1974-03-15

PRIVILEGE


Hon. Robert L. Stanfield (Leader of the Opposition):: Mr. Speaker, I rise on a question of privilege arising from a report in today's Globe and Mail which states, among other things:
Mr. Stanfield said Mr. Turner had promised the House and him privately that equalization would be paid on the export tax revenues in order to obtain Conservative support for the export tax bill passed in early January.
There was never any question of the Minister of Finance (Mr. Turner) making me or the House a promise to pay equalization. That is not the point. The point is that the minister said in the House on January 4 that equalization had to be paid. He referred to the transfer of the money, that is, 50 per cent of the proceeds from the export tax to be received by the producing provinces for October, November, December and January, and said:
-As a result of the transfer of that money, those revenues will qualify under the Federal-Provincial Fiscal Arrangements Act as shared revenues and the bill to the Canadian taxpayer under the heading of equalization will be in the nature of $25 million.
This is not a question of the Minister of Finance making any promise to me; it is a question of a statement made in the House and to me regarding the basis on which, in respect of the bill before the House, we should consider whether or not to give the unanimous consent that he required in order that it could be considered and passed.
The minister emphasized to me in those early days of January, as he did in the House, the importance of the federal government going to the then upcoming federal-provincial energy conference with a free hand to negotiate at that conference, and that if the federal government were to continue the commitment it had made in respect of the export tax for the first four months, with all that money going either directly or indirectly to the producing provinces, the federal government would be faced with very large equalization payments for the months of February and March because of the very large jump in the size of the export tax. Under existing law very large sums would have to be paid out of the federal treasury and, therefore, financed by the federal taxpayers unless some agreement to the contrary could be negotiated at the then forthcoming conference.
The Minister of Finance took the position with me that he could not put the federal government in the position of having to make large equalization payments in respect of the months of February and March and therefore could not commit himself to earmarking the entire 100 per cent of the proceeds from the export tax for February and
March for the oil producing provinces. The minister emphasized that he must have half the proceeds from the tax for the months of February and March in the federal treasury without strings because of these equalization requirements and also because of the money that might be required in terms of price cushioning in the eastern provinces. I thought the minister's position and his request, in terms of the equalization provisions and price cushioning, were reasonable and that he should be given unanimous consent on the basis of 50 per cent of the proceeds from the export tax for February and March going into the federal treasury without strings. We gave that consent.
Since then the federal government has changed its position with regard to the receipts by the producing provinces from the export tax being subject to equalization. The Prime Minister (Mr. Trudeau) stated in the House last week that the government's position is that these receipts by the oil producing provinces are not subject to equalization. Recently the Minister of Finance denied in the House that he ever said they were subject to equalization.
In view of the change in the position of the government, I believe that both the House and myself are entitled to some explanation in view of the fact that the House and myself were invited to take a position on the basis of certain statements in this regard by the Minister of Finance which has since been completely reversed. The newspaper this morning mentions a document, supposedly a confidential document, from the Deputy Minister of Finance which, if it is genuine, seems to confirm that the position of the Minister of Finance and of the government in January was that these portions of the receipts from the export tax received by the producing provinces were subject to equalization.
I want to say two things, in fairness to the Minister of Finance. The first is that he now seems to admit, on the basis of what I also read in the press, that he did say what he said in fact in the House on January 4 of this year, that is, that the payments received by the provinces for the months of October, November, December and January were subject to equalization and that this would cost the federal government $25 million. The minister now seems to admit that he did say that and that it was not a conditional statement on his part. I want also to say that the minister, since our exchange the other day, indicated to me that he wanted to see me personally and discuss this matter. He tried to see me yesterday without success because of my own commitments. However, I believe that not only am I but the House is also entitled to an explanation, in view of the representations made in the House in the course of a debate on a bill and the representations made to me in the course of negotiations leading to unanimous consent, of why the position stated by the govern-

March 15, 1974
Performing Arts Grants
ment in January has been abandoned without the slightest explanation in the House.


Some hon. Members:: Shame!


Some hon. Members:: Hear, hear!


Robert Lorne Stanfield: It is not a question of the government having promised anything to the House with regard to the equalization matter or having promised anything to me. It is a matter of statements made.
I must say I am disappointed in the Minister of Finance. I am disappointed in the government. I hope the government and the Minister of Finance will make a full statement to the House at the earliest possible opportunity explaining why the government changed its position and at least offer the House some apology for making representations to the House which were asserted early in January and in respect of which the position has since been completely changed.


Some hon. Members:: Hear, hear!


Mr. Trudeau:: Mr. Speaker-


Mr. Speaker:: Order, please. Perhaps the Chair will allow the Prime Minister to reply to the statement made by the Leader of the Opposition on a question of privilege. I am sure that the Leader of the Opposition does not want me to rule whether there is privilege in the sense that the matter might be referred to a committee. I would be inclined, of course, not to make a ruling because there is no motion suggested or remedy proposed. Normally in such circumstances the minister or member whose conduct is referred to in a statement based on privilege is allowed to reply. The minister is not here at this time. I am not sure whether it might not be better to allow the minister to reply on some other occasion. The right hon. Prime Minister indicated he wanted to reply on behalf of the government. I take it that it is not only the minister but the government that is impugned or referred to in the statement made by the Leader of the Opposition. Perhaps it might be better to allow the matter to rest for the time being.



PERFORMING ARTS


Hon. James Hugh Faulkner (Secretary of State):: Mr. Speaker, the federal government's programs to encourage the arts during the past few years have had a profound effect on the cultural life of the country. This has manifested itself through the burgeoning demand of Canadians for access to the work and performances of our artists in all sectors of our cultural life. Nowhere has this demand been more acutely felt than in the area of the performing arts. As a result, many of our performing arts organizations are faced with the problem of expanding their facilities to meet this demand.
I am pleased, therefore, to announce that a program of capital assistance has been established to enable the gov-

ernment to act on some of the more pressing applications for capital grants. The first grants will go to the Centaur Theatre in Montreal, which will receive $350,000; the Shaw Festival at Niagara-on-the-Lake, which will receive $300,000; and the Orpheum Theatre in Vancouver, which will receive $1 million.


Some hon. Members:: Hear, hear!


James Hugh Faulkner: The federal contribution to the cost of renovating the Orpheum Theatre, the new home of the Vancouver Symphony Orchestra, will be paid over three years beginning in 1975. At the same time, I would like to announce a grant of $1 million toward building a new home for the Citadel Theatre in Edmonton. These funds will be paid in 1975-1976 and 1976-1977.
The basic criteria for this new capital assistance program will be as follows: first, the grants will be available for well established organizations whose artistic and managerial competence has been proven. Second, there will have to be evidence of the organization's ability to meet the operational costs connected with a new or improved facility. Third, careful consideration will be given to the impact that any expansion program is likely to have on the situation of other artistic groups and facilities, to its over-all usefulness and to its relevance to the performing arts in Canada. Fourth, there will have to be adequate financial partnership among federal, provincial, municipal and private sources.
Over the years, the government's investment in the development of the arts in Canada has paid excellent returns. The benefits to the people of Canada far outweigh the dollars spent. I am confident that these measures I have announced today will result in further development of our national artistic life, as well as in greater access to the performing arts for all Canadians.


Mr. Heward Grafftey (Brome-Missisquoi):: Mr. Speaker, we members of the Official Opposition support in principle the statement made by the minister. I am also sure that the minister will understand our satisfaction that this statement was made today in the House of Commons. I sincerely hope that the minister made this announcement today about these grants only after close consultation and co-operation with the associations and people concerned.

With regard to the grant to the Orpheum Theatre in Vancouver, I certainly know how much members of the Official Opposition from British Columbia have worked toward this end, as did the hon. member for Edmonton Centre.


Some hon. Members:: Oh, oh!


William Heward Grafftey: Just look at their mail.


Some hon. Members:: Hear, hear!


William Heward Grafftey: There is one thing I would like to mention in terms of the criteria outlined to the House by the minister this morning, and I am not saying it too critically.
March 15, 1974

The minister mentioned that this kind of subvention-I am not confusing it with the Canada Council per se-is going only to theatre groups, performing arts groups that have already established their viability and ability to carry on. I understand it in this context, but in terms of cultural assistance in general, which does include the Canada Council, I think that too often we pay attention to groups already under way. I think the minister and his officials could do a better job in discovering struggling artists who are excellent and need help. This has been a problem over the years in regard to government assistance to the arts, and I would like to emphasize it again today.
I would also like to draw the attention of the House to the Speech from the Throne in which the government announced its intention to make many changes in council assistance to science, the humanities and the arts. I am sure this will affect the minister's department and the Canada Council. We are very concerned, whether it be artistic or cultural assistance or assistance to the humanities, that this be done in close consultation with all members of the House. Apart from that, we certainly welcome this announcement by the minister today and congratulate him on it.


Mr. Mark Rose (Fraser Valley West):: Mr. Speaker, like the hon. member for Brome-Missisquoi (Mr. Grafftey), on behalf of my party I would like to welcome the announcement of the Secretary of State (Mr. Faulkner) today on the new capital assistance program. I know that this is going to be welcome news to the many members of the House from British Columbia who belong to my party, and who have also worked diligently on this matter.


Some hon. Members:: Oh, oh!


Mark Willson Rose: Announcements such as this are always welcome, because no one shoots Santa Claus. However, in passing, may I say that I feel that possibly the Vancouver civic administration made a little error. They asked for $2 million and got $1 million. I think they might have been wiser to ask for $3 million and receive $2 million, because all of us should be reminded that actually the total expenditure required to save this theatre in Vancouver Centre-


Mr. Basford:: Hear, hear!


Mark Willson Rose: -has a price tag of some $6 million, meaning that probably $4 million must still be collected from other sources, probably civic and provincial.
As I say, I am pleased with the announcement of this new capital assistance program. However, we really do not know anything about the nature of the program, its parameters, how long it is intended to be in force, what is the total funding required over the years, and other interesting little details that I am sure we will all be anticipating.
I think it should also be said that while we appreciate assistance to the arts in the major centres of the country we should keep in mind that there are many smaller communities that desperately need facilities. Without adequate facilities it is very difficult for artistic organizations to develop anywhere except in the major centres. Artistic enterprises seldom can stand on their own. Historically they have not done so, but that does not mean they are any
Cape Breton Development Corporation the less necessary. I agree with the minister when he says that the money has been well spent over the years and has contributed positively to our cultural identity and development.
May I say one final thing, Mr. Speaker. It is no secret, as was mentioned by the hon. member for Brome-Mississquoi (Mr. Grafftey), that we have tended to direct the largest part of our artistic funds to well-established names in Canada. As a result, I think we have tended to overlook the grass roots in the arts. I mean by that amateur community theatres, ballet and folk arts, band and orchestral groups which urgently require a national secretariat to be located in Ottawa to act as a clearing house for organizational and administrative purposes. A request for such a secretariat, tentatively called Marius Barbeau House, has been before the Secretary of State's department for nearly three years, but there has been no action taken.
I say again that I am pleased with the minister's announcement today, although it may smack a bit of ad hockery without an adequate assessment of the long-term plan. However, we welcome the announcement that the government is embarking on long-term capital assistance to artistic enterprises.


Mr. Jean-Marie Boisvert (Drummond):: Mr. Speaker, I can only agree with the initiative that the Secretary of State (Mr. Faulkner) has just announced. In a civilization which aims at more and more leisure, it is obviously very important that the government assume its responsibilities in order to allow all the citizens of the country to have access to the arts.
In view of the increasing interest in the arts and the higher unemployment rate, for instance, more and more people have the time to go to the theatre.
The government must democratize the arts, that is to say enable the people to participate in them.
However, there is one problem that is not solved either by building or renovating a building, and I mean the cost people often have to pay to go to the theatre.
The government is making an effort to enable the whole population to cultivate itself.
When speaking of art, one often gets the impression that its centre is found in Europe and elsewhere, and that there are few things of international artistic character in Canada.
The government must encourage artists in every way so that Canada can prove to the whole world that it has as many artistic opportunities as any other country.


CAPE BRETON DEVELOPMENT CORPORATION
Mr. Donald Maclnnis (Cape Breton-East Richmond):: Mr. Speaker, I rise under the provisions of Standing Order 43 to move a motion of urgent and pressing necessity. Realizing that Canada is working toward the metric
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March 15, 1974
Oil Export Tax
system I am unaware that there was any intention of altering the Gregorian calendar, which in effect is what the Cape Breton Development Corporation and the Sydney Steel Corporation have done. Apparently they now have a 13-month year. Added to that, Devco has accepted financial responsibility for payments to Mr. William Campbell from the Sydney Steel Corporation. In view of this particular financial arrangement I move, seconded by the hon. member for Cape Breton-The Sydneys (Mr. Muir):
That this House instructs the Auditor General to inquire into and report upon to this House the circumstances under which Cape Breton Development Corporation and the Sydney Steel Corporation issued 1973 T-4 slips to Mr. William Campbell, as both claim to be the employer, although Mr. Campbell was never employed by Sydney Steel Corporation and the total income amount recorded on these T-4 slips exceeded the amount of Mr. Campbell's 1973 income.


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


Some hon. Members:: Agreed.


Some hon. Members:: No.


Mr. Speaker:: There is not unanimity and the hon. member's motion cannot be put.


Mr. Bell:: On a point of order, Mr. Speaker, the hon. member who said no was not sitting in his seat.


Donald MacInnis: Mr. Speaker, inasmuch as two committees of the House have given me 100 per cent support on this issue involving the Cape Breton Development Corporation and as the member who declined the motion was not in his seat when he said no I think that in all fairness the motion should now carry.


Some hon. Members:: Hear, hear!


Mr. Speaker:: I think the hon. member will recognize that not only one member said no. I heard quite a number of nays. To satisfy the hon. member and the House, and because the hon. member seems to think he has a good point, I will inquire again. Is there unanimous consent?


Some hon. Members:: No.


OIL EXPORT TAX REVENUES AND EQUALIZATION-REQUEST FOR UNANIMOUS CONSENT TO MOVE MOTION
Mr. G. W. Baldwin (Peace River):: Mr. Speaker, I also wish to make use of this extraordinary remedy under Standing Order 43. The pressing and urgent circumstances of the matter and the reason why this procedure is being used instead of the ordinary procedure to obtain what I seek will be evident from the motion itself, the facts indicated in the statement made by my leader today, and

the report in the press. If the House will allow me to pursue this search for truth, I would move:
That this House orders the government and the Minister of Finance to immediately produce and table all documents, letters and memoranda or copies of the same which are now or were in the possession of the minister or any member of the government or any government official dealing with the question of revenues from the oil export tax bill qualifying as equalization payments under the Federal-Provincial Fiscal Arrangements Act.


Mr. Speaker:: Is there unanimous consent?


Some hon. Members:: Agreed.


Some hon. Members:: No.


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


LABOUR RELATIONS
Mr. Paddy Neale (Vancouver East):: Mr. Speaker, I rise under the terms of Standing Order 43 to move a motion of pressing and urgent necessity. In view of the protracted and bitter strike now in effect at United Aircraft at Lon-gueuil, Quebec, and in view of the fact that this large American conglomerate is threatening to move most of the production of the PT-6 engine to its plants in the United States, I would move, seconded by the hon. member for Burnaby-Seymour (Mr. Nelson):
That the House urge the Minister of Labour to meet with his counterpart in the province of Quebec in an attempt to obtain an immediate and just settlement of this dispute, to ensure that the production of the engines necessary for our STOL aircraft is continued in Canada and not removed to the United States.


Mr. Speaker:: Is there unanimous consent?


Some hon. Members:: Agreed.


Some hon. Members:: No.


Mr. Speaker:: There is not unanimity.


BEAUTY PAGEANT
Mr. John Reynolds (Burnaby-Richmond-Delta):: Mr. Speaker, as the Miss Dominion of Canada Pageant has replaced the reigning Miss Canada with the fifth runner-up of the 1971 contest instead of with last year's first runner-up, Miss J. Olson, from Delta, British Columbia, I would move under the provisions of Standing Order 43:
That this House ask the Prime Minister to intervene and correct this injustice to Miss Olson and save the integrity and respect of future Miss Dominion of Canada contests.


Mr. Speaker:: Is there unanimous consent?


Some hon. Members:: Agreed.
March 15, 1974


Some hon. Members:: No.


Mr. Speaker:: There is not unanimity.


CANADA MANPOWER AND IMMIGRATION COUNCIL ACT
Hon. Robert K. Andras (Minister of Manpower and Immigration) moved: for leave to introduce Bill C-12, to establish a Canada Manpower and Immigration Council.


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


Mr. James Gillies (Don Valley):: Mr. Speaker, my question is directed to the government House leader. As the Prime Minister yesterday was unable to tell the House what effect the amendments to the Combines Investigation Act would have on inflation, can the government House leader now tell us if the government is going to introduce bills to deal with inflation and other problems mentioned in the Speech from the Throne within two weeks?


Hon. Allan J. MacEachen (President of the Privy Council):: Mr. Speaker, I would help the hon. member by referring him to the exchange between the Minister of Consumer and Corporate Affairs and the hon. member for Saint John's West with respect to the relationship between the competition bill and the question of inflation. I think the connection is clear from that exchange. We have only two days before March 26 for government legislation. Following the first supply period, it will be possible to bring forward a number of bills affecting food production in Canada. I am sure my hon. friend would agree that food production has a direct relationship to the general question of price levels.


James McPhail Gillies: Mr. Speaker, may I direct a supplementary question to the Minister of Consumer and Corporate Affairs. Has he prepared legislation and does he have legislation ready to introduce immediately to do something about the escalating cost of living?


Hon. Herb Gray (Minister of Consumer and Corporate Affairs):: Mr. Speaker, there is a bill before the House which I think will make an important contribution to dealing with this matter. The government, as has been said on other occasions by the Prime Minister and other
Oral Questions
ministers, will be prepared to take the necessary steps that are required by the circumstances.


James McPhail Gillies: Is the legislation ready, and can the minister tell us today when it will be presented?


Herbert Eser (Herb) Gray: Mr. Speaker, I think this is something for the
leader of the House to comment on because the matter of legislation pertains to the government generally.


SHIPPING
Charles Patrick (Paddy) Neale: Mr. Speaker, in the absence of the Minister of Transport may I direct my question to the parliamentary secretary. In light of the minister's public statement of September 28, 1973, that legislation would be forthcoming to ensure that the Canadian coasting trade would be reserved for Canadian registered bottoms, and as no reference was made to this legislation in the recent Speech from the Throne, would the minister tell the House whether he has changed his position in this regard and, if not, when the legislation will be introduced?


Mr. Joseph-Phillippe Guay (Parliamentary Secretary to Minister of Transport):: Soon, Mr. Speaker.


Charles Patrick (Paddy) Neale: In keeping with the assurances the minister gave the House on November 20, on December 17 and again on March 7 of this year, can the minister confirm that notice has been served on the government of the United Kingdom of Canada's intention to withdraw from the British Commonwealth Merchant Shipping Agreement and, if not, will the minister tell the House when that notice will at last be served?


Joseph-Phillippe Guay: Mr. Speaker, the minister is away on government business today. He will be back in the House on Monday and I am sure he will be pleased to answer the hon. member's question.


FINANCE
Mr. Gilles Caouette (Charlevoix):: Mr. Speaker, since the Minister of Finance is not present, I direct my question to the Prime Minister.
The economists of the Royal Bank of Canada declared recently that ten years hence, the Canadian dollar would be devaluated by 50 per cent, thus causing a similar drop in the buying power of Canadians. Has the Prime Minister read this report and, if so, what action does he intend to take to limit this expected loss of buying power?
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March 15, 1974
Oral Questions


Pierre Elliott Trudeau: Mr. Speaker, I cannot speak for the minister and say whether he is aware of the document the hon. member is referring to, but I will inform him.


MANPOWER
Mr. David MacDonald (Egmont):: Mr. Speaker, my question is for the Minister of Manpower and Immigration. It relates to the Opportunities for Youth Program for this year which comes under his jurisdiction. In view of the fact today is the final date for the submission of applications for Opportunities for Youth projects and in a number of provinces there have been no program or project staffs since the beginning of the year, in what way have young people in these various provinces been assisted either with regard to clarification or formulation of submissions which must be in by midnight tonight?


Robert Knight Andras: Mr. Speaker, there has been considerable publicity about the Opportunities for Youth Program for this summer and the availability of funding. Staff has been available to assist those people who wish to submit or design projects. I do not think it has been handled any differently than in the past. We anticipate a number of good project applications.


David Samuel Horne MacDonald: I know the minister would not want to mislead the House. He must be aware of the fact that in Prince Edward Island and I believe in New Brunswick and other provinces there have been no project staffs since the first of the year. It has been virtually impossible for young people to be informed of the nature and details of this year's Opportunities for Youth Program. What assistance will now be given, even at this late date, and in what way will the young people be assisted so that this year's program will operate at the level of previous years?


Robert Knight Andras: Mr. Speaker, I do not anticipate any undersubscription to the funding of OFY. I will re-examine the exact location of our staff, as indicated by the hon. member, and if in any way I have been incorrect in my assumption I will communicate with him and alleviate the situation. At the moment, I do not consider this to have been an inhibition.


David Samuel Horne MacDonald: When I asked the minister earlier about constituency advisory groups, he advised there would be no groups and that local people would be consulted. Will the minister indicate which local people will be consulted, the basis on which they will be selected and why in fact such constituency groups were not organized in view of the strong recommendation to this effect by OFY staff as early as last fall?


Robert Knight Andras: Mr. Speaker, representatives of social agencies, community organizations, citizens groups, municipal

and township officials, federal and provincial government field staff, groups of individuals with specific competence or expertise in the area of project submissions, and members of parliament who indicate their willingness, desire and availability to be consulted, will be contacted.


David Samuel Horne MacDonald: By whom and when?


Robert Knight Andras: By our OFY staff.


David Samuel Horne MacDonald: You have no staff. How can you contact anybody?


Robert Knight Andras: On the second part of the question with regard to constituency advisory groups, I think I indicated in my letter to all hon. members that the allocation was based on the breakdown of 33 market labour-management areas rather than precisely the constituencies. In some cases these market areas will cover as many as eight or ten constituencies. Because of the difficulties that arise from that distribution in terms of a constituency advisory group, plus the lower amount of funding, plus the time element and because of administrative expenses involved in advisory groups, we decided that it was not practical this year to have constituency advisory groups.


OPPORTUNITIES FOR YOUTH PROGRAM-VALIDITY OF FORMULA FOR ALLOCATION OF FUNDS AMONG PROVINCES
Hon. J. A. MacLean (Malpeque):: Mr. Speaker, I have a supplementary question for the Minister of Manpower and Immigration. Will the minister examine the validity of the formula by which the allocation of funds between provinces was made this year? Surely a formula that produces a sharp relative cut resulting in a smaller allocation to the four Atlantic provinces, the Yukon and the Northwest Territories must be faulty, considering the fact that unemployment is higher in those areas than anywhere else in Canada.


Robert Knight Andras: Mr. Speaker, I am satisfied that the formula and the statistics behind the formula are more precise and accurate than we have ever used in the past. I will be glad to go into more detail as to how it operates, although it might be necessary to do that on another occasion when dealing with estimates or, if hon. members wish, individually.


OPPORTUNITIES FOR YOUTH-REQUEST FOR PUBLICATION OF PROGRAM EVALUATIONS
Mr. Joe Clark (Rocky Mountain):: Mr. Speaker, my supplementary is also for the Minister of Manpower and Immigration. In order that the whole House may be in a position to evaluate the program, and in light of the minister's letter to me earlier this week indicating an intention to hide from public view the official evaluation of last year's OFY program, will the minister give a commitment now to publish any evaluations that are undertaken regarding this program, and, will he tell the House what possible justification he can offer for keeping secret from parliament the results of that expensive assessment last year?
March 15, 1974


Robert Knight Andras: Mr. Speaker, we have not departed from any established practice with regard to the release of documents. These are internal documents. I believe there was a thorough discussion of this in the last session of parliament. I believe our views were aired before parliament.


LABOUR RELATIONS
Mr. Lincoln M. Alexander (Hamilton West):: Mr. Speaker, I wish to direct a question to the Minister of Labour relating to the rotating strikes taking place today in Halifax, Montreal, Sept-Iles, Vancouver, Victoria, Toronto and Hamilton. Can the minister bring us up to date as to what form the rotating strikes are taking? Mediation does not seem to be bringing about the desired result. Is the minister now prepared to personally look into this matter? Also, will he advise what special initiatives he is taking with regard to the problems that now exist at Charles de Gaulle airport in France where there seems to be some friction at the present time?


Hon. John C. Munro (Minister of Labour):: Mr. Speaker, I can advise the hon. member that, as he is no doubt aware, mediation efforts were going on yesterday and are again going on this morning. The report I received roughly one hour or so ago seemed quite optimistic that this dispute may be settled and the implications involved that the hon. member identified will no longer be with us.


DISPUTE BETWEEN SEAFARERS UNION AND LAKE CARRIERS ASSOCIATION-INITIATIVES BY MINISTER TO ACHIEVE SETTLEMENT
Lincoln MacCauley Alexander: Can the
Minister of Labour advise the House about another industrial dispute of some importance? If negotiations between the Seafarers Union and the Lake Carriers Association break down, the opening of the St. Lawrence Seaway on April 1 will be affected. What special initiatives has the minister taken with regard to this matter in order that amicable settlement may be reached?


John Carr Munro: Mr. Speaker, perhaps I am an eternal optimist. I also had discussions with various people concerned in this dispute. I am also hopeful that any type of breakdown at a crucial time such as April 1 will be avoided by a settlement.


Mr. Speaker:: The hon. member for Fraser Valley West. Is it a supplementary?


Mark Willson Rose: It is not a supplementary, Mr. Speaker.


Mr. Speaker:: Perhaps the Chair might allow the hon. member for Winnipeg North a supplementary.
Oral Questions


ROTATING STRIKES BY MEMBERS OF AIRLINE EMPLOYEES ASSOCIATION-SUGGESTED REORGANIZATION OF AIR CANADA LABOUR RELATIONS DEPARTMENT
Mr. David Orlikow (Winnipeg North):: Mr. Speaker, I wish to ask the Minister of Labour whether he and the Minister of Transport have discussed or are considering discussing with senior officials of Air Canada the fact that this is not the first dispute with a group of Air Canada employees, there having been disputes with the machinists and airline pilots, and whether there needs to be a thorough look at and reorganization of the whole labour relations department of Air Canada so that the public will not be faced with recurring stoppages, rotating strikes, slowdowns, work to rule and so on?


John Carr Munro: Yes, Mr. Speaker, I have had discussions with the Minister of Transport of the general nature that the hon. member has described. I would also advise the hon. member that extensive changes are going on within the industrial relations department of Air Canada. We are hopeful these will have beneficial results in the future.


TRANSPORT
Mark Willson Rose: Mr. Speaker, my question is for the Prime Minister. Yesterday all members, especially those from western Canada, were intrigued by the statement of the Minister of Transport that he had failed to win the cabinet over to his side or had not yet presented his proposals to cabinet regarding the improvement of Canada's transportation system. Can the Prime Minister tell the House when these proposals are likely to be before cabinet and how soon a decision will be reached on this very important matter?


Pierre Elliott Trudeau: Mr. Speaker, the hon. member must be referring to a series of measures which the minister and, indeed, the Speech from the Throne indicated would be necessary and would be taken. Some have already been before cabinet and have been announced; for instance, the increase in rail cars to the tune of some 2,400 through repairs. Others are yet to come and will be announced in due course.


RAILWAY FREIGHT RATE INCREASE ON STEEL-GOVERNMENT ACTION
Mark Willson Rose: In view of the fact that certain gardes or classes of steel in the Vancouver market are double the price at which they sell in Montreal, and in view of the Minister of Transport's pledge to western premiers concerning a rollback of steel freight rate increases and his revelation last week of his lack of control over the railways, can the Prime Minister tell the House how we are going to effect such a rollback or exert more control over the railroads and when legislation, if

March 15, 1974
Oral Questions
legislation is indeed necessary-I think it is-will be introduced in the House?


Pierre Elliott Trudeau: Mr. Speaker, there have been various occasions in the past when the minister has obtained from the railway companies changes of position or new positions, which he obtained from them merely by talking to them in a nice, amiable way. In other cases legislation may perhaps be required, and if this happens we will introduce that legislation.


POSSIBILITY OF REDUCTION IN NUMBER OF ELEVATOR DELIVERY POINTS FOR FARMERS IF ENCOURAGED TO TRUCK THEIR GRAIN LONGER DISTANCES
Mr. Craig Stewart (Marquette):: Mr. Speaker, my question is along the same lines and concerns the transportation of grain in western Canada. It is directed to the minister responsible for the Canadian Wheat Board. Yesterday, in reply to the hon. member for Vegreville on the matter of the boxcar shortage in the movement of grain in western Canada, the minister stated, as reported on page 503 of Hansard:
We are looking at other means including the possibility of encouraging farmers to haul grain longer distances in their own trucks-
Did the minister mean by his reply that he is going to continue to pursue a policy of fewer grain elevator delivery points for farmers in western Canada?


Hon. Otto E. Lang (Minister of Justice):: No, Mr. Speaker. The issue at the moment is to try to find any means which will allow for the fast turnaround of available rail power and cars. It is true that certain rail lines allow for a much faster pickup, and therefore turnaround, or cars. In this kind of emergency situation, therefore, it might make sense-I stress the word "might"-to invite farmers, I assume with compensation, to move grain farther distances themselves in order to get this faster turnaround. This would be, of course, quite apart from any question of making this kind of program permanent.


Donald Craig Stewart: A supplementary question-


Mr. Speaker:: The hon. member will be recognized for one supplementary and then the Chair will see the hon. member for Victoria.


DATE OF ANNOUNCEMENT OF LONG-TERM POLICY FOR MOVEMENT OF GRAIN
Donald Craig Stewart: As the government has put a freeze on the closure of all branch lines until January 1, 1975, and as the CNR and CPR will not announce their plans for these branch lines until the government announces its long-term policy for the movement of western grain, when will the government be announcing its plans so that the farmers and the elevator companies will know what their future is on these branch lines?


Otto Emil Lang: Mr. Speaker, we have been undertaking a very important program of consultation with the producers and the various parts of the industry involved. The Canada Grains Council has a committee at work attempting to assist in this effort, all of which is designed to lead toward the goal of a policy that meets the needs and real interests of farmers and communities in western Canada. That is the objective. While I am as impatient as the hon. member to see the results of that consultation, the consultation is by no means complete and I am not able to forecast at this point when a decision can be made on the basis of complete consultation.


NATIONAL DEFENCE
Mr. Allan B. McKinnon (Victoria):: Mr. Speaker, in the absence of the Minister of National Defence my question will be directed to the right hon. Prime Minister. In view of the fact the government stated that the total cost of the four DDH-280 destroyers, including all components, would be $170 million and the minister now states that the cost thus far, without all components, is $287 million-and the end is not yet in sight-would the Prime Minister consider instituting an inquiry to determine why these ships will have a cost overrun in excess of $30 million per ship?


Pierre Elliott Trudeau: Mr. Speaker, I will gladly look into the matter and raise it with the Minister of National Defence.


Mr. Speaker:: The hon. member for Kootenay West on a supplementary.


USE OF PORT OF PRINCE RUPERT FOR EXPORT SHIPMENT
Mr. Randolph Harding (Kootenay West):: Mr. Speaker, my question is supplementary to the previous question and is directed to the Minister of Justice in charge of the Wheat Board. In view of the fact that little grain has been directed to the port of Prince Rupert, with only 320 cars being unloaded in February of this year compared with 1,660 cars in February of last year, would the minister advise whether more grain will now be directed to that port in order to offset some of the grain shortage and relieve shipping congestion at Vancouver harbour?


Otto Emil Lang: Mr. Speaker, the port of Prince Rupert is used whenever that does add to over-all handling capacity. Last year, as a result of the tremendous movement of grain, it was used very effectively indeed. The directing of grain is very often in the hands of the elevator companies that have received it and are moving it for cleaning purposes and is not controlled by anybody else. The Wheat Board can, of course, bring pressure to bear on them whenever they can show that some
March 15, 1974

additional movement is possible, but it is true that, under this arrangement, when a smaller amount of grain is moving Prince Rupert tends to suffer first.
* * +


PRESENCE OF DES IN UNITED STATES CATTLE IMPORTED INTO CANADA
Mr. J. R. Holmes (Lambton-Kent):: Mr. Speaker, I have a question for the Minister of National Health and Welfare which is related to the present illogical situation with respect to the use of DES-diethylstilbestrol. In view of the fact that DES has been banned from use for finishing cattle in Canada, and in view of the fact cattle finished with DES are in fact entering Canada, will the minister immediately recommend that an embargo be placed on all livestock and livestock products from countries where DES is allowed?

Oral Questions MULTICULTURALISM


ALLEGED GIVING OF ADVERTISING CONTRACT TO NEW CANADIAN PUBLICATIONS OF MONTREAL WITHOUT TENDER
Mr. Paul Yewchuk (Athabasca):: Mr. Speaker, my question is for the minister responsible for multiculturalism. Can the minister tell the House whether New Canadian Publications of Montreal was given without tender an advertising contract to place government advertisements in the ethnic press, and whether the minister's acquaintance, Stan Martin, who I believe is now executive assistant to the minister has now or has had in the past any financial or familial connection with this firm?


Hon. Stanley Haidasz (Minister of State):: Mr. Speaker, Mr. Martin is no longer an acting executive assistant in my office as of February 28 last, and the advertising program for multiculturalism was given to another firm.
*
* *


Hon. Marc Lalonde (Minister of National Health and Welfare):: Mr. Speaker, I submit that my hon. friend is misinformed. To the best of my knowledge, no United States meat treated with DES is entering Canada now.


John Robert Holmes: That answer is really not very reassuring, because cattle are now entering Canada finished with DES. Can the minister assure the House and the Canadian people that he has in fact established a program to inspect all imports of livestock and livestock products from those countries permitting the use of DES, and can he assure the House and the Canadian people that such a program will prevent the entry of DES contaminated livestock and livestock products into Canada?


Marc Lalonde: Mr. Speaker, I already told this House we are consulting with American government representatives and with the Minister of Agriculture so as to establish regulations that will prevent the importation of DES meat products.


INDUSTRY
Mr. Lome Nystrom (Yorkton-Melville):: Mr. Speaker, my question is addressed to the Minister of Consumer and Corporate Affairs. In view of the announcement yesterday by Noranda Mines that it has increased the price of copper both for use in Canada and for export, and bearing in mind that Noranda Mines has had a 75 per cent increase in profits already this year, will the minister say whether it is the intention of his department to contact this company and demand that it immediately roll back the price increase on copper in this country?


Herbert Eser (Herb) Gray: Mr. Speaker, I think this question would come more properly under the Department of Industry, Trade and Commerce, but I will be pleased to discuss this with the minister.


CONSUMER AFFAIRS
Jean-Marie Boisvert: Mr. Speaker, I should like to put a question to the Minister of Consumer and Corporate Affairs.
As a result of his differences with the bread industry, can he report how his campaign for the boycott of Weston bread is going on?


Herbert Eser (Herb) Gray: Mr. Speaker, I made a suggestion to that effect when it was possible that Weston Bakeries Limited would increase their bread by 4 cents, but at my request they did not do so. It was then unnecessary to follow that suggestion.


COPPER-SUGGESTED IMPOSITION OF PRICE CONTROLS-GOVERNMENT POSITION
Lorne Edmund Nystrom: Mr. Speaker, in view of the fact the minister is not here I should like to direct my supplementary question to the Prime Minister. Keeping in mind the increase in the price of copper and the 75 per cent increase in profits by Noranda, I should like to ask whether it is the intention of the government to impose selective price controls on copper used in this country, particularly in view of the fact that 54 per cent of the production is used here domestically, and this would be of great help to the consumer?


Pierre Elliott Trudeau: Mr. Speaker, I would like to look into the matter before giving a reply. I missed the previous exchange, but the hon. member is no doubt aware that there have been cases in the past where the federal government, through the then

March 15, 1974
Oral Questions
Minister of Industry, Trade and Commerce, did obtain a price in Canada for copper from the Canadian refineries which was lower than the world price or the London Exchange price. This may be a situation which could be looked at again.


CAPE BRETON DEVELOPMENT CORPORATION
Donald MacInnis: Mr. Speaker, I have a question for the Prime Minister. In view of the fact the House leader has a copy of my earlier motion and I have the T4 slips available to show the errors, why would the government deny to Mr. William Campbell, and others in similar circumstances, the services of an officer of this House in order to investigate these injustices?


Pierre Elliott Trudeau: Mr. Speaker, I think the connection between the premise to the question and the question itself is a bit esoteric, but I will look into it and try to understand the sense of the question.


Donald MacInnis: Mr. Speaker, inasmuch as the Prime Minister continues to make the same promise in respect of Devco legislation and as the Minister of Justice has gone far afield, will he give the Minister of Justice a sabbatical leave in order that he may catch up on the law?


Pierre Elliott Trudeau: Mr. Speaker, I am glad to see that the hon. member is back from his sabbatical leave.


Some hon. Members:: Oh, oh!


Donald MacInnis: Mr. Speaker, I rise on a question of privilege. I should like to assure the Prime Minister that I am back on him, too.


PERFORMING ARTS
Mr. Jack Cullen (Sarnia-Lambton):: Mr. Speaker, I have a question for the Secretary of State, and I should like to compliment him on the introduction of a new performing arts policy. In view of the fact that the policy he announced today has a retroactive effect on those who applied prior to and during the preparation of the policy, not knowing the ground rules, and as hundreds of thousands of dollars have been raised and in some cases spent, will he undertake to give serious consideration to reviewing each of these earlier applications with a view to judging them on their merits, notwithstanding the new guidelines?


An hon. Member:: Especially the Sarnia Ballet.


Jack Sydney George (Bud) Cullen: Especially the Sarnia Arts.


James Hugh Faulkner: Yes, Mr. Speaker, but I think in fairness to those groups, and I know how strongly the hon. member feels about the Sarnia application, it is important that we stick to the guidelines as that is precisely why we introduced a policy of having guidelines under which groups can respond, rather than carrying on in the ad hoc fashion we had been following in the past.


SUGGESTED PROHIBITION OF TELEVISING OF NATIONAL FOOTBALL LEAGUE GAMES IN CANADA TO PROTECT REVENUES OF CANADIAN FOOTBALL LEAGUE TEAMS
Hon. George Hees (Prince Edward-Hastings):: Mr. Speaker, I have a question for the Prime Minister. Since the government has indicated that, if necessary, it is prepared to introduce legislation to prevent the World Football League from operating in Canada as a means of protecting the revenues of Canadian Football League teams, in the interests of consistency does the government now intend to advise the CBC not to use its national network to broadcast NFL games on Sunday afternoons at the same time that CFL games are played, in order to maximize the television revenues of the CFL?


Pierre Elliott Trudeau: Mr. Speaker, I will take that question as a representation by the hon. member and will look into it. It may be a helpful suggestion.


George Harris Hees: Mr. Speaker, in view of that non-answer, as usual, by the Prime Minister, will he advise the House why it is that the government is prepared to engage in measures to set up a monopoly aimed at preserving the earnings of the business organizations that control and operate CFL teams? Would you give me an answer to that?


AGRICULTURE
Mr. Norval  Homer@Battleford-Kindersley: Mr. Speaker, I should like to direct my question to the Minister of Agriculture. Can he confirm that there are no cattle to his knowledge coming into this country that have been treated with DES?


Hon. E. F. Whelan (Minister of Agriculture):: Mr. Speaker, I should think that any feeder who is using DES under the laws of the United States following the lifting of their ban would be foolish, because there would be no efficiency in doing that in respect of cattle shipped into Canada. However, I do not think anyone can guarantee that there are or are not such cattle coming in.


EXTERNAL AFFAIRS
Mr. Steven E. Paproski (Edmonton Centre):: Mr. Speaker, my question is for the Secretary of State for External Affairs. Has Canada ever received compensation from France in respect of our being kicked out of Marville and, if not, why not?


Hon. Mitchell Sharp (Secretary of State for External Affairs):: Mr. Speaker, we have not received compensation and we are still pressing for payment.


FRANCE-SUGGESTED EFFORT TO OBTAIN COMPENSATION IN CONNECTION WITH &quot;GREENPEACE III&quot; INCIDENT
Steve Eugene Paproski: Mr. Speaker, does the Secretary of State for External Affairs intend to seek reimbursement of $12,000 from France to recoup the fee for bringing the Greenpeace back to Canada?


Mitchell William Sharp: No, Mr. Speaker, not specifically, but we are seeking compensation from France for the damage done to Mr. McTaggart's eye.


PERFORMING ARTS
Hon. Paul Hellyer (Trinity):: Mr. Speaker, my question is for the Secretary of State. Is the minister in a position to confirm the announced intention of the Canada Council to freeze grants for established artistic organizations such as the National Ballet and, if so, will he agree to ask the council to reconsider this potentially disastrous decision?


James Hugh Faulkner: Mr. Speaker, that issue is now before the standing committee. I think it is very important to recognize the point made by the Canada Council, that there is a limit to the extent to which the Canada Council can be viewed as the sole funding agency for established and existing arts organizations. What the director said to the committee is, I think, an important point, that the private sector's contribution to the performing arts in recent years has dropped. I am suggesting that performing arts organizations and others who support them should start looking to other places for funding as well.


Paul Theodore Hellyer: Mr. Speaker, in view of the fact that private donations are dropping off due to excessive government taxation, and in view of the fact-


Some hon. Members:: Oh, oh!


An hon. Member:: And the high cost of living.
Oral Questions


Paul Theodore Hellyer: -that capital grants for the construction of new buildings are useless and such buildings could become mausoleums if at the same time the government chokes off those living, breathing organizations for whose use they are intended, will the minister make representations to his colleagues to the effect that some of the Opportunities for Youth grants or other funds be made available to the Canada Council in order that it may adequately support the existing recognized institutions of greatness and new entrants and individuals as well?


James Hugh Faulkner: Mr. Speaker, I think it should be clear that we are continuing to support both for the very reasons the hon. member has mentioned. The question at issue is how fast or how rapid the rate of escalation of Canada Council funding should be in respect of established organizations as opposed to trying to respond to very new and exciting developments in the theatre such as the hon. members for Fraser Valley West and Sarnia-Lambton mentioned. What the Canada Council has said is that it wants to respond to these new organizations and will continue to fund established organizations to an extent more generous than any other level of government or the private sector, because it is aware of their importance, but that the rate of increase will not be as great.


Paul Theodore Hellyer: Mr. Speaker, I have one final
supplementary.


Mr. Speaker:: Order, please. The hon. member has asked two questions and I will certainly recognize him again, but I wonder how long this very interesting cultural debate should be continued when so many members are still seeking the opportunity to ask questions. The hon. member for Trinity will be recognized for a last, living, breathing supplementary.


Paul Theodore Hellyer: Thank you, Mr. Speaker. In view of the fact that no artistic or other organization can continue with frozen grants in current dollars with the 10 per cent inflation rate, could the minister explain what it is about the Canadian mentality which, all too often, at the very moment when Canadian organization reaches the threshold of greatness, the bureaucratic hatchet is applied in a sadisticly destructive way?


Mr. Speaker:: Order, please. The hon. member asks a supplementary that invites the minister to make a statement which I am afraid could not be made before we reach the end of the question period.


Paul Theodore Hellyer: On a question of privilege, Mr. Speaker, this is absolutely fundamental. We build in Canada over a period of 25 years an organization from the grassroots that reaches the point where Canadians can be very proud of it. It can travel anywhere in the world and is recognized as being on the threshold of greatness. Why is it that someone always comes along with a hatchet?


Mr. Speaker:: Order, please. The hon. member for Saskatoon-Biggar.

March 15, 1974
Oral Questions AGRICULTURE


SUPPORT FOR BEEF PRODUCERS-GOVERNMENT POSITION
Mr. A. P. Gleave (Saskatoon-Biggar):: Mr. Speaker, I should like to direct a question to the Minister of Agriculture. In view of the continued uncertainty as to prices and returns to beef producers and the bad effect this may have on consumers and housewives in Canada, can the minister tell the House whether he has arrived at any decision or conclusion on whether he will give support to the beef producers of Canada and the form it will take? Can he tell us how soon he will make a statement.


Eugene Whelan: Mr. Speaker, I attended a meeting with representatives of the beef producers of Canada and representatives of the total industry this morning. The meetings are continuing at the present time and I hope to be able to announce something later this day.


INQUIRY OF THE MINISTRY
William Heward Grafftey: Mr. Speaker, my question is directed to the Minister of Justice. Since the beginning of this parliament has he had consultations with the Leader of the NDP, the hon. member for York South, relating to the establishment of a coalition Liberal-Socialist government? My question is based on the statement made by the premier of the province of Manitoba this week.


Otto Emil Lang: The answer is a straightforward no. I have not seen that statement.


AGRICULTURE
Mr. William C. Frank (Middlesex):: Mr. Speaker, I should like to address my question to the Minister of Agriculture. In light of the fact that fertilizer ingredient suppliers can find a more financially lucrative market in the United States for the product Di-calcium phosphate and our own fertilizer industry will also be pressuring and demanding its supply, can the minister assure the fertilizer manufacturers that their important industry will not necessarily suffer from the anticipated shortage that now appears to be shaping up, which if allowed to materialize will have an immediate impact on the cost of food?


Eugene Whelan: Mr. Speaker, we are investigating this bit of information to find out just what we can do and where we can find the product to make sure that it is made available to the producers. I cannot say any more at this time because we are still in the throes of the investigation. We only received this information last week.


COMBINES
John Douglas Reynolds: Mr. Speaker, I have a question for the Minister of Justice regarding the pleas of guilty by seven cement companies in British Columbia. In view of the fact the fines were the largest ever levied under the Combines Investigation Act can the minister advise why none of the directors of the seven companies were charged?


Otto Emil Lang: Mr. Speaker, in each case when a combines matter is looked at the question of the charging of the companies or the directors has to be considered very carefully. I will be glad to refresh my memory as to the exact analysis in this particular case and comment further to the hon. member.


AGRICULTURE
Mr. Ken Hurlburt (Lethbridge):: Mr. Speaker, my question is directed to the Minister of Agriculture. In view of the fact the minister has just returned from my riding where the papers carried the headline, "The Undaunted Minister of Agriculture"-


Some hon. Members:: Hear, hear!


Kenneth Earl Hurlburt: -and in view of the fact Webster's Dictionary interprets "undaunted" as "fearless, undismayed and bold"-


Some hon. Members:: Hear, hear!


An hon. Member:: Right on.


Kenneth Earl Hurlburt: -I would ask the Minister of Agriculture if he would now be bold enough to inform the House about his announcement in Lethbridge of a new national livestock insurance program whereby the consumers will pay part of the risk taken by the cattlemen?


Eugene Whelan: Mr. Speaker, whether or not the hon. member knows it, we pay 50 per cent of the crop insurance premiums and that includes everybody in Canada and everybody is a consumer.


Kenneth Earl Hurlburt: I should like to ask the Minister of Agriculture about his new policy because I was not referring to crop insurance. I was referring to the losses taken by cattlemen in our area.


Eugene Whelan: Mr. Speaker, earlier in the program today I said I would be making-


An hon. Member:: What program?


An hon. Member:: Early show.


Eugene Whelan: Call it program, early show or whatever you want to call it. I just recently said I hoped later today to get permission-I did not say I would get permission but was going to ask permission-to make an announcement about what we intend to do about aid to the beef producers of Canada.


MANPOWER
Mr. Cyril Symes (Sault Ste. Marie):: Mr. Speaker, I have a question for the Minister of Manpower and Immigration relating to earlier questions concerning Opportunities for Youth. With regard to the funding formula for manpower subregions is the number of youth registrations at Canada Manpower centres a criterion for allocation of funds for OFY and, if so, what is the weighted factor of this criterion?


Robert Knight Andras: Mr. Speaker, I believe I set forth the formula in my letter to members. One-third of those funds are being distributed across the country through the 33 labour-management areas strictly on the basis of the population of young people between 15 and 25 years of age. The other two-thirds is to be distributed on a youth job availability index which reflects the population of youth in that age group and the availability of jobs for which they are qualified.


Mr. Speaker:: Order, please. We are reaching the end of the question period. Perhaps the Chair might recognize the hon. member for Central Nova for one question and then call orders of the day.


PUBLIC SERVICE
Mr. Elmer M. MacKay (Central Nova):: Mr. Speaker, I will make it a very brief question to the head of the Treasury Board. Can the President of the Treasury Board say if he has any concrete action pending to reduce regional pay disparities for employees under Treasury Board jurisdiction in this country in view of the present inequitable situation?


Hon. C. M. Drury (President of the Treasury Board):: Mr. Speaker, the question appears to be based rather on a misunderstanding-


Elmer MacIntosh MacKay: Not misunderstanding.


Charles Mills (Bud) Drury: I correct that. I should have said lack of knowledge. As I indicated in the House the other day, it is the policy of the government to try to achieve local parity in wages and salaries rather than parity on a national standard.


Mr. Speaker:: Orders of the day.
Price Control
Is the hon. member rising on a point of order?


Mr. Muir:: On a supplementary, Mr. Speaker.


Mr. Speaker:: The hon. member will appreciate that I refused a supplementary a moment ago to the hon. member for Sault Ste. Marie so that I would have a chance to allow one question by the hon. member for Central Nova. I wonder whether we might allow, rather, a point of order to be raised by the hon. member for Medicine Hat, after which I will call orders of the day.


Mr. Hargrave:: Thank you, Mr. Speaker. My point of order relates to the remarks made by the Minister of National Health and Welfare about DES. I would like him to know that the implant form of DES is not only available in the United States but is in active use there and that in last week's 10,000 to 11,000 head of imports from that country and in this week's probable imports of 9,000 to 10,000 it is highly probable that some implanted cattle are coming into Canada right now.


Marc Lalonde: Mr. Speaker, on the same point of order, I do not want to leave this statement on the record unchallenged. I want to stress that I am informed that we do not anticipate that meat or live cattle that has received DES treatment in the United States would be available for export to Canada before at least the 1st of May this year. So if the hon. member has some cases in mind, perhaps he could bring them to my attention.


Mr. Speaker:: This was not a point of order but a point of debate. I am sure the hon. member appreciates this and so does the minister.


Paul Yewchuk: Mr. Speaker, I am sorry to take up the time of the House on this matter, but I rise on a question of privilege to express my displeasure at not being allowed to pursue a line of questioning which I wanted to develop. I feel that my right to speak in this House on behalf of the constituents of Athabasca has been denied. The line of questioning was one of some significance since it dealt with the matter of conflict of interest which I think is important not only to Athabasca but to the whole country, and I simply wanted to let you know that I was unhappy about it.



GOVERNMENT ORDERS


Mr. Terry Grier (Toronto-Lakeshore) moved:: That this House calls on the government to consider the immediate introduction of legislation designed to control selectively the prices of essential commodities and to give either to the government or to a

March 15, 1974
Price Control
prices review board the power to roll back unjustifiable price increases.
He said: The purpose of this motion is to focus on two principal missing components in the government's antiinflation policy. The first missing component is the power to rollback or prohibit unjustified price increases, and the second is to enable the selective control of prices of essential commodities. I emphasize that these are not the only components of an anti-inflation program and that there is in fact no single magic answer. But in our judgment these are the major missing components. Of course one might have dealt with such other features of an anti-inflation policy as programs leading to the extension of supply of commodities, to an exchange rate policy and to measures to protect the unsheltered in our society, those on low and fixed incomes, the unemployed, and so on.
The Canadian people recognize that some prices and costs are justifiable and reasonable and that there are other prices and costs, principally those of imports, which we cannot easily affect. But there are many prices which it is within our power to deal with, such as those of essential commodities produced or grown in Canada the price of which can be controlled without hardship to Canadians; for example, oil. Canadians will recognize as well that there are other types of price increases which are merely rip-offs, prices that are based upon the theory of charging what the traffic will bear.
Our motion this morning meets both of these problems head on and challenges this parliament seriously to deal with the fundamental problems of inflation. Has the need for rollback powers ever been more obvious than it is today? I think, for example, of the proceedings we have gone through in the last two or three weeks with respect to proposed bread price increases. We have a situation whereby the Food Prices Review Board established by this parliament asserted that only a two cent increase was justified. When the bakers said they were going to go ahead with their increase, we asked the minister what he was going to do. He waffled, he wobbled, he evaded. Of course, he had to do that because he did not have the power of rollback. I ask the government what its reaction will be if after next Wednesday's meetings of the Food Prices Review Board the bakers proceed with their previously announced intention to raise their prices to four cents, against the recommendations of that board and the better judgment of the Canadian people.
We have seen the price of beef at the retail level unresponsive to dropping prices at the farm gate. We have seen the price of steel rise and the price of sugar rise astronomically. We have seen the price of lumber and of other commodities increase because of what can be gained from seling the products abroad. I cannot say in all frankness at this moment to what extent price increases in all these commodities, and others which I might have named, are or are not justified, but I do know that in some cases the lack of justification seems clear. At a time when world demand-supply imbalances are creating substantial upward pressure on prices the temptation here in Canada to take advantage of that situation and to charge what the traffic will bear will be a great one. So will be the temptation to cash in some extra profits, to stretch margins a little further, to tack on a few cents and another few cents.

We can see these few cent increases adding up over a period of time to a substantial sum of money.
Parliament's problem, the question that this House must face, is how we make sure that this temptation is resisted. I suggest we do so by empowering the government or some agency of the government to hold in reserve the explicit, unmistakable power to rollback prices and by being prepared to see that power is exercised as often and as forcefully as is necessary. We meet that problem by being ready to intervene, not indiscriminately but justly, and when increases cannot be justified, to roll them back if they have taken place, to prohibit them if they have not.
I suggest that there is among the Canadian people a mood of deep suspicion that something is wrong and that its cause is being covered up and not dealt with. Why else, they ask, would the government refuse to give itself this obvious, this commonsense power to intervene? What creates this suspicion? It is that at a time when consumer prices are going up and consumers themselves, especially the great majority who are on middle low or fixed incomes are really feeling the pinch, the business community, those from whom people buy the products and services they use, are doing very well indeed.
I want to direct the attention of the House to some profit figures. Corporate profits in 1973 were 40 per cent to 50 per cent higher than in 1972, according to a Globe and Mail study published last month, and may I mention in passing that 1972 was a very good year as well. As a percentage of the gross national product, profits rose to 12.4 per cent- their highest level since 1952. At the same time, wages and salaries as a proportion of the gross national product were down appreciably from their 1971 peak.
The same Globe and Mail study last month gave an informative breakdown of corporate profit increases in various sectors of the economy. Here are some of its findings, based on a representative sample of industry: profits in base metals went up almost 400 per cent in 1973 over 1972. Chemical companies enjoyed a profit increase in 1973 of 35 per cent. The construction and building materials sector enjoyed a profit hoist of 56 per cent, and the food processing sector a percentage increase over the last year of 50 per cent. Industrial mines showed an almost unbelievable increase of 569 per cent. Oil refining showed an increase of 42 per cent. The paper and forest products industry enjoyed a profit increase of 344 per cent. Real estate profits were up almost 100 per cent over last year. In the steel industry profits were up an average of 36 per cent, and western oils up 28 per cent. The total percentage profit increase of all companies sampled was 42 per cent in the year 1973 over 1972.
The Globe and Mail's analysis of these figures included the point that:
The strength in corporate profits continues a trend that began in the second quarter of 1971, but the pace accelerated considerably in 1973.
If we look at individual companies at random we find the following kinds of profit increase: Imperial Oil, 45 per cent; Shell Oil, 42 per cent; Gulf Oil, 58 per cent; Dome Petroleum, 83 per cent; Falconbridge Nickel, 770 per cent; International Nickel, 107 per cent; Noranda Mines, 75 per cent; Crown Zellerbach, 136 per cent; Consolidated Bath-
March 15, 1974

urst, 221 per cent; Domtar, 133 per cent; Great Lakes Paper Company, 375 per cent; George Weston Limited, 86 per cent; Canada Packers, 36 per cent; Dominion Dairies, 31 per cent; Dominion Stores, 30 per cent; M. Loeb, 73 per cent, and Toronto-Dominion Bank 25 per cent. The story is the same in sector after sector-for the corporations very substantial profit increases, for the Canadian people very substantial price increases. The conclusion is inevitable. Canadians must be prepared to see effective government intervention to ensure that the consumer is protected.
As well, Mr. Speaker, there have been a number of other circumstances, perhaps coincidental, although I do not think so, in recent months to deepen the suspicion of the Canadian people that there is something seriously wrong in the economy, and that it is to be found in the decision making capacity of the corporate sector.
For example, there was the Alberta Supreme Court ruling last September ordering Canada Safeway to restrict its operations and reduce its market domination in Calgary and Edmonton. There was the Prices Review Board report of last September referring to a worrying lack of competition in some sectors of the food industry. There was the fining of Browning Arms Company in Toronto last September for resale price maintenance, the fining of Dominion Stores for misleading advertising, the Food Prices Review Board's criticism of the pricing and selling practices of the bakery industry, the Globe and Mail's report of a fine of $432,000 levied by the British Columbia Supreme Court against seven cement companies in that province, including the country's largest ones, for price fixing and other violations of the Combines Investigation Act. Four cement firms are now being prosecuted in Ontario for similar offences. Price fixing charges have been laid against 74 of the best known general insurance companies operating in Canada, relating to the sale of fire insurance in Nova Scotia. Canada's three largest sugar refiners, convicted of price fixing only a few years ago, are once again before the courts on similar charges.
Is it any wonder that the Canadian people feel sceptical about this parliament's determination to deal with the problem of pricing policy and profit policy? I ask that, because against this background what has been the government's response? The government set up a Food Prices Review Board upon the recommendation of the Special Committee on Trends in Food Prices. But its own spokesmen on that committee would not agree to recommend that the board be given the powers of rollback, and neither would the Conservatives on the same committee. We must ask ourselves whose side are they really on?


An hon. Member:: George Weston's!


Terrence Wyly Grier: So, Mr. Speaker, the Food Prices Review Board has no powers of rollback. It has no powers to enforce its recommendations. But it can, and it has recommended. And when it does recommend, as it did two weeks ago in the matter of bread price increases, the government threshes about, with the minister evading, playing for time, ducking and doing nothing, and doing nothing very unclearly.


Some hon. Members:: Hear, hear!
Price Control


Terrence Wyly Grier: Why doesn't the government act to give itself the power of rollback? Why doesn't it tell the bakers, "That is it." It is because it has not asked parliament to give it the power of rollback. And if it did, Mr. Speaker, if the government came before this House I venture to suggest it might get that power. And if it did not, then we would truly find out whose side the members of this House, in their separate parties, are really on.


Some hon. Members:: Hear, hear!


Terrence Wyly Grier: We have repeatedly asked the government, the minister and the Prime Minister (Mr. Trudeau): when are you bringing in these powers? Are you considering bringing in these powers? As I said the other day, the evasiveness of the Minister of Consumer and Corporate Affairs (Mr. Gray) on this matter is a by-word in parliament. And the Prime Minister, who surely must be the chief spokesman for the government on this matter, ever since last May has also evaded the crunch. He suggested, as he did on May 8 last, that it would be the intention of the government "to take action on any reasonable proposition put forward" by the Food Prices Review Board, and "if legislation is needed in order to act as recommended," then of course the government would present it to the House. That was on May 8. We have had nothing since.
On August 13 he said to this House:
In the event that the Board reports that significant instances of profiteering have occurred which the parties concerned are unwilling to correct voluntarily, the government will seek parliamentary authority to undertake corrective action.
On September 4, he reinforced that quasi-commitment.
On November 2, in answer to the hon. member for York South (Mr. Lewis), he said that if these people "refused to take the action that we thought was necessary for the welfare of Canadians, then we would intervene."
On February 27 the Speech from the Throne referred to the government's intention "to prevent any group or groups from taking undue advantage of the current situation at the expense of others," which is unmistakably a reference to the subject matter to which I am addressing myself this morning.
Then, on March 12, in answer to a question I posed to him, the Prime Minister again indicated his intention to come soon before parliament with a request for some kind of power. How soon, I asked him, and he again replied soon. Well, Mr. Speaker, today, Friday, is soon, surely soon enough for the Prime Minister to bring in the kind of legislation which he himself has admitted the government is considering.
It is not just a matter of the Prime Minister coming into the House some afternoon, faced with the defiance of a company refusing to roll back prices, and saying, "O.K. fellows, lets do something about it." Before the government can act it must request from parliament the power to so act. I suggest to you, Mr. Speaker, that the government has repeatedly refused to accept the logic of that position. It has refused to ask parliament to give it contingent power so that, when a case arises, it may intervene.
I remind the House that the government took precisely the kind of step I am referring to, in dealing with the energy crisis last December and in January of this year. It

March 15, 1974
Price Control
asked parliament to empower it through a stated mechanism to act in defence of the Canadian consumer in respect of oil prices should the case arise. And parliament gave it that power. Why not ask parliament now for similar powers?
Mr. Speaker, last fall I introduced in the Committee on Trends in Food Prices a motion which called upon that committee to recommend to parliament that the powers of the Food Prices Review Board be strengthened by giving it the ability to require the rollback of unwarranted price increases. I had hoped that if government members would not lend their support to this motion, at least my hon. friends in the Conservative Party would. I remind the House, Mr. Speaker, particularly in view of reports on events that took place yesterday afternoon in the Committee on Miscellaneous Estimates, that on that and previous occasions neither Liberals nor Conservatives on the committee would agree to recommend to the House that the government give this power to the Food Prices Review Board. Why? Notwithstanding all their spurious objections, I suggest the reason is that the Conservatives are no more anxious than members of the government to challenge the traditional right of the business community to set prices as it sees fit and to call the shots in the marketplace.


Some hon. Members:: Hear, hear!


Terrence Wyly Grier: All the twittering in committee and in this House will not disguise that fundamental fact.


Some hon. Members:: Hear, hear!


Mr. Lambert (Edmonton West):: Why don't you talk about last night in the committee?


Terrence Wyly Grier: I listened to the speeches made by members of the Conservative Party in this House to see whether they had something to offer Canadians in respect of the problem of inflation and I came to this conclusion: in the last year the principal and indeed only recommendation which distinguishes them from any other party in this House is their adherence to the notion of wages and prices control. As recently as two or three nights ago, the hon. member for St. John's East (Mr. McGrath) was interviewed on the CBC television network about the recent increase in the Consumer Price Index, particularly with respect to food. He said "Our approach is a prices and incomes policy", which is another way of saying wage and price controls. I will be very interested, when the hon. member speaks this afternoon, to hear how such a policy is going to change the price of potatoes in Canada, the price of sugar being imported, and the price of beef, and how it is going to affect the price of food in Canada, how that policy is going to affect the well-being of the Canadian people. I am tired of listening to the empty promises of the Leader of the Opposition who says that he has the will. He may have the will but he has not got the means or the policies. All he can offer Canadians is the most discredited economic strategy now alive in the world.


Some hon. Members:: Hear, hear!


Terrence Wyly Grier: A strategy, I remind him, which brought the British economy to its knees, which defeated the Conservative government in that country and which has been disproven in the United States as well.
Therefore, Mr. Speaker, since the proposals of the hon. member for Don Valley (Mr. Gillies) and his party make no sense economically, I ask myself why they are so hung up on wage control. I began to get the answer this week as I listened to the hon. member for St. Paul's (Mr. Atkey) speak on the competition bill and urge the government to apply the principles of anticombines legislation against the labour movement. I heard the hon. member for Prince George-Peace River (Mr. Oberle) in a private members' bill attack the principle of organized labour in Canada. I began to sense that the matter is quite simple: the Conservative Party does not like labour and is not interested in seeing the collective bargaining process take place.


An hon. Member:: We don't like the abuses.


Terrence Wyly Grier: The Conservative Party is trying to persuade the Canadian people that the working man of Canada is not important. They want to control his wages and are pretending to Canadians that their discredited and misbegotten strategy is going to solve the problem of inflation. Mr. Speaker, at whatever political risk is entailed, I intend to say to Canadians-that is a bunch of nonsense.


An hon. Member:: Yours is pure hypocrisy.


Terrence Wyly Grier: My hon. friends cry that I am being hypocritical. No one could know better than Conservatives the meaning of hypocrisy.
The hon. member for Don Valley has talked on a number of occasions about breaking inflationary expectations. He might better have said blunt bludgeoning of inflationary expectations. How does wage control break inflationary expectations? It would break the legitimate expectations of the Canadian people and wreck the economy.
Mr. Speaker, if you want to break inflationary expectations in this country I suggest you empower the government to intervene selectively to roll back those price increases which cannot be justified. You indicate to the business community in this country that you are serious about stepping in and protecting the consumer and at the same time you say, "Where your costs can be justified then we will not impose some unreasonable and artificial control". If the Conservative Party cannot see how that makes common sense, I beg to inform them that increasingly the Canadian people can see that it makes sense.


An hon. Member:: How much more time have you got? We can only stand so much of this.


Terrence Wyly Grier: The motion before the House today does not deliberately insist that this power of rollback be necessarily invested in a Prices Review Board, although that would be our preference. Our concern is that this government or some agency of this government be empowered to act in the matter of rollback.
My hon. friends are so obsessed with titles and the names of agencies that they miss the main point. What we need is the power to intervene. The agency or mechanism which carries out the intervention is surely a secondary
March 15, 1974

consideration. We want the power to intervene to roll back prices; we want the power to prohibit price increases which cannot be justified and we want those powers invested either in a department of the government or in an agency established by the government.
I suggest, Mr. Speaker, that the government must now ask parliament for that power and not wait until the clear evidence of unjustifiability is upon us, as it may be by the middle of next week. Let us get that power now for action when necessary. I expect there is a lot of room for action.
Surely the kind of proposal I have made here today and which our party has made consistently in the last 18 months makes sense. You control selectively by stepping in and stopping those increases which cannot be justified. You use the power granted by parliament to protect consumers and the public interest. You do it fairly, not indiscriminately; you do it selectively, not across the board, but with judgment and justice. You challenge the traditional right of the business community so ably represented by my hon. friends in the Conservative and the Liberal Parties. You challenge their traditional right to call the tune; you end the markup rip-off, the profiteering; you build some fair play into the marketplace.
I wonder if my hon. friends understand the meaning of the term fair play. You say to consumers, "the government is on your side". You stop the evasive shuffling to and fro on the government benches; you end the twittering game playing in the official opposition and you get on with the job of fighting inflation in a realistic and tough way. I suggest, Mr. Speaker, that it is the only way.


Some hon. Members:: Hear, hear!


Mr. James A. McGrath (St. John's East):: Mr. Speaker, I am sorry the hon. member for Toronto-Lakeshore (Mr. Grier) did not ask for additional time, because we would have been favourably disposed to granting it. He put forward such a favourable argument in support of our position that we would have allowed him to go on for quite a while longer.
It must have occurred to the hon. member for Toronto-Lakeshore as he spoke in support of his motion that the government holds the hon. member and his colleagues in contempt. He need only look at the government benches. Where is the Minister of Consumer and Corporate Affairs (Mr. Gray)? Should he not be here when this most important motion is being debated? Where is the Minister of Finance (Mr. Turner)? Where is the Prime Minister (Mr. Trudeau)? Where is the minister's parliamentary secretary? Which government supporters are present? I see the Minister of State (Mr. Haidasz) who is responsible for multiculturalism, the Minister of Supply and Services (Mr. Goyer) and several other government supporters. That is a clear indication of the contempt in which the government holds members of the NDP, and rightly so. They have been prostituting themselves since the beginning of this Parliament. I cannot help but think-


An hon. Member:: And where do the Tories stand?
Price Control


James Aloysius McGrath: I cannot help but think of the hon. member for Toronto-Lakeshore as being like a first-class passenger on the Titanic.


An hon. Member:: Where are the Tories?


James Aloysius McGrath: He is going down, but going down in style.


An hon. Member:: Feeling lonely? Who supports your party?


James Aloysius McGrath: I can assure the hon. member that we are not lonely. We have the majority of the people of Canada supporting us.


An hon. Member:: Not according to the Gallup Poll.


Some hon. Members:: Oh, oh!


James Aloysius McGrath: The hon. member for Toronto-Lakeshore talked about the motion he moved in committee; he talked about the motion moved in the Committee on Food Prices. He wondered why we did not support his motion for giving the board power to roll back prices. Mr. Speaker, he read only part of his motion. He forgot to mention, for example, that the chairman of the board was to be replaced by a new chairman. That was part of the motion.
I will tell the hon. member that we did not support his motion then, nor will we support it now, because we have no confidence in the Food Prices Review Board and no confidence in this government.


Some hon. Members:: Hear, hear!


James Aloysius McGrath: If we are to give any agency the kind of delegated authority the hon. member advocates in his motion, we will only give it to an agency, to a body, in which the members of the House have confidence. I submit to you that, like the people of Canada, the majority of members in this House, including the hon. member for Toronto-Lakeshore if he were honest with himself, do not have confidence in the chairman of the Food Prices Review Board or in the board itself.
Not only did the NDP move a motion in committee in November calling for the head of Mrs. Plumptre; the leader of that party last week, in a speech in Toronto, again called for Mrs. Plumptre's resignation. In addition, he called for the resignation of the Minister of Consumer and Corporate Affairs (Mr. Gray).


Paul Theodore Hellyer: The party is totally inconsistent.


James Aloysius McGrath: In order to accommodate the leader of the NDP and the hon. member for Toronto-Lakeshore, my colleagues and I in the opposition yesterday put forward a motion in the Miscellaneous Estimates Committee whereby we would reduce the salary of the Chairman of the Food Prices Review Board to $1. Where was the hon. member for Toronto-Lakeshore and where were his colleagues when that motion was put forward? They were where they always are, supporting this government. So, they come into this House and speak with forked tongues, and then wonder why we cannot support their motion.

March 15, 1974
Price Control


Paul Theodore Hellyer: They are hiding in the closet with the skeletons.


Mr. Speaker:: Order, please. I see the hon. member for Toronto-Lakeshore rising on a point of order.


Terrence Wyly Grier: On a point of order, Mr. Speaker, may I ask the hon. member, through you, if he will permit a question at this time.


Mr. Speaker:: That is hardly a point of order. Perhaps the hon. member for St. John's East might be allowed to continue his speech.


James Aloysius McGrath: Mr. Speaker, I will gladly permit the hon. member's question, if he will permit me to call it one o'clock.


Some hon. Members:: Agreed.


Mr. Speaker:: This procedure is unusual. I do not see how the hon. member can ask his question if we call it one o'clock. I shall inquire if hon. members wish to call it one o'clock.


Some hon. Members:: One o'clock.


Mr. Speaker:: It being one o'clock, I do now leave the chair.
At 12.58 p.m. the House took recess.


[Stage Direction]
AFTER RECESS

The House resumed at 2 p.m.
James Aloysius McGrath: Mr. Speaker, I had hoped to be able to give up the floor to the Minister of Agriculture (Mr. Whelan) who, I understand, will be making a statement later today.


Gerald William Baldwin: He has to check it out with the NDP first.


James Aloysius McGrath: We look forward to that statement. Obviously, as my colleague said, he has to have it checked out first with the junior member of the coalition.
When the House rose for the luncheon recess, I was replying to the hon. member for Toronto-Lakeshore pointing out to him the weaknesses in his motion and why we feel we cannot support that motion in its present form. That is not to say we are not prepared to support any reasonable motion the New Democratic Party has to bring before this House. We realize the situation is urgent. We also realize this government has to be prodded into action before it will take steps to provide the kind of remedy necessary to cope with the very serious crisis facing this country today.
Let us take a look at the record. In the last session, the government opened parliament with this reference in the Speech from the Throne. This was in 1973.1 quote:
While food prices in Canada have steadied slightly in the last month or so, the Government is concerned about possible future effects of the world-wide trend toward higher food prices and will propose the

setting up of a Joint Committee of the Senate and the House of Commons to make a special study of this problem.
A year has passed. That special study was undertaken by the Special Committee on Trends in Food Prices under the chairmanship of the hon. member for Sarnia-Lambton (Mr. Cullen). Time will not permit me to repeat the recommendations made by that committee in its three reports, but I think it should be pointed out that, in the main, the recommendations of that committee stand ignored. For example, the first recommendation in the first report called for special legislation setting up a Food Prices Review Board. Special legislation, given the makeup of this parliament, would have meant the House would have had some input into the terms of reference of the Food Prices Review Board. I submit we would have had today a meaningful review board with adequate terms of reference and adequate powers to deal with the problem facing the country today. Instead, the government ignored that part of the report, circumvented parliament and set up the board we now have under the authority of the Inquiries Act. The result is that the board, with all its imperfections, has no minister to whom to report. It does not report to this House; its reports are made public. Consequently, this House has no opportunity to comment on the reports, to study the reports or to call upon the board to explain its reports unless, of course, the government brings in a reference to the appropriate committee.
I should add that to cope with that situation we recommended in our last report, the third and final report of the food prices committee, realizing that as a special committee we would die with the end of the session, that the government immediately set up a standing committee on consumer affairs. We made that recommendation in order to ensure that there would be a standing committee of this House set up for the purpose of dealing with the subject matter of the hon. member's motion. More particularly we would have a standing committee of the House to which the reports of the Food Prices Review Board could be referred.
It is rather interesting that just a few days ago I asked the government House leader when he proposed implementing that final recommendation of the Special Committee on Trends in Food Prices, but the response that I received, Mr. Speaker, was anything but encouraging. As a matter of fact, the minister made it very clear that, in his opinion, there are already too many standing committees of the House, and he implied that for this reason he did not see how it could be practical to set up another standing committee. So now we have to carry on by having matters relating to the Food Prices Review Board either referred to the Standing Committee on Miscellaneous Estimates or to one of the omnibus standing committees, such as the Standing Committee on Health, Welfare and Social Affairs. I submit that this is just not good enough.
As for the other recommendations of the Special Committee on Trends in Food Prices, as I say, time will not permit me to list them all. However, we did recommend, for example, a school lunch program, a two-price system, and that the government get on with a special study of a food policy for Canada. All of the recommendations of the committee, with one or two minor exceptions-and these
March 15, 1974

are mainly recommendations dealing with consumer education-stand ignored.
Since that committee was set up, commencing with the reference in the Speech from the Throne at the opening of this 29th parliament, I believe the committee held 35 sittings, heard a vast number of witnesses from all segments of the industry, and was one of the hardest working committees I have ever been associated with in my experience in this House. All members of that committee from all parties took their duties seriously and worked very hard. Whilst we did not always agree, we always tried to arrive at a consensus, especially so far as our reports were concerned.
The only time we differed from that point of view and were not part of a consensus was in the presentation of the first report and the recommendation dealing with the Food Prices Review Board. We felt that that recommendation was not adequate. We felt then, and subsequent events have confirmed us in our view, that you cannot examine food prices in isolation. Let me tell my hon. friends that you cannot examine food prices and ignore the cost of labour. You cannot examine food prices and ignore the cost of shelter. You cannot examine food prices and ignore the cost of transportation. We know what happened in the area of transportation as a result of the so-called energy crisis and the increase in the price of diesel oil. So we differed with the committee in that one instance; but all of the other recommendations, and I think there were six in the first report, were unanimously approved by the committee.
So far as the second report was concerned, the second recommendation of the committee in that report-and this is unprecedented in my recollection-asked the government to get on with implementing the recommendations made in the first report. As I say, that has to be unprecedented. That should have been the last recommendation of our third and final report, namely that because of the seriousness of the situation we ask the government to get on with implementing all of the recommendations of the committee.
Since that time, Mr. Speaker, let us just see what has happened. Bread has increased by 22.5 per cent, meat by 21.7 per cent, beef by 25.2 per cent, poultry by 34.5 per cent, fish by 33.7 per cent, eggs by 26.2 per cent, and sugar by 71.6 per cent. That is what has happened since the government expressed its concern a year ago and announced that it was setting up a Special Committee on Trends in Food Prices.
The food prices committee is now gone: enter the Food Prices Review Board and the studies made by that board. Notwithstanding the limitations of the board, and notwithstanding all of its weaknesses and imperfections, the board has made some very worth-while recommendations. We saw, for example, the report dealing with egg prices. That report made some very serious charges, especially in light of the fact that the Canadian Egg Marketing Agency and the egg marketing boards under its jurisdiction operate under federal government licence. The Minister of Consumer and Corporate Affairs (Mr. Gray) has washed his hands of it and has passed the buck to the Minister of Agriculture (Mr. Whelan), who in turn passed it to another agency, a farm products agency, and asked that
Price Control
agency to examine the charges made by the Food Prices Review Board. As I said in committee yesterday, that is like asking Henry Ford to examine automobile prices.
So far as the recommendation dealing with bread is concerned, last summer and in September the government brought in its subsidies on milk and bread. We were told at that time that there would be no further increases, that this would hold the line. We are now told that in addition to the three cents increase in the price of a loaf of bread just recently announced, milk is going to increase further in price. What happens to the government's subsidy program? Does it react with another ad hoc subsidy? Is the Minister of Agriculture going to get his feet wet today when he makes his statement and provides the House with another band-aid approach, another form of ad hoc subsidy, while the main problem goes ignored? I suspect that is precisely what he is going to do.
Let us now take a look at the Speech from the Throne in which the government announced that it would bring in a new food policy based upon three objectives: An adequate and dependable supply; reasonable prices for consumers and producers; and a continuous supply of export foodstuffs. All of those were recommended within a year by the food prices committee. What I want to know is when the government is going to be seized of the urgency of this situation. When is it going to be conscious of the hardship this imposes on the majority of the wage earners of this country who see their savings being eroded, daily, weekly and monthly by an annual rate of inflation which is now in excess of 10 per cent? The people of this country will not tolerate that kind of situation. This government, if it persists in ignoring the warning signals which are there, will do so at its peril.
I say to the hon. member for Toronto-Lakeshore, and his friends in the labour movement who are very much aware about what I am talking about, all one has to do is look at what is happening to average weekly earnings. The latest figures released by Statistics Canada indicate a progressively deteriorating situation. The average Canadian worker was earning a wage in the month of December that was approximately $5 less than the month before and only 5.9 per cent higher than in December 1972. When that is compared to the cost of living increase over the same period of 9.1 per cent, it is indeed obvious that whatever the workingman had managed in salary increases has been more than eroded by inflation. Is there any wonder there is labour unrest in this country today? The blame for a great deal of that labour unrest has to fall on the shoulders of not only this government but its junior partner in coalition, the NDP.


Some hon. Members:: Hear, hear!


Mr. Cyr:: Mr. Speaker, would the hon. member permit a question?


The Acting Speaker (Mr. Laniel):: Does the House give unanimous consent to the hon. member for Gaspe (Mr. Cyr) to ask a question?


Some hon. Members:: Agreed.

March 15, 1974
Price Control


Alexandre Cyr: Mr. Speaker, I want to ask the hon. member whether he knows that the fishermen in the Atlantic provinces were receiving 5 cents a pound for cod last spring and that they were receiving 15 cents a pound at the end of November, 1973? In view of that, is the hon. member favourable to a price freeze of 10 cents per pound to the fishermen for cod in the Atlantic area this year?


James Aloysius McGrath: Mr. Speaker, I am glad the hon. member has asked me that question as it gives me the opportunity of saying that I agree with him that the price of fish to fishermen has gone up to 15 cents a pound, but the hon. member knows full well that the price to the processor has gone from 29 cents a pound to 70 cents a pound on the United States market. Who is getting a rakeoff in the fishing industry? Obviously, it is not the fishermen off the Gaspe coast and in the four Atlantic provinces who are receiving that increase, yet they are suffering as a result of the highest cost of living in the whole country.


Gerald William Baldwin: Aren't you sorry you asked the question?


Lincoln MacCauley Alexander: Ask another one.


Mr.   De Bane@: Mr. Speaker, would the hon. member permit me a question?


The Acting Speaker (Mr. Laniel):: Order, please. I would also point out to the Parliamentary Secretary to the Minister of Consumer and Corporate Affairs (Mr. De Bane) that the time allotted to the hon. member for St. John's East (Mr. McGrath) has expired. If he wishes to ask a question, he too will have to get the unanimous consent of the House.

The hon. member for Matane (Mr. De Bane) wishes to ask a question. He can only do so with unanimous consent. Does the House give unanimous consent?


Some hon. Members:: Agreed.


Mr.   De Bane@: Mr. Speaker, I should like to ask the hon. member for St. John's East (Mr. McGrath) how he reconciles his last statement that the processors are making great profit with the statement last week by the Leader of the Opposition in the Senate, Senator Flynn, who said that the government should endeavour to make sure that companies make still more profit? Just who is speaking on behalf of the opposition party?


James Aloysius McGrath: Mr. Speaker, obviously the hon. member did not read closely the remarks of Senator Flynn, as he was talking about companies in general. Even Senator Flynn and the hon. gentleman would concede that corporations involved in food processing in this country have enjoyed considerable increases in profits, and this applies particularly to the fish processors in the Atlantic provinces which have been making a lot of money on the U.S. market. All I can say to the hon. member, as I said to the hon. member for Gaspe (Mr. Cyr), is that this money is not going to the fishermen.
[The Acting Speaker (Mr. Laniel).]



ROUTINE PROCEEDINGS


Eugene Whelan: Mr. Speaker, as I indicated this morning, I should now like to request the unanimous consent of the House to revert to motions for the purpose of making an announcement regarding assistance to beef producers.


The Acting Speaker (Mr. Laniel):: The House has heard the request of the hon. minister. Does it give unanimous consent to revert to motions for the purpose of making a statement.


Some hon. Members:: Agreed.


Eugene Whelan: Mr. Speaker, as hon. members are aware, Canadian cattlemen are facing a very difficult situation at the present time. Very simply, the problem is this: They have bought feeder cattle at very high prices, paid high prices for grain and other necessary inputs, and then have seen in the last few weeks a flood of United States cattle coming in, depressing the market and lowering their returns.
At current prices, cattle feeders are losing from $50 to $100 a head on each animal marketed. Canadian cattlemen need to be assisted in this difficult period if we are to have a viable beef industry in this country.
This government recognizes the importance of a viable agricultural industry to the country as a whole. In the throne speech it was made clear that a strong agriculture industry will assure consumers of a continuous supply of high quality food at reasonable prices. To maintain a strong agriculture industry, farmers must be assured of fair returns, returns which equate to the cost of production, plus a reasonable margin for labour and invested capital.
I am therefore announcing a program to assist Canadian beef producers. The federal government will pay a premium of 7 cents per pound live weight on all Canadian cattle for Canadian consumption, grading A1 or A2, retroactive to March 4. The 7-cent premium will also be paid on all A3 cattle slaughtered between March 18 and April 13 inclusive, and on all A4 cattle slaughtered between March 18 and April 6 inclusive.
Premium payments will be made to producers by processors who will then be reimbursed by the federal government. Retroactive payments will be made directly to producers by the Agricultural Stabilization Board on receipt of claims from producers.
This premium program is being instituted to meet four objectives: One, to assure top quality beef for the consumer; two, to prevent the price of beef to the consumer from rising; three, to tide cattlemen over a disastrous period where many would be bankrupted in the squeeze between higher cost of production and lower returns from the market; and four, to ensure a continuing supply of beef to the Canadian consumer, both now and in the future.

It should be emphasized that consumer prices will not be adversely affected as a result of the government's premium program. The premium program will be terminated when there is a return to a better and more stable market for cattle.


Herbert Thomas (Bert) Hargrave: Mr. Speaker, notwithstanding the fact that a copy of the announcement by the minister has just been delivered to me, in view of the remarks and comments I have made over the last two weeks about the cattle situation I think it most appropriate that I respond at this time.
The 7-cent subsidy, and I think that is a much more realistic term than "premium", is the main thrust of the minister's announcement. Cattle feeders have suffered tremendous losses, beginning early last fall and continuing over the year end; they are still losing money. I should like to point out that the Canadian Cattlemen's Association did not suggest or ask last week for this subsidy approach in its presentation to the government. They did not make this suggestion because it would do nothing to stop or even slow down the massive flow of United States feed cattle into Canada. Last week there were some 10,000 to 11,000 head imported into Canada. The indications this week are that there will be about 1,000 less, somewhere between 9,000 and 10,000.
I suggest very sincerely that the announcement of this subsidy will be greeted with mixed feelings in the cattle industry across Canada this afternoon. Those who have sustained substantial losses, and are still sustaining them, will feel one way about it. That is pretty obvious. Those involved in the cattle-calf grass side of the operation, which is really the major or total, if you like, operation, are more inclined to take the longer view and want no part of this kind of subsidy approach. This announcement will do nothing to restore confidence in the total Canadian cattle industry which is so necessary at this time. I suggest even with this week's market upturn of about $2. to $3. in western Canada, and a little less in eastern Canada, the producers of beef cattle who are finishing them in the feedlots today are still $10 per hundredweight or 10 cents a pound below their minimum costs of gain. I know the minister is aware of this.
I think it is regrettable that the cattlemen's proposal for the longer term was not at least commented upon in a meaningful way in the minister's statement. I think it was a very reasonable and workable proposal. The cattlemen themselves had a tremendous amount of input from all over Canada in respect of this aspect of it. Admittedly, there is a longer term, but that is what we need in the industry. I wish to read a telegram delivered to my desk minutes before I came into the House this afternoon. It is from the Saskatchewan Association of Rural Municipalities. I believe the minister spoke at their meeting the day before yesterday. It reads as follows:
At a convention of the Saskatchewan Association of Rural Municipalities in Regina this week the following resolution was passed:
Whereas the cattle industry is recognized as a very important part of our agriculture economy and whereas the livestock feeders of Canada are in a very grave financial position and whereas the large importation of US fat cattle at this time is very depressing to our Canadian
Cattle Premium
prices therefore be it resolved that as a means of alleviating the present situation that we support the Canadian Cattlemens Association, the United Grain Growers, the Canadian Federation of Agriculture, and other provincial organizations in their efforts to attain an immediate escalating tariff on beef cattle based upon reciprocal quotas with the United States.
This is signed by Mr. C. F. Mitchell, President of the Saskatchewan Association of Rural Municipalities. I am told that there were some 1,600 people in attendance at that meeting. This telegram was addressed to me, personally.
I suggest it is long-term policy for beef and cattle that will determine if retail beef prices are to be relatively cheap. I stress the word "relatively". The days of cheap food are long gone. The answer to relatively cheap food, and especially beef, is increased world production. But that increased production must recognize that farmers, including cattlemen, are entitled to reasonable profits. The alternative is decreased production combined with increasing imports and resulting higher beef prices. Once again we have the situation of a serious producer price drop and very little if any corresponding drop at the retail-consumer level. This is an old situation I know, but it is a most frustrating situation and is difficult for producers and cattlemen to understand when they are selling at the time of a downward trend in the market and do not see that price trend transferred reasonably quickly to the retail level. Surely this situation merits appropriate government action. This announcement is a stop-gap measure that will cost millions, I am sure, but really does not deal with the long-term cattle situation.


Alfred Pullen Gleave: Mr. Speaker, whether or not the minister's announcement will stop the phone calls from Saskatchewan to Ottawa, we will know in a day or so. His announcement, in effect, is a short-term policy obviously designed as a bail-out policy to deal with the situation. It is the government's method of dealing with the situation as it sees it, but I believe its application will be limited. There is no floor. The seven cents will be in addition to whatever the market price may be the day the cattle are taken to market. I would judge by the fact that the minister is encouraging the A3 and A4 type of cattle that they will come to market and get the premium while it is still there, and that he hopes to get an increased amount of cattle from the feedlots to slaughter. The minister agrees. Whether or not this plan will work in the interest of the consumers remains to be seen.
I believe we need a stable industry. I think farmers who are in the business of raising feed cattle want to know what the return will be. They would like to know how long the program announced in this statement is to last. If they do not know how long it is to last, they may very well bring unfinished cattle to the market. They do not know whether or not there is a floor price. Obviously-and I repeat this because I think it should be repeated-this is a short-term program. I cannot particularly call into question, and do not wish to call into question the fact that the minister is using a deficiency payment or subsidy approach instead of a tariff approach. In the area I represent there are a great many ranchers and farmers who have to sell their feeder cattle across the border in the United States. We have a very large hog operation and the United States is a very considerable part of the market for

March 15, 1974
Cattle Premium
that finished pork as well as live cattle. Unless there are negotiations with the United States and they agree to a tariff, I would not be in favour of imposing one. I say this frankly in the House. I am not prepared to say, however, in respect of the long-term.
The North American exchange of cattle and hogs is endangered. Even in the past few weeks an objection has been raised against the surcharge which the government put into effect for a period of time. I want to say again, and this disturbs me, that an impromptu and ad hoc approach, particularly to the cattle end of the farming business, has characterized this government in the last few months. First, they imposed a surcharge and then an embargo. The surcharge was removed and a temporary program set up. I agree that under these circumstances the government might need breathing space or time, but I really urge the Minister of Agriculture and the minister in charge of the Wheat Board to say what is the program for support prices for cattle and hogs. I urge them to cease jockeying about with the feed grain policy because the farmers out there want to know what it is and if it is going to affect their production. If they do now know, it will also affect consumer prices.
I do not believe the consumer thinks he is getting cheap food. It may be the opinion of some other people, but the answers to the questionnaires which I sent out last week have revealed that people in Saskatoon do not think they are getting cheap food and the farmers know they are in a bind. They want a policy with some continuity, and this is the point to which I think the government should address themselves forthwith.


Jean-Marie Boisvert: Mr. Speaker, I have first returned from a tour of my constituency during which I visited 22 of the 27 rural parishes. Farmers are now deeply distressed. They are exchanging a dollar for four quarters and sometimes they only get three. They have to tackle the exorbitant cost of feed grain while consumers must face the exorbitant cost of food for their family.
The minister is proposing a subsidy of 7 cents a pound to beef producers. It is quite obvious that this action will not control the cost of living increase and that the consumers will still be paying increasingly higher prices for their food.
The minister is even taking the precaution of saying: I emphasize the fact that prices to the consumers will not be adversely affected. What he means is that even if he gives a subsidy of 7 cents to producers, prices will not increase proportionately. It would be paradoxical if producers were subsidized while consumers would have to pay more for their supplies.
I believe, Mr. Speaker, we will have to begin very soon to think about the consumers. We think about the producers and prices keep rising. We will soon have to subsidize the consumers because they will no longer be able to supply themselves.
We Social Crediters often say: We must think about people before thinking about animals. One of these days,

the government will have to consider that and come to the conclusion that for the well-being of the people, we must call on the people.


EXTERNAL AFFAIRS
Mitchell William Sharp: Mr. Speaker, while we are on motions, may I have the permission of the House to table in both official languages, a copy of a government brief on the Skagit River Valley submitted to the U.S. federal power commission through the U.S. state department on March 14. It had been my intention to table this on Monday, but since the United States has already released the text I thought I should table it now.


The Acting Speaker (Mr. Laniel):: Order, please. Since the House has given unanimous consent to reverting to motions for one specific purpose, namely, to allow the Minister of Agriculture to make a statement, I am sure hon. members would agree to extending that unanimous consent to the Secretary of State for External Affairs to allow him to table the document to which he referred. Is this agreed?


Some hon. Members:: Agreed.


The Acting Speaker (Mr. Laniel):: It is so tabled. The House will now revert to the consideration of supply.



GOVERNMENT ORDERS


[Stage Direction]
The House resumed consideration of the motion of Mr. Grier:
That this House calls on the government to consider the immediate introduction of legislation dessigned to control selectively the prices of essential commodities and to give either to the government or to a prices review board the power to roll back unjustifiable price increases.
Mitchell William Sharp: Mr. Speaker, I enter this debate rather unexpectedly. I am sure it is unexpected to the House and it is unexpected to me, but because of the absence of the Minister of Finance (Mr. Turner) I have been asked in my capacity as Acting Minister of Finance, to respond to the motion put forward by the spokesman for the NDP. I also speak as a former minister of finance and, if I may add, as the reincarnation of a civil servant which I was and at which time I was intimately involved in wartime price
March 15, 1974

and wage controls. That experience taught me some things about price and wage controls that I would like to speak about.
It taught me certain unforgettable lessons about the kind of conditions that are necessary for the successful application of any form of wage and price controls. The two criteria that are of the utmost importance, if there is to be a successful price and wage control, are simplicity and a high degree of approval from the public generally. During wartime when we had an over-all system of wage and price controls every housewife was an enforcement officer. The reason for this was that all that she had to report was whether any price had gone up because by definition under the system of wartime price and wage controls any increase in price was illegal, so that all that a housewife had to do was to report to the local officer of the wartime trade board that someone had broken the price ceiling.
The second factor was strong public support, in other words, the whole of the country was behind the government in its war effort and therefore supported without any qualification the efforts that were made to take any inflationary element out of the wartime situation. Any other efforts that have been made in peacetime to apply over-all price and wage controls on any other basis than that of imposing a ceiling have more or less failed, some of them dismally, some of them comparatively. Indeed, the world is littered with the debris of wage and price controls that did not work.
There are many things in the world that have not worked, and it is not surprising that wage and price controls should not have worked in some cases, indeed in all cases. Perhaps you might say the effort was worth making, but regrettably the efforts made to apply wage and price controls in peacetime have more than failed. Invariably they have been counterproductive. They have not only failed to stem the increases in costs and prices but they have been counterproductive in the sense that they have redu(3d production.
We have had two recent examples of efforts to apply over-all price and wage controls, one in the United States and one in the United Kingdom. We in Canada have experienced the results of the efforts to apply price controls on farm produce in the United States. We have not yet quite overcome the damage caused by these abortive attempts which resulted in the liquidation of cattle. Only today we listened to my colleague, the Minister of Agriculture (Mr. Whelan), announcing one of the measures we have had to take, which traces its origin back to the abortive attempts made to try to control artificially the prices of cattle and meat.
If we look at the United Kingdom we see a different phenomenon there. We see an attempt to apply controls to wages that resulted in a tremendous over-all reduction in production. Indeed, a government collapsed over an effort to put into effect a system of wage controls that did not have the universal kind of acceptance that is necessary if these kinds of controls are to work. To my friends in the Progressive Conservative party I hope this is a lesson
Price Control
about what happens when efforts are made to try to apply this kind of system in peacetime.
As the Prime Minister (Mr. Trudeau) said previously when talking about this matter, and I quote from page 36 of Hansard for February 28:
It is less than honest to dwell expansively on the pleasant prospect of fixed consumer prices, while at the same time diverting attention from the not so pleasant prospect of fixed incomes. It is less than honest not to tell the public that wage controls have their own set of injustices, that they apply most inflexibly to blue-collar workers whose pay can be easily monitored, and most flexibly to white-collar workers who can be given a salary increase under the guise of an artificial job reclassification.
Surely, the lesson we can learn from Britain is what happens when there are groups of people who believe this, whether it is true or not, and it underlines the point I have made that only a system that has widespread, indeed virtually universal support, has any chance of being successful. Yet the Official Opposition continue to advocate a system of over-all controls.
Of course, they put in qualifications. When difficulties are pointed out to them they then begin to make their qualifications. So that one is not quite certain what the views of the Official Opposition really are on this question.
It reminds me of an onion. You keep peeling away at the onion. You take off skin after skin, and finally there is nothing there.


Some hon. Members:: Hear, hear!


Paul Theodore Hellyer: Like in the next election.


Mitchell William Sharp: Except, Mr. Speaker, that if you sit on the other side you have tears in your eyes.


Some hon. Members:: Oh, oh!


Steve Eugene Paproski: Who writes your stuff, Mitch?


Mitchell William Sharp: I regret to say I did not have a speech prepared for me, and so I have to make one of my own today.


Some hon. Members:: Hear, hear!


Steve Eugene Paproski: You are much better at pianos than jokes.


Mitchell William Sharp: The resolution before the House comes from a party that, like the government, has rejected the concept of over-all wage and price controls. It calls on the government:
-to consider the immediate introduction of legislation designed to control selectively the prices of essential commodities and to give either to the Government or to a Prices Review Board the power to roll back unjustifiable price increases.
This is a different proposition and one that is more difficult to deal with in the way in which I have dealt with over-all wage and price controls because its terms are not very well defined. This is a system that is not defined in any way. It refers to selective controls. We are told what those are to be. We are not told what the essential commodities are, but somebody is to be given power to deal with them. I would like to address myself to this particular proposition.

March 15, 1974
Price Control
As I say, this proposition is different from an over-all system of wage and price controls. However, it does have some weaknesses that I would like to point out to my hon. friends on the other side of the House, to those on the far right so far as I am concerned. The first point I would make is that selective controls of this kind are bound to be arbitrary. They are bound to have a selective effect which may not be acceptable.
Selective controls are likely to single out particular groups for government action, and to leave others untouched. That is fine in theory, but the trouble is that it leads the government into a general program because every group in the community wants someone else to be the target of government action. Therefore it is very difficult to keep selective controls really selective. In due course one is drawn into a general program, and into exactly the weaknesses I have outlined in connection with over-all wage and price controls.
The second point is one of general application which relates not only to selective controls but also to over-all controls. It is the problem of anticipation. To bring forward measures of a general character, and they would have to be general to give the government power to impose price controls on anything, would cause anticipation. The same would apply to any measure brought in to impose over-all wage and price controls. All of the people selling goods in the country would be inclined to say, "Let us get our increases put into effect before the government takes these measures."
It could be argued that it would be necessary to give power to roll prices back, but if there was a general anticipation it would be impossible to roll everything back. Rolling back is possible only in selective cases.
Then we have another problem in selective price controls arising out of the nature of Canadian industry, namely, our tremendous dependence upon trade. Suppose the government or the Prices Review Board were to decide to impose selective controls on a particular kind of product, where it was alleged there was gouging, rip-off, or what-have-you, what would one do if a high proportion of such goods were moving in international trade? One would be forced, from putting on selective price controls, into selective export controls. In other words, in order to keep Canadians supplied with goods at any price, one would have to put on export controls to prevent all goods from leaving the country to get the higher prices available abroad. This is in the nature of selective controls; indeed, it is in the nature of over-all wage and price controls. In a country like Canada, with such a high proportion of income coming from trade, one is bound to follow price and wage controls by export controls, subsidies on imports, taxes on exports-the whole structure.
I say to my friends on the other side of the chamber that what appears to be a very simple selective plan, but would lead us, in my judgment, very rapidly into the kind of widespread controls that should be avoided if we are going to be able to deal with the inflationary situation that now faces the world. I should like to revert to that subject for a moment, Mr. Speaker. This is one of the few times in the world's history when we have had universal inflation.

Most of the great inflations in the past have been in particular countries. We think about German inflation, Brazilian inflation, Peruvian or Chilean inflation, but this is one of the few times in the history of the world when we have had universal inflation.


Paul Theodore Hellyer: You don't understand it.


Mitchell William Sharp: We understand it very well and that is why we do not have pat answers like price control. We must deal with what is the underlying cause of our problem today. I will not go into the details of it as I think they are well known. Let us look at the food situation in the world. It is not going to be overcome or controlled in Canada. This is a problem of worldwide dimensions. Indeed, we may be on the verge of the most serious food problem the world has ever seen. I say this, not to justify the fact that we are not going in for price and wage controls or selective controls of the kind advocated by the other side but because there is only one answer to this problem: that is to increase production. This is what is needed in the world, whether in food, fuel, clothing or what-have-you.
The whole emphasis of government policy throughout the world must be upon increasing supply. Therefore, I say to my hon. friends opposite, not that their ideas do not have some merit but that those ideas are counterproductive in terms of what needs to be done in the world today. That is why the government does not accept the resolution before us.


Some hon. Members:: Hear, hear!


Mr. Knowles (Winnipeg North Centre):: What will you say when you do it?


Jean-Marie Boisvert: Mr. Speaker, the NDP motion once more throws the light on the whole problem of the high cost of living and aims at making a suggestion to find a solution.
The motion states and I quote:
That this House calls on the Government to consider the immediate introduction of legislation designed to control selectively the prices of essential commodities and to give either to the Government or to a Prices Review Board the power to roll back unjustifiable price increases.
By moving such a motion, we are taking the well-being of the people into consideration. Anyone who comes in contact with the population, with reality, readily notices that inflation is beginning to hurt many Canadians.
Talk about shortages here and there if you want, but people do not believe a word of it. For instance, it is getting to be a joke to say there is an oil shortage in Canada. People are scoffed at but they do not fall into the trap as easily as the government would hope.
There are enough oil reserves in Canada not only for Canadian consumption but for that of a great part of the world. We are told that oil production reaches not more than a third of its capacity and that was true even before the discovery of the oil sands in northern Alberta and northern Saskatchewan. Surely price hikes are not due to shortages.

In that regard, without having to freeze prices, the government should at least review or rather incentively control prices. I say incentively, Mr. Speaker, because I find it a less socialistic and more realistic term.


Stanley Howard Knowles: Why not!


Jean-Marie Boisvert: Through the implementation of incentives, we neither force private enterprise to act, nor do we choke it. I know an individual in my riding who wanted to erect a two-story building which required a steel structure. So his architect and his contractor took the necessary steps to find the steel and materials required for the structure. That was estimated at $37,000. But he was told that there was no steel left, as if the Iron Ore Company had shut down. He was therefore told that there was no steel left. He had to find another source and change his plan to build a one-story building. Instead of paying $37,000 for a two-story building, he now has to pay $57,000 for one story. This is one of the reasons why a price control system should be based on incentives.
It is like in some other areas. We know that the price of paint has risen by 30 per cent most recently. Those who wanted to buy paint in large quantity before Christmas and New Year's had to use all their pull to get it. That is understandable enough. If an individual has one million gallons of paint in his warehouse and he increases his price by $3 a gallon, he makes a profit of $3 million. That is exactly what is happening. When one sees in supermarkets bags of potatoes selling at $6 a bag one realizes that there is a monopoly involved, that the government is unconcerned and indifferent about it.
An individual manufacturing aluminum posts as we see along highways told me recently that he is now forced to refuse contracts not because his customers do not have money to pay for them but because he is short of aluminum. Just imagine, Canada is one of the major producers of aluminum and there is a shortage of aluminum.
The Secretary of State for External Affairs (Mr. Sharp) just suggested that inflation is a world-wide phenomenon. In a certain way he is washing his hands of the whole mess; it is not our fault, we are not guilty of anything, we are not there to administer, we have nothing to say in that matter, things would be the same without us.
That somewhat reminds me of the fellow whose house catches fire and who says, I am no fireman, I do not touch anything. I will wait for the fire department to get here.
What would you say about a fellow like that? One would be somewhat justified in saying that this government is somewhat acting in the same way when it says, we cannot grapple with inflation, that is none of our business. That is the business of African countries and probably those countries to which we make interest-free loans of hundreds of millions of dollars for 50-year periods.
So this government must open its eyes, stop thinking about its election funds, its fund raisers, and it must find solutions interesting not for the party but for those it is supposed to govern. When I say "those it is supposed to govern," I mean the people of this country, not fund raisers. This government will have to come up with a system to help consumers. I harp on this and I will time
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and time again, the consumers are first and foremost the taxpayers, and they are the ones faced with that plight that is inflation. We will have to stop subsidizing producers, middlemen, etc., and think about the people of this country. In a country such as Canada with so much wealth and so few inhabitants, it is not normal for our people to be as struck as they are now. With a population of nearly 20 million people, Canada may be one of the richest countries in the world, but its population is also one of the most heavily indebted in the world and its standard of living one of the most difficult to catch up with. Then, there must be something wrong with that. The government must act to prevent monopolies from replacing democracy. What I am suggesting is that this is exactly what is taking place in Canada today. Monopolies and high finance are replacing democracy in Canada.
When the government's financial and economic policy no longer reflects special interests, but the production and wealth of Canada, no longer will there be problems of such magnitude for us to face. Concerning the motion introduced by the New Democratic Party, I feel that it is good up to a point, but I do not like the word "selectively" which smacks too much of socialism.
The motion states, and I quote:
... give... to a Prices Review Board the power to roll back unjustifiable price increases.
I am also in agreement with that part of the motion.


An hon. Member:: I am not.


Jean-Marie Boisvert: There is a member of the New Democratic Party who does not agree. I do not understand this.
I agree with that part of the motion because the board is now a very bad joke.


An hon. Member:: What you are saying is also very bad!


Jean-Marie Boisvert: It must be interesting since you are listening.
This is a board created to serve as a front, to stop the people from complaining too much. Its purpose is to give an excuse when it is difficult to find something to say. This is the type of board that this government is giving us: a board created simply to allow the government to stay in the background, to wash its hands of problems as the hon. Secretary of State for External Affairs (Mr. Sharp) said in his speech a few moments ago.


James McPhail Gillies: Mr. Speaker, I am delighted to have this opportunity to participate in this debate and I congratulate the members of the NDP for bringing forward this matter at this time. I am particularly pleased that the hon. member for Eglinton (Mr. Sharp) spoke on behalf of the government, because we now have an idea why the government is doing nothing about inflation in Canada. Anyone who says, as the Secretary of State for External Affairs said, that an incomes policy today would have the same effect as the wartime prices and trade board had previously has misunderstood com-

March 15, 1974
Price Control
pletely what has happened in the last 25 years and what a contemporary incomes policy is all about.
We have been amazed that last year the government permitted an 8 per cent inflation rate to grip this country and has permitted an inflation of 10 per cent to continue for this year and done nothing about it. Now we know why. The government is still looking at the situation of 25 years ago and has learned nothing. The government still believes that the proper economic policy for Canada involves the old continentalist approach it has followed for years. The fact of the matter is that since the days of C. D. Howe and Robert Winters, the economic policy of the government party has been determined by the way it perceived the interests of the Canadian business community and a continentalist philosophy.
It was made clear today that the Liberal Party has had no new ideas in terms of resource policy, ownership policy, competition policy and industrial structure. The government is rejecting any new approach to the fight against inflation because it is still looking back at what happened 30 years ago during the war.
The minister said that the answer to inflation will be found by increasing supplies around the world. He was quite correct. No one disputes that, but it is not the issue. We know that you must increase supply in order to solve the inflation problem and bring supply and demand back into equilibrium. The question is, what do you do during the next one, two or three years to ameliorate some of the inflationary effects which will be felt by people while supply and demand are brought back into balance? I do not for a moment accept the proposition that we must continue with a 10 per cent or 12 per cent inflation rate during this period. There must be policies which are utilized in the short run as well as in the long run because, as Lord Keynes said, in the long run we are all dead. But the question is: How are we to help Canadians who are suffering under the impact of a 10 per cent inflation rate now?
The Secretary of State for External Affairs quoted the Prime Minister (Mr. Trudeau)-I forget the exact words used-and said it would be less than honest to support a policy which locks people into the low income brackets, as an incomes policy might do. Let me say that it is even more dishonest for a government to permit inflation to continue at the present scale and destroy the savings and incomes of people in the middle and low income groups. I ask my friends in the NDP: How can you support the government when statistics show so clearly that last year the rise in average hourly earnings was substantially less than the increase in the cost of living? Arguing that you should not adopt an incomes policy because it would hurt low income groups is to fly in the face of reality and to ignore what is happening.
I cannot understand why the NDP has been able to support the government when it has seen that the government will do nothing to fight inflation in this country and when everybody in the country knows that inflation is our number one problem. However, I am pleased that the party has come at least halfway. By introducing the motion we are debating, it has made clear to the people of Canada that at long last it is interested in the problem of inflation and in doing something about the increase in the cost of living. I am particularly pleased to hear that party
[Mr. Gillies.)
now say that it does not agree with the analysis of the government, namely, that we cannot do anything about inflation in Canada because it all comes from abroad. One year ago we hoped for the support of the NDP on a policy not totally removed from half the policy they are recommending today. They would not support us then.
If the New Democratic Party had supported us a year ago last February when we came forward with our policy, it might now be in effect. If this had happened, what would be the inflationary rate in the nation today? It would certainly be less. No one can say with certainty how much less, but we would not be in the situation where we are at the present time, with 10 per cent inflation. I cannot understand why it has taken them so long to come around. All I can think is that the NDP must have believed the analysis put forward by the government that we cannot do anything about inflation in Canada. I do not know what changed their minds. I hope we do not hear any more speeches from the NDP indicating we cannot do anything about inflation in Canada because it all comes from abroad.


An hon. Member:: You have not heard one yet.


James McPhail Gillies: The fact is we now know that our friends in the NDP accept our analysis that you can do something about inflation in Canada if you have the will. I hope they will support us in programs that will be effective. If they had had the courage to do so a year ago, we might have a different situation in Canada today. Why did they have to wait for a year? Do we have to wait for another year before they really care enough to do something about inflation in this country?
The statistics are very clear. Two-thirds of the increase in the cost of living is in housing and food products. These are areas we can do something about. To argue that all inflation comes from abroad, and you cannot do anything about it in Canada, is ridiculous. You can do something about it if you have the will and really want to help the Canadian people. My own view is that inflation could get worse in this country. Actually, we in Canada have not felt all the pressure of the increase in oil prices as has been felt in Japan, Britain and other places around the world. As soon as that comes into the economy, prices will go up again. The wholesale price index went up 24 per cent last year-2.5 per cent in January. Inflation will get worse in this country. And are the NDP still going to say there is nothing we can do about it?
The fundamental point is that we have to recognize that monetary, fiscal and exchange rate policies, in the traditional sense, something we have always relied on in the past, will no longer check inflation. Such policies are designed to operate in economies that are perfectly competitive and with normal expectation rates. However, these two conditions are not present at the moment in Canada. I am sure hon. members will agree that no one thinks expectations in the economy are now normal. The price of gold is moving toward $200 an ounce. Why? Because of inflationary expectations and speculation. The price of housing in Toronto increased by 22 per cent last year, most of it because of inflationary expectations and
March 15, 1974

speculation. Everybody expects prices will rise. Something must be done to break such expectations.
My second point is that it is folly to think we have a perfectly competitive economy. We do not. I have argued many times that we have a large portion of administered prices in our society today. You have to do something about this situation, particularly in periods of inflationary expectations. The government must also believe this, because otherwise they would not go after the bread industry, the milk or the oil industry in the way they have.
I was astonished to hear the Secretary of State for External Affairs say that the government is opposed to selective price controls. That is precisely the policy the government is following. The minister made a very good argument on why selective price controls will not work. I agree they will not work. They are an ineffective way of tackling the problem. The fact remains that when you have an economy which has high levels of inflationary expectations and some administered prices, there is only one solution: you must have some type of incomes policy. It is folly to think you are going to reduce inflation without it.
Historically, the reason we did not have to have such a policy is that in the past governments were prepared to eliminate excess demand by creating unemployment. No government will or should do that today. We are in a new situation. Throughout the forties, fifties and sixties, when the economy was heated government slowed it down in order to keep inflation under control. Throughout the fifties and sixties that policy worked reasonably well in checking inflation, but at a terrible cost. There was 2 Vi per cent to 3 per cent inflation. Today, governments all over the world are not prepared to slow down the economy and they are wrong if they try to do so. Obviously, with the great need for goods and services it would be absurd to slow down production. However, if you are not prepared to check demand, you need another policy tool to deal with inflation, otherwise it will escalate and get out of control.
In the fifties and sixties we talked about inflation of 2 Vi per cent and 3 per cent in Canada. People said that was all right to live with in terms of a price to pay for full employment. However, we are now talking about 10 per cent inflation and we do not have the necessary instrument in economic policy-making today to get it under control. The policy instrument we must have is some sort of an incomes policy. I would be the first to agree that there have been problems with an incomes policy everywhere, but I also agree totally with Sir Alec Cairncross, for a number of years adviser to the British treasury, that we cannot give up the effort of finding the proper answer-the proper way of making it work-otherwise we will never solve this unending problem of continuous inflation.
Just as we had to find a tool in the thirties to deal with unemployment which was a worldwide problem at that time, we must find an instrument today to deal with worldwide inflation and domestic inflation. It is clear the general monetary and fiscal policy applied in the broadbrush way will not work. It is argued that income policies have not worked well. That is true. However, can anyone name a country where monetary and fiscal policies have
Price Control
worked? That is the real question. Can anyone name a place where the use of broad fiscal, monetary and exchange rate policies alone have stopped inflation? That is the real question.
We must find a way of putting a new policy instrument, an incomes policy, into effect. We have argued for a broad-gauge incomes policy. That operates through the profit mechanism. We have said that profits should be limited in periods of high levels of inflationary expectation. Basically, profit margins could be set, for example, at the average of a preceding three-year period. Prices would still vary depending upon the product mix of the particular industry, but we do believe that in a period of inflationary expectations there should not be excessive profits over and above those needed to assure new investment in an industry. We believe that this is a proper and an understandable policy, a very workable policy.
When the Secretary of State for External Affairs speaks about the wartime price and trade board he has no perception of how a contemporary incomes policy would operate. There has not been a policy such as the prices and trade board proposed for years. Now you control profit margins. This is the kind of policy that we have advocated and in which we believe. It can easily be designed to make allowance for import costs and other defensible costs.
The other side of the coin is that you cannot have a prices policy without a cost policy. You cannot ask one segment of the economy to pay all the price of fighting inflation. This is a problem that must be tackled by the nation as a whole; everyone is involved. If you are to have an equitable incomes policy, you must have a price policy and a cost policy. That is why we have said that you must set general standards for the rate of increase in incomes.
I do not believe it is either possible or appropriate in our society for particularly strong, powerful groups on the labour, as well as business, side to take enormous amounts out of the economy and let the weaker groups get an insufficient income. It is the weaker groups that are suffering from inflation. If you have your pricing policy on the one side and your wage and income policy on the other, both designed to set standards, then although the great majority of people in the economy and the great majority of the transactions that take place in the economy are not directly affected by such policies, at the same time you do prevent any group from taking out of the economy more than they are putting into it.
I cannot emphasize too strongly that in this day and age, when governments are not prepared to use demand management policies, you must have a collateral policy instrument-an incomes policy. The fact that we do not have such a program in this country is causing all kinds of problems. I agree totally with the NDP when they say to us today that we should read the profit figures. There are areas where we do not need profits like this to ensure investment in new activity. We must not have excessive profit margins. But we must have reduced prices. No one particularly likes an income policy. Obviously, it would be preferable if inflation would go away by itself and we did not have to do anything about it. But there is no evidence
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that this is going to happen; indeed, inflation may get worse.
Are we, as members of parliament representing people who are suffering every day, people who are seeing the purchasing power of their dollar drop by 10 per cent and are being sold government bonds at interest rates lower than the increase in the cost of living, and seeing labour- I draw this particularly to the attention of the Minister of Labour (Mr. Munro)-earning incomes that are below the increase in the cost of living, going to sit here and let these things continue? That is an abdication of responsibility. The single most important problem in this country is inflation, and surely that is what we have to deal with; and we cannot deal with the problem in this country without some sort of effective incomes policy.
The members of the NDP are now saying, and I agree with them, that you can do a lot of things domestically to fight inflation. All we need is the will and the energy to do so. Hopefully, supply will increase. We must follow all kinds of supply policies to increase output. But in the transition, until we get more output on the market, surely we have an enormous responsibility to try to protect the Canadian people from the ravages of inflation. I do not believe that our society can stand 10, 12, 14 and 15 per cent inflation. The institutional structures that we have are not designed for this type of erosion in values. A democratic society cannot stand that sort of inflationary cycle. We can do something about it, but only if we accept the realities of the situation.


The Acting Speaker (Mr. Boulanger):: Order. I regret that the time of the hon. member has expired.


James McPhail Gillies: May I have just two more minutes?


The Acting Speaker (Mr. Boulanger):: Is there unanimous consent?


Some hon. Members:: Agreed.


James McPhail Gillies: Mr. Speaker, I really hope that I can persuade my hon. friends opposite-I do not know whether I can or not-that selective controls will not work. They are unjust and inequitable. I recommend that they read the remarks of the Secretary of State for External Affairs on this question. It is also clear that the broad fiscal, monetary and exchange rate policies as now used will not work either to stop inflation under the economic structure that we have at the present time. We must choose new directions. I urge the government to have the courage to do so.


The Acting Speaker (Mr. Boulanger):: The hon. member for Yorkton-Melville (Mr. Nystrom).


Terrence Wyly Grier: Mr. Speaker, before the hon. member commences his remarks, would the hon. member for Don Valley (Mr. Gillies) permit a futher question?


Mr. Deputy Speaker:: Since the hon. member for Don Valley (Mr. Gillies) was granted extra time, I think this would have to be with the consent of the House. Is it agreed that the hon. member for Toronto-Lakeshore (Mr. Grier) shall have the right to ask a question?


Some hon. Members:: Agreed.


Terrence Wyly Grier: I ask the hon. member this question. He said that profit levels this year are too high. Would he say that wage levels this year are too high?


James McPhail Gillies: Mr. Speaker, I would be pleased to answer that question. I said that there have been some profits reported which I think are way over and beyond those necessary to attract investment in those industries. That is my definition of a profit margin that is too high. In the area of labour negotiations and wage rates, one can say with total accuracy that the demands of labour on the economy have been very moderate, given the enormous inflationary pressures they have had to face, and I would not argue that they have been too high at all. However, if you embark upon an incomes policy of any type-and I endorse the argument for some action that my hon. friend used this morning-you must set a policy that people perceive to be fair, one that crosses the whole economy and involves everyone, because in the national interest all groups must work together to get this problem solved.


Lorne Edmund Nystrom: Mr. Speaker, I always enjoy following the hon. member for Don Valley (Mr. Gillies) because I find many of his arguments very interesting. He seems to be moving more in our direction nowadays, but he always fails to give precise details regarding what he really means by an incomes policy. He said it was easy to control salaries of blue collar workers because they are negotiating in a fishbowl; they do not have any collective agreement, so you can easily control their salaries. But how do you control, the salary of a guy clipping coupons, a lawyer, a doctor, a dentist or a person working in a managerial capacity? What about the guy who is not organized and does not belong to any trade union? Do you put the same ceiling on his salary?


James McPhail Gillies: He is the guy who is being destroyed by inflation today.


Lorne Edmund Nystrom: Yes, and he is also being destroyed if you set no rigid ceiling on his salary, whether 6 per cent, as the Heath government tried in Britain, or some other figure such as that used by Nixon in the United States. This is one of the questions that the Conservative Party has not answered in this House, despite the fact they have made an analysis which sounds to me very interesting.
I was also interested to hear the hon. member for Don Valley agree with us by saying that profits this year are too high. I wonder whether the members of his party agree with the analysis which he presented to the House this afternoon. Traditionally, his party has not done so. They talk of high corporate profits being necessary to stimulate investment, which in turn will stimulate the expansion of industry in this country, create jobs, and so on. The hon. member for Don Valley seems to be flying in the face of that traditional Conservative argument which has been put forth in this country for so many years. I suspect, as the hon. member for Toronto-Lakeshore (Mr. Grier) said, that the hon. member for Don Valley may be standing alone trying to articulate a policy that is perhaps more popular to the Canadian people than it is to the Conservative Party.
March 15, 1974

I will not say I was disappointed in the speech of the Secretary of State for External Affairs (Mr. Sharp). It was a short speech of perhaps 10 or 15 minutes, one that I thought was very hastily prepared, based on one of the old arguments from those old textbooks that are going out of date very rapidly and one that I submit did not look very closely or deeply at the problem of inflation in this country or anywhere else in the world.
I say at the outset that I agree with the hon. member for Don Valley who suggested that we can do something in this country about inflation. Inflation is not the sole result of external factors. We do not import all our inflation from other countries. We can do something about inflation here, because Canada is very fortunate in having so many natural resources. We produce our own food, our own energy, our own hydroelectric power; we have our own lumber, nickel, copper, iron ore, steel resources and things of that sort. Because of this, we in Canada can control to a large degree some of the inputs to the inflationary psychology in this country by adopting certain changes in governmental policy. I think this must be done.
The inflation rate this February over February of last year was 9.1 per cent, which is very high for a country such as Canada with all our wonderful opportunities. The price of food in this country increased by 17.2 per cent last year. One can look across the board and see the various inputs that are creating increasing inflation and an increasing cost of living in Canada. Profits went up, for example, by 37 per cent last year. Again, I was very happy to hear the hon. member for Don Valley refer to that fact. The profit increase over 1972 is actually more severe than it appears at first glance, because in 1972 corporate profits went up by 20.6 per cent over 1971, and in 1971 they were up 16.2 per cent over 1970.
You can see that each year corporate profits in this country are continuing to snowball, increasing in a cyclical fashion. I suggest that they are now quite out of control. The corporate share of the GNP, as the hon. member for Toronto-Lakeshore said this morning, is running at 12.5 per cent, which is the highest it has been since 1952. But the share the working people of this country are receiving has dropped in the past year; it has dropped to the point where increases in the average weekly income are less than increases in the cost of living.
This is where I differ very sharply with the Conservative Party which talks about wage and price controls across the board being comprehensive enough to cover all inputs in the price of basic commodities. That is why this party moved the motion we are dealing with today in which we say that because of a sophisticated economy, the government or an agency of government-be it a price control board or something else-should have the power and authority to control or roll back unjustified price increases. I think this can be done and it is a practical solution. This is the direction in which the government has very timidly and very slowly started to move. It has done this with two or three different commodities, but I think we should be adopting it as a permanent policy in Canada, rather than something that is not responsive and is developed on an ad hoc basis only after tremendous pressure from across the country. I do not want to sound
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too simplistic, but when you do this you must combine it with a full series of economic policies.
In answer to the Secretary of State for External Affairs, you must have export controls on certain commodities if you are to have domestic price controls or roll-backs. I think what we are doing in respect of commodities such as lumber, we must also do in respect of commodities such as copper, asbestos, and so on. We must also have subsidies in certain areas, because if you have domestic price controls or roll-backs you might have a danger of creating shortages, and you must cover that possibility in certain areas by subsidies on some basic commodities. This has been done in two or three areas already and I am suggesting it should be expanded and broadened as you consider the whole spectrum of commodities in this country.
What we are talking about in this party is a policy of controlling prices that corporations are able to charge the consumer; we are tackling the real nerve centre of the problem. I am sure this is one thing the government and the Conservative opposition will hesitate to do. The policy they have advocated until now, as far as I can gather, is one of comprehensive price and wage controls. As the Secretary of State for External Affairs said, outside of a wartime situation this has not really worked anywhere in the world, no matter where you might look, over the last 20 or 25 years. We can look at the experience in the United States under different schemes brought about by President Nixon, and we find that their rate of inflation last year was higher than ours-ours being 9.1 per cent and theirs 9.4 per cent.
The same thing is true of Great Britain. Prime Minister Heath tried to introduce a program of comprehensive wage and price controls, yet the cost of living went up by some 12 per cent. That is why I argue, and will continue to argue, that an across the board approach which is rigid and indiscriminatory will not work because of the many factors such a program does not take into consideration. Let me give a few reasons why that type of approach will not work. First, you create many shortages if you put price control on the wrong commodity. This is shown by the United States situation today where, when the Nixon government put controls on certain agricultural goods and food products, it created shortages. Because of these price controls we are having problems in this country with commodities such as beef. If you have a program of total controls, you cannot touch imports from other countries; and Canada is a great trading nation. We import more manufactured goods per capita than any other industrialized country. How can you put controls on a commodity such as bananas which we import from the Caribbean? How do you put controls on television sets, or cars that we might be importing from Japan, when we are trying to sell the Japanese some of our commodities such as wheat and other resources including timber?
As I have said, one of the dangers of a comprehensive program such as the one talked about by the Conservative Party is that it is very easy to impose controls on working people and farmers because their incomes are out in the open. The price the farmer gets for his commodity is in the open and everybody knows about it. The same is true of the income of blue collared workers, pensioners and other people living on fixed incomes.
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There are many dangers in the approach suggested by the Official Opposition. I think the approach they are suggesting is, in general, more dangerous than the one taken so far by the government. That is why we must look at the position we are considering now, which is one of selective controls and roll backs where we find unwarranted profiteering or gouging or where we find there is no necessity for price increases. We can do this in many areas in which we have control in this country, such as lumber, steel, iron, copper, energy, hydro power, agricultural goods, and so on, especially if we combine this with a program of subsidies in certain areas.
As I have said, this is by no means a very simple problem, because if you control some of the commodities in a free enterprise system you will be driving the investment dollar out of the country. Let us look at nickel production. If you put price controls on nickel, the nickel producers will say, "To 'h ... ' with you. We are going to invest our money in another country." If we are to follow the type of program this party is suggesting, it might mean greater public ownership in many areas, particularly in respect of natural gas, oil, nickel, copper, iron ore, steel, and so on. I think that is a necessary part of any policy that is really designed to fight inflation and hold down prices. If you do not do that, the private investment dollar will go elsewhere because of the strength of the multinational corporations. These are some of the things we must take into consideration when we are discussing the rate of inflation in this country.
I now want to suggest two or three reasons why inflation is so high in the world. As we all know, we import some inflation from abroad. I think the first reason is that many of the underdeveloped countries are becoming wealthier and more able to afford some of our commodities. This, as a result, creates shortages and drives up the price of some essential commodities. As a result, particularly of the Japanese market but also of the European Common Market and others, the U.S. dollar has dropped and our dollar, which is presently floating with it, has dropped as well. This is making imports into Canada more expensive than they were two or three years ago. Certainly there is some inflation coming from abroad because we are a large trading nation.
The second reason there is such high inflation in the world, I suggest, is that the traditional western capitalist system is being challenged all around us. The hon. member for Don Valley alluded to this and said that the old standards of reality no longer exist. We see evidence of this no matter where we look. Inflation is now a phenomenon which is spreading throughout the western world. We see problems in respect of the monetary system, balance of trade and many other things right across the western world. There are not very many solutions for this type of price increase and inflation.
There are two or three things we could do as a country, but I suggest they are probably limited. First, we could enter into an international agreement regarding basic commodities in the world. We could set prices, and we could subsidize some of the basic commodities we import which are important to the average citizen. We could perhaps take action against some of the huge multination-

al corporations which are responsible for importing some of these commodities. Here I look, for example, at the sugar industry. We might be prosecuting some of the large sugar companies which I suspect are getting together and arriving at prices which are artificial and far too high at the present time.
These are some of the things we can do about external factors which increase the cost of living in this country. But as I have said, if we did that probably we still would not do much about the inflation rate in general because we must look at our own country and do what we can internally. I think we can do a certain amount because we produce much of the basic commodities we need. We are not like Japan, the United Kingdom or many other countries in the world which depend on the importation of energy and many of their raw materials and food products.
In Canada we produce basic commodities and therefore have some say about the price they are sold at. We must do this on a selective basis, otherwise we will run into all kinds of problems because every commodity is different. The food industry is different to any other. If we placed controls on the price of our food at the top, this would be passed on to the farmers at the bottom. There would be a freeze on what they get at the farm gate. They would hold off on production and would be driven out of business. This is happening in the United States and in many parts of the world where an attempt has been made to place controls on basic food items. If you tinker around with food, then you have to bring in subsidies in respect of items such as milk and bread.
If you want to do something basic about food prices, you must look at the whole food industry, the wholesaler, the retailer, the packing house, the transportation system and all levels of the food industry. Perhaps there is something that can be done to prohibit excessive profiteering, double-ticketing, and so on, in respect of food at the various levels. I think this could be done in the beef industry where the price to the consumer is up and the price to the producer is down. We could have a tough prices review board or a government agency which could investigate and roll back prices on a selective basis especially where there is evidence of gouging of the Canadian public. This is not being done. This is the policy which our party thinks should be followed and one which we think is quite reasonable and would be successful if it were pursued in respect of commodities which are important to our people.
We have mentioned profits in this debate. One way to control profits is by selective control of prices of commodities such as nickel and copper-in respect of which there was an announcement yesterday of another price increase-and pulp and paper. Perhaps there could be a general approach to many other commodities as well. We could also implement an excess profits tax that would take off the top all the excess profits which are considered unjust and should not be perpetrated on the people of this country. We could tax wealth, which I am sure would dissuade some corporations and some people who have money from speculating in land, in the stock market, in housing, in apartment buildings, and so on.
If we had a tax on wealth, which is what the Labour government is now looking at in Great Britain, I am sure it would cool down some of the inflationary psychology
March 15, 1974

and some of the expectations the hon. member for Don Valley so often talks about. If we had tax reforms to plug the loopholes in some of the extractive industries, in particular, in this country we might also cool down some of our inflationary expectations. We have one of the lowest tax rates in the world in respect of the resource industries. We have depletion allowances and fast writeoffs. We have all kinds of tax holidays. If we plugged these gaps we might cool down some of the inflationary psychology we now have.
There are many things we could do. We could control interest rates. Because we have higher interest rates than in the United States, we see the snowballing once again of a new input in the cost of living and in inflation. Someone may say that if you drop interest rates you stimulate the economy and create more inflation, and so on. I do not buy that argument. I think that if we controlled interest rates at a much lower level we would decrease one of the inputs of inflation. This would decrease the price of houses, of commercial buildings, of farmland and other properties. It would also decrease the profits of many of the banks and financial institutions. I think this should be done. Here I am not merely talking about tinkering with our free enterprise system. I am talking about getting at the very root of the system and controlling it on behalf of the people of this country so that the system works for the people, does not take advantage of them and does not try to profit at the expense of the ordinary citizen.
The last point I want to make, because my time is quickly running out, is in answer at least in part to the question the Conservative Party asks about wages. They say, "Well, what about wages?" First of all, the hon. member for Don Valley said that wages have fallen behind other inputs into the gross national product. If that is the case, I for one am not too excited about putting any clamp on wages. I represent a party and a riding that is interested in promoting the welfare and general good of farmers, workers and the average guy in our society. We do not wish to put a ceiling or a clamp on this. I suggest that if we had a program of selective price controls, the result of that program would be to dampen some of the more excessive wage demands we might have in our system.
If the price of basic commodities was to come down or was controlled to a certain degree so that the increases would go up less quickly, then the need for higher wages would diminish and there would be a cooling of the inflationary psychology in that sector of the economy. I suggest that perhaps all we can do in this country is through a program of selective controls on some of our basic commodities, and selective roll-backs on some of prices and commodities that are really hurting the Canadian people. I urge the government to consider this motion very seriously and to contemplate it as one of the solutions to the cost of living and the inflation problem that is rampant not only in this country but in the whole world.


John Douglas Reynolds: I rise on a point of order, Mr. Speaker. Could I ask the hon. member a question?


Mr. Deputy Speaker:: The hon. member's time having expired, there would have to be unanimous consent to enable the question to be asked. Is this agreed?
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Some hon. Members:: Agreed.


John Douglas Reynolds: I ask the hon. member what he considers to be excess profits.


Lorne Edmund Nystrom: I do not know whether I can put my hand into a hat and draw out a figure. I do not consider profits which increased by 37 per cent last year over the previous year to be right and just. I think they are much too high; they are excessive. I do not consider profits in the mining industry, which have gone up by several hundred per cent, to be moderate. I think that a profit rate in the neighbourhood of 7 per cent or 8 per cent might be justified.
I am not saying this as the spokesman for my party; I drew the figure out of the air. When you have profit rates of 50 per cent or 60 per cent, such as is the case in many industries, I consider them to be totally unjust and unfair. Profits should be just high enough to keep the economy going; they should not be excessive. That is precisely why we need a prices review board or some agency that has the power to investigate such matters and to take action to correct them.


Mr. S. Victor Railton (Welland):: Mr. Speaker, I hope you and the members of the House will forgive this impromptu address. I am taking part in the debate because I am very interested in this subject and this morning I saw on television the hon. member for St. John's East (Mr. McGrath) debating this very question with a York University professor. Far be it from me to say who had the better of the argument, although I would have voted for the professor. What is certain is that the hon. member for St. John's East took a great deal more time, and sometimes volume against quality does win.
Anyway, the hon. member said nothing new; he used the arguments that have been presented by the Leader of the Opposition (Mr. Stanfield), the recurring refrain calling for a 90-day freeze on wages and prices, and following this a discussion on ways and means of trying to battle inflation. It seems to me this is a very odd way to go about it. In other words, you must have a three-month freeze before you can start on a solution. The opposition has had almost a year and a half to come up with ideas which might help in reaching a solution but never have they mentioned any new proposals or policy. If they were in power, they think they would be able to start right away and conquer inflation within two weeks-unless they spent all their time talking.
This morning in the television program the question arose whether inflation was entirely intramural or was somewhat extramural. No one on the opposition side ever puts any blame on world conditions; they blame the government entirely for the inflation which exists in Canada. This simply betokens a myopic approach to the subject of inflation and world conditions generally. There is no doubt that Canada is a big country which stands alone and, we hope, stands well; but we cannot get along in the world without comparisons with other countries. I should like to know just where in the world inflation is under control. No one has ever told us this. I wish opposition members would pick out one democratic country where economic conditions are better than they are in Canada. That is an important point.

March 15, 1974
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I next ask whether any opposition member has honestly compared conditions in Canada with what is going on in other countries. Will any hon. member not admit that a good trial of a freeze on prices and wages was given both in the United States and in the United Kingdom? Even President Nixon admitted that if the freeze was not a failure it was at least unwise or unfortunate, and Mr. Shultz did the same. He criticized the freeze and what it caused. Shortages and increased prices were caused when the freeze was over. That is what such a freeze does. This is so simple that I do not think we need to emphasize it. What can you expect from a freeze but prices rising subsequent to it? In Great Britain it was a failure; everyone knows that. In fact, it could not really be brought into full operation because the government was afraid to do that after the first attempt. I think those facts are so fundamental that pretty soon the opposition will have to stop talking about silly price and wage controls and a 90-day freeze. It is becoming a ridiculous notion. When I go home, even Conservatives in my riding ask me why, since it does not work, the Conservatives keep proposing it.
So far as the immediate effects of this motion are concerned, it seems to me that what is proposed is in effect right now. As a matter of fact, last fall the Prime Minister (Mr. Trudeau) brought forward the idea of selective controls. This has been emphasized in the throne speech and to a certain extent it is in effect now. There is no doubt that we have some controls already on milk and on wheat, and in our export and import regulations we have had controls on vegetables and imports of various kinds. As announced by the Minister of Agriculture (Mr. Whelan), there will also be a control on the price of meat.
So far as concerns the idea of rolling back unjustifiable price increases by a prices review board, this is in operation now. The Food Prices Review Board has brought to court some firms that were found to be profiting unjustifiably. The question a Conservative member put to the hon. member for Yorkton-Melville (Mr. Nystrom) as to what is excess profit was a very good question. I think everybody realizes that to do business you have to make a profit. It is only having business in a healthy position and making a decent profit which keeps the country healthy, which keeps wages up and keeps the economy rolling along.
Excess profits are fairly simple to define. We know that with respect to simple mortgages and things like that, there has to be a certain level of interest. We know that companies cannot compete and have a decent profit unless they make between 15 per cent and 20 per cent. We know they have to make enough at least to cover their expenses and give some return to their shareholders. And we know they are taxed very heavily on profits. Excess profits are not the cause of inflation.
It has been well established by the Prices Review Board that there is no one nigger in the woodpile. We have had a very open review of food prices and costs. We know there are many factors involved. Here and there, there may be attempts made by certain wholesalers to collar a commodity market through selling to large chains, but this is being exposed and discouraged. There is no real, serious inequity in the whole price structure except that people want more

and more processed types of food. That is about the long and the short of it.
I think the same could be said about government costs. We always have the opposition saying that the costs of government are going up and that our civil service is increasing by leaps and bounds. Do they know of any civil service in any other country that has the expertise and know-how of our Canadian civil service? Do they think we can get that for peanuts? The people of this country do not want a civil service which is not going to assist them in every way possible.
Through our Department of Industry, Trade and Commerce we help small businesses to get started, to set up their plants, and in other ways. We provide them with expertise on exports. In the Department of Agriculture we have a great many civil servants engaged solely in assisting farmers to find better methods of making better farm income and increasing productivity. In practically every other domain it is a case of service to the people of Canada who are constantly demanding more and more service.
We have the opposition saying that one of the big factors in inflation is the ridiculous spiralling of government costs and that a lot of this is due to an inflated civil service. But, Mr. Speaker, do not think for one minute that no matter which party forms the government the civil service will be reduced. The public like it this way. They deserve to have it this way. It is going to cost money, but it is a small part of the total cause of inflation.
I think it is time we publicly admitted that the biggest cause of inflation is world conditions. With two of my colleagues from the other side of the House, I had the opportunity to visit various countries during January. Mr. Speaker, there is no doubt that Canada is much better off than Japan. The total industrial effort of Japan is huge and Japan has huge stacks of money put away in various areas, but the people of Japan are not getting it. The workingman is living on $1,000 a year and food costs there in proportion are about double what they are here.
So far as India is concerned, it will not have enough money to buy high-priced oil during the next year. It is not that any embargo was placed on India; it is just that with the huge increase in oil prices India will not have enough money to buy it. She will not even be able to cultivate her agricultural lands. People will not be able to light and heat their homes with kerosene, which is the only fuel they use. They do not have the huge electricity grid to supply power that we enjoy in Canada. They do not have self-sufficiency in oil and a good income for everybody, and by everybody I mean those above the poverty line. Out of a population of 560 million in India, only a few thousand people are not poor. Canada just cannot begin to compare herself with India.
The other country we visited was Iran. Their economy is a little better off than Japan's; people there live on about $1,200 a year. They expect to raise that yearly by several hundred dollars and in about five years they hope to have people living as well in Iran as we do in Canada. This is because Iran is wealthy. Part of this is due to the fact that they have no strikes and no real democracy. They have democratic institutions which are very impressive to visit, but alongside every level of government is the shah's government. This goes all the way down to the bottom,
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and it is this government which tells the people what to do and when to do it, with no argument allowed.
So, Mr. Speaker, do we want democracy? Do we want people to have what they wish in this country? Or do we want a controlled economy? There is no way to have controls without having policemen or police types enforcing them. Human beings are human beings. Everybody takes a little crack at evasion once in a while. If there are people who do not, then you really do not like them because they will not take a chance. And they do not get on as entrepreneurs. But if you have everybody watching everybody else, you wind up with a controlled, semi-police state. We don't want that, do we?
It is time we stopped talking about controls since we can control nobody but the poorest workingman. It is not the labourer in this country who has caused inflation. Inflation started outside Canada, and everybody ought to realize that. It arrived with a big jolt when the U.S. devalued her currency. We have never caught up since. Our currency is just following along luckily at about the same level, with the result that we are not very different from the United States. But we are more fortunate in certain things.
Some of the comments of opposition members with respect to inflation have been rather amusing. The Conservative leader says the fundamental need is to pursue a judicious fiscal and monetary policy. What does that mean? It doesn't really mean anything. The hon. member for Don Valley (Mr. Gillies) keeps reiterating the same thing. Neither one of them is saying anything. They are not committing themselves to a policy. Anybody could say what they are saying. I should remind the hon. member for Don Valley that before he came into this House he was against controls-and now, of course, he is for controls. This might indicate some political bias.


Steve Eugene Paproski: He has been the light.


Samuel Victor Railton: The question as I see it cannot be settled by any simplistic solution such as wage and price controls. We have done a great deal to help the poverty section with our social security system and its escalation. We do worry about the people who are not in the poverty section but are in the fixed income section, the retired people who will see the erosion of their savings because of the depreciation of our currency. At the present time this really cannot be helped; let us say that honestly.
I think it is time we realized that good times are coming-in about a year. I think the price of oil will come down and there will be a reduction in many prices because the world is becoming more stable. I believe the settlement of the big strike in Britain was one of the factors. It is too bad the Tory government there was not smart enough to realize that by paying the miners a fair rate they would keep the wheels of industry turning, and although it might cost a little more, they would be tides over for about five years until the oil wells in the North Sea started producing. It rather demonstrates to me that Conservatives throughout the world are shortsighted.


Mr. Ed Nelson (Burnaby-Seymour):: Mr. Speaker, when I go home tomorrow I will be able to report to my family
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that there was a hush in the House as I rose to speak. I will not tell them how many people were here. For many of the members of this House and for millions of people in Canada there is a feeling of helplessness and frustration as they watch the cost of living rise day by day and month by month. The price of food has been rising steadily over the months and the people of my area in particular have been hit hard. According to a regular survey carried out by food price editors across the country on February 1, Vancouver still had the doubtful distinction of being the city where people pay the highest price for food.
The price of food went up more in the last two months than it did in the last 25 years. During the past year food prices have shot up by 13 per cent. Potatoes have gone up, according to Statistics Canada, 94.9 per cent; eggs, 46.3 per cent; chicken, 40.1 per cent; turkey, 35.9 per cent; and so the list goes on. But the winner was sugar. It went up by more than double in less than a year, and of course when the price of sugar goes up so do the items for which sugar is an essential component.
We know why sugar went up so drastically, do we not? The answer is in Statistics Canada, but it is also in the courts of our land. The three largest sugar importers, Atlantic Sugar Refineries, Redpath Sugar and St. Lawrence Sugar, were convicted of price-fixing in 1963. What happened? They were told they were bad little companies and they had to pay a fine. More than that, they suffered the full impact of the majesty of the law and were served with a restraining order not to do it again. But they went on dipping into the Canadian consumer's pocket for eight more years. Now they are back in front of the courts again, charged with the same offence of price-fixing; and not only with conspiring to boost the price of sugar over the years to the tune of millions of dollars-$125 million to be precise-but also with keeping other companies from going into the sugar business. What is going to happen to them this time? Another fine amounting virtually to a licence to go on stealing? Another slap on the wrist?
It is not only the sugar companies, Mr. Speaker; there is a long list of companies that have been convicted of similar offences or are in the process of being convicted. There is concrete evidence that the cement companies, if you will pardon a lousy pun, both in Vancouver and Toronto are involved. And here is a dandy! Price fixing charges have been laid against 74 of the best known general insurance companies operating in Canada relating to the sale of fire insurance in Nova Scotia. There is a list of similar incidents.
I asked the Prime Minister (Mr. Trudeau) during the question period last Thursday if it would be possible to implement legislation to provide for lifting or suspending the business licence of any company convicted more than once of deliberate price-fixing. A naive question. I know that licences are issued provincially and that the federal jurisdiction relates only to the actual commission of crimes. Hon. members will remember that the Prime Minister suggested I write to the provinces concerned-me, the hon. member for Burnaby-Seymour, sitting against the velvet curtain on the very back bench over in the corner in his first term of office, should do what the government should have done long ago!


John Douglas Reynolds: Hear, hear!

March 15, 1974
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Nels Edwin Nelson: Well, Mr. Speaker, I did write to the provinces. I wrote to every premier in this country. My letters might reach the desk of an assistant down the hall. I do not think the Prime Minister should have told me to write to the provinces. I think he should have written. If this government had any kind of guts, it would be writing, it would be conferring and it would be taking the lead in making it clear that corporations engage in this sort of outright banditry at the risk of losing their right to do business in this country. If they cannot do anything else, they can at least try to stamp out deliberate dishonesty in business. I wish every Canadian consumer would write to the Prime Minister and tell him so.
No wonder the people of this country feel a sense of helplessness and frustration. Frustration because they know that, despite the fact that there is a worldwide inflation problem, that there is in many cases a shortage of supply and there is a rapidly growing world population, in their heart of hearts in a country with our natural resources much of the inflationary spiral in the cost of living is avoidable.
The Secretary of State for External Affairs (Mr. Sharp) made a fine speech in which he dwelt on wage and price control-I cannot call it "policy"-statements of the Tory party. They have so many euphemisms for wage and price controls that I cannot keep track of them. But he rejected them in any case, turned to the idea of selective price controls and pointed out that these would not work, and rejected them. That, in effect, is an admission that the government feels it must follow a policy of laissez-faire in the marketplace.
The people feel helpless because they know that neither this Liberal government nor any Conservative government is going to place any kind of restraint on business profits even if they make profits 1,000 per cent over last year's. Look at Falconbridge whose profits showed a 760 per cent increase over last year. Profit is holy, profit is good and there appears to be no point at which it becomes immoral to cause suffering and hardship through excessive profits. That, of course, is why they will not entertain the idea of an excess profits tax, because to them there is no such thing as an excess profit. The question was asked in the House today, what constitutes an excess profit? No one can say. Is it IVi per cent? Is it 10 'A per cent? There is such a thing as fair dealing in business, and a fair profit might vary from one segment of industry to another. But there must be a point, surely, at which it becomes immoral to reap the kind of profits that have been published in the newspapers almost every day over the past year.
The government knows that the Food Prices Review Board could be given powers beyond mere investigation. They could impose selective price controls, they could roll back unjustifiably high prices, they could adopt the terms of our motion standing in the name of the hon. member for Toronto-Lakeshore (Mr. Grier), namely:
That this House calls on the government to consider the immediate introduction of legislation designed to control selectively the prices of essential commodities and to give either to the government or to a prices review board the power to roll back unjustifiable price increases.

The facts are there for all to see. The consumer is getting fleeced right and left, and the government refuses to take action. The evidence is published daily. Dominion Stores, B.C. Packers, Loeb's, Weston's-all are reaping profits as never before. Dominion Stores increased profits by 92.6 per cent over the same period in 1972. Silverwood Industries chalked up a 107 per cent increase in 1973 over the same period in 1972. B.C. Packers, for 24 weeks ending June 17, 1973, chalked up a 125 per cent increase over the same period in 1972. Why go on? The list is endless. It seems that in our society it is morally justifiable for one to charge all that the traffic will bear and for companies to publish triumphant statements of ever bigger gains at the expense of the Canadian public.
Well, not every company publishes such figures. One of the largest octopuses on this continent does not publish profit figures. That one, of course, is the Kraft company whose tentacles stretch out into every food outlet in the country, even to the serving trays of our national airline which seems to have some sort of understanding with the crafty Kraft company. I do not buy Kraft cheese, Mr. Speaker. No, I will correct that: I do not buy cheese with the Kraft label on it, although I have no way of knowing whether the cheese I buy is marketed by Kraft under another label. I do know that I have gone into many stores which sell no cheese but Kraft. Why is that company not being investigated?
The increase in average hourly earnings for 139,600 wage earners employed in the food and beverage industry from March, 1972, to March, 1973, was 7.8 per cent, while the cost of living went up by 13 per cent. Over-all, wage increases in the last half of 1973 were down by almost 1 per cent. Even the Prime Minister admitted that. I wish people would stop talking about wage controls. Mr. Speaker, I know of very few working people who do not have to bargain, conciliate or arbitrate for every nickel they earn. If that is not a form of wage control, what is? Wages are effectively controlled in our society.
How is the farmer making out? According to the research director of the Ontario Federation of Labour, a Saskatchewan farmer receives 3 cents for the wheat contained in a loaf of bread which is selling for 37 cents. A market gardener in Bradford got 3 cents a pound for carrots requiring hardly any processing and selling for 13 cents a pound. So it goes. Somebody is making money at the intervening level, but nobody can find out who it is. Certainly Mrs. Plumptre cannot find out. If anyone suggests that the packagers, advertisers, food chains, processors or any of the middlemen are making excessive profits, the defences go up immediately, as they did when these groups were called before the trends in food prices committee.
One of our researchers pointed out:
The conglomerate nature of the corporations and the fact that they present their yearly earnings in a consolidated statement makes it extremely difficult to get at the actual profit figures solely attributable to the sale of foods. The conglomerate nature of these corporations also enables them to easily hide profits from food retailing and in the case of price freezes to take their profits from another source within the corporate structure.
Whom can the hard-pressed consumer turn to? Not to the government, evidently, because it seems content to turn a blind eye to the problem instead of taking forceful
March 15, 1974

action to control prices in a selective manner as called for in the motion before the House. Over 56 per cent of the average family's budget goes on food and housing. The housing shortage is so acute that the average family can no longer afford to buy a home. Those who do are saddled with astronomical interest rates on their mortgages.
According to the Speech from the Throne, the government is going to solve our problems by concentrating on increasing supply. I suppose that approach could help; but, Mr. Speaker, what is the use of increasing supply if you have a government which cannot, or will not, come to grips with the problems of distribution and cost?
We have never really been short of oil in this country. There is a great deal of oil. The trouble is that the oil companies have it and governments of the past, as well as this one, have allowed them free rein in playing around with the distribution, pricing and control of supply of that natural resource instead of moving into true public control and ownership of this vital commodity. The problem, in my opinion, largely involves distribution and control. The government must exercise greater control over essential commodities as the motion suggests.
If this government will not take steps to do that, what are the alternatives? A Conservative government, with its built-in oil lobby and labour-hating backbenchers? A discredited wage and price control or freeze policy is no answer because policies like that will take us back to the nineteenth century. Such government would be another big business-oriented government and would be like the government of the social creditors under whom we suffered in B.C. for so many years. Notice, I referred to social "creditors," Mr. Speaker.
The Canadian people will surely grow impatient with continuous inaction and will resort to the only recourse left to them which involves, aside from eventually electing a government which cares about people first, action to organize themselves into collective action groups. I hope sincerely that they do this soon. Mr. Speaker, I urge the government to give immediate effect to the motion before us.


Mr. Bill Clarke (Vancouver Quadra):: Mr. Speaker, I last spoke in the House on food prices about one year ago, on the motion of the hon. member for Vancouver Kingsway (Mrs. Maclnnis) calling for the first report of the Special Committee on Trends in Food Prices to be concurred in. What has happened since then, Mr. Speaker? That committee has published 35 minute books covering 44 meetings and examined 100 witnesses.
Now we have the Food Prices Review Board, which is also good at producing books. It has produced its first report. There have been two quarterly reports, and another is due soon. We have seen the wage and price control study to do with Britain. Retail food stores have been surveyed, and we have seen the report on egg prices and, recently, the report on bread prices. Yes, now there is the Food Prices Review Board with a permanent staff of 45 and a very expensive chairman who carries the rank of deputy minister. The board spent about $1 million in the current fiscal year about to end and will nearly double that expenditure, to about $1.9 million, in the coming fiscal year. And where are food prices now? After all these
Price Control
reports, food prices are up. Beef is up by 25 per cent, poultry by 34 per cent, and eggs have risen by 26 per cent, all in one year.
I should like to examine the motion for a moment, Mr. Speaker. The NDP says, "Give the government more power so that it can do something." It is fine for them to say that, now that they are part of the government and feel they deserve power. But let us look at the exact wording of the motion. Its very language reveals the socialists' ignorance of economics. The socialists want "to control selectively the prices of essential commodities." The government has boasted that it has imposed selective controls. Look at the chaos we now face. The NDP motion goes on to say that the government or board should "roll back unjustifiable price increases."
When will those people learn that the government has no power to do anything of the sort? The socialists do not understand the nature and function of prices. They believe that prices somehow are determined by costs of production, whereas in reality the price of a product at any given time has nothing to do with the cost of production.
Before I came to this place I had been involved in producing businesses, particularly in the real estate field. I know of many instances of property selling well below the cost of production, and many a bankrupt manufacturer can testify to the correctness of what I have said. The purchaser is not interested in the cost of production. He is interested in paying the lowest possible price. He is interested in what any particular item is worth to him. The Marxist idea that prices are determined by the cost of production is nonsensical. In reality, the opposite is true.
Market prices of consumer goods and services today determine the amount of production tomorrow. When a person sees that the price of a particular product is high enough to enable him to produce and sell it at a profit, he will produce that product unless he sees that other producers are already moving toward increasing that supply to meet the consumer need. That is why we have market surveys. If other producers have already scheduled enough additional production to increase the supply of a product so that the price will fall to a level making the price unattractive, i.e. unprofitable, then our producer will pass that product.
This marketing system is really marvellous. It spontaneously directs, by means of the profit motive, producers to increase or decrease production. That is how prices determine production. However, they perform another very valuable function as well. They clear markets. If consumer demand for chickens falls, grocers will reduce their prices in order to move them, otherwise they will be stuck with old chickens on their shelves. If consumer demand for chicken rises, grocers will find that chickens are being cleared off their shelves faster than they can be replenished. If they do not mark up their posted prices, early shoppers will clear out the supply and later shoppers will find none available in the store at any price.
Suppose politicians decide that prices should not rise in accordance with demand. The early shoppers would clear out the available supply. If the late shoppers wanted any chickens at all, they would have to go into the free market,
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March 15, 1974
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sometimes called the black market. There they would find some of the early shoppers willing to resell at the higher or market price. The politicians will claim they have saved consumers from high food prices, but consumers will know that at the fixed legal price few chickens are available, except perhaps to the early risers who stand in line outside grocery stores. The rest of us pay the market price which the politicians were unable to lower. That is the situation with consumer goods in general in Russia and with the gasoline market today in the United States.
In the next step in this process the politicians embark on a legal rationing program, which means that they increase our taxes in order to hire bureaucrats to print and distribute ration books. This means that the free market behind the grocery store becomes less a market in good, fresh chickens and more a market in good, fresh ration coupons, and the politicians have made us worse off again. When politicians try to impair the delicate and marvellous workings of the free market, they harm us all.
The socialist resolution mentions "unjustifiable" price increases. It should be clear that no free market price is ever unjustifiable. It is determined by supply and demand. This talk about unjustifiable price increases is typical NDP pap. What may be an unjustifiable price to one member of society may be totally justified to another. It is not for the politicians to make that decision. They would tell an inefficient operator with high costs and low profits that it would be all right to increase his price because his profits are not too high. They would tell the efficient operator who is making a good profit that he cannot increase because it would not be justified. We would have two different companies selling the same product at different prices because the government has said so. Any attempt by politicians to compel people to trade at a legal price which is not the market price would certainly be unjustifiable.
The NDP always want a villain. They rant, rave, shout and confuse the issue. They are trying to fool the people. They say they are interested in people, but they are not. They are just interested in power. All we have to do is look at their votes in recent days. The NDP are devoid of principles, unlike my party which demonstrates in its votes and actions that it is a party of principle and a party of the people.
The leader of the NDP whips the corporations. He forgets that corporations are made up of people. Corporations have no giant pools of money to pay taxes or anything else. All corporation money comes from people; it comes from their customers, suppliers, employees or shareholders. There are no other sources of funds for corporations. The Progressive Conservative Party recognizes that corporations are made up of people.
We have seen the NDP flip-flop on other votes in the House in recent months. Just yesterday in committee the NDP voted against showing displeasure of the chairman of the Food Prices Review Board, completely reversing their position of four months ago when they put a motion which included a provision to fire poor old Plumptre.


Stanley Howard Knowles: She's not that old.


William Hillary (Bill) Clarke: How does the government look in this situation? We have all heard of the two-bit politician. Now we have two-cent government. The government is worrying about a few pennies increase in prices here and there, while ignoring the main problems and causes. They have said as much in the House. They have said there is no problem. They have also said they do not know what the problem is, but they will put in some selective controls anyway. They like to blame inflation on the rest of the world. I wish to quote from an editorial that appeared in the Vancouver Sun:
If smallpox were pandemic among all the nations of the world, the Canadian government would still be expected to try to stamp it out here.
Yet the economic disease of inflation, now raging internationally, is regarded by Ottawa as being quite endurable so long as it isn't worse here than elsewhere.
The government cannot blame this on the Leader of the Opposition (Mr. Stanfield) because he has not any power. What do they do? They just criticize his proposals and say they will not work, even though they do not have any proposals of their own. They do nothing except bend their policies to keep the NDP happy so they can all stay in office together.
What are the basic causes of inflation and high food prices? The basic causes are the policies of the government of Canada. First we have the government's monetary and fiscal policies and, second, the government's interference in business and personal lives of Canadians. We have had a greatly expanding supply of money. It is elementary that if the supply of any commodity is vastly increased, its value will fall. I do not want to get into detail on that because my colleague, the hon. member for Don Valley (Mr. Gillies), explained it very well earlier.


Terrence Wyly Grier: Do you agree with him?


William Hillary (Bill) Clarke: It is interesting to note that in a debate last year on this same topic-


Terrence Wyly Grier: Do you agree with him?


Stanley Howard Knowles: He is hard of hearing.


William Hillary (Bill) Clarke: -I remarked, and I quote:
Both parties of the coalition government say that they want to force manufacturers to disclose more information about their products. Perhaps the government should print a disclosure on its own paper money which would warn the holder that its future value is questionable.
Another factor in the monetary policy is government expenditure. We have just recently seen the budget. I wish to read another quote from a recent edition of the Globe and Mail. This is by the president of the Institute of Chartered Accountants:
Canadians ought to be able to look to government for a lead in the anti-inflation battle.
I do not have time to quote the editorial fully. He goes on to make reference to the wild extravagances of the government and senior civil service. In the same editorial there is reference to another view presented by the Canadian Chamber of Commerce as follows:
It was warning that governments must check the massive growth of
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taxes in recent years to avoid "serious social problems in the attitudes of working Canadians toward the disadvantaged.
Then they go on to talk about the middle-class we hear so much about. Back in Ottawa Arthur Blakely says in his opening paragraph in the Citizen:
Any Canadian family which tried to do its budgeting federal-government style would go bankrupt in short order.
What about these taxes that the government is collecting? Their expenditures have increased to $22 billion, up nearly 20 per cent from last year. I should like to give the House another quote from a statement made over 100 years ago about governments that do this sort of thing. More than a century ago the French philosopher Bastiat wrote:
The state, too, is subject to the Malthusian Law. It tends to expand in proportion to its means of existence and to live beyond its means, and these are, in the last analysis, nothing but the substance of the people. Woe to the people that cannot limit the sphere of action of the state: freedom, private enterprise, wealth, happiness, independence, personal dignity, all vanish.
Let me say something about the government's interference in business and in the personal lives of all Canadians. Take, for example, the CNR with its 30 subsidiary companies. What business has the government to be in the hotel business, the airlines business and the radio and television business which has cost us $300 million in this current fiscal year? The government is also in real estate. I am sure the deputy minister of public works does a good job and is proud of the fact that he is head of the biggest landlord in the country. That is not what governments are for.
What else has the government done in this regard? They have established a whole host of what are called marketing boards which are supposed to be helping the people. The Food Prices Review Board does not agree with that, because the board says that it cannot accept any group action which artificially inflates consumer prices. That is what marketing boards do.
The former auditor general has stated that governments should never go into business because they do not have competent people to place at the helm, and the results are inevitably disastrous. The Polymer Corporation was sold to the Canada Development Corporation and then the government fired the auditor general. We all know the problems Mr. Henderson had when he was auditor general of Canada, and he had this to say: "It's just that the government was plain embarrassed by what I was digging up".
In British Columbia an economic consultant described the effect of government policies on feed grains for cattle which caused the majority of British Columbia-raised beef cattle being grain fed in the prairie province to be slaughtered in the prairie provinces and reshipped to British Columbia. All of this unnecessary movement not only raised British Columbia beef prices but eliminated a considerable meat packing industry.
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Let me now say something about the small businessman and how he suffers from government interference. Many of them are forced out of business because they just cannot cope with government rules and regulations. It is all right for the big boys, but the little fellow just cannot hack it. Individuals are being forced more and more to call upon people like their MPs, who are practically acting as ombudsmen now.
Today we see our MPs in Ottawa with two secretaries, and the government has just authorized an additional one for the riding. In the old days-which are not so old, only 20 years ago-when some of the members of this House first came here, two MPs shared one secretary and one telephone in one office. Now that the government has become so involved in all our lives, each member has three offices, three secretaries and three telephones. In Denmark the people have just thrown out the old government and elected a fellow who promises to abolish taxes and to fire half of the nation's civil servants.
The government has its own version of socialist theories vis-a-vis the corporations. Just as the NDP views the corporations having a bottomless pit of money, governments forget that governments do not have bottomless pits of money. All their money comes from the taxpayers, in this case the people of Canada.
We have looked at the causes, Mr. Speaker, and now let us look at the solutions. What can the government do? The general inflation, the general decline in the value of money, is caused by the rapid increase in the supply of paper money. The government should stop increasing the money supply so rapidly. The substantial increases in food prices in particular are caused by the government's policy of preventing free markets from working normally.
Consumers are served best when they are free to buy from the most efficient suppliers, domestic or foreign. Tariffs are harmful to consumers and should be repealed. The government sometimes lifts tariffs, but is quick to replace them when producers complain. The government's tariffs restrict foreign competition. The government-granted monopolies restrict domestic competition. By protecting inefficient producers from the competition of efficient ones, the government harms consumers by preventing them from obtaining the best products at the lowest price, and the government harms efficient producers by preventing them from growing and prospering.
Finally, Mr. Speaker, over the last two days and continuing next week we are debating the amendments to the Combines Investigation Act. These amendments, if passed, will force competition in some areas where there has hardly been any need. If ever we needed an example of a government devoid of any real basic policy, we now have it. We have one set of laws to prevent competition in many fields, and another set of laws to order competition in other fields. Clearly the government has gone round the bend and has met the NDP coming round the other way.
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May I call it five o'clock, Mr. Speaker?


Mr. Speaker:: It being five o'clock, the proceedings under section (11) of Standing Order 58 are deemed to have
terminated. I do now leave the chair. The House stands adjourned until two o'clock on Monday afternoon.
At five o'clock the House adjourned, without question put, pursuant to Standing Order.

Monday, March 18, 1974