1974-04-15

TRIBUTES TO HON. LUCIEN LAMOUREUX ON TENURE IN OFFICE AS SPEAKER

Hon. Robert L. Stanfield (Leader of the Opposition):: Mr. Speaker, 1 would not want this occasion to pass as I understand that today constitutes a record in terms of your length of service as Speaker in this House of Commons. I do not rise simply because of the length of your service but because I do not believe members of this House would want the occasion to pass without reference to it and an opportunity to pay tribute to you.

Mr. Speaker, I would also like to congratulate you for your services as Speaker of the House, notably for your impartiality and your achievement regarding the maintenance of order and a sense of equity in the House of Commons-

It has been my privilege to serve under you in this House, although for not a long period of time. Indeed, I suffer the disadvantage that you are the only Speaker under whom I have served in the House. But even so, I feel that I can speak with great confidence and with the full support of members on all sides of the House in expressing gratitude to you for the service you have rendered as Speaker. In saying this, of course, I am not suggesting your service is about to terminate or anything of that sort. I simply want on this occasion to pay my humble respects to you and to express my personal gratitude and, I am sure, the gratitude of all members of the House for your impartiality.


Some hon. Members:: Hear, hear!


Mr. Stanley Knowles (Winnipeg North Centre):: Mr. Speaker, I am very happy to join, on behalf of all my colleagues, with the Leader of the Opposition (Mr. Stanfield) in the greetings that are being extended to Your Honour today. A couple of weeks ago many thousands of people in the United States and Canada were quite excited over the saga of Hank Aaron. They were counting his home runs. The day was reached when he was only one short of Babe Ruth's record, then came the day when he equalled that record, and then the day when he passed it.
When we were meeting on Thursday of last week I was conscious of the fact that we were in the midst of our own saga, that Your Honour was only one day short, and that on Friday you would equal the record of the Hon. Rodolphe Lemieux of being in the chair for eight years, two months and 25 days. Today your record is eight years, two months and 28 days. May I point out, also, that unlike the Hon.
Rodolphe Lemieux, you were also Deputy Speaker for a period of time, which makes a total of ten years and eleven months that you have been in the chair. My hon. friend across the way suggests Your Honour has two more years to go. I do not know why the member stops at two years; I believe when we have a good Speaker we should keep him.


Some hon. Members:: Hear, hear!


Stanley Howard Knowles: Without giving the House all the statistics that I enjoyed looking up in preparation for this moment, I should like to draw attention to the contrast between the period between 1922 and 1930 when Mr. Speaker Lemieux set the record and the period during which Your Honour has surpassed it. That other period was one of excitement and drama. During those years there was Beauharnois and the Customs scandal. There were minority governments. In fact, although the Liberals were in power most of the time, they never had a majority by themselves. They were kept going by Progressives and Liberal-Progressives. There was also that interesting occasion when the government fell because a member forgot he was paired and voted when he had not intended to do so!
In my view, the most important thing that happened in that period was when Mr. Woodsworth and a few of his colleagues got the first old age pension bill out of a minority government. This demonstrates what a small party can do, and we are still doing it.
The other point I would like to make is that although Mr. Lemieux was in the chair for eight years, two months and 25 days, during that period of time the House was in session only three years, four months and seven days. This is an indication of how times have changed, for while you have been in the chair, during the past eight years and nearly three months, the House has been in session seven years, eight months and four days, and I suspect that no one knows it better than yourself.
In addition to noting these statistics, I join the Leader of the Opposition in a tribute of praise to Your Honour. Unlike the Leader of the Opposition, I could make comparisons. You are the eighth Speaker under whom I have served in this House. There have been some good ones, but in terms of impartiality, fairness and a sense of humour that enables you to carry this House through, so far as I am concerned, and I think I speak for all members of the House, you are tops.


Some hon. Members:: Hear, hear!


Mr. Rene Matte (Champlain):: Mr. Speaker, we are extremely pleased to join both previous speakers in offering all the tributes and congratulations that you so richly
1404

April 15, 1974
Tributes to Mr. Speaker
deserve. As usual, you have requested that these comments be short. So, I shall stop here and simply repeat that we congratulate you and hope to see you there a long time still.


Right Hon. J. G. Diefenbaker (Prince Albert):: Mr. Speaker-I beg your pardon.


Mr. Sharp:: Please continue.


Mr. Speaker:: Order, please. The Chair recognized the right hon. member for Prince Albert (Mr. Diefenbaker).


John George Diefenbaker: I have never previously turned down a recommendation on the part of the government that I should speak. I shall not depart from that, now that the Secretary of State for External Affairs (Mr. Sharp) has given me his entire support.
I raised this matter a few days ago at the members' prayer meeting. I pointed out that Your Honour had been Speaker longer than anyone else. The hon. member for Winnipeg North Centre (Mr. Knowles) says that he has seen eight Speakers in his time. I have seen nine.


Some hon. Members:: Hear, hear!


Stanley Howard Knowles: It is the same eight.


John George Diefenbaker: When it comes to statistics, I have them off the record. The hon. member has them on the record before him.
I want to say a word which, at the suggestion of the Leader of the Opposition, will add to what he said. We have had many experiences over the years. However, one that I shall always recall, without making any identification, is of a Mr. Speaker who during a frighteningly caustic debate rose in his chair and said, "Order. As long as I sit in this chair there is going to be a minimum of decorum in this House". Today and in recent years we have had a maximum of decorum, and I join those who have spoken of your wisdom, wit and of the fact that above all, regardless of difficulties that necessarily follow in the office that you hold, you have been an ornament to the position of Speaker of the House of Commons.
The speakership is not a dangerous position to hold today. It was originally when those chosen at Westminster had to be dragged to the chair. I never found, in my period of office, that anybody had to be dragged in in order to be honoured as the first commoner of the House of Commons.


Mitchell William Sharp: Mr. Speaker, it is appropriate to the way in which we conduct the affairs of this House that the first tribute should come from the Leader of the Opposition (Mr. Stanfield) and the last from the spokesman for the government. I hope that the opposition in its tributes has recognized, as I have, the fairness and dignity with which you have conducted the proceedings of the House of Commons. You have treated us all as equals, whether we happen to be in a slight majority or slight minority.
May I say to you, Sir, that it is a singular accomplishment to have been Speaker of the House of Commons for

longer than anyone else. Not only have you served with length of service; you have served as Speaker of this House with a charm, distinction and fairness that no other Speaker has exceeded regardless of the time he occupied the chair. So, Mr. Speaker, we all want you to continue as Speaker as long as you feel able to serve. I share the view of the hon. member for Winnipeg North Centre (Mr. Knowles) that when we have a good Speaker, we want to keep him as long as possible. Whether this comes about as a result of delay in election, or for another reason, really does not matter. We should like to have you there for as long as possible.


Some hon. Members:: Hear, hear!


Mr. Speaker:: I apologize to hon. members that this subject has taken so much time. I will try to exercise the same discretion that I seek of hon. members when they rise on motions under Standing Order 43.

I would simply like to thank the hon. members who have had the kindness to express such generous feelings about me. I have no delusions, for I know perfectly well that these tributes are not directed to my humble person but to the position that 1 have the honour of occupying as Speaker of this House.

The Leader of the Opposition (Mr. Stanfield) said a moment ago that he had served under a Speaker for a certain number of years. I was rather shocked by that expression. 1 always thought it was the Speaker who served under a House. I have always felt that way and, I might say, at times it has been my impression that sitting under one House or another, or under certain members, has been a rather heavy burden to carry. What has made it easier for the Speaker has been the wonderful co-operation hon. members have extended to him at all times. Obviously, the Speaker is at the mercy of hon. members.
We all believe in the institution of parliament and believe, I am sure, that central to that concept is the speakership. The speakership cannot continue and parliament therefore cannot operate effectively without the support of all hon. members. I have received that support at all times. I am thankful and grateful to hon. members for that generosity, for their tolerance and understanding, and I extend my thanks to them at this time.
I was tempted to rise a few times while hon. members were delivering some very interesting speeches to remind them that long standing tradition prevents hon. members from either criticizing or commending the Chair. I might say that it is easier to apply the first stricture rather than the second. That is why I resisted the temptation and did not interrupt hon. members.

In any case, I thank my hon. colleagues not only for their kind and generous words, indeed too generous, and I pledge as I have done on my first election to the Chair to continue to do my best to serve this House, to serve hon. members and this parliamentary institution in spite of all its intellectual weaknesses, all its human failings which are the lot of each of us, but also most sincerely, with the enthusiasm that hon. members deserve.
April 15, 1974



ROUTINE PROCEEDINGS


[Stage Direction]
WITHDRAWAL OF MOTION FOR EASTER RECESS On the order: Motions:
Mr. Speaker:: The Minister of Justice moves:
That, when this House adjourns-


Some hon. Members:: Oh, oh!


Mr. Speaker:: Order, please. I wonder whether I might suggest to hon. members that this motion appears, as of this date in any event, to be a nullity. Perhaps the minister might be allowed to withdraw it, subject to bringing in another motion at some other time. Is this agreed?


Some hon. Members:: Agreed.
Motion withdrawn.


TRANSPORT
Mr. Elmer M. MacKay (Central Nova):: Mr. Speaker, I rise pursuant to Standing Order 43 on a matter of urgent and pressing necessity. In view of the continuing work stoppage involving the federation of St. Lawrence River pilots which is having very serious repercussions on Canada's international trade as well as adversely effecting major ports on the St. Lawrence, such as Quebec, Trois-Rivieres and Montreal, I move, seconded by the hon. member for Hamilton West (Mr. Alexander):
That the Minister of Transport immediately make a report on motions regarding the steps this government has underway to resolve the dispute, and also to arrange an immediate meeting between himself, his deputy minister and the administrator of Canadian Marine Transportation Administration, with the parties concerned.


Mr. Speaker:: Hon. members have heard the motion which is proposed under the terms of Standing Order 43. This motion requires the unanimous consent of the House. Is there unanimous consent?


Some hon. Members:: Agreed.


Some hon. Members:: No.


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


THE CANADIAN ECONOMY
Mr. Tom Cossitt (Leeds):: Mr. Speaker, I rise to seek the unanimous consent of the House to move a motion under Standing Order 43 which is self explanatory. It arises from the problem of inflation which is one of the reasons we are meeting in this Easter Monday session.


Some hon. Members:: Oh, oh!


Thomas Charles Cossitt: I move, seconded by the hon. member for Winnipeg South Centre (Mr. McKenzie):
That this House requests the Acting Prime Minister to inform us as to whether the Prime Minister, before leaving Canada on another holiday, left behind in safe keeping any contingency plans for dealing with the national emergency created by the cost of living and if such plans do exist that they be revealed to the House immediately because of the extreme urgency of the situation.


Some hon. Members:: Hear, hear!


Some hon. Members:: Cheap!


Mr. Speaker:: This motion also requires unanimous consent.


Some hon. Members:: Agreed.


Some hon. Members:: No.


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


FINANCE
Mr. Adrien Lambert (Bellechasse):: Mr. Speaker, under the terms of Standing Order 43, I request the unanimous consent of the House to move a motion of a very pressing nature, for it concerns the presentation of the budget. I move, seconded by the hon. member for Champlain (Mr. Matte):
That this House consider seriously the difficulties encountered by the Minister of Finance in finalizing the presentation of the budget, and to give him practical assistance, that this House move without delay to the consideration of the bill tabled by the hon. member for Temiscamingue providing for the amendment of the Bank of Canada Act enabling the bank to grant loans to the Canadian government for periods up to 60 years at an interest rate not greater than the administration costs.


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


Some hon. Members:: Agreed.


Some hon. Members:: No.

April 15, 1974


NUMBER OF RETIRED FEDERAL CIVIL SERVANTS RECEIVING PENSIONS
Mr. Knowles (Winnipeg North Centre): 1.	How many retired federal civil servants are receiving pensions, including their basic pensions and any supplement or supplements added thereto, of amounts within each of the following brackets (a) less than $20 per month (b) $20 to $29.99 per month (c) $30 to $39.99 per month (d) $40 to $49.99 per month (e) $50 to $59.99 per month (f) $60 to $69.99 per month (g) $70 to $79.99 per month (h) $80 to $89.99 per month (i) $90 to $99.99 per month (j) $100 to 149.99 per month (k) $150 to $199.99 per month (1) $200 to $249.99 per month (m) $250 to $299.99 per month (n) $300 per month and over?
2.	How many widows of civil servants or of retired civil servants are receiving pensions, including their basic pensions and any supplement or supplements added thereto, of amounts within each of the brackets indicated in the above question?
3.	What is the number of retired civil servants and also the number of widows of civil servants or of retired civil servants presently residing in each province?
4.	In respect of how many orphans of federal civil servants are pensions being paid and what is the average amount thereof?


Hon. C. M. Drury (President o£ the Treasury Board):: 1.
(a) 205; (b) 358; (c) 975; (d) 1,420; (e) 1,641; (f) 1,680; (g) 1,753; (h) 1,731; (i) 1,755; (j) 7,997; (k) 6,192; (1) 5,185; (m) 4,187; (n) 15,003.
2. (a) 529; (b) 1,431; (c) 1,728; (d) 1,700; (e) 1,597; (f) 1,457; (g) 1,387; (h) 1,280; (i) 1,221; (j) 4,900; (k) 2,867; (1) 1,245; (m) 593; (n) 823.
Province	Annuitants	WidowsNewfoundland	656	264Prince Edward Island	338	155Nova Scotia	2,879	1,307New Brunswick	1,582	732Quebec	8,186	4,411Ontario	21,019	9,686Manitoba	2,332	1,008Saskatchewan	1,490	619Alberta	2,908	1,163British Columbia	7,825	2,958Territories	47	16Outside Canada	820	439
v. *

4.	Pensions are being paid to 93 orphans of federal civil servants in the average amount of $287.49 per annum.
Agricultural Products Co-operative Marketing Act


Mr. Speaker:: There is no unanimous consent; the motion therefore cannot be put.


STATUTE REVISION ACT
Hon. Otto E. Lang (Minister of Justice) moved: for leave to introduce Bill C-23, to provide for a continuing revision and consolidation of the statutes and regulations of Canada.


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

Hon. E. F. Whelan (Minister of Agriculture) moved: for leave to introduce Bill C-24, to amend the Feeds Act.


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

Otto Emil Lang: for leave to introduce Bill C-25, to amend the Prairie Grain Advance Payments Act.


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

Eugene Whelan: for leave to introduce Bill C-26, to amend the Agricultural Products Co-operative Marketing Act.


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

[Stage Direction]
(Questions answered orally are indicated by an asterisk.)
Mr. Knowles (Winnipeg North Centre): 1.	What was the total amount at credit in the Public Service Superannuation Account as at (a) March 31, 1971 (b) March 31, 1972 (c) March 31, 1973?
2.	What rate of interest has the government paid for the use of this money during the fiscal years ending on the dates noted above?
3.	What amount of interest was credited to the Public Service Superannuation Account during the fiscal years ending (a) March 31, 1971 (b) March 31, 1972 (c) March 31, 1973?
4.	What was the total amount paid out of the Public Service Superannuation Account during the fiscal years ending (a) March 31, 1971 (b) March 31, 1972 (c) March 31, 1973?


Charles Mills (Bud) Drury: 1.
(a) $3,989,914,380; (b) $4,488,549,951; (c) $4,945,750,813.
April 15, 1974

2. Quarter ending June 30, 1970, 1.3174; quarter ending September 30, 1970, 1.3262; quarter ending December 31,
1970,	1.3427; quarter ending March 31, 1971, 1.3597; quarter ending June 30, 1971, 1.3838; quarter ending September 30,
1971,	1.3896; quarter ending December 31, 1971, 1.4004; quarter ending March 31, 1972, 1.4157; quarter ending June 30, 1972, 1.4601; quarter ending September 30, 1972, 1.4659; quarter ending December 31, 1972, 1.4778; quarter ending March 31, 1973, 1.4931.
'Approximate Annual Average Rate 1970-71, 5.35 per cent; 1971-72, 5.59 per cent; 1972-73, 5.90 per cent.
3.	(a) $147,693,942; (b) $163,704,472; (c) $184,190,199.
4.	(a) $107,680,827; (b) $118,635,547; (c) $137,073,425.


Mr. Knowles (Winnipeg North Centre): 1.	In each year since the Public Service Pension Adjustment Act of 1959 was passed, how many persons have received payments thereunder?
2.	In each of the above years, what was the total amount paid out under the said Act?
3.	In each of the above years, what was the average amount paid under the said Act (a) to retired public servants (b) to widows (c) to others?
4.	In each of the last five years, either calendar or financial, for which statistics are available, how many pensions under the Public Service Superannuation Act (a) to retired public servants (b) to widows of public servants or widows of retired public servants, have been discontinued because of the death of the superannuate?
Hort. C. M. Drury (President of the Treasury Board): 1.
Year	Number
1959-	60	14,3111960-	61	13,8851961-	62	12,5531962-	63	11,7091963-	64	10,8521964-	65	10,0771965-	66	9,0781966-	67	8,1621967-	68	7,4831968-	69	6,8601969-	70	6,6511970-	71	6,4741971-	72	5,7931972-	73	4,6472.	Year	Amount1959-	60	3,112,2311960-	61	2,956,5151961-	62	2,817,2631962-	63	2,657,7061963-	64	2,504,5031964-	65	2,344,7111965-	66	2,236,2121966-	67	2,038,329
Order Paper Questions
Year	Amount $
1967-68	1,905,478
1968-69	1,777,869
1969-70	1,641,304
1970-71	1,515,000
1971-72	1,368,879
1972-73	1,000,941
Year	Retired Public Servants	Widows	Others$	$	$1959-60	226.72	124.88	12.321960-61	225.43	124.42	11.791961-62	222.01	123.92	10.351962-63	220.66	123.59	10.061963-64	220.26	123.75	7.991964-65	217.94	123.08	6.191965-66	216.03	122.69	7.131966-67	212.52	122.64	5.931967-68	210.27	121.27	6.111968-69	208.19	119.21	4.561969-70	196.52	125.05	5.791970-71	184.83	127.87	nil1971-72	177.51	130.19	nil1972-73	174.19	128.47	nil(a) To Public !	Retired Servants	(b) to Widows	1968-69	1751	1968-69	5141969-70	1899	1969-70	5081970-71	2060	1970-71	5771971-72	2269	1971-72	5881972-73	3081	1972-73	687


Mr. Andre: For each year 1971, 1972 and 1973 (a) how many applications for research grants were received by the Medical Research Council (b) how many research grants were awarded by the Council (c) what was the average amount awarded per researcher by the Council?


Hon. Marc Lalonde (Minister of National Health and Welfare):: (a) Applications for research grants received by the Medical Research Council: 1971-72, 1,612; 1972-73, 1,531; 1973-74, 1,513; (b) Research grants awarded by the Medical Research Council; 1971-72, 1,072 with respect to applications during the year, plus 419 grants for 1971-72 approved in preceding years; 1972-73, 963 with respect to applications received during the year, plus 420 grants for 1972-73 approved in preceding years; 1973-74 1,088 with respect to applications received during the year, plus 325 grants for 1973-74 approved in preceding years, (c) Average amount awarded per researcher: 1971-72, $16,900; 1972-73, $18,070; 1973-74, $19,576.

April 15, 1974
Order Paper Questions


Mr. Mather: What is the percentage of (a) recent immigrants (1972-1973) (b) longer-established Canadians (1965-1968) who are on some form of welfare?


Marc Lalonde: In granting social assistance, the provinces do not maintain separate records of Canadian citizens and immigrants. The only criterion upon which assistance is granted is that of need. Consequently, there are no records of the number of immigrants receiving welfare benefits.


Mr. Gleave: 1.	How many pounds of butter were imported into Canada during the calendar year 1973?
2.	From what countries was the butter imported?
3.	What amounts were imported from each country?
4.	What price was paid for the imported butter?
5.	What was the duty paid on the butter?
6.	What agency of government was responsible for importing the butter?
7.	At what price was the butter sold on the Canadian market?


Mr. John M. Reid (Parliamentary Secretary to President of the Privy Council):: I am informed by Statistics Canada, the Department of National Revenue and the Canadian Dairy Commission as follows: 1. Imports of butter into Canada during the year 1973 amounted to 62,635,400 pounds.
2, 3 and 4. A breakdown of these imports by country of consignment for the 1973 calendar year is shown below:
Country	3. Quantity	4. Value ($)	$ per pound UnitIreland	(pounds) 11,524,200	6,204,000	Price .53Australia	21,134,900	10,611,000	.50New Zealand	25,588,900	12,217,000	.47Argentina	56,000	22,000	.39United States	4,331,400	2,391,000	.5562,635,400	31,445,000	.505.	Tariff item 1800-1 of the Customs Tariff stipulates the rate of duty on butter as: 8 cents per pound, British Preferential Tariff; 12 cents per pound, Most-FavouredNation Tariff; 14 cents per pound, General Tariff. Under the New Zealand Trade Agreement, duty on butter from that country is five cents per pound. In accordance with Article 1 of the Australian Trade Agreement, butter from Australia is also admissible at five cents per pound because of the treatment extended to importation of butter from New Zealand.6.	The Canadian Dairy Commission.

7.	At the Canadian Dairy Commission support price of 71 cents per pound.


Mr. Gleave: 1.	How many pounds of cheese in total were imported into Canada during the year 1973?
2.	From what countries was the cheese imported?
3.	What amount was imported from each country?
4.	What price was paid for the imported products?
5.	What was the rate of duty paid on the imported cheese?
6.	Which agency was responsible for importing the cheese or was it imported by private companies?
7.	At what price was the imported cheese sold on the Canadian market?


John Mercer Reid: I am informed by Statistics Canada, the Department of National Revenue and the Canadian Dairy Commission as follows: 1. Imports of cheese into Canada during 1973 amounted to 43,194,900 pounds.
2, 3 and 4. This cheese was imported from the following countries of consignment for the 1973 calendar year at the unit price shown on the table following:
$ per pound
Country	3. Quantity (pounds)	4. Value ($)	Unit PriceUnited Kingdom	1,084,700	608,000	.46Ireland	12,700	9,000	.70Austria Belgium-	2,041,800	1,036,000	.50Luxembourg	34,300	24,000	.69Denmark	7,387,400	5,231,000	.70Finland	2,444,100	1,049,000	.42France	3,564,300	3,461,000	.97West Germany	1,439,400	890,000	.61Greece	124,400	94,000	.75Italy	3,084,900	3,445,000	1.11Netherlands	9,729,700	4,271,000	.43Norway	1,219,600	742,000	.60Portugal	336,500	334,000	.99Sweden	461,200	257,000	.55Switzerland	4,894,100	4,674,000	.95Hungary	37,500	21,000	.56Poland	415,600	115,000	.27Roumania	272,600	190,000	.69Japan	900	1,000	1.11Australia	72,800	49,000	.67Argentina	754,200	468,000	.62United States	3,782,200	3,321,000	.87Total	43,194,900	30,890,000	.705.	Tariff item 1700-1 of the Customs Tariff stipulates the rate of duty on cheese as: 3 cents per pound, British Preferential Tariff; 3V4 cents per pound, Most-FavouredNation Tariff; 7 cents per pound, General Tariff. Tariff item 1700-2 provides that Cheddar cheese be dutiable at
April 15, 1974

three cents per pound under the General Agreement on Tariffs and Trade. Under the New Zealand Trade Agreement, duty on cheese from that country is one cent per pound. In accordance with Article 1 of the Australian Trade Agreement, Cheddar cheese from Australia is also admissible at one cent per pound because of the treatment extended to importations of Cheddar cheese from New Zealand.
6.	All cheese was imported by private firms.
7.	No prices on imported cheese varieties are published.


Mr. Godin: 1.	Since Quebec Indians are eligible for medical care and hospital services provided by the Health Insurance Plan to the Province of Quebec, how is the federal contribution collected by the Province?
2.	Under the agreement, what amounts were paid by the government each year 1970, 1971 and 1972?


Marc Lalonde: 1. Canada shares the costs of medical and hospital services provided to residents of Quebec and other provinces, including Indians and other native people. Federal contributions in respect of those costs are made under the Hospital Insurance and Diagnostic Services Act and under the Medical Care Act. The payments are determined as follows: (a) Hospital Insurance and Diagnostic Services Act: Quebec has chosen to opt out of this federal program, with the result that the federal contribution to the Quebec Hospital Insurance Program is made through tax abatement calculated by the Department of Finance and not under the Hospital Insurance and Diagnostic Services Act. (b) Medical Care Act: In any year that a province participates under the Medical Care Act it receives a contribution based upon the total costs of all participating provinces and territories providing medically required services to Canadian residents. The total federal contribution is equal to 50 per cent of this total cost and is distributed among the provinces in proportion to their insured populations. Approximately 90 per cent of the contribution is made, based on estimates, in equal monthly installments during the fiscal year. The remainder is paid in the following year when the actual audited costs of all the provinces are known.
2. Payments made or payable by the federal government to Quebec under the Hospital Insurance Program, are as follows: (a) 1970, Actual, $304,219,215. 1971, Estimated*, $343,694,522. 1972, Estimated* $384,359,031.
*For the years 1971 and 1972, only estimated contributions are available at this time. The 1971 contributions will be finalized shortly; as far as the 1972 contributions are concerned, the final contributions will not be known before March or April of 1975.
(b) Payments to Quebec under the Medical Care Act: 1970*, $22,552,600. 1971, $155,069,064. 1972, $172,069,531.
*Quebec commenced participation Nov. 1, 1970.
Order Paper Questions


Mr. Clark (Rocky Mountain): 1.	What was the total cost of all advertising of the program to encourage identification of illegal immigrants?
2.	What was (a) the estimated number (b) the estimated dollar value of man-hours of work devoted to all aspects of that program by (i) public servants (ii) other persons, apart from those persons involved exclusively in advertising programs?
3.	(a) How many new employees were hired, on a permanent or temporary basis, to give effect to this program (b) what is the estimated total cost of their employment?


Mr. Mark MacGuigan (Parliamentary Secretary to Minister of Manpower and Immigration):: 1. $1,277,603.
2.	From a staff or personnel standpoint, the Status Adjustment Program was operated essentially within the existing resources of the Immigration Division of the Department of Manpower and Immigration. Since almost every member of the staff in Canada would have at one time or another become involved in some aspect of the program, it is impossible to provide even a rough estimate of the number of man-hours devoted to the program by permanent staff or the dollar value attached to those man-hours. During the course of the program, however, the Immigration Division of the Department of Manpower and Immigration did find it necessary to engage outside assistance, primarily in the interpreter and translator fields, and this involved approximately 890 man-hours at an expenditure of approximately $3,600.
3.	While no new employees were hired on a permanent basis as a result of this program, the Immigration Division of the Department of Manpower and Immigration did engage 22 casual workers primarily clerks and stenographers at an approximate cost of $32,200.


Mr. Knight: 1.	When Ministers, Deputy Ministers or senior public servants travel on official business, and are accompanied by their spouses, who pays the travelling expenses of the spouse, including (a) transportation, whether commercial airliner. Armed Forces or Department of Transport (b) hotel (c) food (d) incidentals?
2.	If the government pays all or part of the travelling expenses of the spouse, is there a benefit recorded in the T4 slip of the official involved, obliging him to pay taxes on the amount in question?


Charles Mills (Bud) Drury: 1.
The department or agency concerned pays the travelling expenses incurred only when the spouse: accompanies an official representative of Canada on invitation by a foreign government for reasons of protocol, or provides representational support during official visits to Canada by dignitaries from abroad, or assists in the conduct of a government sponsored conference, e.g. performs host or hostess responsibilities. When such travel is authorized, transportation, overnight accommodation and food costs are reimbursed. Incidental expenses are seldom claimed.

April 15, 1974
Order Paper Questions
2. Because payment is reimbursement of additional travel expenses incurred by the official in the performance of a service to the government, the amount is not taxable and T4 slips are not issued.
For the year 1973-74 in the constituencies of Hamilton West, Hamilton East, Hamilton Mountain, Hamilton-Wentworth and Halton-Went-worth, what projects have been approved by the government under the Federal Labour Intensive Program (FLIP) including (a) details of the projects (b) the locations (c) the amounts involved?


[Stage Direction]
HAMILTON CONSTITUENCIES	Hon. C. M. Drury (President of the Treasury Board):
The following projects were approved under the Federal 
Question No. 395-Mr. Alexander:	Labour Intensive Program for the winter of 1973-74:
Department	Location	Detail	AmountCommunications	Hamilton West- Hamilton District Office 135 James Street South Hamilton, Ontario	General Administration Assistance	$ 2,800Manpower and Immigration	Hamilton District Office 135 James Street South Hamilton, Ontario	Reduction of Immigration Appeal Backlog	$ 2,000Consumer and Corporate Affairs	Hamilton East- Hamilton District Office 585 Wentworth Street North Hamilton, Ontario	General Assistance to Weights and Measures Inspectors	$ 1,920Energy, Mines and Resources	Halton-Wentworth- Burlington, Ontario	Great Lakes Survey	$ 3,000Manpower and Immigration	Hamilton-Wentworth- Hamilton C.M.C. 199 Parkdale Ave. North, Hamilton, Ontario	Updating Client Registration	$10,000
[Stage Direction]
Question No. 402-Mr. Holmes:
[Stage Direction]
Have there been recent cutbacks in medical research and, if so (a) is the government seeking appropriate advice from the medical scientific community (b) is the government responding to advice from the Medical Research Council concerning funding allocations (c) will the government review its proposed funding to MRC as it will cause considerable hardship to Canadian biomedical research efforts, Canadian medical schools and to the general health of Canadians?
Marc Lalonde: The Medical Research Council has received increases each year in the funds available to it for the support of biomedical research: (a) The government receives advice concerning medical research through well-established mechanisms which involve input from the medical scientific community, (b) The recommendations of the Medical Research Council are taken into account in arriving at decisions regarding the funding of medical research, (c) The funding of the Medical Research Council is subject to an annual review in which all relevant factors are considered.


Mr. Mazankowski: 1.	How much money was spent improving physical conditions on the Saddle Lake Indian Reserve at St. Paul, Alberta, during the period April 1, 1968 to March 31, 1969, April 1, 1969 to March 31, 1970, April 1, 1970 to March 31, 1971, April 1, 1971 to March 31, 1972 and April 1, 1972 to October 30, 1973?
2.	How much money was spent during the same periods on (a) health services (b) housing (c) water supply (d) roads?
3.	How many children from the Reserve are attending high school and how many attended in 1968, 1969, 1970, 1971, 1972 and 1973 to date?
4.	How many children from the Reserve are attending technical school or university and how many attended for the same periods as above?


John Mercer Reid: (d) 1968-69, $38,800; 1969-70, $55,000; 1970-71, $42,000; 197172, $35,100; 1972-73, $9,700; April 73-October 73, $65,900.
3.	*1968-69, 175; *1969-70, 185; *1970-71, 254; 1971-72, 85; 1972-73, 119; 1973 to date, 136.
4.	*1968-69, 12; *1969-70, 14; *1970-71, 24; 1971-72, Not available; 1972-73, 56; 1973 to date, 22.
'Figures for these years are for the Saddle Lake/Athabas-ka district and not merely the Reserve.


Mr. Boisvert: 1.	How many radio stations broadcast in English only in (a) Canada (b) the Province of Ontario (c) the Province of Quebec?
2.	How many radio stations broadcast in French only in (a) Canada (b) the Province of Ontario (c) the Province of Quebec?


Hon. Gerard Pelletier (Minister of Communications):: The Canadian Radio-Television Commission has provided the following information: 1.-In English only, (a) 562; (b) 157; (c) 32.
2.-In French only, (a) 165; (b) 27; (c) 106.


Mr. Boisvert: 1.	How many television stations broadcast in English only in (a) Canada (b) the Province of Ontario (c) the Province of Quebec?
2.	How many television stations broadcast in French only in (a) Canada (b) the Province of Ontario (c) the Province of Quebec?


Gérard Pelletier: The Canadian Radio-Television Commission has provided the following information: 1.-In English only, (a) 476; (b) 65; (c) 9.
2.-In French only, (a) 90; (b) 10; (c) 63.


Mr. Harding: 1.	How much money will be in the Maritime Pollution Claims Fund as of March 31, 1974?
2.	How many claims to date have been charged against the Fund and what was the amount paid on each claim?
3.	How many claims against the fund are pending?


Mr. Joseph-Philippe Guay (Parliamentary Secretary to Minister of Transport):: 1. $16,806,545.38.
2.	Nil.
3.	Nil.
Order Paper Questions


Mr. Dinsdale: 1.	Is Dr. Verne Atrill in the employ of the government and, if so (a) what functions does he perform (b) what is his salary (c) where is his office located (d) what grants has he received?
2.	How many are on his staff (a) what are their functions (b) what are their salaries?


Right Hon. P. E. Trudeau (Prime Minister):: 1. No,
(reply to question No. 3,327 in first session of the twenty-ninth Parliament refers in part).
2. See 1 above.


Mr. McKinnon: Has the Department of Veterans Affairs stopped hiring university students to work in veterans' hospitals during summer vacation at employment usually related to their future professions and, if so, for what reason?


Hon. Daniel J. MacDonald (Minister of Veterans Affairs):: No.


Mr. Knight: 1.	What is the position held by Mr. Doug McFarlane in the Department of Veterans Affairs?
2.	What is the salary level of this position?
3.	What is the length of tenure of the position held?


Daniel Joseph MacDonald: 1. Temporary member, War Veterans Allowance Board.
2.	$20,300-$25,500.
3.	For a period of one year effective November 25, 1973.



QUESTIONS PASSED AS ORDERS FOR RETURNS


Mr. Rowland: Under the terms of the Defence Research Board Defence Industry Research Program for the fiscal year 1972-1973, (a) which companies received financial assistance (b) what is the title of the research project involved (c) what is the amount of money assigned by the Research Board to the project?
Return tabled.



DEPARTMENT OF JUSTICE RESEARCH CONTRACTS

Mr. Nystrom: 1.	What was the total amount of money spent in each of the fiscal years 1972-73 and 1973-74 to date by the Department of Justice on

April 15, 1974
Order Paper Questions
contracts to outside persons and organizations for research, development and other consulting services?
2.	What are the names and addresses of these outside persons and organizations and what amounts of money were involved in each contract?
3.	What was the purpose of each contract and title of each report submitted?
Return tabled.



DEPORTATIONS UNDER SECTION 28(1) OF 1967 IMMIGRATION ACT

Mr. Rowland: 1.	How many persons have been deported under Section 28(1) of the 1967 Immigration Act, as amended November 6, 1972 by Privy Council Order 1972-2502 which denies landing to persons seeking admission as immigrants who are not in possession of an appropriate visa?
2.	(a) From which countries did such persons originate (b) how many deportees came from each such country?
3.	How many of the persons deported stated that they were seeking entrance as visitors?
Return tabled.



REUNIFICATION OF MAINLAND CHINESE PEOPLE WITH FAMILIES IN CANADA

Mr. Schumacher: 1.	(a) What agreement was signed by Canada with China regarding reunification of mainland Chinese people with families in Canada (b) on what date and by whom was this agreement signed (c) what are the terms of reference of the agreement?
2.	How many mainland Chinese have (a) already taken advantage of the program (b) applications pending under the program (c) made preliminary enquiries regarding the program?
3.	By city and province (a) where are these people now located in Canada (b) where are those whose applications are pending planning to locate on entering Canada?
4.	What investigations are being made to ensure (a) work opportunities (b) financial solvency (c) medical suitability (d) social independence and adaptibility of such people?
5.	What is the total projected number of such immigrants by (a) sex (b) age for each year 1973 to 1980?
6.	Is the program to be effective on an unending basis?
7.	What investigations are made of families in Canada seeking to reunify with relatives from mainland China?
8.	What criteria are used for establishing bona fide family relationships both in China and in Canada?
Return tabled.


Mr. Paproski:: I rise on a point of order related to my question No. 319 appearing at page 79 of today's order paper as follows:
1.	In the Canadian Public Service, excluding Crown corporations, boards and agencies, how many women hold positions with salaries above $15,000 annually?
2.	What is the total number of persons of deputy minister rank in the Public Service, excluding Crown corporations, boards and agencies and, of these, how many are of the female sex?
3.	Excluding Crown corporations, boards and agencies, what is the total number of Public Servants and, of these how many are (a) male (b) female?
Mr. Speaker, this question has been on the order paper for the last six months. They are very simple questions. The government appears to be neglecting to answer them,

perhaps because they do not really care about the status of women in this country.


Some hon. Members:: Oh, oh!


John Mercer Reid: We had the answer to that question as of the end of the last session, but unfortunately there was no opportunity for us to table it. The fact that the hon. member put the question down again, revising the date to March 1, meant we had to conduct the inquiry all over again. I should like to point out to him that a thorough search of almost every file is required at a cost to the Canadian taxpayer of approximately $5 for every file. This can be multiplied by a factor of approximately 300,000 public servants.


Some hon. Members:: Shame.


Some hon. Members:: Oh, oh.


Mr. Speaker:: May we have order, please. The hon. member for Edmonton Centre.


Steve Eugene Paproski: Mr. Speaker, I would be satisfied to get the results as of the last session, if the parliamentary secretary does have those figures ready to produce.


Mr. Bell:: Mr. Speaker, on a point of order; three times the parliamentary secretary has stated that the government had answers to questions ready at the end of the last session. I point out to the House that the government had an opportunity on the last day of the previous session, before we began anew, to table them, and they were asked by the opposition to do so.



ORAL QUESTION PERIOD


Robert Lorne Stanfield: Mr. Speaker, I am sure the Minister of Finance would expect me to ask him a question about the striking increase in the rate of interest charged by the Bank of Canada. Would the minister tell the House in a few words the reason behind this striking increase in the cost of credit? Is it the view of the governor of the Bank of Canada and of the government that there ought to be higher mortgage rates and that the cost of operating small business, for example, should be higher?


Hon. John N. Turner (Minister of Finance):: Mr. Speaker, the governor of the bank, in raising the bank rate, is reflecting two major causes. The first is the sharply rising bond yields and interests rates in the United States and on the Eurodollar market, which has been the dominant factor pushing up interest rates in Canadian
April 15, 1974

financial markets in recent weeks. I suppose that this world wide increase in interest rates reflects the mounting evidence of the strength of global inflationary forces. A contributing factor in the Eurodollar market has been the number of oil importing countries that have been borrowing in order to finance their deficits to meet the new bills from the oil exporting countries, and whose balance of payments deficits have occurred as a result of the rise in world oil prices.
Turning to the domestic front, the second reason is that Canadian financial markets have continued to be exposed to strong credit demand which has been generated by an exceptionally buoyant domestic economy.


Some hon. Members:: Hear, hear!


John Napier Turner: Looking forward, Mr. Speaker, the market undoubtedly sees a rapidly growing demand for funds to finance continued business expansion in Canada and a demand for government funds.


Robert Lorne Stanfield: Mr. Speaker, I must say, in view of the level of our dollar, that it is difficult to see the external pressures so far as the second reason given by the Minister of Finance is concerned. Could the minister indicate precisely what policy, with regard to the growth in the money supply, is associated with this increase of one per cent, which is the sixth such increase in the bank rate during the past year?


John Napier Turner: Mr. Speaker, if the hon. gentleman looks, as I have, at the figures for the first quarter of 1974, he will see that the banking figures indicate continuing rate of growth in short-term credit outstanding and in the total monetary aggregates. Indeed, in the last three or four weeks there has been a requirement for chartered bank loans of over $900 million. The governor of the bank indicated to me over the weekend that monetary policy will continue to accommodate the rapid expansion in the economy, but that he is concerned about the increase in the monetary aggregates-in other words, the money supply.


Robert Lorne Stanfield: A further supplementary question, Mr. Speaker. In view of this, as I say, quite substantial increase of one per cent, an unusual increase in the bank rate to take place at one step, and inasmuch as this move must be in line with some general approach by this government, is the minister still saying that the country should have to wait another month before we learn what are the government's intentions with regard to its general policy, and particularly with regard to its fiscal policy? In view of this striking initiative taken by the governor of the Bank of Canada, does the minister still say that we should wait another month to see his budget?


John Napier Turner: Mr. Speaker, the budget was delayed until we were able to reconcile the division of the benefits and the burdens of the increase in oil revenues and oil prices across the country. The government is, of course, in general accord with the monetary thrust reflected by the action of the governor of the Bank of Canada, although the setting of the rate is his responsibility and the amount of the rate is, of course, his preroga-
Oral Questions
tive. As to the date of the budget, this will be announced in definitive terms in short order.


Mr. Speaker:: The Chair will see the hon. member for Yorkton-Melville, then the hon. member for Temis-camingue, and will continue with supplementaries from the hon. members for Don Valley, Middlesex and others. I believe the hon. member for Yorkton-Melville has a supplementary and so has the hon. member for Temis-camingue, and then the Chair will see the hon. member for Don Valley.


ADVICE OF MINISTER TO BANK OF CANADA AND CHARTERED BANKS ON INTEREST RATES
Mr. Lome Nystrom (Yorkton-Melville):: Mr. Speaker, my questions are in the same area and are addressed to the Minister of Finance. I should like to know whether or not the Minister of Finance instructed or advised the Bank of Canada to raise their interest rate. I also want to know whether or not he has contacted the chartered banks asking them not to increase their interest rates to Canadians?


John Napier Turner: Mr. Speaker, in answer to the first question, the monetary policy in the first instance is the responsibility of the governor of the Bank of Canada. Under the statute, the Minister of Finance and the government have to be in general accord with the monetary thrust set by the bank, but the details leading to the decision regarding the bank rate remain his responsibility.
In response to the second part of the question, no, I have not been in touch with the chartered banks since the rise in the bank rate was announced. Indeed, two of the chartered banks raised their prime rate this morning.


POSSIBLE LEGISLATION TO PROTECT PEOPLE FROM EFFECTS OF INCREASED INTEREST RATES
Lorne Edmund Nystrom: A further supplementary question, Mr. Speaker. In view of the fact that the increase in the bank rate will not have much effect on corporations because they generate their own capital but will have some effect on consumers, farmers, small businessmen and home builders, is the Minister of Finance contemplating any immediate legislation to protect these ordinary Canadian citizens?


John Napier Turner: Mr. Speaker, I have not had a chance to read the announcements of the two banks which raised their prime rate this morning, but I hope they will continue the policy I urged them to follow a year or so ago, namely that there should be, in effect, a dual tier interest system whereby a preferential rate will be given to small businessmen, small accounts, fishermen, farmers and those regions of the country less favourably disposed in the growth of the economy.

April 15, 1974
Oral Questions


POSSIBLE SUBSIDIZING OF MORTGAGE INTEREST RATE-GOVERNMENT POSITION
Lorne Edmund Nystrom: A further supplementary, Mr. Speaker. I should like to ask the minister whether or not he can assure us that mortgage rates will not be going up and that he will make appropriate changes to set aside some funds at 6 per cent, along with tax changes, to make sure that developers and so on do not take advantage of such a policy, if he is to pursue one?


John Napier Turner: Mr. Speaker, I hope the hon. gentleman will allow me not to speculate on interest rates, whether short-term or longterm. In answer to the precise ambit of his question, perhaps he would be good enough to recall the answer I gave to his colleague, the hon. member for Oshawa-Whit-by, in which I suggested to him that any subsidization of the interest rate in a tight market would be reflected in higher housing prices.


POSSIBILITY OF LOANS TO PROVINCIAL GOVERNMENTS BY BANK OF CANADA
Mr. Real Caouette (Temiscamingue):: I should like to put a supplementary to the Minister of Finance.
In reply to a question recently put to him by my colleague the hon. member for Bellechasse concerning the Bank of Canada, the minister said that this bank has not granted any loans to the government in the last ten years. Now, if the Bank of Canada does not grant loans to the government, nor to the chartered banks, even though it has increased its interest rate by 1 per cent, can the minister tell us to whom in fact the Bank of Canada grants loans at a rate of interest 1 per cent higher than it was before?


John Napier Turner: Mr. Speaker, I understand that the hon. member states that the Bank of Canada interest rate somewhat sets the rates of interest asked by the banks. As for government loans, I believe he is referring to the provincial governments. If that is the case, there is always the danger of sharing the responsibilities with regard to the debts incurred by the provinces. That is a very complicated matter, Mr. Speaker; it would lend itself better to a public debate or a private one with the hon. member.


David Réal Caouette: Mr. Speaker, I have another supplementary for the Minister of Finance.
As the Bank of Canada can grant loans to the provinces only for periods not exceeding six months, and as the provinces cannot take advantage of this because the period is not long enough to reimburse them, I would like to know to whom the Bank of Canada is now lending money at its present interest rate?


John Napier Turner: Mr. Speaker, in principle, in terms of the chartered banks' reserves.
{Mr. Turner (Ottawa-Carleton).J


REQUEST FOR EXPLANATION OF MONETARY POLICY
Mr. James Gillies (Don Valley):: Mr. Speaker, my question is for the Minister of Finance. In view of the fact that there seems to be perhaps some misunderstanding concerning precisely what the government is trying to do with its monetary and fiscal policy, could the minister explain the rationale for increasing the money supply and therefore accommodating business on the one hand, and increasing interest rates therefore discouraging investment. At the present time what precisely is the government trying to do?


John Napier Turner: Mr. Speaker, the monetary policy set by the bank has as its rationale or reason to increase the money supply at a rate sufficient to accommodate reasonable expansion of the economy but no more.


James McPhail Gillies: Mr. Speaker, my supplementary is again directed to the Minister of Finance. In the circumstances what is the rationale for increasing the domestic rate?


John Napier Turner: Mr. Speaker, if the bank rate had not risen in the view of the governor then the monetary aggregates would have expanded too rapidly.


RATES OF INTEREST TO BE CHARGED UNDER SMALL BUSINESS, FISHERIES AND FARM IMPROVEMENT LOANS ACTS-GOVERNMENT POSITION
Mr. William C. Frank (Middlesex):: Mr. Speaker, I too should like to direct my question to the Minister of Finance. In light of the fact that obviously high inflation is making it difficult for small businessmen and farmers, who are an important grassroots segment of our economy, can the minister make a commitment to this House concerning what rates of interest will be charged over the coming year under the small business, fisheries and farm improvement acts, and how much more money will be made available under these programs?


John Napier Turner: Mr. Speaker, under statute there is a relationship between the rate of interest charged under those guaranteed programs and the prime rate or bank rate-I suppose in statutory terms the rate the government has to pay for money under the treasury bills. I cannot give the hon. gentleman that commitment, but I can refer him to the figures I recited in the debate last Thursday when this House was considering those loans and also to the releases issued by the Department of Finance last Thursday as well, indicating what the rate of borrowing was under these three programs for the last quarter of 1973.


William Charles Frank: Mr. Speaker, in view of the minister's answer, I would ask him whether he will make every effort to hold the line on those interest rates for the next several months.


John Napier Turner: Yes I shall, Mr. Speaker, bearing in mind one other factor which I think is
April 15, 1974

relevant, namely that the rates under those guaranteed programs should be sufficiently attractive to give beneficial results to the fishermen, small businessmen and farmers, and yet be realistic enough to attract the banks under these programs.


Mr. Speaker:: The hon. member for Edmonton West will be recognized for a supplementary, after which the Chair will see the hon. member for York-Simcoe.


ALLEGED CONFLICT BETWEEN INCOME TAX CONCESSIONS TO MANUFACTURERS AND EFFECT OF INCREASED INTEREST RATES ON CERTAIN AREAS-GOVERNMENT POSITION
Hon. Marcel Lambert (Edmonton West):: Mr. Speaker, not to diminish the interest in the minister this afternoon, but while he is explaining some of the reasons behind this move, would he direct his attention to explaining to this House the apparent paradox of the government moving in areas favourable in respect of income tax to the manufacturing and processing industries and now increasing interest rates which will apparently affect certain areas of this country and small business in particular?


John Napier Turner: Mr. Speaker, if the hon. gentleman would be good enough to take into consideration the combined effect of the manufacturing incentive he cited and the policies of my colleague the Minister of Regional Economic Expansion, he will see the combined effect is to render more competitive industries in the Atlantic provinces and western Canada. Indeed, those rates now, combined with the incentives the province wants to undertake, have made possible a potential petrochemical industry in Alberta.


THE CANADIAN ECONOMY
Mr. Sinclair Stevens (York-Simcoe):: Mr. Speaker, in the absence of the Prime Minister I, too, would like to direct a question to the Minister of Finance. Is the minister aware that corporate profits after tax in the past three years have jumped 5.3 points to 12 per cent of national income, while labour's share of national income in the same period has declined 5 points to 70 per cent. If this is so, is it part of the government's anti-inflationary program to allow labour's share of national income to drop 6 per cent in three years while corporate after-tax profits have jumped 79 per cent in the same period?


John Napier Turner: Mr. Speaker, I can give the hon. gentleman figures to show that over a decade the reverse is true, but I want to say to him that corporate profits in 1973 in this country amounted to $14.5 billion and that in 1974 the intention of reinvesting by business in this country is $18.5 billion; in other words, $4 billion more is being reinvested in this country than business achieved by profits in 1973 and that will mean a larger industrial base, more jobs and more income for the working man and woman in this country.
Oral Questions


Mr. Speaker:: The Chair will recognize the hon. member for York-Simcoe for a supplementary, followed by the hon. member for Winnipeg North Centre.


COMPARISON OF PROFIT POSITION OF UNITED STATES AND CANADIAN CORPORATIONS-SUGGESTED DISCONTINUANCE OF TAX CONCESSIONS TO CANADIAN CORPORATIONS
Sinclair McKnight Stevens: Thank you, Mr. Speaker. This question again is directed to the Minister of Finance. I would mention that if the minister checks the Bank of Canada figures for the period to which he refers he will find he is quite incorrect. With corporate after-tax profits now running at 12 per cent of total Canadian income compared to 6.6 per cent for corporations in the U.S.A., does the minister still believe it is necessary to continue his liberal tax concessions to Canadian corporations bearing in mind such Canadian corporations now earn more after tax than American companies earn before tax in relation to national incomes?


John Napier Turner: Mr. Speaker, I do not think it is an accident either that the Canadian economy is in a stronger economic cycle than the American economy. I put the question to him: What does he want; Canadian jobs or American jobs?


Some hon. Members:: Hear, hear!


AGRICULTURE
Stanley Howard Knowles: Mr. Speaker, may I direct a question to the Minister of Agriculture, whom we are pleased to welcome back from the other place. In view of the fact that during the past 12 months Canadian consumers have had to absorb an increase of 18.6 per cent in the cost of food, and in view of a further announcement of an increase in the price of milk in Ontario and certain other parts of Canada, will the minister consider increasing the subsidy to the producers of milk so that medium and low income people will not have to pay the additional cost the minister feels the producers need?


Eugene Whelan: Mr. Speaker, first of all may I make clear that the only thing I was doing in the other place was protecting the interests of members in this place. To answer the hon. member's question, the agreements we signed with the producers contained an escape clause which permits them, if they can show their input profit-cost ratio has gone up, to apply for an increase in the price of milk. Also, as I am sure the hon. member is aware, the government, through parliament, has passed laws which benefit those on low incomes, those on pensions, the disabled, the veterans and those on family allowances.

April 15, 1974
Oral Questions


Mr. Speaker:: Order, please. The Chair will recognize the hon. member for Winnipeg North Centre on a supplementary and then the hon. member for St. John's East on a supplementary.


Stanley Howard Knowles: May I ask the
minister if he will answer my first question: will the minister consider helping to keep down the cost to consumers by increasing the milk subsidy to producers?


Eugene Whelan: Mr. Speaker, we have just increased the milk subsidy to those producers to whom we have responsibility, namely, industrial milk producers. The ones about whom the hon. member is talking are under provincial jurisdiction.


Some hon. Members:: Oh, oh!


FLUID MILK-POSSIBLE STEPS TO AVOID INCREASES IN PRODUCTION COSTS
Mr. James A. McGrath (St. John's East):: Mr. Speaker, may I ask the minister, by way of a supplementary question, what steps the government is prepared to take to keep milk production costs down, especially in the light of the statement of the president of the Borden milk company that we can expect another increase in the price of milk within three months?


Eugene Whelan: Mr. Speaker, if the hon. gentleman would take note of the items to which the president of the Borden milk company referred, he would realize that the reference was to extra cost for plastics, paper containers, etc. that are used in the industry. The Department of Agriculture does not have very much to do with that.


SOCIAL SECURITY
James Aloysius McGrath: I have a supplementary question for the Minister of National Health and Welfare. In view of the fact that there have been two or three increases in the price of milk since the subsidy program was announced last August, may I ask the minister whether he has satisfied himself regarding the impact of these increases in the price of milk on lower income families in this country, and especially on those families that depend on benefits under the Canada Assistance Plan.


Marc Lalonde: Mr. Speaker, first of all the hon. member knows that such increases are decided by provincial marketing boards. They are the ones who make the decision in this respect. Second, I have indeed looked at this matter and I can confirm to the hon. member that all price increases are making it more difficult for all families. So far as the Canada Assistance Plan is concerned, we are ready to

share with the provinces whatever increases in contributions they are willing to make to families on welfare. We have encouraged the provinces to do so and several provinces have taken advantage of this encouragement of the federal government. So we are taking our responsibilities in this regard very well.


Mr. Speaker:: The Chair will recognize the hon. member for St. John's East on a supplementary, and then we should try to limit supplementaries to some extent as we get closer to the end of the question period. After the hon. member for St. John's East, I will see the hon. member for Portneuf.


SUGGESTED FEDERAL GOVERNMENT PARTICIPATION IN PROGRAM TO PROVIDE SCHOOL CHILDREN WITH MILK-GOVERNMENT POSITION
James Aloysius McGrath: By way of a
supplementary question may I ask the minister whether, in line with his responsibility as Minister of National Health and Welfare, he is prepared to enter into a program with the provinces, in compliance with the recommendation made to this House by the Food Prices Committee last session, to make milk available through a school program to ensure that children of Canadians on low incomes will not suffer from diet deficiencies as a consequence of inflation.


Marc Lalonde: This matter was discussed before the parliamentary committee and various views were expressed on the subject at that time.


REASON FOR GOVERNMENT INTERFERENCE IN FOOTBALL LEAGUE AND NOT HOCKEY
Mr. Roland Godin (Portneuf):: Mr. Speaker, I have a question for the Minister of National Health and Welfare.
In a letter to a person in charge of an amateur hockey league, he once stated that the federal government had no jurisdiction over the organization and administration of any sport in particular.
Does the fact that millionaires have invested their money in professional football explain his decision to interfere in football through Bill C-22?


Marc Lalonde: No, Mr. Speaker.


Roland Godin: Mr. Speaker, I would like to ask a supplementary question.
Could the minister say what were his reasons for not intervening for young amateur hockey players at grips with the monopoly enjoyed by the Ontario Amateur Hockey Association?
April 15, 1974


Marc Lalonde: Contrary to what the hon. member is insinuating, I discussed the matter on various occasions with those in charge of the Amateur Hockey Association.


CONSUMER AFFAIRS
Mr. Joe Clark (Rocky Mountain):: Mr. Speaker, in the absence of the Minister of Consumer and Corporate Affairs, and of course in the absence of the Prime Minister, I would like to direct my question to the Acting Prime Minister. Could he say why the Minister of Consumer and Corporate Affairs, when he finally revived the Canadian Consumer Council, limited its right to tell the Canadian public what it found, and will the Acting Prime Minister say whether it was disagreement about this secrecy or about some other matter which led the government not to invite the former chairman, Mr. Harold Buchwald, to accept re-appointment?


Mr. Pierre De Bane (Parliamentary Secretary to Minister of Consumer and Corporate Affairs):: Mr. Speaker, for the hon. member's information, his premises are altogether wrong. The council just appointed will have a more important budget than the preceding one. I would be able to make public all its researches and all its members will be able to make all the public statements they want, except to divulge the council's proceedings.


Mr. Speaker:: The hon. member for St. John's East rises on a point of order. I will see the hon. member for Rocky Mountain on a supplementary following that.


James Aloysius McGrath: Since this House met last Thursday for the question period, the Minister of Consumer and Corporate Affairs issued a major statement outside the House. I think the record should note the fact that, having made that statement, the minister was not prepared to come to the House today and answer questions from members.


Mr. Speaker:: The Chair will see the hon. member for Rocky Mountain on a supplementary, to be followed by the right hon. member for Prince Albert.


Charles Joseph Clark: Mr. Speaker, I should like to direct my supplementary question to the parliamentary secretary who questions my premise. I ask him if it is the policy of the government that the new Consumer Council will have the right, as a council, to make public its findings, and will he also advise, in answer to my original question, whether it was disagreement about this matter of secrecy or disagreement about some other matter that caused the government not to invite the former chairman to accept re-appointment?


Pierre De Bané: Mr. Speaker, I can assure the hon. member that all members of that council will be able to express
Oral Questions
their views in public on departmental programs and policies, as well as on other matters of concern to consumers, provided reference is not made to confidential documents of the department. They will be able to make any declaration and publish any research they will be doing as members of the council.


Some hon. Members:: Hear, hear!


Mr. Speaker:: The hon. member for Rocky Mountain rises on a point of order.


Charles Joseph Clark: I am sure the parliamentary secretary acted inadvertently when he answered a question which I did not ask. I did not ask what they should do in their individual capacity as council members but in their capacity as members of the council as a whole.


Pierre De Bané: Mr. Speaker, the hon. minister is going to meet the members of this new council within a few days, in early May. I want to assure him that they will have full discretion to co-operate and express their opinions on all matters likely to interest consumers and that they will enjoy every freedom except of course to refer to the department's confidential documents.


EXTERNAL AFFAIRS
John George Diefenbaker: Mr. Speaker, my question is directed to the Secretary of State for External Affairs. It has to do with our Canadian force in the Middle East. I should like to ask him, to begin with, whether or not any agreements or arrangements have been entered into with the United Nations or with the commander of that force so that he is in a way subject to the views or ideas of the government of Canada, supplying, as this country does, so large a share of the force in that area.


Mitchell William Sharp: Mr. Speaker, Canada is participating in the UNEF on the request of the Secretary General. Of course, while our troops are there, they are under the command of the United Nations commander. However, as the hon. gentleman knows, they are not doing patrolling or any of this kind of work; they are doing the much more difficult and demanding work of providing the logistics component as they did in the previous force.


John George Diefenbaker: Mr. Speaker, the reason I asked the question was that I was informed this morning that the commanding officer will not permit a visit to Canadian troops there, even by the Minister of National Defence. I would ask the Acting Prime Minister to protest this because in the past, Privy Councillors have been permitted to visit Canadian troops in the United Nations forces.

April 15, 1974
Oral Questions


Mitchell William Sharp: Mr. Speaker, I doubt the premise of this question but I shall make inquiries. I know I would have no difficulty in visiting troops upon request, and I am sure none of my colleagues would have any difficulty either.


John George Diefenbaker: Mr. Speaker, I would not want to place myself on as high a level as the Secretary of State for External Affairs, but this morning a request was made by my office for a visit on my part to Canadian forces, not in areas in Egypt but in Israel, and the reply was that under no circumstances would anyone from Canada be allowed to visit the forces. Indeed, it was added that this included the Minister of National Defence. As the minister apparently agrees that there should be no such denial, will he immediately get in touch with the forces, because I should like to visit those who serve my country, as in the past I have had that privilege.


Mitchell William Sharp: Mr. Speaker, I am sure I speak for all members of the House when I say that I would not want the right hon. gentleman to put himself in a position of danger, and I am sure this can be the only consideration that prevails. If he would like to visit the troops I will see what I can do, but I certainly would not encourage him to go where there is a lot of shooting. We really would like to have him back.


John George Diefenbaker: Is that the reason the minister does not go?


TRANSPORT
Mr. Frank Howard (Skeena):: Mr. Speaker, my question is for the Minister of Transport. In the continuing saga of the shortage of railway cars, and in the light of information given recently that the shortage of railway cars has detained the movement of lumber causing an increase in the price of housing and other buildings, not mentioning other materials, can the minister tell the House what steps he is taking now to assure return to Canada of Canadian railway cars that are kept in the United States as warehouses thus denying Canada use of them? Can the minister tell the House what steps he has taken to get them back?


Hon. Jean Marchand (Minister of Transport):: Mr. Speaker, last week I met with the railways and the shippers association in order to see if there were things we could do that we were not doing in order to increase the number of freight cars in Canada. One of the things that was suggested was that we get in touch with the American government to see if they could exercise pressure on the railways to have those cars sent back to Canada. We are going to do this through the Department of External Affairs.


Frank Howard: A supplementary question. Rather than relying on the diplomacy or the lack of it, whichever it may be, on the part of the Department of External Affairs, does the minister think that it might be more appropriate

to raise the per diem rate charged to American railroads so that they do not have the gift of Canadian boxcars for $7 a day, to use them as warehouses? Would that not be a more direct way?


Jean Marchand: Mr. Speaker, this is another way but the problem is to know what the impact would be on prices in Canadian markets abroad, if you have an idea of this. We would lose customers because of the new price to be paid by customers, there is no doubt about that.


HOUSING
Mr. Jack Marshall (Humber-St. George's-St. Barbe):: Mr. Speaker, I have a question for the Minister of State for Urban Affairs in charge of housing. In view of the fact citizens living in substandard homes are finding it difficult to bring them up to standard because of the cost involved, and in view of the increase in the cost of building materials, can the minister indicate what progress is being made in extending the residential rehabilitation program to include those citizens living in rural areas, in light of the policy announced recently?


Hon. Ron Basford (Minister of State for Urban Affairs):: Mr. Speaker, we have had consultations with some of the provinces, and with the particular province that the hon. member has in mind. Discussions are going on at the official level as to the application of a rural housing program for Newfoundland.


Jack Marshall: A supplementary question. Can the minister give a definite date as to when the program can be announced which would be directed to those people who are suffering today?


Stanley Ronald Basford: No, I could not, Mr. Speaker.


AIR TRANSPORT
Mr. F. Oberle (Prince George-Peace River):: Mr. Speaker, my question is for the Minister of Transport. In light of the recent inflationary trend and labour unrest in Canada, I understand that the minister may have had some problems to solve in a minor situation that existed in Vancouver and has now spread to other centres with the firefighters who are tying up Department of Transport airports, has the minister anything to report this morning to the House on the situation as it stands? What we can expect in the next few days?


Jean Marchand: Mr. Speaker, there were negotiations late last week between the Treasury Board and representatives of the alliance. I know that tomorrow the firefighters will be called upon to vote on the proposal or the solution that has been reached
April 15, 1974

by both parties. I hope that the firefighters are going to accept this proposal.


Frank Oberle: A supplementary question, Mr. Speaker. Can the minister tell the House when the proposal will be put to the B.C. firefighters and whether the proposal recognizes regional disparities and regional differences?


Jean Marchand: Mr. Speaker, it is a proposal which is a compromise, and it has been negotiated between the alliance and the Treasury Board. I think it is not proper to reveal the terms before the membership has had an opportunity to consider them.


STRIKE BY FIREFIGHTERS AT VANCOUVER AIRPORT- POSSIBLE PROPOSAL CONCERNING REGIONAL PAY RATES
Steve Eugene Paproski: Mr. Speaker, my question is also for the Minister of Transport. At the Public Service Alliance negotiations with the Treasury Board regarding the airport firemen's dispute was there a firm offer of regional rates presented to the bargaining committee and if not, why not?


Jean Marchand: Mr. Speaker, a proposal was made on the part of the negotiating team and has been submitted to the workers who are going to vote on it. After that, you will know exactly what it is.


Steve Eugene Paproski: A supplementary-


Mr. Speaker:: Order, please. There are some four minutes before the end of the question period, and perhaps it might be a good idea to have supplementaries for four minutes, and then call orders of the day.


Steve Eugene Paproski: Mr. Speaker, my supplementary question is for the Minister of Transport. When did the serious bargaining begin? Was it when Toronto and Montreal firemen went on the sympathy strike or does the west have to be shut down completely before government get off their backsides?


Jean Marchand: Mr. Speaker, we are very lucky that we do not have a general strike in Canada if that is the kind of question in the House.


Some hon. Members:: Hear, hear!


STRIKE BY FIREFIGHTERS AT VANCOUVER AIRPORT-REASON FOR ALLEGED DILATORY ACTIONS BY TREASURY BOARD
Mr. Donald W. Munro (Esquimalt-Saanich):: Mr. Speaker, in the absence of the President of the Treasury Board, my question is addressed to the Acting Prime Minister. In view of the fact that the required two months notice to bargain was given on January 31 this year by the Public Service Alliance, the bargaining agent for the airport firemen and others, and in view of the fact that firefighters did not receive word of the pay offer being made until yesterday, April 14, can the Acting Prime Minister tell the House and the nation why the Treasury Board has been so dilatory in its negotiation procedures
Oral Questions
with economic consequences of such serious implications for a good many Canadians?


Jean Marchand: Mr. Speaker, if the hon. gentleman wants to read this morning's papers he will see that the firefighters are not complaining at all about the Treasury Board or the government. They are very satisfied. The problem is elsewhere.


Mr. Speaker:: Order, please. The hon. member for Esquimalt-Saanich for a further supplementary and then the hon. member for Vancouver South.


Donald W. Munro: Mr. Speaker, I wish to respect your call not to get into debate, but the firefighters have been complaining. Since they are designated personnel within the meaning of the Public Service Staff Relations Act and hence perform an essential service to the Canadian public, why has the Treasury Board been so indifferent to the public in that it did not-


Mr. Speaker:: Order, please. That question is clearly debate. The hon. member for Vancouver South on a supplementary.


STRIKE BY FIREFIGHTERS AT VANCOUVER AIRPORT-CONTINGENCY PLANS OF GOVERNMENT IF NO SETTLEMENT
Mr. John A. Fraser (Vancouver South):: Mr. Speaker, I have a supplementary question for the Minister of Transport. In the unhappy event that this strike is not settled tomorrow as a result of offers being put to these gentlemen, has the government made any contingency plans to put substitute firemen in the airport?


Mr. Speaker:: Order, please. I appreciate the importance of the question, but I am sure the hon. member knows it is hypothetical.


AIRPORTS
Mr.   Sean@: Mr. Speaker, I should like to put a question to the Minister of Transport.
Is he now ready to announce the final decision concerning the proposed development by the government of the Hamilton civic airport situated in Mount Hope?


Jean Marchand: Mr. Speaker, I thank the hon. member for Hamilton-Wentworth for enabling me to speak a bit in French.
As my colleague knows, a study on the Hamilton and Windsor airports is now under way at the request of the parties concerned. As soon as the conclusions of that study are known, I will be in a position to tell the member when a final decision will effectively be taken.


Mr. O'Sullivan:: Mr. Speaker, I should like to put a supplementary question to the Minister of Transport.

April 15, 1974
Oral Questions

When the decision is announced, will it be that of the minister himself or the implementation of recommendations made as a result of the study undertaken by the government?


Jean Marchand: I believe, Mr. Speaker, it will be a government decision, since the airport is under the Department of Transport.


PROPOSAL TO INVITE BRITISH COMMITTEE TO STUDY
Mr.   J.-J. Blais@Nipissing: Mr. Speaker, I have a question for the Minister of Energy, Mines and Resources. [English]
In view of the renewed interest of the U.K. government in Canadian nuclear reactor technology, and in view of the imminence of the decision to be taken by the U.K. Labour government with reference to the choice of a thermal reactor for that particular country, would the Minister of Energy, Mines and Resources consider sending an invitation to the members of the subcommittee of the select committee on science and technology studying nuclear reactor technology, so that they can come to Canada and see our technology and be impressed thereby?


Hon. Donald S. Macdonald (Minister of Energy, Mines and Resources):: Mr. Speaker, some steps have already been taken toward extending an invitation to the British select committee. We would, of course, welcome the British select committee if they want to come here. We would expect and feel we could be assured of the co-operation of the government of Ontario, so that the committee could have them visit the Pickering plant, the world's largest and most successful nuclear station.


PUBLISHING
Mr. Doug Rowland (Selkirk):: Mr. Speaker, my question is addressed to the Secretary of State. It is my understanding that the Canadian Book Publishers Council has made representations to the Secretary of State respecting the announced intention of Houghton-Mifflin Incorporated to expand its publishing operations into Canada, and that the Canadian Book Publishers Council has raised some objections to this intended move. Has the minister received these representations and does he intend to take any action on them?


Hon. James Hugh Faulkner (Secretary of State):: Mr. Speaker, yes, we have received them, but there has been no decision on any action.


Douglas Charles Rowland: A supplementary question, Mr. Speaker. In line with the minister's statement to the Canadian

Book Publishers Council in January that it was his intention to adopt policies which would ensure that a substantial portion of the Canadian book publishing industry remains in Canadian hands, can he indicate to the House what he considers to be a substantial portion and whether this move by Houghton-Mifflin will affect this definition?


James Hugh Faulkner: Mr. Speaker, that tends to be a little subjective and difficult to answer directly. The thrust of my remarks in that speech was to emphasize that the support we are giving to the Canadian publishing industry, which is support for Canadian-owned publishers, is the one measure we have devised to ensure that ownership remains in Canada.


Mr. Speaker:: Order, please. The Chair will recognize the hon. member for Winnipeg South Centre and then call orders of the day.


AIR TRANSPORT
Mr. Dan McKenzie (Winnipeg South Centre):: Mr. Speaker, my question is for the Minister of Transport. In light of reports that air traffic controllers may strike on April 17, what specific action is the minister taking to prevent this from happening?


Jean Marchand: Mr. Speaker, a vote is taking place right now among the air controllers on proposals made by treasury board. I think the results of the vote will be known on the seventeenth. Only after that will we know exactly what kind of decision the controllers are going to take.


Mr. Alexander:: A supplementary question, Mr. Speaker.


Mr. Speaker:: Order, please. We have reached the end of the question period. Perhaps the hon. member for Hamilton West might be permitted to ask one supplementary question, after which we should call orders of the day.


Lincoln MacCauley Alexander: Mr. Speaker, it is a somewhat related question, in that we are dealing with strikes.


Mr. Speaker:: Order, please. In fairness to other hon. members who also perhaps have related questions, I do not think the hon. member should ask his question. If the hon. member had wished to ask a supplementary, I would have recognized him. The hon. member for Central Nova indicated that he has an honest supplementary question. He will be recognized for that purpose.


Lincoln MacCauley Alexander: Mr. Speaker, on a point of order, I heard you use the word "honest" in connection with the hon. member's supplementary. I think, as we are dealing with strikes in a particular area, questions related to the whole area of strikes would be in order. I hope that on this day, when we have extended such great praise to the Speaker, with which I certainly go along, that you will allow me to ask a question with regard to what is happening to our postal service, which affects the consumer.

April 15, 1974


Mr. Prud'homme:: Mr. Speaker, on a question of privilege-


Mr. Speaker:: Order, please. We are getting into difficulty. The hon. member sees what difficulty we get into when members take advantage of the Chair's anxiety to co-operate with hon. members by trying to squeeze in one or two quick supplementaries after the question period has expired. Hon. members will appreciate that the question period expired at 14 minutes after three o'clock. I really think that at this point we should not have either supplementary or related questions if we cannot agree. The parliamentary secretary rises on a question of privilege.


George Albert Proud: Mr. Speaker, I rise on a question of privilege. If the hon. member is allowed to ask a supplementary question on strikes, I should be allowed to ask a question. I understand your difficulty, Mr. Speaker, but I have been getting up ever since the question period started. I accept the fact that others have been recognized before me and I do not quarrel with that. Let me say this however. I have a very important question, as a member from Montreal Island, that has to do with strikes. But I am not going to ask my question-


Lincoln MacCauley Alexander: Why not?


George Albert Proud: Because I have not been recognized yet. But, if Your Honour recognizes the hon. member on a supplementary question that has to do with strikes then, surely, in all fairness-and I know we have all celebrated your great fairness, Sir, and I rejoice in that-you should give me the chance also to direct a supplementary question to the Postmaster General on a very important matter.


Mr. Speaker:: Order, please. I think fairness and wisdom dictate that at this point I should call orders of the day.



GOVERNMENT ORDERS


John Napier Turner: that Bill C-14, to amend the Farm Improvement Loans Act, the Small Businesses Loans Act and the Fisheries Improvement Loans Act, be read the third time and do pass.


Marcel Joseph Aimé Lambert: Mr. Speaker, this bill has been extensively covered in this House both on second reading and in committee, but I make no apology for speaking on it again today because an event arose today which has to do with the bank rate. I referred to it during the oral question period. This points out in a very clear way the sort of band-aid program the government has in mind, if it has any in mind, to deal with inflation.
Loans Acts Amendments
We have gone from one step to another on a purely ad hoc basis.
The minister now says, and the Prime Minister (Mr. Trudeau) finally agrees, that inflation and its inflation psychology is the most serious economic problem facing Canada today. The government reminds me of a doctor who, having been asked to correct a bleeding aorta or another major organ in a man's system which causes blood to come to the surface in large amounts, simply applies a band-aid. When the blood comes out further, he puts on another band-aid. He will either run out of body on which to put band-aids or he will run out of band-aids.
Instead of carrying out the deep surgery that is required on the present economic crisis in this country, the government simply throws up its hands and in excuse says, "Look at all the inflation in other countries of the world." Quoting the Wall Street Journal the other day, the Prime Minister boasted that Canada's economy was much better than any other.


John Napier Turner: Have you read the article? You ought to read the whole thing.


Marcel Joseph Aimé Lambert: That reminds me-and I have used this simile before-of the chap who said, "My, isn't that a great telephone pole you have sticking in your eye." The reason he has difficulty establishing any relationship between himself and anybody else is that he has two fence-posts in his own eyes, yet the man with the telephone pole is supposedly worse off.
It is no comfort to Canadian businessmen, farmers and fishermen who are supposedly to benefit under the act and these amendments that inflation keeps galloping and galloping. It is almost like a terminal cancer growing without control by the government. The minister cannot assert that he is imposing any controls on the growth of inflation on Canada today: the facts are dead against him on that point.
We will see just what is the effect of this change. I want to relate it particularly to this act. I first want to establish something in the mind of the minister, if I can get his attention for a moment. I want to make this point in deadly seriousness for the minister, his advisers and speechwriters. When a question is asked from this side, as I asked this afternoon, that is not to indicate that it is admitted policy or asserted to be policy from our position. The minister has more than once totally misrepresented questions directed to him by the Leader of the Opposition (Mr. Stanfield) and by the hon. member for Don Valley (Mr. Gillies), and he may have done the same with some of mine.
I want to say this. If in asking a question we refer to an existing set of facts, or ask the minister to explain government action in light of something else, that does not mean there is inevitably criticism of the first part or necessarily of the second part. We are asking the minister to explain, as I did this afternoon. I want to make that very clear.


John Napier Turner: It is not the question. It is the preamble.

April 15, 1974
Loans Acts Amendments


Marcel Joseph Aimé Lambert: There was no
preamble.


John Napier Turner: I am not talking about this afternoon's question.


Marcel Joseph Aimé Lambert: There is no question about other preambles either. We have witnessed a beautiful job of taking things out of context, particularly during the question period when one is attempting to elicit information. However, let us look at this in today's context in relation to the bill before us. The minister and the government have the corporate tax cuts as a measure to stimulate employment in Canada and especially to counteract DISC. That was the primary purpose. Certain tax cuts were advocated and put into place for corporations engaged in manufacturing and processing. That is point number one.
Point number two is that the principal beneficiaries are located in central Canada, primarily in Ontario. It is a fact that qualifying manufacturing industries are concentrated in Ontario. The proportion of economic activity tied to manufacturing and processing is highest in Ontario, and to a somewhat lesser degree in Quebec, certainly along the St. Lawrence region and in the city of Montreal, more than in other regions of Canada. According to the minister's survey, these corporations have benefited considerably from this legislation. We will take that as fact number two.
I then come to fact number three. This is where I want the minister to explain the apparent paradox in government policy. On the other hand we have a fiscal measure which is designed to benefit a limited part of the Canadian economy. It is not even across the board or across the country because the effects are not even in all parts of the country. Even in my province of Alberta, where there is a good deal of manufacturing and a wide corporate structure, much of it is related to the oil industry. The oil and natural gas industries are specifically excluded from the minister's fiscal benefits for corporations; therefore Alberta does not benefit from that tax cut to the same extent as may do other provinces.
Let us look at the impact on small business. Even though it may be engaged in manufacturing and processing, it will be much affected by the new bank rate and the new prime interest rate. Let us look primarily at the kinds of small business in those parts of the country where the proportion of the economy of small business of a nonmanufacturing and non-processing character, plus farming and fishing, will be hit by this move today. There are certain factors which, taken in isolation, would justify an increase in the bank rate. As a theoretical exercise it would be perfectly fine. But what is the result when one looks at the whole picture?
This afternoon I invited the minister to give us the benefit of the government's views as to the effect of its latest monetary measure. What effect is this increase in the bank rate and the consequent increase in the prime rate likely to produce? Will it be to slow down business activity, and where and to what degree? I put it to the minister that it will, and that the people who will be hit first and hardest are those struggling in the more disad-

vantaged areas of Canada. In reply to a question this afternoon, the minister indicated that the effect of DREE, the placing of expansion loans in the less economically advanced areas, would be to smooth out some of the rough edges. But with all due respect to the hon. gentleman, he is feeding us a lot of tripe because DREE does not operate that way. DREE itself requires close examination in respect of its economic impact as well as its political impact. In many areas, the only justification I could find for a number of DREE loans is the political IOU's which will be left.


John Napier Turner: That is cynical.


Marcel Joseph Aimé Lambert: I am being practical. One has to judge by results. The minister said something about DREE and the Alberta incentives program. Well, the Alberta program was born out of frustration with this government's oil policy. Another factor was the inflexibility of the corporate income tax structure. The Alberta government has undertaken to establish a corporate tax structure with incentives in order to develop more industry. This was not the result of any positive action by the government opposite. And when we consider the program will not be effective until 1977, I cannot understand how the minister could relate it to the increase in the bank rate just announced, and that is what I was talking about.
The minister spoke about the establishment of a petrochemical industry in Alberta. When cabinet ministers make statements like that, we realize how divorced they are from the situation in Alberta. I dare say that outside the area of Sarnia, Ontario, the constituency represented by the hon. member for Edmonton-Strathcona (Mr. Roche) and the one represented by my hon. friend from Pembina (Mr. Hollands), have as high a concentration of petrochemical plants as any region in Canada, if not higher. And there are more going in. This will lead to the establishment of a petrochemical industry, the minister says. Mr. Speaker, all we can hope from the present government is that it does not act in such a way as to hinder the proper development of the petrochemical industry.
A number of hon. members taking part in this debate have spoken about the inadequacy of the ceilings on these loans. I would point out that the loans are not coming from government funds. For example, loans under the Small Businesses Loans Act are made by the chartered banks and so are loans under the Farm Improvement Loans Act. Now the treasury branch of Alberta has been brought in. If I might be allowed to reminisce for a few moments, it occurs to me that somebody by the name of William Aberhart must be turning in his grave.


John Napier Turner: He must be smiling.


Marcel Joseph Aimé Lambert: I remember that in the years between 1935 and 1940 there was no deadlier enemy of William Aberhart than the Canadian banking system. I recall the criminal libel trials about the bankers' toadies. Now the Alberta treasury branch, established under the aegis of the government he then led, has achieved almost the status of a bank. As time goes on, strange things happen. The only reason for this piecemeal recognition of the Alberta treasury branch and other quasi-banks is that the federal government did not have the backbone to
April 15, 1974

insist that all instituttions which carry on a banking function are caught by the legislation dealing with deposit insurance.
The sooner a government at the federal level recognizes that we should deal with banking and credit in this country on the basis of totality, the better. As things are, the chartered banks and a few other institutions are the only institutions qualified to lend under the Farm Improvement Loans Act. Yet the chartered banks hold only 37 per cent of the deposits in the country. All the other depositreceiving institutions carry on banking functions to a greater or lesser degree. The government refuses to recognize this fact by introducing appropriate banking legislation to deal with all institutions which engage in the business of banking. There are many shortcomings in the banking system, but that is a subject for another debate.
I come back to the point I was making. I hope the minister will intervene at this stage of the bill and turn his attention to the paradox which has resulted from the monetary action taken by the Bank of Canada and approved by the government as it affects fiscal measures in other areas. Perhaps he can explain this paradox. If he can, so much the better. I am not trying to make him look like a chump who has failed to do his homework.


Frank Howard: Mr. Speaker, when the bill was being considered on second reading we were debating it, as we were on other occasions when these acts were sought to be amended, on a rather narrow base, namely, the specific application of, say, the Fisheries Improvement Loans Act to fishermen or the application of the Farm Improvement Loans Act to farmers, as the case may be. I think it was demanded of us that we do this because of the very nature of the bills presented. It is difficult to get into a far ranging discussion of banking, banking institutions and interest rates and their effect on the economy, but I think the provisions of the bill are sufficiently broad to permit us to ask ourselves what it is we are trying to do.
I got the impression from the answers the Minister of Finance (Mr. Turner) gave the House today to various questions about the decision of the Bank of Canada to raise the interest rate, the government's policy, and so on, that he was saying he really was not able to deal with the situation, that he was unable to cope, that there was no mechanism by which he could do anything, or very little, to correct the situation. The minister spoke about Eurodollars, other countries seeking to go in for deficit financing as a result of oil prices having gone up, about the way all of these factors throughout the world have injured poor Canada, and that the poor Minister of Finance was helpless in face of these pressures from outside.
On the other hand, I got the impression that the minister was not really interested in trying to do anything about the situation, that he was content to maintain in Canada an arrangement whereby basic decisions concerning fiscal policy are made by the private chartered banks and lending institutions, not by the Bank of Canada even though the Bank of Canada has some authority in law to establish interest rates.
Loans Acts Amendments
I have listened to advice given me at different times, from the time when Donald Fleming was minister of finance in this House, and he and other ministers of finance gave us the same kind of responses we are now getting when we ask questions about banking and interest rates. The theory usually advanced is that the economy is moving at too fast a pace; therefore it needs to have its pace slowed down. The mechanism for slowing it down is to increase interest rates. The Bank of Canada does this by declaring that the pre-discount rate will be at a certain figure. This is a signal to the private chartered banks and other lending institutions, on a kind of rub-off basis, to raise their interest rates on the theory, so we are told, that if it costs more to borrow money, then those who are contemplating borrowing, either for consumer or business expansion purposes, will think twice. These people will say to themselves, "The interest rate has gone up one-half of one per cent and therefore it will cost me too much money to do what I plan to do and I will not borrow money". The theory is that the economy will then slow down a bit instead of moving ahead at an accelerated rate.
It seems to me that the Bank of Canada has engaged in this practice dating from the historic tight money days of the Liberals in 1955 when Walter Harris was minister of finance.


Mr. Barnett:: That was 1956.


Frank Howard: My colleague from Comox-Alberni (Mr. Barnett) tells me that was in 1956. But from reading about and watching events at the federal level before I entered the federal scene myself, any attempts by the Department of Finance, or the minister of finance, or the government, or the Bank of Canada, to slow down the economy by raising interest rates were defeated at every turn by the chartered banks themselves.
This was because, as a companion piece to the Bank of Canada raising the interest rate in order to slow down a heated economy, the chartered banks would embark upon an advertising program to promote the borrowing of money at the higher interest rate, and they succeeded in getting people to do so. So whatever value there was, in the theoretical sense, in slowing down the economy by raising interest rates, it was negated by the very group they were trying to regulate.
Let me give the House a personal example of what I mean. Recently I walked into the Bank of Montreal just across Wellington Street-though you can walk into any branch of the Bank of Montreal and get the same experience-and saw pretty girls running around with big blue buttons on which is written, "Talk to me". Well, Mr. Speaker, I am just like a lot of others; when I see a pretty girl wearing a button with that inscription, all sorts of visions flash through my mind and I want to talk to her. I asked her, "What do you want me to talk to you about?" She replied, "A ski loan. We will lend you the money to buy skis, to buy ski boots or to pay for your ski lodge fees". I told her I did not ski, so she said, "Then we will lend you money for a car, a house, a fur coat, anything at all". The motive was to promote the lending of money and at a higher interest rate, thus defeating the government's attempts to try to slow down the rate of lending.

April 15, 1974
Loans Acts Amendments
There has been a steadily increasing per capita debt in this nation that has been escalating at fantastic rates in recent years and at a steadily increasing rate of interest. An increase in the interest rate of one-quarter or one-half of one per cent has deterred no one, and neither will this one per cent increase in face of the promotional and advertising campaigns embarked upon by the banks to defeat the very intention of the Bank of Canada and the government of Canada.
The result of all this-and this is something that seriously affects small businessmen, farmers and fishermen whom we are discussing in this bill-is that a printing mechanism, a mimeographed system of increasing the money supply, is set up.


Mr. Blenkarn:: You'd better believe it.


Frank Howard: My hon. friend in the Conservative Party says I had better believe it, and I do believe it. It has been in existence for at least 20 years to my knowledge, and it was something that was not debated at all during the historic period from 1958 to 1962. The latest figures on the increase in the money supply that I have end in September of last year, though the latest figures go to the end of the quarter ending in December of last year. However, the increase in the money supply over the past year has been something between $6 billion and $7 billion.
Common sense tells us that if the printing presses are running off more $20 and $10 bills than can possibly be absorbed by the rate of production, those bills already in existence are going to lose value. The more money in existence, the less the purchasing power of each and every dollar. I am sure hon. members recall a situation that occurred in Hong Kong some years ago where people were depicted walking down the street with a wheelbarrow piled high with money in order to buy a packet of cigarettes. Apparently the same situation existed in Germany when they tried to deal with the question of loss of purchasing power by printing more money. This resulted only in destroying that which they were attempting to correct. This is the situation we have in this country. We simply cannot afford this kind of luxury.
I would refer to the responses of the Minister of Finance to questions asked today. I submit that the question period does not give the fluidity necessary for a full examination of this question because it places the minister, as I have said on other occasions, or any minister in the position of having the last word in respect of any question and, therefore, in the position of being able to say whatever he likes, to not say what he does not want to say, or to fob off a question or in response to a question to make some declaration he wishes to get across. That is what the minister did today. He did not attempt to deal with the very serious situation facing us if we permit this type of fiscal activity to continue. The minister said he was concerned about the money supply and would permit it to increase only to the appropriate level, not too much but just enough, with no indication of how much is too much.
The minister had no idea on this point because it is the banks which decide what the money supply will be. That decision is made on the basis of how much money they can

lend at the stroke of a pen, or push off on people who are willing to borrow. It does not matter what the interest rate is, because the bank does not lose. If the bank has to pay out, in some cases, 8 Vi per cent for term deposits, it gets it back again on the money it lends, plus another 2 per cent or 3 per cent in order to have a profit and to set aside some additional money to lend and increase the fires of inflation even more.
With regard particularly to this bill and the extent it covers the situation we have before us, we do not have anything before us at this time to try to handle the total mess we are in financially. We do not have before us any amendments to the Bank Act for consideration, which might permit us to deal with the major question. We have before us a bill which relates to fishermen, farmers and small businessmen. I do not intend to repeat the speech I made the other day, except to say that it is our responsibility to establish a fixed interest rate if through this bill it is our intention to guarantee loans. The banks and the lending institutions cannot lose in this situation, and we owe it to the people who borrow under this legislation to say to them that they shall be able to do so at a fixed rate of interest.
I think a rate of 6 per cent, while an arbitrary figure, is sufficient. This should be written into the legislation. We should also write into the legislation a provision that a lending institution shall not deny an application for a loan except for good and valid reasons concerning the viability of the person seeking to borrow. It should not be denied on the basis that the interest rate is not high enough and that the lending institution therefore will not earn sufficient profit. Farmers, fishermen and small businessmen particularly are groups which deserve more than any other group in society because they have no leverage. Certainly after the decisions which were made over the weekend, and the discussions in the House today, I am sure there will be support from all corners of the House for the following suggestion. It seems to me we should write into this bill a fixed interest rate and should also write into it a provision that a lending institution cannot deny a loan except on a good and valid business basis.
In order to do this, I think it would be necessary to revert to committee of the whole. The clauses in which I think this could be done are Nos. 2, 7 and 9. If we move forward in this respect, it might be necessary to make companion amendments to other clauses when we reach that stage. In order that we might fix the interest rate to help farmers, fishermen and small businessmen, I move, seconded by the hon. member for Comox-Alberni (Mr. Barnett):
That Bill C-14, an act to amend the Farm Improvement Loans Act, the Small Businesses Loans Act and the Fisheries Improvement Loans Act, be not now read a third time but that it be referred back to a committee of the whole for the purpose of reconsidering clauses 2, 7 and 9.


Mr. Peter Reilly (Ottawa West):: Mr. Speaker, naturally I did not know an amendment would be moved at this stage by the hon. member for Skeena (Mr. Howard). I find myself in the position of talking about it without having had too much opportunity to find out what it is all about. However, I gather from the remarks of the hon. member that principally he would like to establish a fixed rate of interest. I would be hard pressed to find myself in dis-
April 15, 1974

agreement with that feature of his amendment. My colleagues say, "Go the whole way". All right; we will go along with the amendment in respect of a fixed interest rate.
Mr. Speaker, I have a few points which might lead to improvement of this bill. Principally, the bill sets out four areas in which it would amend existing legislation. First, it would raise the limit of .eligibility for loans under the legislation for firms which write from $500,000 worth of business annually up to $1 million worth of business. Second, it would increase the total amount of money that could be outstanding in the name of any borrower at any one time from $25,000 to $50,000. Third, it would make new businesses eligible to borrow money, which is secured by the government. Fourth, it would provide that business improvement loans include the purchase of land in respect of the establishment of a business.
The hon. member for Skeena spoke about the financial mess we are in. He is right; we are in a financial mess. Questions were asked during the question period about the decision of the Bank of Canada to raise the interest rate. If I might boil down the words of the Minister of Finance (Mr. Turner), the answer was that it seemed advisable to do so. But I believe there is a very good reason the Bank of Canada found it desirable to raise the interest rate. It raised the interest rate in order to restrict borrowing. I think one simple reason the Bank of Canada found it necessary to take this step is that in recent weeks there has been an unparallelled rush on the money supply by borrowers.
Within the last couple of weeks there were loans to one or more chartered bank from the Bank of Canada amounting to $60 million which normally would have been repaid within a few days, but within a few days that loan was increased to $65 million and ultimately to over $70 million. This is because there was pressure on the chartered banks by borrowers because the money supply was drying up.
In the month of March, lending by chartered banks rose by double the amount that was lent in January and February. Obviously, the reason for this, when you get right down to root causes, is inflation. People are borrowing money to pay off their existing obligations, and they are not saving any money. In my view they are very wise not to save any money, because in the situation in which we live today the man who saves is a fool; he is going to be defrauded of his savings if he leaves them in the bank for only six months. The evidence is there. Statistics Canada has issued another of its doleful reports telling us that clothing is up, food is up, transportation is up, and every single commodity that is a necessary requisite of a reasonable standard of living is going up. As one financial writer put it, the prices of those commodities are reaching escape velocity. It is that reason that has caused the money supply to become short. People put relentless pressure on the banks for loans. And now we have the additional monetary check-the increase in the interest rates.
Against that background we are being asked to consider a bill to help small businesses, to help farmers and to help fishermen. I should like to confine myself to the section of the bill which amends the Small Businesses Loans Act. I
Loans Acts Amendments
have several criticisms of the manner in which that act has been administered in the past and will go on being administered in the future unless there is a change in the attitude of the government and of the minister responsible.
When we assess the value of the act we must first of all determine the extent of its availability to people who require loans. I think it is particularly germane to mention here, as did my colleagues a few days ago, the performance of chartered banks in the field. I will take as an example the year 1972, when we find that the Bank of Montreal made a grand total of 433 loans under this act; the Bank of Nova Scotia made 134; the Royal Bank, 952; the Toronto-Dominion Bank, 181; the Canadian Imperial Bank of Commerce, 358; the Canadian National Bank, 741; others, including credit unions and near-banks, 47-for a grand total of 2,846 loans.
This scarcely demonstrates an overeagerness on the part of chartered banks to participate in this program. This House has heard from more than one member about the lack of enthusiasm demonstrated by banks to lend money under the provisions of this act and how they will steer a businessman, if they can, into more expensive avenues of borrowing. Without proof of that, it is hard to make accusations, but on the evidence that we have it would seem to me, and I think to any reasonable person, that banks are less than enthusiastic about low interest loans.
We have seen that in 1972 the total number of loans was 2,846. In 1973 it was scarcely better; there was a grand total of 3,076. Between the years 1961 and 1973, the first 12 years of experience after the act was made law in 1961, the average total amount lent during those years was $24,286,000. In 1973, the grand total was $31.6 million-once again a very tiny increase over such a long period of time and one which reflects the lack of enthusiasm on the part of the financial establishments to take part in any program which lends money to people at less than the prime or top interest rate.
I think there is a demonstrable need here to make the provisions of this act more available to those who need loans, and this government should take two approaches. The first is a public relations approach and the second is an in-house approach, so to speak. I think the Minister of Finance should consult the heads of chartered banks and make very plain to them the desirability of encouraging the establishment of new, medium and small businesses and the encouragement and development of existing businesses. This is more likely to be brought about under the provisions of an act such as this one than it is when these entrepreneurs are forced to borrow at higher interest rates.
The second thing the minister and his department should do is to make certain that every Canadian is aware of the existence of these provisions. I think there is scarcely a member of the House who will not at least go part way with me when I say that whatever utopian philosophy each of us may espouse for our children and our grandchildren for the year 2050 or whatever, we are faced by the inescapable fact that today we live in a society which, for want of a better term, I will call a free enterprise economy. It is propelled by private industry and private business, and most of that propulsion comes not
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from big business but from medium and small business which, I will point out for the second time in this debate, employs more than 60 per cent of all the people who work in this country. They work for medium and small businesses which employ 100 or less employees.
I suggest that if this country is to move at all, if the economy is to grow and businesses are to expand and create the jobs necessary, then it is that segment of the economy that needs encouragement more than any other at this stage. We have now some 500,000 people unemployed in this country every year. As we know, many thousands more enter the job market and there are no jobs for them. We have been living with this unhappy situation ever since 1969. The hon. member for Skeena spoke about the famous tight money days of the 1950s. I remind him that the latest and most disastrous of all the dangerous economic games that the government can play was embarked upon, not back in the 1950s but in 1969 when the government chose wilfully to go against the advice of all the economists that it paid to advise it on its so-called war against inflation. It chose to ignore advice that if it followed the course it intended to, not only would inflation not be halted but harmful high unemployment would follow.
Of course, the Economic Council of Canada, which was the source of that information, was right. The government chose to go ahead and do what its own in-house people told it to do and the country was plunged into the situation in which we find ourselves today. I suggest that if we are going to get out of that mess, as the hon. member for Skeena calls it, we Vvill only do so by encouraging the entrepreneurs, who provide employment by means of small business, to expand; and they can only expand if they have a ready source of money.
I suggest to the Minister of Finance that he should make all Canadians aware of the fact that money is available not only for existing businesses but for new businesses, because we have to broaden the base. That is a very comprehensive provision in this bill. For the first time, a new business can get off the ground in part by borrowing money guaranteed by the federal government. But that is only if businesses know it is available, and a great many do not know that the present act is there. The responsibility for remedying that lack lies with the Department of Finance. I urge a full-scale public relations campaign to make sure that everybody in this country knows about the act. Every Canadian corresponds with his government at one time or another, and certainly the government is in communication with every manufacturer in this country with relation to income tax, health and welfare schemes and the like. There is no reason why in one of these many mailings full and complete information on this act should not be included.
The segment of the economy which is called medium and small business is important enough now, employing as it does nearly two-thirds of the work force, that it should not have to depend on the good graces of half a dozen different departments and 18 separate laws or programs to deal with its federal government. There are many programs beside this one of which medium and small business could avail itself, but they are not under the one

umbrella. I would suggest to the Prime Minister (Mr. Trudeau), if he thought the country's business was important enough to be here instead of flying off down south-


An hon. Member:: That's a cheap shot.


Peter Reilly: It is nothing of the kind. If it were a cheap shot, it would be only fair play. It is long past the time this segment of the economy ought to have had its own department, its own minister and all these programs under one umbrella.
Mr. Speaker, I think the limit of $50,000 on loans is too low. If I were moving an amendment I would suggest to the minister that the limit be raised to at least $100,000. There is no reason why it should not be. Again, it is the monster of inflation. To a firm that does perhaps three-quarters of a million dollars' worth of business in the course of a year, $50,000 is, to paraphrase a former minister of the Liberal government, nothing more than a drop in the bucket when inflation is making everything ruinously costly. To new businesses and those who wish to expand, $50,000 is not a very significant amount of money.
The cost of industrial land is rising steadily. This act provides, for the first time, that land may be included under the heading of a business improvement loan. Industrial land in metropolitan Toronto now costs almost $100,000 an acre. The time is rapidly approaching when rental accommodation will cost as much as $2 per square foot, according to real estate agents in that city. When you figure rental you have to take the land component as one-third of the cost and that will be up by 50 per cent by the middle of this summer. With land going for $100,000 per acre, I suggest the top limit of $50,000 on this type of loan is not high enough.
The pressure is on for all kinds of money from different sources. Statistics Canada reported a little while ago that a survey of selected lending institutions in this country showed that they had on their books $13.8 billion outstanding to Canadian borrowers at the end of February. Chartered banks general loans went up $370 million in one week alone, the week ending April 3, to a total outstanding on their books of $31.01 billion. In a market like that, I suggest there is an even more palpable need for the medium and small businessman to have a readily available source of money, with a reasonable limit, at a reasonable rate of interest.
The minister said the other day that the volume under this act of the money loaned and the number of loans was increasing steadily and that this showed the good faith of the government and of the banks. The evidence is not, on its face, apparent to me. In 1961, the year in which the act came into effect, there were 2,977 loans, and in 1973 there were 3,076 loans. That is an increase of 99 loans over 13 years. That is really not much of an increase in volume, particularly in an economy which we are told, every time we dare talk about inflation on this side of the House, is booming. I do not believe that is evidence that anybody is terribly enthusiastic about this program or that the government has been pushing it. If anybody bears the responsibility for making this program not only available but known, it is the government which sponsors it.
In summary, Mr. Speaker, I do not have any difficulty in supporting the principles of the bill, but I am in favour of
April 15, 1974

increasing the limit on borrowing to $100,000 rather than cutting it off at $50,000. As I said, I believe this government should attempt to make those who need the money and would borrow it aware of the fact that it is there. Also,
I think there ought to be a fixed rate of interest. I agree with the hon. member for Skeena on that, and I think it ought to be lower than 8V4 per cent or 8!4 per cent.
Finally, Mr. Speaker, as I said before, I believe the small businessman deserves a better deal. I received partial agreement on this from the minister when, as reported at page 1395 of Hansard for April 11, he said:
I agree that the small businessman has a legitimate grievance in this country. He has seen that big government deals with big labour and big business and he really does not have a segment of the government looking after him.
I just repeat the minister's remarks to him and suggest that the government buttress as strongly as they can the need for a special department to encourage the establishment of new, medium and small industry and to help existing businesses expand, thus helping to create the vast number of jobs that are needed if this country is ever to get out of what the hon. member for Skeena calls, picturesquely but accurately, this financial mess.


Charles Joseph Clark: Mr. Speaker,-


Mr. Blais:: Say you like it, and sit down.


Charles Joseph Clark: I think if our function here were simply to tell people we like things and then sit down, we would all be in Barbados today instead of working in the House of Commons.


An hon. Member:: Cheap shot.


Charles Joseph Clark: Mr. Speaker, I am surprised at these comments about "cheap shot", with the Minister of Transport sitting here. I suspect that the cost of an aircraft to go down there and to come back would be far from cheap.


The Acting Speaker (Mr. Boulanger):: Order, please. Under the rules, the hon. member should speak to the subject before us. I ask him to kindly do so.


Charles Joseph Clark: Mr. Speaker, I simply wanted to reply to some of the "cheap shot" comments coming from across the way.
The legislation which is now at third reading stage really tidies up three existing acts, the Farm Improvement Loans Act, the Small Businesses Loans Act and the Fisheries Improvement Loans Act. Yet it will be a mistake to assume that it is nothing more than tidying-up legislation. Some very useful amendments have been brought in and the legislation has been improved in a very real way. With regard to the amendment moved by the hon. member for Skeena (Mr. Howard), it is my impression, as a freshman member, that the amendment may well be beyond the competence of the House to deal with at this stage. I await with interest the ruling which will be made on the point.
It is clear that some real improvements have been made to the bill now before us. I think we all applaud and approve the increase in the ceiling of loans guaranteed
Loans Acts Amendments
under the three categories dealt with in the bill. Certainly I, coming from the sort of constituency I represent, approve and welcome the proposal to extend farm improvement loans to major repairs and overhauls. That will be significant and important to people who make a contribution by engaging in agriculture in western Alberta. I am sure, as my colleague from Ottawa West (Mr. Reilly) mentioned a few moments ago, that the amendment respecting small businesses under which new businesses will be eligible for loans is a very real improvement. This provision will be of considerable advantage in certain areas of the country like my own where great difficulty heretofore was encountered by people who wanted to launch small businesses.
I think the broader definition of what a small business entails will also be helpful. This is a very much more realistic definition than the one contained in the previous act. Naturally, I welcome the evidence that the minister has been taking the advice of my colleagues from Alberta and has included the treasury branches in the list of institutions which are covered by this legislation.
The point which has been made before, and which can be emphasized, is that the increase in the ceiling from $25,000 to $50,000 is, in effect, an indexing operation given the rate of inflation today. The ceiling has not been doubled, in real terms, under this legislation because our rate of inflation is now reaching the two-figure rate. Because of the lack of interest of the Minister of Finance (Mr. Turner) in containing it, it shows every sign of staying that way. It appears we shall have two-figure inflation for some time to come. Instead of doubling the limits on loans which people may need to take out to pay for services, the minister in this legislation in effect has introduced the concept of indexing to enable people to keep up with increased costs they must pay if they are to continue in the fishing operation, the small business or on the farm.
When this legislation has been in effect for some time it will be interesting to review it to see if it is working and if it is helping younger farmers to get into the business of farming. As my colleague, the hon. member for Swift Current-Maple Creek (Mr. Hamilton) mentioned the other night, there is a clear need in this country for reform under which we can extend loans and assistance to young people on the basis of character, not simply on the basis of collateral.
I think all of us who come from agricultural areas are aware of the very serious problem posed for the future of agriculture by the fact that the average age of farmers in this country is just over 50 years. I can remember not so long ago sitting in the living-room of a constituent of mine in Green Court, Alberta. In that room were 14 people actively engaged in farming, of whom only one was under the age of 40. That is the kind of situation we face across this country. One reason is, of course, that it is most difficult for young farmers without large collateral, without wealthy fathers standing behind them, to get started in agriculture.
I think one of the faults of legislation such as this has been that there has not been much interest shown in becoming involved in investments which might contain an element of risk. The provincial government of Alberta has been acting much more imaginatively in this field and has
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been prepared to back certain risk ventures in agriculture involving younger farmers as well as others. I think that will be the only way in which we can overcome this situation, because the consistently high and increasing average age of those who would take advantage of this legislation in Canada entails a situation which contains within it the seeds of self-destruction of the agricultural industry. I hope that after this legislation passes into law we shall have an opportunity of seeing if the changes included in it have encouraged younger people to enter agriculture. Personally, I confess to pessimism on this point; I doubt if we will see that kind of change.
I think most of us hope we can soon pass this legislation into law. It is worth noting that we are here today, and that this legislation has a chance of being discussed and passed into law, only because the House decided to sit this week and not to take a holiday. We are doing our best to get this legislation, which will be of benefit to the farmer, the small businessman and the fisherman, through the House. I think, too, that this bill will be passed more quickly than might have been the case because the House showed the good sense to accept the recommendation of the hon. member for Edmonton West (Mr. Lambert) and consider it in committee of the whole rather than in the standing committee which is already burdened with other responsibilities.
I trust, sir, that the amendment introduced by the NDP will not unduly delay the passage of this legislation through the House after adequate debate. I want to make this point: when the minister was replying to questions the other day and to comments from members on this side, he suggested that the amendments-I think I quote his words correctly-are the result of "a major review of the effectiveness of the programs". I have not had the opportunity to look at the agricultural legislation which was introduced today. I think we will have to see, now that that legislation, or some of it, has finally been introduced, whether there is any relationship between that major review and the effectiveness of programs that cater to small businessmen, farmers and fishermen in this country. It is clear, on the basis of evidence before us, that if there is to be any really major review of the effectiveness of these programs, there will need to be a much more comprehensive range of changes than we see in Bill C-14.
I know that the federal business development bank legislation will be before the House before too long. I know the minister suggested in debate the other day that the relationship between the legislation now before us and the legislation to shear away a portion of the present Industrial Development Bank will be very clear when that matter is before us. The minister perpetually lives in hope. I suppose he now expects us to do the same in relation to the effectiveness and thoroughness of any review that is undertaken of the effect upon people who have to live with this legislation, those whose lives and futures are affected by whatever review he has undertaken.
On the basis of the amendments incorporated in Bill C-14, it is evident there is no major, co-ordinated plan to help the farmers, fishermen and small businessmen of Canada. The point was made before that small and medium businesses in Canada account for 60 per cent of

the employment in this country. Despite that fact, they are virtually orphans in terms of policy. As my colleague the hon. member for Ottawa West pointed out a few moments ago, if we are serious about helping small businessmen in particular, we should draw together the various programs, create new programs and bring them together under one heading so that in fact they will have the same degree of attention that this and other governments have given to larger enterprises.
All members who have been active in their constituencies know that one of the most frequent requests is to help some poor businessman sort out the maze of government programs that may be available to him when he seeks to establish or expand. There is no effective help to members of parliament or to small businessmen in this field. At the very least, the government should be considering a program that would pull together in a cohesive fashion all programs that affect small businesses and small businessmen in Canada. It is important to remember that the small operator, the small businessman or woman, is the chief business victim of the current rate of inflation. Corporations have various means of defence; they can pass on the effects of inflation or obtain compensation in other ways. In nine cases out of ten, the small business operator cannot do that.
Small business operators are the victims of excessive government regulation. They spend literally hours each week filling out forms and reports. This makes their lives much more difficult. I draw to the attention of the House that they are hurt in two ways by this requirement. First, they are hurt because it takes time to fill out forms and provide information for the government. Second, they are hurt disproportionately because they cannot afford experts to find the loopholes, the ways around various regulations which affect them, to find out how particular pieces of government legislation might influence or affect their future. They are not simply the victims of inflation, which is evident, but also the victims of a growing and active government. If we have to resign ourselves to this growth in government we must give conscience to the category of business people, the 60 per cent of employers in Canada, who suffer most particularly from the effects of a large and growing state.
I do not have the figures at hand; as a private member I do not have the competence to gather them. However, given the fact that 60 per cent of the employment in Canada comes from smaller operators, it would be interesting to compare the level of government assistance to this group as against the level of government assistance to the 40 per cent employers represented by the large businesses and corporations of this country. Any such assessment to see whether small operators are being prejudiced should take into account the much greater capacity of large and established corporations, particularly the subsidiaries of multinational corporations, to make use of programs and expertise which exist in order to find their way around regulations which might restrain smaller operators, or to find their way through loopholes that inevitably exist in law.
There is one particular matter which concerns me substantially. When the minister spoke the other night he said he was not prepared to take measures insofar as the effect
April 15, 1974

on small businessmen is concerned to ensure that this loan program is working. He made a simply incredible reply to the hon. member for Carleton-Charlotte (Mr. McCain). The hon. member made the point that there is a very real danger of banks refusing to recommend loans under this program to small businessmen, farmers or fishermen who might become borrowers from the bank at higher rates of interest. The minister was full of indignation, but not full of help: he suggested that the obvious recourse for people so affected would be to tell their member of parliament. The minister is nodding his head in agreement. That is the extent of his policy. That is the extent of his commitment to ensure that this program is not abused by bankers across the country. In light of that answer, it is well to ask ourselves what other legislation is monitored so weakly in Canada that ministers wait for complaints to come from individual members of parliament to see if the program is working. Not very many.
Most members of parliament do what they can to keep in touch with their constituents, particularly those who might have problems with government agencies. Even the hardest working private member of parliament would have a very slight chance of learning of every instance of businessmen encountering this kind of treatment from their banks. For one thing, some businessmen just will not go to their member of parliament, regardless of his party, with information about their private dealings with their banks. This is a very serious weakness in the program that was drawn to the attention of the minister by the hon. member for Carleton-Charlotte. The minister did not give a serious reply. I hope he will reconsider simply relying on the chance that members of parliament will have these matters brought to their attention so they can transmit them to the minister for some kind of corrective action.
One reason I am particularly concerned about the bill before us is that legislation to effect the capacity of farmers, fishermen and small businessmen to obtain loans has special force on a number of Canadians who reside outside our cities. Of course, there are a number of small business operators, men and women, who make their contribution to the growth of the Canadian economy within the cities of Canada. However, it is obvious that this type of provision for loans to farmers and fishermen principally affects the economic vitality of the smaller communities of Canada. Perhaps it needs restating that when assistance is given to a farmer or fisherman to help mount an effective operation, that assistance in effect helps to generate economic activity in the whole of the region where the individual lives.
While there are small business operations aplenty in the cities of Canada, the fact remains that small business is the only business which comes to our smaller communities. This is in part because of an outdated attitude toward the location of industry, an attitude which is equally at fault whether held by members of the government or senior officials of the public service or when held by large companies.
It is a fact of life that when large or medium sized concerns are considering location options, they settle time after time for the large cities. By and large, it is only small businesses which go to the rural areas. Therefore, legisla-
Loans Acts Amendments
tion of the kind before us is particularly important to Canadians who live outside the major cities. I have spoken in this House on other occasions about my feeling that government legislation is weighted, inadvertently perhaps, against the rural areas-that by placing artificial obstacles in the path it decreases the capacity of those areas to grow.
This government, in particular, appears to believe devoutly in the future which its statistics project, that is, a future in which by far the majority of Canadians will be living in a few of our largest urban centres. The fact that the government believes its own statistics means that unconsciously it follows policies in line with such a prediction. I believe such a future is not inevitable for us, but as long as the government accepts this projection as inevitable rural Canada is in danger. Unconscious discrimination against rural Canada has been evident in a number of the measures brought forward since I first came to this House. For example, the new housing legislation was designed to help larger areas; it did not help smaller areas very much.
The sympathies of the government are evident from the attitude taken toward rail abandonment. They are evident also, in the determination shown by ministers to locate penal and other institutions only in the large centres and to ignore the possibility of extending institutional support facilities to some of the smaller places in Canada. They are evident in such small things as failure to inform rural communities of deadlines and guidelines governing LIP applications, assuming that people who live in these communities can learn about such things by reading the metropolitan newspapers or listening to news broadcasts by metropolitan stations. I do not suggest there is any kind of conspiracy against smaller communities. As I say, it derives from the assumption that the future lies inevitably with the metropolitan areas, while failing to acknowledge any capacity to develop a Canadian identity along different lines by encouraging men and women to start business operations in parts of Canada outside the major centres.
We see evidence of the same approach in the legislation before us. It would be impossible to argue that any particular clause in Bill C-14 is directly prejudicial to rural Canada. Nevertheless, the measure fails to recognize that rural areas rely to a far greater extent than urban areas upon small business enterprises. It fails to recognize that time and time again, in the circumstances of today, small business is the only business which locates in these smaller places, giving them an opportunity to contribute to a balanced Canadian identity and a balanced economy.
The concern which should be foremost in the minister's mind during the few weeks in which he is able to hang on to office should be to devise a system which would encourage people to establish businesses in small communities and invest in small enterprises which, at this point, are the only enterprises ready to set themselves up outside the major cities.


Mr. Randolph Harding (Kootenay West):: Mr. Speaker, I intend to take part only briefly in the proceedings on third reading of Bill C-14. It is not my intention to cover all the points which previous speakers have raised. One of the principal changes in the legislation we are considering

April 15, 1974
Loans Acts Amendments
involves the increase in the limit for guaranteed loans under the Farm Improvement Loans Act, the Small Businesses Loans Act and the Fisheries Improvement Loans Act from $25,000 to $50,000. This is certainly an improvement. It is an umpleasant fact that as a result of inflation over the past few years, not very much can be done with the present maximum of $25,000. Even the proposed new maximum is not very satisfactory under present inflationary conditions. One speaker this afternoon thought the maximum amount should be increased to $100,000 and I would certainly endorse such a suggestion.
One important feature has been omitted from the legislation. It has to do with the fixing of the interest rate. The amendment moved by my hon. friend from Skeena (Mr. Howard) would have the effect of sending the bill back to committee of the whole for further study with a view to incorporating into the legislation a change in that respect. One of the most beneficial moves would be to amend the legislation so as to ensure that these loans would be available at a maximum interest rate of 6 per cent. The cost of borrowed capital is one of the heaviest charges which must be borne by any small business. It seems to me that to fix the maximum interest rate at 6 per cent would be a major factor in helping small business ventures to establish themselves or to upgrade their operations. After all, this is the over-all objective of the legislation.
I know of many small business ventures whose owners have worked year after year for almost no reward, principally because of the burden imposed by a high rate of interest on their capital loans. Many proved unsuccessful, and one of the main reasons was the excessively high interest rate charged on loan capital. The same situation is encountered in the farming and fishing industries. In my view, protection against inflationary interest rates ought to be incorporated in this legislation and I urge the House to take action accordingly. I intend to support the amendment and I trust it will be accepted by the minister. In closing, generally I would say this legislation is an improvement over the legislation now on the statute books. It is my intention to support it, and I hope it will be the will of the House to strengthen it along the lines of the amendment.


Donald Alex Blenkarn: Mr. Speaker, earlier I had not intended to speak on this bill, but I am prompted to do so in view of the inordinate increase in the re-discount rate announced over the weekend by the Bank of Canada. This change in the bank rate clearly indicates new government policy. It clearly indicates that the government has unveiled its contingency plan to deal with inflation, and the contingency plan is the same plan used with gusto in 1968, 1969 and 1970 in the famous war on inflation. This is the contingency plan which attacks the business community with a meat-axe, increasing interest rates across the board, raising them higher and higher to tighten money supply, without regard for who is hurt.
When the Minister of Finance (Mr. Turner) was asked today what would likely be the interest rate charged fishermen, small businessmen and farmers, he said it would have to be an interest rate high enough to attract money. Clearly the Minister of Finance has unveiled his contingency plan, the plan we have asked about for over a

year. This contingency plan is Liberal tight money- Turner tight money, if you like. It is the kind of plan we are likely to see when the Minister of Finance produces his budget a month from now or maybe longer. This is why I rise today, Mr. Speaker. The problem that small businessmen, fishermen and farmers face when money gets tight is that they are cut right off because they do not have enough influence with the banks to swing a loan. You can have all the guaranteed plans that you want, but they will not get a loan.
The hon. member for Kootenay West (Mr. Harding) suggested 6 per cent loans for these people. The minister himself indicated today that interest rates will have to be high enough to attract funds. What does this mean, Mr. Speaker? It means, for the small businessman who is trying to become established, a loan under the terms of the act at 9 per cent, 10 per cent or 11 per cent. When members of the New Democratic Party talk about 6 per cent mortgage loans for housing and for small businessmen, fishermen and farmers, they are talking through their hats, because the government does not care about these people. They will let interest rates rise in order to tighten the money supply, because that is their method of controlling inflation. They tried it before, and with some success. They put a lot of people out of work but the inflation rate was lessened. I suggest this is a pretty serious meat-axe method, but it looks as though this is the contingency plan with which the country is faced.
This bill is, in a sense, an indexing bill. I am going to speak today mainly about the Small Businesses Loans Act. The original act provided for a $25,000 maximum loan for small business: this is being increased 100 per cent, to $50,000. In 1961 a dollar would probably have bought twice as much as today's dollar, so all the government has done is increase the limit of the loan. The existing act fixes gross revenues at $500,000; this bill fixes them at $1 million, double the previous amount. In other words, it is doubling legislation, indexing legislation. The bill is trying to make small businessmen, small fishermen and small farmers think they are getting something when they are not really getting anything at all.
Under the Small Businesses Loans Act there were some 2,800 loans made in 1972 in all of Canada. The minister says with pride that over 3,000 loans were made in 1973 in all of Canada, roughly 600 of which were in the province of Ontario. With the number of branch banks, savings offices and credit unions in Canada today, this amounts to much less than one loan per office. The government has not promoted this legislation at all but has placed it on the shelf. It says it is doing something for small businessmen, farmers and fishermen, but the truth of the matter is it has no intention of doing anything. The government will never tell anybody about the legislation and the government will make sure the banks never tell anybody either.
The fact that only some 2,800 loans were made in 1972 is a pretty good indication that the act has not been used to help small businessmen. No real effort has been made by the government to help small business. The provisions of the act are purely cosmetic. The government will say on the election brochures which it will be issuing in a week or so that it has done something to assist small businessmen, and their speakers will stand on platforms and say
April 15, 1974

what great guys they are. But let the people read today's Hansard and learn there was less than one loan per bank.


Jack Marshall: Only two in Newfoundland.


Donald Alex Blenkarn: Two in Newfoundland, my colleague from Humber-St. George's-St. Barbe (Mr. Marshall) says. That is the kind of help small businessmen get from this government.
If we are going to have a tight money policy in the country, which is clearly the contingency plan of this government to fight inflation, then the provisions of this bill must be changed or the Minister of Finance must issue a new statement of policy that will allocate credit. This business of tightening up the money supply so that all the little guys get hurt is no way to manage an economy. If there is too much credit buying in this country and we must cut down on the amount, then surely to goodness it is the obligation of the government to crack down on speculative real estate, to cut down on some of its own waste and expenditure, and to make sure that the small businessmen, fishermen and farmers have sufficient cash to get along with, which means that the government must introduce an allocation system. This is what the minister should be proposing today.
I see it is five o'clock, Mr. Speaker. May I call it five o'clock?



PROCEEDINGS ON ADJOURNMENT MOTION


The Acting Speaker (Mr. Boulanger):: Order. It is my duty, pursuant to Standing Order 40, to inform the House that the questions to be raised tonight at the time of adjournment are as follows: the hon. member for Champlain (Mr. Matte)-National Revenue-Report that certain Quebec oil companies did not pay federal income tax last year; the hon. member for Mississauga (Mr. Blenkarn)-Consumer Affairs-Advertisements for sale of houses in Toronto area-Contracts whereby builder can change price and mortgage terms.
It being five o'clock, the House will now proceed to the consideration of private members business, as listed in the order paper, namely notices of motions.
Newfoundland Ferry Service



PRIVATE MEMBERS' MOTIONS


Jack Marshall: That, in the opinion of this House, the government should consider the advisability of introducing legislation implementing its constitutional responsibility, guarantee and obligation to ensure continuous and uninterrupted transportation service for persons, goods and vehicles to and from Newfoundland and the mainland of Canada.
He said: Mr. Speaker, I am glad to see that my notice of motion is so important that the Minister of Transport (Mr. Marchand) felt it necessary he appear here in person. Perhaps it is because he does not think his parliamentary secretary can give me the proper reply.
Mr. Speaker, my private member's notice of motion is similar to one introduced last week by my colleague, the hon. member for St. John's West (Mr. Carter). Under the terms of union between Newfoundland and Canada a guarantee was given to the province as follows:
Canada will maintain, in accordance with traffic, offering a freight and passenger steamship service between North Sydney and Port-aux-Basques which, on completion of a motor highway between Corner Brook and Port-aux-Basques, will include suitable provision for the carriage of motor vehicles.
For the purpose of railway rate regulation, the island of Newfoundland will be included in the maritime region of Canada, and through traffic moving between North Sydney and Port-aux-Basques will be treated as all-rail traffic. All legislation of the Parliament of Canada providing the special rates on traffic moving within, into, or out of, the maritime region will, as far as appropriate, be made applicable to the islands of Newfoundland.
These terms were signed 25 years ago, and in those 25 years the progress made has been insignificant because we are not much farther ahead today than we were a quarter of a century ago.
Because of a lack of projected planning concerning transportation needs, we have had a series of emergency situations which arise each year due to the lack of foresight.
I am sure that when the member for St. Boniface (Mr. Guay) replies, he will list all the great things the Ministry of Transport has done over the years. He will mention the new ferry that is being built at a cost of many millions of dollars. He will talk about the transportation studies, but he will not convince me that the progress over the 25 years since confederation has resulted in anything but an inefficient transportation policy, that even his minister admits has prevailed over the years.
The government is still blind to the fact that the economic development of Newfoundland will never be achieved unless transportation is treated in a manner which recognizes the geographic isolation of the island. This focuses attention on the need for improvement in port facilities, the lack of which presently deters the industrial expansion which could take place because of the richness of the province's natural resources.

April 15, 1974
Newfoundland Ferry Service
The western part of the province which I represent possesses unlimited natural harbour potential at Corner Brook, which is the hub for transportation of goods and services to the great northern peninsula and Labrador, and is in a direct communication link with Montreal from which the bulk of goods are shipped. It has been a most frustrating experience to get the government to allocate enough funds to provide reasonable harbour facilities.
In 1969, after many years of begging and cajoling, the government finally provided improved port facilities, but to emphasize the lack of planning, by the time it was completed, because of the steady build up of traffic it could not meet the needs for which it was designed. Now, finally, the government has agreed, after more begging, to increase shed space, and reluctantly has included some $200,000 to make a start on additional storage space. Hopefully in future years, as the need requires, another $800,000 may be provided.
The western part of my province has a development potential which should be looked at with the highest priority.
Consistent with the development of the port of Corner Brook is the need to look seriously at the continual expansion of that whole area, along with the adjacent Curling waterfront, where private initiative has supported the development of the fishery. This, tied together with the infrastructure support for the vast pulp and paper industry, warrants a determined consideration by the Ministry of Transport to coordinate with the province a transportation base which is vital to development of that part of the province. In addition the establishment of a linerboard mill just 50 miles from Corner Brook emphasizes the need to treat with the highest priority the further development of Port Harmon to ensure the success of access in and out of the Stephenville mill.
The government should be looking right now, in its reorganization of Atlantic ferry and coastal services, at the need for direct service from Port-aux-Basques and North Sydney to the Bonne Bay area to develop further the tourist potential of the Gros Morne National Park. Even with the additional ferry boats that the parliamentary secretary will tell us about, the service will not be able to cope with the influx of tourists who, hopefully, will be taking advantage of the unique beauty of this party of Canada.
On October 12 the Minister of Transport (Mr. Mar-chand) and the Minister of Regional Economic Expansion (Mr. Jamieson), together with the President of the CNR, announced with great fanfare this reorganization and its major objectives of coordination, improvement and expansion of the present ferry and coastal services to meet expected increased traffic demands in the years ahead, as well as the immediate unprecedented influx of traffic which the present system is attempting to handle.
None can quarrel with the words used by these three knowledgeable gentlemen. In the news release the Minister of Transport said:
The creation of the new CN ferry and coastal operation is coupled with the Ministry of Transport plans for the purchase of new vessels and the construction of new terminals and passenger/cargo handling facilities. The fact that ferry and coastal services will continue to be a vital component of the transportation network has been amply demon-

strated by the tremendous increase in demand upon the services in recent years.
Then we had this statement by the Minister of Regional Economic Expansion:
... In addition to initiatives required to take care of the immediate needs, there was an obvious necessity for an overall programmed expansion of the services to meet the needs of regional growth in industry, commerce and tourism.
I can only wish this new organization well, but hope that the studies promised will be produced, and that when the recommendations are produced to provide the facilities we will not hear more tales of woe explaining that there will be deferment because of lack of funds.
One of the studies in which I am sincerely interested is the one on the Newfoundland-Labrador service, a service vital to the well-being of the inhabitants of that land mass. The meaningless contribution made by the federal government to that part of Canada justifies the use of the well-worn phrase "second class citizen treatment" when applied to northern Newfoundland and Labrador.
Apart from the complete lack of communication between northern Newfoundland and Labrador, other than the existence of a dirt road, the lack of development input to this part of Canada is nothing short of disgraceful. Certainly the northern vision does not include northern Newfoundland and Labrador, and this lack of vision is apparent in the CBC's aim to provide television and radio communication to only 98 per cent of the country. The CNT facilities still leave much to be desired in view of the fact that it is impossible on most days to communicate by telephone with citizens in the north, people who pay exorbitant rates to hear nothing.
Perhaps it is time for a change in the ministers who are responsible for that part of Canada, and I wonder if the Minister of Indian Affairs and Northern Development (Mr. Chretien) might not consider taking over this responsibility.
Priority should be given to some meaningful exploration of the possibility of linking that part of the country with the national park area by continuing the construction of a decent highway to meet the proposed Labrador-Quebec highway. Also, consideration should be given to the proposed development of the lower Churchill to bring power to Labrador and Newfoundland. The Ministry of Transport should consider very seriously the establishment of a ferry service to cover the 10 to 11 miles between these two land masses. This should include other departments concerned, and should be undertaken in consultation with the province. The other ministers responsible would be the Minister of Energy, Mines and Resources (Mr. Macdonald), the Minister of Regional Economic Expansion (Mr. Jamieson), and the Minister of State for Science and Technology (Mrs. Sauve).
But the main point of my motion is to put on record the failure of the government to comply in a meaningful way with the Terms of Union Statement No. XIV indicating that after the date of union the CNR would be entrusted with the responsibility of operating the Newfoundland railway and coastal steamship services and that it would be their responsibility to ensure that the services fur-
April 15, 1974

nished were commensurate with traffic requirements. This they have not done in accordance with their commitment. What is most important, they are breaking faith with this commitment by abandoning the rail passenger service against the wishes of the majority of Newfoundlanders.
On a couple of occasions the minister has hinted that some reconsideration will be given to reviewing that decision regarding the rail passenger service. Certainly I hope that the study of transportation in Newfoundland will be expanded to a review of the need to fulfill the national dream which would provide a rail service from coast to coast. This service should not be from Vancouver to Halifax only, but should include all of Canada and thus cover the area from Vancouver to St. John's, Newfoundland.
I am sure that the minister, who has shown evidence of sincerity, agrees with me that the transportation policy leaves much to be desired-and here I am being kind. I hope that he will heed my remarks, and I am sure that his very capable parliamentary secretary will be able to give me the answers to the questions which I have put, and that a proper transportation service between the province of Newfoundland and mainland Canada can be assured.


Joseph-Phillippe Guay: Mr. Speaker, first of all I would like to let it be known to you and to the House that Newfoundland will not be left aside. Newfoundlanders will receive consideration, as does any other part of the country, with regard to their transportation problems. That is under study at present.
What I would like to point out to the hon. member for Humber-St.George's-St. Barbe (Mr. Marshall) is that the government will not try to minimize in any way the fact that the disruption of the ferry service between Newfoundland and the mainland creates a serious problem. This we recognize. But I would like to say to the hon. member that it appears from his motion that what he wants is to take away the right to strike from the employees of the ferry service.
Is he really serious when he says that he wants to take that right away from them so soon after we have given them that privilege? This motion involves many more people. It involves dockers and those working on the wharves. If that is what the hon. member wants, let us hear from his leader, and let him inform the public that his party wants to take away the right to strike from the employees.
Is it also the policy of the hon. member for St. John's East (Mr. McGrath) to take away that right from employees of the ferry service? If it is, then he also should go on the record and say plainly and clearly to people in Newfoundland that both he, the hon. member for Humber-St. George's-St. Barbe, and other members from Newfoundland-


The Acting Speaker (Mr. Laniel):: Order, please. The hon. member for St. John's West wishes to rise on a point of order.


Mr. Carter:: Mr. Speaker, the hon. member for St. Boniface (Mr. Guay) is deliberately trying to mislead the House. He is pointing his finger at me and calling out my
Newfoundland Ferry Service
constituency. He is saying that we are trying to prevent people from striking. In my motion last Monday I made no reference whatever to the right of people to strike, nor did I suggest in my speech, or in my motion, nor indeed does the motion of my colleague, the hon. member for Humber-St. George's-St. Barbe-


The Acting Speaker (Mr. Laniel):: Order, please. I am sure the hon. member would not ask the Chair to ask the hon. member for St. Boniface to withdraw his remarks. What has taken place is a debate, and this is the purpose of this assembly. I know the hon. member will want to contribute to the debate later this afternoon, and he will have the opportunity then to rebut the comments of the hon. member who is speaking.
Unless the hon. member can prove to the Chair that his honour, his rights or privileges as a member of parliament have been affected, I think we should allow the parliamentary secretary to complete his remarks.


Joseph-Phillippe Guay: So far I have not mentioned the hon. member for St. John's West (Mr. Carter), but now I will name him with the others if he feels the same way as does the hon. member for St. George's-St. Barbe concerning the taking away of the right to strike from the ferry employees for the purpose as he says, of having a better ferry service, and I will not withdraw the previous remarks I have made.


Jack Marshall: Mr. Speaker, I rise on a point of order. I wish the hon. member for St. Boniface would use the correct nomenclature of my constituency which is Humb-er-St. George's-St. Barbe.


Joseph-Phillippe Guay: I will do so, Mr. Speaker. If it is their policy, and if it is also the policy of the Official Opposition to take away the right to strike from employees, they should place it on the record of this House, and also say it to the people in Newfoundland, so that we will know that they do not speak with two tongues, one in their constituencies and one in the House.
It is about time that people heard what the Official Opposition says both inside and outside the House, as well as individual members in their constituencies.
What does the hon. member want to do? Does he want to take away the right to strike of the employees? And if they strike, does he want them placed in jail? If that is the way they want it, again they should say that that is the policy of the Conservative Party and go on the record as saying it, and not put it in the broad terms of the motion before us. May I say further, Mr. Speaker, that it is not the policy of this government to take away the right to strike from the employees.
The government would certainly not entertain the idea of doing what the hon. member is suggesting, and that is to interfere with the right of the workers to strike, a right which was accorded to them as part of the free collective bargaining process.
The federal government recognizes the desirability of maintaining regular service between Newfoundland and the mainland, and would like to prevent problems involv-
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April 15, 1974
Newfoundland Ferry Service
ing the railway system spilling over to the ferry system merely because both are operated by the Canadian National Railways. As a first step the East Coast Marine and Ferry Service was recently set up as a separate entity within the Canadian National organization to handle ferry matters. This new body has now begun negotiations with the various unions representing employees in the ferry system, with a view to finding some mutually acceptable means of limiting strikes against the ferry services.
In the fall of 1972 a team of Canadian National and Department of Transport officials began examining the original structure of the east coast ferry service to Newfoundland and Prince Edward Island, and considering alternatives. Among those considered were: creating a separate entity for the ferry service that would report to the Canadian National Vice President responsible for the Atlantic region; creating a separate Canadian National subsidiary with its own board of directors; creating a Crown corporation, or incorporating the ferry service in the public service.
On October 12, 1973, the Minister of Regional Economic Expansion (Mr. Jamieson), the Minister of Transport (Mr. Marchand) and Mr. McMillan of the Canadian National announced the creation of a new east coast ferry management structure, based at Moncton, New Brunswick, with operating units in Newfoundland, Nova Scotia, and Prince Edward Island, and responsible for all ferry and coastal services operated by Canadian National for the Department of Transport.
A significant feature of this reorganization was the creation of a directing committee for the new administration, composed of senior transport officials and Canadian National officials. The major objectives of the new administration were co-ordination, improvement and expansion of the present ferry and coastal services to meet the expected increases in traffic demands.
It should be noted that under all of the alternatives employees would either have, by law, the right to strike or be able to choose the right to strike as a means of dispute settlement. Is this what we want? Does the motion mean that we should take this away from them?
Even if the various ferry services could be declared essential, I cannot see much point in trying to bring in legislation which would prohibit strikes. There is absolutely no way of ensuring that employees under certain conditions might not find it necessary or desirable to initiate a work stoppage. We should remember that in the last strike situation affecting the ferries the government succeeded in obtaining the agreement of the union leaders that ferry services would be maintained, but their own men rejected the call of the leaders and the guarantee evaporated.
It has been suggested again and again that rather than have a shutdown of ferry service the armed forces should be called in to keep the services running. This has been suggested many times. This seems to me to be a counsel of despair, but fortunately it could never be considered as a viable alternative. For one thing, by law only qualified seamen can operate a passenger vessel, and the appropriate skills and qualifications are not easily found in the armed forces. Furthermore, the law also requires that ships be manned by officers holding certain certificates,

and these are not available in the military. Most of all, however, the government would not be easily disposed to using the military as strike breakers, when the right to strike was itself given by parliament.
I would like to repeat that the Minister of Transport has said on many occasions-including some in this chamber-that if the members want to abolish the right to strike they will have to do so on their own, since the government has no intention of taking such action. I said before, and I should like to repeat, that if the hon. members from Newfoundland and their leader have that policy in their party, they ought to say so and not come in the back door.
I cannot resist at this point drawing the hon. member's attention to the evidence of how seriously the government is trying to live up to its commitments under the terms of union. Detailed planning is already under way for the design and construction of new ferries in Canadian shipyards, and in the interim the government has spent considerable amounts of money on chartering vessels to make sure that all traffic offering can be handled in accordance with the terms of union.
The traffic growth to Newfoundland jumped from an average of 5 per cent a year until 1971 to 14 per cent in 1972, and it has required considerable effort and money to keep up with this sort of growth. I am most pleased to say there is that kind of growth in the area. I am following it much closer than the hon. member for St. John's West (Mr. Carter) may think, Mr. Speaker. I think I am quite aware of what is taking place in his province.
Today on the Newfoundland run we have eight vessels regularly employed. They are the William Carson, Leif Eriksson, Ambrose Shea, Frederick Carter, John Hamilton Gray, Stena Carrier, Stena Seatrade and the Princess of Tasmania. In addition, to clear up the backlog resulting from the 1973 strike, the Stena Trailer and the Jarl Transporter were taken on short term charter.
The replacement of the Lucy Maud Montgomery on this service by the larger chartered vessel the Princess of Tasmania, combined with additional weekend sailings, has helped to provide an increased capacity to handle the growth in highway traffic. In order to eliminate the railcar backlog experienced in the last two years, a railcar carrier the Stena Seatrade has been chartered for two years as of last fall, and tenders have been called for a Canadian built vessel of this type with expected delivery late in 1973.


Jack Marshall: Too late! You should have done it ten years ago.


Joseph-Phillippe Guay: The hon. member says it should have been done ten years ago. Maybe so! The fact remains that it is being done. It takes time, but it is coming and you will get exactly what you are asking for. At least you know it is coming, but the opposition never mentions that these things are taking place and neither do they mention the cost of them. I think it should be repeated many times that this government has taken the initiative to have the ferries built which will benefit Newfoundland very greatly. In the Diefenbaker years they never even thought of Newfoundland, and that is obvious if we want to study the record as suggested by the hon. member for St. John's West.
April 15, 1974

Detailed studies are continuing on new passenger ferries and the related ports requirements. The final design stage should be reached this year.
In conclusion, Mr. Speaker, I can see no reason why the government should favour the motion moved by the hon. member for Humber-St. George's-St. Barbe to take away the right of workers to strike which has been given to them in the past. It is certainly their right, and I for one would not want to support any such action.


Walter C. Carter: Mr. Speaker, it was not my intention to take part in this debate because, as the House recalls, we had a similar debate on Monday afternoon last in connection with a private member's notice of motion which I placed on the order paper, concerning the ferry service.
But having listened to the hon. member for St. Boniface (Mr. Guay) I cannot help but rise to make a few comments in connection with some of the things he said. The hon. member has the uncanny ability to twist words and to make black white.
No one on this side of the House, including the hon. member for Humber-St. George's-St. Barbe (Mr. Marshall), has suggested that workers should not have the right to strike. The hon. member's motion suggests, as my motion of last Monday suggested, that the 500,000 people living on the island part of Newfoundland-Labrador have the right of access to the Canadian mainland and the right to expect goods passengers and motor cars to travel to the mainland without interruption.
Perhaps if Canadian National had been more generous, more considerate, more willing to listen to reason the strikes which took place in the ferry service would not have taken place. The strike which took place last year, which isolated the island part of the province by removing the ferry service, and which imposed hardships on those travelling between the island and the mainland, can be blamed on the attitude of Canadian National and that of the Canadian government generally.
When the hon. member replied to my motion on Monday it was apparent that he was reading a speech which had been written for him, probably by some upper Canadian oriented bureaucrat. Obviously he had taken a correspondence course in cost accounting, because he included in the speech figures to do with the cost of transporting goods per ton from the mainland of Canada to the island part of the province of Newfoundland. My hon. friend's speech writer did not take into account that every ton of freight brought to our province, or brought to Atlantic Canada generally, which is manufactured in Upper Canada, in the golden triangle, is contributing greatly to the economy of the latter area. Certainly the cost of the subsidy is not a negative factor, as the parliamentary secretary would have the people of Canada and this House believe.
We recognize that substantial subsidies are being paid by the government in connection with the ferry service. That, however, is not the argument. The hon. member tried to twist the argument around completely, and to misinterpret the meaning of the motion I moved on Monday, and that which the hon. member for Humber-St. George's-St. Barbe brought forward today.
Newfoundland Ferry Service
We recognize that the ferry service is costly. We recognize, too, that keeping rail freight and passenger service in operation in other parts of Canada costs the Canadian taxpayer a lot of money. The cost of building and maintaining the trans Canada highway was, and is tremendous. That cost is borne by the Canadian taxpayer. We say that, according to the terms of union, we are entitled to travel from the island part of the province to the mainland of Canada without paying a toll or tariff.
How would the hon. member feel if he had to pay a toll charge every time he left his province and drove to Ontario or Saskatchewan? How would manufacturers in his province feel if a tariff were levied on goods manufactured in Manitoba and exported to other provinces, or on goods being brought into Manitoba? That, in effect, is what is happening in Newfoundland.
I contend, and my colleagues agree, that the 90 miles of water separating the island part of Newfoundland from the mainland should be treated, for purposes of rate structures, exactly as if they were 90 miles of trans Canada highway. The same argument could be advanced for the island province of the hon. member for Hillsborough (Mr. Macquarrie). A person living in Ontario can cross the bridge to Quebec without paying a tool or tariff.


Joseph-Phillippe Guay: On a point of order, Mr. Speaker, I wish to make it clear that I was not talking against the transportation system as such. My remarks were directed against the motion presented by the hon. member for Humber-St. George's-St. Barbe (Mr. Marshall), and against the idea of taking away the right to strike of employees. That is a different matter.


The Acting Speaker (Mr. Laniel):: Order, please. The hon. member has had a chance to make his speech. I think he should allow the hon. member for St. John's West (Mr. Carter) to express his own opinion.


Walter C. Carter: I am sure, now that the hon. member for St. John's East (Mr. McGrath) is in the chamber, that he will be pleased to know that the hon. member for St. Boniface has levied accusations at him, too, with regard to the right to strike. The right to strike of Canadian National employees working on the ferry service is being questioned by that party. The hon. member may wish to deal with this.
I will not take up any more of the time of the House. I hope that this motion, unlike the one brought forward on Monday last, will come to a vote. May I leave one word with hon. members: we are not being extravagant in our demands. We know what it costs to keep the ferry service working. We are only asking as an island province, and I include P.E.I. in my remarks, that we be treated like any other part of Canada, and that the people living on these islands not be penalized merely because they live on an island.


Joseph-Phillippe Guay: I agree.


Mr.   Chas. L. Caccia@Davenport: Mr. Speaker, the motion before us is silent on how the employees concerned would go about improving their pay and working conditions. It therefore seems reasonable and fair for the hon. member for St. Boniface (Mr. Guay) to assume that the
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Newfoundland Ferry Service
mover of the motion intends to remove the right to strike of those employees engaged in the ferry service between the mainland and the island.


Walter C. Carter: That is wrong.


Mr. Caccia:: That is a logical conclusion, because the mover of the motion was silent about this. It would certainly facilitate this debate if he had the courage to say that he is against giving the right to strike to these particular employees. Then we would know exactly what is the purpose of the motion. If my assumption is correct-


Jack Marshall: It is your assumption.


Charles L. Caccia: -the hon. member would remove the right to strike in order that this service could be maintained on a continuous year-round basis, and thereby fulfil the needs and requirements of the people who live on the island.
Apparently the hon. member wishes to remove the right to strike. Let me point out that legislation prohibiting strikes does not necessarily lead to the elimination of strikes and other patterns of labour unrest. Sometimes it leads to exactly the contrary result, labour unrest. In this case that might undermine even more the continuity of service about which the hon. member is so concerned. Obviously his way would be the wrong way to go about this.
If you want to make sure that this service is available and not interrupted, you should make sure that the kind of agreement which is signed will satisfy the hopes and aspirations of the men. Certainly you cannot maintain service by introducing legislation to prohibit strikes because your purpose will not be accomplished.
We know that this House in 1967 gave workers in the public service the right to strike. This right became part of their free collective bargaining process. Obviously in view of that decision of Parliament this government does not wish to interfere with the rights of any segment of the public service. If you want to remove the rights of the ferry workers you could also say, "Why not do it for the air traffic controllers, or the firemen in Vancouver, or for other sectors?" If that is your position, you might as well have the courage to say, "Abolish the right to strike of public employees, period".
Perhaps in a moment of ecstacy at their meeting in Ottawa in February the Progressive Conservatives forgot to pass that resolution. They reconfirmed the leadership with a vote of six hundred and some odd delegates. According to the papers that was only a quarter of the enrolled delegates.


Jack Marshall: Mr. Speaker, I rise on a point of order. The hon. member should stick to the motion. He does not know what he is talking about. This is stupid and ridiculous. Probably the only time the hon. member has seen a boat was at a sportsmen show. He should either be put straight or the motion should be put to a vote.


The Acting Speaker (Mr. Laniel):: The hon. member had an opportunity to make his speech. Unless he has a valid

point of order we will return to the hon. member for Davenport (Mr. Caccia).


Charles L. Caccia: It is true that even my best friends could not claim I am an expert on ferry boats, although we do have ferry boats in Toronto which connect the islands with the mainland. They are a fascinating feature of our style of life on Lake Ontario. That is one point.
I will now deal with a major point raised by the hon. member in the motion he has put forward, namely, the question of the guarantee and obligation to ensure continuous and uninterrupted transportation service. Continuous and uninterrupted can only be interpreted to mean one thing. How else can that be achieved except by removing the right to strike? The hon. member may not like my interpretation, but he chose to be silent on how he would accomplish this. Therefore it is perfectly legitimate for the hon. member for St. Boniface (Mr. Guay) and others to interpret it in that way.
It is a well known fact that groups in society who do not have a right to strike fall back badly in their economic conditions. A typical example is the hospital workers. Look at the desperate economic conditions in which they have to work and support their families. The hon. member in his motion is suggesting that those engaged in ferry boat service should work under the same conditions as those who do not enjoy the right to strike. Without the right to strike how can they improve their economic lot?
Is that the kind of policy the Conservatives want to put to the Canadian people? Is that the kind of progress they would like to see? If that is the case they can have it because it is regression, not progression.
History is full of ideas of this kind. It is a well known fact that when people are well paid and their pay is comparable with other sectors of society, they do not withdraw their services. No one in this House could deny that. For example, have members ever heard of chairmen of boards, or presidents of large corporations going on strike? Have members of the Conservative party ever heard of people in the higher brackets of the corporate world going on strike? Obviously not. Why not? One need only look at the financial section of last Thursday's Globe and Mail which listed individuals earning between $200,000 and $300,000 a year. This list gives the incomes of these persons and the companies for which they work.
Because some people in our society can command such an income does that mean the chairman of the board of General Motors is worth 60 times the amount earned by a man engaged in ferry boat service? Certainly not. It is because we do not believe in that kind of assumption that we believe in protecting the right to strike for those in society who have been able to achieve it.
I can see from the expression on the face of the mover of this motion that he does not understand the implication of what he has moved. Probably that is his problem. Anyone who reads this motion will understand that continuous and uninterrupted service means removing the right to strike from the people involved. How can it mean anything less than that?
The mover had better understand the consequences of his motion. The onus was on him to clarify it in his speech. He did not do that. He only talked about the right under
April 15, 1974

the constitution to maintain this service. The onus is on members opposite to demonstrate that this right can be protected without removing the right to strike. Obviously that cannot be done.
In 1967 the parliament of this nation introduced, as a permanent feature for the federal employees of this country, the right to strike. Those involved in this ferry service are federal employees. Therefore, any motion to secure continuous and uninterrupted service from employees engaged in this kind of activity must of necessity remove their right to strike. Whether members opposite like it or not, that is the consequence of this motion. It is as clear as the light of day.


An hon. Member:: That is your opinion.


Charles L. Caccia: Of course, that is my opinion. Any member of this chamber is entitled to express his opinion. That is not unusual. Perhaps we will hear a better opinion from members opposite. However, up until this time we have heard the opinion of two speakers and they were of no particular consequence to this motion.


Some hon. Members:: Oh, oh!


Charles L. Caccia: I can see from the interjections that members opposite do not like that. Obviously I am touching a raw nerve. They do not like to see it brought to the surface that underneath all their declarations of policy they do not support the idea of the right to strike in the public service. That is the essence of this motion.


James Aloysius McGrath: Get some more notes from Joe Guay.


Charles L. Caccia: I do not need more notes from the parliamentary secretary. He has been very helpful in providing me with notes.
The opposition cannot be criticized for lack of consistency. Two members from Newfoundland have put forward motions which are clearly consistent in economic terms. Last week the hon. member for St. John's West (Mr. Carter), I believe, was advocating a reduction in rates applicable to freight and passenger cars using the ferry service to Newfoundland.


Jack Marshall: What cars?


Charles L. Caccia: Read the motion. It is motion No. 4.


Jack Marshall: What passenger cars? You took them away.


Charles L. Caccia: Today the hon. member for Humber-St. George's- St. Barbe (Mr. Marshall) advocated a system whereby people engaged in those services would not be able to strike as are others under federal jurisdiction. This is one way to economize, expressed by the hon. member who spoke today, in order to achieve the objectives of the hon. member who spoke a week or so ago in favour of reducing freight rates. Obviously if you refuse the right to strike, wages and salaries will not be as high and costs will be reduced correspondingly-unless of course, the workers affected choose to take part in illegal strikes, a
Newfoundland Ferry Service
situation which usually leads to chaos. That is the essence of the motion as far as I can judge.


Mr. Heath Macquarrie (Hillsborough):: Mr. Speaker, it is a shameful and shocking thing that when an hon. member from Newfoundland makes an appeal based on the constitutional rights of his province for an improved transportation service he should be greeted by the subtle and slimy sinuosity of those who suggest he is calling for strike breaking legislation. There have been many appeals from my province, and from Newfoundland, for better transportation, but this is the first time there has been such lack of concern as to preclude even an expression of sympathy for the people down there.
The motion is properly phrased for it is in almost exactly the terms as those signed by Prince Edward Island. Let the hon. member sneer at that. We are dealing here with a constitutional right, one which it is my hon. friend's job to defend. I am appalled that supporters of the government on the backbenches are in such a state that they cannot deal with transportation without getting into strike breaking. When we want to talk about the transport system we shall do so. We shall make our plans known. We support the legalized trade unions of this country. In this we do not take a backseat to anybody.


Some hon. Members:: Hear, hear!


Heath Nelson Macquarrie: I say it is shameful if they can give no other message to the people of Prince Edward Island and Newfoundland than to tell them we cannot cure our transportation ills or improve our situation without strike breaking. The minister is right. Transportation is in a mess, and hon. members opposite have been talking to him for so long that their thinking is equally messy.


Mr.   J.-J. Blais@Nipissing: Mr. Speaker, I fail to see how the hon. member for Hillsborough (Mr. Macquarrie) can interpret anything said by members on this side as indicating that opposition speakers have put forward antilabour views. The speeches made from this side simply draw attention to the difficulty which arises from the motion before us.
Everyone agrees there is a constitutional obligation here. No one denies that Newfoundland has as much right as any other part of Canada to enjoy satisfactory communication with the rest of the country. No one denies there is a need for adequate transportation. But it must also be recognized that a solution cannot be reached simply by passing legislation along the lines suggested. The solution has to be an acceptable one, one which will rule out possible interruptions of the service in the future. We cannot force upon those who are operating the ships from the island to the mainland a solution which would mean removing from them the right to the process of free collective bargaining. However, there is no doubt that within the present framework a solution has to be found.
We on this side are objecting to the misleading information given by speakers on the other side of the House- implications that the government has been doing nothing about this problem. That is absolute balderdash.


Some hon. Members:: Hear, hear!

April 15, 1974
Newfoundland Ferry Service


Jean-Jacques Blais: Mr. Speaker, we see sitting over there in his improper seat the master of the Great Plains Navigational Institute, the hon. member for Edmonton Centre (Mr. Paproski), who has absolutely no knowledge of any water. The only water he sees is piped in from I don't know what direction.


An hon. Member:: The Saskatchewan River.


Jean-Jacques Blais: Undoubtedly from another province. And undoubtedly Alberta depends more on Saskatchewan than Saskatchewan depends on Alberta.


An hon. Member:: Six o'clock.


Jean-Jacques Blais: Mr. Speaker, I see it is six o'clock, and although I had some salient points to raise I suggest we might all go for dinner.


An hon. Member:: Continue, by all means.


Some hon. Members:: Question!


Jean-Jacques Blais: Well, Mr. Speaker-[DOT]


James Aloysius McGrath: On a point of order, Mr. Speaker, the hon. member has already taken his seat. He cannot speak twice.


Jean-Jacques Blais: I have not.


Mr. Eymard Corbin (Madawaska-Victoria):: Mr. Speaker,-


The Acting Speaker (Mr. Laniel):: Order, please. Is the hon. member for Madawaska-Victoria (Mr. Corbin) rising to speak?


Eymard G. Corbin: Mr. Speaker, I see that it is six o'clock.


The Acting Speaker (Mr. Laniel):: In my mind, it is not yet six o'clock, unless the hon. member has the consent of the House. In the opinion of the Chair, there are still 45 seconds to go before six o'clock.


Eymard G. Corbin: Mr. Speaker, I am surprised by the attitude of the Tory opposition in the House today. Their behaviour shows clearly that a rest would have been beneficial to them because they undoubtedly are on edge.
Someone who does not understand the motion before us now is either stupid or unwilling to understand. Moreover, once again the French text renders disservice to hon. members because it translates "to ensure continuous and uninterrupted transportation service" by "service permanent". It is not at all the correct translation, Mr. Speaker, and that must be pointed out.


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


[Stage Direction]
AFTER RECESS

The House resumed at 8 p.m.


[Stage Direction]
The House resumed consideration of the motion of Mr. Turner (Ottawa-Carleton) that Bill C-14, to amend the Farm Improvement Loans Act, the Small Businesses Loans Act and the Fisheries Improvement Loans Act, be read the third time and do pass, and the amendment thereto of Mr. Howard.
Donald Alex Blenkarn: Mr. Speaker, when I called it five o'clock I was talking about the government's axe blade approach to credit. I said that if we had to have some curtailment of the money supply in Canada, some reduction in the amount of money available within the banking system because of an over-heated economy, then it was imperative for the government to introduce controls that properly allocated the amount of money available for business. I suggested that if the government really did want to restrict credit, to stop speculation and inflation, then perhaps it might intervene in the speculative activities taking place in the real estate market as well as in the commodities market.
However, one thing that the government must not do is interfere with the amount of money available to small business, to people who produce goods, farm products and fisheries products, because to do so would destroy small business. The loan provisions that are che essence of Bill C-14 would be rendered useless if the government did what it did in 1968, 1969 and 1970, which is to suck up the money supply and to say: "Okay, we are going to cut down inflation and make everybody poor".
This is at the root of the contingency program that this government is proposing to lay before the people of Canada. This is its way to curb inflation. If the government uses monetary controls, yes, eventually they will work. But they will throw 900,000 people out of work, and destroy the business community. They will make it tough for farmers to sell their products and for the fishermen to sell theirs. They will put businessmen out on their ass. But the government has done this before and it is what it intends to do today. That is the reason for the increase in the re-discount rate. This is the government's contingency plan to halt inflation, the plan it has been talking about for the past year and a half.
The government must come to this House and admit that we should have monetary controls, that we cannot continue to print $678 million worth of Bank of Canada notes which are put into circulation because they cannot borrow this sum on the market. I suggest the government must recognize the fact that if we are to tighten the money
April 15, 1974

supply, the money supply must be allocated. Thus those areas in our economy which would die if the money supply were cut off in the traditional Liberal sense would at least have enough life blood to carry on, to grow and build. It is small business, small farmers and fishermen, the businesses run by little people, that make a free Canada possible. A free Canada is only possible if each of us individually has the ability to make it on our own. We can only do this if cash is available to us from a bank.
As far as the Small Businesses Loans Act is concerned, the legislation has unfortunately been a total failure since it was passed. There were only 2,800 loans made under the act in 1972, simply because its provisions are not advertised. What happens, Mr. Speaker, when a guy goes into a bank and asks for one of these loans? The banker says to him, "Where is your wife's signature, where is your life insurance?" If a man wants a government guaranteed loan he is shown the door and told he does not qualify for one. If a man asks for a government guaranteed loan he winds up outside the door of the bank.
In my constituency of Mississauga I know only one person who has ever received a small businessman's loan, and there are swarms of small businessmen in my community. The reason they do not get these loans is simply that the banking system is not forced to give them a loan under the act. The banking system tells them that if they have not got good enough credit for an ordinary commercial loan or for a consumer loan at 12, 13 or 15 per cent, then they have not got good enough credit for a small business loan. There is no requirement upon the banking system to allocate a portion of the amount available for loans to small business.
The only people who obtain small business loans guaranteed to some extent by the government are those who have pull, who have drag, or who have the knowledge to tell a banker he had better give it to them or they will call their member of parliament. If a person has to say to his banker that he will call his member of parliament he might or might not obtain the loan. The probability is that the banker will find something wrong with this person's credit because, under the terms of the act, it is only those persons ordinarily commercially qualified who may obtain a loan in the first place.
A bank may take the position that because the government guarantees only 90 per cent of the loan it must pick up the balance of 10 per cent-that if the bank stands to lose one penny on a dollar loan it will refuse to loan the money. Banks can think of a thousand reasons for not making loans at 8!4 per cent, 9 per cent or 10 per cent, when they themselves can get 14 per cent and 15 per cent.
So, what happens? Nothing happens. The problem with this legislation is that there is no requirement on the banking system to lend any money. Each chartered bank could sit back and take the position that it will not lend money under the Small Businesses Loans Act with only 90 per cent guaranteed by the government. There is no allocation provision in this legislation. There is no provision which requires any chartered bank to lend any amount of money whatsoever to the small businessman, the fisherman or the farmer.
Loans Acts Amendments
However, banks do make some cosmetic loans. The Canadian Bank of Commerce in 1972 made less than 600 loans. This is the second largest bank in the country. It will undertake some cosmetic loans, but the gross amount in 1972 in respect of small business amounted to only $28 million, while the total amount of money involved in bank loans was over $40 billion. When we talk about an amount of $28 million in that context it is obvious that it is only cosmetic loans that are involved.
This is a cosmetic act. It is cosmetic because the government intends to go on the election platform in 1974 saying what great value this is to the small businessman, the fisherman and the farmer. The truth of the matter is that the government does not give a damn about the fisherman, the farmer or the small businessman, because it is unprepared to demand that the banking system in fact lend a reasonable amount of funds to the man who is trying to succeed on his own.
This attitude on the part of the government should be explained by the Minister of Finance (Mr. Turner), but we do not receive such an explanation. When the small businessman goes to the bank he must pledge his wife, his life insurance policies, his children, his house and the family silverware in order to obtain a loan. He will obtain a loan only if he qualifies, and it really does not matter whether or not this act exists because he either accepts the loan on the bank's terms or does not obtain a loan at all.
If we are to control inflation in this country we must control the amount of credit available. We must control the expansion of our money supply, and in controlling that expansion of the money supply we can do two things. We can either accept the axe-blade approach of this and past Liberal governments, which is to tighten up the money supply and say "The devil take the hindmost", or we could have a selective allocation of money in certain areas of the economy to make the economy grow and work. We can either have the axe-blade approach, which sees that the speculator receives all he can and, as a result, the small businessman is out on the street, or we can have a government concerned about the development of the economy, a government that is prepared to see that the small businessman receives his share and that the speculator gets cut off.
This is the difference between the attitude of this party and that of the government opposite. The government does not want to worry about selective controls, or about the fine art of tuning the economy to make sure that credit supply is available to those who have a more rightful call upon it. The government seems to take the position that those who can afford to pay for the money will receive it, that the speculator will get all he wants in commodities, real estate or whatever, but the man who is trying to build a small business will be cut off because the Minister of Finance says that unless the interest rate is high enough the banks will not lend to the small man.
Well, how high does the interest rate really have to be? Does it have to be 10 per cent or 12 per cent? Do we in this nation always have to be controlled by the New York rates? Do we in Canada always have to determine our interest rates having regard to the foreign exchange control rates? Do we have to worry about the fact that General Motors can borrow its money in the Canadian money

April 15, 1974
Loans Acts Amendments
market and pay dividends in the United States with Canadian money? Is this the kind of Canada we want, or are we prepared to have an independent Canada, with independent control of our credit?
I say we must have an independent Canada, a Canada prepared to have control of its own credit. If the small businessman requires a loan he should be able to obtain it at a reasonable rate of interest. He should not be pirated or pushed around because of a money shortage, or because Ford of Canada, General Motors, a steel company or some other large corporation has better credit and can take the dollar and do what it wants with it. That is the approach the government takes.
In its contingency plan the government takes the attitude that if the rates are increased enough, and if the money supply is made tight enough, the money supply will be reduced. That is true. The effect of this attitude is an axe-blade approach to chop down the money supply without regard to who is hurt. I say that is exactly what will happen to the small businessmen, the fishermen and the farmers. It is what happened to them in 1969, 1970 and 1971 under the policies of this government. What we need today is a statement from the Minister of Finance to the effect that he intends to control inflation in such a manner that those who produce in Canada will have enough credit to work with, that those who create supplies will have enough money to work with and so that those who farm, fish and are involved in small business will have enough money to work with but that those who speculate in commodities, real estate and so on will be out of luck. So far this has not been the attitude the minister and this government are prepared to express. The small businessman, the farmer and the fisherman cannot conceivably trust this government because what they are looking at is a re-enactment of the 1969 and 1970 tight money situation.
That was their attitude when they said: 6 per cent of the people are out of work, so what, we are going to control inflation. All right, perhaps there it is necessary to have some monetary controls to control inflation, but they do not need to use monetary controls as if it were a meat axe. You do not have to chop willy nilly. You can deal with the money supply on a proper allocation of that supply to those parts of the community that are entitled to the use of credit in a society. Until we have a federal administration that is prepared to make sure that the allocation of money supply is socially acceptable and is prepared to tune the economy of this country, I for one as a member of this House will have no faith in this government. I say to you that small business has no faith in this government, that fishermen have no faith in this government, that farmers have no faith in this government, and indeed the people of Canada have no faith in the government. If the government had any guts, it would let us have an opportunity to vote no confidence and thus find out who has faith in it because, I suggest to you, that an election today would throw them out where they belong.


Some hon. Members:: Hear, hear!


Mr. Leonel Beaudoin (Richmond):: Mr. Speaker, I am happy to add a few words, after having listened carefully to the comments of the previous speaker about the bill before the House tonight, especially as concerns the amendment.
Mr. Speaker, I would like to say at once what I thought of the comments of the hon. member for Mississauga (Mr. Blenkarn) who spoke before me and who, for all practical purposes, put the blame for the increase of the interest rates on the government. I agree with him that the government is to blame for letting the Bank of Canada increase its interest rate. However, I should like to refer to the administration of the right hon. Mr. Diefenbaker, for 1958 to 1960. In 1960, I was a small businessman. Like all other small businessmen, I had to borrow from the bank. At a given moment, my credit was good for $5,000 or $6,000 in a bank. The next day, the Progressive Conservative government of that day wanted to slow down at all costs the impetus of Canadian businessmen by reducing their bank credit. In 1959 and 1960, all businessmen saw their bank credit reduced in order to curb inflation. For them, it was the tightness of the money they put in the bank. I think that the present government, with the present Minister of Finance (Mr. Turner), whom I like very much by the way since he is a charming man, must listen to those who have decided that we should not have tight money, but that we should force those who need money to borrow at a higher interest rate, which is the same thing. When the Progressive Conservative party is in power, it promotes tight money in order to stop inflation and prevent businessmen from obtaining credit to be able to increase production.
Since I was a manufacturer at that time, I had to reduce my administration and the number of my employees by 50 per cent, because I no longer had the capital to wait for receivable accounts, and to make the business work. I therefore had to reduce my expansion and I waited for the Progressive Conservative government of that time to decide to relax bank credit to some extent.
I believe that neither the Progressive Conservatives of that time nor the present government have the solution to the difficulties of the small businessman.
The bill before us this evening enables those who want to buy cattle to borrow $50,000 instead of $25,000. In two or three weeks, they are going to pay the bank an interest rate of 11 'A, 12 per cent. At present, as western beef producers know, it is possible, as I read the other day in the beef producer's bulletin, a gross price of 4 Vi per cent. The more the beef producer gets into debt, at 12Vi per cent, the sooner he will go bankrupt, and the more he will be inclined to give up breeding. Perhaps at a certain time, such a bill might have been good, when the bank lent money at 4%, 5, 5V4 per cent, but now, it is a worthless jumble, it is useless. How will those who want to borrow money at 12 Vi per cent, when their operations bring in only 43A make profits? How will they live?
I think that the government increases the interest rate on loans in order to slow down Canadian home builders, to slow down manufacturers and other people who are confident in the future, to check the inflation which increases by 1, 1 Vi per cent a month.
April 15, 1974

Loans Acts Amendments Mr. Whicher: I thought it was STELCO.
As far as I am concerned, I do not believe this at all. At present, the only thing which prevents more businessmen from expanding is a lack of material. It is due to the fact that the government, under the tax system, considers the manufacturer's inventory as a net profit and then he has to pay taxes on this inventory. If he is taxable at 25 per cent, he pays 25 per cent more than he should on his inventory.
Therefore, he does not keep any inventory. If you want to buy gyproc, metal or any other building material, they make a back order and say: We do not have it, we will deliver it to you within two, three, four or five months. Why? Because the government decides to impose a tax on manufacturers' inventories. If a manufacturer's income is taxable at 24 or 25 per cent, he must then pay 25 per cent of tax on his inventory. Therefore, he does not want any inventory. First he sells his product and then sends his invoices. There is nothing in his books, there is nothing for sale, there is no more inventory.
That is what the government says: We must stop inflation. On the contrary, when the manufacturer's inventories are not released, it results in a product shortage. Then, there is no more bargaining and people say: I'll buy it. There is no more cash discount and people buy the product whenever they need it. That is what is happening at present.
Through this bill, the government tolerates the increase in interest rates, and manages to get people who need money to borrow it even if it is more expensive. This will involve a rise in the cost of living. I wonder what the Minister of Finance is thinking about when he says: By increasing interest rates, we are stopping inflation.
I will recall that in 1968, the interest rate was 6 per cent and it has now gone up to 12 per cent. Of course the 6 per cent increase in the interest rate will be felt by anyone who needs food, machinery or other products. How could we control inflation? I suggest that this is a wrong reasoning, and I do not believe in it at all. With such an increase in interest rates, the rich are getting even richer, because they are lending money, and the poor are getting poorer because they borrow money at any rate. They need it and they make loans at 12, 13 or 14 per cent. They even borrow from finance companies at a rate of 28 per cent. They just don't care, they borrow money at the price at the going rates, they get poorer and the rich get richer. That is not the way we are going to stop inflation. We merely move money around; there is nothing to be done that way.
Mr. Speaker, I think the bill we are discussing has not been well thought out if one considers the timing of it, and I do not think it will do any good. This bill is useless and it is not introduced at the right moment because with current interest rates nobody will be able to benefit from it. I think those who pretend to make money with such interest rates will not be able to realize any benefit.


Lincoln MacCauley Alexander: Mr. Speaker, I thought I would place some remarks on the record because I am primarily interested in the small business man although I come from a major industrial city, the city of Hamilton.


Lincoln MacCauley Alexander: I hear my friend across the way is not going to run any more. He has made a fantastic contribution, so he thinks, to the process. He mentioned one of our major industries. Without the steel company this nation fails; without the steel company we would not have the type of community involvement that exists. I understand they are giving money not only for loans to students but to enhance the community and such things as that. So, when you mention the steel company, speak with a great deal of respect.
To get back to my point, Mr. Speaker, I am concerned about the matters in Bill C-14 relating to Farm Improvement Loans and Fisheries Improvement Loans. Many of my colleagues on this side of the House have taken positions of some merit and have struck home in terms of the needs of members of their communities.
I my humble estimation, Mr. Speaker, the small businessman is of some significance in our country. Unquestionably he is a major taxpayer, he is an employer, he is a community leader; yet keeping in mind that those facts cannot be disputed, he is continually ignored. This is a problem which all of us face and realize. He is not only ignored but is continually frustrated by such things as an inefficient post office, an unworkable unemployment insurance scheme and the higher premiums for it recently announced by the responsible minister. He is also concerned about the high job vacancy rate in this country whilst he is begging for help for his own manpower problems. He is concerned and frustrated because of the voluminous legislation with which he has to contend, and he does not know what is going on. I am talking about the small businessman now.
It is all right for the big corporations-they have their high priced accountants, and auditors, and lawyers and lobbyists.


An hon. Member:: And lawyers!


Lincoln MacCauley Alexander: I said lawyers, and I am a member of that honourable profession myself. Big business is able to look after itself, but the small businessman sees all this legislation coming out daily, weekly, monthly.
First of all he does not understand it, and secondly cannot implement it. He is very concerned when he submits briefs or brings statements before the House or a member of parliament, particularly those who are temporarily in government, that they may end up in the wastepaper basket.
Another thing that bothers me is that the small businessman does not know what is the political ideology of the government.


An hon. Member:: All things to all people.


Lincoln MacCauley Alexander: I hear my friend, the socialist say, "All things to all people", and I think he is right. I think that is what the government is attempting to do and it is bothering the small businessman. I think the policy of my friends on the left is to be all things to all people; what they want to do is look after people from conception to ressurection. This is NDP philosophy, whereas that of the

April 15, 1974
Loans Acts Amendments
Liberals is to look after people from the womb to the tomb. Ours is that much better-from birth to death.
I repeat that the small businessman is concerned that the government is attempting to look after people from conception to resurrection, which is the principle ascribed to my friends to the left.
Our small businessmen and women work long hours and are totally involved in building a business, building an inventory, attempting to play a viable role in their communities and, indeed, in all of Canada. In this respect the small businessman is the strength of this nation. He is concerned when he finds that there is money for OFY, for LIP, and untold millions for the permanent community work programs, whatever they are. Yet there does not seem to be anything for him. He is the backbone of our economic strength, paying both federal and provincial salestax, municipal tax, gasoline tax, cigarette tax, UIC tax, and he is involved with the Workmen's Compensation Board. He is taxed to death to help others, but who is helping him? When I think of all those taxes, the amount that he receives, only $28 million allotted under the Small Businesses Loans Act in 1972, is chicken feed compared with the financial contribution he has made to our economic development.
I say, Mr. Speaker, that if the small businessman is not given further consideration by government, and if our economic system is not one that provides opportunity for him, then we will see free competitive enterprise disappear.
We must solve these problems, Mr. Speaker, and determine the measures that should be adopted in order to facilitate the supply of capital funds from Canadian sources to allow expanding industries to retain control. We must determine what measures should be recommended to enable and encourage our own financial institutions and banks to supply more freely this needed capital. Finally, we must decide how new and expanded industries can be channelled to reduce regional disparity.
Surely these problems are infinitely more important than worrying about the World Football League getting into Canada. The government of Canada should concentrate on offering the Canadian people a policy which places Canada in the forefront of the nations of the world in developing a progressive, elastic program for our economic growth, based less on the emotionalism of a narrow nationalism and more on sound economic thinking.
Here the government has introduced some ad hoc amendments to the Small Businesses Loans Act. It had introduced amendments to the act since 1961. I tried to get the annual report for 1973, but apparently it is not out yet. Let me refer to page 5 of the 1972 report, the language of which I assume is not far different from that which we will find in the 1973 report. It says:
The Small Businesses Loans Act came into force in 1961 for an initial period of approximately three years and was subsequently amended from time to time to provide additional lending periods and widen its scope of operations.
The purpose of the legislation is to facilitate the availability of term credit to small businesses for a wide range of capital improvements. To this end, the Act authorizes the Minister of Finance to guarantee against loss term loans made to small businesses by chartered banks (Mr. Alexander.]
and other lenders designated by the Minister. Borrowers are required to provide a certain portion of the cost of the capital improvement from their own resources.
That last statement is worthy of notice. Most people who wish to avail themselves of the provisions of this act do not realize that they need a certain amount of capital in order to become involved. Unless they have some money of their own, or some collateral, the chartered bank or lending institution will say, "My doors are closed to you."
The purpose of this act is to enable people to become involved in the wholesale or retail trade, service business, construction, transportation or communications industries. Until now you could borrow a maximum of $25,000 if you had a gross income of some $500,000. The ceiling is now being raised to $50,000 for those with gross incomes of just under $1 million. I understand that the minister is in a position to guarantee some $250 million for purposes of the Small Businesses Loans Act for the next three years.
There is certainly a need for this increase in view of inflation. If you are a farmer and you want to buy a tractor you must spend a lot, as the Minister of Agriculture (Mr. Whelan) knows. If you want to get into the service industry, or open a restaurant, $25,000 is not much good; that ceiling went through the window a long time ago.
Let me now refer to clause 6(1) of the bill. This amendment would extend the meaning of "bank" to include Alberta Treasury branches, thereby making those branches eligible lenders under the Small Businesses Loans Act. Without question that amendment is good, because chartered banks and other lending institutions need competition and they will get it under this provision.
Let me also refer to clause 6(2). This amendment, which adds the underlined words in the bill, would make new businesses eligible for business improvement loans. That disturbs me, Mr. Speaker. It talks of new business. What new business in the wholesale or retail trade, in the service business, construction, transportation or communications could you start with $50,000? I don't know. It is obvious that you need to have some portion of the starting capital before you borrow. Say that the total requirement is for $80,000. This means that you need $30,000 in the kitty before you can apply for the other $50,000.
I note clause 6(5) would extend the meaning of "small business enterprise" to include any business enterprise with an estimated gross revenue of up to $1 million. At present the limit is $500,000. Frankly, in these days of inflation I do not know how you could start any of the types of business I mentioned with the small amount of capital provided for here. However, as speaker after speaker has said, this is a step in the right direction and we must go along with it. At the same time we must register some of our concerns.
Let me point out that this bill provides nothing for market research for the small businessman. It says nothing about technical studies being available to him, or about the feasibility of such studies. These matters are significant to small businessmen. They are vitally important. I suggest that the banks ought to provide this service for nothing. After all they have on hand about $40 billion in one form or another, and we only loaned about $28 million under this program in 1972. You would think that
April 15, 1974

the banking community would show a community instinct which could enhance the well being of the small businessman who, in turn, could enhance the banks' business.
The banks will not co-operate under this program, as member after member has said. The bill does not compel a lender to lend. There is no compulsion on lending institutions, chartered banks, or what have you. That is really upsetting. As many members have said, when you go to a bank manager for a loan he says, "You cannot get it because you are a bad risk." He will not lend you money under the Small Businesses Loans Act, but suggests that you borrow other money at 18 per cent or, failing that, that you go to the Industrial Development Bank. And you know what they will tell you. There is no way you will get money from them. That is why I say we are going through a charade.
A good friend of mine by the name of David Bernstein of Montreal is concerned about the attitude of the banks. He has written this about the banks and lending institutions: There exists at present a large number of financial institutions known as 'near banks', such as trust companies, savings and loan associations and syndicates operating regionally who should be authorized to enter into the banking field within their regions, but subject to monetary and fiscal policies dictated by the Federal authority. This would serve a secondary object of compelling the chartered banks to abandon their traditional policies, and oblige them to compete with these so-called regional financial institutions for investments in Canadian industries. This in turn might require the law to restrict the current practice of the chartered banks in establishing additional branches at will and not to defeat the proposed changes only to force these small financial institutions out of business.
He asks the questions, "Are there any financial institutions in Canada that can fill this vacuum? and goes on to say:
It is my considered opinion that we now have financial institutions capable of fulfilling this need enabling Canadian business to obtain Canadian capital for the fuller growth of business in our country. Our chartered banks should be given the power by law, and encouraged to play a more active role in serving the legitimate needs of Canadian business, and the latter freed from the necessity of seeking such assistance outside of Canada, either from alien financial institutions, or by surrending control to alien corporations acquiring a majority interest in their shares or minority interest in a conglomerate merger.
The Canadian Government has had for its purpose to penalize or to prevent foreign take-overs of Canadian corporations, however they have done relatively nothing in inducing Canadian capital investment in Canadian enterprise.
He refers to the takeover bill as Bill C-132.
Bill C-132 has for its main object to permit the Canadian Government to prevent foreign take-overs of Canadian corporations where it is to the detriment of the Canadian economy, however it does not provide for any means in which a Canadian enterprise can obtain the necessary capital in Canada.
That is a significant statement by a very learned person. As a lawyer he probably has deals with smaller businessmen all the time. He is very concerned about the plight with which they are faced.
Has this act really been a tremendous success? I do not think so. Page 9 of the Small Business Loans Act Annual Report 1972 gives the loans by provinces and types of businesses for the calendar year 1972. Let us look at the province of Ontario, the province of opportunity, the province that sets the path of leadership, with all due respect,
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for most oi tne otner provinces. How many loans did the banks, chartered institutions and other lending institutions make? I will read the figures for 1972. This is not for a month. I am talking for a whole year. In Ontario in the wholesale trade there were 23 loans. In the retail trade there were 153; in construction, 74; manufacturing, 89; service businesses, 236; transportation, 16 and communications, 5. Is that really a big deal? Does that show this act is attractive to small businessmen?
Perhaps we have a good act, but the criteria which are set down by regulation are really a detriment. That is why we have these insignificant figures in terms of how many loans are involved. It is hard to imagine that Ontario had only 596 loans. Let us look at the other provinces.


James Aloysius McGrath: Don't look at Newfoundland.


Lincoln MacCauley Alexander: I cannot help but get to that one. The hon. member for St. John's East (Mr. McGrath) says not to look at Newfoundland. However, I will start with the Atlantic provinces. These figures are for the year 1972. In Newfoundland there were five loans.


James Aloysius McGrath: Shame!


Lincoln MacCauley Alexander: Do members want to hear what happened in the Yukon? There was one loan. In the Northwest Territories there were two loans.
I see the Minister of Finance (Mr. Turner) behind the curtain. I am glad he is here. I am not trying to make a partisan speech. I am just trying to show how ineffective this act is in terms of small businessmen. What about Prince Edward Island? There were 31 loans.


Daniel Joseph MacDonald: We're right up there.


Lincoln MacCauley Alexander: The Minister of Veterans Affairs (Mr. MacDonald) seems happy with his 31. Surely he is not satisfied with that. He cannot be satisfied with 31 loans from his province. If that is his aim, I say shame. If that is so, he will not be back.
In Nova Scotia there were 37 loans. What kind of nonsense is this? These are areas which are continually crying about the need to remove their disparities. In New Brunswick there were 45 loans. The provinces that need the loans are not getting them. Why? Who can answer that?
In Quebec there were 1,091 loans. Ontario got about half that, 596; Saskatchewan, 174; Manitoba, 133; Alberta, 275 and British Columbia, 456 for a sum total for the whole dominion of Canada of 2,846 loans totalling $2814 million. Isn't that absolutely ridiculous?


Frank Howard: Were there any in the Yukon?


Lincoln MacCauley Alexander: Yes, one in the Yukon. The minister stands with pride. When we get to the banks, they are just as bad as this government in terms of their treatment. The figures have been given before, but I will put them on the record again: Bank of Montreal, 433; Bank of Nova Scotia, 134; Royal Bank of Canada, 952; Toronto Dominion Bank, 181; Mercantile Bank of Canada, 1; Canadian National Bank, 741; Provincial Bank of Canada, 41; my bank-the one I get my loans from, and I have them-Canadian Imperial Bank of Commerce, 358; Bank of British

April 15, 1974
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Columbia, 4, and Credit Unions, 1. That is not a very good record.
We got a statement from the minister. He stated on November 21, 1973-and that is one of the last statements I saw-that the mortgage rate in the period under review, April 1, 1973 to September 30, 1973, was 6V4 per cent. What is it now? 8 Vi per cent.
Some members of this House, particularly those to my left, want the interest rate reduced to 6 per cent. No bank in the Dominion of Canada, or no near bank, would lend money at 6 per cent. You cannot get it at 814 per cent now. That is what it was on April 1. Some members want to bring it down to 6 per cent. We certainly could not support any move with that as a basis of a motion. I am not the official spokesman, but it makes sense to forget about the socialists. They do not know what is going on around here anyway. All I can say about them is they are in control, without responsibility, and without principle. I think that is a fitting description of my socialist friends. I am not going to take much more time.


Some hon. Members:: Go ahead.


Lincoln MacCauley Alexander: I think I have registered my concern. It was a legitimate concern. I did not try to be partisan or anything like that. We have an act, but without any moral suasion in terms of these banks how is it going to work? I wish somebody could answer my question. Why should a bank under the guaranteed provision in this bill lend money at 814 per cent when it can lend money out at twice that amount?
Do we not have some responsibility here? I do not like to see government moving in and telling somebody what to do. That is the problem with this government, and we do not operate that way. However, there must be some way whereby moral suasion or persuasion can be used on a continual basis in order to have these institutions accept their community responsabilities.
My hon. friend from St. John's East (Mr. McGrath) refers to arm twisting. That's all right, too. I think the Minister of Finance does hold periodic meetings. Perhaps they are to no avail. They look to the minister, and he's got that charm and everything; he's a good looking boy, and tbey give him the old fast foot, and before you know it he's out, they're out, and the Canadian people are getting shafted again.
God knows, the small businessman is the backbone of this country. We must create a climate of positive direction in which funds can be made available to him so that he can further his business interests, so that in turn the government can get the taxes it requires to pay for services the Canadian people are not calling for.


An hon. Member:: Like old age pensions?


Lincoln MacCauley Alexander: Only by helping to develop strong Canadian-owned business can we ensure innovation, new knowledge and technology which can be exported around the world. This is not a condemnation of foreign investment. Rather, it is a condemnation of the present govern-

ment for failing to develop policies to strengthen Canadian business.
We welcome the bill unquestionably. It is motherhood. When someone is given an opportunity to get more money we certainly cannot say it is wrong. But I wish I could send it down to defeat, because when there is no compulsion, no obligation on the part of the banks, the legislation, in my view, is nothing but a facade-it is just a wasted exercise.


Joseph Adrien Henri Lambert: Mr. Speaker, I do not want to extend the debate unduly on Bill C-14, but I think it is my duty to rise as the spokesman of the people or organizations directly affected by this bill which actually amends three acts already in force.
I will deal first with the part of the bill amending the act applicable to farmers with regard to loans and the increased loans which may be granted and guaranteed by the Minister of Finance. This legislation, in the past, has certainly helped farmers particularly when interest rates were not usurious as they are today.
This reminds me of the time when I attended school and was taught catechism. We were told about the sin of avarice and that lending money at usurious rates was a capital sin. In my opinion, this is still true in 1974. It has become a vice and such high interest rates have become a genuine national sin. Everybody complains about it in the House and outside. And yet nobody takes the bull by the horns to correct this situation and checks those dreadful and skyrocketing interest rates which are directly responsible for inflation.
We are in a vicious circle and within a system which compels us to pay them whether we like it or not. That is why, last year, the farmers had to borrow $20 million a month, as stated by the Minister of Finance (Mr. Turner) on the second reading of this bill.
Mr. Speaker, this means that the needs exist and that farmers resort to what they feel are the best credit sources for them, which ensures them a profit and survival.
But, Mr. Speaker, all this is not costing the governement anything. It only guarantees the loans granted by the banks to the farmers. We should pay tribute to the farmers, because they have been very honest so far. In fact, losses have been so small that they are not worth mentioning. They amount only to one fifth of 1 per cent. It is a lesser risk than the normal risk people take in any sphere of our economy. The farmers know exactly what they are doing when they sign a commitment. They are aware of the responsibilities they are assuming. They are even ready to bleed themselves white to honour their commitments.
It is not enough to let them run into debt by allowing them to borrow. We must also let them hope that some day they will succeed in financing themselves, thus avoiding a very burdensome item in the field of expenses, that of interest. There is a reason for the high rate of interest. Just today I moved under Standing Order 43 a motion which seemed to please the entire House, but because of parliamentary procedure even when 263 are in favour of a motion, if one wakes up earlier than expected and says: "No" we cannot even tell who said it. The word "no" has
April 15, 1974

been heard and therefore the Chair has to say: "The motion cannot be put."
Now, Mr. Speaker, even if the Crediters are sometimes accused of making senseless proposals, we note that after a while, and this a strange thing, the government did carry out a few which eventually make sense.
Mr. Speaker, if the government were to agree to this proposal,-I hope the Minister of Finance (Mr. Turner) will take good note of it,-to the effect that the public sector be financed differently from what it is today, it would disappear from the loans market and would cease to be the main competitor of private enterprise on the money market. That would help lower the interest rates, which would in turn allow private enterprise to survive and hope to compete on the world market, all this could be achieved through the Bank of Canada, which, after all, is our own institution.
Last week, Mr. Speaker, I put a question on the Order Paper, which reads as follows: Did the government borrow from the Bank of Canada during the past ten years? .. . The reply was "No", and a few details were provided: Under Section 18(1) of the Bank of Canada Act "The Bank may ... (i) make loans or advances for periods not exceeding six months to the government of Canada." Well, in six months, one cannot go very far.
So, obviously, the government does not wish to be indebted to the Bank of Canada for a mere six months. It is therefore suggested that this legislation be amended by Parliament in order to allow the Bank of Canada to lend money for much longer periods at interest rates which would cover administrative charges. It seems to me that this would be sound administration.
Again, this will come about. But here we have a poorly timed engine which needs a tune-up. The engine turns and firing does take place, but when it does, the piston has already travelled a little too far, and the combustion chamber has become too large. So, the revolution is delayed, since compression is inadequate.
Well, when it comes to legislating in Parliament, this is what happens. We are not tuned-up, and our action is delayed. When damage has been done, we then decide to act.
This is the reason why I suggest again today to the government and to the minister of Finance that they consider very seriously the very concrete proposals that we are making so as to make the Canadian economy competitive on the international market, to enable us Canadians to be really ourselves throughout the world.
If nothing is done, I am afraid that we shall soon find ourselves in a rather difficult situation.
Mr. Speaker, in spite of existing legislation we find that farmers have left and are still leaving the farm, because they are not assured of an income enabling them to make a living, to make some profits that will at least leave them something in the end.
Some time ago, I had started to explain to the House, before running out of time, the problem of the dairy industry. Why has there been so many auctions? In the March 27 issue of La Terre de chez nous, 16 auctions were
Loans Acts Amendments
announced for the sale of large dairy herds of 40, 50, 75, 100 heads of cattle. Those are people quitting the dairy industry.
I have here a resolution concerning only, the Quebec district, and I quote:
Extract from the minutes of the annual general convention of the industrial milk producers union of the Quebec region, held ... on March 12, 1974.
This resolution says that this year in that region alone, 652 producers have given up dairy production.
I have also here a letter from the president of the Canadian Federation of Milk Producers, dated March 26, 1974. He is not just anybody, but a responsible person, Mr. Speaker. He describes a situation that concerns him and also comments on the report of the Food Prices Review Board. I will only quote the following paragraph:
"There surely exist serious reasons to worry about the incomes of a large number nf producers in this sector ...
-the dairy industry sector,
. .. about today's prospects of this industry and its ability to provide Canadian consumers with an adequate supply of dairy products at reasonable prices."
The level of milk producers' incomes has been maintained too low much too long and the process of recovery is much too slow coming about.
As I stated earlier, our engine needs a tune-up.
This country is faced today with the escalating sales of dairy herds and a constant reduction in dairy production.
Therefore, Mr. Speaker, this is a suggestion which we must be concerned about and which deserves being pondered. I concede that, on March 31, the hon. Minister of Agriculture (Mr. Whelan) announced a new policy for the current year.
Improvements were made but they are insufficient. One can refer to figures worked out by experienced people in that field, who figured to the nearest cent what it costs to produce 100 pounds of milk. An analysis is made of the cost of grain, which is $2.22, that of hay, $1.98, that of milk transportation, 38 cents and that of mineral salt which is of 8 cents and we come to a total of $10.15 for 100 pounds of milk. But now, since April 1, the average price received by the producers of industrial milk is $8.50. Therefore there is a marked loss and even if we allowed them to borrow ten times more than they can borrow now, from banks or from caisses populaires, the whole amount being guaranteed by the Department of Finance, that would not settle their problem except for a short time.
But they will merely tie up future production and if the future is not better, they will have to do as others have done, get out of business.
The same thing can be said of pork production. For the last few months, our pork producers have been producing at loss and one is distressed to notice that they are losing great amounts of money. I know that the Minister of Agriculture and his public servants are now considering the problem but there is one thing I am sure of, I am sure that the minister is not getting enough co-operation from his colleagues, especially those from the Treasury Board. That gentleman cannot perform miracles and if he is not given the credits needed for planning policies that will enable producers to stay in business and to overcome that

April 15, 1974
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difficult period, they will go bankrupt like other people, and bankruptcies may be more numerous than we think.
In concluding, Mr. Speaker, I should like to deal with another part of this legislation, namely the legislation amending the Small Businesses Loans Act. Since I came to this House, I have often heard my colleague, the hon. member for Compton, (Mr. Latulippe), speak on that subject. In fact he knows what he is talking about, being an industrialist himself who has started at the bottom rung of the ladder. He has often asked that the $25,000 loan provided for in the act be considerably raised to allow small businesses to expand and get established in areas where there are no labour intensive industry. On that subject, Mr. Speaker, I think the Minister of Industry, Trade and Commerce (Mr. Gillespie) made a much more eloquent plea than I could make myself, when he stated the following in the House on July 11, 1973:
Canada's smaller and medium sized enterprises and entrepreneurs form a key part of our Canadian economy. They employ an estimated five million people, almost 60 per cent of our entire labour force. Two-thirds of Canadians work for businesses employing fifteen persons or less. Most of these businesses are owned and managed by Canadians and provide a means of developing greater Canadian participation in our country's growth. Small enterprises are often the most efficient way of producing goods and services to meet Canada's particular needs.
I endorse that statement.
The small business unit has a flexibility to meet the local production and distribution requirements of Canada's various regions.
In addition to their significant economic role, small businesses make an important contribution to the development of Canada's social fabric. They foster the development of self-reliance, enterprise and are closely identified with community life.
How true that is!
A well balanced economy should, therefore, consist of healthy small businesses as well as larger units where scale of output is necessary to be internationally competitive.
Mr. Speaker, I could not agree more with the minister. Words are not enough, we must act. The Minister of Finance might say: That is what we are trying to do by increasing the guaranteed amount from $25,000 to $50,000. That will do some good, but could it be too late? Because of the current inflation, will the amount of $50,000 really be worth $50,000 or could it not rather be considered as $25,000 twenty years ago? That is the question we must ask ourselves and that needs to be answered.
During 20 odd years, members of all parties have very frequently-and sincerely, I hope-about industrial decentralization. We had to decentralize industry and all parties included this in their program. I think that nobody had enough faith in this policy to follow it efficiently and intensively. If we want to work to improve the social climate of our country, which is getting worse everyday, I think that one of the most effective measures that we could take immediately would be to decentralize industry by bringing it to the rural centres, where there is an increasing number of qualified people who are able to meet the needs of the industries who will accept to settle in these centres. This would allow our young people to build family houses in unpolluted areas where there is space. This would allow them to have a normal family life because they would be able to settle in areas where the

lack of air and space is not a problem yet. In this way, we should be solving a very difficult problem, that of space for those married couples who still wish to have children.
When I visit the big cities, it disappoints me to see multiple unit buildings and, when I visit either relatives or friends, it makes me sad to see that in these two, three, four or five apartment buildings, space has been provided for the refrigerator, the range, and all types of electrical appliances, but there is no room for human beings. There is one bedroom and another small room for a baby. When the latter arrives, it is realized that there is no more space. Steps must be taken accordingly, and God knows how many are advertised on TV, over the radio and in newspapers!
Mr. Speaker, I still believe in the divine institution which the family is. We must try not to limit its possibilities to big business whims, but to accommodate incomes of families to their needs so that they may fulfil their task and remain themselves in this modern social world. Such an institution must remain the basis of our society, as otherwise, like other countries which have overlooked this, we will witness chaos which does not profit anyone.
That is why we must increase those small businesses loans, but for heaven sake's let us put an end to all the red tape that discourages those who want to use them. They have to overcome so many obstacles that they are disgusted right from the start and they give up after a few tries. There are qualified men who can operate a business or an industry, who have that natural ability but and all they can do is to sit back and say: It is no use trying; they make it so difficult and there are so many problems of all kinds that we are discouraged at the very beginning.
Mr. Speaker, I ask the Minister of Finance who is responsible for this legislation to encourage the banks to grant loans to those small businesses. We are not asking them for a gift, but a loan. I am convinced that the higher the interest rates, the more profits they make. To my mind, the Minister of Finance has a very heavy responsibility and he must intervene if need be, by introducing legislation so that an end might be put to those usurious interest rates. There is nothing to keep Canada from taking the first step. Some will say to me: Dear God, it is easy to talk about it, but we depend on the international market! Perhaps, but if only we were true to ourselves in Canada, we could at least try it out, try to be masters in our own country, and stop acting like sheep. For once we would show initiative, without jeopardizing anything, and do something concrete.
In closing, Mr. Speaker, since my time has almost expired, I should have liked to speak a bit more of the provisions of the act concerning fishermen. I know that this bill was introduced in the same spirit for the fishermen, and we know how difficult their work is, and the hardships they encounter every day.
I trust my remarks will at least spur on those who are responsible financially. I can assure the Minister of Finance of this: he need not hesitate if he wants to go ahead and, as I said a while ago, if he wants to grab the bull by the horns, I shall help him and grab its hoofs.
April 15, 1974


Sinclair McKnight Stevens: Mr. Speaker, I feel it is a worthwhile opportunity to join in the third reading debate on Bill C-14. I say this because the bill deals with the farmer, the small businessman and the fisherman in this country. I believe it is wise that we in parliament first take a look at the record of what the government has done for the farmer and the small businessman in the 10 years it, and its predecessor, have been in office. I refer to the share of net national income enjoyed by the farmers and small businessmen. The short answer is that the farmer and the small businessman have not had it so good since the last year of Conservative rule in Canada.
I think it is pertinent to recall that in 1963 total business income of an unincorporated nature was 10.3 per cent of the national income, and that under Liberal government rule that share has declined every year to the present level of 7.5 per cent of the national income.


Some hon. Members:: Shame!


John Napier Turner: Perhaps more companies are being incorporated.


Sinclair McKnight Stevens: I can assure the minister that small businessmen are not being incorporated as a result of any encouragement given by the present government.


Some hon. Members:: Hear, hear!


Sinclair McKnight Stevens: I wonder how the Minister of Finance (Mr. Turner) would explain the lot of the farm operator. In 1963 the farm operator had 4.5 per cent of the national income in this country. Last year he had 3.4 per cent, and that was one of his better years under the Liberal government reign. As was mentioned during the question period earlier today, the lot of all in Canada, particularly the lot of the bigger corporations, has not been so poor under the Liberals. I think it bears reiterating that corporate profits after taxes in the last quarter of 1973 have soared to 12 per cent of the nation's national income from 6.7% three years earlier, while the share of labour has fallen from 75 per cent to 70 per cent. Not only is this government fond of big government but it is fond of big business, judging from how it has treated certain of the larger corporations in the country.
I gave some background because I believe it is important that we get into perspective the true nature of the Trudeau government in Canada. This bill is tokenism; it is a gesture; it is something that the Liberals can hang a press release around when they have to answer on what they propose to do for the farmer, the fishermen or the small businessman in Canada. For example, I followed the remarks of the Minister of Finance when this bill came up for second reading in the House and I found it interesting that he pointed out that the Small Businesses Loans Act came into effect in early 1961, and then, presumably in a moment of great pride, he said:
Since inception, including the last full year of operation, $290 million have been made available to small businesses under the provisions of this legislation. Lending reached a peak of $30 million in the year ended December 31, 1973.
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I would have thought that the minister would have been ashamed to put such figures on the record as justification for this act. Imagine talking about a peak year in which $30 million were given in loans to small businesses! Last week Canadian chartered bank assets went up $550 million alone. That is the type of financing in the country at present, yet we have a Minister of Finance who feels it is a credible showing that in an entire year small businessmen received loans under the relevant legislation totalling $30 million.
Again, as we know, part of this bill is to increase the aggregate amount that chartered banks may lend under the act to $250 million, and the aggregate amount that other lending institutions may lend to $100 million. That is the government's answer to the small businessman in Canada.
There is another bill on the order paper. I refer to Bill C-10, an act to amend the Export Development Act. Surely it shows the true colours of the present government when we consider that it is proposing to increase the share capital alone of the Export Development Corporation from $125 million to $400 million. It is proposing to increase the capital of the Export Development Corporation by almost the total amount that it is willing to guarantee in chartered bank loans to small businesses.
That is only the beginning. It also proposes, if this parliament should be so foolish as to allow the bill to pass, to permit the Export Development Corporation to borrow up to ten times the authorized capital, that is $4 billion. It proposes that the present lending limit in one category be increased from $1.5 billion to $4.25 billion. Under another heading it proposes that that corporation should have the right to lend not $450 million-the present level-but $850 million. I mention this because here is a corporation that has been dealing with the favoured few corporations that the government likes so much.
Here the average loans are in the neighbourhood of $20 million to $30 million. The loans are granted to countries lucky enough to get this benefit while those Corporations in Canada, which in practice are mainly over 50 per cent foreign controlled, in turn get the benefit of the financing which has been at a rate slightly over 7 per cent per annum. What a strange situation! Here we have a government proposing to extend the limits of the Export Development Corporation so that it may facilitate financing for foreigners of over $5 billion, at interest rates in the neighbourhood of 7 per cent, and we are told on the other hand that it is a worthy amendment which would allow small businesses in Canada to borrow up to $250 million, not from the government but from chartered banks at 8 per cent plus.
We are told that the small business rates will be pegged to the long term bond rates in Canada which, as the Minister of Finance pointed out, beginning on April 1 would justify a rate of 8 per cent. So not only is the government proposing extremely high limits for one sector of the economy, the big business community, compared with the limits that it is proposing for the small business sector, but it is also proposing to continue a rate differential so that small businesses in Canada will have to pay 1 per cent above the going bond rate in Canada,-now 8 per cent whereas those who are lucky enough to get the

April 15, 1974
Loans Acts Amendments
Export Development Corporation financing do so at roughly the rate the government borrows, namely, 7 per cent.
I mentioned that figure of 8 per cent because, as the Minister of Finance pointed out, the going rate beginning April 1 will be 8 per cent for loans to small businessmen, farmers or fishermen. But I would emphasize that in the last few weeks the bond levels in Canada have shot up most dramatically. For example, in the two weeks ending April 10, the yield on long term government bonds on average has jumped .35 per cent. I would suggest that when the new rate is pegged, as this formula will cause it to be pegged for small businessmen, farmers and fishermen, it could well be that the average lending rate for small businessmen, farmers and fishermen will be 9.5 per cent, or higher, under this legislation in Canada.
As we know, Mr. Speaker, there is an amendment before us in which the hon. member for Skeena (Mr. Howard) has proposed that the bill be sent back to committee for the purpose of studying clauses Nos. 2, 7 and 9. It is my understanding that the hon. member hoped that some interest ceiling might be written into the bill to guarantee that the farmer, the fisherman and the small businessman will not have to pay rates of interest of 8 per cent or 9 per cent, or whatever rate the present formula will dictate.
One can sympathize with the hon. member's intention, but I feel that he is missing the point. There is little purpose in this government, or any other, setting a rate that is below the going rate, and expecting the chartered banks to abide by it. Obviously the government must accept the basic problem and decide what course to take. If it wishes to utilize chartered bank assets it knows there are ample assets to utilize.
I have pointed out that our money system went up $550 million in the last week alone, but perhaps it is more relevant to point out that in 1963 total Canadian bank assets, net of any foreign assets, were $17.8 billion, and in 1973 they had reached $55.1 billion. In that short period bank assets in this country have more than tripled. There can be no question, therefore, that there are ample loanable funds available if the banks can be induced to lend them to small businesses.
I suggest that the government knows, as certainly the business community knows, it is only gesturing to say that any chartered bank should be expected to loan any sizeable amount of its loanable funds at below the going rate, yet that apparently is what the government expects in this legislation.
I would suggest that if the government wishes to see lower rates for businesses, the farmer or the fisherman, it must accept one of two alternatives. It must subsidize the lending institutions to ensure the lower rates, or it must take the Export Development Corporation route and loan the funds to the smaller businessman through some corporation, or directly from the government itself.
Those are the alternatives, Mr. Speaker. It is not fair for the government to pretend that this is legislation that is readily available and may be used by small businessmen, as is suggested so often by members of the government

when they are asked what they are doing to help small businesses in this country.
I have attempted to show the virtual misrepresentation that the government has placed before this House concerning the bill and the legislation we are now considering.
There will be a day of reckoning, Mr. Speaker. I think it is important that members of this House not become implicated in a government charade without pointing out the facts for the people of Canada to decide. The facts are, Mr. Speaker, that we have a government that literally has not dealt with inflation in a prudent manner, that has decided to take a laissez faire attitude with respect to inflation. It is a government that to date has had the support of a certain caucus in this parliament that oddly enough has felt that a more determined stand to contain and control inflation would somehow not benefit the labouring man in this country. Mr. Speaker, nobody in Canada has been hurt more than the average wage earner through the incompetence of the present government.
There is no other way for this government and this Minister of Finance (Mr. Turner) to explain why labour income in this country has fallen by 6 per cent in the last three years as a share of national income, while corporate profits, after taxes, have jumped by 79 per cent. This is the hard reality of the government's lack of policy concerning inflation in Canada: the favoured few in the eye of the Trudeau government have benefitted from inflation whereas others, especially the unorganized in our labour force, have been hurt severely by rampant inflation.
I would suggest that not only has the labouring man been hurt but the smaller businessman has been hurt as well, and the gesturing, the press releases, and the statements of good intentions which have come from the government are not enough to restore the imbalance that has taken place as a result of the cruellest tax of all, namely inflation.
When we are touching this, Mr. Speaker, I have already referred to the fact that the bond market in Canada has sold off dramatically in recent weeks. It is common knowledge, for example, that the Bank of Canada had to enter the Canadian bond market to support it, and that it now owns over half a billion dollars of Canadian securities that it did not intend to buy a few weeks ago, and that one of the reasons for this is the over-spending of the government. The day of reckoning is coming, Mr. Speaker.


John Napier Turner: You guys are not going to be standing on the mountain!


Sinclair McKnight Stevens: The day is coming when the government will have to make its peace with the money markets of Canada if it intends to continue to fund its heavy spending programs in the manner it has been funding them over the past few years. Until last year it was able to do much of its funding through the sale of Canada savings bonds, but not last year. Consequently the government's cash position has deteriorated by approximately $1.2 billion in the past year, so it now has considerable financing to raise in the coming months.
April 15, 1974

The Bank of Canada has decided to raise the bank rate, but not only for the little reasons given by the Minister of Finance. It has acknowledged that the Canadian bond market has to adjust to substantially higher interest rates, to allow the government to finance the spending program it is determined to put before the House and to finance with debt issues. These are the facts. The unfortunate victims of this lack of government planning and of the government's poor approach to economics are those whom this legislation is purported to assist, the farmers, fishermen and small businessmen.
I know nobody likes to interrupt a vacation, but I strongly urge that it is time for the man who calls himself Prime Minister of this country, and who feels that he should have the confidence of the House, to return to this House and see if in fact he has the confidence of the House and of the people of Canada.


Lincoln MacCauley Alexander: Where is he?


John Napier Turner: Cheap shots.


Mr. Gordon Ritchie (Dauphin):: Mr. Speaker, I welcome this opportunity to speak on the third reading stage of the small loans bill. The concept underlying this bill has been around since 1944. In this bill the government has not really brought forward any new approach. I suggest that an approach different from that first contemplated in 1944 is necessary. Legislation such as this was first enacted, as I say, in 1944, and has been updated over the years.
This bill will increase the ceilings for lending, in line with the inflation we are living with in our economy. I agree with the main thrust of the bill, but I think there are forces in our economy which are working grievously against the operation of small businesses, among which I would include unincorporated farms and fishing. This bill will do little to alleviate the disadvantages from which those businesses suffer. It will only act as a palliative and will not solve the real problem.
The real problem of a small businessman is the accumulation of the capital which is necessary if he is to function properly within the economy.
This bill will make it possible for him to acquire more capital. The state will guarantee the funds he may borrow from the bank, in order that he may compete and remain viable in the economy. The accumulation of capital with which to pay off these loans is becoming increasingly difficult because of our tax structure. As inflation expands, the tax bite put on an individual through the income tax increases the government's take.
The government's share of the income of the individual who is in business for himself expands steadily. Thus he finds it increasingly difficult to make ends meet. Furthermore, people find it difficult to accumulate the capital which is necessary to own a farm or small business. This bill will not help the underlying weakness in our economic system, which puts little emphasis on the accumulation of savings, savings which are necessary if someone is to own a farm or small business.
Adjournment Debate
People accumulate capital for various reasons. For instance, they may want to pass the money on as a legacy to their children and those who come after them.
Some, who through good fortune in this world have acquired wealth, want to pass it on to their families. This attitude, while important some years ago, no longer seems to be quite so prevalent. Of course for people of modest means there is little point in accumulating capital for their children, who are usually as well off or better off than their parents were. As well, the provincial estate tax takes large portions of estates, so that the incentive to pass on capital in the small business community is seriously diminished.
Sometimes part of a business or farm must be sold to meet the estate tax. In addition, the capital gains tax brought in by the present government will seriously limit one's ability to pass capital on to one's family. Actually, the capital gains tax and the estate tax represent severe deterrents to the accumulation of capital. As assets must be sold to pay the capital gains and estate taxes, one can see that we are really taxing inflated gains. To a large extent the capital gains tax contains a large element of inflation. This bill does nothing to help in that regard. May I call it ten o'clock, Mr. Speaker?


BUSINESS OF THE HOUSE
Mr. Baker:: Mr. Speaker, before we call it ten o'clock may I ask the Minister of Finance (Mr. Turner) if it is intended to carry on debating this bill tomorrow and, hopefully, to conclude it?


John Napier Turner: Mr. Speaker, I think we are having such a stimulating debate on this bill that we ought to continue it tomorrow and, if the House should so decide, dispose of this legislation one way or another. We could then get on with the Canada Pension Plan amendments.


Stanley Howard Knowles: And after that?



PROCEEDINGS ON ADJOURNMENT MOTION

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

René Matte: Last week, Mr. Speaker, I had the opportunity to ask a question. In my opinion, this question was extremely important and deserved an answer which, although incomplete, might have shed some light on the situation.

April 15, 1974
Adjournment Debate
If there is a area of universal concern to Canadian taxpayers, it is certainly that of income taxes, since every individual with an income must turn over part of it to the internal revenue department for the administration of his country. People with fixed inomes are perfectly aware of what they are paying in income tax. They are equally aware of their neighbours' contributions.
However, in the case of corporations and especially multinational corporations, it is very difficult to find out whether they are really paying their share to the country in which they operate. It is extremely important because those companies do not pay their fair share of taxes and the small wage earner will have to make up the difference needed for a sound administration of the country. A few weeks ago the Quebec government learned that seven oil companies had not paid income tax.
Mr. Speaker, owing to the price escalation of oil products which in certain cases have increased by 50 per cent, we wonder how a company can avoid income tax. Since the same companies are found throughout Canada and must file income tax returns with the federal government, it is therefore extremely important to compare their tax contributions to the Quebec and federal governments.
I ask to the Minister of National Revenue whether there have been meetings, negotiations, inquiries and controls made in that connection. It is an important and even urgent question since it is high time that we should know exactly what are the facts in order to plug utterly unacceptable loopholes. Mr. Speaker, it is all very well to exhort people to stay calm, to pay their taxes quietly, but the fact remains that the report stating that seven oil companies have paid no taxes in the province of Quebec is a cause for misgivings in the average citizen's mind.
It can be asked therefore why there are so many complaints which sometimes get to the point of revolt. I think that these things must be clarified. We must know if the same situation is prevailing at the federal level. That is the purpose of my question. Without divulging secrets, can the Minister of National Revenue say if these companies are in the same situation with regard to federal income tax?
The public has a right to know and, obviously, as their representatives, it is our duty to throw some light on this situation. If the system is maintained, we might eventually have a dreadful future.
Therefore, Mr. Speaker, I ask simply if some of these companies have neglected to pay federal income tax and secondly if there have been, or will be, meetings with officials of the Department of Revenue of the province of Quebec, so as to compare tax returns of these companies with those submitted to the federal Department of National Revenue.


Mr. Maurice Foster (Parliamentary Secretary to President of the Privy Council):: Mr. Speaker, on behalf of the Minister of National Revenue (Mr. Stanbury), I would like to remind the hon. member that Revenue Canada, Taxation, is not free to disclose income tax information in respect of identified taxpayers. Therefore, I cannot state

whether a particular corporation or a particular group of named corporations did or did not pay federal income tax for any given taxation year. However, it can be seen from the latest statistics for the 1970 taxation year that approximately 145 corporations which can broadly be classified as oil companies paid federal income tax, and some 640 did not.
Statistics issued by Statistics Canada in a publication Corporations Statistics shows that for the 1971 year oil companies paid federal income tax in the amount of approximately $150 million.
There are a number of reasons why an oil company may not pay federal income tax in any particular year. A corporation may have a loss for a year, or the profit for the year may be offset by losses carried forward from previous years. An important factor in arriving at the amount of taxable income of an oil company is the deduction that is allowed for exploration and development expenses. Most of the major oil producing companies in Canada have incurred very heavy expenditures in exploring for oil and developing new wells. Under the Income Tax Act such costs are deductible in a taxation year to the extent the company has income, and any such costs not deductible because of the income limit may be carried forward and claimed as a deduction in a subsequent year when the company has profits. The total amount of exploration and development expenses claimed by all oil companies in the 1971 taxation year was approximately $820,000,000.
It must be recognized that a company engaged in producing oil is subject not only to federal and provincial income taxes but is also required to pay royalties to the government of the province in which the oil is produced. The amount of such royalties paid is a business expense of the company, and is therefore deductible in arriving at taxable income for federal income tax purposes.
There is no evidence to suggest that the oil companies in Canada are not reporting their taxable incomes properly in accordance with the provisions of the Income Tax Act.


CONSUMER AFFAIRS-ADVERTISEMENTS FOR SALE OF HOUSES IN TORONTO AREA-CONTRACTS WHEREBY BUILDER CAN CHANGE PRICE AND MORTGAGE TERMS
Donald Alex Blenkarn: Mr. Speaker, on March 5 last I asked the Minister of Consumer and Corporate Affairs (Mr. Gray) a question concerning the activity of certain building corporations advertising houses for sale. I related to the minister the problem which arose when some persons went to buy a home and were advised on the site, by the agent of the builder, that the homes were really not for sale-that they could put in a reservation but the reservation would provide that their deposit would be returned without interest if the builder-developer felt the price was not sufficient. Moreover, the terms of payment, price, closing date and the rest could be altered unilaterally by the builder.
As a result of my question the activity of a number of builders in Toronto advertising in the Toronto Star and the Toronto Globe and Mail were severely curtailed, and the Urban Development Institute disciplined the builders involved by advising them that such advertising was improper.
April 15, 1974

I want to say to you, Mr. Speaker, that the effect of my question in bringing this matter to the attention of the House was probably to remedy the problem as far as advertising is concerned. However, it clearly did not go to the root of the matter, since this problem is one which arises because of the fact that inflation is taking place in Canada at a totally unrealistic rate.
In Mississauga, for instance, the cost of housing is rising at the rate of $50 a day at the very least, seven days a week. In these circumstances one cannot really blame a builder-developer if he says to a prospective purchaser, "I, as developer, am entitled to the inflation which takes place between the time you order the house and the time the house is delivered." I might add that this period is sometimes as long as eight months.
One cannot really blame a builder and accuse him of gouging when he says, "I want at least the inflation which takes place during the time I am responsible for the property." After all, with building costs of all kinds going up by between 2 per cent and 5 per cent a month there is no way in which a builder or a developer can be sure what his costs will be half a year from now.
Earlier last fall the Minister of Agriculture (Mr. Whelan) said he would freeze the price of milk for one year, and he applied a five cents a quart subsidy. That was four to five months ago. The price is now going up another nickel a quart on top of the nickel a quart of last fall. This is what is happening in our economy. We have runaway inflation. We have a government that does not give a darn about runaway inflation.
This runaway inflation is most spectacularly shown in the price of housing in the metropolitan areas. Time and time again it has been related in the House how the price of housing in the greater Toronto area has escalated by 40 per cent in the past year. This may be the result of speculation. It may be because the banking system is financing this speculation. Certainly it is because there is an acute shortage of serviced land. It is certainly due to the fact that all we have from the Minister of State for Urban Affairs (Mr. Basford) are demonstration programs.
We do not have an attack on the quantum of serviced land. We do not have a concerted attack to increase the supply of housing. We have innovative programs. We have Habitat 2000. But we have nothing that will correct the problem of a young couple who need a house.
Housing is a basic commodity. Bricks and mortar are basic commodities. We need to put shelter over our people. Society today demands warm, comfortable, decent housing, yet the government slaps an 11 per cent sales tax on this very commodity and refuses to remove it. The government has collected over $1 billion from this tax in the last five years, but uses none of this money to increase the supply of land which will make housing cheaper. The provision of housing is probably the main concern of most people in urban society. The escalation in the price of this one commodity alone is evidenced by this business of reservations that are still being sold.
Adjournment Debate
I do not blame the builder-developer for this since the government says, in effect, "Look after yourself." As far as we are concerned, says the government, housing is an international problem, and so is inflation. I ask: when in Canada was the cost of housing an international problem? Our houses are built with Canadian materials, on Canadian land, with Canadian labour. What international matter is involved? Yet the government continues to allow prices to escalate. It continues to allow the financing of this speculation to escalate, and cares little about the ordinary guy who wants a house for his family and kids.
[Translation\


Pierre De Bané: Mr. Speaker, it would be hard to compete with the hon. member whose demagogy and hypocrisy are equalled only by his selfcomplacency when he tells us that his action in the House has solved the problem of misleading advertising in Toronto. I can assure him that seldom has a member of parliament been so far from the truth.
If misleading advertising has been decreasing in the Toronto area, it is precisely because the research and investigation branch of the Department of Consumer and Corporate Affairs proceeds vigorously against any industry, in the field of construction or any other field, which resorts to misleading advertising. And in the field that he has referred to, I can tell him indeed that the department suing certain home builders actually led to some convictions in the Toronto area and had a salutary and exemplary effect on all other industries. If he can be consoled in thinking that he is the one who produced such an effect, good for him, but I want to say to him that as far as we are concerned and as far as the Toronto metro area is concerned, it is not this kind of self-indulgence that will impress people.
In the matter of land speculation, I have been astounded when the hon. member said that he did not blame those who speculate on land. Personally, I think it is despicable and that on the contrary speculators should be condemned for a basically immoral act, because it is speculating on something where no capital gains is derived from our own investment.
Therefore, I find it unfair to want to stigmatize an evil without blaming the responsible persons, because in this area it is evident that the speculation psychological pressures are assuredly something that has no economic basis.
Therefore, the way the hon. member puts all the blame on the government without admitting the abusive craving for profit making of those who have land or offer public services nor the primary responsibility of governments and of the Ontario Conservative government in particular, I suggest, is a wrong and inaccurate way of reporting the facts.
As to the fight against inflation I suggest that any reasonable person will admit that the present government provided much assistance to citizens, through the various

April 15, 1974
Adjournment Debate
subsidies they granted. The hon. member referred to the dairy production. I might in turn mention subsidies on the price of bread, subsidies granted under the welfare program, the old age security pensions, the family allowance plan and the escalation of pensions. Those are all programs that the government put forward, precisely to enable the people who live on fixed incomes to fight with some success against the problem of the rising cost of living.
Motion agreed to and the House adjourned at 10.20 p.m.

Tuesday, April 16, 1974