1974-11-26

ROUTINE PROCEEDINGS


[Stage Direction]
Second report of Special Joint Committee on Employer-Employee Relations in the Public Service-Mr. Blais.
[Editor's Note: For text of above report, see today's Votes and Proceedings.]

Hon. Donald C. Jamieson (Minister of Regional Economic Expansion):: Mr. Speaker, in accordance with Standing Order 41(2) I am pleased to table in both official languages a copy of the report on a possible steel complex in eastern Canada prepared for my department by the Stelco Technical Services Group. I have arranged for copies to be forwarded to some interested members. A limited number of copies has been made available to the parliamentary distribution office as well.



ORAL QUESTION PERIOD


Hon. Robert L. Stanfield (Leader of the Opposition):: Mr. Speaker, I have a question for the government House leader and Acting Prime Minister. When does the hon. gentleman intend to bring forward the motion dealing with the proposed rules regarding conflict of interest as applied to members of parliament and move the necessary reference to committee in that connection?


Hon. Mitchell Sharp (Acting Prime Minister):: I hope I shall be able to meet with the leaders of the other parties today and have the opportunity of discussing this and other matters. There are a number of very urgent items on the order paper which we hope to see disposed of, including the petroleum administration bill and the bills founded upon the budget; these are of most urgent importance because they affect the price of fuel in eastern Canada, and I hope they can be disposed of even before we turn to such an urgent matter as the one to which the Leader of the Opposition has referred.


Robert Lorne Stanfield: In view of the great importance of this question to the people of Canada, and in view of the great desirability of setting the committee to work with the necessary instructions on this question as it relates to all members of the House of Commons as well as to members of the government, will the hon. gentleman not give us an assurance that he will bring this reference forward at a very early date, particularly in view of the obvious differences of opinion which exist between members of the government and ourselves on this subject? After all, the Prime Minister is just as likely to blow his stack on this subject after Christmas as before.


Some hon. Members:: Oh!


Mitchell William Sharp: I wish to assure the Leader of the Opposition that we have nothing to hide and that we would welcome the views of hon. members on the other side concerning this question of conflict of interest as it applies to members of parliament. We might then find out whether they want their spouses to be affected in the same way as they have suggested spouses of members of the cabinet should be affected.


Robert Lorne Stanfield: If we tender the hon. gentleman one of the days allotted to the opposition, could he screw up his courage enough to bring forward this question on one of those days?


Some hon. Members:: Hear, hear!


Mitchell William Sharp: I can assure the hon. gentleman we have no reluctance to debate this issue, but I do hope members opposite have the same perspective with regard to other business before the House and will deal urgently with the matters to which I have referred.


Some hon. Members:: Oh, oh!


GUIDELINES FOR CABINET MINISTERS-USE OF PRIVATE INVESTMENT COMPANIES-SUGGESTED DISCLOSURE OF LIABILITIES AS WELL AS ASSETS
Mr. Perrin Beatty (Wellington-Grey-Dufferin-Waterloo):: My question, too, concerns the government's conflict

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of interest guidelines, and I hope the hon. gentleman will not be evasive in his reply. Is it the policy of the government that cabinet ministers who choose the so-called disclosure option under the conflict of interest guidelines can continue to manage their investments secretly and directly through private investment companies, disclosing the names of the companies but not the companies' assets?


Mitchell William Sharp: That is a very technical question, Mr. Speaker-


Some hon. Members:: Oh, oh.


Mitchell William Sharp: -which I will have to take as notice.


Henry Perrin Beatty: A further supplementary question, Mr. Speaker. Apparently the minister does intend to be evasive. My supplementary arises from the guidelines tabled by the Prime Minister concerning conflict of interest of civil servants last December 18, one of which stated: "In order that honesty and impartiality may be beyond doubt, public servants should not place themselves in a position where they are under obligation to any person who might benefit from special consideration or favour on their part or seek in any way to gain special treatment from them". In order to ensure that a similar policy is followed for cabinet ministers, is the government intending to take action requiring the disclosure of liabilities of cabinet ministers, not just their assets?


Mitchell William Sharp: Mr. Speaker, I think these are the kind of questions that can be discussed when reference is made to committee. We would certainly welcome the views of hon. members, first of all as to how these rules are to apply to members of parliament. Then based on this foundation we can formulate the conflict of interest guidelines relating to members of the cabinet.


Mr. Speaker:: The hon. member for Brome-Missisquoi can ask a final supplementary.


REQUEST FOR ASSURANCE MINISTERS HAVE NOT TRANSFERRED ASSETS TO THEIR SPOUSES
Mr. Heward Grafftey (Brome-Missisquoi):: Mr. Speaker, my question is directed to the Acting Prime Minister and involves solely ministers of the Crown. Can the Acting Prime Minister assure this House that during the time that the right hon. Prime Minister gave his ministers to put their affairs in order under the new conflict of interest regulations no minister transferred to his or her spouse assets which, if held in the name of the minister, would put him or her in conflict of interest under the regulations?


Mitchell William Sharp: Mr. Speaker, I am not personally, of course, in a position to answer that question but it is one which I will direct to the Prime Minister.


William Heward Grafftey: A supplementary question. Would not the Acting Prime Minister-


Mr. Speaker:: Order, please.


FINANCE
Mr. Edward Broadbent (Oshawa-Whitby):: Mr. Speaker, I have a question arising out of correspondence tabled yesterday by the Prime Minister related to the recent budget. In the absence of the Prime Minister I will address my question to the Minister of Finance.
With reference to the oil agreement reached in discussion with the provincial premiers last March, the Prime Minister, in separate letters dated March 12 of this year to Premiers Blakeney and Lougheed, referred to the "one year" accord which was reached between him and the premiers. Would the Minister of Finance inform the House why the federal government decided unilaterally to break this accord, to use the Prime Minister's own term, since such action not only changed fundamentally the details of the particular agreement but put in serious jeopardy all future relations based on trust between the federal government and the provinces?


Hon. John N. Turner (Minister of Finance):: Mr. Speaker, the Prime Minister will deal with this fully in the budget debate tomorrow.


ALLEGATION FEDERAL GOVERNMENT BROKE AGREEMENT WITH ALBERTA AND SASKATCHEWAN ON TREATMENT OF OIL ROYALTIES PUT INTO CAPITAL ACCOUNT
John Edward Broadbent: A supplementary question, Mr. Speaker. It would have been nice to have the Prime Minister here today, but I will put a second question to the minister though I suspect I will get the same answer. The Prime Minister said in each of the letters to Premiers Blakeney and Lougheed, with reference to provincial capital funds established with additional oil royalties, that "we would propose that these capital amounts would not be included in the revenue base for equalization". In view of the fact that in his reply dated March 21, 1974, Premier Blakeney said, and I quote: "I concur with your proposal", meaning the Prime Minister's proposal, would the minister on behalf of the government explain what could possibly have led the cabinet to decide to break this specific federal-provincial understanding so totally?


John Napier Turner: Mr. Speaker, that understanding was not broken. As I say, the Prime Minister will deal with this subject tomorrow. I can say to the hon. gentleman that when Premier Blakeney, the Prime Minister and I-the three of us alone,-two weeks ago discussed the question of Saskatchewan's understanding of equalization, after a mutual analysis of the subject Premier Blakeney said there was no misunderstanding. As I say, the Prime Minister will deal with that fully tomorrow.


John Edward Broadbent: Mr. Speaker, on a final supplementary-


An hon. Member:: Sit down.


Some hon. Members:: Order.
November 26, 1974


Mr. Speaker:: Order, please. In fairness I have never really taken the occasion to appear in any way to limit the opportunity of the leader of the NDP to ask a rather lengthy question followed by supplementaries during the lead-off portion of the question period. However, under circumstances in which he has received again a reply which indicates that his questions will be answered by the Prime Minister during his speech tomorrow, it would seem appropriate to wait for that speech rather than to go on with another supplementary question at this time.


John Edward Broadbent: With great respect, Sir, I sat here as the parliamentary leader of the NDP and listened to members of the Conservative party not only lead off the question period, which I respect, but follow with a series of supplementary questions directed by not one but two other members of that party.


Some hon. Members:: Hear, hear!


John Edward Broadbent: So far, Mr. Speaker, I have asked two questions only, and given the fact that the Prime Minister is away and we are told is going to deal with this very important issue during the debate, it seems very important to get this matter on the record in the hope that he will deal with these questions which are of great concern not only to members of this House but to all the premiers of the provinces.


Mr. Speaker:: Order, please. This may be an appropriate occasion to clarify both matters raised by the hon. member in his point of order, the first being the practice of beginning the question period each day with questions posed by the Leader of the Official Opposition, then by supplementary questions by members within that party. This is the practice the Chair has been following in recognition of the fact that that party enjoys a particular status in the House as Her Majesty's Official Opposition.


Some hon. Members:: Hear, hear!


Mr. Speaker:: Ordinarily that practice extends to only one member. However, there are occasions when the subject is such that it perhaps requires extended treatment. During today's question period, as an example, when the subject is of such current importance and interest, it seemed appropriate to go to a second member of that party before moving on. Undoubtedly other members may want to pursue the subject further, but rather than carry out that questioning at this time, I felt it was appropriate to go to the leader of another party in recognition of that importance.
Having regard to the hon. member's point dealing with three supplementary questions, I have always permitted that. However, as I have already said to hon. members, when a minister rises in his place to answer a question by indicating that in respect of further information that is sought the answers will be given tomorrow or, as in this case, the information on the subject under question will be dealt with fully by the Prime Minister in a speech tomorrow, it seems to me appropriate not to carry the matter further by way of supplementary questions. This is an unusual situation and I would rule on it in that way. It is a discretionary matter, and in these extraordinary circumstances I think it calls for an extraordinary cut-off to the
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opportunity that would ordinarily be given to the hon. member as a matter of course.


Mr. Nowlan:: On the point of order, Mr. Speaker, because of the importance of the question and the assurance given by the minister, I should like to point out that we have had an example already during this session of this parliament of a Prime Ministerial speech in respect of which many members thought the question of inflation would be dealt with, but not even the word was mentioned. I just wonder what assurance we have that the subject matter of the questions posed by the leader of the NDP will be mentioned tomorrow, in view of this precedent?


Some hon. Members:: Oh, oh!


Mr. Douglas (Nanaimo-Cowichan-The Islands):: Mr. Speaker, I rise on that point of order. I have always had the greatest respect for the decisions Your Honour has handed down, and I know that you discharge your responsibilities as Speaker of this House with great fairness and impartiality. However, I do want to suggest that it is not within the competence of anyone to say for sure that the Prime Minister will tomorrow answer the questions the leader of this party has now asked.
Surely he has a right to put those questions because he cannot be sure, the government cannot be sure and certainly Your Honour cannot be sure, that those questions will be answered in the speech to be made by the Prime Minister tomorrow. I think he should be allowed to ask that second supplementary. As a matter of fact, I think some of the rest of us ought to be allowed to ask supplementaries arising out of the answer to his question.


John Napier Turner: Mr. Speaker, on the same point of order-


Some hon. Members:: Oh, oh!


John Napier Turner: -surely it is open to the hon. member and his colleague from Nanaimo-Cowichan-The Islands to put those questions to the Prime Minister tomorrow if they are not satisfied with the points he makes in his speech tomorrow. The question the hon. member is putting is an important one. It has certain debating aspects. The Prime Minister will be dealing with the general subject and the hon. member will have the opportunity tomorrow or subsequently to put that question to the Prime Minister in its true context.

fTranslation]


ROYAL CANADIAN MOUNTED POLICE
Mr. Eudore Allard (Rimouski):: Mr. Speaker, I have a question for the Solicitor General.
Since it seems the Royal Canadian Mounted Police has files on each member of parliament and some individuals from across the country, would the Solicitor General be able to tell the House whether that is true and, if so, would

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it be possible for me to go through my file, as a citizen and member of parliament?


Hon. Warren Allmand (Solicitor General):: Mr. Speaker, the RCMP does not have dossiers on all members of parliament.


Some hon. Members:: Oh, oh!


William Warren Allmand: It is not the policy of the RCMP to investigate members of the House of Commons unless they are suspected of committing some criminal offence or of being a threat to national security.


An hon. Member:: A point of order, Mr. Speaker. [Translation]


Eudore Allard: I have a supplementary question, Mr. Speaker.
Could the minister tell the House whether in fact the Royal Canadian Mounted Police has files on some people who are now federal members of parliament?


William Warren Allmand: Mr. Speaker, as I have just said the RCMP does not have files on any member of parliament unless he was suspected of a criminal offence or subversive activity. If we were investigating a certain member of the House of Commons we would not announce it in the House of Commons.


Eudore Allard: Mr. Speaker, I would like to ask a final supplementary question.
Could the hon. minister tell the House if, in case a file existed about me or any other member of parliament, we could look into it?


Mr. Ellis:: On a point of order, Mr. Speaker-


William Warren Allmand: Well, Mr. Speaker, as I said if there were an active file in respect of a member of the House of Commons, I certainly would not advise the person being investigated that he was suspected of some offence. If the hon. member is referring to a closed file or something similar, I think it would be up to the member to come to see me on that and I would discuss it with him.


Mr. Speaker:: Is the hon. member for Hastings rising on a point of order?


John Raymond Ellis: Yes, just briefly, Mr. Speaker. The Solicitor General said no members of parliament were investigated unless they committed a crime, as I recall what he said, or were suspected of criminal activity. Having been subjected to an investigation by the RCMP because of some interest I had in the Unemployment Insurance Commission about a year ago, I know that not to be true. I just hope the Solicitor General is not accusing me of some criminal activity.


William Warren Allmand: Mr. Speaker, it is the policy of the RCMP only to investigate individuals, whether or not they are members of parliament, if they are suspected of committing an offence or suspected of subversive activity.


Some hon. Members:: Oh, oh.


William Warren Allmand: The hon. member made an allegation that he was investigated by the RCMP. That is a serious allegation, and I will check into it and report to the House.


FINANCE
Hon. Alvin Hamilton (Qu'Appelle-Moose Mountain):: Mr. Speaker, in view of the very serious charges that have been laid by the ministers of some of the provinces vis-avis federal ministers of the Crown breaking their word and agreements, I wonder, in the interests of being constructive, if I could not ask the Minister of Finance a question in the hope that he will take it in the spirit in which it is meant. In view of the fact that mining companies, as distinct from oil and gas companies, are very hard hit by the double taxation of the present budget, will the minister give an opportunity for this industry to make representations before the ways and means motions on income tax become law?


John Napier Turner: Mr. Speaker, I do not know of any way under the present procedure in which that could be done, since the ways and means motion and the subsequent bill are dealt with on the floor of the House.


Francis Alvin George Hamilton: Since I have failed in getting an opportunity for the mining industry to present its case, I wonder if the minister-in view of the fact that the mines ministers conference will be held next week on December 4, 5 and 6-would give some assurance that the views of Provincial Mines Ministers will be considered before the ways and means motion is finally passed and made into law.


John Napier Turner: I would certainly want to hear what they have to say, but I want to say to the hon. member that officials of the mining industry have seen me on several occasions since the May 6 budget and are well aware of the situation on provincial and federal taxation. I have also had separate meetings with the mining association of British Columbia and several of the other provinces, and I would be glad to have anything else they could add.


Francis Alvin George Hamilton: I understand the answer of the minister about the mining companies in response to my first question, but I am asking now about provincial ministers. Will they be given a chance of representing the mines of their provinces?
November 26, 1974


John Napier Turner: When they are down here, if they would like to see me my door is open.


ROYAL CANADIAN MOUNTED POLICE
Mr.   Sean@: My question is directed to the Solicitor General. It arises out of the deportation from Canada on or about October 29 of two suspected members of the Palestinian Liberation Organization who jumped ship at Thunder Bay. Could the minister advise the House whether the RCMP has uncovered or is investigating the possibility of the existence of a conspiracy on the part of the murderous PLO to have their members jump ship at Canadian ports in anticipation of terrorist activities at the 1976 Olympics?


William Warren Allmand: Mr. Speaker, the story that appeared in some of the newspapers that two suspected members of the PLO jumped ship in Canada was not correct, and that story was never confirmed by me or by the RCMP. What happened is the following: On October 28 at Thunder Bay two crew members of a Greek ship deserted. On October 29, the Salvation Army telephoned the RCMP to report that the deserters were there and wanted to surrender to Canadian authorities.


Mr. Fairweather:: They infiltrated the Salvation Army.


Some hon. Members:: Oh, oh.


William Warren Allmand: Hon. members do not seem interested in hearing the answer, Mr. Speaker.


Mr. O'Sullivan:: Quite the contrary, Mr. Speaker. We are critically interested in the answer to the question.


Some hon. Members:: Oh, oh.


An hon. Member:: So listen to it.


Sean Patrick O'Sullivan: My supplementary question to the minister-


An hon. Member:: On an answer you didn't hear.


Sean Patrick O'Sullivan: -is whether the RCMP has taken precautions to ensure that the PLO will not succeed in any plans they may have of which the RCMP may be aware to plant terrorists in Canada. Furthermore, would the minister say whether discharged Constable Samson of the RCMP had in his possession all the details of the security arrangements surrounding the 1976 Olympics?


William Warren Allmand: I will continue to answer the first question. Following the call from the Salvation Army, the RCMP and the immigration authorities picked up these two individuals and had them deported to their own countries, namely to Greece and to Syria. The only allegation that these people might have been related to the PLO is a statement by the captain of the ship that he thought that
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one of the two was a member of El-Fatah, but the RCMP found no information to back that up, and they also say that there is no organized effort to plant cells in Canada by jumping ships.
With respect to Samson, we have no information that Samson had plans for Olympic security and was selling them, as alleged recently by the hon. member for North-umberland-Durham (Mr. Lawrence).


EXTERNAL AFFAIRS
Mr. J. M. Forrestall (Dartmouth-Halifax East):: Mr. Speaker, my question is directed to either the Secretary of State for External Affairs or to the Minister of National Defence. It has to do with the status of the Canadian forces in the Middle East and the present position of our men. Has Canada now been invited to commit troops for a further period in that theatre and, if so, for what duration of time and, if not, will we withdraw our troops in the near future?


Hon. Allan J. MacEachen (Secretary of State for External Affairs):: With respect to the UNEF, there has been an invitation from the Secretary General of the UN to commit the force for another period, and that is presently under consideration by the government. With respect to the force operating in the Golan Heights, the mandate expires at the end of November, and that presently is also under consideration by the government.


J. Michael Forrestall: Could the Secretary of State for External Affairs expand a little on the nature of the invitation from the Secretary General in terms of what we have been asked to do. Are we to take from the minister's reply that we are there to continue in the role that we were invited to play at the outset, or has there been any change in the status of the role which would involve, for example, an expansion in the number of troops?


Allan Joseph MacEachen: My understanding is that there has been no changed role proposed for Canada, but in the light of the question I will be ready to double check. However, that is my impression at the moment.


HOUSING
Mr. Lincoln M. Alexander (Hamilton West):: Mr. Speaker, I should like to direct a question to the minister responsible for housing, and I think he has notice of this question. On November 1 he advised the House and the nation that: "Rather than wait until legislation can pass through the House, I wish to make this benefit available to families immediately". I am referring to the $500 grant with regard to housing. Subsequently, I have been advised by CMHC that this grant, although effective as of Novem-

November 26, 1974
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ber 1, 1974, cannot be made until the necessary legislative authority is given, which is expected within the next several weeks. There seems to be a problem here, some misunderstanding as to what the minister's attitude is, and I hope he can clarify it now. Is that money available immediately, as he indicated in his statement of November 1?


Hon. Barney Danson (Minister of State for Urban Affairs):: I thank the hon. member for bringing this misunderstanding to my attention, but I would like to draw his attention to the total statement as it appeared on page 2 when I said:
In other words, Mr. Speaker, the legislation, if approved, would be retroactive and would benefit people who bought and occupied their new house now, without waiting any longer.
In other words, we must wait for the legislation. The commitment is being made as of November 1. I wanted Canadians, including the hon. member, to know where they stood. As soon as that legislation is brought in, the moneys can be paid in accordance with the will of the House.


Lincoln MacCauley Alexander: Mr. Speaker, the minister cannot fluff me off that way. The statement was definite. It shows purpose and intent, that the money is available immediately. Now, apparently, the money is not available immediately and legislation is required before the payment can be made. In order to-


John Napier Turner: Question.


Lincoln MacCauley Alexander: What is the Minister of Finance saying? He had better look after his job.


Some hon. Members:: Hear, hear!


Lincoln MacCauley Alexander: In order to give some hope of this payment being immediate, will the minister use his influence and see to it that this legislation is given priority in the near future.


Barnett Jerome Danson: Mr. Speaker, I need not use much influence as my colleague, the Leader of the House, has already told me that he will give priority to this legislation as soon as it is ready. It is in the final stages of drafting and we hope to introduce it in the near future.


EXTERNAL AFFAIRS
Mr. Heath Macquarrie (Hillsborough):: Mr. Speaker, my question is to the honourable and learned Secretary of State for External Affairs. It is based on his speech to the United Nations General Assembly in which he declared that Israel should be an essential party in deciding the question of the PLO's attendance at the Geneva Conference. Assuming that the minister is aware of the Israeli

government's public statements on this matter and considering that the Palestine created by the UN is under Israeli occupation and that one and a half million Palestinians are in refugee camps, how does he envisage the Palestinian representatives being at the Geneva Conference?


Allan Joseph MacEachen: Mr. Speaker, I do not know whether my vision is involved in the earlier statement. It seems to me self-evident that, unless there is concurrence on the part of Israel with regard to whom it will negotiate or with whom it expects to negotiate, there is little prospect for a settlement or any negotiated result. That is why it is obvious that Israel has a role to play in deciding which group, body, person, organization or combination thereof will speak for the Palestinians.


Heath Nelson Macquarrie: Mr. Speaker, may I ask a supplementary question for clarification. Is it the view of the minister that Israel will be able to exercise a veto over the composition of the other delegates at the conference?


Allan Joseph MacEachen: Mr. Speaker, I would not put it in that negative form but I believe that it is reasonable to expect that Israel, as one of the interested parties, will be involved in reaching a decision as to what personality, body or representative will speak for the Palestinians. It is hoped, in the circumstances, that the question of the veto will not arise on either side of the negotiations.


TRANSPORT
Mr. Les Benjamin (Regina-Lake Centre):: Mr. Speaker, my question is directed to the Minister of Transport. As early in October the President of Canadian Pacific said that when the freight rate freeze expires we would see hefty hikes in freight rates and as the railways have now filed application for a 25 per cent increase in rates which were affected by the freeze, can the minister inform the House when he intends to introduce long-awaited legislation which will force the railways to disclose their costs, bearing in mind that such legislation will undoubtedly receive speedy passage in this House.


Hon. Jean Marchand (Minister of Transport):: Mr. Speaker, perhaps the Leader of the House can convince the other House leaders that we should introduce this legislation right away. It is not complicated, and I hope it will be before the House soon.


SUGGESTED EXTENSION OF RAILWAY FREIGHT RATE FREEZE UNTIL IMPLEMENTATION OF LEGISLATION FORCING RAILWAYS TO DISCLOSE COSTS OF OPERATION
Leslie Gordon Benjamin: A supplementary question, Mr. Speaker. Since the freeze was expressly intended to provide an opportunity to review and remove certain anomalies and inequities in freight rate structures and since the attempt to do so has been
November 26, 1974

thwarted by the railway's refusal to reveal their cost data, will the minister agree to extend the period of the freeze until such time as the proposed legislation is in effect or until the railways have provided the information which is required.


Jean Marchand: Mr. Speaker, I do not think, personally, that that would serve any practical purpose, because, as you know, the freeze touches only about 22 per cent of the revenues of both the CN and CPR. We do not know exactly how rate structures are made up; we do not know exactly which ones would be affected and we shall only know when CN and CPR file their applications with the CTC. So, I think the most efficient thing to do is to introduce the legislation as soon as we can.


RAILWAY FREIGHT RATE FREEZE-INTENTION OF GOVERNMENT WITH REGARD TO PAYMENT OF COMPENSATION TO RAILWAYS
Leslie Gordon Benjamin: A final supplementary question, Mr. Speaker. As both railways have succeeded in making the government, and particularly the Minister of Transport, look very foolish, because they have thwarted the intent of the freeze, will the minister advise the House-I asked him this earlier in October- how much money the railways have received in compensation as a result of the freeze or whether the government intends to pay anything, since the railways have refused to give the information which is needed.


Jean Marchand: Mr. Speaker, this matter is being negotiated right now.


ABORTION
Mr.  R. Gordon Ii. Fairweather@Fundy-Royal: Mr. Speaker, my question is directed to the Minister of Justice. Would the minister care to table or otherwise make available the letter he wrote to the Secretary of State in which he gave his views on abortion, as the letter was shown on the CBC national news last night. May I also ask my supplementary question, which is this: If the letter is confidential, is an investigation under way to determine how it became available to the CBC, as the minister refused to table it in this House.


Hon. Otto E. Lang (Minister of Justice):: Mr. Speaker, this is certainly not the type of correspondence ordinarily tabled, and we are looking at the second part of the question.


Robert Gordon Lee Fairweather: Mr. Speaker, the second part of the question was, "or otherwise make available."
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BASIS FOR STATEMENT BY MINISTER OF JUSTICE- GOVERNMENT SHOULD NOT FINANCE GROUP ENGAGED IN ILLEGAL ACTIVITIES-PRODUCTION OF EVIDENCE
Mr. Stuart Leggatt (New Westminster):: Mr. Speaker, my supplementary question is this. In the letter, the contents of which were broadcast over the CBC last night, the Minister of Justice said that it is so unseemly and against our political interest to have the federal government involved in financing a group engaged in illegal activities. Can the minister advise the House whether the advice he gave the cabinet as the cabinet's legal officer was based on his political interest, or was it based on a proper legal interpretation of the Criminal Code given by the law officers of his department.


Otto Emil Lang: Mr. Speaker, I should like the hon. member to understand that the word "political" has a broad, important and honourable meaning. The federal government, in considering these matters, should take into consideration how a government appears to act as well as how it acts in the interests of the public and in upholding the laws of the country.


Stuart Malcolm Leggatt: A supplementary question, Mr. Speaker. That letter also referred to illegal activities which allegedly were carried out by that particular women's group. Did the minister have any evidence of illegal activities? If so, did he request the Attorney General of Saskatchewan to lay charges based on that evidence, and will he table the evidence, if he has it?


Otto Emil Lang: Mr. Speaker, I think the hon. member's premises are false.


POST OFFICE
Hon. W. G. Dinsdale (Brandon-Souris):: Mr. Speaker, my question is for the Postmaster General. Will the hon. gentleman inform the House and the people of Canada if the disastrous fire in Terminal "A", Toronto-


Robert Gordon Lee Fairweather: Burn the old mail!


Some hon. Members:: Oh, oh!


Walter Gilbert Dinsdale: Mr. Speaker, I thank the hon. member for Fundy-Royal for his assistance. Will the Postmaster General inform the House if the fire caused a further delay in the handling of the 50 per cent of mail which passes through this important terminal daily and, specifically-if I may ask my supplementary question now-has there been any loss of pension cheques or family allowance cheques? If so, what action is being taken to meet this emergency?


Hon. Bryce Mackasey (Postmaster General):: Mr. Speaker, there was a serious fire during last evening in Terminal "A", Toronto. I do not think there is anything humourous about the fire. There was about $2 million worth of damage although, happily, no family allowance,

November 26, 1974
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pension or welfare cheques were burned, thanks to the tremendous cooperation of the Toronto police and Toronto firemen, who were able to protect the mail on the bottom two floors with tarpaulins. But for their help the damage would have been more extensive. We are very grateful to them. We have also hired other premises in the Toronto Exhibition Centre in order to continue the mail operations. The mail that has been damaged is mostly mail going to and from overseas as well as third-class mail.


INDUSTRY
Mr. Roch La Salle (Joliette):: Mr. Speaker, I wish to put a question to the hon. Minister of Industry, Trade and Commerce.
Since comments were made public last week to the effect that United Aircraft of Canada Limited might completely move its operations outside Quebec if the conflict that affects it were to last, is the minister aware of such a possibility and, if not, could he get some information about it and report to the House?
fEnsriish]


Hon. Alastair Gillespie (Minister of Industry, Trade and Commerce):: Mr. Speaker, I am not aware of that probability. Of course, there is always that possibility, but I have satisfied myself that it is not a probability.


MALTING BARLEY-SUGGESTION PREMIUM SHOULD BE PAID TO THOSE WHO PRODUCE THIS TYPE OF BARLEY
Mr. J. H. Horner (Crowfoot):: Mr. Speaker, I have a question for the Minister of Justice in charge of the Canadian Wheat Board. Can he assure the House that the $1.15 premium paid for malting barley will go to those producers who produce the malting barley?


Otto Emil Lang: As the hon. member well knows, Mr. Speaker, it has been common practice for the premium on this particular grade of barley to be distributed in the pool that relates to that grade, apart from whether or not their barley was selected for malting. The wheat board has under consideration a possible proposal to recommend a separate pool for selected malting barley. Needless to say, if the wheat board recommendation comes forward, I will bring it forward as soon as possible.


John (Jack) Henry Horner: Would the practice outlined by the minister not tend to distort feed barley prices on the open market?


Otto Emil Lang: I do not think so, Mr. Speaker. The real question is whether it is more fair to distribute the premium for the barley selected only to those farmers whose

barley was selected by the malting companies or whether it should be distributed to those farmers who produced that particular kind of barley and sold it otherwise into the system. Over the years up to this point the weight of farmer opinion has been in favour of retaining the malting premium for all farmers who produce that particular grade or quality. There is a bit of evidence regarding a change of mood among producers at the present time.


EXTERNAL AFFAIRS
Mr. Douglas Roche (Edmonton-Strathcona):: Mr. Speaker, my question is for the Secretary of State for External Affairs. At the World Food Conference in Rome the government pledged $50 million of development assistance for the current year. Subsequently, the minister told this House on November 14 that the money had been committed, but not designated. My question is, committed for what? Specifically, can this $50 million be used to send food now to nations experiencing severe crop shortfalls, particularly Bangladesh where severe cold, floods and crop failures have produced destitution?


Allan Joseph MacEachen: Mr. Speaker, I recall making a statement in the House during my speech on the address to the effect that that question of allocation of $50 million was under consideration. I do not contest the hon. member's use of words, but I do not think I put it exactly that way. In answer to the second part of the question, the money could be used for current hunger situations, including Bangladesh. At present there are a number of proposals relating to a number of countries under consideration. I hope to be able to make a statement or an announcement on this matter as soon as a final decision is made.


Douglas Roche: Since the World Food Conference in Rome, several members on this side have been trying to find out how the $50 million will be used. I previously asked the Minister of Agriculture specific questions. He said the answers would be forthcoming in his statement which was given in this House last Friday. Specific answers to the specific question of how the $50 million that we said in Rome we were going to send have not been given. Did the minister go to Rome and pledge $50 million without any idea as to how that $50 million would be used?


Allan Joseph MacEachen: No, Mr. Speaker, not at all. Specific answers will be given which I think will be satisfactory to my hon. friend.
November 26, 1974


REGIONAL ECONOMIC EXPANSION
Mr. Elmer M. MacKay (Central Nova):: Mr. Speaker, my question is for the Minister of Regional Economic Expansion. Were all political roadblocks cleared away by the minister and the premier of Nova Scotia in their recent meeting insofar as finally having Metropolitan Area Growth Investments Limited, an important Crown agency which was funded for $20 million in 1973, become operative and useful? Can the minister now confirm that this important agency is now in a position to fulfill a useful and active role?


Donald Campbell Jamieson: Mr. Speaker, certainly any disagreements there were as to procedure have been cleared away. They were not serious disagreements, but they are now out of the picture. We are in the process of searching for a chief executive officer. If I can take the time of the House, if any hon. member knows of a good candidate, I would be pleased to hear about it.


An hon. Member:: Stanbury.


Some hon. Members:: Hear, hear!


Mr. Speaker:: Orders of the day.


Miss Nicholson:: Mr. Speaker, I rise on a question of privilege. The record of the vote last night has excluded my name and substituted the name of Mr. Nielsen. I would just like to explain that I really do not think Mr. Nielsen and I look at all alike.


Some hon. Members:: Hear, hear!


Mr. Speaker:: I am sure you would not vote alike. However, it was observed that this error had been made in the transcription of Votes and Proceedings. Steps have been taken to make sure the record is correctly reported.



GOVERNMENT ORDERS


[Stage Direction]
The House resumed, from Monday, November 25, consideration of the motion of Mr. Turner (Ottawa-Carleton) that this House approves in general the budgetary policy of the government.
Mr. Speaker:: The hon. member for Malpeque (Mr. MacLean).


Mr. MacLean:: Mr. Speaker, I was under the impression that a member of another party was to speak at this time.


Mr. Speaker:: The Minister of Industry, Trade and Commerce (Mr. Gillespie).
The Budget-Mr. Gillespie


Alastair William Gillespie: Mr. Speaker, I thank the hon. member for Malpeque (Mr. MacLean) for clarifying the situation. I was not aware Your Honour had called orders of the day. With your permission, Mr. Speaker, I would like to speak at this time.


Mr. Speaker:: Please allow me to assure the minister that I did in fact call orders of the day, after which the Clerk read the appropriate order, resuming debate on the motion of the Minister of Finance. Everything now seems to be in order to proceed with the minister's intervention in this important debate.


Alastair William Gillespie: I would like, Mr. Speaker, in the time at my disposal to direct my remarks to the problems and opportunities that prevail in international trade and their effect on Canada's industries. Very clearly, there are important implications in the efforts of countries to deal with inflation while encouraging economic growth. Equally challenging is the problem of adjusting to rapidly changing international trade payments and patterns caused by price changes, particularly for oil. Of course, as all hon. members are aware, there is great need to quickly come to grips with the food needs of the world. If I were to try to put the problems facing us in a few words, I would say they are problems of political will and of confidence.
The international trading system is under enormous and conflicting pressures brought on primarily by balance of payments problems and by inflation which has shaken confidence in some quarters. This is why the individual and collective will of the trading nations to keep the system going is so important at this time. The difficulties of managing balance of payments adjustments are considerable and I do not want to underestimate them, but I am encouraged that governments of major trading countries are concerned about the risks of unilateral action designed to restrict imports to safeguard their balance of payments in the face of high energy bills. I believe there is an earnest desire on all sides, out of self-interest if nothing else, to co-operate in solving this problem. It is reflected, for example, in the trade pledge adopted last June by members of the OECD. With this pledge, governments undertook a political commitment against introducing import restrictions for balance of payments reasons.
Moreover, much effort is being devoted to finding political and economic ways and means of recycling earnings of the oil exporters to countries whose payments positions have been jeopardized by the energy crisis. The energy problem has demonstrated in a stark way how interdependent are the trading nations of the world. At a time of difficulty, perhaps it is worth recording that world trade has expanded many times since the Second World War and that as citizens of a major trading country we are richer for it. In large measure, this growth stems from the six rounds of tariff-cutting negotiations carried out under GATT auspices since 1947. We are now preparing for the seventh round-the Tokyo round. In this round we shall be seeking easier access abroad for more of our manufactured goods so as to enable a higher degree of processing of our natural resources in Canada before they are exported.

November 26, 1974
The Budget-Mr. Gillespie
Foreign trade barriers, both tariff and non-tariff, are a major impediment to further processing in Canada. We look to these multilateral trade negotiations as the most effective way or removing or reducing these barriers. To this end, we are promoting a "sector approach" in the context of GATT negotiations, advocating a uniform or zero tariff for all steps of processing of, say, a mineral up to its fabricated state-from the ore to the beneficiated ore, to the smeltered metal to the refined metal, to the fabricated metal products; the whole chain of further processing.
In preparing our position for the GATT conference we have been fully aware of the interests of the provinces. Over a year ago I invited the provinces to submit their views on what they would like us to obtain from the negotiations and what they would be prepared to concede. I have held a number of meetings with my provincial counterparts to discuss these questions. A number of useful meetings between federal and provincial officials have also been held. Some provinces have already submitted their views and these will be most helpful to the Canadian negotiators. I should like to take this opportunity to invite those who have not already done so to submit their views. I hope the Canadian negotiators will shortly be able to move into the intensive phase of these discussions which have been delayed pending the obtaining of the needed negotiating mandates by the United States and the EEC.
We have, of course, all been watching with considerable interest the progress, or lack of it, of the U.S. trade reform bill through Congress. The mandate contained in this bill is a vital ingredient for getting on quickly with the new round of trade negotiations. If an effective negotiating mandate is not obtained by the U.S. administration, it will be a serious setback to international trade liberalization. United States leadership is essential if we are to make effective progress at this time. In addition, this is not the time for countries to allow the international trading community to slip back into the dog-eat-dog policies of the 1930s. We should play our part in trying to strengthen international co-operation. I am hopeful the need for an effective mandate will be recognized and pursued urgently to ensure against a serious deterioration in the international trading environment, for time is running out.
Against this background, let us take a look at Canada's current trading picture and make some projections of what we may expect by way of international trade over the next 12 months and even beyond. For the first ten months of 1974, the value of our exports is up by 28 per cent, compared to the same period in 1973. Thus, for the whole of 1974 I now expect that our exports will total more than $31 billion. To put it in another way, I expect that exports will increase by about $6.5 billion over the figure for 1973, compared with a gain of something more than $5 billion from 1972 to 1973. Some may find this surprising, especially in a year when our major trading partners, the United States, the United Kingdom and Japan, have experienced an economic downturn. The increase in our exports has taken place, of course, because Canada is fortunate enough to be a major exporter of a number of commodities which are in short supply and for which prices have risen sharply in the past year. These include wheat, copper and zinc as well as crude petroleum, with

regard to which the collective action of the OPEC countries has resulted in even larger price increases.
Although the physical volume of exports of these commodities has been lower in 1974, increases in price have more than offset decreases in volume. The commodities I mentioned have, therefore, made a major contribution to the increase in the value of Canada's exports in 1974. It is largely because of the decline in the physical volume of those commodities, including lumber, that the index of the volume of Canada's total exports has declined in 1974. For the first ten months of 1974 this decline amounted to about 6 per cent, compared with the 1973 levels, and I expect that the decline for the year as a whole will also amount to about 6 per cent. We are aware, too, that the physical volume of our exports of automotive goods has been affected by the drastic slowdown in the United States auto market. A similar decline in housing construction in the United States and a slowdown in Canada have caused a serious problem in Canada's lumber industry.
The budget contains a number of important measures which should help to increase market demand in Canada. I refer particularly to the reduction of the sales tax on building and construction materials from 11 per cent to 5 per cent. There are already indications that this is being reflected in lower average housing costs. Second, there is the change in the treatment of capital cost allowances on new, multi-unit residential buildings put up for rent. Parenthetically, I might mention another helpful measure-the provision for a $500 cash grant to individuals who purchase for the first time new, moderately priced housing units.
Returning to the budget, I hope, too, to see more developed land coming on to the market because we have eliminated the privilege of taxpayers to charge against income the carrying costs on land awaiting development. There is, also, the provision for capital cost allowances at 15 per cent to firms who hold certain types of timber limits and/or licences to cut timber. We all recognize that transportation is a major cost factor in forest-based industries. Thus, the complete elimination of the 12 per cent sales tax from a wide range of transportation equipment, including large trucks, will be felt not only in forest-based industries but also in downstream industries, including residential construction.
My department is carrying on a vigorous export promotion program. As a matter of fact, a timber trade mission returns from the Middle East tomorrow and I am optimistic about what it will have to report. Timber exports to the Middle East, by the way, increased from just $75,000 for all of 1972 to more than $3.5 million for the first six months of this year. I believe this is an illustration of what aggressive promotion can accomplish. We found a new timber market in Cuba which took nearly $3 million worth of lumber in the first six months of this year alone. They imported none at all from us in 1972 or 1973.
We have also been promoting other Canadian export interests. All hon. members are aware that I led trade missions to Mexico, the Middle East countries, and Brazil this year, and I can assure them that in every country we were impressed by the great interest in Canada and in the
November 26, 1974

desire to co-operate with Canada in the development of closer trade and economic relations.
As a result of my visit to Iran in April, for example, it has been agreed to conclude a trade agreement with that country to facilitate the flow of goods from both sides. It is apparent that a wide scope exists for a wide exchange of products, the employment of Canadian expertise, the establishment of joint ventures and other forms of economic and technical co-operation between the two countries. In Brazil, just last month, I was further convinced that aggressive marketing by Canadian entrepreneurs can and will pay off. Brazil itself presents myriad opportunities. This year we have already trebled our trade with Brazil, on a year to year basis, over last year. Our increase in exports to Brazil this year will be of the order of $200 million. These opportunities in Brazil range all the way from increasing our current exports to establishing new, joint ventures with Brazilian partners.
I submit that there is sufficient international demand to give the Canadian economy a needed stimulus and to provide the confidence that market opportunities can indeed be captured by an aggressive Canadian business community. At the same time, however, I have been impressed by the need for flexibility in our trading strategies. In certain developing countries, for example, I can see direct participation in their industrial development as clearly the best way to strengthen our trade and economic relations. I am encouraging Canadian business interests to look at the opportunities provided by joint ventures. I also plan to continue the market development program that I have initiated through trade missions to ensure that Canada does not lose out on the major, new international trade and economic opportunities.
As for next year, we must be realistic. We must recognize that Canada cannot much longer escape the impact of continuing economic stagnation in our trading partners. It looks as if the rest of the industrialized world will experience marginal economic growth next year, particularly during the first half of the year. This means that recovery, in physical volume, of our exports will be slow in 1975, certainly in the first half of the year. In spite of that, however, we should still obtain a moderate increase in total value of exports.
Over the longer run, I am optimistic. Canada has been steadily building an internationally recognized and internationally competitive industrial base. It has a strong supporting institution in the Export Development Corporation and has a variety of programs offered by the Department of Industry, Trade and Commerce. What is essential to our export outlook at this time, in view of the slowdown abroad that I have noted, is that Canadian entrepreneurs keep up the momentum of recent years even though in the short run it may not appear to be in their immediate interest. But over the long run it will clearly be in their interest and it will be in the interest of Canada. I can assure them and Canadians generally that we will be doing our part to assist them.


John Angus MacLean: Mr. Speaker, when I go around my constituency and discuss with the people I represent matters that are of special interest to them, I find that not since about 1938, which is many years ago, have so many people been apprehensive and worried about
The Budget-Mr. MacLean
the future. This is due partly to the fact that they cannot see ahead. They are troubled about where they are going, not only as a province and as a country but as a western civilization. In addition, they are beset by economic problems. They feel lost in a sort of desert of shifting sand, their savings depreciating and their costs escalating. Goals which were almost within their reach quite recently are now suddenly unattainable. The necessities of the immediate future they find have been squandered in the luxuries of the immediate past.
There are three important matters with which I find my constituents concerned, and I propose to talk about them for a few minutes but not in order of their importance. These three problems are the energy crisis, inflation, and what I might term loosely as the food crisis. For a few decades now North American civilization has been infatuated with the high-powered automobile. We have been producing millions of cars that consume twice as much gasoline as necessary to travel a given distance. It seems unreasonable to me, and I think to most people, that an automobile should require a gallon of gasoline to transport one man perhaps 10 or 12 miles, which is often the case in our large cities where people insist on using high-powered automobiles, expensive ones at that, which consume a large amount of gasoline. Other cultures are not so dependent upon the automobile as are we in North America.
In addition to this, in the last few decades there has been great mechanization in the field of agriculture, with a parallel input of energy in the form of petroleum products. Added to that we have, of course, begun to use oil almost exclusively for heating homes because of its convenience and for other reasons. I think that for many years we were living in a fool's paradise. The cost of crude oil remained fairly steady, but as times changed and the western world became more and more dependent on oil from the Middle East and other sources, and it became a sellers' market instead of a buyers' market, it became inevitable that the cost of petroleum products in their raw state would increase.
This is exactly what has happened, Mr. Speaker. For many years the price of crude was around $3.85 a barrel, basis Edmonton. I do not know exactly what that would mean, but I suspect it would mean that the countries in the Middle East would charge, by way of royalties or taxation, something like $1.70 per barrel of oil exported. At the same time, countries in which these products were being consumed were taxing them to an even greater extent. The provinces were collecting an average of $2.40 a barrel in the form of gasoline tax on Middle East oil imported into Canada, from which gasoline was extracted. It was hardly surprising, in that situation, that the cost of oil would greatly increase.
Canada is in the relatively happy position of being self-sufficient in oil and will be for a couple of years or longer because our exports equal our imports. This created a special problem because we wanted the cost of crude to Canadians to be below the world price and the only way to accomplish this was to impose an export tax on what we exported, to subsidize what we imported. Under these circumstances no one objected to this tax because in that

November 26, 1974
The Budget-Mr. MacLean
way the differential between the cost of crude oil to Canadians and the higher world price was maintained. In these circumstances, the producing provinces had to make a concession for the common good and they have been very generous in the matter of the distribution of this export tax.
In addition, the exporting provinces own the resources, under the British North America Act. Petroleum is a non-renewable resource and the provinces are concerned that they obtain a reasonable benefit from the exploitation and selling of this resource which can only be sold once. Therefore, they impose royalties. Someone has likened royalties to rent in doing business. There may be some similarity in the case of renewable resources such as stumpage on forest land, and that sort of thing, but in the case of non-renewable resources there is no relationship between rent and royalties. Royalties represent the sum of money a province receives for what it sells because one day its non-renewable resources will be gone forever.
The Minister of Finance (Mr. Turner) declared in his budget that royalties paid to a province are not legitimate deductions in computing income tax. Royalties paid to a foreign country are allowable, but if royalties are paid to a province they do not represent a legitimate deduction in computing income tax. What the government is saying, in effect, is that royalties paid to a province are illegitimate; they are not legal and should not be considered. This position is high-handed, unfair, untenable and even illegal. I implore the Minister of Finance to re-examine his position with regard to royalties. The minister has made a long and involved argument in favour of this stand, on the basis that royalties in some cases are not really royalties but are camouflaged taxes that erode the federal tax base, and that sort of thing. I am not arguing that there is not some basis for that argument and I would agree that this may be so in some cases. But that is not justification for denying what I believe to be a superior right of a province, that is, to charge royalties on resources that are owned by the provinces and exploited by companies.
Surely, a much better solution would be found if the Minister of Finance were to agree that these royalties will be accepted as legitimate deductions for income tax purposes up to some mutually agreed amount, either a percentage or a specific amount based on the quantity produced, or something else that could be worked out. I am not suggesting the technicalities here, but I think this could be done. The minister said that to find a solution of this sort would be very difficult. That is an old, old argument. I remember perhaps 20 years ago when the suggestion of making cash advances on farm-stored wheat was put forward time and time again. The government of that day said it would love to do this, but it was technically impossible and too complicated. The government gave a million reasons why this could not be done. However, the government changed, and it was done; it was not found too difficult. I think a way could be found and I implore the minister to try to find it. Surely a compromise could be reached without violating the basic right of a province to charge royalties on the exploitation of the natural resources which it owns.
At the present time, primarily Alberta is involved. However, we should not forget that presumably most of the oil

in Alberta has already been found, and if we are to find additional large quantities of oil in Canada they will be found either on land that is under the jurisdiction of the federal government or in a province or provinces other than Alberta. Therefore, every province has an interest in this principle not only in respect of petroleum products but in respect of the whole spectrum of natural resources. As far as petroleum is concerned, we in the Atlantic provinces feel that the federal government has a penchant for confiscation. It is argued that offshore resources belong to the federal government. The government now thinks that as far as the Atlantic provinces are concerned, if commercial quantities of oil are found in that area it will not matter, because the federal government says it has a prior right over natural resources discovered offshore.
Referring to page 11 of the budget speech of November 18, the minister said:
Third, the federal government should recognize the special position of the provinces with respect to the taxation and charges on resources within their boundaries.
I agree with that. The trouble is the minister says this but has not done it. This government is doing the opposite, and I suggest it should do what the minister has said it should do. I have taken more time on this matter than I intended, and I now turn for a few moments to the problem of inflation. It is my belief that high government expenditure is a considerable factor in inflation in this country. It is perhaps not the most important factor, but it is important. I am concerned about the rapidly accelerating and excessively large expenditures of governments in Canada, not only at the federal but at all levels. The federal government is not without blame, by any means, in this regard. The minister was interviewed on television the other night. I had the pleasure of watching him for a little while. He was asked the following question by Mr. Lynch:
Why don't you admit that the thing is beyond your control, as many people think?
He was speaking of inflation and the expenditures forecast for the next fiscal year. The minister replied:
I won't admit that at all. I will say that the discretionary element in those expenditures is about $7 billion or $8 billion out of $35 billion because a lot of it is statutory, a lot of it is federal-provincial in medicare, hospitalization and equalization, some of it's the servicing of the public debt, and so on ...
With that I agree. However, if one looks at the forecast for the next fiscal year it will be seen that it is roughly $35 billion. If we subtract even the larger of the two figures mentioned by the minister, $8 billion, we are left with $27 billion. The minister, in effect, is saying that the non-controllable expenditures for next year will be about $3'/2 billion more than the total expenditures for last year. In that light I think it is fair to say, unhappily, that government expenditures are out of control. The rate at which they are out of control is a question that remains, but the fact is that these trends must turn around; we cannot go on like this indefinitely without something going bust.
As a nation, we must reverse some of these trends. We must control them or level them out so that such a large amount of earnings will not be extracted from Canadians
November 26, 1974

in the form of taxation. I have been talking about billions of dollars. Speaking of millions or billions of dollars makes the figures become almost meaningless; however, we should not forget the astronomical sums of money which are being spent by the federal government. Someone said, in this respect, that if one were to give his wife $1 million and she spent $1,000 a day, she would be broke in about three years and would be asking for more; but if one gave his wife $1 billion and she spent $1,000 a day, she still would not have run out of money at the end of 3,000 years. We tend to think there is only one comma between one million and one billion, but there are three in one billion. Therefore, people are concerned about the future and I believe there is a confidence crisis.
Last weekend I was reading an official booklet put out by Air Canada which referred to how one might benefit from the monetary crisis. It advised people travelling by Air Canada to buy gold, silver or Swiss francs. I think what we need in Canada is an atmosphere in which Canadians can believe that their best future lies in the development of this country and in the principle of production. If we can increase our efficiency and our productivity, prices in real terms are bound to be more advantageous for the consumer.
I wish now to turn to another matter. I am sorry that I have only a few moments left to deal with it. I refer to the crisis in respect of food production. Over the last 30 years Canadians have been able to buy economically-priced food. In my judgment, food has been underpriced for many years. For almost three decades the price received by the primary producer has remained practically constant. The price to the consumer has increased gradually, but this is due to the fact that food is being marketed in an ever higher state of processing. Also, the cost of distribution has increased. But the price the primary producer has received for his product has remained almost static for about three decades.
Under these circumstances, the principle of supply and demand has broken down. As prices dropped, the primary producer, instead of producing less tried to produce more in a neverending attempt to stay out of bankruptcy. In the process thousands, if not millions, of farmers in North America have been forced off the land, with the consequent effect that in order to gain the degree of efficiency needed to produce food at low cost there had to be large units of production with very high inputs of energy, in the form of petroleum products, and fertilizers. No longer does the farm produce its energy as well as food. With the terrific increase in the price of energy in the last couple of years, the cost of producing food has skyrocketed.
I have almost finished, Mr. Speaker; I see that you are becoming very restless. Perhaps I would be allowed one more sentence, and I shall leave it at that. The result is that we can never expect to buy food as cheaply, even in constant dollars, as has been the case over the last few decades. We can have cheap food now and starvation in the future, or we can have reasonably priced food now, economically distributed, guaranteeing continuous production in the future.
At this moment, many beef producers in my riding are on the verge of being forced out of business. There is general apprehension on the part of many people that
The Budget-Mr. Landers
perhaps it is beyond the power of governments in a democratic system to take the resolute action which must be taken now to control inflation. I believe some governments in democratic countries can control inflation, but it would seem this government is not one of them.


Mr. Mike Landers (Saint John-Lancaster):: Mr. Speaker, first of all I would like to remind the Liberal cabinet that on July 8, 1974, we had an election and that by accident, design or otherwise I was elected to the government side of the House of Commons to represent Saint John-Lancaster. Prior to July 8, 1974, one of the main thrusts of my campaign was to convince the voters of Saint John-Lancaster that our constituency should have a member on the government side of the House of Commons. Apparently, the voters were convinced.
Now, Mr. Speaker, I hope to be able to convince the cabinet that Saint John-Lancaster should be recognized for the foresight and insight of its voters. More specifically, I hope to be able to convince the Minister of Transport (Mr. Marchand) and the Minister of State for Urban Affairs (Mr. Danson) that the constituency of Saint John-Lancaster has some special needs. With regard to the Department of Transport, I have come to realize that a "no" answer can normally be expected to requests made of that department. My complaint is that the "no" answer is often a long time arriving and often precludes a member of parliament making attempts to modify the "no" answer to a "perhaps" answer.
In the constituency of Saint John-Lancaster we have a number of problems. However, we have one urgent need- more housing; especially more low-rental housing and senior citizens' housing. I fully realize, Mr. Speaker, that this problem is not unique to my constituency, and I was pleased to hear the budget proposals in relation to housing. However, due to an industrial construction boom in Saint John-Lancaster, workers are being imported from the rest of the province, the rest of Canada and from countries throughout the world. These workers come armed with lucrative expense accounts and are prepared to pay higher rents than regular citizens of Saint John-Lancaster can afford.
The influx of workmen has caused a serious housing shortage, and because many of these workers are on expense accounts, rents have escalated rapidly, putting them out of the reach of low-income families and out of sight for senior citizens. Each and every week since I was elected I have received a minimum of five supplications for housing. One senior citizens' apartment tower presently under construction received, before construction began, five applications for each unit that would become available. Because of the housing crisis I implore the cabinet generally, and the Minister of State for Urban Affairs specifically, to rush to the assistance of my people. The housing shortage is a fact. It will not go away. If, as a member of parliament, I am unable to convince my government to alleviate this problem over the next four years, I shall call upon the voters of the constituency of Saint John-Lancaster to retire me; to march to the polls and turf me out.


J. Michael Forrestall: We'll remind you of those words.
1670

November 26, 1974
The Budget-Mr. Hailiday


Mike Landers: Many problems exist in the field of transportation. Due to the increase in population and the construction boom, traffic congestion has become intolerable. Immediate negotiations must commence between the federal government and the provincial governments to ensure completion of the Saint John throughway on an emergency basis. The Saint John winter port is badly in need of additional federal funding, not necessarily on a cost-recoverable formula. Although the National Harbours Board and the provincial government apparently could not agree on Rodney terminal, the terminal is almost completed. Some federal funding has been made available; however, the brunt of the cost of Rodney terminal is falling on the backs of the citizens of the province of New Brunswick. I call upon our government to lift the financial burden from the backs of my people and also to provide additional funding for a forest products terminal. Other terminals are needed as well: however, I would call upon government officials and National Harbours Board officials to consult the International Longshoremen's Association before deciding what to build and where to build it.
I now turn to the Saint John airport. A recent list of eight current priorities of the city of Saint John, released by the mayor and council of my city, called for improvement of the airport, including the lengthening of both runways, better navigational aids and lighting, better terminal amenities and improved air service. We are looking for direct, dedicated flights to Toronto, as a first priority, Montreal, Halifax and Boston, plus an improved regional air service and dedicated freight service.
I call upon my government to consider allowing blind and otherwise handicapped people, who have to be escorted to major cities for medical and other attention, to fly at a 50 per cent fare discount on Air Canada flights. Also, the escorts of blind or handicapped persons should be allowed to fly at a 50 per cent discount. If this fare structure were implemented, the present discrimination against such people requiring escorts would be eliminated. I wish to point out that in the provinces of New Brunswick and Nova Scotia, sightless persons and their escorts are allowed a 50 per cent discount on intercity and interprovincial bus services. However, it takes 14 hours to travel from Saint John to Halifax, which is a long and boring trip for a sighted person but, I submit, it is a most painful and even longer trip for a sightless person. Therefore, the Canadian government should provide reduced air fares for blind and handicapped persons requiring escorts.


Mr. Bruce Hailiday (Oxford):: Thank you, Mr. Speaker, for recognizing me for this, my first speech in the House of Commons. It has been a fascinating study of human behaviour for me, sitting here at the back, listening to and observing 263 other hon. members perform, each in his or her own unique manner. With this event soon to be behind me, Mr. Speaker, you can probably count me as one further member whom you will have to keep in order in the future. Having said that, and acknowledging that at this stage of the first session of the thirtieth parliament it would seem inappropriate to congratulate Your Honour upon being elected Speaker of this House, as hon. members preceding me have so fittingly done, may I take this opportunity to commend and congratulate you on the skill and art which you have acquired and exercised in a short

few weeks in your role as Mr. Speaker. Not having been subjectively involved in the debates to date, I have been able to assess, I would say, dispassionately your handling of sometimes difficult situations in a manner which I have felt to be most creditable to the high office Your Honour holds on behalf of all hon. members.
I would say also, Mr. Speaker, that these remarks should be considered to apply equally to the Deputy Speaker and Chairman of Committees of the Whole House (Mr. Laniel), the Deputy Chairman of Committees of the Whole House (Mr. Penner) and the Assistant Deputy Chairman of the Committees of the Whole House (Mrs. Morin). As a new member, I have been impressed by the affability, friendliness and co-operative attitude displayed by the staff under your jurisdiction.
In a few days it will be 21 years since a member representing the constituency of Oxford has given a maiden speech in the House. On that occasion it was the late Wally Nesbitt who so faithfully represented Oxford in the House and whose privilege it was to speak at that time on behalf of his constituents. I am honoured both to be chosen as his successor and, indeed, to sit in the House. Inasmuch as there are only very few hon. members now in the House who were here 21 years ago, perhaps I can be forgiven if I offer a few comments in praise of my constituency.
Oxford is situated in the heart of southwestern Ontario. Interestingly enough, the village of Tavistock where I live, on the northern fringe of the riding, is probably farther from a significant body of water than any other municipality in Ontario. We are about equidistant from the three great lakes-Huron, Erie and Ontario. I hasten to admit, sir, that we do sit on the edge of the headwaters of the Thames River which, although it may dry up in the summer, develops into a significant river as it feeds the reservoir known as Pittock Lake in Woodstock and courses on through the riding toward London and Lake Erie. Morphologically, the boundaries of the riding of Oxford correspond precisely to those of the county of Oxford. As a county in Ontario, we are unique in having been recently granted the privilege and responsibility of undergoing a political internal restructuring in lieu of a scheme of regionalization which has involved large areas of Ontario.
The economy of Oxford is quite diversified, with our population about equally divided between rural and urban dwellers. We are basically an agricultural community with a long and enviable record in the dairy industry. Although cheese-making was carried on in the very early days by pioneer settlers, the first cheese factory in Canada was established in 1863 near Norwich, in Oxford, to be followed two years later by the forerunners of the present Ingersoll Cheese Company which in 1866 produced the still famous mammoth cheese weighing over 7,000 pounds which was shown at the New York State Fair. One year later, in 1867, the Canadian Dairyman's Association was founded at Ingersoll with a convention attended by over 200 delegates from Canada and the United States. As a more timely note, I can say without fear of contradiction that both the right hon. Prime Minister (Mr. Trudeau) and the hon. Leader of the Official Opposition (Mr. Stanfield) would most certainly have been presented with a gift of
November 26, 1974

Oxford cheese when they visited our riding during the recent election campaign. In addition, Oxford is blessed with a significant mixture of other branches of agriculture, including beef cattle, hogs, poultry, tobacco, cereal and feed grains, increasingly large acreages of corn, turnips and apples.
Our urban balance is maintained by the city of Woodstock and the towns of Ingersoll and Tillsonburg, each of which makes a significant contribution by way of manufacturing and light industry of a remarkably varied nature, much of the products of which are exported across Canada and around the world. This segment of our economy continues to make significant strides, with a good growth potential for the future. Although Oxford, by this description, may sound like a land of milk and honey, we do have our problems in spite of three forays into our riding by the Minister of Agriculture (Mr. Whelan) during the last election campaign. A constituent of mine of a different political persuasion than I, but nonetheless a friend, has strongly urged me to say something nice about the minister.
Well, Mr. Speaker, like other new members I have got to know that he, too, is an honourable gentleman. But more than that, he has provided the farmers of Oxford and, indeed, Canada with an unparallelled challenge by way of an agricultural policy with the ups and downs of a rollercoaster. Like the rest of Canada, our farmers suffer from the same insecurity generated by complete lack of a consistent agricultural policy. Or, again, take the matter of excessive government intervention in the dairy industry. I quote Mr. Philippe Pariseault, chairman of the National Dairy Council of Canada, in speaking to the council back in September:
Here is a partial list of new intrusions by our benevolent federal benefactors: moisture content of cheese, fat content of butter and cheese, fat content of ice cream and frozen desserts, fat content of yogurt and cottage cheese, generic classification of cheeses, recall code procedure, Companies Act, competition bill, environment Canada regulations, termination of the fluid milk subsidy, enlargement and extension of milk powder subsidy. Maple Leaf grade symbol, increase in support price for butter and powder, maximum coliform content for cheeses, preparation of brief for GATT, preparation of brief for Food Prices Review Board, report on the dairy industry by Dr. McFarlane, regulations for partially skimmed milk, seminar on the dairy industry held by FPRB, emphasis on violations under Weights and Measures Act, Health and Welfare research projects, codex alimentarius-margarine standards.
And, as Mr. Pariseault points out, this all takes more staff, more government spending and either more taxes or more inflation of the money supply. I think it was Thoreau who once said: "Government is best which governs not at all." Mr. Pariseault went on to say:
There doesn't seem to be anyone in Canada in charge of co-ordinating the over-all federal government's concern and intervention in our industry. We've had Agriculture Canada, Health and Welfare, Consumer and Corporate Affairs, Statistics Canada, Weights and Measures, Environment Canada, dairy branch, Canadian Dairy Commission, food additives, etc. All get into the act and talk about developing more rules and regulations for our industry during this past year.
It is difficult to be too critical about a great deal of this government's activity, but it's the proliferation that is so overwhelming and the timing appears to lack any co-ordination whatsoever. After all, one can have an excess of filet mignon and sex.
The Budget-Mr. Halliday
It would be redundant and time-consuming for me to detail more of these problems now. But by the same token, many of our industrial and small business concerns and farmers have struggled along during the past six years with inadequate financial support in the way of federal small business loans, which just often are not available, together with a government policy not always favourable to the growth and development of Canadian-owned industry.
I would like to touch on one more specific problem which is not unique to Oxford but concerns southwestern Ontario in general. I speak of the appalling lack of public transportation in the rural areas, a problem which appears to be completely ignored by our present Liberal government. Twenty years ago, virtually all the villages and smaller towns in my area were served several times daily by either bus or train, and in many instances by both. Gradually over the last 20 years these means of public transportation have been withdrawn to such an extent that many communities now have no access to larger urban centres. This is a serious handicap for pensioners, for those who do not drive and for single car families where the breadwinner has the car all day. In many instances it causes commuters to waste gasoline energy when they would otherwise use public vehicles for going to and from work in the cities. At a time when efforts are being made to encourage people to live outside the large urban and metropolitan areas, this lack of public transportation is a significant deterrent.
All rail passenger systems were discontinued in midwestern Ontario on November 1, 1970. This was done as a result of a decision by the railway transport committee of the Canadian Transport Commission under the authority of the National Transportation Act of 1967. Public hearings were held to review this measure in the spring of 1972, in London, Chatham, Stratford and Walkerton. It has been 2 Vi years since the public hearings were held and release of the report by the Standing Committee on Transport and Communications which recommended that the rail service for this area be reinstated. This recommendation of the Standing Committee on Transport and Communications was submitted to the Minister of Transport (Mr. Marchand) in a letter sent on April 3, 1974, to the Hon. E. J. Benson, president of the Canadian Transport Commission. The minister referred to expressions of concern by the public and members of parliament that public transport services in the region were inadequate, or in some cases non-existent. He requested that the commission, in co-operation with provincial authorities, undertake a review of the situation. At present the passenger rail service has not been reinstated.
Having spent thousands of dollars on public rail hearings in this area, and with the report of the Standing Committee on Transport and Communications recommending the reinstatement of rail service, why has this government done nothing to implement the recommendations or offer a viable alternative such as bus service? The Fifth Report and Review by the Canadian Council on Rural Development, dated December, 1973, and entitled "Commitment to Rural Canada" states, on page 13, under the heading "Rural Predicaments" that improvements in communication and transportation networks make accessibility easier and extend the size of the area served by
28543 - 37)4

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The Budget-Mr. Holliday
urban centres. Mr. Speaker, while the networks may be there, the total absence of public vehicles on these networks makes a mockery of the succeeding statement on page 21 that "the ultimate goal of development is, therefore, the improved well-being of the people."
I would like now to deal with three topics essentially of national concern but relatively ignored by our government save for paying them lip service. I refer to the problems of inflation, inadequacies in the field of medical research and, finally, the utter failure of the government to adopt policies designed to instil a sense of dignity, self-pride and self-respect into Canadians. Inasmuch as this is a budget debate, it would be only appropriate that I should refer to the problem of inflation. To be sure, the Minister of Finance (Mr. Turner), who is present in the House, referred to it several times in his budget address. Although physicians are sometimes acknowledged as being inept and lacking in business acumen, it takes very little expertise on my part to realize that what the Minister of Finance is offering this country serves only to fan the flames of inflation.
Even I can realize that year after year of deficit budgeting, with its concomitant expansion of the money supply and credit, can lead to nothing but uncontrolled inflation. And, of course, one does not have to read for very long either books on inflation or the daily newspapers to realize that world authorities on economic and fiscal policies are saying the same thing. But, Mr. Speaker, we have had a government for the last six years, and will for the next four years, that has found it can buy the votes of the Canadian people by offering them ever increasing give away programs by the single deceitful procedure of expanding the money supply. Sir, it is nothing short of reprehensible that this government should, for reasons of its lust for power, commit this travesty on the Canadian people.
Next, Mr. Speaker, I would like to discuss certain aspects of our health care system which I feel are deficient and which I believe our government finds it expedient to ignore. One could devote one's total time allotment to discussing problem areas in health care. By the same token, governments that promise the people "the best health care available" are simply ignoring costs for, as in education, the limits are infinite. Before making rash promises it would be prudent to try to determine what good health care really is, or, in short, how one measures the quality of health care.
This brings us to the question of medical research. The recent Liberal administration has been satisfied to adopt, once again, the politically expedient stance of giving or providing "free" health care to all Canadians. As mentioned when discussing inflation, more votes can be secured by offering the present expensive system of health care whereby, until lately, the prime focus has been on high-cost, hospital-centred care. To invest money in researching how to provide more effective health care and, more important still, how to measure the quality of health care is not something that is newsworthy or vote-catching.
Over the years government funds for medical research in Canada have gone almost entirely to furthering research in the basic sciences and clinical branches of medicine. And even in this area the amounts made available in Canada are pitifully small in proportion to what the USA and Scandinavian countries provide. Commendable as this type of research is, and acknowledging the contribution that has been made to a better understanding of the etiology and treatment of disease processes, we have completely overlooked the funding of operational research and how we can better put to use the clinical knowledge that is made available to us. In short, how does one measure the quality of medical care?
Medical associations have recognized this challenge as of paramount importance and have even made attempts to enter this difficult field of study, only to be stalled for lack of funding. Again I say, it is fine for governments to promise complete care from the womb to the tomb, and by so doing remove all responsibility from individual citizens most of whom could well provide for themselves at lesser cost; but where the problem is too great for individuals or even large associations to cope with, the government abdicates its responsibility to the people as in the question of how to assess the quality of health care. To illustrate how our present government views this whole matter I would refer to a working document published in April, 1974, entitled "A New Perspective on the Health of Canadians." The Minister of National Health and Welfare (Mr. Lalonde)-who is present in the House, I am pleased to say-has his name on the cover, as would an author, and, indeed, he has written the preface, or at least signed it. I went through 76 pages of this treatise looking for some reference to quality, and at the end of a 12-page chapter headed "Major Problem Areas in the Health Field" I finally found, in the second last word, the one and only reference to quality in the statement that we had to "ensure accessibility to quality service." There is no suggestion that we might have to research what quality service is, in fact. However, the same chapter discusses the health status of the population in terms of life expectancy, mortality rates, causes of death, morbidity, problems in the organization and delivery of health care and, finally, conflicting goals in the health care system-but no thought of how to measure the quality of health care. The following was even admitted:
No such public demand exists for research and preventive measures. As a consequence, resources allocated for research, teaching and prevention are generally insufficient.
How is that for leadership, when a cabinet minister not only fails to recognize the existence of a problem, but even when he does he states that no funds would be available if there were no public demand. That same chapter discusses the problem of costs of personal health care, stating that for a family of four in 1971 the cost was about $1,100 and that "most of the costs were met by insurance." The minister knows that this is not entirely true, and that the majority of these costs are met by taxes and not insurance.
Nor can I fail to observe, in the same chapter, the statement that "what is really needed is a measure of the prevalence of ill-health in the "population." The College of Family Physicians of Canada, with whom I have been closely associated for many years, has repeatedly been turned down by this government when we have sought funds for the establishment of an illness observation unit designed to collect and measure the very information the

November 26, 1974

minister said is needed. Finally, Mr. Speaker, as a family physician and general practitioner whose numbers represent slightly over 50 per cent of practising physicians, much could be said about the problems which they face. However, since I have been discussing the problems of medical research I would be remiss if I neglected a major problem affecting this important and rapidly growing group of doctors.
Traditionally, medical research has been done at university centres under the aegis of a principal investigator who is normally a salaried member of that institution. But we have now entered a new era where medical teaching and medical research, particularly in the field of family medicine, must increasingly be done by private physicians out in the real, live world of general practice. Again, the government is dragging its heels by failing to recognize that physicians out in practice have to sacrifice income and earning power in order to devote time to operational research and morbidity studies. Unlike the university-centred principal investigator, these physicians must be remunerated for time spent on research. Once again, it is the people of Canada who suffer in the long run due to the failure of this Liberal administration to adjust to changing times.
Finally, Mr. Speaker, time does not permit me to deal adequately with the more philosophical yet very real problem of how our government is gnawing away at and destroying the very fibre of our Canadian citizens. The budget which we are debating serves only to aggravate this insidious process of decay of human worth and selfrespect by paying people for doing nothing, instead of using the money to reward them for doing productive work. The October, 1974, letter of the Royal Bank of Canada states:
Government is an art to be learned, like medicine or engineering or law, or any other profession, and not merely an office to be won.
This government may have won the office but it is still groping for the art.


Mr. Raynald Guay (Parliamentary Secretary to Postmaster General):: Mr. Speaker, I would like to take this opportunity to congratulate you as well as the Deputy Speaker and Chairman of Committees of the Whole (Mr. Laniel), the Deputy Chairman of the Committees of the Whole (Mr. Penner) and the Assistant Deputy Chairman of the Committees of the Whole (Mrs. Morin). I am sure you will justify your reputation of earnestness and impartiality while acquitting yourself of this task which is so burdensome these days when you must preside over the discussions of a Parliament housing the representatives of four different political parties.
Even if the budget presented by the hon. Minister of Finance (Mr. Turner) did not generate unanimous enthusiasm, it did seem to please the majority of the members in this House and, I think, most other Canadians as well as it provides for a number of positive policies aimed at fighting against Canada's present number one problem which is inflation.
In 1973-74 we tried more or less successfully to fight inflation and unemployment. Of course, the economic position of the United States did not help us as everyone
The Budget-Mr. R. Guay
knows that our own economy is closely involved with that of our neighbours. However, I think that this budget speech contains certain measures which can give more independence to Canada and will allow us to overcome this problem of inflation.
Certain budget policies are interesting especially concerning the following subjects: suggestions concerning resource taxation, adjustments to the equalization payments system, provisions to stimulate housing, support for investment, important decreases in personal income tax and, finally, savings protection.
Some other provisions included in last May's budget have been added, to wit: taxes or exemptions in certain fields, stronger stimulants for small industry, improved registered retirement savings plans, new legislation for the reorganization of companies and finally provisions to reduce custom duties.
With regard to some of the proposals, I should like the Minister of Transport (Mr. Marchand) to give us more details on how he intends to set up the merchant marine which was mentioned briefly in the Speech from the Throne.
Does he intend to set up a department, a commission or an independent body to do so? As for me, Mr. Speaker, I feel that a department in charge of the merchant marine, as well as of all matters pertaining to transportation by water, would be ideal, considering some of the criticism the Department of Transport has been subjected to; it is a huge department, composed of several divisions. I feel that solution would free, not only the Minister of Transport from part of his responsibilities, but also the administrative mechanism of that department.
Having said this, I wish to congratulate warmly the Minister of Transport for his tenacity throughout the years in wanting to give us a merchant marine. As a matter of fact, he fought for that idea even when he was in the CNTU and since then, he has kept on believing in it and doing everything possible to achieve it. Progress in that direction is now encouraging, but does the minister know when it can become a reality?
That is an area from which our country has been absent for many years, although Canada ranks among the most important trading nations in the world. The benefits which would result for our economy would be many, in view of the increasing amount of products such as grains, oil, ores, coal, lumber and a great many other commodities which Canada must export.
It is difficult to accept that Canadian ships or ships under Canadian flags are nearly absent from this area. In my opinion, this is a matter of important national prestige. I was very glad to hear this mentioned in the budget speech, and I dare hope that the money that will result from the new tax on natural resources will help equip Canada with a merchant marine, thereby allowing our own people to transport our own resources aboard our own ships.
Another matter closely related to shipping has to do with shipyards. Our last program, known as STAP, that is the Shipbuilding Temporary Assistance Program, has en-

November 26, 1974
The Budget-Mr. R. Guay
abled the ones we have to build over thirty ships for foreign owners, while gaining valuable experience in the construction of heavy tonnage units and developing new building methods.
I think that the government would be well advised to keep this program and enlarge its scope so that it may be applied to shipowners who could benefit from it either by increasing or streamlining their present fleet. I do hope that the departments concerned will take the necessary measures to assure the survival and the maintenance of that fleet. This program is to expire on March 31, 1975.
Always with regard to shipyards, my riding at Levis has one very well known all over our country if not all over the world. In the past few years, at least four departments have been preparing a study for a report on the feasibility of building a giant dry dock in the Lauzon shipyards. I am eager to know when that report will be tabled. As far as coastal traffic is concerned, I note with utmost satisfaction that several of the points I made in my budget speech last year did materialize.
At that time I also drew attention to the pension fund for CN workers. Some commendable improvements were brought to the pension plan for retired CN employees, but I think the basic problem has not yet been solved, namely pension rates for retiring employees. CN employees are now wondering why, as employees of a Crown corporation, they are not being treated exactly like employees from other corporations under federal jurisdiction.
I believe their demand is reasonable, and I think their pensions should be geared to the cost of living.
Another problem inherent in inflation is that of agriculture, and especially farmers. I have no need to emphasize the very serious situation of egg, grain, and beef producers, and even sugar producers now, since all that is being accurately reported on by mass media.
The government also admits to that emergency situation. Therefore, I would like to see measures developed rapidly to prevent those disasters which we will necessarily head for if we do not take immediate action. The government should act more quickly in respect of food products and especially sugar.
What is the Minister of Agriculture (Mr. Whelan) waiting for to make a statement on those measures and programs for helping farmers produce more sugar beet? Besides, the Minister of Industry, Trade and Commerce (Mr. Gillespie) should enter as soon as possible into international agreements with sugar producing countries and of course try to get the fairest, that is the cheapest prices.
Incidently, I would like to make a few comments on the Plumptre Board. The Plumptre Board has no powers but an informative role, or at least that of a watchdog, if one looks at what happened last month in the Ottawa area. We know that the Plumptre Board made a survey during over five weeks going from store to store, checking prices, publishing price differentials. Fortunately, because the Plumptre Board was there, last month's statistics prove that only the Ottawa area did not register higher food prices. For that reason I welcome the work of the Plumptre Board.
As I said in my opening remarks I will not praise indefinitely the Plumptre Board because I know it has no

power but at least until we take further steps it continues to play the role of watchdog it plays so well at present.
Another suggestion comes from the farmers themselves. Recently Quebec farmers at a convention asked the federal government to intervene directly into the beef problem. It replied that the matter came under provincial rather than federal jurisdiction. I confess this is true but it is also true that we were elected to this House by the people of this country and it is our duty to help them when they ask us to do so.
When he next meets with his provincial counterparts, will the Minister of Agriculture consider setting up an agreement scheme providing for special intervention by the federal government when the people of this country ask for it and when situations such as those we faced and we now face call for it? Mr. Speaker, the people of this country need to be reassured, and I sincerely hope that this Parliament will take the necessary steps to ensure more stability in our economy.
Mr. Speaker, this is my first speech since the election of July last, and I want to thank the voters of the riding of Levis who elected me for a fifth consecutive time and put their confidence in me so I would vindicate first their interests and contribute with my colleagues to passing legislation guaranteeing them more justice and a happier life. I want to assure them that I will do everything in my power not to betray their confidence.


Mr. Derek Blackburn (Brant):: Mr. Speaker, for those of us who sit on this side of the House it is always a challenge to participate in a budget debate because in my view Liberal budgets are almost always deceptively misleading at first glance. This budget is certainly no exception. Not only is it deceptive but it is, in my judgment, misleading. Moreover, it is based on highly questionable assumptions with respect to the predicted rate of growth of the economy and the export outlook of our durable goods. But most significant of all is that at a time when Canadians on low and fixed incomes are not making ends meet, and when Canadians in the middle-income bracket are bearing an increasingly burdensome share of taxation, there will be neither relief from inflation nor any meaningful relief from taxation.
Indeed, Mr. Speaker, this budget is one of the most regressive budgets we have seen in the past six years. It harks back to the days before the Carter commission on taxation. It is a piece of classical nineteenth century Liberalism. It is a budget for the wealthy, for the big corporations, for the foreigners who own and control our resource industries. It is a budget for the big investors. This is not a budget for the hundreds of thousands of ordinary Canadians, many of whom supported the Liberals last July hoping that the Liberal Party would finally come to grips with the spiralling cost of living, high unemployment and the growing dissillusionment in general with respect to politics, politicians and governments.
When fully appreciated by the Canadian people, this budget will serve only to heighten their suspicions that government in Ottawa today is no longer responsive to their basic needs; that it no longer cares about decent housing at reasonable prices; that it no longer cares if
November 26, 1974

ordinary Canadians are paying over 75 per cent of their incomes in taxes, food and accommodation; that it no longer cares about the widening gap between those who have wealth and power and those who have neither. In short, Mr. Speaker, this budget will do nothing to redistribute more equitably and more humanely the great wealth of this nation. In reading the budget one gets the impression that the mandarins in the Department of Finance have not changed their philosophy since the grand old days of the Manchester School. Joseph Chamberlain would have been proud of this budget. What a short way in economic philosophy we have come in one hundred years!
I am sure, Mr. Speaker, that hardly a day goes by that members on both sides of this House do not receive letters from their constituents asking why building lots which sold for $8,000 two years ago now sell for $17,000; why basic food staples such as bread, milk, meat and vegetables have nearly doubled in price in the same period of time; why mortgage interest rates have priced the average home buyer out of the market; why bank interest rates, even backed by collateral, have soared to 18 per cent. The list could be extended, but suffice it to say that Canadians across this country are growing angrier by the day as they see their real income falling behind at the same time as their suspicions of price gouging and profiteering are increasing. It is this deplorable situation that is dividing our nation and leading to social tension and mistrust. And this budget has done nothing to allay our people's fears, suspicions and frustrations.
If we cannot learn from our own mistakes, Mr. Speaker, why cannot we learn from the mistakes of other countries such as the United States where division between rich and poor has been the major cause of violence and social upheaval? I hope that some day the Liberal Party will abandon its old-fashioned posturing and face up to the realities of the latter half of the twentieth century. Let us look at some important aspects of the budget as they affect ordinary Canadians. The Minister of Finance (Mr. Turner) said that "continued attention must be given to mitigating the effects of inflation on the more vulnerable members of our society". Just what attention has he in fact given? The government is going to give $500 to every Canadian who is buying his first home. This was a great election gimmick. But how many will be able to take advantage of this "gift"? In the first place, the house must be a new house. In the second place, the cost of the house must fall under a certain ceiling, which in my constituency of Brant is about $34,900; but in the city of Brantford, in which I live, it is impossible to purchase a new house for less than $38,000 or $40,000. So much for that "gift".
Has the government done anything about the exorbitant interest rates home buyers must pay even if they can afford the down payment? The answer is, of course, no. But the government is prepared to allow trust companies and other mortgage firms to borrow more money for mortgages, even though there has been no evidence whatsoever that, over the past three years, as more mortgage money became available interest rates went down. The opposite was the case. This is why most Canadians cannot buy a house today, Mr. Speaker. They simply cannot afford the
The Budget-Mr. Blackburn
carrying charges. Their monthly budgets will not permit it, and they cannot just print their own money. The budget did state that the government will allow Canadians to save $1,000 a year up to ten years, for a total of $10,000, and deduct this from their taxes. But how many Canadians can afford to save $1,000 a year? Again, very few; and certainly not those on low or fixed incomes-certainly not the very Canadians who so desperately need better housing.
There is little indication in this budget that the federal government is prepared to push its land assembly scheme of which it was so proud a couple of years ago; it is simply dragging its feet. But the government is not dragging its feet when it comes to the wealthy real estate investor. Lawyers, doctors and wealthy businessmen will now be able to form syndicates for the purpose of building large luxury apartment buildings, because they are now to be given a 100 per cent capital cost allowance write-off against all other forms of income if they invest in rental accommodation. What a fantastic new tax haven for the rich! We in the New Democratic Party believe that decent housing in a country such as Canada should be the right of everyone. The only way this will ever come about is by greater government intervention in and control over housing, not by giving tax hand-outs to the wealthy. We have seen far too much of this in the past. And because the private sector controls the housing industry, we have seen residential building lots double and even triple in price in the past four years.
The Minister of Finance has announced that the federal sales tax on building materials would be reduced from 11 per cent to 5 per cent. Again, at first glance this may look like an effective means of lowering the cost of housing. Indeed, for a short period of time the advantage here may be passed on to the home buyer. But in fact, whenever hidden federal sales taxes have been eliminated or reduced in the past, prices have mysteriously climbed back up again. Look at the price of footwear and clothing for children. This sales tax reduction will ultimately benefit, not the home purchase but the large developer, the guy who has had it so "rough" during the past three or four years. So, Mr. Speaker, in the field of housing for those who most need it, this budget is a farce. It is worse than that; it is contemptible.
I would now like to turn my attention to the "fantastic tax breaks" that ordinary Canadians are going to get from this budget to "mitigate the effects of inflation", as the Minister of Finance so benevolently put it in his budget address. In the first place, those whose incomes are so low that they do not pay income taxes get no breaks in the budget, because this budget is not in any way designed to curb inflation. They will continue to suffer the ravages of inflation without any mitigation whatsoever. Again there is the deception I referred to earlier, Mr. Speaker.
But what about those Canadians who are on low and middle incomes and do pay taxes? Under existing law, taxpayers are entitled to reduce their federal tax liability by 5 per cent, with a minimum tax credit of $100 and a maximum of $500. This budget will increase the minimum by the paltry sum of $50, and the maximum by $250. So the guy at the lower end of the pay scale gets a tax break, to fight inflation, of 97 cents a week, when in fact his pur-

November 26, 1974
The Budget-Mr. Blackburn
chasing power declined by nearly $6 a week during the past year alone. The Minister of Finance, in granting this "fantastic tax break", has the unmitigated gall to ask working men and women to exercise restraint at the bargaining tables this year. What deception!
However, if your income happens to be around $30,000 a year, you can claim a tax credit of $750. It is this, Mr. Speaker, that makes this budget to regressive, so unfair and so oriented toward the wealthy in our society. I ask, how can a struggling family in Canada today fight inflation with a tax reduction of less than a dollar a week? The price of food and rents is going up; houses are beyond the reach of not only the poor but the middle income earners. Yet the Minister of Finance says his budget will "mitigate the effects of inflation". That is so much rubbish. In virtually every situation since the Second World War, wage increases have come after the effects of inflation have reduced the purchasing power of working people. No reputable economist has suggested that the latest round of price increases has been caused by pressure from wage demands.
Is it any wonder that thousands upon thousands of Canadian workers, men and women, are becoming deeply frustrated with the present spiralling cost of living? No one in his right mind would opt for wage restraint when he has lost nearly $6 in real wages per week and the government gives him back less than a dollar a week to fight inflation. A great deal of the labour unrest in Canada today is due to the fact that Canadian workers have lost faith in their governments to protect them against the devastating effects of inflation, with no end in sight. In his budget speech, the Minister of Finance stated that "we have to find a better way of reconciling competing interests of the various groups which make up our society". No one can argue against that. Yet statistics show that wages and salaries, as a proportion of the gross national product, have been falling steadily since 1971. In 1972, wages and salaries made up 55 per cent of the GNP; by the fourth quarter of 1973 this figure had fallen to 53.2 per cent. Meanwhile, corporate profits have been going up from 9.6 per cent of the GNP in 1971 to 13.7 per cent in the last quarter of 1973.
In his budget, Mr. Speaker, let us see how the Minister of Finance responded to this situation. First of all, he has extended indefinitely the two year rapid write-off for the purchase of machinery and equipment by manufacturing and processing companies. This extension is based on the questionable assumption that the GNP will continue at about 4 per cent when in fact the OECD, a more accurate forecaster than the Minister of Finance, predicts that the real growth of our economy could fall to 1 per cent.
Secondly, the minister's reaction to the wishes of the private sector is based on the other faulty assumption that Canada's trade will remain strong. Canada exports 60 per cent of her goods to the United States. That country is now in a recession, with no sign of improvement in sight. If we cannot sell our products to the United States-and there is already a decline-what good is the rapid write-off? I also strongly suspect that the Minister of Finance's thrust toward deficit financing is not so much to buoy up our economy but is, more precisely, to pay for the unemploy-

ment that is bound to increase as our volume of trade with the United States continues to decline. I suppose we will just have to wait to see what taxpayers across the country, generally speaking, will have to pay for unemployment insurance benefits in 1975.
This budget, Mr. Speaker, also has seriously reversed the government's earlier decision to create a greater public presence in our resource industries not only in terms of investment but in terms of important decision-making. Now the emphasis has been shifted back to the private sector, to those "poor, destitute" companies like Exxon, Shell, Texaco, BP and so on, whose profits have been soaring as the retail price for gasoline and home heating fuel has soared. In fact, within a year we may well be paying over $1 for a gallon of gasoline. As the Minister of Finance has implied, the primacy of the private sector in the resource field is reaffirmed. This is a serious, retrograde step.
Unless Canadians, through their elected governments, gain greater control over their natural, non-renewable resources, we will be a have-not nation within a generation. Why, then, I ask, is the federal government bent on lowering the tax rate on petroleum products from 30 per cent in 1974 to 28 per cent in 1975 and to 25 per cent in 1976? And why the 100 per cent write-off of exploration expenses? These measures will put hundreds of millions of dollars in the corporations' hands, only to be stacked up with other little goodies like tax deferments. Again I repeat, this is a rich man's budget; it is a corporate budget; it is not a people's budget.
Here we have a situation where the Minister of Finance says we must lessen the burden of inflation on those most vulnerable, yet does nothing for the most vulnerable. He reaffirms his faith in the rich, powerful, corporate elite by giving them even bigger hand-outs and tax concessions, and does nothing to place our depleting natural resources in the hands of responsible, democratically elected legislators. At the same time, no doubt to protect himself later, the Minister of Finance admitted that not only would food costs remain high but they would probably go even higher in the coming year.
We in the NDP presented a policy during the last election campaign-a policy I admit the people of Canada did not accept-to establish a prices review board with power to investigate suspicious increases in prices and to roll back those increases if they were clearly unwarranted. We still demand this as the only safeguard for the average Canadian against price gouging and profiteering. But with four years of majority government ahead of us, I doubt whether this will ever become government policy. In the meantime, Canadians will continue to pay more and workers, organized and not organized, will not only bear the brunt of this tragic situation but they will continue to be unfairly and unjustifiably blamed for it.
I would like to turn my attention to our senior citizens. As of October 1, a single pensioner receiving the maximum old age security and the guaranteed income supplement was receiving just over $200 a month. The average rent for a one-bedroom apartment in the city of Brantford, where I live, is between $160 and $170 a month. Though there are a few very fine senior citizens' public housing developments in Canada, they total only 67,000 units. In Canada there
November 26, 1974

are about two million senior citizens. What did the budget have for these two million Canadians? Sixty per cent of these people will derive no benefit at all from the budget because they are receiving the guaranteed income supplement. For those whose incomes prevent them from getting additional assistance because of private pension schemes, there is a benefit. For this I am personally pleased, because now they will be tax exempt up to $1,000 a year on income from private pensions. But, I repeat, the majority will get no benefits whatever, not even an increase in the basic OAS.
It is also worthy to note, Mr. Speaker, though tragic, that there is nothing in this budget to assist the native peoples of Canada. Once again they have been totally ignored. Some time ago I asked the Minister of Finance if he would grant a tax concession to retired Indian teachers who had taught in Indian schools on reserves all their lives. When they were working they did not have to pay income tax because of the Indian Act. Now that they have retired they find they have to pay income tax on their superannuation, yet the source of income is the same-the federal government. In view of the fact that both their salary and superannuation are considerably lower than those who teach or have taught off reserves, I asked the Minister of Finance if he would eliminate this tax on superannuation. He passed my representation on to the Minister of National Revenue (Mr. Basford) whose executive assistant sloughed it off with departmental jargon showing lack of both sense and compassion. I intend to pursue this issue further.
Mr. Speaker, my time is running out, if it has not already, but 20 minutes is not enough time to attack a phony, misleading budget. In conclusion, I have searched in vain for the answer to the question, what has this budget done for the average Canadian? Is there anything in it of substance to effectively cure the monster which is gobbling up everyone's savings, driving up the cost of living and provoking conflict between unions and management? No doubt those who do not have will be the payers for those who do. As I have pointed out, the only persons who got a break on November 18 are the wealthy, and the corporations; and by no stretch of the imagination can anyone say that prior to the budget they were the most vulnerable members of our society. This budget is so out of tune with the economic realities of today that I predict we will see another budget within six months. But I am not holding my breath; we will probably just get another replay.


Mr. Irenee Pelletier (Sherbrooke):: Mr. Speaker, I am especially glad to take part in the debate on the budget.
We have two opportunities each year to express our personal opinions on subjects which are important to us. Today, I would like to tell you about my opinions and make a few remarks on a very current subject and certainly one of the foremost problems of our time-that world poverty and particularly starvation.
Mr. Speaker, I would have liked to tell the House about the social economic problems of the area and the constituency which I am privileged to represent. However, during the debates on bills to be brought forward during this Parliament, I will have other opportunities to talk
The Budget-Mr. I. Pelletier
about this and to describe the economic situation in my constituency where economic readjustment remains slow.
The subject about which I shall talk today is much more general and much more far reaching, but it still concerns the people of my area. It is the problem of poverty and hunger in general.
The measures announced by the hon. Minister of Finance (Mr. Turner) in his budget speech are extremely important for the Canadian economy and we shall have other opportunities to discuss them. However, Mr. Speaker, I was extremely glad to note the remarks of the Minister of Finance when he said, and I quote:
Our countries, including Canada, must review their foreign aid programs in the light of ...
-the present situation.
Canada must, at the minimum, help these people meet the most urgent and basic need of their people-food.
The minister also stated: We also intend to expand all our contributions to developing countries capable of increasing their own food production.
These are moral commitments. We intend to fulfill them.
Mr. Speaker, I had the privilege and the honour to be a member of the Canadian delegation to the world food conference held in Rome from November 3 to 17 and I thought it might be interesting to tell my colleagues in this House about some of the comments that were made recently at the conference and generally outline the international food situation as described at the conference as well as the Canadian position assumed at Rome and the possibility of substantially increasing our aid to developing countries.
For a dozen years certain international agencies, especially the World Health Organization and the Food and Agriculture Organization, have been warning the world about the possibility of a food shortage and giving ways and means to avoid the crisis now confronting us on a world scale. What has brought us to this point? Whatever the reason, said United Nations Secretary General Kurt Waldheim at the beginning of the conference, the crisis is facing us and we therefore must act now.
It is paradoxical, Mr. Speaker, that the present world food shortage, accompanied by malnutrition, which has never been so widespread, should happen at a time when the potential of technological progress is taking on unprecedented proportions.
When the FAO launched an invitation to all the countries of the world for a world food conference, everyone was asked at the start to present concrete provisions and to suggest immediate solutions to the extremely urgent problem of hunger in many areas of the Third World.
In many ways, and especially as to concrete provisions, one could say that the Rome conference was half a success.
On the other hand, the fact of having brought to the attention of the world the main ingredients of this complex problem of hunger and thus revealing the alarming proportions of the situation is sufficient evidence that the Rome conference was a success.
How is it that the food problem, the problem millions of people face to feed themselves, and the malnutrition prob-
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November 26, 1974
The Budget-Mr. I. Pelletier
lem should have suddenly appeared at this particular moment?
In his opening address to the World Food Conference on November 5, the Secretary General of United Nations stated:
The situation is indeed critical. World food production which had shown a disastrous decline in 1972 has reached levels which in the historical perspective may be reasonably high, but have never allowed to a security margin nor to meet the spiralling demand ... From now on, to alleviate, the difficulties of the world strategic reserve, we can only rely on .about 25 million hectares of tillable land unused in the land banks of the United States.
The Conference held in Rome has provided most of the delegation with the opportunity to state openly their policy with regard to the serious food problem. In one of the most noted statements during the Rome Conference, the Honourable General Carlos Romulo
-Secretary of Foreign Affairs of the Republic of the Philippines and chairman of the Philippine delegation to the UN food conference, in a speech entitled "What went wrong?" said:
I dare suggest to my fellow delegates from developing countries that there must be something wrong with our development plans, something wrong with our objectives and priorities, something terribly and disastrously wrong, when 25 or even 30 years of independence and development have only led us to this sorry pass, to this crisis-and I know it is an overused word, but I can find no real equivalent-to this crisis of world hunger.
What went wrong? Where did we take the wrong turning? I am aware, deeply aware, of the aspirations and expectations of our peoples, or-more accurately-of their leaders and planners and decisionmakers. After centuries of colonial exploitation, of producing raw materials for the industries of the metropolis, of being captive markets for its manufactures, of being "hewers of wood and drawers of water", we were driven by the desire, by the urgent political need, to develop our own economies, to be economically independent, to give employment to the landless workers crowding into our new cities, to mean something in the world, to be respected and taken into account, to find our "place in the sun".
Surely, this was not wrong. Surely this was a legitimate objective, a legitimate aspiration.
What was wrong, what went wrong, I dare suggest to my colleagues from developing countries, was our understanding and appreciation of priorities and of the economic and social, and by that token also the political realities.
The question, the hard question, the unavoidable question, we must now ask ourselves is this. What is the purpose, what is the use, of brand-new factories, or even of a nuclear device, when millions of our people do not have enough to eat? When an unacceptable proportion of our children die before leaving infancy? When those who survive are stunted physically and mentally? What price, then, a nuclear bomb or the missile to carry it across the globe?

Similar remarks, Mr. Speaker, have been made by many heads of delegation in respect of developing countries themselves. Some reproaches have been directed to the developing countries for the exercise percentage of their gross national product earmarked yearly for national defence.
Some delegations have also pointed out the fact that several developing countries accept to make investments sometimes somptuous but of little importance for the basic development of their social and economic potential. Sever-

al reproaches may certainly be directed to the developing countries. But the same is true, Mr. Speaker, for the developed countries, and in this respect, I think the latter have a major responsibility to shoulder for the present world food crisis.
Most of the developed countries' delegations at the Rome Conference have been disappointed, and this in many respects. Everyone thought that the developed countries represented at the Rome Conference would make concrete propositions and contribute a substantial aid for the difficult food problem which is rampant in many parts of the world. For many countries faced with serious food problems, it has been a great disappointment. We can say, Mr. Speaker, that amongst all the countries which have sent a delegation at the Rome Conference, Canada has certainly been one of the countries whose propositions have been best received, not only by the developing countries but also by the developed countries which have appreciated the Canadian position as a firm, sensible and realistic one.
Everybody agrees that Canada has an enormous food potential. Moreover, agriculture, not only in developing countries, but also in developed countries, is presently under-going huge difficulties. A great variety of factors explain why the agricultural sector now has to face extremely intricate problems.
Millions of people in several countries of the world not only do not eat their fill, but are positively starving. Only a short time ago, the FAO stated in one of its publications that 10 to 15 million people died directly or indirectly from starvation or malnutrition every year. Several countries had agricultural and food surpluses, possibly not this year, but just a few years ago. Many countries voluntarily slowed down agricultural production, and also destroyed food stocks. Considering the rise in oil costs and its incidence on the increased cost of fertilizers, and considering that political leaders of many countries in the world find it extremely difficult to deal in a positive and definite way with that huge problem, may I say, Mr. Speaker, that the contribution of rich countries in the Rome conference was so scanty that we might regard as somehow shameful the parsimonious commitment of rich countries to those countries to which they are so much indebted.
We all know the advantage taken by several countries, purposely or unvoluntarily, of the huge differences in rates of change and of an all too often unfair trade situation.
Canada had a prominent role in that conference, and our Minister for External Affairs (Mr. MacEachen) indeed made a key speech in the Congress House. The Secretary of State for External Affairs stated in his speech and I quote:
We in Canada will not shirk these responsibilities, and are willing to play our part in furthering those common endeavours which bear promise of helping to produce a lasting freedom from want for all mankind-but the endeavours will remain barren if they are not truly common and truly sustained.
A little further on, the minister said:
We are now carefully re-examining the skills and resources that may exist in Canada suitable for assisting the development of new agriculture and fisheries capacity in developing countries to determine practical ways of making them readily available. We therefore intend to have a matching response for countries who set about energetically to
November 26, 1974

mobilize their internal food production resources and who give a high development priority to efficient food production.
In a more encompassing perspective, the minister stated:
-mankind has no choice but to arrange his feeding in harmony with a balanced use of all the earth's resources, or his civilisation will go the way of those of Nineveh and Babylon-which destroyed the soils that fed them.

There are several ways, Mr. Speaker, to change the present food situation in several countries of the world. There is, of course, food assistance and plain help to developing countries, which must be considerably increased. In many countries, there is a lot of waste that must absolutely be prevented. Sacrifices must be made by some nations if they want to put an end to hunger. As regards our country, people must be made aware of the problems of poverty in general and of nutrition in the third world in particular. This awakening must be done not only by the decision makers, but also at the whole population level. Here, Mr. Speaker, non-governmental agencies can play a major role. Mention must also be made of the important part these agencies played at the Rome conference. I am convinced that they will pursue their awareness campaign throughout the country. In our efforts to try and change the situation in which several countries now find themselves, we should not forget the farmer. I was very pleased to see that the hon. Minister of Agriculture (Mr. Whelan) took the responsibility of pointing out to the delegates to the Rome conference, and particularly in the commissions, that the farmer was indeed the basic element of a reform which would make it possible for the developing countries to expand considerably their food potential. I must say, Mr. Speaker, that the hon. Minister of Agriculture of Canada was highly praised by several delegates to the Conference because of what he said and because he took the defence of the agricultural class. Two suggestions were made at the Conference in order to remove hunder in the world which are worth being pointed out. Mr. Romulo, whom I quoted earlier, stated:

Let me sum it up briefly. There is no substitute for food. You can have your factories, as many as you want; mills and markets, foreign exchange reserves, golf, oil, special drawing rights, whatever your economists and financial experts can think of and demand; but if your people do not have enough to eat, if they do not grow enough food to feed themselves, you are in trouble, deep trouble, you are in crisis.
An economic crisis, a political crisis, a moral crisis, and in the long run nobody can bail you out of it except yourselves.

Mr. Speaker, a similar statement was made by the chief of the Chinese delegation, who reminded the developing countries that they should no longer depend on wealthy countries, given their selfishness, and that from now on they should depend on their own resources only.
Although these statements are certainly commendable, for they offer, in the long run an ideal solution to our
The Budget-Mr. I. Pelletier
problems, the fact is that this solution is not possible in the short run.
Mr. Speaker, as regards development assistance, Canada can be a leader. One of our great diplomats, Mr. Maurice Strong, said a few years ago:

There are three overriding influences determining our age, one is the space race, one the nuclear arms race and the third the development race; Canada has no role to play in the first two, but in the one of the developing countries we can be a major power. We know what development means because we've done it here ourselves.

Mr. Speaker, during the two weeks of debates and discussions of the Rome Conference, one of the most remarkable contributions which I had the privilege to listen to was not made at the Palace of the Congress where the conference was held, but during the audience which Pope Paul VI granted the Conference delegates in the St. Peter Basilica in Rome. Here are some excerpts which I found particularly interesting:
This crisis appears mainly as a crisis of civilization and solidarity. A crisis of civilization, and method which appears when the development of life within a society is seen from a unilateral point of view, when considering only the type of society which results in an industrialized civilization, that is to say, when putting excessive trust in the automatism of purely technical solutions and forgetting basic human values. A crisis which appears when the search for economic success only resulting from major profits in industry intensifies, thereby causing the nearly complete abandonment of the sector of agriculture and the accompanying neglect of its highest human and spiritual values. Also, a crisis of solidarity which maintains and sometimes accelerates the disparities between individuals, groups and nations, and which unfortunately results-as it is increasingly obvious-from the insufficient will to contribute to a better sharing of available resources, especially with underdeveloped countries and with human sectors which are still living under an essentially primitive type of agriculture.
We are therefore faced with the paradox of the present situation: Mankind has an unequal power over the universe; it possesses tools by which full productivity can be obtained from its very resources.
Will the very people who hold those instruments remain struck with paralysis in the face of the absurdity of a situation in which the wealth of a few would tolerate the persistent misery of too large a number, in which the highly enriched and diversified food consumption of a few nations would be content with the vital minimum granted all the others, in which human intelligence could alter the fate of so many gravely ill and yet would shirk the task of ensuring adequate food to the most vulnerable peoples of humanity?
Should it come to that, grave errors in orientation will have been committed, though perhaps at times only through neglect or omission. It is high time to discover how the mechanisms have been warped, that the situation might be rectified or rather set upright from end to end.
And finally, the Pope added:

To you who are engaged in a task at once so difficult yet so rich in promise, we put forward two principles to guide your work: on the one hand, to face up to the data of the problem without allowing yourselves to become bewildered in your evaluation of them through panic or through excessive timidity; and on the other hand to feel yourselves sufficiently stimulated by the absolute urgency and priority of the needs in question so that you will not be satisfied in any single case by delays or by half measures. This conference will not resolve everything on its own; it is not in its nature to do so. However, through the clarity and energy of its conclusions it will give the impetus to a series of effective and sincerely accepted commitments; or contrary to the expectations placed in it and in spite of the goodwill of its members, it will have been held in vain.
28543-38)4

November 26, 1974
The Budget-Mr. Stevens
>


Mr. Sinclair Stevens (York-Simcoe):: Mr. Speaker, I think one should try to assess why the Minister of Finance (Mr. Turner) is unique in not having been subjected to
more criticism during his tenure as finance minister in this government. Anyone reading the budget speech will learn the answer, I suggest. The minister is unique because he has discovered that if you want to keep out of trouble, you must do nothing. Anyone examining the minister's record will see that it is a record of drifting. It has been his policy that this country should drift aimlessly in its dealings on the world market, in its approach to modern economics, in allowing inflation to take its course and in allowing other economic pressures to take their course. He has done little to control the inflation ravaging this country.
When one deals in billions of dollars it is easy to lose perspective. Therefore, I think it is wise to look at what has been happening in this country in the last ten years. According to current estimates before the House, the government plans to spend in the current year almost $26 billion, compared with slightly under $10 billion which the government spent in the year before the present Liberal government assumed power. Total government spending in the 1974 fiscal year was slightly under $20 billion; this year it is to be slightly under $26 billion. It is to spend 30 per cent more in one year. Or, putting it another way, the government is to increase its spending at the federal level, in one year, by an amount equal to the total federal budget of the early 1960's. It is time members of the House asked for this trend to be arrested.
I was disappointed in the statement the Minister of Finance made on CTV. He said he would attempt to hold spending this year down to a 15 per cent increase and then he said, as reported in the newspapers:
Now it's intensely difficult in the political process to hold these expenditures down.
Why is it so intensely difficult for the government of Canada to do what is prudent and hold expenses down, when virtually all other nations are trying to do that and are succeeding? The United States intends to hold its budget this coming year down to $300 billion. If our minister were, say, minister of finance in the United States he would increase that country's spending to $345 billion. They would spend $45 billion more than they intend to spend this year.
The actual situation is more alarming, Mr. Speaker. Estimated government spending in the current year, that is, the 1975-76 fiscal year, will run, according to the appendix to the budget speech, at $28,750 million. But there is a footnote which says that this is a mid-point range; in other words, expenditures could go up to $30 billion just as easily as they could go down to $27 billion. That is significant. If you add 15 per cent to the minimum of $26 billion the government estimates it will spend in the current year, you will add slightly under $4 billion and the total will be slightly under $30 billion. I suggest that if the Minister of Finance has been completely candid he would have admitted that the government intends to spend $30 billion in the current year, and not the more modest figure he mentioned on budget night. The formula can be expressed another way: the government has been spending at the rate of a 40 per cent cumulative increase per year at the

federal level. How can we arouse the Canadian public to the dangers entailed by this spending spree being indulged in by Ottawa?
I wish to deal with specific items in the budget. Two particularly distressing points should be mentioned. The first is the government's persistent attitude concerning the taxation of resources. It is particularly unfortunate that the government has chosen to confront the provinces on the question of resource revenue sharing. The Minister of Finance, supported by the Prime Minister (Mr. Trudeau), has indicated that royalties paid to provinces with respect to oil and other resources are no longer to be deductible from income for purposes of income tax. The government's attitude on the payment of royalties to provinces is strange. The Minister of Finance confirmed yesterday evening that royalties payable to foreign governments can still be deducted from income before the federal income tax is computed.
What is the difference? Let me give an example. If a Canadian company is taking oil from Venezuela, it must pay approximately $2.28 per barrel in royalties and pay a profits tax of $6.31, for a total payment to the government of Venezuela of $8.59. Under existing Canadian law, both the royalty and the tax paid to the government of Venezuela can be considered as a business expense and may be deducted from income before calculating Canadian federal income tax.
But if the same company proposes to take oil from, say, Alberta, what happens? The royalty payable to Alberta is $2.62 per barrel. But the government says, "No, you cannot consider that royalty as an expense; you cannot deduct it from income in computing income tax." The company must pay 34 cents per barrel more in royalty to Alberta. I ask, how is the Minister of Finance justified in saying, "In no way will the royalty you pay to the province of Alberta be deductible as a business expense"? I believe this House deserves an explanation from the government. Why is this policy being followed? We need an explanation for the government's strangely changed attitude to oil taken out of the ground in this country.
I point out that while the Americans are striving to change their position from one of dependency on foreign oil to one of self-sufficiency, Canada appears to be drifting from a position of self-sufficiency to one of foreign dependency on oil. President Ford hopes to lead the United States to self-sufficiency in oil production by 1980. The Prime Minister of Canada appears to be willing to allow our country to become dependent on foreign oil by 1982. The American plan, named "Project Independence", anticipates that through better conservation measures and the development of as yet untapped oil reserves, the United States will be able to switch from being a net importer to being a net exporter of oil.
What is happening in this country? Last Friday the Minister of Energy, Mines and Resources (Mr. Macdonald) outlined an entirely different future for Canada. He released a pessimistic National Energy Board report which says that Canada will not have enough oil for domestic purposes in 7.3 years, and that we shall become dependent on oil imports in the relatively near future. Within eight months the present government has changed its position dramatically on this question. When appearing before the
November 26, 1974

Standing Committee on National Resources and Public Works last March, the Minister of Energy, Mines and Resources, when referring to oil, stated:
We can see a ten-year supply, a ten-year period during which the supply will be adequate to meet the Canadian demand.
A year earlier he said:
For another decade or longer we could continue to meet export commitments and to meet the growth of the Canadian market.
In the energy department's policy for Canada published in 1973, a 15-year reserve of oil was referred to constantly. It was pointed out that these figures did not include the oil sands reserves or northern reserves. In the space of less than a year, what has happened to Canada's oil reserves? Did they leak away? Did someone kick a hole in our oil barrel? I suggest the answer is no. We have a government that acts in strange ways. There may have been a mistake in calculations, but I do not believe it is that. I believe the government has taken its present stance with regard to oil for five deliberate reasons. First, the government plans to increase the price of oil from $6.50 a barrel to $8.50 or more. How can you suggest such an increase, however, without first claiming oil is in short supply? The industry has stated higher prices are needed before oil exploration can continue, so it is higher prices we are going to get. That will mean seven or eight cents more for a gallon of gasoline.
Second, Canada would like to cut back on oil exports to the United States. It is certainly easier to explain the cutback if you can first say to the Americas, "Honest fellows, we are running out of oil ourselves. We would like to help, but you know how it is". Third, the government intends to launch their new Crown corporation-they love Crown corporations-which will be known as PetroCan. It will be active in the oil exploration field. It can better be justified by stressing that oil reserves are low and the new state-run corporation will be needed to find new oil. On that point I would say "balderdash". PetroCan will not start to solve any oil reserve problems in Canada in a meaningful way.
Fourth, this government has done virtually nothing to encourage conservation in this country. They have not instituted a program other than the petty little $1 million advertising program that they recently suggested. They have not instituted a program to grapple with the fact we are misusing much of our energy resources in this country. I believe the present stance with respect to reserves is to get the public ready for some type of program of conservation. The government wants to dissuade the public from the belief there is virtually unlimited wealth in resource energy in this country. In short, in order to have a more effective energy conservation program I believe they are suggesting we have to talk scarcity.
The fifth reason is that previous oil reserve estimates anticipated that exploration would continue to produce new oil finds roughly equal to our annual consumption of oil and gas resources. For the past year, however, with government indecision and quarrelling with the industry and the producing provinces, the drilling rigs have commenced to pull out of our oil-fields. Little new oil has been found and the authorities are at last getting alarmed. Hence the gloomier picture.
The Budget-Mr. Stevens
It is unfortunate that we in Canada, with so many natural assets and with such great resources, have to be ruled by a government which is in a position of allowing the country to not properly manage the resources at our disposal. We do not have to become dependent on foreign oil imports. If we do, there is only one government in this country and one association that is to blame; that is the Trudeau, Liberal government which has ruled this country indecisively since 1968.


Some hon. Members:: Hear, hear!


Sinclair McKnight Stevens: I now wish to touch on a second awkward point in this budget, the question of housing. As hon. members know, housing starts in this country are dropping dramatically. We have a new Minister of State for Urban Affairs (Mr. Danson). When confronted with that statement, he said, "Well maybe the forecasters say that housing starts are dropping, but it is my job to prove the forecasters wrong." I hope the minister will start on his program and soon prove the forecasters wrong. We have not seen anything in the form of legislation from that minister, nor in this budget, that would lead any forecaster to doubt his previous forecast of disaster for the Canadian housing industry.
Take the $500 gimmick to home owners. I sometimes believe that government projects rarely sound better than when they are first announced. Do you remember, during the election campaign, the promise of $500 for each and every home buyer, made by the Prime Minister? Many felt it sounded pretty good. True, with house prices soaring, some wondered if $500 would even cover one month's inflation. However, most agreed something was better than nothing. It now appears that what the government had in mind was closer to nothing than something.


Some hon. Members:: Hear, hear!


Sinclair McKnight Stevens: The Minister of State for Urban Affairs announced earlier this month, and reiterated today, that the scheme would begin as of November 1, but there were conditions: the $500 would be available to first time buyers only; it could only be received if you bought a new house. In my constituency a house would have to sell for less than $44,915. With the average price of a single-family home in Newmarket now $52,318, and in Aurora $51,060, it is not likely the government will be sending many $500 cheques to that area. In fact, it is not likely they will be sending many cheques anywhere. Based on the minister's own estimate of the cost of the grants this year-$2 million-it would appear that throughout the nation less than one buyer in 200 will be eligible for the grants. That is what you call getting maximum publicity mileage out of a minimum effort.
There is an aspect of housing that is perhaps being overlooked. There is a regional disparity in this country that is not being dealt with by the present government. I am referring to the fact that a person in Toronto needs a 40 per cent higher income to buy a home than does a resident of Montreal. For example, in Ontario the average price of a single-family house is $46,899. In Quebec it is $32,600. Yet the average income in Ontario in 1972 was $6,690, while the average Quebec income was $6,286, only some $400 less. To date, however, the government has treated this problem as a national one. It has not acknowledged that if $500 is worth anything, one needs more than $500 in the

November 26, 1974
The Budget-Mr. Lapointe
Toronto area in order to help a Toronto man to buy a house comparable to one in Montreal. Prices have got out of line, yet this aspect of the matter has not been recognized or dealt with.


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


Mr. Charles Lapointe (Charlevoix):: Mr. Speaker, I want to thank you for giving me the opportunity to participate in this important debate on the budget.
It has been several years, 16 to be exact, since the member for Charlevoix addressed his hon. colleagues from this side of the House. I would like to take this opportunity offered by this first speech I have the honour to make today, Mr. Speaker, to thank the people of my riding who put their confidence in me during the last election. The return of Charlevoix to the Liberal party after 16 years means a lot to me because the mandate given to me is first of all to come and express in this House and to the government the needs of my riding, and also work within the Liberal government to establish across this country a just society for all Canadians. It is for the sake of that ideal that I was elected, Mr. Speaker, and that is what I intend to fight for beside the right hon. Prime Minister and his cabinet colleagues.
The budget introduced by the Minister of Finance (Mr. Turner) meets exactly that double mandate in the sense that, through various measures, it is first aimed at lessening the tax burden of those on low income, something which will allow us to help those in our society who are most vulnerable to the effects of inflation. Second, the budget is aimed at making all parts of Canada benefit from the particular resources which are sometimes the attribute of a single area.
As a member representing a riding experiencing an unfortunate rate of unemployment of about 25 per cent all year round, it will be easily understood that it was with some apprehension that I expected a budget that could have been little more than anti-inflationary. Fortunately, Mr. Speaker, the Minister of Finance had the wisdom and the courage not to listen to the prophets of evil and introduced an expansionary budget allowing the people in underprivileged areas of this country to look at the future with hope.
The economic slowness of underprivileged areas such as my riding is very often due to their remoteness from large centers. Because of this fact, the Speech from the Throne included a new transport policy for such remote areas, a policy enabling their people to live at the same pace as others in urban centres.
At this point, Mr. Speaker, I would like to pay special tribute to the hon. Minister of Transport (Mr. Marchand) who always worked for a united Canada, as is once more illustrated in this new transport policy. This policy is especially important for my constituency, where there is no regular air service within a 450 mile radius, and where train service is provided in a quarter only of the total Charlevoix area.
Mr. Speaker, I hope we will soon be in a position to reactivate Forestville et Saint-Irenee airports, which will allow people in Charlevoix to live at the same pace as those in urban centres and also to use services in those centres. Also in the field of transportation, it is important, Mr. Speaker that our ports along the St. Lawrence be maintained in operation. In addition to the traditional importance of these ports for our trade and tourist industry, it should be fully realized that Charlevoix has always depended on the St. Lawrence and that the use of its docks is a privilege we grew accustomed to.
We cannot speak of regional disparity without mentioning the Department of Regional Economic Expansion which since its inception has been the main factor in providing equal opportunities for all Canadians. I very firmly believe in the department's work. It will need increasingly bigger funds to meet the demands from all such Canadian areas that are not responsible for the inflation spiral or pressures on the economy, but that must of necessity bear the consequences. It is urgent in my opinion that the department, along with the Department of Industry, Trade and Commerce, take steps in the nearest possible future to help create jobs in the tourist industry. This industry, the leading economic force in a number of Canadian areas, has an increasing need of government help to face the general cost increase. It should be treated in the same way as other industries. Furthermore, Mr. Speaker, in that field and in most cases, they are small and medium businesses to which the government wish to give assistance.
For too long, Mr. Speaker, the riding of Charlevoix was considered, outside our area, as one of the most beautiful parts in the province of Quebec, reserved for the wealthy tourists who enjoy living in isolation during summer months.
Times have changed and people wish now that the touristic attractions in their riding be organized on an industrial basis which will allow them to work for decent wages and to participate also in the many advantages we find in Charlevoix, advantages which were reserved until recently to a small minority.
Located between two very active economic poles, that is the Quebec City area and the Baie-Comeau-Hauterive area, the riding of Charlevoix does not benefit at all from those two centres of attraction. Inside our own territory, our future must be based on agricultural and touristic development, on the development of forest resources and of our maritime location.
In my riding, people live on a very low scale. The great national problem which we now have to face is the fact that this country still has underprivileged people, underdeveloped areas and Canadians who are unable to get their share of the resources and benefits it offers. That is why, Mr. Speaker, the budget proposed by the Minister of Finance (Mr. Turner) should have favoured an expanding economy in order to come to the help of those Canadians who have a right to pass the poverty point.
As I mentioned earlier, Mr. Speaker, I believe, and I know that my colleagues hold the same view, that it is for the achievement of this single purpose, that I have been sent to Parliament. It is rather significant that a majority government should have been elected in this time of

November 26, 1974

alarming economic troubles. We have been given a clear mandate, which is governing this country for the wellbeing of all Canadians.
When we look to the future, we cannot help thinking that governments have to interfere in economics, social and international policy, and they will have to do so more and more in the future.
Mr. Speaker, we must stop worrying about the terms used to describe the government's action, we must not engage in vain debates whether we are too socialist, capitalist or centralist, or not enough. We must take advantage of the years when we are in power to put forward economic and social measures whose only aim will be the wellbeing of Canadians. This is exactly what the budget proposed by the Minister of Finance intends to do.


Mr. Bill Clarke (Vancouver Quadra):: Mr. Speaker, much has been said in this debate by my leader, and by my colleagues from other provinces, concerning the disallowance by this Liberal government of royalties and other provincial taxes as deductions in computing taxable income. The Minister of Finance (Mr. Turner) referred to the tradition involved in allowing these deductions in the past, but he hides behind the complexity and variety of the provincial claims. In doing this he completely ignores the constitutional rights of the provinces given under the British North America Act. The government is trying to make a scapegoat of Alberta in order to hide its all-out financial war against the provinces.
Little has been said about the effects of this policy on my own province of British Columbia. This is probably because of the absence of our premier in Tokyo. However, his resources minister said the federal government move was an obvious and deliberate invasion of provincial fields of revenue. British Columbia's mining industry, which is also involved with non-renewable resources, has been hard hit, and much of its direction has been forced out of Canada. Even renewable-resource industries, such as forestry-which is striving for a sustained-yield position-will be greatly concerned by the government's decision to disallow the deduction of provincial taxes.
The obvious intention of the government is the total disallowance of all provincial levies. Already the minister has indicated that the Ontario land speculation tax is non-deductible, and every Canadian businessman must now wonder when some provincial or municipal tax that he pays will become a non-deductible expense in the view of this government. Even some normal business expenses such as advertising were disallowed when the expenditures were for space in foreign periodicals. The failure to resolve this issue only reinforces the impression that the government continues to offer stop-gap legislation.
The most startling thing about the budget is that it makes no attempt whatever to wrestle with the problem of inflation, and yet it is itself inflationary. It predicts higher government expenses and calls only for a rate of growth of government expenses lower than that of recent years. Referring to the minister's estimated reduction in total financial requirements from $2 billion to $1 billion because of the effects of higher-than-expected inflation, the Globe
The Budget-Mr. B. Clarke
and Mail was moved to observe that "the government has been the big inflation winner."
This view is consistent with that expressed by the Honourable J. V. Clyne, a prominent British Columbia industrialist, who said during this year's election campaign that the Trudeau government had totally abandoned any idea of curbing inflation in favour of seeking votes. He cited this government as the worst contributor to inflation, and referred to the increase of 140 per cent in government spending over the past six years.
Looking into the budget we can see that it treats a few of the symptoms of inflation. There are a few tax cuts for individuals fortunate enough to have taxable incomes, and there are added exemptions for pensioners. The minister proudly states that a married wage-earner with two children will pay no federal tax in 1975 unless his income exceeds $5,871. If his income does not exceed $5,871 he will be starving, Mr. Speaker. Other than the indexing provisions of 1973, the only benefit available in 1974 to the working poor is a $50 increase in the minimum cut in personal income taxes, which does not even begin to cover their loss by added inflation since indexing began.
Now let us look at some of the income tax changes and how they affect other taxpayers. Compared to the married wage earner with two children who pays no federal tax on his $5,871, the minister tells us the married pensioner-couple can earn $8,258 before paying any federal tax. Of course, the minister will not help them receive that much. They would have to have a substantial private pension plan and over $10,000 in Canada savings bonds or other security in order to obtain the maximum benefit from the minister's offer. This is just another empty offer by the government to those pensioners who are struggling to exist and cannot afford to take advantage of it.
But here is the big gainer, Mr. Speaker,-the non-typical couple who are both employed. Let us say they both take a $1,000 home ownership savings plan exemption, and both use the $1,000 interest deduction, and both have a maximum deduction under a registered retirement savings plan. This charming couple will receive exemptions of $16,000 and, in addition, will be eligible for tax cuts of up to $750 in 1975.
We should not be misled by the minister's reference to the fact that no federal tax is payable by the sample wage-earner or pensioner. Even these individuals will pay a significant amount of provincial income tax that this government will collect from them on the regular tax form.
I recall that nearly two years ago in my maiden speech in the then budget debate I suggested the total removal of personal income taxes and the substitution of a consumption tax. The government laughed, but I would like to quote briefly from my speech, as reported at page 1708 of Hansard for February 27, 1973:
There is also a precedent for this idea in this country. Already the government allows individuals to save up to $4,000 per annum tax free in a registered retirement savings plan. This money is taxed when it is taken out of the plan and spent, usually after the taxpayer has retired. Look at the effect of this idea on a young family starting out-and much is said about the difficulties facing them. At present, two young people working side by side to make a start for their family are forced to pay a vast portion of their income in tax, even though their consumer expenditures are very low. My suggestion would allow them to get a

November 26, 1974
The Budget-Mr. B. Clarke
boost by paying a tax only on the amount they spend. Similarly, those on low incomes would pay little in tax, and high-living Canadians would pay their lair share based on their high expenditures.
This government by its registered home ownership savings plan has taken another step toward my suggested goal, and I suppose I should feel grateful. And I would be, if the minister did not continue to permit so many glaring inequities to persist in our tax system.
We can see another example of the government's bungling in its attempt to solve the housing problem of Canadians. The government has reduced the sales tax on building materials-something Progressive Conservatives have long advocated-from 12 per cent to 5 per cent, providing a good saving on an average house, but leaving about $500 in sales taxes payable.
In the meantime, the Minister of State for Urban Affairs (Mr. Danson) has announced that he will give purchasers of new, moderately priced homes a $500 grant. Now, of course, this is just another empty offer because of the lack of new homes in the price ranges given. But, Mr. Speaker, the government has retained all of the bureaucracy of the sales tax department, and you can be sure that it costs just as much to collect a 5 per cent sales tax as it does one of 12 per cent, and it will create a whole new bureaucracy to administer the $500 grants. The net effect to the purchaser would be the same if the 12 per cent tax were wiped out entirely, and we would eliminate a double bureaucracy.
This housing minister's predecessor was horrified last session when I said the government should get out of housing. My views were echoed only two months ago by the Vancouver Province newspaper, which said:
... our housing difficulties, particularly in the rental field, compose a classic case of problem creation by government.
It continued:
We did not begin to experience real rental shortages in this country until the federal government removed the tax incentives that channeled a lot of private money into rental accommodation.
Finally, the badly needed incentive to entice high-income Canadians to invest in housing has been restored, if only for 13*/2 months. Of course the government needs the private sector to solve the housing problem, and has shown repeatedly that government-provided housing is unacceptable or unavailable to those people the government says it wants to help. But, typically, the government's plans to help the needy must fail because the really needy cannot afford to take advantage of the plans offered.
Many of the factors in the high cost of housing can be traced to the action of some level of government. For example, not too long ago municipal governments used to approve sub-divisions with gravel roads, septic tanks and drainage ditches. Improvements were put in gradually and paid for over decades through local improvement taxes. Now they require pavement, curbs, underground wiring, street lights, storm and sanitary sewers before the first house is occupied. The municipalities were saved, but the purchaser had all these costs added to the purchase price of his new house. Today delays of two years in obtaining all approvals are common, and this can add 25 per cent or more to the cost of raw land in a subdivision.

This government did its share in escalating housing prices. For example, CMHC refused to lend on non-sew-ered lots. The government's inflation has caused interest rates to skyrocket, which magnifies borrowing costs for housing in an incredible fashion. A typical 7 per cent mortgage for $40,000 carries monthly payments totalling $84,000 over the term, but a 12 per cent mortgage of the same amount requires payments of $124,000, a $40,000 increase.
If one doubts that inflation is a factor in interest rates I should remind hon. members that the Liberal government sold 3 per cent perpetual bonds in 1936. These bonds are still outstanding and worth about one third of their face value in 1936-dollars, or about 10 per cent in terms of purchasing power. This year the government sold Canada Saving Bonds at 93/i per cent, and these carry an immediate cash redemption guarantee.
Bond yields offer an interesting aside here, Mr. Speaker. The minister, early in his budget speech, referred to the increase in the average yield of outstanding Canada Savings Bonds, which is now 1014 per cent if held to maturity. No mention was made of the yield on marketable government bonds maturing after 1980, with rates that vary from 4>/2 per cent to 63/S per cent and with present market values ranging from $69 to $81 for a $100 bond. No, the minister would only adjust interest rates when it was to his government's advantage. In order to stop the flood of redemptions on Canada Savings Bonds he had to increase their yields. But the poor holder of the marketable bonds has to suffer the effects of the government's inflation policies right up to the maturity date of the bonds he bought in good faith.
Holders of Canadian government annuities find they too are locked into long-term agreements at rates of 4 per cent, and they, along with the holders of the 3 per cent perpetual bonds, are having their pleas for justice turned aside. When it suits the government the minister claims sanctity of contract, to the detriment of patriotic Canadians who loaned their money to the government. Truly the government has been the big inflation winner.
Before the increase in yields on Canada Savings Bonds was found necessary the minister told an annuity holder that an increase in annuity yields would require "a tax increase for all taxpayers to subsidize a minority of Canadians who are holders of government annuities". In the same letter he said:
Certainly, if any action of this nature were to be contemplated, it seems to me it could hardly be restricted to government annuities, and not extend to holders of government bonds.
Now this highly-principled government has done a complete about-face and given special consideration to the holders of some government bonds, but no consideration to annuity holders and holders of other government bonds. It reminds me of the government spokesman who, in reference to the principles involved in resource taxation, said that the federal government had backed down halfway on its principles and that the provinces should do likewise. That is so typical of members of this government. They do not realize that if a principle is involved it should be worth defending, and there is no backing down.
Let me return to the contribution the government has made to the high cost of housing. Naturally an investor
November 26, 1974

faced with 10 per cent inflation cannot lend his money out at less than the rate of inflation plus a return on investment. A few months ago G. Arnold Hart, Chairman of the Bank of Montreal, said savings would have to yield 17 per cent for the average taxpayer to get ahead of inflation which is running at an annual rate of 10 per cent or more.
Governments speak of speculator profits, and say government land banks are necessary. Speculators will not make profits if there is no demand. The increased value of land only reflects the demand for it at any given time. For example, today houses in Ottawa are selling for less than they did last spring. Demand is off because of high interest costs, lack of mortgage funds and other reasons. So what does the government decide? It decides to add to the existing demand for raw land the pressure of government bids for its land bank. The government will have to outbid all other potential buyers.
Inflation again is a factor in higher constructions costs. The government's inflationary policies force all workers to seek not only increases to keep up, but create an anxiety in people and a loss of confidence which forces them to seek gains to cover future inflation. The construction industry is highly organized and very powerful, and its workers are therefore able to obtain top wage increases not available to all home buyers.
Now the Minister of Finance and the Prime Minister (Mr. Trudeau) say they can do nothing about inflation. They talk about imported inflation. I would refer these gentlemen to the "Bank of Canada Review" where they will see that the export price index increased 37 per cent in the year to April, 1974, whereas the import price index increased only 26 per cent in the same period. The conclusion one can draw from this is that our prices are rising at a substantially higher rate than those of our trading partners.
While our government is saying nothing can or needs to be done by Canada, the British government told a NATO meeting this month, in London, that the prized possession of freedom and security were at risk if the evils of recession and inflation were not controlled.
The government says it is trying to help the poor, and points to its generous programs to help the needy. But the government's over-all policies on inflation and taxation are eliminating the benefits for the poor and the elderly, and are making these Canadians more dependent than ever upon the very government that continues to say it wants to make these people more independent.


Mr. Gilbert Parent (St. Catharines):: Mr. Speaker, this is the first time I have spoken in the House of Commons and, in all humility, I must confess it is one of the proudest moments of my life, including my pride at having my family here today. My one regret is that my son is not here to share in this, the highlight of my public career.


Some hon. Members:: Hear, hear!


Gilbert Parent: I congratulate you, Mr. Speaker, and your associates, not only because you have been chosen by your colleagues to preside over our debates and deliberations, but also on the stand you took last November 5, when the duties, responsibilities and privileges of the Speaker of the House were reiterated and reaffirmed.
The Budget-Mr. Parent
For some weeks now I have been weighing which items I should include in my initial address to the House. It is understood that I will comment on the budget presented by the Minister of Finance (Mr. Turner) on November 18. But more than that, I wanted to set forth guidelines for myself as a member of parliament, having regard to my constituency of St. Catharines, our beloved country, and to our role in the international community of nations.
The city of St. Catharines is set in the richest countryside and most inviting climate in central Canada. It is just about the right size, with about 114,000 people. It is big enough to support excellent elementary and secondary schools and a university. I have had the pleasure of teaching in three secondary schools in the city, and also of serving as a school board trustee for the schools in the county. Both these experiences were rewarding and interesting.
St. Catharines has five libraries, well staffed and well equipped medical facilities, and enough variety of activity and personality to ensure continued interest. It is near enough to several large cities such as Toronto and Hamilton to provide a change, if you so desire.
St. Catharines is an historic town with United Empire Loyalist origins and sturdy, happy, productive ethnic groups. Each year our folk arts festival attracts thousands of participants and visitors. In June, 1974, over 28 ethnic groups took part in the festivities. In all modesty, Mr. Speaker, I suggest that St. Catharines is a microcosm of Canada and we are proving daily that people from various cultural backgrounds can and do live in harmony. It is called 'The Garden City,' and with just reason. It has more parks per capita than any other city its size in Canada.
Employment is high in the plants and shipyards within the city limits. New construction as well as three new industrial developments are likely to mean continued prosperity. It should be noted that with 1975 designated as the year for women-and my able colleague from Trinity commented on the status of women yesterday-there is no job discrimination and women's groups in St. Catharines are respected and well accepted. St. Catharines is an easy going town-perhaps due to the climate, or perhaps it is the friendliness of the people there. The city nestles in the shelter of the Niagara escarpment. One of my continuing delights is to look out of my dining room window and savour the beauty of the escarpment.
The largest employers in the area are the automobile factories, the paper companies, the metal fabricators, and the food processors, including the wineries. It has been estimated that 80 per cent of Canadian wine comes from the vineyards of the Niagara Peninsula. My colleague, the hon. member for Lincoln (Mr. Andres), can attest to that. These wines are the pride of Canada. The Niagara Grape and Wine Festival held toward the end of September attracted over a million visitors to St. Catharines, and we helped in fostering favourable international understanding by welcoming the citizens of our twin city in the West Indies.
One of the strongest influences in recent years was the establishment in 1964 of Brock University. The city vibrates to the pulse of young academics. A few weeks ago

November 26, 1974
The Budget-Mr. Parent
I had occasion to visit Brock, and from the Tower the view of St. Catharines is breathtaking. The theatre is alive and well at Brock. We have a symphony orchestra which is the envy of southern Ontario. Athletics compliment the academic flavour and the two live side by side, encouraging physical fitness and scholastic excellence. Our prowess in lacrosse is legendary.
In 1970 we hosted the world rowing championships. Our Royal Henley course is the finest natural rowing course in Eastern Canada. Each year over 3,000 young men and young women use these facilities and we are now fielding crews who are competitive internationally. It should be noted that crews from all over the North American continent compete yearly at the Royal Henley.
It is incumbent upon me, Mr. Speaker, to see to it that the views and the opinions, as well as the problems of the citizens of St. Catharines, are articulated in the national councils of government. Conversely, it is my responsibility to ensure that our people are kept informed of the development in the House of Commons. To this end, I have inaugurated a plan whereby I can report directly to my constituents by radio via talk shows and interviews, by newspaper, and by sending out at least four newsletters per year.
It is my duty to communicate with the inhabitants of St. Catharines by attending the various cultural and organizational functions which take place. It is my pleasure to trumpet the achievements and accomplishments of our city and its citizens.
In order to be conversant with the legislation and regulations which affect our citizens in St. Catharines, I have asked for and been appointed to the following important standing committees of the House of Commons-Labour, Manpower and Immigration, and Veterans Affairs.
Since the House opened on September 30 the Standing Committee on Labour was instrumental in settling the West Coast grainhandlers' dispute, the sub-committee on manpower has presented legislation for parliament's consideration, and the sub-committee on immigration has moved to make our immigration policy flexible enough to admit over 200,000 immigrants each year while also permitting us to select those people who have specific talents which are in short supply in Canada. On November 6 the Standing Committee on Veterans Affairs updated the Veterans Act to make it an instrument more responsible to the needs of our veterans.
The budget that parliament is debating is, in its approach to the country's economic problems, one of the most important in many years. To describe it as a re-run of the May 6 production with new sub-titles hardly does it justice. The Minister of Finance has reworked it from his earlier presentation by ameliorating the crunch of the oil and gas industry and by lessening the confrontation between Ottawa and Edmonton over resource revenues.
Most important, however, he reworked it in light of domestic and world economic conditions and prospects that have changed since May 6. He reworked it against a backdrop of recession fears in the United States, Japan and Europe, where Canada sells most of its exports. As a result the budget is a careful selection of policies which, in

large measure, are designed to soften the impact of declining foreign demand for Canadian goods and services.
After a government is elected with a solid majority, as this government was last July, one would normally expect tax increases and government spending programs reflecting election promises. Instead it has proposed to reduce taxes, to curb government spending and to implement election promises only when they contribute to the objective of strengthening the country's ability to withstand economic assault, be it inflation or recession.
This is sound economics. Many persons have been advocating government economy and tax cuts for the last two years and more, the latter particularly so that people would have more take-home pay in order that they could buy more and thus create incentive for industry to hire unemployed workers. Now it has been concluded that the time is opportune for this approach, so the domestic market can take up any incipient slack, or part thereof, in the country's industrial infrastructure.
The Minister of Finance was not unduly pessimistic last Monday evening. He mentioned the word recession only twice; once a nod to the risk, and later a reference to the gathering forces of recession throughout the world. But he admitted that the outlook for the Canadian economy is less bright than in May, that signs of slowing down have appeared, and that tariff protectionism and payments problems abroad are causing weakness in foreign demand for our exports. In proposing tax cuts, he said there is need to sustain the growth of purchasing power over the period ahead.
I note that it is six o'clock, Mr. Speaker. I could finish my comments after the break. I require about a minute and a half more.


Mr. Knowles (Winnipeg North Centre):: Mr. Speaker, I suggest that we extend the time enough that the hon. member might finish his speech, and then enjoy his dinner with his family.


The Acting Speaker (Mr. Penner):: The House has heard the suggestion of the hon. member for Winnipeg North Centre (Mr. Knowles). Is that agreed?


Some hon. Members:: Agreed.


Gilbert Parent: I thank my colleagues, Mr. Speaker. The budget gets rid of some of the aggravations of tax returns, as by limited exemption of interest and pension income from taxation. It is also strongly humanitarian, as when it proposes limited tax exemption of private pensions, transfer of tax credits to spouses, aid for those who want but cannot afford houses, and more aid for the handicapped. These proposals tend to cut the ground out from under those who argue that our liberalism is spelled only with a capital L.
The proposal to put higher taxes on heavy cars makes sense when you consider the need to conserve domestic oil resources. So does the corporate surtax, and higher taxes on alcohol and tobacco. The costs of government are at an all time high, and rising under the influences of inflation and swollen equalization payments to the provinces.
I have been asked many times what my reaction is to being in the House of Commons. I must confess, Mr. November 26, 1974

Speaker, that the first time I was ever in the House was as a sitting member. At first I was awestricken; now I am only slightly confused by the procedures. But I hasten to add that I have no doubt as to my role as a member of parliament in this House, this crucible of democracy in Canada. I am sobered by my responsibilities and duties.
As a supporter of the government in power, I am expected to criticize constructively government policy and to offer my own opinions and ideas. It is true that I am not as vocally prominent in the House as my colleagues who form the opposition, but my reticence does not extend to our regional or national caucuses. I am a Liberal by choice. I choose to be a member of the Liberal party because it satisfies my own personal beliefs, and I believe it encompasses the hopes and aspirations of the majority of Canadians. This was borne out by the results of the July 8 election.
Canada is part of the international community of nations and it readily embraces this most important role. For years our peacekeeping forces have spread our reputation as a nation which is strong, understanding, fair minded and decisive.
The prophecy made by Victor Hugo at the Paris Peace Conference held in 1849 comes to my mind. Here is its most celebrated excerpt: "A day will come when war will seem absurd, a day will come when there will be no battlefields other than markets open to trade and minds open to ideas. A day will come where cannonballs and bombs will be replaced by votes and universal suffrage throughout the nations. A day will come when cannons will be shown in museums just as intruments of torture are being shown today. A day will come when we will see two huge groups, the United States of America, North America and South America, standing face to face, with the United States of Europe extending hands across the seas and exchanging their goods, their trade, their industries, their arts and their genius."
Mr. Speaker, to my mind, that day has come.

I look forward to the months and the years ahead during which I will be sharing in the decisions of this superb legislative body. It is quite probable that the awe of my first days will be replaced by a reverence which is reserved for quasi religious bodies.


The Acting Speaker (Mr. Penner):: Order, please. It being after 6 p.m., I do now leave the Chair until eight o'clock this evening.
At 6.05 p.m. the House took recess.


[Stage Direction]
AFTER RECESS

The House resumed at 8 p.m.
Mr. John Wise (Elgin):: Madam Speaker, may I say what a great pleasure it is for me to join other hon. members of the House in the debate on the budget. Before
The Budget-Mr. Wise
I begin my remarks may I congratulate the freshman member from southwestern Ontario, my neighbour, the hon. member for Oxford (Mr. Halliday). It is clear from his fine performance in the House this afternoon that he will continue to represent that old riding in Ontario, Oxford, in the very fine manner in which it was represented for 21 years by the late Wally Nesbitt.
I sat quietly and listened attentively on budget night while the Minister of Finance (Mr. Turner) delivered his 18,000-word document. The minister has acquired the ability to make a good presentation in this House, and elsewhere for that matter, regardless of the merit or content of that presentation, be it good, bad or indifferent; I sincerely extend that courtesy to him personally and regret that he is not present to hear my remarks. The budget is unique inasmuch as the foreword, preamble, observations, international scanning and comparisons make up the bulk of the text. The actual changes and adjustments are dealt with like passing flashes in the night. Descriptions of his address are many and varied. Some describe it as a consumer budget; others simply as a bad example. Some see it as a tightrope walk or a rerun of something old, something new.
I do not want to reject the budget outright, Madam Speaker, for some of its proposals, as far as they go, are both necessary and welcome. The reduction of the sales tax to 5 per cent from 11 per cent and 12 per cent on building and construction materials, the larger exemptions for pensioners, the allowance for interest and incomes from private pension plans, are meagre measures but ones well received and indeed desired by individuals. The removal of sales tax on heavy trucks and municipal water system materials and equipment will represent a degree of savings to our municipal governments which, with their limited tax base, are experiencing real financial difficulties.
We must ask ourselves this: how effective will these budget proposals really be? Does this budget do enough for business interests? Will the budget really cut into inflation, or will it even cool the inflationary expectations so prominent both internationally and domestically? In view of the government's past record and performance in this regard, I must say, Madam Speaker, that it is most difficult to share the minister's optimism. He indicates that he is striving to get the rate of inflation down below the double digit level. Hopefully, he is more adept at striving than the Prime Minister (Mr. Trudeau) is at wrestling.
It is obvious that, with the introduction of this budget, the government has chosen to continue its high wire dance rather than move ahead with any real authority in order to cope with record high inflation and the increasing cost of goods and services. We acknowledge the fact that inflation is present internationally, and that we are somewhat limited in this area. We are limited in our ability to control the cost of imported goods, but we also should be prepared to acknowledge that a larger inflation percentage than perhaps the minister is willing to admit is related to our own domestic situation in connection with goods and services.
The decision rests in the hands of the minister. He has chosen again not to act, and Canadians and Canadian businessmen are forced to tread water until some time in

November 26, 1974
The Budget-Mr. Wise
the future. We hope they will survive and not drown in the process. Yes, the strong and the rich will survive; many of the others, unfortunately, will endure further hardship.
It is almost unbelievable that absolutely no measures for agriculture were contained in the budget. This government that avows a policy to increase production seems quite content and satisfied to let milk producers sell their product at or below the cost of production. It seems satisfied to let beef producers sell their product at 40 cents per pound while the cost of production is recognized to be 60 cents; it does not take into account beef cow prices at 10 cents to 15 cents.
The budget contains no tax concessions whatsoever to producers of food products. I ask the minister, where, in his 18,000-word document, will I tell producers to find the item to encourage them to continue in business and, indeed, to increase their production? I am aware of one item involving a tax increase. The minister has told tobacco producers in southwestern Ontario that they will once again have to shoulder an extra tax burden. This is not the first occasion, of course, when these producers have been called upon to bear extra costs. Too often they have received political wipings from this government.
The budget does little to assist small businessmen or to dispel their concerns over lack of capital. An article in the Financial Post of November 23, 1974, entitled "Small Firm Necks in Tight Credit Noose" and written by Roger Worth clearly and accurately describes the near drastic plight of small business. Mr. Worth indicates that Canada's small businessmen are turning to leasing companies, factoring firms and even finance companies in attempts to beat a major cash crunch. Tight credit rules and cash shortages force small operators to pay suppliers on a cash on delivery basis rather than the usual 30, 60 or 90-day terms. Proof of this situation was indicated when a finance company manager made it known that loans to small businessmen and entrepreneurs were on the upswing. He indicated that his company was getting good credit risks who were paying between 16 per cent and 24 per cent for money because they had reached their credit limits at the banks. This is certainly not a healthy situation.
This sector of which I have been speaking, Madam Speaker, forms the backbone of our economy. This sector is responsible for providing stability to our economy and social well-being to our lives. It is also vitally important in that it employs approximately 60 per cent of our labour force, and these people are not protected by large unions who can look out for their interest. Seldom are they protected by labour contracts and cost of living benefits, or "COLA" clauses.
It must be recognized that some business ventures are extremely risky; others are doomed to failure. On the other hand, our large, progressive and sound operations of today in most cases experienced small, perhaps somewhat uncertain and shaky beginnings. The lack of working capital is a serious problem and the budget does nothing to help remedy the situation. The lack of adequate mortgage money, and record high interest rates combined with inflated prices, have played havoc with residential development and home construction at a time when our housing needs have never been greater.

Canadians have witnessed a slump in housing starts ranging from 20 to 30 per cent. Ad hoc programs have no doubt assisted in a small way, but have fallen far short of the needs of Canadians.
With regard to the $500 grant for first time buyers of new homes, a measure contained in the May budget and introduced by the Minister of State for Urban Affairs (Mr. Danson) a short time ago, how effective can this measure be when it is estimated that only one purchaser out of 200 will qualify? Surely the Minister of State for Urban Affairs must be less than enthusiastic about this program. I suggest this program would be greatly improved if buyers of older homes could also qualify for this grant.
The real problem in the supply and demand aspect of the housing industry is caused by high interest rates and a critical shortage of mortgage money. Until these are modified it is difficult to imagine any substantial improvement or real progress being made.
I want to say a few words concerning the minister's heralded tax cuts. The minister's contention that income earners keep his new tax cuts in mind when forming their wage demands is nothing but whistling in the dark. The year 1975 will no doubt see an unprecedented string of strikes, both legal and illegal, accompanied by excessive wage demands and excessive inflationary settlements.
Labour leaders, because of spiralling unchecked inflation, are forced to make demands according to what they think the cost of living will be in the coming years, and their estimates are invariably extremely high. This is no great wonder considering that the government does little to ease the fears or increase the confidence of these wage earners who cannot be blamed for looking out for their own interests.
To repeat as I began, the budget is not all bad. Some of its provisions are welcomed. Its failure lies in the fact that it does not go nearly far enough and that it involves a little too much hoping, and perhaps even praying, than it does concrete changes in economic policy that will help us to cope and effectively deal with the inflationary pressures ahead.


Otto Emil Lang: Mr. Speaker, it is a pleasure to take part in the debate on this particular budget in view of its interesting and rather unusual history, as a budget which in large part was put before the House on an early day in May. Although it was received with a great deal of acclaim in many parts of the country, it was less well received by the House in the mood it was in at that particular moment. It is a budget which was defeated in the House of Commons but sustained by the electorate in Canada. Therefore it is basically put before the House of Commons again with the endorsement of the best possible kind.
Having had a budget sustained by the electorate in this fashion, the Minister of Finance (Mr. Turner) found it possible to put before the House, notwithstanding that, some significant improvements in the budget and its overall approach. One or two of these, like the change in the reduction of the sales tax in housing, were as a result of a change in the circumstances. This led the minister to
November 26, 1974

conclude quite rightly that what would have been wrong to do, in a time of extreme demand upon housing and an all-out construction program, as existed only half a year ago, was in fact right in circumstances when the housing industry had slowed and where an encouragement to purchase was in fact desirable.
The budget, after the election, also showed the impressive fact that whether winning or losing, it is possible to obtain certain messages from the electorate. I think we understood the general concern of the country about restraint in government spending as a major kind of approach. In a rather different area, the improvement in the position of persons on private pension reflected the continued concern of the government, a concern reinforced by discussions and contact with people throughout the campaign.
In the way in which the government can, we have moved to put people on private pensions in a better position to protect themselves against the deterioration of the value of their pensions. We are allowing them a deduction on a certain part of their pension benefits. Where there is not a second income in the family and both pensioners are over 65, we are allowing them to claim the full over 65 special deduction against private pension earnings.
These are significant and important steps along the road to improving a budget which was already sufficiently good that it could be stood upon and campaigned upon successfully in the country.
In the budget as it stood in May there were also certain significant approaches and proposals with regard to the taxation of oil, gas and minerals. It is perhaps important to recall that these provisions were in the budget as it stood before the electorate on July 8.
In this particular budget, the Minister of Finance has made some changes in those proposals, but not changes in the basic principles which were seen as being important in the approach to taxation of oil and minerals in Canada and the approach between the provinces and the federal government in that regard. Tonight I want to particularly deal with these issues because they are seen, I think, rather wrongly today as being issues of particular or special concern to the west, Saskatchewan or Alberta in particular, and therefore to the area where I was born and which I represent.
In dealing with this issue, I wish to propose that we recognize there are three quite separate questions involved in the current dispute about the place of oil and gas taxation in particular. These three issues are, I suggest, first, the special question of the export tax or the price for oil in Canada. The second is the right to taxation, the proper constitutional position for the federal government as opposed to the provinces with regard to particular taxation or an approach to it. The third issue is the correct use of whatever constitutional power there may be in existence-in other words, the correct levels of taxation and the correct sharing arrangement between federal and provincial governments, having in mind the importance on occasion of at least a third share, the share of industry of individuals involved in carrying on activities.
I say that the export tax must be examined first because it frequently is brought forward in a confusing way by
The Budget-Mr. Lang
western premiers who try to deal with it as though it bore on the other two issues. The export tax issue is essentially a question of whether in Canada we have the right to determine what the price of a product such as oil ought to be, particularly when there is no free market price being set-when the price is being set by a cartel which, if we could exercise control over it, we would try to break up. If there were an international government perhaps we would be able to break up that cartel. But the point I should like the hon. member for Crowfoot (Mr. Horner) to consider is that we need not accept the cartel price in Canada, since we happen to be in a fortunate position. What is the right price for oil?


John (Jack) Henry Horner: You should make it clear who is subsidizing
whom.


Otto Emil Lang: It is not a question of who is subsidizing who. The question is, simply, what is the right price for oil? Would the wrong price be justifiable in these particular circumstances? We made a judgment, and it was a judgment agreed upon by ten provincial premiers assembled together, which in itself made it quite a remarkable agreement. The right elements to take into consideration when dealing with the proper price for oil are questions like the long term supply and demand situation, the question of alternative sources of energy, the fact that as oil becomes a scarcer commodity the higher price is reasonable to restrict use or abuse. These are all appropriate considerations when making a judgment. And judgment is not easy.
I do not say there is any magic attaching to a particular price, but that, it seems to me, is a separate issue. The determination of what is the right price for oil in Canada, regardless of the actions of the cartel formed by other countries, is a special question. I suggest it does not involve any question of outright subsidization of any one group by another. Rather, it represents a refusal to accept exorbitant profits being made by a particular group in Canada just because people like them elsewhere would go for a similar price.


Some hon. Members:: Hear, hear!


An hon. Member:: You didn't move like that over
rapeseed.


Otto Emil Lang: Well, we did, as a matter of fact. We moved with our export tax before the western provinces had even appreciated the problem.
Another matter which should be borne in mind, when trying to determine whether $6.50 was an appropriate price, is that one year or two years before that price was set when oil was priced at $3 or less, Alberta took the view that the more oil sold at that price the better. That was their approach just two or there years before. They may have been deadly wrong, but at least I put this forward as evidence.
The next question is the question of the right to tax, the question of the attitude of the federal government, when assessing its own taxes, toward what amount of taxation measures could be undertaken on the part of provinces or,

November 26, 1974
The Budget-Mr. Lang
in other words, whether it was right in theory to disregard royalties imposed by a particular province when determining what should be the level of a particular federal tax. It should be plain to anyone that in a federal state it would be altogether inappropriate for the federal government to take more in taxation from an industry in one province than it took from an industry of exactly the same kind in another province. This is essentially the principle which is involved.
To go further, how ridiculous it would be if the federal government were to take less from an industry in a particular province because the government of that province chose to take more from that industry as its own share. In other words, if we were to allow provincial taxation generally to be deducted before calculating federal tax we would be encouraging, practically forcing, provinces into the position of taxing at the highest possible level to make sure that the federal government got less. This could be put in another way. Indeed, it was evident from the actions of Alberta and Saskatchewan that it was the other way.
If there is a federal tax structure and an appropriate level of taxation to be imposed by the federal government on industry throughout the country, the provinces may be tempted to increase their levels of taxation if those are to be counted by way of subtraction. We saw this clearly in the way in which Alberta and Saskatchewan acted. Alberta introduced higher levels of royalties than had been contemplated. Royalties were taken not only from the increased profits of the companies but from the proportion of revenue which the federal government would have obtained from those companies.
Look at what happened in Saskatchewan. Royalty rates there were put up even higher. If these rates had not been treated as they were treated in the budget we are now considering, the people of Saskatchewan, through those higher royalty rates, would have obtained a higher share of the profits of the oil industry than those in Alberta, though the oil industry in Saskatchewan would have paid less to the federal treasury than the identical industry in Alberta. This is unacceptable from a federal viewpoint.
There are some who claim that this approach to the treatment of royalties may encourage provinces to consider the next step of actually socializing the industry. I have heard this said, but it is wrong for two reasons. First, the very spirit of what we are doing is against that proposition. Saskatchewan has already gone half way toward socializing the industry by applying its particular level of royalty. This approach is being discouraged rather than encouraged by our handling of this question.
Further, there seems to be an easy assumption that somehow or other we could not or would not tax a Crown corporation operating a business which otherwise would be taxed within a province. Let me say it is our considered opinion that we could indeed tax such a Crown corporation operating in any such field. The fact that we have not done so in the case of utilities like power and telephone concerns is not a sign of the lack of constitutional power to tax but, rather, reflects policy decisions made at the time.
Indeed, utilities may be in a special position anyway because they are quite commonly under government own-
ership or directly regulated so that their profit or return is very carefully controlled. I do not say this means we have to avoid taxing them in every case; I simply say it may be an explanation for the decisions which led to this conclusion as a matter of policy.
The point which I consider to be of importance is that we could indeed tax a Crown corporation within a province if it engaged in activity which otherwise we were taxing in other provinces. This should be accepted by everyone in the House who does not believe that our constitution was not specifically aimed at promoting socialism in the provinces. If it were otherwise, every step toward socializing an industry would remove that industry from the federal taxation scene and there would be a clear impetus toward socialization.
The hon. member for Regina-Lake Centre (Mr. Benjamin) may smile, and that is because he would like a constitution which was aimed in that direction, but I should like to think that members of the Conservative Party and, indeed, the premier of Alberta might think twice about approving a constitution which was biased toward socialism because of the nature of the tax structure. Our considered conclusion is that it is not so, either in fact or in law.
The real question is not the right to tax and the propriety of allowing the federal government to tax business without regard to taxes or royalties imposed by provincial governments, but rather what the appropriate level of the tax should be. That is the appropriate question.


Mr. Andre (Calgary Centre):: Is that what you said at the meeting of the premiers?


Otto Emil Lang: Yes, Madam Speaker, we indicated quite clearly in advance of that conference that it would be necessary for us to protect ourselves in regard to our revenue against such action that the provinces might take.


Harvie Andre: That's not true!


Otto Emil Lang: I suggest that as far back as last January the federal government made clear its position that the key question was appropriate shares between the federal government, the provincial governments and industry. The argument about appropriate shares is, of course, practically as old as confederation itself. It is not our view that the industries in this country should be so throttled with taxation that they have no incentive to explore. It is not our view-though it is the view of the NDP government of Saskatchewan today-that it is appropriate to expropriate without compensation and take over industries, totally discouraging all development and private initiative. That is not our view. It is our view that we should have appropriate and fair shares, which is the kind of matter that we can discuss.
In recognition of this, in his budget in May the Minister of Finance indicated, even though for very logical reasons he had to move to the conclusion that royalties should be treated as non-deductible for purposes of federal taxation, that he would allow a higher level of abatement which, in effect, restored to the provinces an appropriate and decent share of the revenue that was available. After all, it was
November 26, 1974

the provinces that took the first move in regard to taking most of the revenue that was available, and that also tried to move to take away not only the revenue from the companies but revenue from the federal government as well.
The question of what is the appropriate share is a question that needed discussion and that had discussion. In effect, the Minister of Finance said this. I did not think he needed to be of the opinion that he was taking too much in May of last year but, being the accommodating person he is, and in an accommodating government he said we would make some more revenue available to the companies and the provinces and hope that provinces, such as the province of Alberta, would agree to give more revenue to the industry so there would be incentive there for them to explore and develop resources. That is the approach that was taken.
Of course in the province of Saskatchewan-this should give the Conservative members opposite some cause for reflection-there is little likelihood of the NDP government being concerned to make any room at all for the companies. They are not concerned about the companies, or about development, private enterprise or private initiative. I hear the hon. member for Regina-Lake Centre (Mr. Benjamin) applauding the complete absence of private initiative in his province. I am glad to tell him that within a few short years we will be putting him back to private enterprise and initiative, and I have told him that before.


The Acting Speaker (Mrs. Morin):: Order, please. I regret to interrupt the minister but the time allotted to him has expired.


John (Jack) Henry Horner: Madam Speaker, it is indeed a rare occasion when I follow the hon. member for Saskatoon-Humboldt (Mr. Lang). Most of the debates in which he and I speak in this House are on wheat and related subjects. I will not tell the House now that I am not going to divorce myself from wheat on this occasion, but mostly when debate relates to those two subjects the minister in charge of the Canadian Wheat Board waits in abeyance until I have spoken, and then attempts to answer the criticisms I have been able to level at him and his department.
I should like on this occasion to spend my entire 20 minutes criticizing the Minister's approach. All I can say to him and his fellow Saskatonians, both in this House and in Saskatchewan, is that I hope the Prime Minister (Mr. Trudeau) makes room for him after the next election in some university, such as McGill or Laval in Quebec. After this speech about taxing provincial corporations in the field of power, telephones and oil if necessary, and his attempt to disallow the Crownest freight rates, I really do not think there will be much room for him in Saskatchewan. I have often forecast-and I shall be there when it comes about-that I shall see Otto Lang tarred and feathered, and driven out of Saskatchewan.


Some hon. Members:: Hear, hear!


Otto Emil Lang: The oil is too expensive these days, Jack.
The Budget-Mr. Horner


John (Jack) Henry Horner: I will pay for the oil, and I will pluck the chickens. That will be a little sacrifice that I will make for my beloved home province of Saskatchewan.
In his budget the Minister of Finance (Mr. Turner) dealt with the economy of Canada and compared it to the world economy. He suggests that Canada is on an inflationary cycle about which he can do nothing. He hesitates to slow it down because slower growth will mean slower growth.


An hon. Member:: How about that!


John (Jack) Henry Horner: If the House will allow me more than 20 minutes I can quote his exact words. One can find them on page 2 of the "Budget Highlights," where he says that world economies are weakening and that the world may well be in for a recession. He even suggests that the world may be in for a deep recession. One can gauge his words in that way and ask: what can we do about it?
The minister also adds on page 2 of his "Budget Highlights" that we are in need of massive growth in the production of food commodities and a number of other things. In the budget one looks for two indicators. First, the minister says the world is bound for a deep recession, and one looks for some indication that the Canadian economy will be protected so that Canadians feel this deep recession less than the rest of the world. Second, the minister stresses in his budget that the world is heading for a crisis in food production, and one asks what the budget can do to stimulate food production in Canada. Those, Madam Speaker, are the two highlights I took from his budget, and these are the two features of it to which I will direct my remarks this evening.
In trying to gauge the minister's political future at this time I ask myself what he is attempting to do in his budget. Is he trying to protect Canada by putting forward an expansionary budget, or is he trying to protect his own political future? It is for every member of the House to put forward his own views, and I have no doubt that the Minister of Finance will disagree with mine. He sees himself, one year from now, looking backwards and saying: "Well, I put forward an expansionary budget and we are in a deep recession. I did the best I could, so do not criticize the Minister of Finance".
Madam Speaker, you know the kind of political futures ministers of finance have in Canada. I am not suggesting that the minister's future is going to lead him to a higher role in Canadian political life, though he might think so in some of his inner reflections. But this is the main reason he has put forward an expansionary budget at this time.
Let me take him through one short and elementary lesson in economics. If you are headed for a recession and the finance minister of the country does not heed that recession and deal with it, then he only deepens the recession. This is the course that the minister is plotting for Canada today by putting forward an expansionary budget. He should really be cautioning all Canadians to produce more, save more, and spend less; but he is doing nothing of the kind.
Today the world is gripped by some kind of energy crisis. I have looked in the budget to see what it is going to do for Canadians in this respect. Is it going to encourage them to produce more energy in the form of hydro electric

November 26, 1974
The Budget-Mr. Horner
power, gas and oil, at less cost? I do not see anything in the budget that would encourage them in that way. Will it encourage Canadians to produce more food at less cost? I see no encouragement in the budget in that regard.
The budget has attempted to keep abreast with rapidly growing inflation. The Minister of Finance has given some recognition to escalating revenue in the federal treasury brought about by inflation, and has attempted to give some of this back to lower income groups. I do not deny the minister that fact, and certainly this is worthwhile if he acknowledges that he can in fact do nothing to apprehend the inflationary spiral that exists in Canada and other countries in the world.
What can the minister do at this particular time to offset the recession most Canadians and most world citizens believe we are heading for in the next year? The minister has suggested in the budget, and I could quote the page, that he expects a 4 per cent economic growth rate in Canada.


John Napier Turner: After the budget.


John (Jack) Henry Horner: The minister corrects me. After the budget he expects a growth rate of 4 per cent. He also said that he expects, after the budget, an increase in government expenditure of 16 per cent. One does not have to go past grade three or grade four, or to have an excellence in mathematics, to realize that a 16 per cent rate of growth in government expenditures and a 4 per cent growth rate in the economy constitute an inflationary complex.


John Napier Turner: That is at about the grade nine level.


John (Jack) Henry Horner: Can we believe the minister that the rate of government expenditure will be limited to 16 per cent? Let us look at the past record which shows that the rate of expenditure increased by 24 per cent. What gives us the idea that he will hold the line on this budget?


An hon. Member:: He said so.


John (Jack) Henry Horner: Somebody says "He said so", but we on this side of the House know that he does not have a close relationship with the President of the Treasury Board (Mr. Chretien), and that they are miles apart on many things. I am afraid we cannot believe him when he says that he and the President of the Treasury Board will hold the line on government expenditure. It is with sad heart that I say to this House that we have no confidence in the government which says it will hold the line on government expenditure. We know that a year ago government expenditure increased by 24 per cent. The Minister of Finance now is predicting a 16 per cent increase, and 4 per cent real growth in the economy, and that in itself is inflationary.
In Canada we have the ability to produce energy, and we have the ability to produce food. These are two commodities the world will be anxious to receive throughout the coming years. I have heard the Minister of Finance in this House and on television suggest to the country that the federal government receives only 8 per cent of the

royalites being paid on oil and gas in Canada, and he cannot understand why the producing provinces, Saskatchewan and Alberta, condemn him for not allowing royalties as a tax exemption within those provinces. These royalties have been allowed as an exemption ever since confederation.
The minister is a lawyer and he has a great deal of legal assistance at hand, and there is nothing in the world to stop him from providing a clear and exact definition in respect of royalties if he finds that the provinces are finding loopholes. There is nothing to stop him or his department from laying down the exact meaning of a royalty which falls within his exemption category. If the provinces go beyond the boundary then the minister can say that he does not consider what they are attempting to exempt as a proper royalty.
The minister did not follow that course. He said that all royalties would be disallowed as tax exemptions within the federal government's jurisdiction. The minister has completely disallowed royalties paid to the province as tax exemption items for resource companies.
There has been much talk about the bleak future in respect of energy supplies, and I should like to deal with that for a few minutes, as well as with the National Energy Board report. I think I would be remiss if I did not point out at this time how Albertans feel about the way the minister is using them. The minister is using and abusing them.
I have in my hand a letter sent from a consulting firm in Calgary to an individual who wanted to purchase a small oil company in Saskatchewan. He wrote this consulting firm asking whether this would be a wise purchase. This involves a $2 million expenditure, and relates to 61 exploration and some producing wells. Let me just read the last paragraph of this letter which states:
Alberta operators are not hit as hard by provincial royalties as are Saskatchewan operators; nonetheless, as a consultant I cannot in clear conscience recommend to you investing monies in Canadian oil and gas properties even though lack of private investment spells the end to my consulting practice.
That is like the old mother hen cutting off her own head. Mr. D. O. Bossort, the consultant, attached a financial statement for the month of October 1974 in respect of this oil company which shows that the federal export tax amounts to $76,344, and federal income tax amounts to $18,926.91, for a total federal tax of $95,270.91. It shows that the provincial tax and royalty of the same company amounted to $13,513.46, with a royalty surcharge of $30,994.23, for a total of $44,507.69, with a net after taxes of minus $344.86. It is no wonder the consulting firm did not advise this private Albertan Canadian citizen to buy into that small company in Saskatchewan.
I might add that this company had gross operating costs of $18,582.05 monthly, but by the time it paid federal taxes and provincial royalties it was operating in the red. This, as I say, is a $2 million enterprise. Government bonds represent a far better investment than oil and gas. This is a pure and simple example of that fact to all Canadians. I am prepared to put this whole letter on the record, or to send a copy of it to the Minister of Finance or anybody else who wants it. I suggest it is a prime example of why Canadians will not independently go out and buy up small
November 26, 1974

companies or shares in multi-national corporations, because they are all losing money producing oil and gas.
The individual to whom I have referred has said that he plans to leave whatever oil and gas remains in the ground. Why should he bring it out when it costs him $344.86 a year to do so? Let me point out, for the benefit of Canadians all across the country, that wise Canadians are not putting their money in oil and gas, and wise Canadians who already have their money in oil and gas are leaving those resources in the ground because it does not pay them to take them out after paying the taxes this Minister of Finance has levied.
The Economic Council of Canada pointed out today that the domestic price of oil should be allowed to rise to the international level by 1977, otherwise Canadians will become dependent on foreign oil before the end of this decade. That is pretty simple, but did the minister say anything about that in his budget? I suggest that he said nothing like that.
What does the National Energy Board report say in respect of oil exploration? It tells us what we already knew. It states that voluntary conversion and reducing oil sales to the United States are trivial substitutes for finding and developing new Canadian oil. It says what I have said many times. I have said that we will be a net importer of oil by 1982. I said in this House, time and time again, that the pipeline from Sarnia to Montreal would be empty in six years. I said that on April 9, 1974. The National Energy Board report substantiates what I have been saying in this House and what Imperial Oil has been saying. What has the government done? It has gone on blindly.
The National Energy Board report further states:
The lack of important discoveries of oil in traditional Prairie areas means Canada-caught between rising demand and falling production-can run out of oil. It will have to import heavily unless it quickly develops big-very big-new reserves.
Canada will have to import heavily unless it quickly develops big new reserves. That is the point I want to make. What did the Minister of Finance do? He attempted to ease taxes. He did not clear the air. Since his budget Gulf Oil has publicly stated that it will reduce expenditures for oil exploration from $322 million to $222 million. If one takes into consideration that the expenditures by Gulf Oil represent 5 per cent of the normal amount of money spent on exploration in Canada, this means there will be $1 billion less to be spent on exploration this year because of the budget of the Minister of Finance.
Further, the National Energy Board report says that we will run out of oil unless we quickly develop big new inventories of oil and gas. We cannot do it with this budget. All the people of Canada, for whom the minister is supposed to speak, want to have an abundant supply. We do not want to be in the bleak position suggested by the National Energy Board, which says quite clearly that in 1985 Canada will be producing 900,000 barrels a day and will be importing 2,500,000 barrels a day. In 1990, if conditions remain the same, we will be producing 600,000 barrels a day and importing 3,100,000 barrels a day. We are on the wrong track with regard to energy.
The Budget-Mr. Horner
Now I should like to deal with the question of food. It is interesting to hear members speak repeatedly in this House of their deep concern for the starving millions throughout the world. We always take pride in being a great wheat producing country. Last year there was an anomaly in Canada, which was no fault of the minister in charge of the Wheat Board, although I might also say it was no credit to him. World prices rose substantially. Farmers were embarrassed by the huge amounts of money they received for their wheat sales. In fact as of this day, in deferred payments through the Canadian Wheat Board the Farmers of western Canada have deferred payments amounting to $500 million or $600 million. That includes wheat sold through the Canadian Wheat Board and grain sold off the Canadian Wheat Board. We see the final payment for last year's crop deferred until January 1. That amounts to another $500 million.


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


John (Jack) Henry Horner: I wonder if I could beg a few minutes to finish the thought I was expressing?


The Acting Speaker (Mrs. Morin):: Is it agreed?


Some hon. Members:: Agreed.


John (Jack) Henry Horner: Thank you, Madam Speaker. I also wish to thank members of the House. I should like to finish this chain of thought in respect of wheat. We have an anomaly in Canada in that when people throughout the world are starving the wheat farmer is reluctant to deliver grain. We have a situation where there are now deferred payments amounting to $600 million. The minister has deliberately deferred the final payment of $400 million to $500 million on last year's crop, and we see the rise in the initial payment deferred until January 1, which amounts to another $100 million.
So without even a close tabulation there is already waiting for the farmers on the prairies payments of $1 billion for wheat, which they will have to declare as income next year. As one engaged in the business of raising cattle I know many instances arise where farmers will defer paying income tax by deferring sales of cattle. They will feed cattle for a longer period, and attempt to defer the payment of income tax by buying cattle on December 31. We see the same thing happening in the grain industry.
There is an interesting situation outlined in the budget where, through a registered home purchase savings plan, people may set aside $1,000 a year for a total of ten years for the purchase of a home, or the purchase of furniture for the home. There is already in the Canadian tax system a plan whereby a wage earner can set aside $4,000 each year in a registered retirement savings plan, which he may draw upon at some future time whether or not he should be working. However, the farmers and people in the grain industry have to deliver their wheat in the next year. The government should seriously consider helping the farmers set aside some money in a registered retirement savings plan so that the individual farmer will be able to be self-reliant through hard times and good times.

November 26, 1974
The Budget-Mr. Caccia
I would suggest, for the agricultural industry, a registered retirement savings plan with a maximum savings limit of $50,000. In this way the minister in charge of the Canadian Wheat Board will be able to do away with the guaranteed prices for agricultural commodities, because the farmer himself could accept the liability by setting aside $50,000 in a registered savings plan upon which he could draw when crops were poor or when prices were low. I believe such a system would create greater self-reliance within the individual in the field of agriculture. It would create less dependence upon the government, which is always a good thing, because governments continually muddle things, particularly this government. I would ask the Minister of Finance to consider this.
The Minister of Finance has said that the budget is good only for as long as he thinks it is good, and that he will bring in another budget whenever he thinks it is wise, in four months, in six months or at some other date. If I gauge it correctly it will be in March of next year, because the farmers then may be reluctant to plant grain and reap the crops to produce food for the world for they will be reluctant to pay the government the income tax they might have to pay.
Those engaged in the agriculture industry are becoming astute businessmen. They do not want to consider their income before taxes. They like to consider it after taxes, the same as any other businessman. So I encourage the minister to bring in a budget next March and to accept this concept. It will do the agriculture industry some good, it will do the millions throughout the world crying out for food a lot of good, and we must consider that seriously.


Mr.   Chas. L. Caccia@Davenport: 
Some hon. Members:: Oh, oh!


Mr. Caccia:: Third, we have worked very hard, despite the howls from the opposition benches, to establish a price for Canadian oil several dollars below the international price. We have put an export tax on oil, despite the howls from the opposition benches, to pay for the cost of oil imported to eastern Canada. Fourth, we have again imposed in this budget a 10 per cent surtax on corporate profits earned between May of this year and April of next year to catch undue profits.
I ask you, Mr. Speaker, how do these picayune measures proposed by the Tories to trim government spending and establish an inquiry into the UIC stand up as measures to fight inflation against the background of our Liberal policies? I ask you to comment on this. Obviously, there is a bankruptcy of ideas on the other side if that is all they can come up with, Mr. Speaker.
In the limited time left to me I would like to speak briefly about our manpower policies and unemployment.


Mr. Oberle:: It will take too long.


Charles L. Caccia: The hon. member is quite right, particularly in trying to straighten out the confusion in his mind because only last week he was trying to link the unemployed with empty seats on airplanes. Imagine that!
X0)
May I now touch on immigration. I take this opportunity to urge the Minister of Manpower and Immigration (Mr. Andras) not to yield to the temptation, evident in some quarters, of linking immigration to unemployment.


Some hon. Members:: Hear, hear!


Charles L. Caccia: I do not subscribe to that theory. There is no study to this effect. Since coming to Canada 19 years ago I have seen no evidence to support the notion that immigrants take jobs away from others, or that they fill jobs which would otherwise be filled by native Canadians. The evidence shows the contrary, that immigrants fill vacancies in construction, in mines, in factories, in restaurants and in hotels, and that these vacancies occur because Canadians do not wish to fill these jobs. This subject has prompted much political rhetoric in the past few decades.
When the green paper sees the light of day, probably on a cold day in January, I hope the minister will deal with immigration on its own merits. He should ask whether Canada wants immigration, what kind of immigration it wants, and where, and not link immigration to unemployment levels, unless it can be demonstrated that there is a relationship between the two. Personally, I do not believe there is such a relationship.
I believe that immigration has served and continues to serve Canada well. Besides filling economic vacancies, immigrants have become and will continue to become new consumers and stimulate new production of items such as furniture, clothing, appliances, etc. Immigrants seeking jobs numbered between 60,000 and 92,000 on average in recent years for which statistics are available, or less than 1 per cent of our labour force. At the same time, in the third quarter of this year 120,000 jobs in Canada remained
The Budget-Mr. Caccia
unfilled. I suppose that figure can be interpreted several ways. Personally I think these facts point to two things; first, to a probable flaw in recruiting policies abroad; second, to a flaw in our manpower training program. This, after all, is understandable, as it is difficult to keep pace with the changing demands of employers in the post industrial society.
I should like to pursue these thoughts in a broader sense. It seems to me that the time is rapidly approaching when we in Canada must offer people work of a sort that fits a post industrial society. What we have done in the past few decades served a useful purpose, but we are on the threshold of a new age and we shall need a new approach for dealing with men and women in the labour force from the time they enter it until they retire.
Our private enterprise system, while it has been a system that has produced a higher standard of living for more people than any other system we know of, has had and continues to have the inherent weakness of not being able to generate full employment. This is true despite the many government spending programs and policies introduced in the post war period to support it.
There is a growing number of people, including myself, who believe that our unemployment insurance scheme should have a more positive orientation. But we should not engage in the kinds of witch hunts which opposition members have been proposing. We, in the Liberal party, do not act that way.


Some hon. Members:: Oh, oh!


Charles L. Caccia: I believe that we should assess the system and see how it can be improved. I see merit in giving our unemployment insurance scheme a more positive orientation. It should not merely be an instrument which reacts passively to the cycles of varying degrees of unemployment our private enterprise system seems unable to overcome, despite government spending programs and policies designed to do just this. Therefore the question is; why unemployment insurance? Why not employment insurance?
Employment insurance, presumably, could be based on our present approach to unemployment insurance, namely, a fund. All Canadians who are working would contribute premiums to that fund, which would be available to Canadians who are out of a job.


Frank Oberle: That is merely another form of unemployment insurance.


Charles L. Caccia: This fund would have two functions. It would provide income to maintain those who become unemployed while they are seeking employment, and it would provide employment for those who cannot find jobs in the private and established public sector of our economy. It would be funded in the same way as the unemployment insurance fund.
Since the major function of the employment insurance fund would be its job creating aspect, perhaps I might deal with that first in the time available. Many useful jobs could be created which would benefit society as a whole. In making the selection, perhaps three factors should guide us. First, the jobs should be non-profit in nature;

November 26, 1974
The Budget-Mr. McCain
second, they should have the element of an investment in our future; and third, they should be varied enough so as to provide choices. For example, we could create jobs which would involve recycling; reforestation of Crown lands; the renovation and maintenance of historical buildings; the restocking of our rivers, lakes and seas; the cleaning of our rivers, beaches and ravines; the maintenance and repair of homes of retired citizens whose income limits their ability to pay for such work; the provision of supporting personnel to work with the handicapped and retarded children in our society; the preservation of wild life, and a host of other jobs. These are examples only. We have already learned what is needed through government programs like LIP, which was a forerunner of future programs. The LIP program indicated the road we might follow.
The selection of jobs which will be created by the fund will be decided in consultation with provincial authorities, labour unions and management, to ensure that the jobs supported by the fund do not conflict with their interests. The selection will not be without problems, but if we are to provide jobs which will not otherwise be created, some decisions will have to be arrived at despite the problems.
The next consideration which must be dealt with is the wages to be paid for this type of employment. My own view on the wages which might be paid for the kinds of jobs the fund would support is this: if one were to evaluate a job in terms of its usefulness to society, such job should command a much higher wage than many jobs which are included as part of the private enterprise job stock.


Frank Oberle: We will all be working for the government.


Charles L. Caccia: We are inviting members of the opposition to contribute their ideas and improve what we are putting forward. These ideas have been advanced for the sake of improving our entire society, because if we were to do things as members of the opposition think they should be done, we would continue to be boxed in by automation instead of becoming its master.
This is the challenge that is facing Canadian society and, I suppose, all western society. The number of jobs to be created would of course be determined by the level of unemployment that exists in other sectors of the economy. Some unemployment will always exist because of the fact that people who have to become unemployed need time to search for another job. This would, of course, have to be taken into account.
The other function of the employment insurance fund is to provide income to maintain those who become unemployed while they are seeking employment. The levels of income maintenance would be the same as those paid in benefits through the unemployment insurance fund, with the same maximum and subject to income tax as at present. The duration of the-


Mr. Deputy Speaker:: Order, please. I regret I must interrupt the hon. member, but his time has expired.


Mr. Fred McCain (Carleton-Charlotte):: Mr. Speaker, I do not profess to be an expert in a great many fields as did

the former speaker, the hon. member for Davenport (Mr. Caccia). With regard to his remarks I would simply like to say that if his expertise in all the other subjects he covered is comparable with his expertise in agriculture, he really lacks expertise and has demonstrated it here tonight.


Some hon. Members:: Hear, hear!


Fred Alward McCain: There are a lot of barnyard phrases one could use. A great many of them would be applicable as a description of his remarks. However, let us refrain from those in the august company in which we find ourselves, and simply say that his remarks on agriculture certainly must be a reflection on his knowledge of all subjects upon which he spoke. It is extremely limited indeed by that measure.


An hon. Member:: Let's hear what you have to say that
is constructive.


Fred Alward McCain: That sarcasm might work back home, but we don't need it here. I find, as I look at the budget, that there are two subjects which are extremely significant by the total absence of constructive suggestions for their well-being. These two subjects are, of course, fishing and agriculture. It is as though fishing did not exist, and agriculture was a consumer problem not worthy of any major reference as far as government is concerned. For too long this has been the treatment of both these subjects.
Not too long ago the people on the east coast of this country suffered a serious amount of storm damage. It was utterly impossible to get any answers from the department. I can assure the minister that as of this moment, with the storm that is presently raging on the Atlantic coast, he better have a policy of a constructive and remunerative nature because the damage in all probability will run into the hundreds of thousands of dollars.
A rather minor storm was estimated to have caused something in excess of $100,000 damage to lobster traps off Grand Manan about a week ago. The storm of that day is insignificant compared with the one of today. Therefore, what is to be the policy? Is it the intention of the government-the Minister of Finance (Mr. Turner), the Prime Minister (Mr. Trudeau) and all those who sit around and behind-to ignore the traditional position of the government of Canada toward those who suffer losses over which they have absolutely no control? This was accepted as a national responsibility until the advent of this particular administration. It has been evaded effectively and shamefully since this administration took office under this Prime Minister.
It is time the government began to take a long, hard, practical, progressive look at what is necessary in the face of the rudimentary economic structure of both fishing and agriculture, and developed concepts which will produce health in each industry.
I will not dwell on the fishing problems as they presently exist. However, I will repeat that there has been a totally unrealistic approach in respect to regulations from the water to the can, from the fisherman to the processor, which have been totally unrealistic and which are contradictory to all the practices in a great many other countries

in the world. They have been detrimental to the fishing industry and fishing opportunities that would be presented around our shores given a realistic approach. Under the direction of this administration we have seen this nation close fishing operations which are thriving in other areas. We have seen this nation deprive our fishermen of an opportunity to catch fish in the sea, fish which are marketable in other areas in Canada.
We have seen our health regulations, as devised by the government for unquestionably good purposes, imposed upon our fishermen whether the fish are to be consumed at home or abroad. We have seen other countries approach our shores to try and buy fish from our fishermen, but we have said "No, we will not eat it ourselves and will not sell it to you." This is done even though these other countries have entirely different standards for their food requirements. We have unnecessarily and ill-advisedly deprived our fishermen of income which was rightfully and properly theirs.
In the agricultural industry we have not been particularly realistic in our recognition of the problems as they exist. There is no denying the economic health of the western grain grower, as described by the last speaker from this side of the House. There is no denying that certain aspects of agriculture have been extremely profitable. There is likewise no denying the fact that the crisis in several other facets of the agricultural industry for a long period of time has put agriculture in the position where people can ill afford to have a hard year. In some instances a hard year is just around the corner.
It is rather interesting to note that the government of New Brunswick chose to make an arrangement with a starch factory in that province so it would re-open its doors in case there should be a necessity of processing culls, a second rate product in the province of New Brunswick. This is indicative of a supply which may indicate reduced prices which that industry can ill afford. However, there is no immediate mechanism to put it to work under this government program. If the people concerned do strike a depressed year in income, they may not be in a position to plant another crop. It is an ad hoc approach. It is, I am sorry to say, a continuation of the approach which I heard a former minister of agriculture, the hon. Mr. Olson, put forward, "If the heat is too strong, get out of the kitchen." What he was saying was that if you cannot compete on the international market, don't farm.
There has been no change in this structure, no recognition of the necessity of international negotiation to give our agricultural industry an element of projection which it deserves, both for itself and the service of consumers at a fair price. Ministers have walked blindfolded in the mass of confusion as they formulated agricultural policy. It will not work. Their one policy, which has been the cornerstone of agriculture, has ended up in the position of being investigated by a committee of this House. I submit that that in itself is reflection enough on the attention which is given to agriculture, and on the keystone policies which the government has formulated and put into practice through legislation.
The budget may very well denote a great many difficulties as far as the Atlantic area is concerned. I wonder if in the long range the Atlantic area is unique in the position
The Budget-Mr. McCain
in which it finds itself, particularly with respect to energy and its long-term supply.
It is about time the government of Canada got off the ad hoc boat and began to alert the Canadian people to the exact nature of the long-term energy supply situation. There is now some indication by insinuation, and I suppose it will come out bluntly before too long, that all Canada may eventually have to pay world prices for oil. It is obvious that the first area which would be affected by such an eventuality would be the Atlantic area, and that there is no plan in the wind to take care of the energy requirements of the Atlantic area, particularly of industries in the petro-chemical field.
It is time consideration was given to the question of whether or not there is likely to be sufficient oil to fill the pipeline which it is proposed to build to Montreal. It is time the government gave consideration to the change in income patterns which might take place if the oil resources of Canada should attract industry and jobs to their locations. I do not quarrel with the idea of growth in any part of Canada, but I suggest the government should be aware of the possibility of such a shift in the distribution of wealth, jobs and opportunity and the effect this might ultimately have on the Atlantic area.
The government should consider whether Quebec might be next to be affected. Will Ontario be affected in turn? Our known energy resources certainly lie west of the Great Lakes, not east. Money, jobs, production, cuddle around the energy source to take advantage of lower costs of production. The entire equalization formula as we have known it may well be changed, province by province.
Making this situation worse is the policy of confrontation pursued by the Prime Minister, the Minister of Finance and others in the cabinet with respect to the development of natural resources and the income derived therefrom. There was never a time in our history when there was any dispute as to the ownership of natural resources. They were the property of the provincial government concerned, whether in Quebec, New Brunswick, Alberta, or any other province. Never has a federal government said to the provinces; "We should share in the revenue which comes to you because of your natural resources."
Even in the driest of dry times, the Province of Quebec or the Province of Prince Edward Island has only, by virtue of equalization grants, shared in the benefits which accrued to others by virtue of their bountiful natural resources. But now the Government of Canada is demanding its share and challenging the provinces on this basis.
It seems to be new to the government that anybody should suggest a percentage of profits as a yardstick for royalty derived from natural resources. Such a measure was initiated in the fifties in New Brunswick for a special purpose, and agreed to by the Government of Canada in the hope that it would lead to development in New Brunswick. The government of New Brunswick agreed not to collect a royalty on a cents per pound or any mandatory basis in connection with a natural resource, but to ask for royalties only at such time as the mining companies had developed a surplus under federal tax laws. This goes back

The Budget-Mr. McCain
to the fifties. But it seems to have come as a surprise to the government that a percentage measurement of profit should be the measurement by which royalties are to be paid to a province.
This approach, as presently exercised by other provinces, has been pursued to excess. Only from this point of view do I support the Minister of Finance. Excessive charges have been levied at the provincial level. But the answer is not to confront ten provinces because two or three do not stay within the guidelines laid down by the government. The answer is to sit down and negotiate a sane and sensible deal with those provinces which have stepped over the traces by federal standards.
As a result of excessive taxes imposed by various provinces in Canada there has been a new impetus for exploration of mineral resources both in New Brunswick and in Nova Scotia. There are indications that some of the offshore exploration for oil may have been concentrated in the Atlantic area because unstable economic structures exist in the rest of Canada affecting oil resources. Reliance was placed upon the economic commonsense of the Atlantic area as an attractive basis for exploration and development. This certainly applies in the case of metals.
If the government applies to the whole of Canada the income tax law proposed in the budget before us, it will not only be punishing one or two particular provinces that have quarreled with it, but it will be punishing other provinces as well. This is not good government. We in the Atlantic area are concerned about this change in basic principle-about not allowing royalties as an expense of operation of the companies. This is not fair. It is not right. It is an infringement of constitutional privileges extended to every province since confederation. Is it the intention of the government to rewrite the constitution through the budget?


An hon. Member:: Yes!


Fred Alward McCain: Members opposite know the problems they would face if they were to try to rewrite the constitution by legislation. Are they attempting it by means of a budget which automatically passes at a given point in time, regardless of the views of the opposition or of the provinces? If so, it is a shame and it is detrimental to the wellbeing of the country. And little do they care, Mr. Speaker, about what happens or what may be the feelings of others as long as those in power in Ottawa get their own way regardless of the consequences to the rest of us.
There has been a great deal of talk about the fiscal responsibility of the federal government. The government has expressed concern about the increasing cost of goods and services. I submit that in perfect contradiction of these expressions of concern the government has produced a series of budgets which are a denial of these protestations.
In the fiscal year 1973-74 the budgetary requirement was $23,726 million, according to figures made available in the budget speech delivered by the Minister of Finance. In the fiscal year 1974-75 the corresponding figure was $30,175 million. In the fiscal year 1975-76, as projected at this moment, the figure is no less than $34,900 million. In 36 months the government has escalated its expenditures and tax collection by 50 per cent. By what possible standards

could there be an appeal to any section of the public to exercise restraint when the government sets an example by spending at a rate greater than the rate of inflation which presently exists?
Take one example of the effect of federal policies. There are in this country shortages of products required by agriculture, particularly in the chemical field. Within the last few months an executive of a company producing one of these products came to my office and stated that his company alone could end one of the shortages which presently exists, but it would not do so now because, if his firm were to invest money at its present cost, it might very well be priced out of the market due to interest charges alone. That is the effect of high interest rates in this country on development, employment, agricultural and chemical opportunities.
This stifling budget, and this stifling policy of high interest rates, have to be changed. It is a contradictory budget, which makes one question the real veracity of any government that would support such a situation as this. The budget is contradictory with respect to small businesses. No real concern has been expressed about them. The minister is going to change the Industrial Development Bank and do a lot of things, he says, for small business. But when you consider interest charges, labour charges, raw material charges and inventory charges, and the way they have escalated over the past five years, and if we adopt the standards of some of those members to our left and say there have been excessive profits so let us tax them as well, then I submit that the small businessman is constrained and restricted, and at this moment in time is looking forward to a not very bright future.
I grant you, Madam Speaker, that there has been a change in his taxable returns, but I submit he has now reached the point in time where he needs, as does every individual taxpayer in the country, an exemption, whether it be $30,000 tax free profit, provided it is reinvested in the business and works for the business. Small business is hurt and it is high time that the government, to the benefit of small business, the provinces and people in general, came out from behind its facade and into the world of reality.


Mr. Leonard C. Jones (Moncton):: Mr. Speaker, I listened very carefully last Monday night to the budget presented by the Minister of Finance (Mr. Turner), and I would be less than honest if I did not commend the minister on his very lengthy, historic and concerned review of economic conditions, both nationally and internationally. Certainly the stated objectives of the budget to meet the serious economic problems of the country are worth while, but whether the actions that will be taken will really attain those objectives remains to be seen.
I trust that the members of the House will not push the panic button too soon or too late, as the case may be, for fear that instead of inflation, recession, slow growth and such other economic phrases, we hit rock bottom with a serious recession or depression, along with even more serious unemployment. We are just gliding at the moment. The trip will not be smooth or easy, but with less wind and proper navigation we should be able to land fairly smooth-
November 26, 1974

ly within the next 10 or 12 months-that is, if the pilot, navigator and crew have steered the proper course.
What I am saying is that I sincerely trust that the members of this House realize the terribly fragile condition of the economy and use their best endeavours, despite political or party allegiance, to co-operate with the minister in every way possible in order to share the load and achieve the goal of moderating inflation and, at the same time, sustaining economic growth.
However, I question whether the May budget, so called, was the real issue in the July election, at least in my own constituency anyway. I just want to set the record straight in that regard.
It behooves all of us during this session to be patient with the minister and the government in their alleged efforts to "wrestle inflation to the ground". But it behooves the minister and the government to inform the House immediately of all the restraints and their results, both good and bad, and if it is necessary to change course at any time, immediately to advise the House. If his theories are wrong, the minister should admit it. Each and every one of us must continue not only to urge government restraint-that is, reduce government waste, duplication, bureaucratic bungling and empire building, red tape and inefficiency, and, at the same time, provide adequate services-but we must urge and promote savings and less waste, not only in government at all levels but also at all levels of the private sector. Quite frankly, it is not so much what is in the budget that should concern this House; it is what is missing from the budget that concerns many, many Canadians.
Much is said in the budget about housing. A number of other items should have been added. First, there should have been an amendment to the Income Tax Act to provide for deduction by home owners of mortgage interest, municipal and provincial property taxes. Mortgage interest under the present act is subject to taxation in the hands of both the mortgagee and the mortgagor. This is double taxation and unfair and unjust. Second, there should have been an amendment to the Income Tax Act to exempt from taxable income interest on municipal bonds. Third, there should have been an appropriate provision for assurance that elimination of sales taxes on building materials and supplies will be credited to the home owner. Fourth, there should have been steps to reduce interest rates immediately on mortgages for home building or home purchase, and reduce interest rates for municipalities for public works by setting up a separate banking authority. I sincerely believe that these items could very well be included in the budget without upsetting the balance, and they certainly comply with the objectives, goals and aims indicated by the Minister of Finance on Monday night last.
The matter of regional disparity is still an important priority in this country. I was happy to hear during this session that government restraint will not cut into programs of regional economic expansion, particularly in the Moncton constituency. This is one program which eventually could make the poor provinces self-sufficient. Regional economic expansion must concern itself not only with secondary industry but also with transportation and pri-
The Budget-Mr. Jones
mary industries such as farming, fishing, forestry and mining, along with power development.
Furthermore, a great deal is said about what is being done for our older citizens. Possibly the old age pension should be renamed a citizen's service pension, and on that basis these pensions should commence at age 60 instead of 65, in certain qualified cases, with the basic pension increased substantially.
The budget as presented purports to provide savings by government restraint. There is certainly a need to cut out waste, duplication, red tape and bureaucratic bungling, and to create greater efficiency in government. A little common sense, along with business sense, can create a great deal of savings of both dollars and cents.
One of the quickest and most effective ways to save millions of dollars, yes even billions according to some calculations, and create unity in the long run, is to reassess and improve the method of implementation of bilingualism in this country. Many public servants are just waiting for "doomsday," the date of their retirement, in the knowledge that their chances of promotion are practically nil. The merit system, in fact, is no longer in effect. Adult language educational programs in the government services and in Crown corporations just are not effective for the amount of money spent thereon. This is a perfect example of government waste.
Problems of this kind usually are solved by educational means, not at the adult level but in the public schools throughout the country. It is time we took an example from other countries where barriers have automatically arisen because of segregation in educational systems. It is my sincere belief that if Canada and Canadians are to be truly bilingual, and if we are to believe in equal rights and opportunities for all, then all youngsters in this country must be educated together. If this country is to be truly bilingual, it is time both English and French were taught in our public schools on an integrated basis. Let all our children be educated together. Let them learn together, play together and work together. Then they will get along together. Then and only then will our children become true Canadians.
If the consent of the provinces is required, or if it should be necessary to amend the British North America Act in order to bring this into effect, then a serious attempt to do so must be started forthwith. We should face the facts. Barriers are a problem in Canada. So often I have found young people unable to obtain employment in their chosen field, both in government and in private business, because they are not bilingual. The ground rules are being changed quickly and easily. Many of our young people are not being given the opportunity to comply with the rules. The barriers are set up at a young age. Let us change the ground rules if need be, but let us make a proper and fair preparation for such changes.
Bill 22 enacted by the legislature of Quebec will not promote unity or harmony. In my opinion it is unconstitutional, and will result in injustices and inequities for Quebeckers and other Canadians. The onus is still on the federal government to put a halt immediately to this matter by appropriate steps. Bill 22 conflicts with Canada's Official Languages Act and the New Brunswick offi-

November 26, 1974
The Budget-Mrs. Appolloni
cial languages act in that it provides for only one official language in the province of Quebec.
Millions, yes, even billions of dollars can be saved both in government at all levels and the private sector if the implementation of bilingualism is reassessed and halted. If the government and the minister are sincere in their efforts, then this is the type of item which can and should be deleted as not absolutely essential to our economy, security and wellbeing. Top level meetings should be arranged with the appropriate ministers and first ministers of all the provinces right now.
In addition to languages being taught through a uniform integrated educational system from sea to sea, along with geography, the sciences, the arts, etc., our children should learn more about the nature of that thing which will concern them every hour of their lives; the money in their pockets and the banking and credit system. They should be taught how money works, what banks do with it, how governments are controlled by it. They should be taught about the banking system and how banks can increase or decrease money supply. Perhaps if all these things were taught to our children, and they were given more knowledge and know-how in respect to the monetary system, the next generation would never find itself in the economic situation we find ourselves today.
One former Liberal prime minister once said:
Once a nation parts with the control of its currency and credit, it matters not who makes the nation's laws ... Until the control of the issue of currency and credit is restored to government and recognized as its most conspicuous and sacred responsibility, all talk of the sovereignty of Parliament and of Democracy is idle and futile.
Just to be fair let me read what a former Progressive Conservative Minister of Finance once said:
I emphasize that the government of Canada has no power of control whatever over the money supply. It cannot increase it or decrease it.
As evidence of good faith the Banker's Association of Canada, representatives of the federal government and the Bank of Canada should meet to work out the details and timing of a changeover to a new monetary system as soon as possible.


Mrs. Ursula Appolloni (York South):: Mr. Speaker, I rise this evening first of all to pay tribute to a great parliamentarian. I did not agree with all his views, but I have no doubt whatsoever that he was sincerely dedicated to the people of Canada. I refer to Mr. David Lewis, and would like to take this opportunity to wish him well in his new career.


Some hon. Members:: Hear, hear!


Ursula Appolloni: I should now like to congratulate the Minister of Finance (Mr. Turner) on what I believe to be a sincere desire to give this country a budgetary policy which is both realistic and humane. Inflation is the scourge of our times, and I applaud the minister's determination to fight it and at the same time to maintain economic growth without jeopardizing employment. We must not underestimate the complexities of inflation. Anyone who says there is an easy, pat solution to the problem is either a fool, a liar, or both.

One of the easiest traps into which a free enterprise system can fall is that which by promoting vertical integration in the name of efficiency, can very well be instrumental in elbowing out the small businesses. Yet in the same free society it is often the same small businesses which, by their creativity, industry and determination, are the very pivot on which our economy turns. To these small but essential businesses I am proud to say that this government in this budget has accorded recognition and incentive.
Many of the constituents whom I have the honour to represent are senior citizens to whom we owe an immense debt of gratitude for their hard work and fine example. The people of York South, therefore, welcome the tax concessions to pensioners.
I should like to pause on that note, Mr. Speaker, and add a few words about the Canada Pension Plan. My constituents are primarily hardworking people to whom the work ethic is a fact of life. But, our modern pace is quicker and more full of stress and strain than that of some years ago. Despite the best will in the world, the 60-year old of today is sometimes just too tired, too exhausted to work, yet he or she just cannot afford to retire. In the name of these people I look forward to the day when the eligibility age for the Canada Pension Plan can be lowered to 60.


Some hon. Members:: Hear, hear!


Ursula Appolloni: And what of the millions of housewives who, through no fault of their own, are ineligible for the same plan? Let us not forget the fact that, despite the growing number of women in the labour force, there are still many who would rather sacrifice material gains in order to assure a proper home atmosphere for their children and a base of peace and tranquility for their husbands. Many of those housewives would be delighted to contribute, but many cannot afford to, and this latter group must be just as protected as the former.
I realize that the problem is a complex actuarial one which needs the attention of people more qualified than I to solve it. Complexity alone is no reason for sweeping questions under the mat. I would hope, therefore, that the Department of National Health and Welfare will dedicate to this subject the same capabilities and skills it has afforded to others.
To many of the constituents of York South the ravages of war and the horrors of discrimination and persecution are harsh memories, of which they bear the scars to this day. To them, and to their friends and relatives they left behind, peace is not only a necessity to survival, but a daily prayer. To these constituents the recent proceedings at the United Nations have been of paramount importance.
Canada too wants peace and strives daily for justice for all. I hope and pray that both can be achieved, and applaud the Liberal government, of whom I am a loyal supporter, for continuing its efforts, and in no way deviating from its path of traditional friendship towards Israel.
At one time in my career I was a member of the air force. There I received training second to none, combined with a sense of duty and discipline that has stood me in good stead throughout the following period of my life. May I now take this opportunity to express my deepest
November 26, 1974

admiration for the work done by our armed forces, not only-


Some hon. Members:: Hear, hear!


Mr. Deputy Speaker:: Order, please. I regret to interrupt the hon. member, but it being ten o'clock we must proceed to the adjournment motion.



PROCEEDINGS ON ADJOURNMENT MOTION

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

Charles Lapointe: Mr. Speaker, further to the question I put on November 20 last to the President of the Treasury Board (Mr. Chretien) concerning the removal of the special allowances to federal civil servants on the north shore, I should like to give additional information to my hon. colleagues and the President of the Treasury Board in this regard and, in return ask the latter to enlighten me on that decision which strikes me as unjust, not only for the 800 civil servants on the north shore, but also for the population in that area which extends from Forestville to the eastern part of my riding, and encompasses as well the larger part of the riding of my colleague from Manicouagan (Mr. Blouin).
I should like to add, Mr. Speaker, that the same problem exists in Skeena, in the Prince Rupert area, in British Columbia.
In his reply to my previous question, the minister had advised me that the decision to abolish pay allowances had been taken following recommendations by the Joint National Council, which comprises representatives of both the Treasury Board and Public Service Alliance. I accept this explanation, Mr. Speaker, but I feel that this decision, no matter how it was reached, is hardly acceptable to those who must live in an area where they cannot readily obtain all essential services and where the cost of living is 12 per cent higher than in the nearest major center, namely Quebec City.
Mr. Speaker, I should like the President of the Treasury Board (Mr. Chretien) to take into consideration the fact that all specialized services are not available to us on the north shore, for instance in the area of health, and that the people must travel to Quebec City or Chicoutimi to see a specialist. Such is also the case in the area of education where local general or technical training schools offer only a limited number of options. In many cases, parents must send their children away to continue their education at the secondary level, and in all cases at the university level.
Adjournment Debate
Moreover, Mr. Speaker, I would like to mention briefly the fact that private companies of this area provide an additional amount for their employees, either in the form of special allowances or in the form of higher wages, and even both in some cases, to allow them to face more adequately the higher cost of living in the area.
The same applies, Mr. Speaker, to the employees of the Central Mortgage and Housing Corporation, who receive a special allowance of $728 if they are single and $1,044 if they are married. Bank employees also receive a similar allowance of approximately $900 a year.
I wanted to give all these details, Mr. Speaker, to show that there is a danger that the federal public service will have difficulty in the future in hiring people as able as the present employees because it is quite possible that north shore staff will ask to be transferred to another area or seek employment in the private sector.
In closing, Mr. Speaker, I would like to emphasize the urgency of this problem, because if it is not solved quickly, the population of the area may soon not have any federal
services.


Hon. Jean Chretien (President of the Treasury Board):: Mr. Speaker, I am taking note of the remarks of my hon. friend who has spoken about a problem that I consider serious. It would perhaps be appropriate to say a few words about its history.
The special allowances granted to public servants in that area, as well as those for employees on the north shore of British Columbia, were created several years ago because of existing conditions at that time. However, in 1969, the Treasury Board referred the problem of isolated positions in Canada to the Joint National Council, which includes representatives from the unions and the management, which I myself represent.
The Joint National Council studied the problem and tried to establish criteria determining the conditions under which public servants working in isolated areas should receive isolation allowances. They defined mini-mums and reached the conclusion that wherever the cost of living was not 20 per cent over that of the area closest to the point of arrival of supplies, there was no need to grant the special isolation allowances which were established in the Skeena riding and on the Quebec north shore to solve problems in those areas that were experiencing unusual development quite a number of years ago.
This is a very difficult situation both for the union and ourselves, because the problem has been under study since 1969 and the Joint National Council made its decision more than a year ago, long before I became President of the Treasury Board.
I can understand clearly that in Sept-Iles, Baie-Comeau and some areas of the constituency of my hon. friend and of the hon. member for Manicouagan, hiring conditions may be better in the private sector than in the public one. But collective bargaining provisions at the government level make it possible to negotiate regional rates that meet those needs.
We have done so in other areas, and I can see no reason why we might not, as the collective agreements of the civil servants in that area are being negotiated, introduce
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November 26, 1974
Adjournment Debate
regional clauses that would provide them with rates similar to those in the private sector, as the hon. member mentioned earlier.
I am pleased that the matter has been raised. I do not foresee any solution in the near future. I am ready to discuss that problem with the union. I am personally in favour of regional negotiations, because sometimes national rates do not fulfill their objectives. Therefore, I would rather favour regional negotiations, but, under the present circumstances, and considering standards are not met, I can see no reason why there should be special allowances just for those places.


EXTERNAL AFFAIRS-WORLD FOOD CONFERENCE IN ROME- PROPOSAL BY UNITED STATES TO ESTABLISH EXPORT PLANNING GROUP
Douglas Roche: Mr. Speaker, since the World Food Conference ended in Rome we have heard nothing from the Canadian government except self-congratulations about our role there. If the rhetoric of the government were food, the world would have a massive case of indigestion. The fact is that the government has, as usual, set up a smoke screen of verbiage. The Broadway playwright who gave us "Promises, Promises" could not hold a candle to this government. Instead of being congratulated the government ought to be castigated, for the fact is that it failed to respond adequately to the world food crisis with even emergency or long term measures.
We got a great press around the world for our pledge of one million tons of food grains per year for three years. The world thinks that we are rushing food to starving people. What a fraud! The fact is that it will be one year from the Rome conference before any of that food is in anyone's mouth. There may be millions starving, but they will have to wait for another crop year, and then have to wait while we work out transportation arrangements. I asked the Minister of Agriculture (Mr. Whelan) on November 20 what is the earliest month in 1975 in which food would be sent from Canada, what countries would receive it, and what transportation arrangements were being made. The minister said that this information would be in his statement subsequently made in the House last Friday. But you can search that statement in vain for these specific answers.
Then there is the question of the $50 million in immediate assistance. I quote from the opening speech made in Rome by the Secretary of State for External Affairs (Mr. MacEachen) as follows:
As an earnest of Canada's commitment to the solution of the world food problem, I am pleased to announce that the Canadian government has decided to allocate at once the sum of $50 million of Canada's development assistance to be used in ways which will make an effective impact on the present critical situation.
Since then many members have been trying to find out how and where this $50 million will be spent. Just today, almost a month after the minister made that statement, he was unable to provide specific information to my question. Yet the minister says:
I regard the problem of hunger as great if not greater than any of the other global problems.

Well, if this is how we respond to an emergency, our long range solutions for the alleviation of starvation will likely show up in the next century.
What is holding up the immediate implementation of this aid? Can it be the grain inspectors' strike, which has virtually halted grain movements out of Canada? If so, let the government state it clearly and then tell us what it is doing to end the strike. At least let us know that the government is trying to do something, particularly for the people of Bangladesh. Only today I had a lengthy conversation with an official of that country who confirmed a report in the New York Times, November 24 that thousands of people in Jamalpur, 120 miles northwest of Dacca, are destitute because of crop failures, the effects of floods and now severe cold:
What's the use of feeding them?
This is what a distraught international official said of these victims.
They are going to die anyway, if not by hunger, surely by cold.
In this district the people get a ration of a quarter of a pound of watery gruel made of rice and lentils once a day; they are being kept alive on what is technically a starvation diet.
I refuse to believe that Canada could not find a way to get food, not to mention clothing, to these hapless men, women and children if we really cared. Why not an airlift? Why could we not apply some of that $50 million to flying emergency supplies to people in real emergency conditions this winter? Why cannot we back up our words at international conferences with immediate action?
Why is there starvation in a world that has been blessed with the Green Revolution? I spoke of Bangladesh. The people of Bangladesh know how to grow food and they could feed several times their population. But they cannot afford the capital investment needed. Last year Bangladesh spent $40 million on oil imports. This year the bill is $160 million. That is the story of the developing countries. They are being squeezed out of existence by international energy politics. When developing countries cannot afford energy, they cannot produce fertilizer and crop yields plunge. There must be monetary and trade reform at the international level so that developing countries can be enabled to produce their own food.
All of this is well known. The external affairs minister himself said in the most important sentence of his speech in Rome:
Canada emphatically supports the development of increased food production capacity by developing countries as the key to an anti-hunger strategy.
This brings us to the structural reform I advocated in a question to the minister on October 10 in which I suggested that emergency measures to obviate famine be contained within a total strategy for development. But our response is inadequate, measured in terms of emergency aid or long-range development.
A total strategy, as the United Nations keeps telling us, involves a better trade deal for the developing countries so they can help themselves and thus close the rich-poor gap. Yet Canada's history in trade negotiations involving de-
November 26, 1974

veloping countries has been negative, to say the least, and this trend has only been reinforced in Rome. Time and again, Canada has been in the forefront of those countries regularly turning down the requests, suggestions, demands and pleas of the Third World. This history leads me to believe that we need to have a total reappraisal of our position in GATT, which has been truly labelled a rich man's club. Let us stop using diplomatic tricks to sideline the Third World's legitimate aspirations to better trade deals.
Could we not heed the words of President Echeverria of Mexico, who sums up the food crisis by saying:
... in the final analysis, this situation has been determined and brought about by the inability of the great industrial nations to submit their production model to a system of international solidarity and shared development and interdependence based on equity and justice.
Since the food conference opened in Rome I have received 71 letters from people urging strong Canadian action. These are more letters than I have received on any other single subject, with the exception of capital punishment and abortion. I know that the Prime Minister (Mr. Trudeau) has also received a very heavy volume of letters.
Canadians care about this issue. They want a government that will face up to this global calamity with courage, conviction and action, not just words.
I am happy to see the minister present in the House. He knows of the great respect I have for him. I wish him great success in his important portfolio. He knows that I will not oppose any initiatives he may take in this field, and I encourage him to take greater initiatives in the field of international development.


Allan Joseph MacEachen: Mr. Speaker, the hon. member referred to the performance of the Canadian government at the World Food Conference at Rome. It is unfortunate that he
Adjournment Debate
and other members should fail to recognize the substantial contribution which Canada made to the success of the World Food Conference. It does not help Canada or the hungry of the world to misrepresent and undermine the solid commitment which was made at that conference. It is unfortunate that we must look to persons outside Canada if we are to recognize what was actually contributed at that conference.
We were asked to respond to precise proposals that had been put before the conference by the secretary general of that conference, who was appointed by the United Nations. In making our food commitment for a three-year period commencing next year, we were responding to the precise request of the secretariat.
If other member nations at the World Food Conference had responded in like amounts, either in cash or in quantity, I can say with certainty that the concern expressed tonight by the hon. member about the hungry of this world would be less soundly based.
Canada can hold up its head with respect to its performance at the World Food Conference and its commitment. I hope the hon. member will recognize that.
The hon. member talked about the $50 million. We did commit for this year an additional sum of $50 million for development. In making that commitment we had in mind that there might be projects or possibilities opened up at the conference to which this $50 million could be allocated. However, these possibilities did not open up. We are presently engaged in determining the places best suited for the allocation of this additional $50 million.
The commitment will be lived up to and the decisions will be announced very early. I can assure the hon. member that he has no reason to doubt the sincerity of the government in making that commitment, of which the precise terms will be made public at, I hope, an early date.
Motion agreed to and the House adjourned at 10:20 p.m.
28543 - 39(4

Wednesday, November 27, 1974