expressed amazement. I asked him whether he had ever met our Minister of Finance, who certainly is an over-achiever when it comes to inflation.

I was hoping that in a general way the minister and this government would have changed some of their orientations from what they were evidenced in the budget introduced in this House last May. This was too much to expect. We have before us tonight a budget that still displays the same two flaws-antagonism and self-conceit.

As to the resources industry, sir, the minister has made significant changes in taxes as they directly affect the industry. He seems to have pretended, at least, to have backed off a bit with regard to the provinces, but the essence of his position is still one of confrontation. Having in May created the confusion that he created in the industry, leading to a very substantial reduction in exploration in this country, which was an act of madness by any standard, he confirmed his position here tonight in so far as he has made any changes. We will see what the effect of these proposals is on the provinces, but we have already seen the disastrous effects of the minister's policies which he presented in May.
While the government has been bloody minded with regard to resources, as far as inflation is concerned it is still a paper tiger. In his presentation tonight the minister goes a step beyond his past practice of making a virtue of necessity; he is now attempting to dignify gutlessness in the name of prudence. And he attempts to dignify it in a welter of words, which indicates to me that the government has given up trying to wrestle inflation and is taking the new approach of trying to tell the House the same old story long enough and often enough to bore it to death. He is even sending his ministers to sleep. I say that, sir, in the full recognition of my own sometimes accidental expertise in achieving such an objective.
The Budget-Mr. Stanfield

This budget follows close on the heels of an election through which the Canadian people gave this government a clear mandate to govern this country. It does not now face a minority situation in this House.


An hon. Member:: It is all in its interest.


Robert Lorne Stanfield: Still, the Minister of Agriculture (Mr. Whelan) claims all the credit for it, saying that they could not win without his help. As much in its own interest as in that of the country, the government could not be in a better position to exercise strong leadership and undertake a large scale program to fight inflation.

The government has no fear of being defeated in this parliament. There is no need to gloss over things because an election might be imminent. There is not even a vestige of legitimacy left to any claim that things are not serious enough to call for strong measures. Things have long since been demonstrably serious; even the Speech from the Throne recognized that. The government is in a strong position from which to take significant action, and still it presents a totally inadequate, out of touch rerun of the May 8 budget, with variations on that theme.
This is the minister's fourth budget-I think I am right in that.


John Napier Turner: You are right in that.


Robert Lorne Stanfield: If he keeps on like this we will be able to recite 90 per cent of his fifth budget from memory. We will just have to remember to make a few minor changes to take care of inconsistency, and we will have to presume those important little inclusions to allow for the gutlessness and the intellectual dishonesty.
In that vein, Mr. Speaker, what could have been more dishonest than the minister's year and a half long sermonizing on supply? This was to be the key to bringing down prices-increase supply. This was the government's thrust. The minister wanted us to believe that he was the helpless victim of anchovies with bad compasses. And let us not forget the trouble the poor fellow had with the weather.
We warned, time and time again, that price increases caused by supply dislocations were becoming serious enough to trigger mounting inflationary expectations, and that these expectations must be dealt with firmly or cost-push inflation would sweep through our society like wildfire. Those words were pooh-poohed. It was just a temporary supply problem, according to the minister; evidently just another one of those very irritating aberrations which never ruffle the feathers of finance ministers, past or present, in this government.
Here we are now, Sir, just over six months since the last budget which was still promoting this single line of attack against inflation, and the minister's feathers seem to be in some disarry.


An hon. Member:: Not as much as yours.


Some hon. Members:: Hear, hear!

The Budget-Mr. Stanfield


Robert Lorne Stanfield: The feathers have been flying as the chickens have been coming home to roost, not to mention the eggs, Sir.


Some hon. Members:: Hear, hear!


Robert Lorne Stanfield: The minister was wrong to begin with, way back when he focussed solely on the supply aspect of the inflation problem. Then having focussed on it, to the exclusion of the terrible dangers of substantial cost-push inflation, and even having focussed on supply to this extent, the government made a horrible botch of things. Look at the livestock industry, the poultry industry, the fishing industry and the lumber industry. I wonder whether the minister is talking about the same country I know and visit.


Some hon. Members:: Hear, hear!


Robert Lorne Stanfield: Look at what the minister's inflation policies have done to the armed forces. The Minister of National Defence (Mr. Richardson) has not done that all by himself. Look at these dislocations today, and today's prices, and give the minister his score for performance in stabilizing and improving supply and prices. He deserves to be scored in more than one sense of that word.
Then, as it became clear that this sandcastle about inflation was disintegrating, the government developed a new cover up story which was presented in the Speech from the Throne. It was suddenly time to get out and talk to a lot of people about this terrible international problem of inflation. Some sloganeer in the bowels of some Liberal library dredged up a couple of phrases about "sharing the pie" and "achieving a consensus". Both these pursuits are quite legitimate when they are honestly dealt with, but the way the government is kicking them around these days provides another example of dishonesty, and there is no other word for it.
On November 7 my colleague, the hon. member for Hamilton West (Mr. Alexander), asked the Minister of Finance what progress had been made in his talks with principal groups in the country; talks which both the minister and the Prime Minister said were aimed at a co-operative effort to fight inflation and to seek a consensus on fairly sharing the national productivity pie among wages, prices and profits. The minister replied that talks were in progress and he said he hoped "to provide further clarification to the House on budget night". This was only one of a long list of undertakings the minister hoped, or wished, or promised to follow through on tonight. In his reply he went on to say: "As the program develops, it will be fully apparent to the House and to the people of this country". But I ask any fair minded member of this House-


An hon. Member:: Don't look that way.


Some hon. Members:: Oh, oh!


Robert Lorne Stanfield: Is there anything at all in what the minister reported tonight on that program? Did he say anything here tonight at all except to make it very clear that, from the start, it was a complete hoax and a complete fraud on the part of the Prime Minister?


Some hon. Members:: Hear, hear!


Robert Lorne Stanfield: Mr. Speaker, I think those fellows better relax because this is just a warmup tonight. The minister tried to create the impression tonight that he is imposing restraints on the share of the pie going into the federal treasury. There, too, he was far less than honest, and I accuse him of dishonesty.


Jean Marchand: That is not fair.


Robert Lorne Stanfield: That is not fair? It is not only fair, I am going to document it, but not tonight because I have some mercy for those miserable sinners across the way.
The minister tried to create that impression, and tried to achieve an illusion by sleight of hand. He said expenditures had been trimmed, but expenditures reported now for the current fiscal year are some $450 million higher than even anticipated in May. That is real trimming. It is not the expenditures of this government that are getting trimmed, it is the people of this country.


Some hon. Members:: Hear, hear!


Robert Lorne Stanfield: The minister is able to show a balanced budget because he has, in fact, raised the real rate of taxation in this country this year, and not reduced it as he pretends.
The minister has not come clean with Canadians, and this government has not come clean. It is not offering leadership, and it is certainly not offering leadership by example.


Joseph-Phillippe Guay: Would you run again, Bob?


Some hon. Members:: Oh, oh!


Robert Lorne Stanfield: Mr. Speaker, I just want to say one thing to the hon. member for St. Boniface (Mr. Guay), and I want to say it in a way that is not rude. I wish he would just keep his mouth closed enough so that he would not blow my papers all around when I am trying to speak.


Some hon. Members:: Hear, hear!


Robert Lorne Stanfield: The Prime Minister and the Minister of Finance talked about a consensus, but that really smells of "con", and not consensus. It is all too apparent that any talk about sharing the pie really means sharing what is left after the federal government takes its share. If discussions go ahead on this basis we are doomed to failure, and properly so, and this minister, this government and this prime minister will be responsible for that failure.
On that positive note, Mr. Speaker, I move, seconded by the hon. member for Saint-Hyacinthe (Mr. Wagner), that the debate be now adjourned. I hope you will all be here on Wednesday to hear the remainder of my remarks.


Some hon. Members:: Hear, hear!


Mr. Speaker:: Before putting the motion to adjourn the debate I should bring to the attention of hon. members that the Minister of Finance (Mr. Turner) not only laid certain documents on the table but has requested that they be recorded in Hansard and Votes and Proceedings. I presume that the order that was made at that time would include that request as well. Is that agreed?
November 18, 1974


Some hon. Members:: Agreed.
On motion of Mr. Stanfield the debate was adjourned. [Translation]
Hon. Mitchell Sharp (President of the Privy Council), seconded by the Minister of State for Science and Technology and Minister of Public Works (Mr. Drury), moved: That the House do now adjourn.
The Budget-Mr. Stanfield Motion agreed to.


Mr. Speaker:: This House stands adjourned until two o'clock tomorrow pursuant to Standing Order.
On motion of Mr. Sharp the House adjourned at 9.52 p.m.

Tuesday, November 19, 1974