1974-10-24

MESSAGE FROM THE SENATE

Mr. Speaker:: Order. I have the honour to inform the House that a message has been received from the Senate informing this House that the Senate has passed Bill S-8, an act respecting the use of national safety marks in relation to motor vehicle tires and to provide for safety standards for certain motor vehicle tires imported into or exported from Canada or sent or conveyed from one province to another, to which the consent of this House is desired.



ROUTINE PROCEEDINGS


Mr. Speaker:: The hon. member for Burnaby-Richmond-Delta on a question of privilege.


Mr. John Reynolds (Burnaby-Richmond-Delta):: Mr. Speaker, I rise on a question of privilege of which I have given notice, and I have also given notice to the members that it affects. Yesterday during the committee of the whole proceedings on the transportation estimates I was questioning the Minister of Transport (Mr. Marchand) regarding the use of search initiator buoys with respect to which the government passed a regulation to the effect that they should come into operation on July 1 last year. When I asked the minister why they had not come into operation, in his first answer to me he said, as reported at page 677 of Hansard:
There are certain technical problems which we did not overcome. We are trying to solve them and will consider the situation.
I then continued questioning the minister on that and other matters. When I finished my statement I said to the minister that this was an extremely important matter in the province of British Columbia. There are a lot of tugs operating in Canada and people are dying every year because they are being sunk. I wanted to know if he could really give me an answer as to why these regulations had not been put into effect. Although he said previously there had been technical problems, the minister then said to my amazement "the regulations are in effect. There is no
doubt about that." The fact of the matter is that the regulations are not in effect, and I will read a telegram in a moment or two from an individual who is involved and has made a statement on this.
[DOT] (mo)
The question I want to raise now relates to a question of privilege raised by the hon. member for Vancouver East (Mr. Lee), and I should like to quote from this statement made yesterday:
A question of privilege, Mr. Chairman. With all due respect to the hon. member for Burnaby-Richmond-Delta, as a member from British Columbia I worked very closely all this time with members of the Canadian Merchant Service Guild on the west coast and made representations to the Department of Transport. They are well aware of the problem that we brought to their attention. As a matter of fact, I just spoke to Captain Arnie Davis who is the Secretary-Treasurer and he indicated to me that the regulations are in force on the west coast.
That statement totally refuted what I had been saying to the minister, that these regulations were not in force and were not being enforced. So, I called Captain Arnie Davis and asked him whether he had made this statement to the hon. member for Vancouver East (Mr. Lee). He was puzzled and sent me a telegram which I should like to read, as I think it refutes what the minister and the hon. member for Vancouver East have said to the effect that the regulations are in force. The telegram reads:
Research initiator buoy regulations. This is to confirm that to the best of my knowledge the named regulations have not and are not in force on the west coast of Canada as of October 22 1974. A.W. Davis Secretary Treasurer western branch Canadian Merchant Service Guild.
That is the same gentleman referred to by the hon. member for Vancouver East in his statement last night. I bring this forward this morning because it is an extremely important matter. While I realize you may say this is argument, these members have made statements in this House that are untrue, and I think we should have some answers from the other side.


Mr. Art Lee (Vancouver East):: Mr. Speaker, I did speak with Captain Davis this morning about the conversation we had last night. There may be some room for error but I am quite sure I specifically asked him whether the regulations were in force. There may be some indication that we were talking about two separate things, and he may have answered in the affirmative to something else I had asked. When the hon. member asked about that specific aspect I spoke to Mr. Bonn of the Marine Safety Inspection Department this morning and he said the regulations are in effect.


Mr. Speaker:: Order, please. Ordinarily I think this matter would be strictly a matter for debate. However, since the hon. member for Vancouver East (Mr. Lee) did raise it yesterday on a question of privilege, and as the hon. member for Burnaby-Richmond-Delta (Mr. Reyn-

October 24, 1974
Oral Questions
olds) gave me notice this morning, I thought perhaps there might at least be an opportunity given to the hon. member for Burnaby-Richmond-Delta to present his comments on the question of privilege. As the House will know, there was no motion following the hon. member's question and, therefore, no action is called for by the Chair.



ORAL QUESTION PERIOD


Hon. George Hees (Prince Edward-Hastings):: Mr. Speaker, as the figures released this week by Statistics Canada show that the index of real product, which is the real growth in the economy, has decreased since the end of the second quarter, the period for which Statistics Canada reported zero growth in the economy, can the Minister of Finance indicate when we may expect an announcement of new policy to produce that increase in production the minister has stated many times in this House must be attained if we are going to wrestle inflation to the ground?


Hon. John N. Turner (Minister of Finance):: Mr. Speaker, if new policies were to be announced they would be announced budget night.


George Harris Hees: Mr. Speaker, when the minister brings forward his budget in two or three weeks can we expect an announcement in respect of policies that are going to be more effective than the hot air of the last three budgets which has produced nothing but stagflation?


FOREIGN INVESTMENT
Mr. Benno Friesen (Surrey-White Rock):: Mr. Speaker, my question is for the Minister of Consumer and Corporate Affairs. Could the minister confirm or deny the recently published report regarding a possible takeover of the T. Eaton Company by the J. C. Penney Company of the United States?


Hon. Andre Ouellet (Minister of Consumer and Corporate Affairs):: I cannot.


Benno Friesen: Mr. Speaker, could the minister then assure this House that in the event these allegations prove to be true that he will do everything in his power to keep the company truly Canadian?


André Ouellet: Mr. Speaker, I believe the hon. member is referring to the takeover of a Canadian company by foreign interests. Rules have already been established and I

must remind the hon. member that the matter falls within the jurisdiction of the Minister of Industry, Trade and Commerce. I shall certainly draw his attention to the matter the hon. member brought up.


GOVERNMENT MEASURES TO ENSURE ADEQUATE INSPECTION OF MEAT
Mr. Edward Broadbent (Oshawa-Whitby):: Mr. Speaker, I have a question for the Minister of National Health and Welfare. In view of the fact that yesterday in the House the minister said that it would require having a health inspector in every store in the country every day to obtain adequate inspection of meat, and since presumably he could not mean this seriously and was not suggesting that it be taken seriously, I should like to ask the minister in view of what the Chairman of the Food Prices Review Board had to say yesterday on the same subject whether he is reconsidering his position and taking steps to ensure that meat sold at the retail level across the country from time to time will receive adequate inspection.


Hon. Marc Lalonde (Minister of National Health and Welfare):: Mr. Speaker, my statement of yesterday still stands. I might go even further and say that to ensure completely safe meat we would have to almost have an inspector in every house, because there is no guarantee concerning what happens between the time this meat is sold in the store and the time it is consumed. The inspection which is being carried on at the present time is being carried on with all due diligence. As I said yesterday steps have been taken, since the report of the Food Prices Review Board of last June, to improve the situation even further and we will keep on improving it.


John Edward Broadbent: I have a supplementary, Mr. Speaker. Once again the minister has proceeded in an entirely erroneous way. The question I ask does not pertain to what happens to the meat after it leaves the store until it is cooked, but rather what happens to it while it is in the store. In view of the fact that the Chairman of the Food Prices Review Board has said that the level of excrement, which the minister considers to be acceptable in meat, is potentially-and I say this in all seriousness-fatal, I should like to ask the minister if he would have his officials reinvestigate this matter and square it with the information provided by the Chairman of the Food Prices Review Board.


Marc Lalonde: Mr. Speaker, the comments of the hon. member indicate that he himself does not take the matter very seriously. I refer him to my statement to the House, yesterday, which still stands. Indeed, I explained the events that have taken place: improvements have been made since the tabling of the commission's report in June 1973, and more will be made. I refer in particular to changes to the regulations which have now been under way for several weeks and which, I hope, will become official in the near future.
October 24, 1974


John Edward Broadbent: Mr. Speaker, considering that ten days ago the minister said that it is appropriate for Canadians to drink milk, provided it is in powder form, and now it is being said that they can eat excrement, provided it is well cooked, I ask the minister if it is his view that an agricultural producing country like Canada cannot guarantee food at reasonable prices and in safe condition.


Marc Lalonde: Mr. Speaker, the hon. member is getting carried away by his own imagination. Let him consult my statement to the House yesterday. If he will kindly listen to the answer, he can then perhaps draw a conclusion. I would ask him to kindly check my statements on the matter. If he does so, he will find that there is no relation between them and what he has just said.


Hon. Robert L. Stanfield (Leader of the Opposition):: Mr. Speaker, I have a question for the Minister of National Health and Welfare.
In view of the consumers' constant concern for the quality of ground beef and the position adopted by the Chairman of the Food Prices Review Board, could the minister reassure the House and Canadian consumers as to the quality of ground beef in Canada?


Marc Lalonde: Mr. Speaker, may I refer once again the Leader of the Opposition to the replies I made yesterday in the House, when I clearly indicated that millions of bacteriae are breathed in and consumed daily by every citizen, and that it is impossible to find a completely sterile environment in which to live. As to the quality of minced meat, for the information of the Leader of the Opposition, there has not been, over the past year, a single case of food poisoning through minced beef consumption reported by a Canadian hospital or health institution. Not a single case reported to date.


REQUEST FOR AID OF MINISTER OF AGRICULTURE IN ENSURING ADEQUATE INSPECTION OF MEAT
Robert Lorne Stanfield: Mr. Speaker, I would like to ask a supplementary.
The minister talks a lot, but he simply adds to the worry of the Canadian people.

I should like to put a question to the Minister of Agriculture. In view of the continuation of this sloppy inspection system and the resulting effect of this on the farmers who are delivering a clean product to the market, is the minister prepared to take on the Minister of National Health and Welfare to get him to provide adequate inspection as well as to take on the Minister of Consumer and Corporate Affairs to do something for the farmers?


Hon. E. F. Whelan (Minister of Agriculture):: Mr. Speaker, the different departments of the government are known for their co-operation. As I said the other day, we work very closely together to make sure that the public of Canada is protected better than any society in the world.
Oral Questions


SUGGESTED INCREASE IN INSPECTION CAPABILITY OF DEPARTMENT
Mr. James A. McGrath (St. John's East):: Mr. Speaker, my question is for the Minister of National Health and Welfare. In view of the regulations which the minister has statutory authority to enforce through the Food and Drug Act which state that no one shall sell any food unfit for human consumption, and in view of the findings of the Food Prices Review Board through their investigators that in some stores meat was sold which was unfit for human consumption, may I ask the minister what he proposes to do to carry out his statutory responsibilities to increase his inspection capability to ensure that meat unfit for human consumption is not being sold in Canada at retail level?


Some hon. Members:: Hear, hear!


Marc Lalonde: Mr. Speaker, in any case where there is precise proof that meat unfit for human consumption has been sold, proceedings will be instituted under the regulations. It will involve not only cases reported by my department's inspectors but also any one which might be spotted by any organization or any person.
Should the board want to report special cases to the attention of my department, I hope it will immediately communicate with it and give particulars about them.


REQUEST FOR INCREASED SAMPLING OF MEAT
James Aloysius McGrath: Mr. Speaker, a final supplementary on a question of national urgency. In view of the importance of this question to the health and peace of mind of Canadians will the minister now undertake to carry out the recommendations of the Food Prices Review Board and at least increase the amount of sampling that is being done across the country, bearing in mind the lack of inspection capability. In that way at least we would be able to get a clearer picture of just how serious this matter is.


Marc Lalonde: Mr. Speaker, I have already given such directives and they are being put into effect. But one must retain some sense of perspective in all this. As indicated, consumption of ground beef runs in the hundreds of million pounds a year. The government cannot possibly inspect each and every pound nor even every hundred pounds of meat before it is sold.
There are limits to what can reasonably be done. Directives have been given to increase the quantity and quality of inspection, but I repeat that one should retain a sense of perspective in all this. I would like to repeat the answer I gave the hon. member yesterday, which is that all the information we have now shows that this high level of bacterial elements in ground beef does not itself represent any danger for Canadians.

October 24, 19V4
Oral Questions
I hope all those making remarks about this now will keep this sense of perspectives, because excessive statements on this cannot be of any help to Canadians.


IMMIGRATION
Mr. G. H. Whittaker (Okanagan Boundary):: Mr. Speaker, I have a question for the Minister of National Revenue. In view of the fact that three summer legal students who worked for the Vancouver police department reported yesterday on the Jack Webster show that truckloads of prostitutes and their salesmen were coming across the border from Washington state to Gastown in Vancouver-


An hon. Member:: More bad beef!


George H. Whittaker: -on a regular basis can the minister report on this and what is he going to do about it?


Mr. Clark (Rocky Mountain):: How do they vote?


Hon. Ron Basford (Minister of National Revenue):: Mr. Speaker, I have no personal knowledge of the situation to which the hon. members refers but I shall take it up immediately with my colleague the Minister of Manpower and Immigration.


Mr. Andras:: On a question of privilege, Mr. Speaker. Neither am I an expert.


Stanley Ronald Basford: Mr. Speaker, I think either one or both of us should go to Vancouver to investigate. I will of course confer with my colleague. He administers the immigration policy and I the customs policy. We will endeavour to ensure, so far as inspection procedures allow, that there is no influx of American criminals into Canada.


George Harris Hees: Trudeau will use his famous phrase to tell them what to do.


THE CANADIAN ECONOMY
Mr. Eudore Allard (Rimouski):: Mr. Speaker, I have a question for the hon. Minister of Consumer and Corporate Affairs.
Since according to Statistics Canada the cost of living increased 15 per cent in the last few months and that it keeps on climbing, that the cost of living adjustment index seems to be levelling between 7 and 8 per cent, does the minister intend to take the necessary measures to adjust the purchasing power to present inflationary costs?


André Ouellet: Mr. Speaker, in the throne speech, the

government announced a series of measures to fight inflation.


FINANCE
Mr. James Gillies (Don Valley):: Mr. Speaker, my question is for the Minister of Finance. Given the fact that since the introduction of floating exchange rates around the world several banks in major countries have failed, what conversations has the minister and the Bank of Canada had with the commercial banks of Canada with respect to their dealings in foreign exchange markets.


John Napier Turner: Mr. Speaker, we have had conversations dating back at least six months with the chartered banks, through the Canadian Banking Association. Both the governor of the bank and I have had these conversations. We were assured that Canadian chartered banks have taken very strict surveillance procedures to ensure that the Canadian banking system remains in its current sound condition.


INSTRUCTIONS TO COMMERCIAL BANKS CONCERNING OPERATIONS IN EUROPEAN COMMON MARKET
John Napier Turner: Mr. Speaker, as the hon. gentleman directed a question to me, through the Acting Prime Minister, on October 21 relating to the Eurodollar market, perhaps you will allow me to reply at this time. I assume the hon. member at that time was referring to the Eurodollar market. The Bank Act states that Canadian banks must maintain adequate and sufficient assets against liabilities incurred in foreign currencies. It does not, however, give to the governor of the Bank of Canada, the Department of Finance or the Minister of Finance authority to regulate borrowing activity of commercial banks abroad or in foreign money markets. I assure the hon. member that the operations of our banks in foreign currencies are closely followed both by the Bank of Canada and the federal Department of Finance.


James McPhail Gillies: Mr. Speaker, may I direct a supplementary question to the Minister of Finance. Given the fact that foreign exchange reserves of Canadian banks and their dealings in the common market have increased to an enormous extent, does the minister not feel that he can use moral suasion, particularly as common market activities are having such an impact on international inflation, with Canadian banks and ask the chartered banks to operate less substantially in those markets?


John Napier Turner: Mr. Speaker, it is also in the interest of the country that our banks operate abroad. Actually, we now have the third largest international banking system. It is because of that growth that there have been consultations between the Bank of Canada and the chartered banks.
October 24, 1974


GOVERNMENT POSITION ON DEALING WITH INTERNATIONAL INFLATION
James McPhail Gillies: May I ask a final supplementary, Mr. Speaker. Does the minister take the position that, in international inflation as with domestic inflation, we will not be able to do anything about these problems without taking action of a specific nature along the lines I have suggested.


John Napier Turner: Mr. Speaker, I agree with the thrust behind the hon. member's question. The problem we must deal with on an international basis is that of total international liquidity, particularly in the Eurodollar market. That will be one of the subjects to be discussed at the next meeting of the interim committee of the International Monetary Fund.


HOUSING
Mr. W. C. Scott (Victoria-Haliburton):: Mr. Speaker, my question is for the Minister of State for Urban Affairs. In light of the fact that housing units in Trefann Court in Toronto have been awaiting a decision by Central Mortgage and Housing since mid-July, could the minister indicate to the House when an agreement might be made to settle this matter and allow the houses to be filled.


Hon. Barney Danson (Minister of State for Urban Affairs):: Mr. Speaker, I am also disturbed about the delay with relation to Trefann Court. Active discussions have been going on. I think there should be an announcement either this week or next week which will provide a satisfactory resolution of problems for all the parties concerned and will ensure that the management of the Trefann Court project will achieve its aims. I particularly want this excellent project to be an exemplary one. Arrangements have been made to make it a good ongoing project and I hope to announce something soon.


WHEAT-TIMING OF REQUEST FOR RETURN OF OVERPAYMENT UNDER TWO-PRICE SYSTEM
Mr. Craig Stewart (Marquette):: Mr. Speaker, may I direct a question to the minister responsible for the Canadian Wheat Board. During the recent election campaign the minister in charge of the Wheat Board mailed cheques to western farmers covering their share of the two-price wheat payment. Now, his department claims that 80 per cent of the farmers were overpaid and they have been asked to return the money. Will the minister tell the House if this was another election bribe or is he seriously thinking he can recover this overpayment?


Hon. Otto E. Lang (Minister of Justice):: Mr. Speaker, the cheques in question were only mailed to special permit holders. I want to make that clear so that there is no
Oral Questions
misunderstanding about the breadth of the distribution. The cheques were mailed as soon as the full amount could be calculated and the money voted some months before the election. The letters which were mailed immediately before the election were letters indicating overpayment which had regrettably happened as a result of computer error. Of course, it is still our obligation to collect money which was paid in error in that fashion. A good deal of it has already been returned.


Donald Craig Stewart: A supplementary question, Mr. Speaker. Can the minister tell the House, if a mistake was made, how come 80 per cent of the farmers received overpayments and none received underpayments, and how is it that the cheques were mailed out over one month before the election and none of the farmers received letters notifying them of the overpayment until after the election?


Otto Emil Lang: Mr. Speaker, I want to make it clear that it was computer mistake which led to overpayments. Let me say most emphatically to the hon. member that many farmers received their letters requesting repayment before the election, and it was brought to my attention directly at that time.


SCIENCE AND TECHNOLOGY
Mr. Harvie Andre (Calgary Centre):: Mr. Speaker, my question is for the Minister of State for Science and Technology. According to data just released by Statistics Canada, the proportion of federal government funds for scientific activities which are contracted to private industry has remained essentially stagnant for the last few years. Since this is in direct contradiction to government policy as stated by the minister's predecessor once removed and repeated by his immediate predecessor, what steps is the minister taking to ensure that government policy will finally be implemented?


Hon. C. M. Drury (Minister of State for Science and Technology):: Mr. Speaker, the effectiveness of the contracting-out measures is the result of a number of causes. Also, there has not been entire success in the private sector in continuing previously started initiatives. The result has been a balance. We are continuing to contract out, in preference to executing work within government establishments, and the results in the next few years will show that this has been successful.


SUGGESTED APPOINTMENT OF FULL-TIME MINISTER
Harvie Andre: Mr. Speaker, may I direct a supplementary question to the Acting Prime Minister. As current federal government policies respecting science and technology are not being implemented and as the last two throne speeches contained reference to enhanced activity for this ministry, can the Acting Prime Minister indicate when the government will appoint a

October 24, 1974
Oral Questions
competent full-time minister who will be responsible for the ministry.


Hon. Mitchell Sharp (Acting Prime Minister):: Mr. Speaker, I know of no more competent colleague than the one sitting to my right.


WHEAT-TIMING OF REQUEST FOR RETURN OF OVERPAYMENT UNDER TWO-PRICE SYSTEM
Right Hon. J. G. Diefenbaker (Prince Albert):: Mr. Speaker, my question arises out of the answer given by the Minister of Justice. I wonder whether that computer was directed in any way from the Liberal organization head office, because the letters asking for repayment were dated some two weeks before the election and none, that I know, were received until about two weeks after, when they would no longer affect the government vote in western Canada.


Otto Emil Lang: Mr. Speaker, since there is considerable interest on the part of hon. members, I will obtain the actual dates and make them available to hon. members. As I indicated before, it was brought vey forcibly to my attention before the election that the letters were in fact being received. The first instance which came to my attention of letters being received was when I happened to be in Assiniboia constituency.


John George Diefenbaker: What about Humboldt?


Otto Emil Lang: That did not affect the voting results, as we have a very good Liberal member in the constituency. I will also check on the exact date the cheques were mailed. I know, however, that they were mailed about one month before the election being called. As you will recall, there was a movable feast at that point.


John George Diefenbaker: Mr. Speaker, I rise on a question of privilege in connection with the statement just made by the minister concerning the movable feast that the western farmers had. He said that the cheques were mailed out at least two or three months, was it, before the election was even called. Let me give the answer to the minister, for apparently the production adviser has not informed him. The production adviser states in this letter that the cheques were dated May 27-this would be about 17 to 18 days after the election was called-and that they were mailed between that date and June 3. I point out that this was simply an election bribe that did not work.


FISHERIES
Mr. Walter C. Carter (St. John's West):: Mr. Speaker, my question is for the Minister of Fisheries. As fish

landings in Atlantic Canada, particularly off Newfoundland and the northeast coast of Labrador have declined this year and in recent years, can the minister tell the House if he will act on the recommendations which were made to his predecessor by the Newfoundland government and the private sector with respect to the need to close the Hamilton Banks during the spawning season? Scientists, including people in the minister's own department, have stated that this is probably the main reason that fish landings have declined in that area in recent years.


Hon. Romeo LeBlanc (Minister of State (Fisheries)):: Mr. Speaker, this is one question that I intend to discuss with the new minister of fisheries for Newfoundland. I am hoping that he and I can get together within the next 10 days. One of the problems in this area, as the hon. member knows, is that this has to be done by international agreement. We shall be looking into the matter at the next ICNAF meetings but, like many other things, they move much too slowly for our satisfaction.


ALLEGED INABILITY OF CANADA TO ENFORCE ICNAF AGREEMENTS
Walter C. Carter: A supplementary question, Mr. Speaker. In view of the statement made to the parliamentary committee on fisheries by Mr. Level-ton, who I believe is the director general of the fisheries and marine service in the Department of Fisheries, to the effect that Canada is unable at the present time properly to inspect and enforce ICNAF agreements respecting ships fishing on the Hamilton Banks, can the minister tell the House whether there are any plans in his department to increase our inspection capability to ensure that the ICNAF agreements, and quotas under the agreements, are adhered to by foreign ships fishing in the area?


Roméo LeBlanc: Mr. Speaker, I would have to check the exact words that the director general used, though I am not quarrelling with what the hon. member has said. Obviously, there is a limitation when you are operating under an international agreement. We are trying to improve control and inspection in this area. I would also remind the House that cost is one factor we have to consider. There are many programs that are very important to the fisheries, and I would hate to see them sacrificed to surveillance costs only.


Walter C. Carter: Mr. Speaker, I think the minister should bear in mind that the cost to the economy of the areas in question is considerable. I do not think that costs should be the over-riding factor.


Mr. Speaker:: Order, please.


October 24, 1974


ABORTION
Mr. Stuart Leggatt (New Westminster):: Mr. Speaker, I also have a question for the Minister of Justice. In view of the recent memo that the minister forwarded to many hospitals setting forth his personal view on the subject of abortion and his personal interpretation of the Criminal Code, and in view of the minister's implied threat with respect to prosecutions of legally constituted hospital abortion committees and his obvious lack of confidence in the medical profession, would the minister advise the House whether he considers it to be part of his role as Minister of Justice not only to administer the laws of Canada but also to interpret those laws, and thereby usurp the function of our courts?


Otto Emil Lang: Mr. Speaker, I should like, first of all, to make it clear that the only hospital committee to which I addressed myself in a way that I was aware of was the hospital committee in the Territories for which I am Attorney General, as though I were a provincial attorney general. In the case of other provinces, I drew to the attention of the attorneys general the nature of the 1969 law and the problem that can exist if the hospital committees are not in fact reading that law appropriately. It did seem to me that it was quite appropriate for an attorney general, before launching a prosecution against a hospital committee, to indicate to the hospital committee the problem that exists in regard to applying the law, and this is what I did in the case of the Northern Territories.
It is indeed an important role for an attorney general, in the particular circumstances of the 1969 law, to attempt to see that it is being applied in the way parliament intended. For after all, if we had intended a broader, wide open form of law we would have passed one, but we did not so intend. We put responsibilities upon hospital committees, and I think it is a proper role for attorneys general in this country to make sure that those responsibilities are carried out.


REQUEST THAT MINISTER OF JUSTICE NOT INTERFERE WITH GRANTS TO WOMEN'S GROUPS
Stuart Malcolm Leggatt: Mr. Speaker, my supplementary question is this. First of all, the previous minister of justice, the present Minister of Finance, on June 2, 1970 stated that this act is deliberately left open to medical judgment in order to give doctors some latitude. That interpretation the minister has refused to apply or even to indicate to hospital committees. In view of the fact that the minister has now interfered with the Department of the Secretary of State in the granting of funds to women's groups, particularly the women's centre in Regina which has collapsed as a result of the minister's interference, and in view of his recent interference in Saskatoon's women's group, where I understand a decision has not been made, would the minister give the House some assurance that he will no longer interfere in grants that have been properly approved by the director of this women's program in the Department of the Secretary of
Oral Questions
State? In other words, will he presume someone to be innocent rather than proven guilty without a trial?


Otto Emil Lang: Mr. Speaker, since in principle that was more a speech than a question, I hope I may have a little latitude to deal with the points raised by the hon. member. First of all, I share completely the view of my predecessor, the present Minister of Finance, that the law in 1969 did in fact leave the medical judgment to hospital committees. But what I also insist on is that they in fact legitimately and rationally exercise their medical judgment and not do something without exercising any medical judgment at all.
As far as grants by the government to organizations or people in this country and my role as Minister of Justice are concerned, in this regard I feel it incumbent upon me to give advice to my colleagues as the legal adviser to the government when there may be a danger that grants may be used in a way that furthers or promotes an illegal purpose. Indeed, I should think I would be in serious breach of my position, even as a minister of the Crown, if I saw any grants going to organizations for illegal purposes and did not do something about it. The government would be under severe criticism from gentlemen opposite in any case if any kind of public money went to an organization which was or might be involved in an illegal activity. I think that is clear.


SUGGESTION MINISTER OF JUSTICE ENCOURAGE FORMATION OF ABORTION COMMITTEES
Stuart Malcolm Leggatt: A final supplementary, Mr. Speaker. The minister has indicated that he would like to see the laws of this country applied consistently across this country. In view of that, Mr. Minister, would you therefore encourage the establishment of abortion committees so that a decent percentage of women will have those facilities made available in regularly constituted hospitals and the law at least applied consistently in this country? Because in most of this country there are no such abortion committees available to the residents of those communities.


Otto Emil Lang: Mr. Speaker, I hope hon. members will see the distinction in my function as Minister of Justice in trying to see that the criminal law is in fact properly applied. The criminal law makes the killing of an unborn child, generally speaking, an offence, though there is a narrow exception to that.
The criminal law is not the mechanism through which hospitals are required specifically to do positively a particular kind of medical care or technique of care, and if the hon. member wants to make submissions in relation to hospitals and what they should be doing he should be making them, not even to my colleague, the Minister of National Health and Welfare, but to provincial ministers of health throughout this country.

October 24, 1974
Oral Questions


POSSIBILITY OF AMENDING LEGISLATION
Miss Flora MacDonald (Kingston and the Islands):: Mr. Speaker, will the Minister of Justice agree that since the vague wording of the present legislation originally introduced by the present Prime Minister lends itself to diversity of interpretation, it is the responsibility of this House and not of individual therapeutic committees to effect whatever changes he and the government consider necessary, and he should have the moral courage to bring this matter before the House for debate rather than trying to give effect to his views or his interpretation of the law by back door methods?


Otto Emil Lang: Mr. Speaker, I have indicated on other occasions that I would in due course be prepared to consider bringing this matter again before the House, specifically if it were to appear that the will of parliament, as indicated in 1969, was not in fact being carried out. I should say, however, that I do not agree with the hon. member that the wording is indeed so vague as to be impossible or difficult in its application. The wording does allow for certain medical judgment and if that medical judgment is exercised responsibly, and if hospital committees fairly and properly address themselves to the question of whether the health or the life of a mother is endangered before issuing a certificate, then the 1969 law can work, and perhaps can be the best solution to this problem that this country can in fact have.


AIR CANADA
Mr. Heath Macquarrie (Hillsborough):: Mr. Speaker, in the absence of the Minister of Transport perhaps I should direct my question to that distinguished son of Prince Edward Island, his parliamentary secretary. It is prompted by a front page story in the Charlottetown Guardian to the effect that an announcement of the inauguration of Air Canada service to Prince Edward Island is being delayed because of an argument between the Minister of Veterans Affairs and Air Canada as to who should make the announcement. Will the minister break this fearful deadlock and make the announcement himself, and also accept my long-standing invitation to announce the provision of a new and modern air terminal for the capital city of my province?


Mr. Cliff Mclsaac (Parliamentary Secretary to Minister of Transport):: Mr. Speaker, I will be glad to convey the feelings of the hon. member to my minister.


An hon. Member:: To both of them.


Joseph Clifford McIsaac: I sure that either he or the Minister of Veterans Affairs will be pleased to make a formal announcement.


ABORTION
Mr. Leonel Beaudoin (Richmond):: Mr. Speaker, I should like to put to the hon. Minister of Justice a question that is supplementary to the one that has just been asked.
Since in most hospitals doctors are reluctant to become members of the famous therapeutic committee that must examine abortion cases, could the minister say whether he will introduce in the House amendments to the Criminal Code in that regard?


Otto Emil Lang: Mr. Speaker, I was not aware of this difficulty. I certainly will be glad to look into that matter because obviously, if it were for that reason the law could not work, it would deserve attention.


CONSUMER AFFAIRS
Mr. Maurice Dupras:: Mr. Speaker, I have a question for the Minister of Consumer and Corporate Affairs.
Is the minister aware of the 10 per cent increase Hydro-Quebec has been authorized to charge its customers by the Quebec government and if so does he feel this raise is warranted?


André Ouellet: Mr. Speaker, I must say I have no jurisdiction whatsoever on that decision, which is provincial responsibility. I would, however, be curious to know how the Quebec minister, Mr. L'Allier, will reconcile this decision by his government with his criticism of the Bell Canada increases.


EXTERNAL AFFAIRS
Charles Joseph Clark: Mr. Speaker, I have a question for the Secretary of State for External Affairs.
In view of recent statements made before the Cliche Commission by the business manager of Local 791 of the International Union of Heavy Equipment Operators, Mr. Robert Meloche, whereby a former employee, Mr. Rene Mantha, has asked his pardon to the federal cabinet, and that the same person is now working in Zaire under the auspices of CIDA, does the minister intend to investigate the case and report to the House?
October 24, 1974


Hon. Allan J. MacEachen (Secretary of State for External Affairs):: Mr. Speaker, I will take the hon. member's question as notice.


Charles Joseph Clark: Mr. Speaker, I have a supplementary question. Could the minister confirm whether the name of the company that hires Mr. Mantha is Syntec, and that it is operating under CIDA?


Allan Joseph MacEachen: Mr. Speaker, I will also take that aspect of the question as notice.


FINANCE
Mr. Gordon Ritchie (Dauphin):: Mr. Speaker, did the Minister of Finance have any discussion with the province of Saskatchewan regarding the new tax structure in respect of the potash industry, and does he regard this proposed tax change as a further erosion of the federal tax share of this resource industry?


John Napier Turner: Mr. Speaker, last Friday when I met with the Minister of Finance for Saskatchewan, Mr. Wesley Robbins, and the Minister of Energy, Mr. Elwood Cowley, we spent three hours discussing resource taxation and other matters, and not once on that occasion was I given any advance warning of the announcement made by the province of Saskatchewan in respect of the potash industry.


PENITENTIARIES
Mr.   Sean@: Mr. Speaker, I should like to ask the Solicitor General a question arising out of the very alarming escape yesterday from the Laval maximum security institution of five extremely dangerous inmates, three of whom have past records of escape. The minister said yesterday he was disgusted. Can he now tell us what he has done about it, whether there has been any progress in the pursuit of these dangerous criminals and whether any disciplinary action has been taken at the institution?


Hon. Warren Allmand (Solicitor General):: Mr. Speaker, the investigation into the escape is still underway. I spoke this morning with the Commissioner of Penitentiaries who is on the site and is investigating the matter as well. Of course, disciplinary measures will be taken once we find out exactly who is responsible for what has taken place. In my opinion there has been negligence, but I have not as yet been able to accuse those people responsible. When I receive a report I will do so. I might say that we
Oral Questions
had put out special orders in respect of these men sometime ago. They were supposed to be given special attention and watched particularly closely.


An hon. Member:: That makes it worse.


William Warren Allmand: For some reason or other these orders I had given, and which had been given by the Commissioner of Penitentiaries, were not followed.


Mr. O'Sullivan:: Mr. Speaker, the minister says he is still unable to indicate who is responsible, and yesterday he said he was disgusted. I should like to ask with whom he is disgusted, those of the institution, the Commissioner of Penitentiaries or has the Solicitor General now joined the opposition in its disgust at the lack of leadership shown by the Solicitor General of Canada?


William Warren Allmand: Mr. Speaker, I am disgusted by the fact that we had issued special instructions in respect of men who had escaped before and who had threatened to escape again, that they were supposed to be watched in a very close way but they still escaped. I am disgusted with this particular thing. I intend to get to the bottom of it and apply disciplinary measures.


PROPOSED REFINERY IN NOVA SCOTIA-DISCUSSIONS WITH FEDERAL GOVERNMENT
Mr. Lloyd R. Crouse (South Shore):: Mr. Speaker, I should like to ask the Minister of Energy, Mines and Resources whether there are any negotiations going on at the present time between the federal government, the government of Nova Scotia and Shaheen Natural Resources concerning the development of a three million barrel a day refinery to be built in Nova Scotia and, if so, does he have any report to give the House on the present stage of this project?


Hon. Donald S. Macdonald (Minister of Energy, Mines and Resources):: Mr. Speaker, there have been none with myself. I do not know whether my colleague is in a position to respond to that.


Lloyd Roseville Crouse: Then, Mr. Speaker, I would direct the question to the Minister of Regional Economic Expansion.


Hon. Donald C. Jamieson (Minister of Regional Economic Expansion):: Mr. Speaker, I am aware of recent discussions which took place in Halifax between the government and Shaheen interests. To this moment the federal authorities have not been involved except in a peripheral way as to the development of Harbour facilities at Canso. That is the limit at the present time of any overtures made to us by the government of Nova Scotia, and these were quite general.

October 24, 1974
Oral Questions CONSUMER AFFAIRS


HAZARD CREATED BY KRAZY GLUE-REQUEST FOR CONTROL OF SALE
Mr. John Rodriguez (Nickel Belt):: Mr. Speaker, my question is directed to the darling of the Canadian Chamber of Commerce, the Minister of Consumer and Corporate Affairs. In view of the serious hazard to children of a glue called "Krazy Glue" which is a very powerful sealer and is advertised as "Krazy Glue", and in view of the fact that it is on sale to children and one eight-year old child had his eyes sealed shut by this material, will the minister ban its sale to children?


André Ouellet: Mr. Speaker, it is clear that my department controls the labelling of such products. I am informed that the label indicating it was a dangerous product did appear on the product in question; the company did not infringe regulations.
Unfortunately, I must recognize that the product did cause serious damage and that it can be very dangerous for the eyes. I hope any consumer who will buy this kind of dangerous product will be extremely careful.


John R. Rodriguez: I have a supplementary, Mr. Speaker. Again I find great difficulty in respect of some of the answers given here. In view of the fact that the label contains the words "not intended for the use of children" in type about the size of one millionth of a milligram, and is such that any seven-year old or ten-year old would find it very difficult to read, would the minister consider instructing the manufacturer of this product to use large print and instruct the retailers not to place this material in the toy department section of their stores?


André Ouellet: Mr. Speaker, of course I am going to look into this matter but I also hope that the parents as well will keep an eye on these products and not allow children to use them.


AGRICULTURE
Mr. Bert Hargrave (Medicine Hat):: Mr. Speaker, I should like to address my question to the Minister of Agriculture. In view of the current threat of retaliation by the United States against Canada's cattle and beef quotas, and our DES policy, and in view of the special hearing on this issue in Washington tomorrow, and in view of the report in Farm and Country of October 22 that Australia and probably the United States will be allowed to borrow on next year's global quota allotments from Canada, will the minister now clearly indicate if the government has indeed agreed to this borrowing device that would obviously work to increase import quotas in our last quarter of

this year and permit above average imports of fat cattle and carcass beef into Canada?


Eugene Whelan: Mr. Speaker, I have not seen the article to which the hon. member refers but from what he says there is no basis in fact to it whatsoever.


EXTERNAL AFFAIRS
Mr. Stan Darling (Parry Sound-Muskoka):: Mr. Speaker, my question is directed to the Secretary of State for External Affairs. In light of the revelation of a special language being used for communication between Washington and Ottawa, will he now reveal to the House the code word that is allocated for this purpose to each of Her Majesty's ministers.


Mr. Speaker:: Order, please. The hon. member for Edmonton Centre.


ROYAL CANADIAN MOUNTED POLICE
Mr. Steven E. Paproski (Edmonton Centre):: Mr. Speaker, my question is for the Solicitor General. Since it is well known that the RCMP has been in charge of security for the 1976 Olympics can the minister inform the House why there is a sudden turn to the United States for security measures?


William Warren Allmand: Mr. Speaker, the RCMP is partly responsible for security for the Olympics in conjunction with the Montreal urban community police and the Quebec Provincial Police. The story referred to is really an indication that we are seeking advice as to how to deal with special security problems. This is not done only with the United States but with any part of the world where we feel we can receive help.


AGRICULTURE
Mr. John Wise (Elgin):: Mr. Speaker, I should like to direct my question to the Minister of Agriculture. Has he requested or will he be requesting officials of his department to carry out an inspection in respect of the quality of storage and storage equipment facilities containing what has been reported as a fairly large turkey stock in this country. I emphasize that I am referring to the storage facilities themselves and not their contents.


Eugene Whelan: Mr. Speaker, the authority we have under the Department of


October 24, 1974

Agriculture for cold storage I am sure is being exercised, but I will double check to make sure that what authority we have is followed. If we have authority to check these cold storage facilities to see that they reach a certain standard, I will do so.


Mr. Speaker:: Orders of the day.


BUSINESS OF SUPPLY
[Stage Direction]
The House resumed, from Wednesday, October 23 consideration in committee of Bill C-31 for granting to Her Majesty certain sums of money for the public service for the financial year ending the 31 March, 1975-Mr. Chretien-Mr. Laniel in the chair.
The Chairman:: When the House concluded its considerations yesterday, Schedule A of the bill was being discussed. In accordance with the understanding of yesterday the committee will now proceed to the estimates of the Minister of State for Urban Affairs whose estimates are listed at pages 29 and 30 of the bill.
The hon. member for Winnipeg North Centre rises on a point of order.


Mr. Knowles (Winnipeg North Centre):: Mr. Chairman, I rise on a point of order in the hope that we may have some understanding about the division of our time for today. It is in accordance with the understanding we have had that we are now starting the discussion of the estimates of the Minister of State for Urban Affairs. I think we should have an understanding concerning how long that discussion continues. The other department we are to deal with today is the Department of National Defence. If we were to finish our consideration of that department, we could then move to the Department of Indian Affairs. There are almost eight hours left for debate today. I would offer the suggestion that the committee agree that discussion of Urban Affairs end not later than five o'clock.


Mr. Woolliams:: Mr. Chairman, I should like to say that I think five o'clock would be a good time at which to cut off the proceedings. If that is agreed I should like to speak to another small point of order if I may.


Gérald Laniel: Perhaps we should solve one point at a time. Does the committee agree that the proceedings on the consideration of the estimates of the Minister of State for Urban Affairs continue until not later than five o'clock.


Some hon. Members:: Agreed.


Eldon Mattison Woolliams: Mr. Chairman, may I say with the greatest respect that last evening we ran into some difficulty in connection with procedure. I want to bring it to your attention so that various members who have various ideas on housing will have twenty minutes in which to express them. I ask you to take into account that if a member chooses to take up his twenty minutes in putting questions to the minister regarding his program or chooses to make a speech, or a combination of questions and answers and speeches, the time allotted to him will be
Estimates
twenty minutes. That is the agreement we reached last evening and to which the President of the Privy Council agreed. I hope that we can proceed on that basis because if we get into another procedural argument, we will lose time.


Gérald Laniel: Order, please. Am I to understand that a member should be allowed either to make a speech or ask questions but that no member should have the floor for more than twenty minutes including questions, speech and answers? Of course, enough latitude will be given to the Chair so that if a question requires a fairly long answer the Chair can be lenient so far as the twenty minutes are concerned. Is that agreed?


Some hon. Members:: Agreed.
On Schedule A-Urban Affairs


Barnett Jerome Danson: Mr. Chairman, I was interested in the agreement on procedure, and I am quite happy to go along with anything that the House decides-indeed, I have to do so. I welcome this opportunity, particularly as a new minister and especially as I am new to this portfolio, to discuss the portfolio and its various aspects as well as its estimates with hon. members today. I think that if we can look at it in that light, we can achieve a great deal by finding out what the ministry and its three facets are attempting to do, what the objectives of this House are, and what are the concerns of members of both sides of this House. We have here the blue book. I must say that in the six years I have been a member of parliament I have not really learned how to master that impressive document. However, I am blessed with excellent officials who will be of great assistance.
As hon. members know, there are three principal hats within my portfolio: first, the Ministry of State for Urban Affairs; second, the National Capital Commission, and third, CMHC. I have not recited them in any particular order of importance; they are all equally important, but I have put them in that order because I intend to deal with them in that way.
The Minister of State for Urban Affairs is concerned with urban growth and the pattern and quality of that growth in this country. If we look at the projections for this nation, we see that 90 per cent of all Canadians will be living in urban centres by the end of the century. If the present trends are permitted to continue, one third of all Canadians will be living in three major centres around Vancouver, Toronto and Montreal. As great as those cities are, our concern is that such a trend is not desirable, but I think it would be unrealistic to pretend that we can reverse it. However, if we can shape it and manage it in some way, even divert it by as little as 3 per cent, 5 per cent or 7 per cent, that would represent a massive shift. But, more important is that we should decentralize the concentration in these areas to make sure that the quality of the development and of the growth is of a kind that is acceptable and one to which we as Canadians would aspire.
As minister I have great difficulty in determining where "urban" begins and ends because I think it starts on the farm and in the smallest community. Unless these are
702

October 24, 1974
Estimates
vibrant and good places in which to live, people will flock to our cities. Cities are great places in which to live, but I think they should be places of choice and people should not be pressured into moving into those centres. There are different ways of approaching this matter. We are concerned about the quality of life both in the smaller communities and in the larger centres, but especially in the cores of those communities.
The Ministry of State for Urban Affairs set up some three years ago is relatively new. My two distinguished predecessors have been experienced, able and sensitive ministers and they have established the trilevel process which means that all levels of government confer together about problems of mutual interest in relation to the urban fact in this country. This is not an easy process. The provinces and municipalities have their jurisdictions which they guard jealously. It is not by accident that they are there. I think there is something valuable in our system of government which allows each of us to deal on a priority basis with those matters which we can best handle. I reject the term "senior and junior levels of government" because I do not think they are really applicable. They are just different levels of government, and a case could be made for each level being the most important. They are all important and different, and the trilevel process helps to bring us together in a mutual cause to discuss matters of mutual interest and learn where each fits and can help the other.
Perhaps one of the most significant moves as a result of the second trilevel conference in Edmonton was the establishment of an independent trilevel task force on municipal finances headed by Dr. Deutsch. This is very important because municipalities themselves have been deeply concerned about their tax base. I do not think anyone acknowledges that a proper tax base is the most equitable, the best that can be devised, but we do not know what the answers are. Some people suggest federal tax transfers or provincial tax transfers, but I think we all recognize the fact that it is very easy to spend money that someone else provides. It is the very essence of our democratic system that we are elected to carry out the trust of the people. In some ways I think we should be called trustees rather than members of parliament. We initiate programs and tax people for the money to implement those programs. We take responsibility for that at election time or, conversely, we do not implement programs and we do not tax people, and we take the responsibility for that also.
I feel deeply, therefore, that it is important that the level of government which spends should also take the responsibility for that taxation. I could go on to give examples of other jurisdictions with other municipal income taxes. Strangely enough, they have not been all that successful, as I have found in speaking to the mayor of one of our major cities this morning. The municipalities have the responsibility for taxing, but it becomes a very different thing when you leave that responsibility to someone else and you just have the responsibility for spending. That is fundamental to our system of responsible government.


An hon. Member:: Then, why don't you bring the estimates back to the House?


Barnett Jerome Danson: There are other things in the ministry which are of particular interest. One is the railroad relocation and crossing act which offers a unique opportunity to the provinces and municipalities to join us in redeveloping, particularly central cores, regenerating them where they have been blighted by railways, and making them into better communities in which to live. Certainly, we must co-ordinate the federal presence which is considerable in most urban centres. Federal land holdings are considerable. There are some 200,000 acres of federally owned land in urban centres across Canada which are not usable for housing but which could be strategic land if used for recreation in the development of cities and towns. We have established a special policy of land management in the federal government and hon. members might be interested in this.
First, the federal government will, by and large, no longer sell its land holdings which are surplus to needs of government departments. Public lands will remain as much as possible in the public domain so the public has a basic decision to make on that land use.
Second, when a government property is no longer required by the department which is using it, a rapid examination will be made by the urban affairs ministry to determine what should be the best use of that land in urban terms. This will ensure that the redevelopment of federal properties takes place in the light of urban rather than purely narrow financial considerations.
Third, all important federal land holdings in major cities will be systematically reviewed on a cyclical basis to ensure they are being put to best urban use. I could go on at great length, Mr. Chairman, on the urban affairs aspect of my portfolio which is included in the estimates today and this may come out in my discussions.
I should like to mention the National Capital Commission because it is of special interest to members of parliament and to all Canadians. In my list of priorities, the capital city must first of all be a good place in which to live and work; that is the primary function of an urban centre. Second, it must be the capital city for all Canadians. All Canadians must feel at home here, must feel comfortable here, no matter what region they come from or what their mother tongue. We have development plans for the core area and the linking of the Ottawa and Hull regions. We have a regional plan as well for the greater national capital region.
I hope all hon. members have read the annual report issued last week by the National Capital Commission. It suggests some very interesting things and puts forward some good ideas for the national capital region. We will shortly be issuing the concept plan of the National Capital Commission. This looks at the development of the area for the next three decades. It follows the Greber plan which has been used over the last 20 years. We now have an opportunity for a new approach. We also have the Fullerton approach which deals with the governmental structure for the region. These present a unique opportunity to examine the reports and the expertise that have accumulated, and it is for that reason that in the Speech from the Throne we proposed a joint committee of federal

October 24, 1974

houses to study the national capital plan, the concept plan, the Fullerton report and any other information that comes to hand. I think we all have a special interest in this.
I strongly suspect that hon. members are primarily concerned with the housing situation today, although I hope it is not their only concern. I think the record of this government gives us reason for pride as Canadians, though not for complacency, of course. The Economic Council of Canada said that over a five-year period, from 1968 to 1973, it would be necessary to build millions of homes in Canada. That was quite a challenge. As a matter of fact, as a candidate in 1968 I said that if we did not achieve that objective I would not stand again as a candidate for my party.


Eldon Mattison Woolliams: Then, you had better sit down.


Barnett Jerome Danson: No, we have exceeded that goal year by year. We have exceeded 200,000 homes every single year and have established records one after the other.


Some hon. Members:: Hear, hear!


James McPhail Gillies: Relate that to population change.


Barnett Jerome Danson: This is quite a good rate of progress. In the six years there have been 1,350,000 homes and in the same period there have been 700,000 new family formations. Quality of housing has also improved, although there are naturally areas of concern. We still have a long way to go with those who are socially deprived, who have financial and economic problems, and with the native peoples and others.
Quantity itself is not enough. There must be quality of housing and good distribution in all regions and at all economic levels. Our concern must be for those who are most vulnerable and not able to afford housing. Some people suggest housing has been used as an economic tool, but if you look at the budget you will find that each year more money has gone into housing.
The new program which came into being in 1973 was in operation for only half of that year and our capital commitments for that year were $923 million. The capital budget for 1974, the first full year of the revised act, is $1,262 million. Of this budget, 77 per cent is committed to housing programs and the balance for land, sewage facilities and other operations considered as infrastructure. Of the housing budget, 95 per cent has gone into low cost housing for people who cannot normally afford it and some of the 5 per cent balance has gone in CMHC's role as lender of last resort in regions where lending institutions are not normally active. A high proportion of the 5 per cent has also gone into low and moderate priced housing.
One of the most interesting innovations of my predecessor was the Assisted Home Ownership Plan, or AHOP. Some people said it would not work because the price limits were not realistic, that they were too low. But a funny thing happened on the way to the forum, Mr. Chairman. People started to look for housing in the price range and, because of tight money, builders realized this was where they could get funds so they started to build houses within the price range. It has had the effect of supplying homes and bringing down the price. We know that in many major centres prices were set at what the traffic
Estimates
would bear and not necessarily related to the cost. In 1974, $300 million was budgeted for that program and its success resulted in a substantial increase of the budget. It produced some 20,000 homes for 80,000 or 90,000 Canadians. Part of that was for existing housing and part of it for new housing.
It soon became apparent that the success of this program was one of its greatest problems, and that we would have to increase the supply of funds. In effect, we had to make a trade-off. Rather than have the program work simply for people getting housing, we wanted to use what funds were left to increase the housing stock. I know it is a disappointment to some people that it was not continued for existing housing but I felt that we had to conserve our resources and use them where they would be most effective. During my term as minister, this is the approach I will be taking-to get the maximum leverage out of the taxpayer's dollar.
Public housing in this country has been a great success. In the last six years the stock has been increased substantially and more housing has been produced in this period than in the previous 22 years. That is not a bad record.


Mr. Gilbert:: It is still only one per cent of the total housing stock.


Barnett Jerome Danson: My hon. friend mentions the one per cent figure. I understand his concern, as I know the constituency he represents. We need new housing. We are not producing old new houses, if I may use that term. We need new houses. As far as we are concerned, 95 per cent will go to those income groups we have mentioned.
I am concerned about the reluctance of municipalities to accept public housing. I think politicians can give leadership in this field. People must not be gun-shy and say "No, we do not want these people in public housing in our area". Some people respond too quickly this way, and the solution requires leadership.
You cannot lead people who do not want to be led. Through leadership we must provide a voice which will be responded to in the community, so that we may develop a cohesive housing policy for the betterment of society. This will not come about by itself. It needs people to do it. We must recognize that this is a problem we must all face. We must also realize that there is a need for public housing. The attitude of people should not be, "Let them build public housing in an area other than mine." We cannot approach our problems in that fashion. On the other hand, if we accept our responsibilities we will become mutually enriched.
I could talk about non-profit and cooperative housing, which is a relatively new national force in the housing picture and deserves attention. The program is not increasing housing stock very much, but it is an important factor.
Let me say this, Mr. Chairman. In the field of housing the government of Canada is not standing still. We have an immense number of programs at work. There is no simple solution to our problems. We can talk about lending guarantees, public housing, senior citizens' houses, student housing, land assembly programs and services,
28305-45'/;

October 24, 1974
Estimates
AHOP, our limited dividend rental programs, our cooperative housing, our mortgage investment corporation, the registered home ownership savings plan, of which I will speak more later, programs like NIP, RRAP, programs for rural housing, and so on. As I say there is an immense number of programs which can help us do the job and which we have modified and improved as we go along. I welcome hon. members' questions, so that we can discuss these things together.


Eldon Mattison Woolliams: Mr. Chairman, may I congratulate the minister on his new position. I have known him since he came to the House. I think all will agree with me when I say he is an affable person. He will do the best he can in the circumstances, as all will agree, I think.
The minister faces vast problems. The previous minister, to whom I was not quite so kind, was full of puffery but little came of it. That is what prompted us at the beginning of the session to ask questions about housing.
In the 20 minutes allotted to me I will talk about the housing crisis and see if we cannot arrive at some solutions. I will ask the minister some questions and expect short answers. So many questions need to be answered and only the minister and his departmental officials can help us.
First, the minister must accept that there is a crisis in housing. Why is there a crisis in housing? In responding to a question asked on October 2, the minister implied that there is no housing crisis, even though housing starts this year are down by 24.3 per cent. Although the minister said in the House that there is no housing crisis, he said the contrary when interviewed by Southam News Services on October 21. According to the article by Guy Demarino:
Danson says he's 'about to present new ideas to cabinet' to help solve the housing mess. But any new ideas will take considerable time to be explained, developed, discussed, accepted, and financed-
Danson also wants his cabinet colleagues to support a plan, under which public subsidies would be linked to private capital and lead to more homebuilding. The government would, under the plan, subsidize private lenders to bring the effective mortgage rate down to AHOP levels.
Clearly, the minister thinks there is a housing mess. It is no use talking about AHOP. Of the $500 million allocated, $437 million has been spent. The minister must go to the Minister of Finance and others who control the economy for more money. But they say "no, we are cutting back; we are in a tight money situation." So, I understand his moaning. The problem is truly great.
How many wage earners are buying new houses? According to the Toronto Star, about five per cent of wage earners at one time bought new houses. That figure has now sunk to zero. Wage earners cannot afford high-priced housing and the highest mortgage interest rate in history. In Vancouver, for example, because the vacancy rate has dropped almost to nil, rents are going up. Wage earners are going to the boss and saying, "Give us more money; we need it to pay higher rents."
Houses are not selling. Why? According to law firms across the country, CMHC and conventional mortgage loans are running at better than 11 per cent. If you lack the full down payment and need a second mortgage, you will pay between 18 per cent and 20 per cent. I foresee a decline in our economy and there will be more foreclo-

sures in housing than this country has ever seen. Without exaggerating, what happened in the '30s will look like prosperity. The minister does not control money. The real demons are his colleagues who will do nothing about inflation. So, when he spoke today, it was like sneezing in a dust storm. It meant nothing.
Now, let me ask some questions. Housing starts in 1974, compared with 1973, are down by 24.3 per cent, according to Statistics Canada. Why are these housing starts down? The chairman of the Conference Board of Canada looked forward to one million extra houses being built by this year. Yet housing starts have fallen below 200,000. That figure was picked out five or six years ago by the Economic Council of Canada. I want to ask the minister why housing starts are down and what action is being taken to meet this situation outside AHOP. Incidentally, I hope the hon. gentleman does not mention that word while he is replying to my questions, because it means nothing-he cannot get any money out of the Minister of Finance.


Barnett Jerome Danson: The hon. member obviously recognizes that the basic problem is inflation, and he does not accept that the record of the present government compares more than favourably with that of any other government in the world in this regard. As I say, the real problem is inflation, which brings us to high interest rates. Despite this, our completions this year will be in the range of 250,000. Understandably, the hon. member is concerned about next year.
The admonition not to mention AHOP is unfortunately, I think, because the program has been highly successful. It would be unfair to exclude it when it is providing something like 20,000 units. Incidentally, the decline is not in new dwellings; the real concern is for rental accommodation in the coming year-multiple unit structures. This is where the emphasis will be placed, and I would draw attention to Section 15 of the National Housing Act which brings in the private sector. Possibly new methods will be required so that the immense resources in private funds available for housing can be directed to that field at lower rates. If we are to bring these rates down, it will be by subsidy. That is my objective-to bring the private lending institutions into the field. They have the funds, but cannot get them out working today because of the high interest rates.


Eldon Mattison Woolliams: I notice that according to the newspaper article the minister talked about subsidizing interest rates. I also noted, in the same article, that the Minister of Finance had said that in no way are there to be any subsidies. So, we are locked in.
I should like to ask the minister two questions. The first relates to the $100 million a year for land acquisition about which the former minister used to spread his chest. How much of that sum has been allocated and where were the land banks established-if anything was done at all? Has a further $100 million been allocated for this year? As we all know, the cost of land is the demon when we get into the realm of housing. In brief, how much was spent, where was it spent and does the minister have another $100 million this year?
October 24, 1974


Barnett Jerome Danson: This is a new program and I appreciate the hon. member's recognition of its importance. It is being applied right across Canada. It is not the intention to fund strictly $100 million a year; the program calls for $500 million over five years. I believe we have exceeded the $100 million in the last couple of years. In reply to the hon. member's question, perhaps I should begin by giving the figure for Alberta, which is $690,000. Then, Newfoundland . .. This can't be right surely-$6,910,000. Yes, that makes up the total. Newfoundland, $6,910,000. I didn't believe what I saw. But it shows what a Liberal government can do when there is a strong opposition.


Some hon. Members:: Oh, oh!


Barnett Jerome Danson: Ontario, $19 million; British Columbia, $3 million. And so on. So this money is going out. The program is going on stream and we are just beginning to see the results. There is a terrific time lag here, as I am sure the hon. member would appreciate. But the program is going on stream.


Eldon Mattison Woolliams: The list the minister gave is still far short of $100 million. Alberta, $6 million, British Columbia $6 million, Ontario, $19 million-that is a long way from a $100 million. But is $100 million set aside this year?
I want to turn now, to the demonstration program. This involved $100 million to be spread over five years to finance what we call innovative programs. The intention was to look at new technological methods of cutting housing costs. As I pointed out in the House this scheme would cost more than $54,000 a day for every day it was in operation. I should like to know what experimental project has been carried out with that $100 million and where it has been built, outside one situated in the former minister's constituency, perhaps, to impress the voters.


Barnett Jerome Danson: First, as to the land assembly program. If the provinces respond there will certainly be another $100 million available this year for that purpose. As to the urban demonstration program, nothing as yet has been spent out of this fund. It is a very serious program. As the hon. member implied when one is spending $54,000 plus change a day it has to be treated seriously. This program extends over a five year period. An advisory committee consisting of highly qualified professionals has been set up, not to build any sort of gimmickry, or to build in any particular constituencies, but to put in concrete form real responses to urban problems. The committee knows I intend to be rather tough in this connection because I have the ultimate responsibility. This is to result not in any great schemes which will benefit mankind but in specific projects in Canadian urban centres or around them, for the benefit of Canadians. Purely theoretical exercises will not be considered. I know this is the feeling of the advisory committee as well. The first funding will be next year.


Eldon Mattison Woolliams: So nothing has yet been spent out of this $100 million. It has not built one house. It seems to me that this money should have been spent to help people build houses.
Let me draw the minister's attention to some figures I have here-these are put out by Statistics Canada. The cost of new houses in Canada has risen by 60.7 per cent in
Estimates
the last five years compared with 38 per cent in the United States. Mortgage interest rates in Canada have gone up by 76.9 per cent compared with 18.4 per cent in the United States. The cost of property insurance rose by 130 per cent in Canada though it rose by only 13 per cent in the United States. I could go on and on to show how inflation in Canada has eaten away the resources of the little man until he can no longer afford proper shelter.


Barnett Jerome Danson: Would the hon. member permit an observation in relation to those statistics?


Eldon Mattison Woolliams: I want to put one more question. The minister can comment then, if he wishes, at the same time as he replies to what I have to say. I am far from happy about the Prime Minister telling us he intended to give people $500 in lieu of not abolishing the 11 per cent sales tax. Then, during the election campaign, he said that the government would do it in the next four years. I ask the minister, how many Canadians have yet received these $500 cheques? I suggest not one. It is like an innovative program. Let me ask the minister whether he has any legislation ready yet to carry out this promise, or is this another election bluff like the promise to curb inflation?


Barnett Jerome Danson: Mr. Chairman, I think it is worth observing, though I have not checked the statistics in this regard, that United States housing starts have dropped 50 per cent, compared with 23 per cent or 24 per cent in this country. I think that is of particular significance. Our policies have produced housing, theirs have not. I am not suggesting that we do not have problems, but I do not think that the situation is a crisis. Rather it is a problem, but a problem with which we can cope. Obviously, with housing starts dropping off south of the border almost 50 per cent, in what is one of the most advanced nations of the world, this is an indication that we are doing better. With regard to the $500 in lieu of sales tax, this is something that we have under active consideration. It was a commitment.


An hon. Member:: It was a promise.


Barnett Jerome Danson: Yes, and I hope to be making an announcement within the next several days in this regard.


Eldon Mattison Woolliams: Mr. Chairman, I have a few minutes left so may I just say this. I could go on all day asking the minister questions, but they all add up to one thing. The government has been full of words not deeds. In light of the fact that Canadians are now unable to get proper shelter, and in light of the fact that real estate agents are not selling houses, would the minister look into an outfit called Rentex. People looking for a home pay this outfit $50 to find a home for them and they have a monopoly all across the nation. I would ask that action be taken under the Combines Investigation Act.
I should also like to see an investigation in connection with a certain development around Calgary concerning the amalgamation of four or five companies. Not only is this happening in Calgary but it is happening in other cities, too. I did receive a letter from the president of a company in my area who complained about what was

October 24, 1974
Estimates
going on. Therefore, I ask the minister to look into this situation for the good of Canada and Canadians. I will now sit down since my time is up, and may I say I appreciate the courtesy of the minister for taking the time with me, even though he was unable to give me all the answers.


John Gilbert: Mr. Chairman, last July and August I would have had no difficulty complimenting the Minister of State for Urban Affairs on his appointment. He is a very affable, likeable and competent type of person. But he has been a cabinet minister now for almost four months, and on the basis of his performance in that short period, and also the attitude of the government to one of the most serious problems facing the country today, the serious housing shortage, I am convinced he is really trying to smile and bluff, certainly from having listened to him for 20 minutes this morning. The housing crisis has rather serious consequences for most Canadians. I think that instead of becoming minister of housing he is becoming minister of hoaxing. He is pulling a cruel hoax so far as his attitude to, and inaction in, the housing field is concerned.
Why do I say that, Mr. Chairman? First of all, let me look at the Liberal promises made during the election. First was the $500 tax free grant to first time purchasers of new homes. The answer of the minister in the last five minutes was that this matter was still under active consideration. An amount of $500 is very small in light of the dramatic increase that has taken place in the cost of housing during the last few years. In fact, in the year 1973 the increase in the cost of lumber and wood products amounted to $800 for the average home. The minister now says he has under active consideration a $500 grant to first time purchasers of new homes.
May I mention to the minister that if he were to remove the 11 per cent sales tax, not on all homes but particularly on homes priced in the moderate to middle income bracket, there would be a saving of $1,300 on the average home. From the minister's answer to the hon. member for Huron yesterday in regard to this grant, I have come to the conclusion that the minister is trying to bluff and smile his way through this serious problem.
Secondly, I remind the minister of another election promise of the Liberal party, namely that they would direct more national housing mortgage moneys into moderately priced homes with low down payments. This was given great thrust when the Prime Minister made his western trip. May I tell the minister that the limits set were so low that they would exclude virtually every house now on sale in our cities. That was the second promise of the Liberal party.
Thirdly, they said there would be a provision to allow homeowners to pay off mortgages in the first five years without excessive pre-payment penalty. The Prime Minister and speakers for the Liberal party made sure not to define the word "excessive". The question now arises, why should the average homeowner have to pay a penalty because he wants to pay off his mortgage within the first five years? This indicates the cruel attitude of the minister to people who are struggling to pay off their mortgages.
May I continue at two o'clock, Mr. Chairman?


Gérald Laniel: Order, please. It being one o'clock I do now leave the chair until two o'clock p.m.
At one o'clock the committee took recess.


[Stage Direction]
AFTER RECESS

The committee resumed at 2 p.m.
Gérald Laniel: Order, please. When the committee rose at one o'clock the estimates of the Minister of State for Urban Affairs were under consideration, as found at pages 29 and 30 of schedule A of the bill.


John Gilbert: Mr. Chairman, at the time of the adjournment I had stated that the Minister of State for Urban Affairs had changed his concept from that of minister of housing to that of minister of hoaxing. I suggest the reason for that is inaction by the government respecting the serious housing problem across the country. I gave as examples of inaction of the government the lack of action on the $500 grant for first-time purchasers of homes, and the government's attitude regarding NHA participating more in the mortgage field across the country, especially in respect of low-income families. The government set the limit so low that virtually no one in a city could take advantage of the program set forth by the Prime Minister during the election campaign. I also said that the government's idea of allowing home owners to pay for mortgages in the first five years without excessive prepayment penalty had not been put into effect by the government.
The fourth Liberal promise during the election campaign was a change in the NHA regulations permitting CMHC to buy land and lease it to co-operative and nonprofit housing organizations. The record in respect of this promise has been dismal failure. The president of CMHC said there is reluctance to provide funds, on the basis that projects could be unprofitable. The question of profit is hardly a criterion for co-operative housing. We have witnessed Toronto city officials and officials of the Ontario Federation of Labour coming to Ottawa to persuade the minister to become more active in supplying funds for non-profit housing and co-operatives. That action has been very slow.
The fifth Liberal promise during the election campaign was in respect of regional and local ceilings on NHA mortgages. This was to be done by regulation, but there has been no action to adjust the rates of NHA mortgages pertaining to different regions across the country. Those were the election promises.
Let me now come to the performance of the Liberal government and the lack of action by the minister of hoaxing. Regarding the supply of housing, there has been a dramatic decrease in the number of house completions and it is now almost certain, qs the hon. member for Calgary North said, that in 1974 there will be a drop of approximately 20 to 25 per cent in house completions. This means a loss of $1.5 billion in wages and salaries to Canadian workers. Goodness knows, we have a serious unemployment situation especially in the forest products industry of British Columbia and Quebec where these men could be employed.
October 24, 1974

I am sure the minister knows that developers in large cities said in the spring of 1974 they would not build multiple units because their return did not compare with the return on land speculation or on the construction of single-family dwellings. We experienced a dramatic drop in housing starts because developers found they could make more profit on land speculation and building singlefamily houses. We have a serious crisis in housing rental units, especially in the large cities.
Today the minister pounded his chest as he talked about the Assisted Home Ownership Program.


An hon. Member:: Not too hard, I hope.


John Gilbert: The minister failed to mention that the substance of the proposal made during the election campaign was to raise the subsidy from $25 to $50 and that the eligibility limit for the subsidy was to be even lower for NHA mortgages. The limit in British Columbia was $32,000 before one became eligible for AHOP, and $30,000 in Ottawa, yet experience has shown that you can hardly buy the necessary land in our larger cities for that amount of money.
With respect to the cost of housing the record of this government is even more miserable and dismal. The cost of land and the cost of mortgage money have risen at a tremendous rate. Last year we heard what the Liberals and the Tories said when the Residential Mortgages Financing Act was passed. It was supposed to stabilize the flow of money by making mortgages more attractive. That was the purpose of the bill. Since the passage of that bill last year we have seen the conventional mortgage interest rate increase from 9.5 per cent to 13 per cent. This is what the Tories and Liberals did when they brought in the act to make mortgages more attractive.
In respect of the price of homes we have seen a slight drop because of buyer resistance to the cost of homes and the high interest rate. There has been a drop in Toronto from $57,000 to $55,000 for the average house. When I travelled through my constituency during the election campaign I was amazed at the number of empty houses owned by speculators which had "For sale" signs on them. The reason was that most of these houses were in the $45,000 range and required a mortgage of at least $35,000. To obtain a $35,000 mortgage on a 25-year basis, at a rate of interest of 11 per cent, would require monthly payments of principal and interest of $336.89. In other words, if you take yearly payments of $4042.68 for a period of 25 years, it totals $100,670.
Is it not obvious why there is such resistance to buying homes in our large cities? I now refer to the minister's attitude toward housing. We in the New Democratic Party say that every person is entitled to decent housing at reasonable cost. This has also been stated by the Social Development Council and, as the hon. member for Don Valley reminds me, by the federal task force. Let us consider the attitude of the minister. He suggests that people must choose whether to buy a house or have extras such as a car, boat, or other luxuries. He says that they cannot have both. I would remind the minister that many Canadians cannot have either; they cannot have a house or
Estimates
the luxuries he speaks about. I am amazed at his philosophy.
What is the minister's solution? He said he would encourage developers, through tax incentives, to build houses. He has the limited dividend section of the act through which he hopes to encourage them to build. I would remind the minister that in the last six years limited dividend housing has never passed 5 per cent of the total housing for the year. There was one exception, in 1970, when the sum of $200 million was directed toward smaller lots with smaller homes for Canadians.
This is the second part of the minister's philosophy. He has taken no action with regard to interest rate increases. He has done nothing in respect of a land bank. He has done nothing with regard to the $500 bonus plan. He has done nothing regarding the 11 per cent sales tax on certain housing. He has taken no action in respect of the 50 per cent capital gains tax, which should be at least 100 per cent. He has done nothing with regard to Indian and Metis housing in Canada. This is a very disgraceful performance.
My time is limited, but I must tell the minister what we in the New Democratic Party would do if we were facing the problems he faces. I shall sum it up in five sentences. First, we would bring land under public ownership and development through a $3 billion revolving fund for the acquisition of development land around our major cities. Second, we would institute a 100 per cent capital gains tax on land sales, with an additional surtax on speculative holdings of less than five years, in order to bring down the cost of acquisitions. Third, we would provide 100 per cent funding to provinces and municipalities to service land holdings. Fourth, we would provide 6 per cent mortgages for low and moderate income families. Fifth, there would be direct government intervention to ensure an adequate supply of moderately priced housing either through contracting out to private builders or, where necessary, construction by a government agency.
Mr. Chairman, I should like the minister to take the initiative and change his philosophy so there would be a major thrust toward having Canadians decently housed at reasonable cost. I would rather call him a minister of housing than a minister of hoaxing. At the moment I would say he is perpetrating a cruel hoax on many Canadians.


Robert Lorne Stanfield: Mr. Chairman, when one considers the responsibilities of the Minister of State in the field of housing and urban affairs, and the cheerful responses the minister offers the House, one is tempted to ask the popular question: Why is that man smiling? I have nothing but good wishes for the new minister. I would not want him to misunderstand me. I respect his talent and his good humour. I am very much afraid, however, that he is already falling very quickly into the complacent attitude that many of his senior colleagues in the administration have made a hallmark of this administration. If he could be redeemed from that fate before the cement sets hard around him, I would be very happy. This is one of the main reasons for my intervention today. It would be a shame to see a new minister, particularly one in this portfolio, become lost in the attitude that everything must be right after all because the Liberals are still in power.

October 24, 1974
Estimates
There is much to be disturbed about in this country's affairs. A good portion of what disturbs me revolves around the government's cynicism, and repeated examples of it, in the realm of housing. Over the last couple of years the government frequently has said one thing and done another. It has promised, then deferred, and then done nothing more. Now we have a new minister along with the most recent flock of unfulfilled promises.
It seems to me that the minister and the government expect us and the Canadian people to sit around and wait for something to happen at some time in the future. I do not think that is good enough. The Prime Minister might well like us to believe that he is keeping his word when he states that the housing program promised during the election campaign will be implemented in the course of the life of this parliament-some four or five years-but his government will not in fact be meeting its responsibilities if it does not show determined leadership in bringing forward a housing policy at least to attack the immediate problems.
It seems to me the kind of policy required must be comprehensive and must involve more than simply some inventions by CMHC. It will require the co-ordinated effort of every department of government including, of course, housing, urban affairs, manpower, immigration, Indian Affairs and certainly finance. The minister may say we are not in a housing crisis-as he is fond of saying-but certainly we face a crisis in housing right now, a compounded crisis both in terms of cost and supply, because housing starts are down significantly and costs are up very dramatically. In five years-I think my figures are right-the cost of new housing has increased by over 60 per cent, according to Statistics Canada. That is just in respect of houses. If you include land costs, the increase over a period of five years for a new property including land is almost 110 per cent on average. Over the same period, mortgage interest rates have increased by almost 77 per cent.
A year ago we could see that housing prices and mortgage interest rates were increasing beyond the reach of most Canadians. One did not have to be very smart to see that. We could see, also that the housing market was becoming more and more an inflation shelter for those who could afford that kind of investment as hedge against inflationary expectations. The NDP member who just finished speaking said that in many instances it became a source of speculation and a hedge against inflation. Over and over again we and others warned the government that this was happening and that the little guy was being crushed in the process. There was no appropriate response from the government. Indeed, it was months before the government even conceded that our analysis was accurate.
Then, of course, we had the election campaign, bringing forth a flurry of activity, a basket of promises and AHOP. AHOP was made more generous. It had to be, because it certainly had become a rather sick joke the way it was operating. But now AHOP is all the minister talks about. Ask the minister the time of day and he will tell you about AHOP. The government's tactics, so far as defence is concerned, are "A HOP" a skip and a jump.


Some hon. Members:: Hear, hear!


Robert Lorne Stanfield: The minister appeared on the television program "Question Period" and said that in order to deliver houses and apartments at an economic price we must accept some compromises; that there are certain trade-offs which we might have to accept-for instance, green spaces. On October 7, the hon. member for Grenville-Carleton asked the minister to clarify what this meant. The minister replied, in one of his more illuminating statements, as follows:
This is an ongoing discussion with provincial and municipal officials as well as other people in Canada. Certainly, we have to treat this with great sensitivity, and I put as high a priority on parks and recreation as on any other element in the housing field.


An hon. Member:: He made it sound better.


Robert Lorne Stanfield: He may have made it sound better, but there was no more substance to it. I do not believe that the minister's answer clarified his earlier statement, and I say very frankly to him through you, Mr. Chairman, that I do not like what seems to be the general direction of the minister's thinking in this regard. I do not accept the position that provision of adequate serviced land will require the diminution or the reduction of green spaces in our cities. I say this as emphatically as I can, because it is very hard to get green spaces in cities. I do not know of any city in Canada which has too many of them, and I do not want to see green spaces lost through some alleged short gain.
To put it another way, I do not believe that the preservation of green spaces in existence precludes the adequate provision of land for home or apartment construction. The green spaces we now enjoy in our urban areas in no way caused the severe housing problems that we are now facing, and they must not be compromised as part of some half-baked solution to our problem of making available enough serviced land. I say, sir, that in this country there is no excuse for that kind of trade-off. The open spaces we have to do something about are not the green, open spaces in our cities but, rather, the gaping holes in the policies of the minister and the government. Who knows what the housing policy of this government really is? Is there any contingency planning to meet the crisis? There does not seem to be, from any evidence that I have seen. We are geared to conditions which generally do not apply now, if they ever did. Take the explosion in the price of land for residential development. It stands directly in the way of tens of thousands of ordinary, hard working families who want to own their own homes. I believe these people are justified in not viewing such prices as a necessary or acceptable burden.
The president of CMHC stated recently that the government is using all the devices that are available to increase the supply of serviced land. He said that the government could intervene heavily if housing starts fall much below
200,000	next year, but not before. Mr. Teron expressed the view that this number of starts is enough to allow us to hold our own without making any substantial improvement in the general living conditions of Canadians.
Does this government now believe that times are so good with respect to housing that it should do nothing more than make certain that things do not get any worse? Is
October 24, 1974

that the attitude of the minister and of the government? I say that this country has every right to expect something better. For far too many low and middle income Canadians, the situation is quite intolerable. The government has, indeed, a moral obligation to avert shortages and another escalation, in prices next year and to improve vastly the situation which we are already experiencing.
With regard to land prices in particular, I believe that a major thrust is necessary to improve this situation and to ensure an orderly and adequate expansion of our housing stocks. The government, in conjunction with the provinces, must provide the resources to do that job, and provide them now. I say to the minister that this would be an investment in social and urban progress and, furthermore, it would both moderate inflationary pressures in this field and generate employment. The minister responsible for housing and urban affairs and the Minister of Finance should be launching such an initiative without delay. We will be looking for comprehensive responses and answers.


Mr. Marshall:: It will come in the budget.


Robert Lorne Stanfield: I will not wait for the budget. I am tired of sitting around waiting for the budget and I dare say the Canadian people are also darned tired of waiting for the budget. The Conference Board in Canada has predicted that if the government continues with its present approach-


An hon. Member:: Oh, oh!


Robert Lorne Stanfield: The windbag over there can just settle down. I don't know whether he was moved down to that corner so as not to disturb the House too much.


Mr. Baker (Grenville-Carleton):: We are getting a draught here.


Robert Lorne Stanfield: The Conference Board has predicted that if the government continues its present policy, we will witness a further decline in housing starts next year. If nothing is done quickly, and if the present trend continues, a severe housing shortage will develop by mid-1975, according to the board, and as we move into 1975 completions will begin to fall off unless the decline in new housing starts is reversed. Without such reversal the supply of new housing will be very tight after mid-1975, and that will inevitably lead to further upward pressures on rents and on housing prices. I suppose that is the government's anti-inflationary program. If we now had more adequate inventories of shelter in major areas, this restriction in supply would not be too drastic in its effects. But on the contrary, inventories in most urban areas are at extremely low levels.
A recent report of the Economic Council of Canada, entitled "Toward more stable growth in construction", contains the following words:
Our analysis indicates that more stable growth in housing starts would significantly retard future increases in housing costs.
That is something which any government with the slightest interest in fighting inflation and helping the
Estimates
people should bear in mind. I continue reading from the report:
With increased stability in residential construction, therefore, more and better housing could be financially accessible to the poor, and all participants in housing construction itself would probably also benefit.
I would hope that this government would at least do something to help housing and fight inflation apart from talking about the problem being international. Here is a lead for the minister. The report went on to say its findings indicate that a good part of the instability in housing construction stems from over-all instability in the economy and the instability of government monetary policies in particular. The Minister of Finance himself recognized this relationship when he said in the memorable May 6 budget address:
Rates of interest are high, but the way to bring them down is to slow the rate of inflation. This will take time. Meanwhile, I expect the banks to continue to give preference in their lending to small business, mortgage finance for housing and borrowers in the less-favoured regions of the country.
However, sir, expectations are not policy and the Minister of Finance's management of the Canadian economy has led us, among other things, into another classic boom and bust cycle in housing construction. The severity of the problem and its impact on our society calls for effective action and we are not getting it. One reason the mortgage market is so difficult for someone trying to build a new home is apparent. In August, 1971, the percentage of NHA guaranteed mortgages being used to finance the purchase of existing homes was 5.6 per cent; in August, 1972, it was 8.5 per cent. In August, 1974, the percentage of NHA approved guaranteed mortgages being utilized for the purchase of existing homes, rather than building new homes, was 45.4 per cent. That was 45.4 per cent, Mr. Chairman, of NHA guaranteed mortgages being used, not to help purchase new homes but to help purchase existing homes. That is easy to understand, because the old mortgages which might have been on the existing homes were completely inadequate in view of inflated prices when the homes came on the market. This indicates the scope of the problem which the minister faces, and he just seems to be trying to smile it away.
Mr. Chairman, the Prime Minister talks about leadership, and the Minister of Finance tells us time and time again that supply is the cornerstone of the government's anti-inflation program. Where is the supply policy for housing? It does not exist. Where is the comprehensive, anti-inflationary policy which is necessary to stabilize prices and mortgage interest rates? Where is the great leadership we heard so much about?


An hon. Member:: In France.


Robert Lorne Stanfield: Mr. Chairman, I hope the Minister of State for Urban Affairs will himself seek some answers to these questions and that he will seek some other answers from his leader, the Minister of Finance and his other cabinet colleagues. I hope he will face up to these problems, because there is no time to waste.


Some hon. Members:: Hear, hear!


The Deputy Chairman:: Order, please. The hon. member for Vancouver-Kingsway.
710

October 24, 1974
Estimates


Mrs. Holt:: Mr. Chairman, I regret that I must intervene in this debate-


An hon. Member:: Why regret?


Simma Holt: -and delay our brilliant Minister of State for Urban Affairs, but I must correct the record of this morning and enlighten the hon. member for Calgary North.


Some hon. Members:: Oh, oh!


Some hon. Members:: Hear, hear!


An hon. Member:: Did you set her up, Barney?


Simma Holt: I should like to advise the hon. member, hon. gentlemen on the other side of the House and any more of their ilk, that I am not here because I am a pretty girl.


Some hon. Members:: Oh, oh!


Simma Holt: I am not here because I am an ugly girl. I am not here because I am nice, and I am not here to please or displease. I am here because I am competent enough to detect the intellectual sham of the hon. member for Calgary North.


Some hon. Members:: Oh, oh!


An hon. Member:: What has this got to do with housing?


An hon. Member:: Who printed that for you?


Simma Holt: Also, I have the intellectual depth and training to know that he started out on the wrong premise. When he started discussing British Columbia, he was into my territory and did not know what he was talking about. Had he not spent so much time absorbed in his own eloquence and what is happening in this House, he might have known that the socialist hordes have taken over in British Columbia.


Some hon. Members:: Hear, hear!


An hon. Member:: That's why you are here.


Simma Holt: There is another one of the same ilk. I should like to suggest that the reason there are no housing starts there, and why there are zero rentals, is that there are rental freezes in British Columbia-in case the hon. member did not know about it. As far as building rental units is concerned, they are turning them into condominiums. Housing has gone out of reach; it has doubled since February because of rental freezes. As to the formula put forward by the hon. member for Broadview, we had a taste of it and I hope it never happens in Canada.


Some hon. Members:: Hear, hear!


Mr. Dick:: Is British Columbia not part of Canada?


Simma Holt: Before I sit down, Mr. Chairman, I think it would be appropriate to recognize that the hon. member for Calgary North and the hon. member sitting beside him have the same Neanderthal attitude.


Some hon. Members:: Hear, hear!


An hon. Member:: Author!
[The Deputy Chairman.]


An hon. Member:: Barney Danson.


Simma Holt: Because of that Neanderthal attitude-


B. Keith Penner: Order, please. I think we want to hear the hon. member for Vancouver-Kingsway.


Some hon. Members:: Hear, hear!


Simma Holt: Thank you, Mr. Chairman. Because of their attitude, I should like to move that their salaries be reduced to one dollar per year.


Some hon. Members:: Hear, hear!


James McPhail Gillies: Mr. Chairman, I congratulate the minister upon his appointment and hope he discharges his tremendous responsibilities with the courage needed to meet them. Before I speak about housing, I want to comment on what the hon. member for Winnipeg North Centre said yesterday in suggesting that the condemnation of government spending should not be too great. He lectured us and said civilizations progress by spending money.
Let me say this. The times when civilizations have not made progress have been those when people have lacked confidence in the ability of their elected members to spend their money wisely and effectively. Unless we deal with estimates responsibly and effectively, we shall run into serious problems. Anyone who thinks that the estimates are handled properly in House of Commons committees obviously has never attended a committee meeting. Until the opposition is given proper staff, and until estimates are considered in the House of Commons, we shall see uncontrolled and improper spending, not because of fraud but because the estimates are not examined as people have every right to expect they will be.
I am delighted to have this opportunity to speak on schedule B concerning Central Mortgage and Housing Corporation, found on page 30 of the bill. I am speaking on vote 10 which has to do with our total housing program and policy. I was astonished to hear the minister say this morning that there is no serious problem in housing. I should not have been surprised, however, because that is how members of the government talk about any difficult situation. We are getting to the stage with this government where there are no standards, no goals with respect to inflation and housing.
I cannot understand a minister who comes from the Toronto area suggesting that there is no housing problem in the urban areas of our country. I cannot understand other senior ministers suggesting that. Today the apartment vacancy rate in metropolitan Toronto is probably below 1 per cent, and everyone knows that unless a vacancy rate is 5 per cent, the rental market will not function properly. Allowing a vacancy rate that low to develop means that the housing problems of those in the rental market will be particularly severe this winter. Rents are rising. The standard rule of thumb used to be that one should not spend more than 20 per cent of one's income on rent. Today in Toronto people are paying 30 per cent, 40 per cent and, in the case of low income groups, up to 50 per cent of income for rent. That is a shameful situation. It
October 24, 1974

brings degradation and real hardship to people with low incomes.
It has always been argued that people should not spend more than 214 times their income on housing. The average family income in Toronto is about $12,000, which means that the average house should sell for $30,000. There are no houses for $30,000 in the area. People can no longer afford a home. Housing for middle income groups is not being built. It does not exist in our metropolitan areas.
At one time in this country people could choose their type of accommodation. Some like to rent, some to own. They cannot choose today. The difficulty is that they cannot find accommodation at all which is commensurate with their income. Considering our low density of population and the fact that we have all the things we need to build houses, the present situation is puzzling. How can one explain this very serious situation? I suppose the minister will blame it on inflation. Why should inflation cause our housing problems? Has inflation created the present housing situation? Even though the Minister of Finance thinks that inflation exists somewhere in the upper atmosphere, it is clear that not all inflation is imported.
If we want housing, we have all the land and materials we need. So why should we see in Toronto the highest housing prices on the north American continent? It makes no sense. You cannot blame our difficulties on inflation. Indeed, the reverse is probably true. The lack of housing starts and the fact that the supply of housing has not been growing adequately has contributed greatly to inflation. The increase in costs in the housing sector is responsible for much of the increase in the cost of living. The increase in housing costs obviously has been a major factor in workers asking for more income, which in turn brings more inflation. If we had a housing policy which worked, there would not be as much inflation in this country as there is today.
Housing starts are down 24 per cent this year. I want the minister to tell us why, if we must solve inflation by increasing supply, the supply of housing in Canada is dropping and therefore contributing to inflation. It cannot be suggested with any reality that our housing problem stems from inflation created abroad, but it may be argued that we have a serious housing problem because of the amount of inflation we have created domestically and the way we have tried to fight that inflation. Does the minister suggest that a major way to fight inflation is to raise interest rates? The government has followed this policy. High interest rates do not stem inflation. They contribute to it. Obviously, high interest rates do not slow consumer spending or capital investment, but high interest rates stop mortgage lending and the construction of apartment houses. I want the minister to tell us if he thinks you can slow down inflation by cutting down the supply of houses and whether raising interest rates will solve the problem.
The other day the minister said in the House-I do not want to misquote him-that we are moving away from boom and bust in housing in this country. We have not done that. The whole history of housing construction in Canada since 1946 shows a cyclical pattern involving high interest rates. The government follows a high interest policy and housing starts drop; it cuts down interest rates
Estimates
when the economy goes into a slump and housing starts go up. As a consequence, ever since 1946 we have had no sustained housing program.
We shall never cope with the housing problem until we eliminate this interrelationship between a monetary policy and housing. You see, all the programs the minister has put forward, in respect of which we are asked to appropriate some several hundred million dollars, will not accomplish very much at all; they will work only at the periphery of the difficuties. I support moves toward income-geared rental programs. I think we perhaps need land banks. I think we need more sewers, and so on. But these things do not really go to the heart of the issue. The real issue is whether we are to have a sustained building program which is unaffected by aberrations which may occur because of changes in general monetary policy. We have never, in this country, developed a well separated pool of funds to flow into the mortgage market, such as has been done through the building societies and savings associations in other countries. I do not know whether or not this is the answer for Canada; there are some drawbacks attached to it. But it is evident we shall never make progress until we tackle this basic issue.
The challenge to the new minister-and we all wish him great success-is to act with courage to face the fundamental issue. He must come to grips with the situation which has faced Canada ever since 1946, that is, the interrelationship between housing and general monetary policy. Does the government have any plan to partially isolate the mortgage market from the general monetary market, operating as it is? If not, no success can be expected in dealing with the housing problem as a whole. The only way in which people belonging to low income groups will ever get the housing they need lies in the industry increasing the supply of housing faster than the increase in demand over a sustained period in the metro areas. This can only happen if we devise a way of getting mortgage funds flowing into the market in a regular pattern.
I do not know whether the Minister of State for Urban Affairs wishes to adopt the same position as that taken by the Minister of Finance, namely, that inflation can be cured without causing any dislocation or trouble. No one who has studied the housing market since 1946 can help realizing that until there is some way of isolating the mortgage market more effectively we will not achieve the sustained pattern of housing construction needed to meet the needs of those living in urban areas.


Barnett Jerome Danson: Would the hon. gentleman like me to answer some of the questions he raised?


James McPhail Gillies: I should like the minister to answer them all.


Barnett Jerome Danson: Mr. Chairman, I am surprised that a man as distinguished as the hon. member for Don Valley, a man with an academic background of some prominence before he came here, should now talk about isolating mortgage funds from reality. This is a government which deals in reality. We do not set interest rates in isolation from the real world in which we live. Any time we do that, we must do it through a form of subsidy in one way or another. It is
28305-4 6'/a

October 24, 1974
Estimates
better to understand this fact. If the hon. member is trying to hoodwink the people of this country, or even the members of this committee, along the lines that the government has set, or can set interest rates in isolation to reality, I think it is unfortunate. To suggest that we use it as a method of affecting the economy-


Robert Lorne Stanfield: He did not suggest that.


Barnett Jerome Danson: Let me say this, then. We have consistently put more money into the housing market each and every year. In 1973 the figure was $923 million. In 1974 it is $1,262 million. There has been a constant pattern of increases of this nature. We have built more social housing in the past six years than was built in the previous 22 years combined. Members of the opposition ask, "Why don't you do something about it?" Evidently they were not listening when I listed 17 or 18 specific programs. When the Leader of the Opposition says we should do something about assembling land, I can only wonder where he has been. We have established a fund of half a billion dollars which is being used effectively and to which the provinces and the municipalities are responding. These are the things we are doing.
The hon. member for Don Valley raised a good point when he talked about the flow of mortgage funds. I am directing a great deal of my attention to this subject. However, I cannot come up with magical solutions because I have responsibility for taking action rather than criticizing. We must maintain the flow of these funds, but we cannot do it in isolation from world interest rates. We must do it in the real world in which we have to live. Most people recognize this fact. You cannot fool the people of Canada. Hon. members opposite could not do it in the last election, and they are not going to fool them again by this distortion of economics.


Some hon. Members:: Hear, hear!


Barnett Jerome Danson: Consider what has been accomplished through the programs to which I have referred. Consider the limited dividend program. Members across the way said builders would not go along with it. But the money is there and the proposals are coming forward. We are prepared to break these funds loose. This is the way in which to use the taxpayers' dollars to the maximum advantage and break the money loose for low income housing. For the same reason, we have set up the mortgage exchange corporation. We cannot deny there is a problem, but every time there is a problem the opposition tries to turn it into a crisis. The people are not fooled by that any more. They know that life is not easy; that it is full of problems. And the government is here to deal with problems as they arise.
I feel there is a big market for investment of mortgage funds from outside this country. Many are interested in investing their money in Canada because, thanks to good government and the state of our economy, we provide a safe haven for it. I should like to see more aggressive methods used, perhaps by CMHC, to secure a greater share of this money for housing. If people abroad wish to invest a great deal of their money with financial security, they can easily find a safe investment and a productive return in this area. We will not get money into the mortgage

market unless people respond to the real world. People will not invest in that kind of situation any more than builders will build buildings when there are rent controls.
I think I have answered a few of the points that have been raised. The question of supply is fundamental. This is why, when we talk about completion of houses, the fact that we will have completed 250,000 by the end of this year-the second highest in our history-is not a bad record for a crisis situation. However, the amount that the private sector is putting into existing housing does disturb me, especially in the hon. member's beautiful city of Halifax. I would urge the private sector to put a higher ratio of their lending into new, low cost housing rather than into existing housing.


Robert Lorne Stanfield: That is the "real world" you are talking about?


Barnett Jerome Danson: Yes, that is the real world. In the program for which I am responsible, a great percentage of the funding is going into existing housing and is doing a job, namely, helping people to buy homes. This is the kind of trade-off that we have to face. Do we use this money to help people buy homes, or for the twofold purpose of buying homes and increasing the housing stock? I made that decision knowing that it would affect people adversely, but in the belief that the ultimate benefit of all is best served by concentrating taxpayers' money into new housing. Certainly, the thrust is to increase that supply and to use it with maximum leverage to improve housing standards for Canadians.
As a matter of interest, I might mention to the hon. member for Don Valley and to the Leader of the Opposition who also spoke about supply, that there were 130,000 new family formations, 30,000 household non-family formations-a new phenomenon, I suppose, in our society- and 25,000 vacancies or losses of older homes that had deteriorated, making a total of 185,000. So the total requirement to keep up with growth amounts to 185,000 starts or completions, whichever way you wish to put it. This compares with our record last year of 268,000 starts and 250,000 starts this year.
I recognize as a valid point that there will be difficulties next year. We are down 23 per cent to 24 per cent this year, compared with our American friends who are close to 50 per cent down. So there is a problem. Nevertheless, I suggest we are doing better at controlling inflation than almost any other nation in the world, and we can do even better. Hon. members will soon hear of the new programs that I propose to introduce into the House, or modifications of existing programs from which we have learned a great deal. These will improve the situation materially.


B. Keith Penner: The hon. member for Don Valley has a few more minutes.


James McPhail Gillies: Mr. Chairman, I. am astonished at the response given by the minister to the position that I have presented. Let me tell him that I am sure the people cannot be fooled all of the time. If the minister has the time, I ask him to look at the mail from his constituents who are trying to cope with the rising price of houses and
October 24, 1974

higher rents in Toronto. In view of the statements he has made, how does he account for the fact that there is such a terrific housing problem in the metropolitan area of Toronto? People do not manufacture problems. Rents are going up as never before. Prices are so high because supply is down. There is no new construction because interest rates are so high.
I hope the minister is not suggesting that the government of Canada does not influence interest rates in this country. I was trying to suggest to the minister-this is a point that he missed-that he is dead wrong if he thinks that this government has not used, either directly or indirectly, housing as a stabilizing factor on the economy. It always has, and it is doing so now.
As minister responsible for housing, should he not now be putting forth a policy or program to remove once and for all the concept that we are always going to use housing, riding on the backs of people who can least afford it, as a stabilizing factor on the economy? Obviously, interest rates are influenced by many factors, but in 1946 the government of the day was able to bring in a direct loans program which moderated the impact of general monetary policy on the mortgage market.
What I urge this new minister, a man with the respect of every member of the House, to do is try to find a way to eliminate the use of housing as a stabilizing factor. It means nothing that there will be 240,000 house completions next year, if the year after the number is going to go down and then up again like a yo-yo, always in response to monetary policy. What we need, if we are going to solve the housing problem in this country, is a well organized and well oriented construction industry that knows there is going to be a continuous flow of mortgage funds.


B. Keith Penner: Order, please.


James McPhail Gillies: That is the real problem. These other considerations are just peripheral.


B. Keith Penner: Order. I hesitate to interrupt the hon. member, but he was given a little extra time since the minister's reply was at some length. May I also remind the hon. member for Hamilton West that if he wants to ask a question at this point, he will be using up his time; and there are other members who rose ahead of the hon. member for Hamilton West and who should be recognized first.


Léonel Beaudoin: Mr. Chairman, I listened very closely to the minister responsible for Central Mortgage and Housing Corporation, the Minister of State for Urban Affairs (Mr. Danson). To my mind, he may be going in the right direction, but the way strikes me as slightly foggy. The government has certainly done much to encourage the building of single-family units in the last few years. Still, much remains to be done.
I feel that the main problem homebuilders, private or professional, must face is that of the exorbitant cost of water and sewer mains.
In 1968, it cost $45 a linear foot to install sewers and water mains in Toronto, Montreal, Winnipeg and Vancouver. The cost has now gone up to $90 a foot in those same
Estimates
four cities. Add to that the problems created by the persisting misundertandings between the province of Quebec and the federal government.
The Quebec Department of Municipal Affairs does not decide early enough with the federal government where grants will be made for the installation of water and sewer services to allow the interested parties to pay the cost. At a cost of $90 a foot, those services are much too expensive, in the case of a 100-foot lot, for a private citizen to ever hope to own his home.
To service costs must be added the excessive interest rates, the rise in building costs over the past three years, so that for a $20,000 investment, that is, an ordinary 4-room house, the monthly payment amounts to $325, that is, $250 for mortgage and $75 for services. Once you add to this the water and school taxes, you reach a dead-end. No citizen can afford to pay $325 a month in addition to taxes for a house. He is therefore compelled to look for an apartment to rent.
In the Sherbrooke area, the situation is not so critical as elsewhere, but in such large centres as Toronto and Vancouver, where land prices have increased threefold over the past two years, it has become impossible. In these cities, people cannot build their own houses, nor avail themselves of the benefits available from the Central Mortgage and Housing Corporation which lends low rate money to those whose annual income is less than $10,000. These people must therefore look for apartments to rent. They are willing to pay excessive rents, as in Toronto for instance.
This creates decidedly an interesting situation. Therefore, I suggest that the minister should make it possible to have better coordination between municipal, provincial and federal governments. For the sake of those who want to buy land, it should be known once and for all where the provincial government will grant subsidies to provide services.
In his contribution to the debate on the Address in reply to the Speech from the throne, the minister said:
So far this year CMHC has made direct loans amounting to more than $568 million to finance more than 27,000 homes-about two-thirds of them new construction. I announced a few weeks ago that we were prepared to put $50 million at 8 per cent if builders in some of the larger cities would build housing for rent at agreed-upon moderate rates.
I would point out to the minister that builders are willing to build low-cost housing. But in view of the investment cost and the lack of cooperation from municipalities which do not have the means to help them, one has to realize that the contractor has built 40-, 50- or 60-unit building whose rent he estimated at $225 or $235 a month but for which he now has to charge $300 a month because prices are changing too fast. Such a project takes six or seven months or even a year to finish. The prices have changed so much that it is impossible for the developer to rent his apartments for a reasonable price. The minister also said that:
Earlier this year we secured the co-operation of private mortgage lenders who agreed that high ratio loans should be available only for housing in the middle and lower price range.

October 24, 1974
Estimates
In my opinion, this is applicable to projects around a small town like Quebec city, Sherbrooke or Granby because, in or around those places nobody, except for a few isolated cases, thought of acquiring land and waiting until the municipality or the province decided to go ahead with development. Generally, the land was not bought by people with a view to taking advantage of the situation.
I am sure that in my area, Mr. Chairman, houses can still be built for $22,000 or $25,000. Of course, this would not be possible in Toronto or Vancouver. I had the opportunity to visit housing projects in Toronto, big construction projects for what was supposed to be moderately priced housing, but actually the apartments are renting out at $300 or $400 a month. This housing was built for people whose income is less than $12,000 a year. They just cannot afford them. The builders keep them empty for one or two years or often go bankrupt, and the CMHC only has a small amount to pay and has to have houses finished in order for them to have some sort of value.
If the minister has low cost housing in mind, he still has a long way to go in the future to manage it. The minister also told us that the government will establish for next year, as it did last year, a general classification for people who buy a moderately priced house for the first time. They have suggested that a $500 subsidy be granted as a form of compensation to those who are particularly in need of help to pay sales taxes on building materials. That matter was dealt with in the last estimates and I think that suggestion will be put forward again as soon as it can possibly be.
I urge the minister to go on in that way, but I think the $500 subsidy which would lower the cost of buying a house should be raised to $1,000. Most of all, the CMHC should ensure that the subsidy would really be used to buy the house. It would otherwise profit the contractor or the intermediaries.
I think the minister seems to go in the right direction, and I believe that this amount of $500 should be paid to the home buyer.
Mr. Chairman, the minister has also announced that he would relieve of a part of his income tax the buyer of a first house, whether it be a young couple or the individual who buys a single family home for the first time. I did not go thoroughly into his speech and I do not know whether the matter concerns only a single family home or a duplex, but I think it is the former. If his intention is such, I am convinced that we will pass a worthy legislation. That could contribute to relieve the congestion of large cities, and eventually allow everybody to own a house.
Mr. Chairman, there is another matter I would like to bring to the minister's attention. It concerns the scale used in respect of the salary which must be earned by the individual who wants to get a mortgage loan at a low interest rate.
Anyone who now earns less than $7,400 a year is not entitled to the annual $500 grant. I would like to suggest to the minister to increase the grant to $1,000 a year since, at the present time, according to the established scale, the person who really needs a house and supports a small family is generally the one who earns the lowest salary. Those who earn high annual salaries of $20,000 or $25,000 do not worry at all because they can easily buy a house.

On the other hand, for the one whose annual income ranges from $5,500 to $8,000, there is a difference of $2,000 which should be taken into consideration by the minister.
The minister said later that the year 1975 would be fruitful for the low wage earner who will want to acquire a house. As for me, I am not as optimistic as the minister, because I believe that the rate of interest must stop increasing or stay at the present level for at least one year.
On the basis of my personal experience, I can say that in 1974 my company built houses at an interest rate of 93A, 10 M and 11 Vi per cent. This is a significant change if we think about a $19,000 mortgage on a single family dwelling. It makes all the difference, and, finally, the person who was interested yesterday in buying a house will not be able to afford it tomorrow, because his salary will not have changed while his obligations and purchasing power will.
I believe that the minister would be making some progress if he could tell us when the interest rates of the Central Mortgage and Housing Corporation will stop changing every three, four or six months and will finally be stabilized. In my opinion, this would be helpful.
I would also like to point out to the minister that to set the construction industry back on its feet, or at least to maintain it, it is essential that the person in charge of the Central Mortgage and Housing Corporation meet more often with the Minister of Municipal Affairs of each province so that cities can develop harmoniously. More land should also be made available to those who want to build a house.


B. Keith Penner: The hon. member for Winnipeg South Centre.


Mr. Alexander:: I rise on a point of order, Mr. Chairman. We are now engaged in a debate involving individual members, but perhaps the House will bear with me for a moment. I have not heard the minister say one word about senior citizens. With all due respect, I think this is one of the most important aspects of the housing industry. I know the minister receives letters, just as other members do. I remember during the election, as I am sure the minister does, knocking on the doors of senior citizens on the third floor of buildings. I want to know what effort is being made by the federal government, the provincial governments and the municipalities working together to relieve this very serious situation.
Ever since I have been here the situation has been that the supply is nowhere near the demand. I want to know what we can expect from this department to give some relief to our senior citizens. I heard the minister emphasize the young and the middle-aged. I go along with him to a point, but I think the priority should be in terms of the senior citizens. What is his department doing in respect of this very serious problem?


Barnett Jerome Danson: Certainly, Mr. Chairman, the hon. member has heard me speak about the young and the middle-aged. I think it is important that we be concerned about everyone. I believe my hon. friend has also heard me speak
October 24, 1974

about my personal priority in the social field, which happens to relate to senior citizens. Because I do not wish to create any false hopes, build up expectations or play a game with the senior citizens, to whom we have great responsibility and for whom we have great respect, I want to make certain that I have the exact figures so that I may be specific. There are many programs involving the municipalities and the provinces. There is the limited dividend program. Some are non-profit programs and some are co-operative programs.


Lincoln MacCauley Alexander: They are not working, and you know it.


Barnett Jerome Danson: I want to make sure that I give the hon. member and the senior citizens an accurate answer in this regard. I hope the hon. gentleman will bear with me, and perhaps at the next opportunity to intervene I will give these figures precisely. I think, in all fairness, there have been improvements in some constituencies. Many members from all sides of the House have spoken to me about senior citizens' housing and are aware of the responses that have been made. There have been improvements; it is almost a minor miracle. I am not saying, however, that we have solved the problem. If the hon. member wishes to play games, that is up to him, but I intend to give an honest answer.


Lincoln MacCauley Alexander: On a question of privilege, as a member of the class of '68 I am a little surprised at the minister. At no time have I implied that I was playing games. I am shocked to think that the minister would look at the hon. member for Hamilton West and think he is playing games in this important area. He may talk about other constituencies, but I know that in Hamilton West, if I do not receive three or four letters a week from senior citizens in this regard, something is wrong. The supply is not there. It does not look as if the situation is changing at all. The situation may be different in some other constituency. But I want to know whether these people can expect relief. It is a shame that they should have to live in this standard of housing. The minister knows this as well as I do. He should not be bombastic about this problem.


B. Keith Penner: Order, please. With all due respect to the hon. member for Hamilton West, I must remind him that he took the floor first on a point of order and next on a question of privilege. I do not believe that in fact he had a point of order or a question of privilege; he rose to intervene in the debate. That would be acceptable except for the fact that the Chair had recognized another member of his party. If that hon. member is prepared to yield to the hon. member for Hamilton West, then the hon. member for Hamilton West may proceed.


Mr. McKenzie:: I so yield, Mr. Chairman.


Lincoln MacCauley Alexander: Mr. Chairman, I certainly accept the remonstrance given me and I shall now sit down, because I know I have made the point with the minister.


Barnett Jerome Danson: Mr. Chairman, I rise on another point of order. Since this question was raised on a point of order, I would like to answer it.


B. Keith Penner: Order, please. It is not a point of order at all. The minister is rising to speak to a point of
Estimates
order which was not, in fact, a point of order under the rules. At the next opportunity the minister has to rise, he may incorporate the answer in his remarks. The hon. member for Winnipeg South Centre.


A. Daniel McKenzie: Mr. Chairman, in rising to speak on the urban affairs estimates I wish to devote my time to Canada's housing problems and the need to assist Canadians in obtaining decent shelter at reasonable cost. It is a time for action, not reports, studies and statistics like the $100 million urban demonstration program that the Liberal government proposed last March. This $100 million study is nothing but a diversionary tactic and is clearly ineffective to assist in solving the existing housing crisis. The $100 million could be spent much more wisely, such as in providing serviced lots and reducing interest rates.
To say there is a national housing crisis in Canada is the understatement of the century. Housing costs are rising at a rapid rate. We must now look to new programs and approaches to provide more housing, and more economical housing. One area to which we must give careful consideration is the provision of more mobile homes and trailer parks. Mobile homes can be made permanent as they are a kind of prefabricated housing. Today I wish to present a new horizon for housing, namely, satellite towns and attractive residential parks. The popularity of mobile homes is increasing steadily. An estimated 25,000 new units were used in 1972 in Canada. More people are turning to mobile homes than to other more conventional types of residences.
Today I will speak of a more community-oriented type of mobile home area, with proper fire protection and facilities. Today, the lifetime family home has all but disappeared due to a wide variety of social and economic causes. People move about with mounting frequency. This factor of mobility in modern family life has reached the point where it warrants due consideration in every urban study. I should like to quote from a recent news release entitled "Canadian families are moving more". It reads:
More Canadian families moved from one city to another last year than in 1972, says the Coast to Coast Real Estate Service.
A survey of long distance moves shows that 21,777 households were relocated in another city during 1973 compared with 17,493 a year earlier.
More than half the trips originated in Toronto, Montreal or Ottawa, about 20 per cent in Winnipeg, Calgary, Edmonton and Vancouver and 10 per cent in Halifax and Quebec city. The balance of the long distance transfer business was shared by other major urban centres such as Hamilton, Regina, Saskatoon and Victoria.
Coast to Coast Real Estate Service is an association of more than 100 realtors in 187 offices across Canada.
Frank Hodges, vice-president and manager of corporate relations for A. E. LePage Limited, Toronto, a real estate company, said recently nearly 750,000 families changed their place of residence last year, the vast majority within the same city or to nearby communities in the same province.
If the trend in the mobility rate, as indicated by family allowance statistics, continues, he said, Canadian families a few years from now will be moving once every three years.
"Being moved has become a way of life for certain occupations", he said. "Our own experience would seem to show that the number of household relocations is evenly split between government departments and agencies and private business".

October 24, 1974
Estimates
A typical case is that of a head of family transferred by his company to another city. Commonly, the wife and family stay behind until the house is sold and the current school term is finished. Houses take time to sell. As the holiday time draws near, the wife becomes increasingly anxious to sell. Far too often it happens that in order to resolve the long uncertainty and rejoin her husband, she takes a beating on the sale. At the other end, the husband is unfamiliar with the prices of houses in the city to which he has moved. He also has a deadline in the purchase of a home, and it is quite possible for him also to take a beating on the price he agrees to pay. At both ends someone pays a substantial real estate commission. Excellent jobs in faraway places are constantly presented by Manpower, but they are often beyond the reach of the man who owns his home. This type of situation works to the disadvantage of both employer and employee.
Circumstances such as these, together with the rising cost of houses, have created booming trailer sales across the country. But trailers have their limitations. In many ways they are a poor substitute for a conventional home. But the market continues to expend and where sufficient need exists, development will follow. It may well be that mobile homes will evolve in ways that have not yet been considered. A possibility with a seemingly great potential is that of a combination of the old and the new. Why not have basic mobile units with supplemental stationary living space available, on a rental basis, in designated residential areas in every major population centre of the country?
The two sections of the mobile home would be readily attachable. This is the only part of either unit that would need to be standard. The mobile unit is not too large, as trailer sizes go, but it is completely self-contained. It would make a practical, low-cost home for several years for a newly married couple. Any time they wish, they can obtain a supplementary unit on a rental basis, and if and when they want to move all they have to do is move their furniture out of the rental unit into their mobile home and they are ready to go. They can turn their mobile unit progressively into a two, three or four-bedroom house complete with basement, in any part of the country, as the family's needs expand, and when the children have grown up and moved away the parents are not faced with the costly problem of disposing of a house that has become too large for their needs. They can go back to their original trailer unit and in retirement or old age move anywhere they wish.
This type of combination unit lends itself to satellite towns, slum clearance projects, new mining towns in out-of-the-way places, and especially to armed forces personnel. Both the supplementary and the mobile unit are within a wide price range, and also there is a wide choice in the type of lot on which they can be located. Spacious lots with lawns and gardens, or modest lots at a minimum price may be available. A sufficient number of lots would have to be available for unattached trailers as well as combination units. Mobile units will have to be somewhat wider than highway regulations now permit, but if the need arises both the legislation and the highways will adjust.

There is an opportunity for radical change in both the design and methods of construction of mobile units. Not only the mobile unit, but the relatively small and simple stationary section could be built in a centrally located factory on a mass-production basis and easily moved to the desired location. The plumbing facilities will all be in the mobile unit, the heating will be electric, with the panel located in the mobile unit. The mobile unit will tend to become more like a conventional house and less like the present type of trailer.
The wheels could be eliminated and the chassis redesigned in such a way as to allow for ready transportation on a low-bed unit. The present practice is to move the trailer with a rented tractor, so why not have the tractor supply the wheels also and carry the mobile unit instead of pulling it? This would save a great many sets of wheels which are seldom used and it would reduce construction costs. The mobile unit will have to be placed on some type of surface foundation with a heated crawl-space. It will have to be sufficiently light and rigid to lend itself to moving.
The mobile unit plan I propose takes up an area of 488 square feet. The construction cost of conventional homes today is approximately $22 or more per square foot, exclusive of the price of the lot. At that price, the cost of a dwelling of this size would be approximately $9,900. This price, however, includes a basement, installed sewer and water lines, and municipal fees, which altogether would amount to at least $2,800. This would reduce the cost to $7,100. Add $300 to this price for selling costs, and we have a round figure of $7,400. With the economy of large-scale, mass-production methods, this is a realistic figure. With a down payment of $500 and a subsidized rate of 8 per cent, a monthly payment of $78.87 would pay off the balance owing in 12 years. The three-bedroom supplementary rental unit has 390 square feet of floor space. At $20 per square foot, construction costs will amount to $7,800. This figure includes complete plumbing and kitchen and bathroom cabinetwork, but these are in the mobile unit. The control panel for the electrical heating and lighting is also located in the mobile unit. There is also the factor of centralized mass-production methods of construction. Altogether, the saving per square foot could amount to as much as $2,600. Building lots in developments specifically designed for the purpose, beyond the scope of the land speculators, might start at a minimum price of $2,500, with larger and more expensive lots available. We thus arrive at a minimum cost of approximately $7,700.
If the residential park is owned by a Crown corporation and operated on a non-profit basis, the basic cost to the tenant would be taxes, interest on the investment, depreciation and administration. Interest at 8 per cent on $7,700 amounts to $56 per month. Taxes on a dwelling of this value should not run over $25 per month. Let us say a minimum rental of $85 per month for the three-bedroom unit, with four bedrooms costing a little more and two bedrooms a little less. The rent on parking space for the trailer alone would run from $5 per month up, depending upon the area required and the number, if any, of school-age children. It thus appears that payments on the mobile
October 24, 1974

unit, plus the rental on a supplementary unit, could be held to a minimum of $110 per month.
In the time it would take for a newly married couple to reach the point where a supplementary unit became necessary, the monthly payment could be held to a minimum of $55 to $60. With the addition of the supplementary rental unit, the price would go up to $110, where it would remain until the mobile unit was paid for, at which time it would drop back to the $65, more or less, rental for the supplementary unit. When the children grew up and moved away, the rent could be reduced to the price of a parking lot for the mobile unit alone on the basis of a childless couple, perhaps not over $10 per month.
This is a housing concept of a truly revolutionary nature. It may have sufficient merit to become a major factor in the building industry. Five hundred residential parks, with an average capacity of 1,000 dwellings, including both single and combination units, might not be too much to look for in the first five or six years of operation. The provision of so many low-cost homes of this type could not fail to have a profound effect upon all other types of housing. It would have a powerful effect upon the currently inflated prices obtainable for every type of older home.
The type of residential development required could be designed to be aesthetically acceptable. There would be trees and lawns and boulevards and playgrounds for the children, as in any modern suburb. In every case, the supplementary unit would be in front and the mobile unit hidden from view at the rear. In the residential parks, there also could be variations in exterior design. Many variations and improvements would be sure to follow if the project is put into operation.
No doubt there will be criticism of my proposal, but I hope it is constructive and perhaps others will have new ideas and innovations to put forward. But mainly, we must take drastic measures to lower housing costs. I believe my satellite town proposal is a step in the right direction.


Mr. Cullen:: Mr. Chairman, I want to begin by congratulating the minister on the portfolio which he now holds. When he and I came to this House in 1968, we were seatmates. I did not think he would go so far to get away from me. I was interested to hear the hon. member for Don Valley and the Leader of the Opposition refer to the minister as affable and say that he was seemingly trying to smile away his problems. I would suggest to them that they not underestimate the tenacity and competitiveness of the minister. They should not be misled by his affability or smile, because the minister has a very enviable war record. He came through the war and established a business, making a huge success of it. He has fought three successful election campaigns and now sits on the treasury benches. All this should be an indication of the toughness and tenacity of the minister. I would say, if they need to be reminded on the other side, that they should speak to the gentleman who spent almost a quarter of a million dollars in two elections trying to take the seat away from the minister.


Lincoln MacCauley Alexander: Let's get into the housing problem.
Estimates


Jack Sydney George (Bud) Cullen: Mr. Chairman, the hon. member for Hamilton West thought the only way he could get into this debate was by bootlegging a point of order and a question of privilege. He indicated his concern for social housing, and I know he has that concern.


Lincoln MacCauley Alexander: You betcha.


Jack Sydney George (Bud) Cullen: The problem is that when his party was in power, unhappily they did not have that concern. Can you imagine how many senior citizen housing units we would have today if they had come up with the idea in 1957-58? Now we have to catch up because of the failure of that party.
Mr. Chairman, I, too, was sitting as a backbencher and considering the AHOP program and listening to the opposition's criticism that it would never be used. Not only is it working, but funds are running out and in some areas they ran out because of its success. I think the former minister is to be congratulated for this and I hope the present minister will be successful in obtaining more funds for the program.
The members who have addressed the committee today, Mr. Chairman, have been mainly from our larger centres, such as Halifax, Don Valley, Toronto, Broadview, Vancouver and Hamilton West-with his bootleg comment.


Lincoln MacCauley Alexander: That's all right. I made my point.


Jack Sydney George (Bud) Cullen: We have not heard as much from the smaller areas and I should like to make a representation on behalf of the Sarnia-Lambton area. The hon. member for Lambton-Kent is not present, but I know he shares my concern over the impact of the expansion of the petrochemical industry in the Sarnia-Lambton area. There is going to be a desperate need for housing there.
The hon. member for Winnipeg South Centre has suggested a program. Perhaps that is the way we will have to handle the problem of many people moving into a particular area, because of construction, who will ultimately leave the area. That is the kind of positive response that I like to hear from members of the opposition; not just criticism but positive suggestions. I do not know whether the hon. member's idea has merit, but I think it warrants study.
The mayor of Sarnia has written to the minister on behalf of the city and its environs, indicating that in the next five or six years 6,000 or 7,000 people will be in the area at one time. This is a matter of serious concern, not so much to the city of Sarnia but to the townships, because there is no more room to build within the city boundaries. The township have the problem of becoming dormitories only, because they have to rely on a real estate tax base that has not much industry. This problem should be resolved by the federal government, the provincial government and the municipal governments working in co-operation.
I am happy that the deputy minister of housing for the province of Ontario met with the mayor of Sarnia. They have announced that there will be an area housing study. I would ask the minister to give consideration to lending some personnel from his department to participate in this study. The minister speaks primarily of ten critical market

October 24, 1974
Estimates
areas, but it seems to me that one more should be added- the Sarnia-Lambton area. I do not think municipalities can handle a problem of this scope, because they do not have the tax money available. It should not be left entirely to the provinces, either. This is a situation where the three levels of government should get together.
Why are we so sensitive about this problem, Mr. Chairman. People in the Sarnia area remember when the Polymer Corporation moved in during the war; they remember the emergency that resulted from the construction which took place. There was an influx of people and we ended up with a section of the community called Blue Water. Houses were just thrown up. Then 15 or 20 years ago we had the expense of clearing out that area, expropriating and compensating people for their substandard homes and moving them to other parts of the city.
There is a little time left, and we want to avoid problems. Therefore, I hope the minister will consider the representations of the mayor which were set out in a letter he wrote the minister and the Minister of Finance. This project concerns an area larger than Sarnia. If the kind of expansion Alberta is embarking upon takes place, such a program could form a pilot project which could affect people who are required to move out of an area once construction work has ceased. I think in this way light could be shed on how to cope with a serious problem.


Walter C. Carter: Mr. Chairman, I join my colleagues in congratulating the minister upon his appointment, and wish him well. Considering the poor act he is following, he cannot help but look good. From what the minister said in the House and in committee, one would think there is no housing problem, that talk of slums and inadequate housing is nothing more than a rumour started by 200,000 or
300,000	Canadians who live in substandard houses. Some of the programs the minister announced are not performing the function intended for them. With all these intials, NIP, LIP, LEAP, AHOP, and so on, I expect that in ten years we shall have a third official language in Canada.
The neighbourhood Improvement Program is not working as well as it should. It discriminates against the poor provinces because, although the government agrees to make funds available under the program, the balance must be made up by the municipality or province, which may not be financially capable of providing the required equity. For example, under the Neighbourhood Improvement Program, the government gives as a grant 50 per cent of the cost of a project and lends 75 per cent of the rest. This must be paid back by the municipality, and the province must also come up with a substantial amount of equity. It is no use providing, say, $.5 million to St. John's, a city of which I can speak with some authority, because the city cannot match the government's offer and cannot undertake the program.
What is the minister's motive in restricting assisted home ownership for new houses? I suggest the reasons given by him justify a continuation of the application of the program in the purchase of older houses. Not everybody who can qualify for AHOP can afford or wants to buy a new house. I suppose the minister thinks that if AHOP applies to new housing, it will boost the building
(Mr. Cullen.]
industry and result in increased starts and completions. Obviously, his plan is failing. In September of this year housing starts were 34 per cent below those of the previous year. The program is not proving effective in providing new homes, and the results are apparent with the lumber industry and with trades connected with the building industry.
I join my colleague from Hamilton West in saying that we must treat our citizens more fairly. Like the hon. member, I have received many inquiries from senior citizens in my constituency who have begged me to intercede on their behalf and find for them a decent place in which they can live their last few years. Is it not a sad commentary on our government and on our society that our senior people who gave so much in the service of this country, who raised families and contributed so much to the development of this country, should spend their last few years pinching pennies, trying to make ends meet, and often paying rents which are totally unacceptable, considering their meagre incomes. In many cases their only source of income is their old age security pension and the guaranteed income supplement.
I draw the minister's attention to the situation existing in my riding. I suspect the same conditions prevail elsewhere in Canada. I am talking about the raw deal we have given our senior citizens. Some senior citizens' apartments are in complexes that were built under the limited dividend section of the act-section 16, I believe. I think the minister is familiar with this question. I gave him copies of letters which I had sent to his predecessor. It turns out that the occupants of these homes are now in their sixties and seventies and are not eligible for government assistance or subsidy to offset the increasingly high rents they must pay. I suggest the government must help old people living in these complexes to qualify for some type of assistance, some type of subsidy similar to that given to people in apartments which were built under section 44 of the National Housing Act. Under that section, the federal government provides 50 per cent of the subsidy and the province and municipality the other 50 per cent.
I want the minister to tell us what steps are being taken to alleviate the harsh burden being carried by so many of our senior citizens. I have evidence that the people who live in these homes-which, by the way, were built through public financing under the limited dividend section of the act-are paying as much as 70 per cent of their total income in rent. This makes a mockery of the income formula which has been adopted by the government and by CMHC and has been used by them in computing mortgage payments, and so on. A further interesting aspect is this that one of the conditions under which these apartments were built is as follows:
The rentals to be charged shall be rentals which the corporation deems to be fair and reasonable having regard to the probable family income of the occupants of each family housing unit.
So I contend that the government has a serious responsibility to the people who occupy homes which were built under that section of the National Housing Act, a solemn responsibility to ensure that the rents being charged are fair and reasonable and bear a reasonable relationship to the family income of those occupying the units. I could
October 24, 1974

continue, but there is not much I can say that has not already been said in the course of this debate. I wish to impress upon the minister the importance of doing something for our senior citizens. It would not cost a great deal of money; I am sure we could trim the fat off some of the government departments to help these people who have done so much for us and who must spend the last years of their lives in near poverty, trying to balance an impossible budget. I should like the minister to tell me what plans he has, especially for those who live in these complexes which were built under the section of the National Housing Act to which I have referred.


Barnett Jerome Danson: In view of the concern expressed by the hon. member for Hamilton West and by the hon. member for St. John's West, I think the committee might be interested in figures relating to senior citizens' housing. None of us would ever agree that we have enough, but out of a $400 million budget for non-profit housing over 50 per cent goes to senior citizens. That is a bias in favour of senior citizens by comparison with the rest of the population.
Moreover, in the public housing sector of the senior citizens' housing program the existing stock totals 32,895. Currently under construction across Canada are 16,400 units. So the stock presently under construction represents an increase of almost 50 per cent. This is being done in accordance with programs which hon. members opposite find inadequate. I agree they are inadequate.


Some hon. Members:: Hear, hear!


Barnett Jerome Danson: I should like to double that number, or triple it. We talk of problems, and there are problems. But we are meeting them head on. And this does not include the non-profit housing, in which sector another 6,000 units came on this year, that is between January and September.


An hon. Member:: And the people are still waiting for houses.


Barnett Jerome Danson: Well, I expect some rational approach from hon. members opposite. We would like to do everything at one time, but even Liberals cannot do that. I am not satisfied. We want to do more. I see the hon. member for Hamilton West has just returned to the chamber. I am sure he heard the figures from behind the curtain. I have been very impressed by the quality of the debate this afternoon. Hon. members have referred to me as being affable and smiling. That is one of my problems. I refuse to carry the world on my back as a burden, but I take my job deadly seriously. I always have. Whatever I have accomplished in life has been through working extremely hard and never giving in.


Lincoln MacCauley Alexander: True to the class of '68.


Barnett Jerome Danson: The important thing is not to take oneself too seriously. I see a lot of people here who take themselves so deadly seriously that it is frightening. But they do not accomplish anything. However, as hon. members pointed out, we do have problems. Some of them are being managed quite well, though there are others which perhaps are not being managed to our own satisfaction. We
Estimates
have made mistakes, but they have been mistakes of comission. We have some excellent programs in force now.
We have been talking here-some will say ad nauseam- about AHOP. The fact is that AHOP has been very highly successful, and since it has been so successful I want to find out whether we can stretch it still further, even though it may not be perfect. As to limited dividend rental housing, it is important for us to realize that the rental housing situation is probably the closest thing approaching a crisis which confronts us unless we fail to act quickly, particularly in the major centres.


Eldon Mattison Woolliams: That is exactly what I said.


Barnett Jerome Danson: This is why we have used a section of the National Housing Act, section 15, in order to secure funds which would normally have been used in other programs-programs which for one reason or another were not moving quickly. So we found $50 million for the last quarter of this year. Everyone said it could not be done, that nobody would respond. Well, they are responding right across the country. Sixteen developers have shown interest in St. John's, Newfoundland, alone, and 53 in Toronto alone. Yet the hon. member for Broadview was saying, I believe, that these were unrealistic levels. They were unrealistic, he said, because no one could buy a house at that price at that time. What has happened? I have the figure here of the number of AHOP units built in Toronto. It is 1,080. The fact is the price of housing was not related to costs, and when we provided money to purchase houses they were available at those prices. This is what we are achieving, and this is the success we intend to exploit.


An hon. Member:: That is like giving a peanut to a starving elephant.


Barnett Jerome Danson: If the hon. member were to go to areas of the country in which his party's policies were in force, and saw what is happening there, he might not be too enamored, though I must say some of the provinces have taken great advantage of federal funding for limited dividend and senior citizens programs, and so on. I regret, sometimes, that it is not quite clear where this money is coming from.


An hon. Member:: Answer the question put to you.


Barnett Jerome Danson: I think it is important to members in all parties to make certain our constituents know where these funds are coming from, because if our provincial counterparts do not let them know, they may think that you and I are not concerned or are not interested.


Paul Wyatt Dick: I rise on a point of order, Mr. Chairman. On this specific point I happen to agree with the minister that it is most important that people in our constituencies should know where the funding is coming from. However, I was wondering whether the minister would explain his policy as to when an urban affairs program is being opened up.
[DOT] <1610)


An hon. Member:: What is the point of order?

October 24, 1974
Estimates


Paul Wyatt Dick: If the hon. member will just listen, I will tell him.


B. Keith Penner: Order, please. I regret having to interrupt the hon. member, but he is seeking the floor on a point of order and in fact is asking a question of the minister. That is legitimate, but the hon. member must do it when he is recognized for that purpose, not at this particular moment.


Paul Wyatt Dick: If the minister would not take so long, we would have time.


Walter C. Carter: The minister did not answer my question. I appreciate that the minister is not taking himself too seriously, and I suspect that if we have any more statements like the one he made a moment ago the people of Canada will not take him too seriously, which would be unfortunate. The point I wanted the minister to clarify had to do with people living in senior citizens' apartment complexes which were built prior to the amendment to the section of the act under which they were built.
Would the minister try to find some way whereby these people can qualify for a subsidy, in conjunction with the province, similar to that now given people who live in apartments constructed pursuant to section 44 of the act? Would the minister answer that question?


Barnett Jerome Danson: Mr. Chairman, I am aware of the problem to which the hon. member has alluded, and it does disturb me. There is an inequity here. Although programs are improved as they go along, people who took advantage of a program which seemed very attractive at the time are now finding them less attractive than newer programs. I cannot promise anything definite. In some respects this problem is in the same category as perpetual bonds, old annuities. When do you start making them retroactive? But I recognize the problem. It is something we must look into, perhaps in conjunction with my provincial counterparts, to find ways to make the programs more equitable so they assist these people.


Walter C. Carter: One final, short question, Mr. Chairman. In view of the fact that these apartments are financed by the federal government under the National Housing Act, would the minister undertake to commence consultation with his provincial counterparts-I ask this question because the federal government has a vested interest in these apartments-with a view to working out some kind of arrangement under which people living in such apartments will qualify for a subsidy which will bring their rents down, hopefully, to an acceptable amount?


Barnett Jerome Danson: I understand the hon. member's concern. We are presently in touch with the provincial authorities. Some programs apply to fixed rents, older ones to low rents. Others are geared to income. But the whole subject is under review. I assure the hon. member it is a problem I take seriously, and I shall take a special interest in these consultations.


Mr. Orlikow:: Mr. Chairman, I could not help listening with wonderment to the glowing words of the minister in charge of housing. Last year we built about 280,000 houses, and ministers of the government at that time were very

proud of that number. This year, although we are down 25 per cent from that number, they are still proud and are still boasting, even though there is no evidence at all that we have come anywhere near to meeting the needs of the people of Canada. There is no reason for the decline in housing starts except for the fact that the price of building a house and the interest rate at which houses have to be financed have risen to the extent that people cannot afford to purchase a home.
One of our criticisms of the AHOP program of which the minister is so proud is that it is insufficiently funded. The minister always tries to deny that fact, yet today he has told the committee that 1,000 homes, approximately, have been financed under the AHOP program in the city of Toronto-1,000 homes in a metropolitan area now populated by about two million people! Surely even this government recognizes how far short of meeting our housing needs this program falls.
People want to buy houses, but the cannot afford them. The minister ignores the fact that in many countries, including the United States to the south of us, governments have instructed banks and mortgage companies to lend money for mortgage purposes at regulated rates substantially lower than the commercial rate. I am not sure what the rate is in the United States at the present time, but it is substantially less than the 12 Vi to 13 per cent people in Canada pay. Countries such as Sweden and many western European countries have similar programs.
Thousands of families in this country cannot afford, and are not likely ever to be able to afford, a home. Thousands of our native people are without adequate shelter. It has been estimated that there are 10,000 Indian families who need new homes right now, but there is no program to meet their need. Large numbers of native people move into cities, particularly in western Canada-Winnipeg, Regina, Calgary and Vancouver-and even if they have a skill, they cannot find a job and do not have even the smallest of down payments under any program of the Canadian government that assists people to purchase a home.
What these people need is rental housing. The minister says we are building a substantial number of units, but this is like telling a person who wants to buy a bicycle that there are no bicycles but lots of Cadillacs being built, so he should buy a Cadillac. It was once said of the people of France that all citizens were equal and had the right to sleep under a bridge over the Seine, and this is what the minister is saying to those who are looking for housing. Just whom are we building houses for? Would the minister tell us when we are going to start meeting the needs of the people of Winnipeg, Toronto and Montreal who are living in dilapidated houses, houses that simply do not meet the standards of a country as wealthy as Canada?


Barnett Jerome Danson: Is the hon. member asking me a question?


David Orlikow: I have been watching the minister answer questions, and I have the fear that if I sit down the minister will use up the rest of my time answering me, so I should like to ask him two more questions in his capacity as minister in charge of urban affairs, not in connection with housing. Before I get off the subject of housing, would the minister explain what he is doing about the
October 24, 1974

reorganization of his department? I have the feeling that housing decisions and housing policies are still being made in that tremendous bureaucracy we have built up over the years known as Central Mortgage and Housing Corporation. Are questions of housing policy and housing needs still being dealt with by people who are responsible to the minister, and therefore to the House, or are these decisions still being made essentially by Central Mortgage and Housing Corporation? In my view, and in the view of many people in the province who are interested in housing for the poor and middle income people, this arrangement is completely inadequate.
I should like to ask several questions about which I think the department of urban affairs should be concerned. Within the next 25 years, 90 per cent of the population of this country will be living in our cities.


Walter David Baker: Eighty-five per cent.


David Orlikow: Someone suggests 85 per cent. However, the exact figure is not important.


An hon. Member:: And that is sad.


David Orlikow: It may be sad, but it is a fact of life. I should like to know whether the minister and his department are really looking at the problems that will flow from this urban growth. What are the minister and his department doing about developing land? Let me give two illustrations-and I do not want to get into the same bind I got into last night with the Minister of Transport. I will refer to the metropolitan Toronto and metropolitan Montreal areas. Another airport in the Montreal area has already been started at Mirabel. In the not too distant future another airport will be constructed in the Toronto area. The estimated cost of providing rapid transit from the new Montreal airport is $450 million. I am not aware of what it will cost to provide rapid transit to the Pickering airport, but I am certain it will be as much if not more.
Following the construction of a new airport, we find new factories, new housing developments and new commercial developments. Is the minister's department involved with the provincial and municipal governments in planning ahead for these things, or will we wake up one morning with a new airport at Mirabel, only to find it takes two hours to fly from Montreal to Winnipeg but two hours to get from the airport to downtown Montreal, and the same situation at Pickering? I should like the minister to deal with that problem.
What role is the minister's department playing in the movement of railway terminals from their present locations in the major cities, with all their assets, to new locations? Are we going to allow the CPR and the CNR, which is theoretically a publicly-owned corporation, to move from their present locations, as they did in Montreal, to new locations, selling their present locations, incuding yards and stations which are often extremely valuable properties, to the highest bidder in order to obtain as much money as possible?
That is what happened in Montreal. Tens of thousands of people were then brought into the area without any
Estimates
consideration given to how they were to be transported. Is the minister's department, the Department of Transport, the Department of the Environment, or any federal department going to get in on the ground floor in advance of these developments to see that things are done according to an orderly plan which will meet the social and economic needs of the people in the areas, or are we to permit these grandiose developments without the benefit of order, as we have in past years?


Barnett Jerome Danson: To answer the specific question, I should mention that I was in the hon. member's city last Monday and met with the distinguished mayor-who I presume was re-elected yesterday-and the premier of the province. As to what we are doing in that city under the Neighbourhood Improvement Program, let me remind the hon. member of the Selkirk Park project involving a commitment of over $4 million; the Midland housing project, which I understand is to involve another $2 million, along with the cultural centre which is to cost some $600,000. In so far as housing starts are concerned, I can only repeat again what is being done under AHOP. There are 900 units being built in metropolitan Winnipeg. That should not be related to what is being done in Toronto because one must realize that many of the housing starts in Toronto are not really within the metropolitan area.
In this group which is being served, the average family income is $6,852 per annum, with some 30 per cent having a family income of less than $6,000. Those are figures that apply across Canada and I think that is a pretty good indication that we are serving the right people. I am delighted that the member has raised these questions. I was also interested in the hon. member's comment about providing Cadillacs to people who are riding bicycles. But it is interesting to note that when money is available at low cost, housing starts increase. Having regard to urban policy, I am deeply involved and interested in such a policy relating to housing per se for individual communities. This is still a very active policy on the part of CMHC, requiring a great deal of intergovernmental coordination on a trilevel basis. The ministry itself is actively interested in this area.
The hon. member raised an interesting question regarding the Mirabel airport. The construction of such an airport has a major influence on urban development, particularly in the case of the largest city in Canada. It involves
80,000	acres under federal control. There is what is known as the Tram study specifically in relation to a transportation plan such as the hon. member mentions. I believe Mr. Douglas Fullerton is chairing that committee for the province of Quebec. Our representative is Mr. Douglas Ryan, a senior member of the ministry. So we are actively involved. This is a perfect example of co-ordination in these areas of government. These people are extremely interested in transportation.
When you think of the amount of planning required in respect of major transportation systems, such as the one between the Mirabel airport and downtown Montreal, and the acreage involved, you can imagine the amount of urban planning that must take place at three levels of government. This is of tremendous importance and I am sure these people are working seriously on the problem. The question of railway relocations is under active con-

October 24, 1974
Estimates
sideration and an announcement on this program will be made shortly. There is a time lag because there must be urban planning, agreements with the provinces, and other things. But the question of railway profiteering is eliminated by the nature of the act. These companies cannot profit as a result of land transfers, but under the act they do not lose money.
We have to watch the situation very closely, and it is one of the matters that I believe will be covered in the proceedings of the CTC, the group that is monitoring these things. I do not think the CTC should be making policy decisions, but technical decisions are being made by it. So we are watching the situation very carefully.


Jack Marshall: I should like to make a couple of comments and then follow with several questions of the minister.


David Orlikow: Madam Chairman, I rise on a point of order. I think I have a few minutes still at my disposal.


An hon. Member:: Give it up.


B. Keith Penner: The Chair assumed the hon. member had concluded, but perhaps he might be allowed an additional two minutes to finish his remarks.


David Orlikow: I have another question I should like to direct to the minister. If he cannot answer it immediately, I hope he will do so soon. One of the worst problems faced by this country is the shortage of housing. Certainly in Winnipeg this presents a problem. What I have in mind now is the problem as it relates to housing for native people. Some months ago-I think, in fact, it was two years-a proposal was sent to CMHC involving the construction of a native village to include housing, a cultural centre and other buildings. This is not to be located in my constituency but in the constituency of the hon. member for Winnipeg North Centre. I understand it involves the old Royal Alexander hotel site. I think it has been approved, but there has been no recent discussion between those who made the proposal and officials of CMHC or the minister's department.
I wonder whether the minister could give me any information on that matter now, or whether he would undertake to discuss it with me or my colleague the hon. member for Winnipeg North Centre, and, more importantly, with the people who made the proposal to his predecessor.


Barnett Jerome Danson: Madam Chairman, the projects of which I am aware in Winnipeg relating to the native people are Camew and Neeginan. It is a problem which I know the premier has taken seriously. This is a problem which he spoke about to me and my colleagues. It is an area I should like to explore further. It is of particular interest. I think the problems are rather serious. I should be pleased to go into this question further with the hon. member, together with my officials. I should be glad to arrange as complete and up to date a briefing as possible, and I assure him of the greatest consultation with the people involved.


B. Keith Penner: Perhaps hon. members will pardon my interruption. In view of the very limited time remaining, in respect of this department, between now and five o'clock, perhaps it would be the desire of hon. members to limit themselves to question and answers of the minister. Is that agreed?


Walter David Baker: We will do our best.


Some hon. Members:: Agreed.


Jack Marshall: Madam Chairman, since you are so agreeable I will go along with you on this. I have just a few points which I shall put in the form of questions and, hopefully, the minister will do his best to answer them. First of all, following the subject raised by my colleagues in respect of senior citizens' housing, the minister indicated that another 6,000 units were in the process of being built. I wonder whether consideration is being given, in the design of senior citizens' homes under the non-profit sector, to providing for people who are disabled and physically handicapped. I could dwell on this matter for many moments. I wonder whether the minister would ask his officials if consideration is being given to this matter, or what their plans are.
The minister indicated that in order to meet the need,
185,000	homes are required. Those provided over the past two or three years and this year represent a quarter of a million. I wonder whether the minister is aware of the increasing need because of the baby boom since World War II and DREE incentive grants which have caused expansion in places that were not industrialized before, thus creating the movement of people such as technicians and others in specialty trades. It would seem that because of this situation some infrastructure should be provided beyond the 250,000 homes, in order to cope with the problem.
If I might be a little parochial, I wish to say that through the investment of DREE funds, the district I represent on the west coast of Newfoundland is in the process of spending hundreds of millions of dollars to bring power across from Labrador to Newfoundland by way of cable. This is an isolated area and because of the jobs created there will be a need for water and sewage services as well as housing, because many people will have to move there.
Then moving down my coast, just recently a zinc mine was started which employs 300 people. This situation should also be taken into consideration. A program should be developed through DREE to work out a solution to these problems and to ensure that the money is found for places where it is needed. I could point out places where the minister could find $100 million.
I did not listen to the first speaker, so perhaps this question has been answered, but under the urban demonstration program I understand there is $100 million allocated. I do not think this is required. I wonder if the minister would consider taking this $100 million and transferring it to programs such as AHOP, NIP and RRAP. The other thing on which the minister might comment concerns the $100 million rural native housing program. This program would fulfil a great need in rural Canada, particularly in rural Newfoundland. In the release of the
October 24, 1974

minister's predecessor I believe it was suggested that 100,000 homes should be built for rural and native people over the next five years. There are not too many native people in my area, although there are many rural people who do not have the necessary funds to build homes.
Another way in which I suggest the minister could save money to help overcome the emergency would be to expand the $10 million NIP and RRAP programs. I am sure there are thousands of substandard homes in Canada. Many of these people wish to build new homes. In the meantime, however, we could relieve the emergency if more funds were found to provide these $5,000 loans with $2,500 forgiveness so that these people could bring their homes up to standard. At the same time, this would contribute to one of the most important things which should be insisted upon, that is, giving municipal building standards and insulation standards priority. This would mean a saving of hundreds of millions of gallons of home-heating fuel.
I should like the minister to give us an indication of his relationship with the Department of Regional Economic Expansion in providing housing to support industry, and also his relationship with the Minister of Veterans Affairs in respect of overcoming the housing needs of veterans who cannot acquire homes through the limited funds available under part II of the act.
I would dwell now on another matter. I have been talking to a person from Corner Brook. A university is being built there. I was told that in order to provide homes for students, the cost of the land involved would be $18,000. I am not talking about Toronto or Montreal but about Newfoundland. This is the amount required to provide a serviced lot for the many students who would be coming into this medium-sized city. In order to allow other members to have an opportunity to speak, I will leave those questions with the minister and hope he will reply to them.


Barnett Jerome Danson: Madam Chairman, there are standards and special provisions for senior citizens, such as the wide door program and things of that nature. Another program which is under way is housing for the handicapped. This should be ready shortly. We are looking for revision of the present program and are working with various departments involved with the handicapped. This should be ready shortly, and perhaps there will be legislation to deal with it. In so far as Corner Brook is concerned, this matter comes under the NIP and RRAP programs. Almost $639,000 has been accumulated.
As to rural and native housing, we have agreements with Alberta, British Columbia and Manitoba and we are looking forward to agreements with other provinces so that we can get those going. Our relations with DREE are very close, both in the housing field and in urban affairs, particularly in the Atlantic provinces. The Minister of Veterans Affairs and myself have a very close relationship and we have been having discussions. We happen, both of us, to be veterans. I have to be careful with my words now. At one time no one listened to me, but now I have to be careful of what I say.


Some hon. Members:: Oh, oh!
Estimates


Barnett Jerome Danson: Some of the programs which we veterans honestly and in our hearts understand were designed for us when we were young veterans after the war and are not applicable now. We are trying to develop types of programs that are really relevant to veterans today. I believe the hon. member has some conception of the fact that the real need of veterans now is not the same as it was for young, vigorous veterans coming out of the army and trying to raise families on half-acre lots. They have other needs now, and we must respond sensibly to those needs rather than with gimmicks.


Paul Wyatt Dick: I should like to put a couple of questions to the minister. One refers to a matter he raised in his speech in reply to an hon. member, namely, that he wants people in the constituencies to know that federal funds are being made available. I suggest that if he happens to finance a building in a constituency represented by someone other than a member of the Liberal Party, he can still make the announcement, rather than send a Liberal from the far end of the province to represent him. The constituents would at least know that it is a federal member who is representing the government. I wonder whether the minister is prepared to use that tactic, rather than trying to find a Liberal senator or Liberal member far away from the area to go in the minister's stead if he is not able to make it, and if he is prepared to use the present member of parliament for that purpose.


Barnett Jerome Danson: Madam Chairman, I am already working on procedures that will be automatic and will involve the local member, because we all have an interest in showing the federal presence. We represent the federal government and it will be the local member, regardless of his party, who will undertake this work.


Some hon. Members:: Hear, hear!


Barnett Jerome Danson: May I say, on a point of order, "his or her party", because there are women involved too.


Paul Wyatt Dick: I have a couple of short questions to put. The feeling throughout the country of people who live in constituencies consisting of small towns and rural areas is that CMHC funding is not available for their housing needs. Perhaps the Minister of Agriculture can provide the Minister of State for Urban Affairs with information regarding that point. Would the minister like to respond to this attitude of people in towns of less than 10,000?


Barnett Jerome Danson: NHA guarantees are applicable. There are some very remote areas where private lenders will not service such loans; we move in as lenders of last resort in such situations. But as regards smaller communities, if we are not being active and are not serving a purpose, I wish the hon. member would provide me or the corporation with the information. However, I do not think that that is often the case.


Paul Wyatt Dick: Is it not a fact that CMHC will not assist with mortgages where there are no sewage facilities?


Barnett Jerome Danson: Yes, it is not a fact.


Some hon. Members:: Oh, oh!

October 24, 1974
Estimates


Barnett Jerome Danson: The proper answer is that it is not a fact in the sense that we do assist where no sewage facilities are available in the normal trunk services. But we do have a sewage tank policy.


Some hon. Members:: Oh, oh!


Barnett Jerome Danson: Where the installation meets certain standards, where the size of the lot is adequate and meets local standards, this is the case. We are trying to avoid strip development. This is an area where we might have centralized tanks or lagoons. Aerated lagoons are of particular interest to CMHC. These are not very appetizing subjects, in fact no more than hamburgers to which we referred earlier today, but these are the facts of life. Sewers and sewage treatment are an extremely important part of the operation. We want to make certain that the development is good and we do not want to be overrestrictive, but we have to protect both the public interest and the client's interest, as well as the corporation's interest, in that regard. So this program is available, but we are being careful and we do not want to be overrestrictive either.


John Douglas Reynolds: I have a rather long speech, Madam Chairman, but I think I will put my questions to the minister one at a time. They are very short. The first question involves interest on first mortgages. I have had a question on the order paper for a long time asking whether the government has figures as to cost if we were to allow people to deduct interest on their first mortgages from income before calculating taxes.


Barnett Jerome Danson: I am sorry, I have not seen the question. I do try to answer those questions as rapidly as possible. This would be more properly a question for the Minister of Finance. It is one of the options at which the minister responsible for housing must look at all times. There are obvious inequities and obvious benefits in the situation. We see it happening in other jurisdictions. All I can say is that I look at this as one of the options with less priority.


John Douglas Reynolds: My second question involves the 11 per cent federal sales tax. Again, I have had this question on the order paper for a long time. Can government officials figure out what it would cost the government of Canada if the 11 per cent sales tax was removed? The first and second questions involve the Minister of Finance, but I think this is important policy which should be looked into by the Minister of State for Urban Affairs. Whether or not he agrees with the policy-this is certainly the policy in other countries of the free western world-it is a matter that should be looked into. I wonder if the minister's officials have figured out how much it would cost the country to eliminate the 11 per cent sales tax.


Barnett Jerome Danson: On dwellings it would be somewhere in the area of $450 million to $500 million. Taking it off all building materials, the figure would be well in excess of $1 billion which would have to be compensated.


John Douglas Reynolds: My final question concerns the 1 per cent premium that is charged on total loans as mortgage insurance which is held in trust and managed by CMHC. I am wondering who that 1 per cent is benefiting. It benefits the mortgage lender, but he already has the mortgage on

the building in these days when the value of mortgages on homes has certainly not gone down. So we find we have well in excess of $300 million sitting in trust with CMHC. Since the consumer pays that 1 per cent, it would be a saving right off the top if the minister could eliminate it. The mortgage lender does not need the extra protection since he has the protection of the mortgage, and certainly there is no mortgage in this country that would not pay itself out.
My final point before the minister answers my questions is to congratulate him upon his appointment. I have been sitting here all day listening to the minister answer questions. I wish we had had the same type of co-operation yesterday from the Minister of Transport.


Barnett Jerome Danson: Madam Chairman, with reference to mortgage insurance, the 1 per cent charge has been a standard charge which, incidentally, applies to private insurers also. It is profitable for the corporation, but there are losses, I was surprised to hear that. This gives them a sense of security, and it also enables the lender to lower preferred rates. There are advantages that way, too. I might have more to say about this in relation to other matters and warranties at a future date-not too far in the future, I hope.


B. Keith Penner: I will recognize the hon. member for Surrey-White Rock, followed by the hon. member for Northumberland-Durham.


Benno Friesen: Madam Chairman, as the minister is aware, there are several questions that I have been discussing with him. One relates to factory relocation. The minister is aware of the issue in my riding of Surrey-White Rock. I should like to ask him what kind of funding is available under Bill C-27. What kind of budgetary allotment has been made in that bill?


Barnett Jerome Danson: There are no specific limits on funds. Of course, it has to be approved by the provinces and submitted to the federal government, but generally speaking we will fund a reasonable program. For the study it is 50-50; that is, 50 per cent between the federal government and the province and/or municipalities who have a great stake in it. Some provinces may accept that or may want to share it with the municipalities. It would vary depending on what costs the municipality had that were not directly related. There are no limits on it, depending on the scope of the program, but there is responsibility on both sides.


Benno Friesen: If we hurry this up we will have the department "danson" well. Maybe not barn dancing, but "danson". On this side of the House we are not very intellectual, so we will have to try harder.


Some hon. Members:: Hear, hear!


Mr. MacFarlane:: Honesty is always the best policy.


Benno Friesen: How would you know? Madam Chairman, there is another problem and that is the administration of CMHC. First, we are all aware that there are several regulations that are imperative if the low dividend program is to work. One is that there is a limitation on
October 24, 1974

lending; another is that it is supposed to be ascribed to low income families-and each of those words is operative in that term. Officially, there is supposed to be an affidavit of earnings given by the people who will make use of the program.
I recognize that it is difficult to police all the areas that are making use of this program. As a matter of fact, the chairman of CMHC in Vancouver, who is directing his attention to the limited dividend program, said the program is open to abuse by developers and that proper policing would take "an army of inspectors". I suggest this man has adopted the same attrition policy that the Minister of National Defence has been using.
I am concerned because I thought there was an oversight. I investigated on my own and found that the only question being asked was, "Do you have a family?" No question was asked about income. The only restriction was whether or not one had a family. If one had a family, there were no apartments available. And that was supposed to be for low income families. If one did not have a family, they had an apartment available right away, especially on the second and third floors because there were two and three-bedroom apartments there. I asked how this could be, if they were restricting families to the lower floors, and what did people with the two and three-bedroom apartments on the second and third floors do with them, and I was told that they could convert one room into a den. This is housing for low income families in Surrey, where there is a zero vacancy rate. People are waiting for two and three-bedroom apartments, and this sort of thing is going on.
At the time this situation was discovered the former minister said he would initiate an investigation. I recognize that the present minister was not the cause of this problem, but he has responsibility for it now. I should like to ask him whether that investigation has been conducted, and if it has, what was discovered? Then I have some more questions, Madam Chairman.


Barnett Jerome Danson: Madam Chairman, I understand an investigation has taken place in relation to rental property. I do not have the full details but I will be pleased to get them for the hon. member. In general, I share the concern that some of the limited dividend projects could be abused. We have a continuing screening and auditing procedure which we are watching very carefully. I know that Mr. Teron, president of CMHC, is also especially concerned. These things are being watched and there will be more regular review procedures on some of the programs we are entering into now. Because they are related to income, virtually all our programs are targeted at people who should not spend more than 22 per cent of their income on shelter. The rates under AHOP and other programs are set to accomplish this. We want to make sure that this provision is adhered to and as people move into different economic brackets there should be a regular review procedure.
It is as fair as possible, but I am sure there will be occasional abuses. When they are brought to our attention we will look into them. You cannot operate a program of $1 million or $114 million every year without some mistakes occuring. We will be vigilant, without developing a police force or a procedure that would be inappropriate in our country.
Estimates


Benno Friesen: Madam Chairman, I suggest that if we take the former minister's statement as accurate, we will find there are as many as 500 former CMHC officials now working in the private development sector. As a matter of fact, in the particular project that I visited, Imperial Park-side Freeholds Limited, the directors are Donald, Gerald and Ruby Gales. One of the leading appointments is a Mr. Zitzerman of Imperial Developments of Winnipeg, who was formerly with the law firm of the Liberal leader in Manitoba, Mr. Izzy Asper. Another company which this family has is Beacon Hill Lodges. Mr. William Hignett, formerly president of CMHC, is a member of the board of directors of Beacon Hill Lodges.
Madam Chairman, I wonder if the reason there has not been further investigation is the close relationship between CMHC and former members of CMHC who are working in the private sector. I would ask the minister to make a special effort to investigate this question. Maybe we can do something to solve the housing situation, particularly where the senior citizens are concerned.


Barnett Jerome Danson: Madam Chairman, I have not counted the number of people who came from the corporation, but I would say that as long as there is nothing improper, it is highly desirable that the expertise built up within the corporation is used in the private sector. By the same token, the expertise in the private sector comes into Central Mortgage and Housing Corporation. The best example of this is the president, Mr. Teron. I welcome the fluidity between the public and the private sector but, of course, if there is nothing wrong. Mr. Hignett, former president of CMHC, is now a consultant with the Ontario government on mortgage programs. This is a development we should welcome but, of course, if there is anything wrong it should be examined.


B. Keith Penner: Order, please. Before we go on to another department I should like to recognize the hon. member for Northumberland-Durham.


Mr. Lawrence:: Madam Chairman, I have one question for the minister. I apologize for taking him away from housing matters, but I think at least one question should be directed at some of the other duties of his portfolio. Before I, for one, give my consent to passage of his estimates I should like to have his views on the record. We are entering into what might be a new round of federal-provincial conferences respecting the constitution, and I should like to know the minister's views on the representation of urban areas at such conferences.


Barnett Jerome Danson: Madam Chairman, I am not quite sure how to answer that question. I am not trying to evade it. I believe this area is the prime responsibility of the Prime Minister. I pointed out in my opening remarks that I put emphasis on the division of responsibility, and certainly in dealings with the provinces under such circumstances the Prime Minister would take the urban impact into consideration. I wish I could give a better answer, but it is not my area of responsibility.
We cannot forget that the provinces, too, are involved; they have their area of jurisdiction to protect. Indeed, I

October 24, 1974
Estimates
should be presumptuous if I said anything without discussing it first with the provinces, with whom I work closely. Actually, I am almost late, in leaving for a meeting in Sudbury with the hon. member's former colleagues in the provincial cabinet. There is to be a trilevel meeting.
['Translation\


B. Keith Penner: It being five o'clock, it is my duty to interrupt the proceedings in accordance with an order made this day and to proceed with the consideration of the National Defence estimates.

These estimates are to be found on pages 15 and 16 of the bill.
On schedule A-Department of National Defence


Charles Joseph Clark: On a point of order, Madam Chairman, at what hour is consideration of the Department of National Defence estimates to end?


Mr. Lefebvre:: Madam Chairman, this is all included in the agreement announced by the President of the Privy Council.


Walter David Baker: On the same point of order, Madam Chairman, I understand that consideration of these estimates is to end at ten o'clock. Is that correct?


Thomas Lefebvre: Eleven o'clock.


Walter David Baker: I understood the National Defence estimates will be considered until ten o'clock tonight, after which the committee will consider the next item until the agreed time of adjournment. Is that correct?


Thomas Lefebvre: That is correct.


Mr. Richardson:: Madam Chairman, I welcome this opportunity to discuss the estimates of the Department of National Defence for 1974-75 and to discuss with members of the committee the outstanding service provided by the Canadian armed forces. It might be helpful if I outlined the over-all financial position for the current year now under review. I also want to share with members of the committee my thoughts about the financing of the defence program.
First, may I emphasize that in dollar terms the defence budget has not been cut. It has been increased substantially. The blue book of estimates will show that we were to spend this year, the year under consideration, $2,360 million, or some $144 million more than last year. That $144 million represents approximately the 7 per cent increase which was approved in the financing formula we started on last year.
In addition-this is even more significant-we expect before the end of this year to have approval from the government to spend another $140 million on top of that 7 per cent increase. This means that the defence budget for the current year will be more than one quarter of a billion dollars, almost $300 million, greater than last year. It must be evident, therefore, that the defence budget has not been cut.
We in National Defence are aware, as are all other departments and all citizens, that rapidly rising prices are a major problem. We saw, when planning early in the fiscal year, that if we had adopted the over-all program, if we had got everything we wanted, we would have been another $100 million over even an expanded budget, one that was up by more than a quarter of a billion dollars. In order to reduce expenditures and prevent that almost uncontrolled expansion of expenditure, we took the steps I shall describe.
Essentially, we reduced expenses in four areas. First, by natural attrition the strength of the force in numbers went from about 82,000 to about 79,000. Through that attrition process we achieved an expenditure saving of more than $50 million. Second, we made reductions in operations, that is, in areas such as fuel consumption and travel. The reduction in operations for the current year represents a saving of $12 million. Third, we stretched out the procurement process and in that way, while trying to maintain all essential capital requirements, cut expenditures by $23 million. Finally and fourthly, we took a hard look at the purchasing program. As hon. members know, we have a very big inventory. We found that by better inventory management, by not having more then we need on our shelves and by introducing a new system, we were actually able to save this year $13 million.
These figures add up to about $98 million, or approximately the $100 million by which we would have been over even an expanded budget if we had not taken these steps. These reduced expenditures have enabled us to stay within the budget, even though it is up almost $300 million. We have stayed within a budget which is not out of control and which is reasonable for the current year.
The strength of the force has declined, as I said, to 79,000 personnel. With that number we cannot expect to perform the same tasks as we could perform with a larger force. Therefore, it will be necessary for us to balance the tasks and commitments of the armed forces with the smaller numbers available to perform those tasks.
I now want to speak about the important work the Canadian armed forces have been asked to do by the government. I think that when we consider all these tasks and commitments we will realize that little we will discuss in this debate on the estimates is more important to the armed forces and to Canada than the issues involved in the four central tasks of the Canadian armed forces.
The first task, and the one to which we give the highest priority, is nothing less than the defence of our sovereignty, the maintenance of Canadian independence. I have spoken of this in some detail on other occasions and I do not intend to elaborate on it at this point. Everyone will agree that this role is vital.
The second task is to participate with the United States in the defence of North America. In this connection we think of the very important and close relationship we have with the great neighbour who shares this continent with us. This is a most important subject and one which really goes beyond the role of the forces themselves.
The third task of the armed forces is to work with our NATO partners to carry forward the concept of collective

October 24, 1974

security and to participate in the collective defence of the free world. When we conceive of our various relationships with Europe, can we think of another which is closer or more important than the fact that more than 5,000 members of the Canadian armed forces live in western Europe-their families are with them; their children go to school there? That is a link of measureless importance to our relationship with those countries.
The fourth great task is our new and vital role in trying to help achieve international stability, the role called peacekeeping, one in which Canada has demonstrated not only leadership moral but very practical leadership to the world. Those are our four great tasks, and when hon. members stop to think of them they will realize they are among the most important issues which can come before this committee.
I want to point out that when we are thinking about defence policy, when we are thinking of the taxpayers' money being spent on defence, there is very much more than the more apparent benefit to be considered. Indeed, the taxpayer gets double value for money spent on national defence-sometimes more than double value. There are other benefits; perhaps they could be described as hidden benefits, but they are nevertheless very real. I need hardly remind the committee of the great economic benefit which results from the payroll to communities directly affected. We only have to try to close, not a base but a small station somewhere and immediately we begin to hear about the great impact this would have on the economy of the region. We do not hear so much when everything is going along normally, but when we try to close a base we soon find out the benefit which it has brought to the community. But more important than the payroll or even the economic benefit is the benefit to industry which accrues from the expenditure of tax dollars for defence. I refer to the new technology which is being developed and to the jobs which are provided in advanced technology particularly in the electronics industry. This is of great significance to Canada.
There is yet another area, one which is not so well recognized by the public. A significant portion of the tax dollars used for defence are used to meet the cost of training. We in National Defence are the largest vocational training and educational institute in Canada. We have some 90 trades, and today there are literally tens of thousands of men and women in Canada who are doing better for themselves and for their country as a result of the training they received because we spent National Defence dollars on their training. This is a hidden benefit which should be remembered when considering defence expenditures.
I could go on to give a long list of other benefits which are sometimes overlooked, but I shall not go into detail. All hon. members are aware of our youth program, the cadets. They are aware of our work in opening the north, in establishing airports there. They know that we are involved in the protection of the environment, that we have a responsibility not only for identifying oil slicks but for clearing them up when they occur. For these tasks, we have both the expertise and the equipment.
Hon. members are aware of the support we are given- perhaps not as much as some who sit across the way would
Estimates
like-in identifying foreign vessels which have entered our fishing waters. These are all ways in which the defence dollar is spent for the benefit of Canada. Canadian forces are involved in assisting at major sporting events such as the PanAmerican Games and the Olympic Games. Then there are ceremonial events. Some of these go almost unnoticed, but they are wanted by the Canadian people. Search and rescue is another example.
I could go on to list other benefits Canada is receiving when we spend defence dollars. However, what I want to say is that the real question, the simple question facing us today in National Defence is this: how do we continue to perform those four important tasks and provide the other benefits I have described in days when the cost of everything we require is rising rapidly, and still manage to stay within a budget which does not reach uncontrolled limits?
There are some answers which will have to be considered by this committee and by my colleagues in cabinet. One answer is, of course, to provide a great deal more money. But there are limits. Important as it is that we should have more money, there are clearly limits in days when we want to restrain our expenditure. The answer of granting unlimited funds is not possible in today's world. The other thing to do is to balance our tasks with the tax dollars we can obtain.
Whatever amount of money we finally spend in the future, one thing is certain: we will have to change the ratio between our expenditures for personnel, operations and capital. We will have to increase the percentage spent for capital and new equipment and for operations. At the present time, as I believe most hon. members know, we are spending 67 per cent of our budget for pay and allowances, 22 per cent for operations and 11 per cent for new equipment.
If I may conclude very briefly, Madam Chairman, it is against this background that I believe the estimates should be considered this evening. I have simply tried to point out to the committee that the defence budget has not been cut in dollar terms, but substantially increased. The four central tasks of national defence are important to Canada and all of us here are involved. I look for hon. members' help in deciding what to do with these really big issues-big issues, not just for defence but for all of us in Canada. There are other benefits accruing to the taxpayer that must be considered.


Mr. McKinnon:: Madam Chairman, I should first like to say a word about the last two days in this House and the benefits of the committee of supply. I have been here for about two years and I have heard a great deal of discussion about the committee of supply and what a boon it was to the House in keeping the power of debate and decisionmaking within the House. I had never realized how much cabinet ministers are protected during the question period by the rules and customs applicable to that period. Last night was quite a change for ministers from the usual question period, with the routine of one question, two supplementaries and then a question from a different member to a different minister. I suggest that those who believe parliament to be the supreme authority in the land now realize more than ever just what the Liberals took

October 24, 1974
Estimates
away from parliament by the rule changes in 1968 which they enforced by the use of closure.
I listened with a great deal of interest to the presentation of the Minister of National Defence. Since I was not in the House on October 15, 1974, it was very gracious of the minister to repeat tonight what he said then. I was hoping that he was going to answer the important question that is before all Canadians now, and that is: can the armed forces cope with its current roles and tasks? There is a great divergence of opinion on this subject.
I knew the minister was going to say, before he said it, that he would increase expenditure on capital equipment.
I	do not want to say that the minister has deliberately misled the House or the nation. I did not say that he was doing it deliberately last October when he said that there was a 7 per cent increase in his budget, and that this annual increase would allow for a substantial increase in capital expenditure. I did not say that he was deliberately misleading the House the other day, when he said, "We will use the payroll which would have been used to pay someone not now a member of the armed forces to buy equipment." I do not know whether he was deliberately misleading the House when he said, "What we must aim at is an elite force made up of well equipped and well motivated personnel."
To illustrate my cynicism and the cynicism of the forces themselves to this kind of statement, I should like to go over a few previous statements by Liberal ministers in this regard. I quote from the white paper on defence of 1964:
The total savings to be effected as a result of such reductions will make available funds for capital equipment purchases, and eventually make possible more equitable distribution of the defence dollar between equipment and housekeeping costs.
Does that sound familiar, Madam Chairman? Again, a Liberal Minister of National Defence, on May 8, 1964 said:
This reduction ... will assist us in the difficult task of getting our defence expenditures back in balance. We must increase the proportion of funds available for new equipment if we are to have a viable and effective force in the years to come. The present proportion of about 14 per cent for equipment is unacceptably low and must be increased to something in the order of 25 per cent in the years ahead. Even this proportion is not high compared to other forces.
I think the minister said our present proportion is about
II	per cent, though I think he has "upped" it by about .8 per cent, according to the reference I have. Again, in July of 1964 a Liberal minister promised as follows:
We are going to make whatever savings we can in other areas, in logistics, training and area commands so we will have the maximum savings available for the purchase of new equipment for our armed forces.
Then in February, 1966, this was said by a Liberal cabinet minister:
Program changes had to go through the whole system and the amount of time consumed was so great that the project momentum was often lost and the initial Canadian advantage overtaken by development projects in other countries.
The classic example is the armoured personnel carrier, the Bobcat V.C.
Then he went on to say, believe it or not:
An example of the improved flexibility is in respect to the interesting development of a full scale prototype of an ocean-going hydrofoil vessel.

What an improvement! Then may I quote another authority, who in this House said in 1966:
We have heard statements emanating from the minister's office to the effect... that the savings to be derived from the new policy can be devoted to the acquisition, as the minister likes to put it, of military hardware. On the other hand, having listened to members of the opposition such as the hon. member for Calgary North-
That was the Hon. D. S. Harkness, a former minister.
-it becomes clear that the government has not in fact succeeded in diverting any of these rumoured savings into the acquisition of better and more modern weaponry.
I am of the opinion that the public relations efforts that went into this ... have been very expensive and I am not sure that this has not succeeded in giving the people of this country ... an entirely misleading and false impression of the reality of the situation. It seems that we are looking at a hoax of epic proportions because it does not appear possible that Canada's defence capability has been improved-
That was said by Mr. Ed Schreyer. The following quotation sounds exactly like the one in the statement of the minister tonight. This is what a former Liberal minister said in 1967:
One of the stated intentions of the savings that could be made was to use those savings for new equipment for the armed forces. No one regrets more than I do that last year we were not able to increase the amount of money being spent... I hope that there will be a very substantial improvement in the coming fiscal year-
A question was put on the order paper in October, 1967, by the hon. member for Brandon-Souris. He asked:
In view of the information revealed by an answer tabled in this House last Monday, which indicated that Canada's armed forces have suffered a reduction in personnel from 123,000 to 105,000 over the past three years, could the minister indicate whether this process of attrition is to continue indefinitely or whether there is an absolute floor; and if so, what that floor is?
This was the answer by the Hon. Leo Cadieux, the then minister of national defence:
This is a very broad question. I prefer to answer by saying I hope we can have adequate forces to meet our commitments.
Then on March 1, 1968, the same minister said this:
We have fixed the floor at 100,000 and I hope we can stay there. This is what I consider a minimum to meet the commitments that we have.
There has not been one commitment involving more than 300 to 400 men lifted from the armed forces from that day to this. Then, again, he said in June of 1969:
We have concluded that a regular force of 80,000 to 85,000 will be needed to meet Canada's defence requirements ... Basic to our planning was a firm decision to concentrate wherever possible, on reducing administrative and support activities, to provide us with a higher ratio of operational to non-operational forces than in the past.
Then on October 10, 1973, the present minister had this to say:
This annual increase will allow for substantial increases in capital expenditure, particularly for greatly needed new equipment.
After 10 years of Liberal ministers cutting back personnel and buying new equipment the minister last October found himself repeating the same old song, that at the present time National Defence is spending approximately 11 per cent of its budget for new equipment and facilities. He said that under the modernization and renewal program almost 20 per cent of the total budget would be spent for new equipment by the end of the 1970's. He now announces that this plan, which was supposed to last until
October 24, 1974

the end of the 70's, is now as dead as the dodo. The minister stated that the new formula would solve this problem which has plagued the department for so many years, that is, too low a percentage of the defence budget being used for capital equipment.
On October 15 of this year the minister said:
The only way we can improve the military capability and the conditions of the present members of the armed forces is to reduce the number of recruits taken in and put on the payroll. To state the equation in the simplest possible way-we are going to use the payroll that would have been used to pay someone not now a member of the armed forces to buy equipment and improve conditions for the people now in the armed forces.
It is no wonder the minister is unwittingly deceiving the people of Canada. The record is there. This is the same speech made once a year for about 10 years by Liberal ministers of national defence, yet the result has been exactly the same in every year. A person could look through the estimates here and spend hours talking about various items. Let me try to get two or three questions answered by the minister.
The present situation is, in my mind, so serious it has led to hitherto unheard of protests from senior serving officers. General Garton said the other day that we will have to reduce instruction and flying time. Admiral Boyle said that he cannot carry out our roles with fewer men and will need to cancel training exercises.
General Dextraze said in a news letter in September that he knew that rumours have been circulating to the effect that we are about to have our staff reduced again, but these rumours are untrue. It does not seem to me that the Chief of the Defence Staff would put his signature to such a statement to counter the rumour if he had not previously consulted with the Minister of National Defence. Will the minister tell us what consultation took place in September before the Chief of Defence Staff wrote that letter denying any cutback in personnel?


James Armstrong Richardson: Madam Chairman, I should first of all like to say to the hon. member for Victoria that in his recounting of the history of statements of past ministers of defence he has not really been stating the facts as they appear in the blue books. I would draw his attention to what we are studying, that is, pages 15-6 and 15-7 of the estimates, where he will see that the expenditures for capital equipment increased from $172 million in the year 1972-73, to $228 million in the year 1973-74, and up to $270 million for 1974-75, after the economies mentioned previously. This constitutes an increase of more than $100 million in that two year period.


An hon. Member:: What did you buy?


James Armstrong Richardson: We could give you the full list. We have been moving in the direction I have stated; in my judgment perhaps not moving as rapidly as we would like, but certainly moving in that direction.
I was looking at these figures when the hon. member referred to a statement by the chief of staff. I would appreciate it if the hon. member would ask the question again if he wishes me to comment on it.


Allan Bruce McKinnon: Madam Chairman, I hesitate to ask the question again because the minister has used up three or four of my allotted minutes not answering my question. I was curious to know whether there was any consultation
Estimates
between the Minister of National Defence and the Chief of the Defence Staff before he issued the statement in September denying the rumour that the forces were to be cut down.


James Armstrong Richardson: I assume that the hon. member is referring to the personal message the chief of staff wrote to the armed forces. He writes in a very personal way, and naturally what he says reflects conversations he has had with me. As I have said here in this House and in committee, I am in complete agreement with the chief of staff on the fact that if the number of personnel is to be reduced the tasks must be reduced, and that is what the chief of staff said in that letter.


Allan Bruce McKinnon: I take it there was consultation between the minister and the Chief of Defence Staff, and the minister agreed to the sending out of that message which gave the impression that the forces were not to be cut, yet the minister is telling us that there are defence cuts, and that the force is to be reduced by the process of attrition. The minister has put the Chief of the Defence Staff in an absolutely impossible situation. I do not know whether the minister believed, at the time he was consulting with the Chief of Defence Staff, that there were to be no cuts in personnel, but if he did he must then have been misled by somebody else, possibly the cabinet. I should like to have more detail on this if the minister can give it.


James Armstrong Richardson: There are two points involved here. First, at the time of that letter in September, the strength of the armed forces was at 79,000 and, secondly, that type of letter is not one in respect of which the chief of staff would consult with me regarding every sentence and paragraph. I will say, however, that he certainly has reflected the policy of the department as I have outlined it.


Allan Bruce McKinnon: Then I can only assume that the betrayal goes one level higher, and that the minister has been suffering under the delusion that he was going to get funds which the cabinet is not now willing to give. My time is just about up, and I would hate to sit down without trying to be a little more constructive about defence than one could possibly be in this milieu.
I have been getting more concerned each year about the way the money is going out from the minister's office and department, and particularly the small amount being apportioned to the purchase of equipment. What is really needed is for the minister to decide on a plan which is not based on dollars, because under this Liberal administration the dollar is the least reliable measure of any, with the value of the dollar going down each year. Anyone who suggests that last year the 7 per cent increase in the budget would look after things simply does not know the facts of life.
The minister must come up with a plan based on how big a force he wants, how he wants it armed and equipped, and then if it is based on five years he should say to his masters: "If you do not agree to this, fire me. If you do agree, don't welsh on it later".


Mr. Brewin:: Madam Speaker, there is in our view nothing sacrosanct about military spending as such. It is often

Defence who told us in plain words that this form of defence is no longer practical. I should like the minister to grasp the nettle now and, instead of being slightly evasive, frankly say that this form of defence is not good and we will not proceed with it. He should say that there will be some expenditures for the defence of our sovereignty, and he should mention what he believes is necessary so that we can examine that on its own merit, without pretending that it has something to do with NORAD.
So far as NORAD is concerned I think there would be a sigh of relief by the Canadian people if we showed the gumption to get out of something that has made no sense at any time, or at least not for the past ten years or so.
There is one other matter I should like to raise. I know others wish to speak and I shall therefore be brief. This subject was raised by my colleague, the hon. member for Nickel Belt, in a question a day or so ago. I want to ask the minister about a certain report. I have it from a magazine called Latin America of October 18, 1974, to the effect that a Canadian mission from the Department of Supply and Services and the Department of National Defence, headed by Colonel Basil Collett went, to Brazil in order to look over the purchase of an armoured car which would replace what I understand to be completely worn out armoured cars that we have now. I would like to know whether they want to do that and whether the figures are in the neighbourhood of $200 million or $300 million.
I should like to ask the minister whether he has consulted the Secretary of State for External Affairs on the impact of such a purchase. Is he aware that Brazil is governed by a military dictatorship, and that many other countries in South America would view such purchases with very grave apprehension? We cannot do these things in one department without taking account of what should be happening in another. I think that Canadians are aware of this because this magazine tells me that Colonel Collett was instructed to maintain a non military profile during his tour of Brazil. I do not know whether or not that is so, but there will be strong political opposition at home and among our NATO allied, as well as in South America, to this sort of purchase.
I hope that the minister will be able to tell us that that will not be the source. How are we going to pay for them? Will we pay bolstering up the present regime in Brazil with other military supplies? That is what Brazil's neighbours in South America feel. I ask the minister to tell us whether these facts are reasonably outlined. I can give him the name of the company with which we are supposed to be dealing, and I could give him more details if he is interested in seeing them. But I would like to hear how far we have proceeded toward this particular purchase, and I want to suggeest to him that it has political implications that should be examined before any such purchase is concluded.


James Armstrong Richardson: Madam Chairman, let me say in answer to the last question raised that this is just a matter of what we call sourcing, or finding the areas where we might be able to acquire the kind of equipment that we need, and to make comparisons with what is available in other countries. The negotiations in this respect are not
Estimates
far advanced, and are not at a stage at which it would be necessary for me to consult the Secretary of State for External Affairs.
Now, if I may, I should like to comment briefly on the earlier remarks of the hon. member for Greenwood because he has expressed his views to me very clearly a number of times on NORAD. I would like to suggest to him that we are not in as fixed a situation as he implies- we do make changes from time to time. We have closed down three radar stations this year that were part of the NORAD set up. We have reduced the number of our CF 100's to nine. We are certainly following closely the changes that the Americans are making in their reduction of interceptor aircraft. We are quite capable of making adjustments in NORAD. As I have said before, we do not have to make changes in the agreement because, as the hon. member knows, the NORAD agreement does not specify any equipment. I can assure him that we have an open mind, and we pay very careful attention to his views.


Mr. Kempling:: Madam Chairman, it is hardly worth while for me even to take a deep breath because it is almost six o'clock. I have some remarks that I would like to make through you to the minister and, after I make them I should like to put some questions to him as well. I think that at this time I will spin it out until six o'clock, if I may, because I do not think it is worth starting now and then trying to break off my remarks.
Generally speaking, I sympathize very much with the problem the minister has with his budget. I support a strong military force in this country, a well equipped and well trained military force, and I am in favour of seeing them have the best possible equipment. I hope that we will be able to maintain a force in the order of 90,000 to 100,000-not the much scaled down force we have now.
I am afraid that if this scaling down continues, as my colleague has illustrated for us, we will arrive at a point in time, five, six or ten years from today, when we will be looking at a force of perhaps 35,000 or 40,000. I recognize that there are people in this country who would like to see our armed forces reduced to nothing more than a national police force, but I am not one who supports that idea. So I can tell the minister that if he is in favour of improving the position of our armed forces, of equipping them adequately to do a proper job and of maintaining a good strong presence, then I will support him.
May I call it six o'clock.


B. Keith Penner: It being six o'clock I do now leave the chair until eight o'clock.
At six o'clock the committee took recess.


[Stage Direction]
AFTER RECESS

The committee resumed at 8 p.m.
Gérald Laniel: Order, please. When the House rose at six o'clock, the committee was considering Bill C-31, more specifically the votes for the Department of National Defence which appear on page 16 of the bill.

October 24, 1974
Estimates


William James Kempling: Mr. Chairman, I had just started my remarks about five minutes to six so I have some time left. I was saying to the minister, through you, that I am a very great supporter of the armed forces and I hope the plan for the future would be to increase their number rather than reduce it. I would like to see the level at 90,000 or 100,000, rather than see it cut to about 70,000 as is the suggestion now. If we keep changing ministers of national defence as we have done in the last few years, I suppose in a few years time we will see a different minister here telling us that we can get along with 50,000 but that they will be better fed, better clothed, better paid and they will still do the job we want.
I am very disturbed at the prospect of a cut in the armed forces, and I do not accept that we have actually increased the dollar amount of the defence budget. The fact is that its share of the GNP has gone down considerably between 1968 and 1974. In the 1968-69 budget it was allocated 16.4 per cent, and today it gets 11 per cent of the federal budget. Inflation is eating away our armed forces, and their equipment in particular in a very disastrous way.
In the last four or five years we have had four ministers of national defence and, as one of my colleagues mentioned already, each has come to us with the same story. I get pretty upset about the attitude toward the portfolio of national defence and its position in the cabinet. I am not one who likes to take personal shots at individuals but I feel that the national defence portfolio is a sort of catchall-a place where they drop people when they do not know where else to put them. This is the inference we have to draw in light of so many changes over the years.
Surely if there is a good minister in the portfolio they should leave him there and let him carry their plans through. We will have one minister who will expound a theory or lay down some procedure, and then another one will come along and say it cannot be done. This appears to be a sort of game, but a dangerous one.
If we should continue with the present defence policy I am afraid that in an emergency, national or international, we could not respond adequately. When I see that we have destroyers but no crews, that we have tanks that we cannibalize to keep other tanks going, that we have aircraft that we cannibalize for other aircraft, and obsolete motor vehicles procured in 1952, I must conclude that we are in pretty bad shape. My colleague says some of the motor vehicles could be sold as antiques, and perhaps if we keep them for another 20 years they could. The danger is that the longer we delay procurement the more it is going to cost. I am sure the minister realizes this.
When the minister says that we are going to cut this capital expenditure and that capital expenditure and thus will be able to cut $100 million or so out of our estimates, he is really saying that these aircraft, trucks, tanks and naval vessels that we are going to procure some time in the future will cost maybe 50 per cent more than they would today.
The other matter that concerns me is our northern sovereignty. I have read a great deal about this, and a lot of passionate words have been spoken on the subject. I have read the views of the United States. I wonder what is happening when I see that they have commissioned two of
[The Chairman.)
the largest icebreakers in the world, larger than anything afloat today even in Russia or Finland. These are certainly not going to be used in the Caribbean; they are going to be used in the Arctic. Do we have the capability of defending our northern sovereignty? I do not think so. I do not think we have either the equipment or the personnel to do very much about it.
I have about five minutes left, Mr. Chairman, and I should like to ask the minister a few short questions and I would appreciate short answers.
First, what have we done regarding the replacement of motor vehicles? Are we going to let contracts, have they been let, and for how many vehicles?


James Armstrong Richardson: Mr. Chairman, we have started to replace our vehicles, having purchased about 500 new trucks. We need many more. We are negotiating for the purchase of more than 2,000 114 ton trucks. Our truck procurement program is just starting and is not far advanced.
May I comment about the hon. member's statement. He said that the portfolio of national defence was a catch-all. I think those were his words. May I reply?


William James Kempling: I meant nothing personal.


James Armstrong Richardson: I realize that. Because many dedicated men and women serve in the armed forces, and because I am responsible for spending more than 10 per cent of the federal budget my portfolio is-and I am not saying this because I am the minister-one of the most important portfolios in the government. On behalf of the armed forces that should be recorded.


William James Kempling: I accept that. I did not mean anything personal. I made the observation because one minister comes in, lasts about 18 months, and is replaced by another, and so on. This, I think, is a downgrading of the armed forces. I made my comment in all sincerity, without wishing to make a personal comment about the minister himself.
I am concerned about the procurement program for the 114 ton vehicles, but I am also concerned about tracked vehicles. How are negotiations for these 1 !4 ton vehicles proceeding? How close are we to procurement? Where do we stand with regard to the tracked over-the-snow vehicle so desperately required in the north?


James Armstrong Richardson: Mr. Chairman, we have conducted negociations in both of these areas for many months, and those involving tracked and over-the-snow vehicles are close to completion. As soon as we resolve some money questions which, as you know, are under discussion, we hope to go ahead with both programs.


William James Kempling: Will the government procure these in 1975 or 1976? When will we have some of these vehicles in our possession?


James Armstrong Richardson: I hope to have them early in 1975. That is my intention.
October 24, 1974


William James Kempling: Mr. Chairman, does the Department of National Defence intend to expand the role of our armed forces in northern Canada? I am particularly concerned about the north in view of the remarks the minister made about the environment, roadbuilding, and our position in northern Canada. I assume that the plan to procure tracked vehicles is part of an over-all plan to increase our presence in northern Canada. Would the minister comment on that?
The minister spoke about cutting $100 million from our defence budget. Last week, according to Newsweek magazine, we lent $100 million to Iran. That country, in turn, bought from the United States tremendous quantities of military hardware. It spent almost twice as much as we spent on our national defence budget. The people of Canada would have been served better if we had not lent Iran $100 million at 7 per cent but kept the money for our defence budget. That was only a comment. Would the minister care to speak on the northern aspect I mentioned earlier?


James Armstrong Richardson: Mr. Chairman, as I said in the statement I made at the beginning of our examination of my estimates, one of the important roles for the Canadian armed forces is that of participating in the opening of the Canadian north. We are proceeding with what we call the new Viking program, under which 125 men go north, live, and work under northern conditions, and test equipment. Within the last year we opened the Arctic training centre at Churchill, Manitoba, and our forces will train there regularly from now onwards. May I mention that ships of the fleet sailed into Hudson Bay this summer for the first time on training exercises, demonstrating that Canada is not bounded by two oceans but by the three oceans. We are doing a number of things, as I have mentioned, to make our presence felt in the north, and this, I believe, will increase rather than diminish as we proceed.


Mr. Anderson:: Mr. Chairman, it is a great pleasure to address this august assembly for the first time.


Some hon. Members:: Hear, hear!


Hugh Alan Anderson: Defence policy has been much criticized in the past. People say that we spend too much, that we have not spent enough, that our forces are underequipped or they are overequipped, that we should increase our commitment to NORAD, and that we should get out of NORAD.
The minister said that in these inflationary times he will try to keep his budget within reason, because the government is committed to showing restraint in its dealings; otherwise, how can it expect the Canadian people to follow its example if it throws money away as if money were going out of style?
Let me reminisce about defence policy during the time when the Liberals were not in power. It interests me, because I was in the Royal Canadian Air Force at the time.


Some hon. Members:: Hear, hear!


Hugh Alan Anderson: During the period 1956-1962 we needed a new long-range patrol aircraft. Air Defence Command
Estimates
needed a new high performance aircraft. That new aircraft was on the drawing board. It was known as the Arrow.


Some hon. Members:: Oh, oh!


Hugh Alan Anderson: That piece of new equipment was killed deader than a dormouse by those who now sit across the floor from me. There was a need for new equipment then also.
The matter of personnel, discussed in great detail recently, also concerned us then. In 1962 three permanent commissions were granted in Air Defence Command- Mr.Chairman, that was three in all Canada! You may think morale is low now. Let me say that morale today is pretty good when compared with what it was during that period.
During that period people who had been trained as air crew were put on flying duties for a three year term and then transferred automatically to ground duties-this after many thousands of dollars had been spent on their training. That practice has now been changed.
Then again, during the last real crisis we experienced, the Cuban missile crisis, the airforce was using an aircraft the C101, which had been accepted from the United States to replace the Arrow. It was an aircraft in no way comparable to the Arrow. However, at that time we did not possess a single effective weapon in Canada. If bombers came over Canada there was no way of striking at them since National Defence policy had failed to provide us with the necessary weapons.
There has been talk regarding NORAD. Certain hon. members feel we should leave this organization and that Canada should not defend its territory. I say we have a duty to take part in the defence of Canadian sovereignty, regardless of the cost of that commitment. The theory appears to be that there is no menace from Russian aircraft at the present time. I would be happy to believe this if I saw evidence that the Russians were dismantling their bombing fleet, but since this is not the case, and since their bombers are carrying atomic weapons, I think there must be a threat from that direction.
It was not missiles which delivered the bombs in Korea or in Viet Nam; it was conventional bombers. For this reasons I shall support NORAD until I see that the other side is reducing its own force. It seems odd that we should have to stand here and defend our position. Why should we have to feel guilty about protecting our country? We think it is right, and that we have a duty to maintain these defences.
There has been some debate regarding our membership in NATO. I think that over the years NATO has been the deterrent which has kept Europe free.


Some hon. Members:: Tell the Prime Minister!


Hugh Alan Anderson: As long as I have some say in it we shall continue our present posture toward NATO.
With regard to our commitments as a peacekeeping force, I believe the world recognizes the contribution Canada has made. We are ih a special position as a nation
734

October 24, 1974
Estimates
whose forces can operate on the soil of other nations because we do not seek to increase our territory; we are not a warring nation. The respect which we enjoy among other countries in the world bodes well for Canada.
The primary objective of our defence policy must be the maintenance of Canadian sovereignty. There is no disagreement about that. As a nation of 22 million people we cannot compete with the United States or with the U.S.S.R. in defence research and multi-billion dollar defence projects. Modern armaments are expensive, and by the time new projects leave the drawing board they are obsolete. At the present time our defence posture requires new ships, new planes and other new military equipment, but we cannot get all these things at once, especially during a period of inflation when we must all show restraint. I support the position taken by the minister when he says we are trying to live within our budget and restrain our spending.


Francis Andrew Brewin: Would the hon. member answer a question?


Hugh Alan Anderson: By all means.


Francis Andrew Brewin: May I congratulate the hon. member who has just spoken, if this was his first speech in this chamber, as I understand it to have been. It was delivered with great capability. My question is this-


Allan Bruce McKinnon: Mr. Chairman, I hesitate to raise a point of order in the middle of a question by the hon. member for Greenwood. I do so because I was informed by the Chair that, having exhausted 20 minutes of my first opportunity to speak, I would not be allowed to take part in the debate again. I have no objection to the hon. member for Greenwood being allowed to ask a question, provided I am given a similar courtesy.


Gérald Laniel: The hon. member for Comox-Alberni took only about eight minutes of his time, after which he allowed a question. A question is normally allowed by the Chair in those circumstances.


Francis Andrew Brewin: I do not know if the hon. member was in the chamber when the question of NORAD was discussed this afternoon. I referred to a statement made by the Secretary of Defence Schlesinger which referred to the air defence conducted through NORAD-he did not actually use the word "NORAD"-and in that statement he said: "Because there is no defence against missiles, defence against manned bombers is not practicable". If the hon. member is not prepared to accept my advice-and I would not blame him for that-is he not prepared to give some weight to the words of the Secretary of Defence in the United States?


Hugh Alan Anderson: I am aware of that statement, but I am also aware of the fact that the United States has not dismantled its NORAD equipment. So I can only assume that the capability is still there. Then again, Mr. Schlesinger is but a person; I should like to have the opportunity

to question him about the point of view he has expressed. I should like to know the context in which he made that statement. What does the defence staff think of it? What do the joint chiefs of staff think about that opinion? At any rate they have not put it into practice. Until such time as that friendly nation, which is still carrying a tremendous stock of manned bombers, takes action to cut its fleet I think it is mandatory that we give our support to NORAD.


Allan Bruce McKinnon: Would the hon. member accept one more question? In the course of his speech he said that some people were complaining about the forces being over-equipped. Could he identify the people who made that particular claim?


Hugh Alan Anderson: The hon. member is quite correct. We have all recently emerged from an election campaign. This matter was raised in my area-some people were saying there is too much of this and too much of that. It is inevitable that people will take sides. I was referring, really, to the money we were spending. This particular point was not made here in this chamber but during the election campaign.


Mr. Nowlan:: Mr. Chairman, I appreciate the opportunity to participate in this debate, and I should like to tell the minister that I intend to express a few frank views about the situation in defence as I see it. Anything that I say is to the minister in his capacity as minister and in no way reflects on any personal friendship I had with the minister before my remarks, and I hope will have when I have finished my remarks.
In light of some of the things occurring today as well as some of the matters the minister has under study, I would say the situation is so serious that, even though I should like to ask a multiplicity of questions, as others have, this is not time to talk tamely but to talk frankly.
I was disappointed in the extreme that the minister, in presenting his estimates to this committee, gave an apologia, as he did also last time he presented his estimates, as well as in the statement he gave the committee a week or two ago. He sounded more like a stockbroker flipping coupons and juggling figures than a minister expressing the concern of all of those who have a sincere interest in the defence of this country.
He justified a saving of $100 million, and yet when we look at the LIP program some $90 million has been spent. No one suggests that the budget has been cut, but some budgets have been cut by the government in the last few years. The minister could have said some substantive things about defence when he dealt with the four priority tasks of our forces, but he got involved in this semantic debate about figures, taking $17 million here and $14 million there, and ending up with $100 million. If he wants to be Auditor General I think he should move on to other pastures and not confuse serious issues.
The issues are serious because we have had a defence freeze for four years. We have also had a galloping rate of inflation of 15 per cent in terms of service procurement, not 7 per cent which was the yardstick in the formula introduced last year. It is a futile exercise to talk about a
October 24, 1974

cut in the budget, because we know that due to inflation and the freeze the budget has been effectively cut. More important, the effectiveness of the forces has been substantially reduced.
In all kindness, Mr. Chairman, I say to the minister that the vacillation, not only of himself but of his four predecessors in the last five years, the indecision in leadership still evident in his department, and the retreats from decisions that have been made, have all compounded the problem, so that members of the forces of this land, be they private, corporal or general, are in a state of despair, bewilderment and downright depression, as has seldom been the case in peacetime history.
I say peacetime advisedly, because what a peace it is! For example, look at Cyprus. The minister knows more about Cyprus than I because he has been there. Then there is the Middle East. Those are two hot spots in the world that are tinder dry. Yet the Warsaw pact commitment is getting bigger and bigger every year, at a time when our stature as a component part of NATO is shrinking, as indeed is NATO itself. So one cannot describe conditions today ideally as peacetime conditions.
I am sure Confucius or Joseph Howe would have said that if a country cannot patrol or protect its own borders it will not survive as a state. As far as Canada is concerned, I think the capacity of the forces to patrol our borders, and protect the sovereignty of which we are all so proud, is somewhat limited.
Developing a Canadian identity through cultural programs using the broadcasting media are all to the good. Yet when it comes to being bosses of our own territory, a fundamental function of a sovereign state, I suggest we are missing out. By sovereignty, I mean sovereignty over our own borders and the three seas that surround us.
It is a strange paradox, and a sad commentary, that the cutbacks which the minister talked about, but which he did not define in terms of the four functions, are being made at a time when there is increased emphasis on sovereignty, be it in the Arctic, off our shores, both in connection with the fisheries and the 200 mile limit, or our responsibility to NATO to patrol certain sections of the North Atlantic.
The hon. member for Halton-Wentworth would be the last person to show any disrespect for the services, and quite frankly, I thought the minister was indulging in a little political partisanship by casting some reflection on the hon. member. He would be the first to admit, as I think the minister would also, that the peacetime serviceman, even in this sort of pseudo-peace we are in today, is the most maligned and misrepresented individual in the public service. The fact that there have been five ministers since 1968 in this important department, which the minister took pride in today, does not give members of the forces much opportunity to find out who their current minister is, so how can he defend the interests of servicemen and officers?
It is time that the Minister of National Defence did start to defend the forces and to fight for the forces, rather than being an apologist for a government that has no interest in the forces, does not care about the forces, and thinks in the abstract terms of the Prime Minister that some are bad,
Estimates
others are worse, so let us not get involved at all. This is not the kind of leadership that we deserve from a minister of national defence. The minister must become the advocate of the forces.
The minister should tell Canadians the way it is. There are problems in defence, and they should not all rest on the shoulders of the minister. Let him tell Canadians about our contribution to NATO. In the statement that the minister filed before the committee in 1973, he told Canadians that we are thirteenth out of fourteen nations in terms of gross national product contribution. The only country below Canada was, as most members know, Luxembourg, and it can hardly be counted because it has only one battalion which serves in Belgium. So we are really last. Is that the kind of commitment of which the Prime Minister is proud? How can he say, as he said in Brussels today, that Canada is proud to continue playing an important part in NATO, when our percentage support is the lowest on the totem pole? Let the minister tell Canadians that.
Let him also tell Canadians about our responsibilities in the north, about how our air patrols and numbers of men have been substantially cut back, and how the option is open to him to cut them back even further. Let me tell the minister that if one of the options that he is considering becomes reality, then I will do my darndest to make sure that either I leave the House or the minister does. Certainly one of us should go if the minister is serious about one of his options respecting the north.
There must be a presence if you want to have sovereignty. If the minister thinks you can cut back overflights for six months at a time without our presence in the area suffering, then he is more naive than I thought.
Let the minister tell Canadians about NATO. I am not talking just about forces in the north, because that is only one facet of defence. Tell Canadians that this night, and every night for the last month, our aircraft have not been flying as far out into the Atlantic, or as often as they used to do. In fact they are staying pretty close to home. The minister knows that cutbacks have affected Maritime command flights. He should start levelling with Canadians.
Someone recently talked about banana republics. I am sure I could compare the military budgets for 1972-73 of most of the banana republics of South America and would find that they spend more proportionately of their national production on defence than we do here. Tell Canadians what we are doing in respect of NATO. Why is this all shrouded in mystery and secrecy?
If Canadians are not prepared to pay the price of defence then the minister will have the understanding of this House. He cannot have things both ways. The minister cannot make statement after statement, as referred to by the hon. member for Victoria today, in the face of shifts, changes, retreats and reversals in our defence policy-and this has been going on since 1958,-with complete despondency and depression in the service.
The minister said that defence of North America is one of our priorities. One of the reasons we are not sharing and joining in exercises in the north with our American cous-
28305-471/!

October 24, 1974
Estimates
ins is because of cuts in finances. We can spend $2.5 billion on unemployment insurance and $750 million for consultants' reports, but now we have the minister taking the time of the House telling us what a grand fellow he is because he saved $100 million in the estimates today.
In all seriousness, some poeple in the forces are thinking today that this minister is a fraud if he pretends that we are fulfilling the minister's own four stated objectives.


An hon. Member:: You don't know what you are talking about.


John Patrick (Pat) Nowlan: I am not sure who said that but he should stand up. The minister may not have time to answer my questions as I will likely take up my entire 20 minutes, but let me repeat that the minister is a fraud if he stands in this House tonight and suggests we are presently discharging the four commitments to which he referred-and that was true even before any cutbacks.
There has been some reference to cutbacks to the extent of 30 per cent. Having relation to the four stated objectives, I should like to know where those cutbacks will take place. Surely this is the time for the minister to indicate what are the problems and what he considers should be done. He should let us know if we are going to get out of NATO, cut back on our sovereignty expenditures in the north, cut back on our peacekeeping role, or cut back on our Norad commitments. These are the things we should be hearing about here today rather than references to a savings of $100 million in the over-all defence spending.


An hon. Member:: What about Cyprus and the Middle East?


John Patrick (Pat) Nowlan: I suggest that the President of the Treasury Board knows more about Indians than he does about defence. In any event I have the floor at this time. I do not know how much he knows about Indians, but I think they have scalped him a couple of times.


An hon. Member:: Shame!


John Patrick (Pat) Nowlan: An hon. member shouts "shame". It may have been the hon. member for Vaudreville. He is ashamed everytime he speaks. The minister talks glibly about cutting back 30 per cent.


Mr. Herbert:: Mr. Chairman, I rise on a question of privilege. On a number of occasions I have had to correct members of the opposition. I did not at this time interject, but in any event the county is the county of Vaudreuil.


John Patrick (Pat) Nowlan: Mr. Chairman, I am not going to chase after muskrat tracks, I am going after something a little bigger.


Angus (Gus) MacFarlane: Mr. Chairman, we have heard some reference to the fact that this government does not care about the armed forces, and this affects me because I am in this government. I would have hon. members understand that there are many of us who have served, who care about the forces, and who will not accept that kind of criticism.


An hon. Member:: You have a lot to learn.


Walter David Baker: Take it to your caucus.


George Harris Hees: You are not a member of the government and the way you are carrying on you never will be, Buster.


B. Keith Penner: Order, please. I would suggest to the hon. member that what he is raising is an argument and not a question which relates to his own privilege or the privileges of this House.


John Patrick (Pat) Nowlan: Mr. Chairman, I do not have time to indulge in these frivolities and indiscretions of hon. members opposite. If they do not know the difference between the cabinet and a member of parliament they have a great deal to learn about political science. The hon. member for Hamilton Mountain is a very delightful gentleman, and I know that after he sits and listen to the contributions of various members he will realize that I am directing my remarks to the government and not to Liberal backbenchers, NDP backbenchers or Conservative backbenchers.
With all due respect his own Prime Minister called members of parliament nobodies.


An hon. Member:: And he isn't even a somebody.


John Patrick (Pat) Nowlan: In any event I will ignore these interventions tonight because I am not going to run through the swamp after muskrat tracks when I can go after the Minister of National Defence.
The minister and his officials talk about cutting back to the extent of 30 per cent. I should like to know how you cut back 30 per cent in respect of a foot soldier. Is he supposed to walk only one mile instead of three?


An hon. Member:: You cut off part of a leg.


John Patrick (Pat) Nowlan: That is about as naive as some of the things the department has done. Obviously when you have moving parts, as you do in the mobile or Maritime commands, you have extra costs for aviation fuel and the like. The minister says we are going to have a well fed, well equipped and well motivated Praetorian Guard. Incidentally, my latin is as good as my French, and my French is not too good.
Let me become serious, Mr. Chairman, as I know I am reaching the end of my time. How can you have such a guard when the forces have no purpose? They cannot have a purpose if the minister makes no commitment.
How can any member of the service, especially one in Maritime Command, believe that this minister has a commitment to the force when the largest single problem the minister has is in terms of the capital cost necessary to replace the LRPA? I will not get into that, but the command most affected by that replacement has never even seen the minister. Its members have never seen even his shadow. Since the hon. member became a minister of the Crown he has not taken it upon himself to get out of Ottawa to make an official visit to Maritime Command. Certainly that alone has not done much for Maritime Command.
Let me conclude by saying that we heard a great deal during the election campaign about leadership. The government received a mandate to lead. It is time the minister started to lead by making some decisions about the forces.
October 24, 1974

Perhaps before he makes those decisions it would be a good idea, both for the minister and the forces, if he moved around the country speaking to service clubs, explaining the problems and the limitations.
Perhaps I could refer to the Minister of Agriculture as an example. I have disagreed with him on many occasions and on many issue, but I respect his energy. He deserves some kudos for his commitments to farmers. I think it is time the Minister of National Defence took a leaf from that minister's book. He should become the spokesman for the armed services just as the egg monster has become the self-styled spokesman for the farmers. Perhaps then he would become known to the servicemen as the Minister of Defence, no longer dominated by his cabinet colleagues or restricted in his activities. Let him start now by meeting his men in the different commands. The minister has been all around the world, but he has not visited his own men in Maritime Command.
I do not know about Mobile Command or Air Transport Command, but Maritime Command, as the minister knows, is one of the biggest problems. It is obvious, because of its moving parts which are involved in the sea or air aspect, that that command is most concerned about the cutbacks in operations. I had intended to read a beautiful speech by Churchill given in 1938 about the annexation of Czechoslovakia but I am afraid that my time is just about up, Mr. Chairman.


Robert Lorne Stanfield: No.


John Patrick (Pat) Nowlan: All right. Then by popular request I shall read these words of Mr. Churchill spoken in th House of Commons in England on October 5, 1938. He was the first person who said that Neville Chamberlain came back with an unmitigated defeat. I want to read this seriously because of the problems the minister has and the narrow focus he has on these problems. We are getting close to the same situation.
In talking about Czechoslovakia Mr. Churchill said:
But we cannot consider the abandonment and ruin of Czechoslovakia in the light only of what happened only last month.
I stress that because it is not just a decision about the Argus that is involved; it is the over-all thing.
It is the most grievous consequence which we have yet experienced of what we have done and of what we have left undone in the last five years-five years of futile good intention, five years of eager search for the line of least resistance, five years of uninterrupted retreat of British power, five years of neglect of our air defences. Those are the features which I stand here to declare and which marked an improvident stewardship for which Great Britain and France have dearly to
pay-
That was in 1938. All I can say in closing, especially to my friends to the left, is that men have not died peacefully in their beds since civilization dawned. There has always been some type of war. Mr. Chairman, I want to say that we can get out of that situation, but we are not out of it and we will not get out of it by not protecting ourselves.


James Armstrong Richardson: Mr. Chairman, some of the remarks of the hon. member for Annapolis Valley do not require comment. However, it always comes as a surprise to me, and as a surprise for those of us who are working in the
Estimates
interests of the Canadian armed forces, to find that it is usually the members of the opposition who refer to the Canadian armed forces in the kind of language that I wrote down and which was used by the hon. member- downhearted, ill-equipped and with low morale. I do not know why they seem to want to degrade the Canadian armed forces in that way.


John Patrick (Pat) Nowlan: Visit them.


James Armstrong Richardson: I do visit the armed forces. I talk frequently with members of the forces and I do not find them downhearted. I find them dedicated. I find them highly professional, efficient and proud of the work they are doing for Canada. I think that if the hon. member for Annapolis Valley had been in the House earlier today he would have heard the importance which I attach to the roles played by the armed forces. I do not intend to repeat my statement now. However, may I say with your indulgence, Mr. Chairman, that if everything was as bad as the hon. member and other hon. members suggest in the past ten years-


John Patrick (Pat) Nowlan: I said since 1968.


James Armstrong Richardson: Mr. Chairman, I want to read not from an old paper but from something which appeared in an Ottawa paper this afternoon. This may be an indication of whether things are as bad as they are made out to be.


John Patrick (Pat) Nowlan: Who wrote it?


James Armstrong Richardson: The name is Robert P. Rothschild. He says:
There is no question but that the Canadian armed forces are about the best-trained and most professional military organizations in the world.


George Harris Hees: He is a general. He was one of your boys who is now retired. We used to call him the baron, Baron Rothschild.


James Armstrong Richardson: The last sentence I wish to read states: Their record of achievement has few, if any, equals. The Canadian people have every right to be, and should be, extremely proud of them.


John Patrick (Pat) Nowlan: On a point of order-


Some hon. Members:: Oh! Oh!


Gérald Laniel: Order, please. I believe the hon. member for Annapolis Valley wishes to raise a point of order, if hon. members will allow me to hear it.


John Patrick (Pat) Nowlan: Mr. Chairman, I must say I have been here ever since the debate started. I listened to the minister. So far as General Rothschild, who just retired from defence headquarters, is concerned, the reference to him accentuates my point. How many sergeants messes and corporals messes has the minister visited, and did he get out in the field?


Gérald Laniel: Order, please. The hon. member for Vancouver South.


Mr. Fraser:: Mr. Chairman, through you I should like to put some questions to the minister. The first question

October 24, 1974
Estimates
relates to the air-sea rescue squadron on the west coast, Squadron 442. A year ago I had occasion to ask the minister questions related to the difficulties that squadron was having in maintaining its equipment and keeping all its aircraft in the air for an optimum period of time. The questions I asked and the subsequent debate which took place made it clear-and I know there is no disagreement on this point-that there was no criticism of the squadron and that in fact the men operated as efficiently as possible.
As recorded at page 7213 of Hansard for October 25,1973, I asked the minister the following question:
Will the minister either replace these worn-out aircraft or increase the number available, and when will this be done?
The minister answered in part:
In the new modernization and renewal program that I have announced there are funds for new equipment which will be going into search and rescue, as well as into other areas.
Would the minister tell us exactly what has been done with regard to 442 Squadron further to the comment he made a year ago.


James Armstrong Richardson: Mr. Chairman, broadly speaking the equipment for search and rescue has been maintained and improved. I cannot bring forward the details at this moment to tell you exactly what equipment has been added to 442 Squadron.


John Allen Fraser: Mr. Chairman, may I ask the minister if he has any knowledge whether there has been any change in the basic equipment of Squadron 442 in the past year, or whether there has been any change in the procedure of supplying that squadron with replacement parts on a more efficient basis than was the case a year ago?
The minister understands that at the time the problem was to try to take spare parts from a base somewhere in central Canada to British Columbia, and there was a further difficulty in that civil aircraft flying into Comox did not have the capacity to carry many of the parts. Can the minister tell us whether he has any knowledge of any change in the basic equipment, or in the parts replacement system that was in effect at that time?


James Armstrong Richardson: I can understand the hon. member for Vancouver South being interested and concerned about the question of spare parts for the squadron in his region, and I will undertake to provide that information in detail. As I have said earlier, however, I cannot do it at this time.


John Allen Fraser: I thank the minister for his answer. I want to state unequivocally-because there are some members on the government side of the House who seem to think that any criticism coming from this side indicates lack of interest or respect for the armed forces of this country- that, as the minister may know, I served modestly in the armed forces of my country some years ago and I am extremely proud of it. Any comments I have to make are made because I think the armed forces in the country fulfill a very necessary function, and that we are served by dedicated men.

However, I am concerned when I find that cuts are taking place. Also, when I talk to people in the armed forces and we hear unfortunate descriptions of the situation, I find that that can only lead to low morale if it remains uncorrected. I may say to some hon. members who have spoken tonight that I served with the Canadian brigade in Germany in 1953, at which time the government said it was the finest and best equipped brigade that had ever left Canada.
This does not concern the minister, but that sort of statement was made at the time when we served in the infantry brigade in Germany, when we had no web belts and no steel helmets, we were short of munitions, and in fact could not have fought our way out of a wet paper bag because of a basic breakdown in supply and communications. Yet I remember, as a young soldier, the government telling me that it was a marvellous brigade. But I was there and saw things that the then minister of national defence, when he came to visit, never saw because he had no chance to look at men in the line, or to talk to the people who could have told him what was the trouble. So I urge the minister to be sure in all his travels to talk to everyone in the forces, and not just to those who may feel they have to be apologists for him.
I ask the minister to let us know exactly how many front line battalions are stationed presently in Canada. I believe there are nine infantry battalions, and I take it the minister agrees.


James Armstrong Richardson: That is the correct number.


John Allen Fraser: Can the minister tell me what is the strength of those battalions? If he cannot tell me the exact number of men, can he give me the approximate strength?


James Armstrong Richardson: A battalion is in the order of 600 to 700 men.


John Allen Fraser: Unless battalion strength has been changed drastically since I was in the forces, at which time a battalion at full strength was substantially more than that, is the minister saying that battalions are now running at around 500 or 600 men?


James Armstrong Richardson: I said 600 to 700 men.


John Allen Fraser: Is that the answer?


James Armstrong Richardson: That is the figure that I have used and understand to be substantially the right figure for the strength of our battalions at present.


John Allen Fraser: May I then ask the minister whether, from a military point of view, looking at what is a full strength battalion on the Canadian battle order, whether these battalions are under strength or up to strength?


James Armstrong Richardson: Compared with their wartime or fully authorized strength, they are undermanned.


John Allen Fraser: That is the point I am trying to make. I understand that in NATO we have 2,800 ground troops. I should like the minister to tell me how many of that number are actually front line combat troops. I am not talking about medical personnel or other support troops.
October 24, 1974	COMMONS DEBATES__________________________________________739
In other words, have we one full strength battalion that could go into action in Europe?


James Armstrong Richardson: I understand that the correct figure for the land troops in Europe is 3,000.


John Allen Fraser: Of the 3,000, how many are front line combat troops?


James Armstrong Richardson: All of the 3,000 are front line troops.


John Allen Fraser: Where else do we have front line combat troops-how many in Cyprus and how many in the Middle East?


James Armstrong Richardson: In Cyprus we have front line troops numbering 950. Our forces in the Middle East are involved in logistics and are not considered front line in the same sense.


John Allen Fraser: Doing some very rough arithmetic it seems to me that Canada is in a situation of having total front line combat troops numbering less than 11,000 or 12,000 men. I understand that this is less than a division. What I am asking the minister-and I am not asking this in a pejorative sense but in the hope that some support from this side may make it easier for the government in terms of public opinion and in terms of the government's own deliberations-is whether he is satisfied that on a budget of $2.5 million the best Canada can do is to put less than
10,000	men into the front line as combat troops? Is that good enough on that budget?


James Armstrong Richardson: It does not really help us to look at only one part of the Canadian armed forces and ask about our whole budget. The hon. member has not mentioned the air or the sea personnel, and yet part of the budget goes to them.


John Allen Fraser: I am quite aware of the other branches of the armed forces, and I am not trying to say that the budget does not cover them, but I am saying that our armed forces are consolidated. Is the minister satisfied that that is all we can do with that budget?
We have 22 million people, we have an annual budget of $24 million, and we have a total of 79,000 men in the armed forces. Is that good enough, and is the minister satisfied with that?


James Armstrong Richardson: I think we would never be satisfied if we only considered the sharp end unrelated to the support side. We want to increase the sharp end, and I believe this is what the hon. member is talking about. I know something of his background to which he referred, and also his active participation in the militia, and I think he has a good point. We should put as much emphasis as we can on the sharp end. However, we cannot get along without the support forces, and in coming to the conclusion that he may be trying to reach, he should give consideration to the equipment that is in use. This is something that I have tried to emphasize. Very clearly it is not just the numbers that should be considered, whether they are infantry or sea or air forces. It is not just the numbers that determine the military capability, but numbers with equipment. You
Estimates
have to measure numbers and equipment in order to assess military capability, which is the central objective.


John Allen Fraser: I could not agree more with the minister that one cannot measure military capability only in terms of numbers. My colleague says that our front line troops number about 10,000. I assume that when the minister refers to those troops he means troops with equipment and with back up. My question is: how much lower can the armed forces decrease before the land component of the Canadian armed forces reaches militarily a negligible number of men? Can we sink any lower?


James Armstrong Richardson: Mr. Chairman, this is the issue we are facing. We have our commitments in Canada for internal security; we have our commitments to NATO of 5,000 men; we have our commitment for peacekeeping, and we have to achieve a rotation of those personnel. There have to be training programs. The hon. member is correct. We have reached the level where it is difficult for us to carry out all the tasks we are required to undertake. The forces are double tasked and in some cases, triple tasked in order to carry out the duties expected of them.


John Allen Fraser: I thank the minister for his answer, and I think we have got to the heart of the matter. I hope he will remind his colleagues tomorrow that he has support on this side of the House for the difficulty he is in, and he has a lot of support from the public. I might just end my remarks by reminding the House of a verse quoted back at the time of the Napoleonic wars, Mr. Chairman. It goes like this:
God and the soldier we alike adore
In times of danger-not before
The danger gone-and all things righted
God is forgotten, the soldier slighted.


Stuart Malcolm Leggatt: Mr. Chairman, I am going to participate in this debate a little late, and so I am sure a good deal of what I wanted to say has already been said, but I should like to ask the minister to clarify something.
On page 15-18 of the estimates in the section headed "Contribution to NATO Collective Defence Measures", a rough addition of the figures produces something under $1 billion for capital expenditure. This would presumably be hardware of various kinds, ships, etc. May I ask the minister if this is a budgetary item or a phased purchase program which has been hidden in the $2.36 billion total defence budget, or should I consider that item, something over $800 million, to be part of the total $2.36 billion defence budget for this year?


James Armstrong Richardson: Mr. Chairman, I believe the hon. member is looking at the first column on page 15-18 headed "Currently Estimated Total Cost", rather than the actual estimates, but I would have to get clarification from him before I fully understand his point.


Stuart Malcolm Leggatt: Mr. Chairman, it is a case of straightening it out in my own mind. Page 15-18 of the estimates deals with capital expenditures, and under the heading "Contribution to NATO Collective Defence Measures" in the column "Currently Estimated Total Cost" the total comes

October 24, 1974
Estimates
to over $800 million. I should like to ask the minister whether that is a budgetary estimate for a year, or are we talking about a phased projects program in terms of capital expenditure in the NATO program?


James Armstrong Richardson: Mr. Chairman, if I understand the hon. member's question correctly, I would say it is a phased program. The first column gives the total that we intend to spend over a number of years; the second column indicates what has been spent up to March 31, 1974, on that program; the third column shows how much we expect to spend on that program this year, and the fourth column shows what we have still to spend in future years.


Stuart Malcolm Leggatt: Thank you, Mr. Chairman, that clarifies the matter. I have heard a considerable amount of debate about whether we should leave this budget as is, Mr. Chairman. It has been an interesting debate because my friends in the Conservative Party have reacted fairly predictably. When we talk about public expenditures there is a tremendous hue and cry, but when we get to the subject of defence they say we are not spending enough money.
If we want to save the taxpayers' money this is the place to do it. I congratulate the government on having gone part way by reducing some of these expenditures. If it would really like to save money, however, it could start with the contribution this country makes to the NATO defence alliance and the 5,200 troops committed to that alliance. If we were to bring the troops home and withdraw that $800 million capital expenditure it would save my constituents a pretty significant amount of money which could go a long way toward increasing pensions and improving social services.
The usefulness of NATO to this country is over, Mr. Chairman, and it is time that this House entered into a serious debate on that subject, instead of a debate about the Sherman tank we are about to purchase.


Eldon Mattison Woolliams: Ramsey MacDonald talked like that and they all nearly lost their lives.


Stuart Malcolm Leggatt: In reply to the hon. member for Annapolis Valley who suggested that World Federalists were just dreamers, Mr. Chairman, I must say that if we do not start dreaming about world federalism and world order, this kind of debate we are having is pretty futile. We will not have a world.
I should like to commend the government on the contribution the Canadian armed forces have made to the cause of world peace. I think it is time we honoured those men who died in the cause of peace both in the Middle East and on Cyprus, while performing a very difficult role. I hope on Remembrance Day some special tribute will be paid to the soldiers who have the difficult job of being unprotected from both sides in a war. We should pay them the honour that is their due, especially those men who died in the service of world peace.
The hon. member for Esquimalt-Saanich raised the matter of the Law of the Sea Conference and I should like to ask the minister a question on that subject. It is very likely that this conference will result in at least a 200 mile limit, plus the continental shelf. That could be a difficult

problem for this country, Mr. Chairman, because we will have to patrol that area. May I ask the minister what plans there are for patrolling the 200 mile limit off the coast of British Columbia? Our naval equipment is probably inadequate, and possibly the wrong type to service a very large area.


James Armstrong Richardson: I thank the hon. member for New Westminster for referring to the greatest cost of our peacekeeping. I have said this before. Our greatest loss is the loss of life and the number of men who have been wounded in peacekeeping service. I felt that strongly when I attended the funeral of Private Berger in Rimouski. I will be in Lahr, Germany, on Armistice Day, and I will recall there the sentiments which have been expressed here tonight.
Concerning the Law of the Sea Conference, we know that a final decision has not been made. The next conference is ahead of us, and we are preparing to do what we can to implement any new understandings and protect Canadian Interests within the limits finally determined at that conference.


Stuart Malcolm Leggatt: My last point concerns the approximate $54 million being spent on defence research. We should examine the effects of grants given for defence research. When you develop a defence industry which depends on these grants, and admittedly in Canada the risk is small at present, you can run into the sort of thing which happened with the Arrow in Toronto. That aircraft was developed directly because a military-industrial complex was in existence. We know the agony of the decision to scrap the aircraft.
Let me ask the minister if some of that $54 million which is used for defence research has been responsible for a device known as the sound disorientation device. It is used in the interrogation of prisoners, and is now being used in northern Ireland. Is my information accurate? Are our defence research people making this kind of device, which can be classified as a device of military intelligence rather than military hardware.


James Armstrong Richardson: Mr. Chairman, I have no knowledge of that device. I can confirm the hon. member's figures. We spend about $4.5 million on grants to industry and $3 million to universities. That is part of the total of $54 million which we spend on defence research. The remainder is used to operate our own defence research establishments.


Stuart Malcolm Leggatt: Mr. Chairman, we spend $54 million on defence research but not a penny on peace research. Some organizations in this country do effective and useful work in determining the real causes of war, instead of rattling sabres as some of our friends do. I suggest that we should consider seriously giving grants to organizations which do research into the historical causes of war. If you want to spend money effectively, that would be a good start. Most countries of northern Europe spend money on peace research. It would be a useful change if we spent money on peace instead of on war.


A. Daniel McKenzie: Mr. Chairman, the Minister of National Defence commented about an article in this evening's
October 24, 1974

Ottawa Journal by Robert P. Rothschild. May I continue quoting from that same article:
The sad fact is that they are almost reduced to skin and bones. Muscle in the form of modern equipment is lacking. Increased costs and inflation have meant that there is an ever-decreasing portion of the defence budget that can be devoted to new equipment.
Reducing the strength of the forces without cutting out complete commitments will only mean that they will not be able to carry out their tasks properly. This will inevitably breed frustration with a consequent lowering of morale in all ranks, no matter how well paid the serviceman will be-
-government spending is on the increase. The percentage allotted to national defence is on the decrease. One can hardly escape the feeling that the government does not believe in its own announced defence policy.
Last week I asked if the money for overhauling the Boeing 707 at Winnipeg would be allotted under CAE. As the fund is not mentioned in the estimates, will the minister seek the fund next year? Will these funds come under the defence budget, or will the minister apply to Treasury Board?


James Armstrong Richardson: Mr. Chairman, these funds have been approved by Treasury Board. Of course they were not approved when these estimates were prepared. The figures only appear in the estimates after they have been approved by Treasury Board.


A. Daniel McKenzie: Mr. Chairman, some months ago the minister said that his department would go into partnership with Air Canada for transporting military personnel. Has that procedure begun?


James Armstrong Richardson: Mr. Chairman, I understand we have not entered into charter arrangements with Air Canada.


A. Daniel McKenzie: Is the department planning to enter into an agreement with Air Canada? The minister made a public announcement on that. May I bring to the minister's attention a brief presented to the government in February, 1972, by the Air Transport Association of Canada about the commercial-military partnership which would conduct air transport operations? Even if the minister faces some difficulties, would he consider reviewing that document again and consulting those people about transporting troops and cargo? Also, can the minister explain what his department's relationship will be with Air Canada?


James Armstrong Richardson: Mr. Chairman, we have discussed contingency plans with Air Canada but we have not entered into any contract for the carriage of our personnel or supplies. From time to time we make use of commercial airlines, but we have no contractual arrangement on a regular basis.


A. Daniel McKenzie: One further question. Does the Department of National Defence have a program to translate all existing technical documents, training and instructional documents, and schematic drawings into the French language? If there is such a program, may we have a description of what is involved?
Estimates


James Armstrong Richardson: That is a very long-term program. We are implementing the B and B policy in the department but the program to which the hon. member referred is not actively under way at the present time. It is long term.


A. Daniel McKenzie: Does the minister have any idea what the overall cost will be for Canada? Will these documents be translated in each province, in each depot, and also in our overseas bases?


James Armstrong Richardson: I am certain that the figure for the whole of Canada has not been determined. It has not been determined by us.


A. Daniel McKenzie: Is there any sum included in the estimates this year to provide for translation services? How far back will the department be going in its translation procedure? Will the department be ordering bilingual documents in connection with any new equipment that is required?


James Armstrong Richardson: There is provision in the estimates for the translating of manuals and of information relating to new equipment.


John Wise: Mr. Chairman, I welcome the opportunity to participate in the proceedings today, an opportunity which allows us to make comments and pass judgment on departmental activities, or perhaps, more appropriately, inactivities and expenditures within the Department of National Defence.
The main thrust of concern, care and criticism dealt with has been, and no doubt will continue to be the very obvious attempts by the government to reduce the priority of the National Defence Department in relation to other government departments.
Last weekend I had the pleasure of attending a portion of the annual conference, held in St. Thomas, of District A, Royal Canadian Legion. This conference was attended by over 300 delegates representing the many legion branches in southwestern Ontario.
Countless numbers of members expressed concern, disgust, disappointment and disapproval over recent announcements by the government with respect to present and future programs. This group of highly distinguished citizens expresses a well qualified view that must not go unheard. It is a view for which I have the highest respect and regard, and theirs is a concern that I share.
Let me cite in part a resolution presented and passed at that conference. It reads as follows:
Canada has not the military strength to live up to her present commitments. We of the Legion advocate the maintenance of defence on sea-land-air by virtue of our partnership in the commonwealth, the United Nations and NATO. We strongly object to the cut in Canada's armed forces strength.
This statement accurately reflects the mood of that segment of our society, and no doubt reflects the mood of a great number of Canadians.
Now, Mr. Chairman, having expressed the views of a segment of our society to which we owe a tremendous amount of gratitude, indeed for our whole freedom and democratic way of life, I want to turn to another group of people who are close to the beginning of their lifespan, and
742

October 24, 1974
Estimates
upon whose shoulders our future and Canada's future rests. I refer to the youth of Canada. It has often been said, and rightly so, that the most valuable of all resources in our country is our youth.
I will deal, in particular, with the air cadet league of Canada, without a doubt a most neglected group, whose extreme misfortune it is to be placed at the mercy of a defence department that does so little and appears to be planning to do even less for such a worthwhile sector of our Canadian society.
I am in receipt of a recent letter from Mr. Art Jordon, general manager of the St. Thomas YMCA, and the commanding officer of an air cadet squadron. Some of his remarks are pertinent to this debate. He says:
Your are aware that for the past 11 years our YMCA together with the Air Cadet League of Canada, and the Department of National Defence has sponsored an air cadet squadron in St. Thomas.
It has been and we believe still can be a potent force for good among our young citizens.
Unfortunately, in recent years, about the last three to be exact, we have detected what appears to be diminishing interest in cadets by the Department of National Defence. Promises have been made regarding new training aids, films, uniforms, and the support of girl cadets, yet nothing has happened.
We can readily understand the need to curtail expenses at the government level, but seriously question these curtailments being made at the expense of a program that has proven its value over many years.
Some of our squadron's accomplishments are as follows: 27 private pilots, three glider pilots, 14 senior leaders, three athletic leaders, seven to military college, five to police forces, and 19 to regular armed forces. No less than 1,011 different individuals have served one year or more in the squadron.
This record of service can no doubt be multiplied many times across our country.
It is difficult to believe that we are still attempting to outfit the young people in World War II uniforms and using training aids such as ancient .303 rifles with .22 bores.
Our board of directors want to continue this program but if the senior partner, the Department of National Defence, does not soon take some steps to modernize its part of the operation, then there will not be any way we will be able to continue to interest the young men and women who could well be our leaders of the future.
Some of these criticisms require elaboration. Anyone who has seen an air cadet squadron, a navy or army cadet squadron on recent parade could not help but be aware of the deplorable condition of the cadet uniforms. At this time the cadets are wearing the old blue uniforms, many of them are shabby and most of them ill-fitting.
One can easily imagine the difficulty of trying to recruit young people into an air cadet squadron when candidates see the members trooping around in a finely disciplined manner, yet dressed like refugees from a Sad Sack comic strip.
Poor as they are, the supply of these blue uniforms is running out and there is no existing contract to produce more. So the discouraging problems of dress worsen year by year until, I suppose, cadets are left with no working military uniform at all.
The Department of National Defence must take responsibility for outfitting these cadets in a more reasonable manner. Past promises in this regard have not been kept, so one tends to be suspicious of promises made now or in the future. What is required is action, and the sooner the better, before it is too late.

Let me be more specific. A trial uniform, similar to the one used by the permanent force, came out in 1971. Each cadet squadron was given one new green uniform on a trial basis. However, by the end of the 1972 cadet year it was decided by the Department of National Defence that the cost of this clothing was too great and that a cheaper model had to be found.
After more vacillation, a new uniform concept was presented two years later, in May of 1974, at Montebello. Present was Captain N. McPhee, director of cadets, and representatives of cadet organizations from each province. The tone of the meeting was that although the uniform could have been much better, it should be produced immediately in any case, due to the fact that it was so badly needed. The Defence Department said it could not provide the new uniform for at least another year. Now the thinking appears to be that no new uniform will be available before 1977 or 1978. There have been rumblings in fact that the uniform may not even be acceptable to the Department of National Defence after all, and that still another will have to be found.
It has also come to my attention that rank badges are not available and that they are no longer being made. One commanding officer of a cadet squadron here in the capital city of Ottawa told me that if there were many more officer and NCO changes, rank badges would soon have to be made from odd cloth or scraps of material that might be available. If this is the state of cadets and their uniforms in Ontario, where cadets are considered relatively well off, I do not know what must be happening in some of the less fortunate areas of the western provinces and the maritimes.
Another contentious issue is that concerning girl cadets. I should like to take the opportunity of enumerating some of the problems encountered by these girls, because they are not officially recognized by the Department of National Defence. They have no uniform whatever, unless the squadron not only designs one of its own but is successful in persuading an already overtaxed sponsor to pay for it.
If new uniforms could eventually be produced, will there be one suitable for girls as well? Undoubtedly this will bring about longer delay and will probably result in more expense. The minister must be aware of this. More important, he must be prepared to do something about it.
I have a number of items that I wished to comment on, but in view of the time I shall conclude by saying that I trust the Minister of National Defence and his department will give serious consideration to rethinking their position regarding young cadets in Canada.


James Armstrong Richardson: Mr. Chairman, I should like to thank the hon. member for Elgin for his remarks, and particularly for bringing the views of the Legion concerning national defence policy to the floor of the House. With regard to girl cadets I draw his attention to the order paper. If he would look at today's order paper, on page 6, item No. 16 is an act to amend certain statutes to provide equality of status thereunder for male and female persons. Perhaps he has read the bill. It gives official recognition to girl cadets.
October 24, 1974


Mr. MacKay:: Mr. Chairman, I should like to pursue a line of questioning initiated in part by the hon. member for Vancouver South. How many operational tanks are available to the armed forces in Canada?


James Armstrong Richardson: From memory, Mr. Chairman, a total of 72 Centurions. I believe there are 32 that are operational in Europe, the balance are in Gagetown. There is a total number in Europe of 51; of that number that are operational, I believe my figure of 32 is correct.


Elmer MacIntosh MacKay: With all respect to the minister, I have been informed that in Wainwright, Alberta, there are about 60 Centurion tanks, housed in hangars, which have been largely cannibalized but which could usefully perhaps, through a program like the Israelis use called Retrofit, be restored to first class fighting machines for considerably less money than it costs to buy a new modern battle tank. Can the minister say how much it would cost to refit one of these Centurion tanks to put it in the kind of condition that the armed forces of Israel have been refitting their tanks to with great success-tanks of American, German and Russian design?


James Armstrong Richardson: The Retrofit that the Israelis have undertaken is, I believe, on the Mark XI Centurions, which is a newer model than the one to which the hon. member referred. Although there may be a possibility of refitting them, I think that is very unlikely. The hon. member should identify the date of the tank and its age, before suggesting that we could do the same thing with older tanks as is done with newer models.


Elmer MacIntosh MacKay: With respect, Mr. Chairman, I put it to the minister that he is the one who should be able to date these tanks that are available to the armed forces of the country. I ask him what vintage are these tanks? Are they the same that the minister of national defence for Australia, Mr. L. H. Barnard, referred to in his very interesting speech in April of this year, which is reported in the Australian Foreign Affairs Record? Are they the same type as the type that the Australians are finding obsolete, or are they still older models than the ones referred to by the Australian defence minister?


James Armstrong Richardson: I believe the hon. member is referring to the Mark V tank, which is much older than the Mark XI, the Centurion tank we are using in Europe.


Elmer MacIntosh MacKay: I put it to the minister that if we have a tank that is older than a newer tank that the Australians have found to be obsolete, then why is it that a country with half of our population but with substantially larger armed forces is increasing its military budget substantially and we are not matching them? They find it necessary to replace tanks and long range patrol aircraft, while we are still muddling along with equipment that is older and more obsolete than theirs. What is the reason for this?


James Armstrong Richardson: I have talked with the minister of defence for Australia, Mr. Barnard, and I know we are well ahead of Australia in terms of replacement of long range patrol aircraft.


Elmer MacIntosh MacKay: That we are well ahead of Australia is certainly a revelation. Is it not true that we are still
Estimates
seriously considering replacing the Argus with 707s, which are nothing but converted passenger airliners but without the low level surveillance capability of the Argus?
Speaking of the Argus, I am informed by Canadair, manufacturer of the Argus, that the useful life of these aircraft, which is 20,000 hours, has not yet been reached. I remind the minister that these large and heavy aircraft have been flown for some of their operational hours under very heavy operational conditions, 200 feet over the Atlantic in bad weather. A couple of years ago these aircraft were showing signs of metal fatigue and they had to be grounded for a while. In view of the fact that it was only superb flying skill on the part of our air crew that got us by with the loss of only one aircraft, is it not time that we decided what we were going to do in this regard?
Again I draw a parallel with the Australian situation. They are talking of replacing their aircraft, which I think is the Orion. The minister says we are ahead of Australia in the replacement of equipment of this sort, but just how far ahead are we? How can we be when there has still been no decision from the government about replacing the Argus?


James Armstrong Richardson: The Australians have not, to my knowledge, made any purchases. When I spoke with them over a year ago our studies were well advanced, and they were interested in learning from us, from our knowledge and studies of long range patrol aircraft. We were ahead of them in our investigations. As hon. members know, we have entered into the contract definition phase with Lockheed and with Boeing, and that program is on schedule. We will be reaching the end of this phase in the spring of 1975.


Allan Bruce McKinnon: Mr. Chairman, I am sure the Minister of National Defence would not want to mislead the House intentionally. It is my understanding that according to "The Military Balance" in 1973-74 they had one NR squadron with 10 P-3B Orions and 1 MR squadron with 12 SP-2H Neptune. I certainly think he must have been misinformed as it is unthinkable that the International Institute for Strategic Studies had been misinformed.


James Armstrong Richardson: There is certainly no intent on our part to mislead one another. I am simply aware of the conversations I had, and I know that the Australians were, as we were also, considering the Boeing as one of the aircraft they might use for long range patrol aircraft. I do not believe they have made a purchase. The figures that you have referred to are, no doubt, in reference to the aircraft with which they were already equipped.


Elmer MacIntosh MacKay: Mr. Chairman, I realize that there is not much time left. I should like to leave a little time for the hon. member for Victoria, and I know the House leader of the NDP would like a few moments, but I should like to conclude with one brief comment. It seems to me, from what the minister has said about the decision making process involving the replacement of our LRPA service, that this is engaging in a decision to make a decision to make a decision. I would hope that very soon, in view of the increasing inflationary pressures and the obvious need
28305-48'/j

October 24, 1974
Estimates
for some decisions to be made quickly, the minister will get on with this job.
I should also like to state to the minister that I am disappointed, if I can rely on statistics I have been able to obtain, that our defence budget as a percentage of our total federal budget has been steadily decreasing from 16.4 per cent in 1968-69 down through various stages until it is now 11 per cent, and as a percentage of our gross national product from 2.4 per cent in 1968 to 1.8 per cent at this time. This, coupled with increasing military costs, makes the situation very serious. I am sure the minister will find that the people of Canada in general, and the members of Her Majesty's Loyal Opposition in particular, will support him in trying to get more funds for the vital task of defending our country.
I would remind the minister that there is no point in vacillating, and I would ask him to consider seriously the idea of leasing some heavy hardware and exploring the cost of amortizing the same. We have to equip our troops with proper armament or, in my opinion, we will be doing them and our country a great disservice.


James Armstrong Richardson: Mr. Chairman, I would simply like to thank the hon. member for his support for a larger budget, and for his suggestions.


Stanley Howard Knowles: Mr. Chairman, I shall take only two or three minutes. One of the pieces of legislation which the Minister of National Defence administers is the Canadian Forces Superannuation Act. This is the act under which long-service members of the armed forces receive their pensions. It is similar to the Public Service Superannuation Act, although there are some differences. Another act which is almost parallel to the Canadian Armed Forces Superannuation Act is the RCMP Superannuation Act.
I am not going to launch into a discussion of the various things that might be at fault in the armed forces pension legislation, but there is one point that is very annoying to many retired servicemen. It has to do with the annual escalation of pensions which applies to retired public servants, retired members of the RCMP, and retired armed forces personnel. There is a stipulation that, no matter what one's age when he retires, he cannot draw the escalation until he reaches age 60.
There is a slight qualification in that if one is 55 years of age or over and has 30 years of service he can qualify right away. As the lower ranks have pointed out, this favours those in the higher ranks and discriminates against those in the lower ranks, because those in the lower ranks are forced to retire early.
This is a broad subject and I know that one superannuation plan cannot get out of step with another, but I implore the Minister of National Defence to lock arms with his colleague, the Solicitor General, who is responsible for the RCMP, and for the two of them to have a conference with the President of the Treasury Board. He is new, and this is a good time for him to do something worthwhile. This is a good time for him to make the necessary adjustments so that when servicemen and RCMP personnel are retired in the normal course they might draw their annual escalation without having to wait until age 60. May I ask the minister if he will consider this

in concert with the Solicitor General and make the necessary representations to the President of the Treasury Board?


James Armstrong Richardson: Yes, I will be glad to do that.


Walter David Baker: Mr. Chairman, along the lines of the question asked by the hon. member for Winnipeg North Centre I should like to ask a question regarding the thousands of members of the Canadian armed forces who have retired and entered the Public Service of Canada immediately upon retirement. Many of them find themselves now in the position of having worked their entire lives in the Public Service, one part in the armed services and the other part on the civilian side, and are unable to count their service for leave purposes in the Public Service of Canada.
Again, in the same vein as the hon. member for Winnipeg North Centre, I ask if the minister would undertake that he will bring to the attention of the President of the Treasury Board the inequity which seems to exist in respect of these people who have served Canada in another capacity and are now continuing their service in the Public Service? I merely ask for that undertaking from the minister.


James Armstrong Richardson: Mr. Chairman, I have been advised by my colleague, the Minister of Finance, that this matter has been of interest to him and that he has consulted with the President of the Treasury Board, and the Solicitor General who is responsible for the RCMP. He is involved with all of us, and I think I can give an assurance that the matter the hon. member has raised is being given serious consideration.


Sean Patrick O'Sullivan: Mr. Chairman, I thank you for recognizing me, though I regret the indication that I only have enough time for one question. Perhaps I might cite one case that has come to my attention recently. It involves the widow of a serviceman who spent almost his entire adult life in the armed forces. He died, and left her to fend for herself against continuing and rising inflation. She was advised that his military pension had been cut in half. Surely the minister recognizes, as do the officials of his department, that one person cannot get by adequately on half a pension. I am wondering whether the minister is causing this to be reviewed, particularly on behalf of widows with dependents. We all look forward to some positive measures to assist persons in such a predicament.


James Armstrong Richardson: Mr. Chairman, the circumstances described by the hon. member are difficult, but they result from a law which was passed by this parliament. Probably there are circumstances which require examination by all of us.


B. Keith Penner: Order, please. It is my duty, pursuant to the agreement reached earlier this day, to interrupt the proceedings and call now the estimates for the Department of Indian Affairs and Northern Development to be found in Schedule A at page 10, 11 and 12 of the bill.

On Schedule A-Department of Indian Affairs and Northern Development.


Mr. Buchanan:: Mr. Chairman, I would like to take a few moments to briefly discuss some of the problems and interests of the three branches which comprise the Department of Indian Affairs and Northern Development. These are the Indian and Eskimo Affairs Program, the Conservation Program, and the Northern Development Program.
First, I would like to deal with some aspects of the Indian and Eskimo Affairs Program. At the forefront of Indian problems is housing. It is painfully obvious that the program of direct subsidy which the department has been pursuing for some time is simply not keeping up with the demand for housing, especially on reserves.
Many of the houses are substandard, others are rapidly deteriorating. The root of the problem is that virtually all Indian bands and individuals are trying to build houses with only the subsidy money, without making any contribution of their own. This contribution would provide the wherewithal to build better houses and the incentive to keep them in good repair. Good housing lies at the heart of progressive community development because of its total effect on peoples' lives.
Because of the high priority I attach to housing, I was glad to find that housing policy was urgently under review in the department. The National Indian Brotherhood had input into the review through its housing brief, which it presented last April. I was personally disappointed in this proposal by the National Indian Brotherhood because its virtually exclusive thrust was to seek a substantial increase in direct subsidies from the federal government. It seems to me that the subsidy system has demonstrated its weaknesses.
Not only do the funds fall short of its actual need but, even more important, there is absolutely no incentive for the Indian occupant to maintain or improve the home when he does not have one cent of his funds invested in it. My response to the National Indian Brotherhood has, therefore, been to emphasize the co-operative aspects needed for a sound Indian program. They have requested a meeting with me later in November to review thoroughly this whole area. I look forward to meeting with the executive of the National Indian Brotherhood at that time.
However, I do believe that full use should be made of all government programs which are available to assist in the housing area. This has not been done in the past. These programs-whether we are talking about senior citizens housing, low income rental housing, or home improvement programs-all provide alternative sources of assistance for the Indian people. These should be combined with assets the bands have to contribute, and with the individual Indian's ability to pay as well. I look forward to developing jointly proposals for a program along those lines, a program that will be largely under the control of the Indians themselves at the band level.
In the area of economic development my approach has been to follow the same line of reasoning. I am all in favour of deploying government funds so that much needed economic activity can be generated in the Indian communities, in line with the aims and needs of the people concerned and largely under their control. But the govern-
Estimates
ment's contribution to this activity should be combined with contributions the Indian people can make themselves. The government's contribution should be used as a catalyst, or to provide missing components in schemes of development devised by the bands.
I might also mention here that more needs to be done, and is being done, to ensure that the full range of government program-from all departments and agencies, and at the provincial level-are made available to the Indian people, and that the total federal effort relates to services and programs provided by the provinces. There is a growing awareness on the part of Indian leaders at all levels that they are not taking full advantage of the government approved opportunities that are open to them as Canadians for social and economic advancement. I intend to encourage them by all means to seek to use these benefits for their people.
Viewed in the perspective of the whole country, the Indian people as a group exercise control over substantial assets. This applies to their land base particularly, which is increasingly in demand in this country. Some bands have put their land to productive use and thereby increased their assets. But their example has not been followed by all bands, even those who are occupying lands of significant economic value.
Hon. members, particularly Albertans, my have noticed the development of the Enoch Band. This is a proposed development involving half a million dollars on five square miles of band land. It is my view that Indian bands and Indian individuals should be fully prepared to help themselves by making optimum use of any assets they control. The government and the department can, and will play their part in providing seed funds, technical advice and managerial training. But the objectives of neither the Indian people nor the government will be achieved unless the emphasis on self-help is sustained.
I am seriously concerned about our making rapid progress toward self-reliance whether in the field of Indian housing, economic development, local government or education. It will not be achieved in any of these fields unless or until there is a diminished dependency on direct government subsidy.
In the area of claims, in the past year and particularly during the past few months we have been hearing a lot about land claims. We can expect to hear a lot more about them in the years to come. Most of these claims are the subject of longstanding grievance on the part of native groups, but the fact that they are emerging now in concrete form is the direct fruit of the government's policy of funding research on rights and treaties. That program began in earnest in 1970 and has resulted in comprehensive proposals for land settlement in those areas where native title was not previously extinguished and in a growing number of specific claims relating to certain treaties and the administration of the Indian Act.
To deal with this rapidly expanding activity the department has established an office of claims negotiation, as a branch separated from the Indian and Eskimo Affairs Program and the Northern Affairs Program. The executive director of this office, the Indian Claims Commissioner, and other government representatives concerned with

October 24, 1974
Estimates
claims questions, during recent months have had intensive discussions with various native groups.
In the Yukon negotiations are continuing with the Council for Yukon Indians representing both status and non-status Indians there; in British Columbia there have been separate consultations with both the Union of British Columbia Indian Chiefs and with the Nishga Tribal Council about their land claims; in the Northwest Territories there have been separate ongoing discussions with the N.W.T. Indian Brotherhood and Innuit Tapirisat about how to approach land settlements there; in northern Quebec representatives of the department have sat in on negotiations between the Quebec authorities and representatives of the Indian and Innuit groups of the James Bay area.
The specific claims have given rise to discussions as well, and some of the issues are very difficult indeed because of the various interests involved. The department is currently reviewing the whole situation with a view to making certain changes in the claims process. I have already expressed my willingness and desire to discuss that process with authorized representatives of the native people.
In the area of relations with native associations, the government continues to attach the greatest importance to its relations with the native associations at national and regional levels. It was for this reason that on October 9 a group of ministers met with members of the executive council of the National Indian Brotherhood to discuss a number of questions of current interest. There will be additional meetings of this kind with the brotherhood- the next one is scheduled for early February. In the interim we are jointly considering the need for supportive services, perhaps in the form of a secretariat, to strengthen this consultative mechanism.
I am confident that improved communication will result from these efforts. Our initial meeting can be regarded as a prototype and forerunner of future consultations at ministerial level with the executive of the National Indian Brotherhood.
The government will be engaged in full consultation on all levels with the native people as we begin to work out the revisions to the Indian Act needed to bring it into line with the current needs and wishes of the people concerned. As you know, the government has funded the National Indian Brotherhood to prepare their recommendations on revisions to the Indian Act. We are looking forward to receiving recommendations in the near future. The government sees these consultations on the Indian Act as the major preoccupation and main focus of its efforts to develop mutually satisfactory relations with the native people, for their benefit and the benefit of Canadians generally.
During the first two months in my portfolio I have been greatly occupied with Indian affairs, but I have tried not to ignore the other areas of major responsibility. During the week of September 28 I made a wide ranging tour of the Yukon and the Northwest Territories where I welcomed the opportunity to meet members of the Territorial government and councils, representatives of native

groups, hamlet councils, the press, and the public at large. In part this was a familiarization tour, but I also wished to learn at first hand about the major preoccupations of northerners at present.
In both territories there was a keen interest and some uneasiness about the major land claims that have been advanced. The native peoples have their own anxieties about the pace and direction of resource development, but other northern residents are just as concerned about possible adverse consequences of putting too much emphasis on native interests in land.
These concerns are linked to other impending events in the territories-the constitutional changes that were brought about during the last session of parliament, the forthcoming elections for the territorial councils, and the public inquiry which Judge Berger is carrying out for the federal government into the Canadian Arctic Gas Pipeline Limited application for pipeline right of way. All these developments are somewhat unsettling perhaps, but in the next year or so they should have the combined effect of setting both territories on a firm course toward a balanced development, based more than ever on the needs and aspirations of northerners themselves.
With regard to the matter of parks I should assure hon. members that the solid progress achieved in recent years in the development of national and historic parks and sites is continuing. New program initiatives for Parks Canada, introduced as "Byways and Special Places", have now been organized as the ARC program, Agreements for Recreation and Conservation. These initiatives complement the traditional national parks and national historic sites programs by introducing a system of linear parks based upon land or water routes important to Canada's history and displaying the best of our scenic resources.
The historic canals, for which my department assumed responsibility during the last two years, are the most obvious initial components of the ARC program in which the federal government has an existing responsibility. Initial reaction has been almost exclusively positive, and two programs will become realities shortly. I expect to bring an agreement to cabinet shortly which will provide for the development of the Rideau and Trent-Severn waterways jointly and co-operatively with Ontario. Other provinces are evaluating the program's concepts according to provincial priorities, and the interest is most encouraging.
Finally, I would mention that it is my intention, so far as resources permit, to accelerate the development of our national historic parks system over the next few years. Like my predecessor I regard the parks policy as one of the major elements in the expanding relationship between the federal and provincial governments, and as one that can contribute heavily to the furtherance of Canada's national wellbeing. In my view there is perhaps no better way to safeguard Canada's future than by doing all we can to conserve our natural and historic heritage from the past.
There is one final comment that I should like to make. I should like to put to rest some of the misconceptions and misunderstandings that various people seem to have about the departmental budget. Before assuming responsibility for Indian Affairs and Northern Development I had heard,
October 24, 1974

as I am sure many hon. members had, that Indian Affairs spent 60 per cent to 70 per cent of its budget on administration costs. I investigated these allegations and I can assure you that there is absolutely no foundation to them.
I find that Indian and Eskimo affairs administrative costs represent approximately 7 per cent of the budget, and this figure compares favourably with that of the government as a whole.
Moreover, while Indian and Eskimo affairs expenditures have risen more than threefold in the past six years, the program's staff has remained almost at the same level it was six years ago. This means that our budget increases have not gone to hiring more civil servants but directly to expanding programs which benefit the Indian people. For 1974-75, 31 per cent of the budget was for education expenditures, 14 per cent for social services, 24 per cent for economic and community development-this includes $60 million which was managed directly by the bands themselves-and 23 per cent for capital expenditures on housing, schools, roads, etc. The final per cent is made up of treaty payments and payments to the superannuation account. The 93 per cent of the budget which is not spent on administration is spent on programs which directly benefit the Indian people.
The Department of Indian Affairs and Northern Development is a complex and interesting one and there are many other aspects upon which I could make additional comments this evening, but I believe these remarks will give some indication of the areas of interest and concern, and I will be interested at this point in hearing the comments and questions of my colleagues.


David Orlikow: Madam Chairman, I rise to say a few words in place of my colleague, the hon. member for the Northwest Territories, who had to fulfill some speaking engagements in his constituency for which he had made arrangements a month or so ago, and which he could not change when we found out yesterday that this debate would take place today.
I was trying to calculate how many ministers in charge of Indian Affairs and Northern Development I have heard making Ministerial Maiden speeches since I came to this House 12 years ago, and it seemed to me that, with the exception of the six years that the former minister held this portfolio, we have had just about one minister each year. The same speech has been made, with very few changes, by every minister we have had. We have been told of the improvement each year, how much money was being spent, and that around some mythical corner most of the problems will disappear.
By coincidence, Madam Chairman, just today the House Leader of my party received a telegram from Grand Council Treaty No. 3 Indians at Kenora. I should like to read it into the record, not that what they say is necessarily correct but it is representative of what native people across Canada believe, and of what is true in general if not in this particular case. The telegram reads:
-demand a no vote in tonight's vote to cut our capital projects. We wish to remind you that poor housing has been a factor creating unrest in our area for a number of years as recently as the occupation at Kenora this summer. Unless our requests are realized this discontent-
Estimates
ment will grow and grow until not a day will go by without violence and terror in northwestern Ontario. We will not be the victims of inflation fighting for the government. Our conditions must be improved not ignored. We look to you to support our people by defeating the government's motion tonight.
I believe they are wrong in thinking that the capital moneys to be provided for housing will be cut tonight or any other time, but they are not wrong in their feelings that Indian housing programs in this country have been and are a disaster.
A publication put out within the last month or so by Statistics Canada called "Perspective Canada" was the subject of an article in the Winnipeg Free Press on October 2, 1974, which read in part:
Housing, one of the biggest concerns in recent Indian representations, seems to have actually shown a decline based on a three-fold rating of reserve homes as poor, fair or good.
In 1971, Statistics Canada found that 25.4 per cent of families on reserves needed new houses. In 1965, 19.7 per cent were said to need new homes.
Statistics also show that in 1971, 15.9 per cent of occupied houses needed major repairs. In 1960, 6.8 per cent were found to be in that state.
The agency found that in 1971 51.7 per cent of frame houses and those other than log were good while 20.8 per cent were rated poor. Eight years earlier, 59.4 per cent were rated good and 12.9 per cent were considered poor.
The statistics showing the percentage of Indian houses without electric power and running water are even more sad to relate, Madam Chairman. Tonight the minister lectured us on how he was ready to co-operate and consult with the native people and their associations. If he would refer to the representations made to the Standing Committee on Indian Affairs and Northern Development by the National Indian Brotherhood a short time ago, he would find that they complain that they have little if any say in the kind of housing programs developed for the reserves.
In a statement made to the cabinet last April they pointed out that up until now government programs have failed because of inadequate funding, a piecemeal approach, and the historical and still present paternalistic approach. They pointed out that there was a backlog of at least 10,000 housing units in the Indian community, and that in the next five years this will increase to about 15,000 units. They asked that the department or Central Mortgage and Housing develop a program and allocate funds which they would use themselves, deciding where, how and when to build the houses required. They suggested a program spread over the next five years at a cost of something like 400 million.
What they are saying, Madam Chairman, is that they have had enough of the department telling them what to do, when to do it, and how to do it. They want to make the decisions themselves. I should like to hear the minister tell us what his department intends to do for the Indians of this country along these lines.
Having spent the bulk of my time speaking of the need for improved housing on the reserves, I want to spend a minute or two speaking about conditions in the city I represent. I am sure the minister knows that, according to Statistics Canada, the Indian population of my city has grown from 210 people in 1951 to over 5,000 in 1971.

October 24, 1974
Estimates
The hon. member for Regina-Lake Centre says that this has made the slum landlords happy and wealthy, and that is true. I would be happy to take the minister and his deputy around the city of Winnipeg and show them how the native people live there. They would see the slums and hovels still in the core of the city, despite the efforts of the former minister and his officials.
There is a rapid influx of native people to the cities and they are living in the worst conditions imaginable. I should like to ask the minister what he proposes to do about native housing and when the native people will have something to say about the type of housing they are to get?


J. Judd Buchanan: Madam Chairman, I should like the hon. member to know that I share his concern. I do not like the paternalistic approach, and in my opening remarks I tried to emphasize that the approach has to be a co-operative one.
There is no way that the direct grant subsidy housing is going to meet the housing needs of the Indian people. Madam Chairman, but there are many programs available that are not being capitalized on by the Indian people. The figure mentioned of $400 million over the next five years is not going to be realized through a direct grant program. On the other hand I do not find it a frightening figure if you tie it in with other programs. The hon. member mentioned substandard housing, that lacked plumbing and so on.
I have tried to visit all the reserves. I will try to visit those in the four western provinces, B.C. and northern Ontario on the next long week-end. I have already arranged a meeting with the band council of the Treaty 3 people to whom the hon. member referred.
The point is we must use other programs. Under one upgrading program we pay up to $5,000 for family homes if the family income is less than $6,000. Half that is forgiven as a grant, the other $2,500 must be repaid over about 20 years, I think. I discussed this program at one reserve I visited a couple of weeks ago. I was told that 60 out of 65 houses on the reserve did not have indoor plumbing. When I said that this program would be useful, and that repayments would be only $15 or $20 for the next 15 or 20 years, I was told, "This is not the customary way to do it". Somehow or other we must change these ideas, because there is no way we can help these people with straight grant in aid programs. If we want to help them, we must do it through consultation. Our approach must be cooperative and not paternalistic.


David Orlikow: Madam Chairman, I have heard some of the things the minister said ever since coming here. I put a question on the order paper which was answered last week. If my memory serves me right, I asked how many people engaged by the Department of Indian Affairs are employed as teachers in secondary schools, in elementary schools and as teachers' aides. As I remember, the answer was 1576 people are so employed. Yesterday I entered a question on the order paper which has not yet been answered. It asks what percentage of those people are of Indian origin. I have not been given the answer, but if

there are more than 50 I will buy the minister the best dinner one can buy in Ottawa.
Last week the hon. member for the Northwest Territories put on the order paper a detailed series of questions about the number of people employed by the department in the Northwest Territories at various levels, from senior specialist down to casual labourer. He also asked how many people are of native origin. The answer was a shocker, a disgrace. Excluding the people in the lowest paid category, those who are unskilled and untrained, the percentage is less than 5 per cent. That is an optimistic classification.
In short, less than 5 per cent of workers in any category are of native origin. If these people are not discriminated against, and I do not think they are, what an indictment this is of our educational system and of our attempt to bring these people into our society. If the minister really means what he says, let us see some action and hear less of the sort of preaching I have heard in my 12 years here.


J. Judd Buchanan: Madam Chairman, I look forward to eating a steak dinner at the expense of the hon. member opposite.


Stanley Howard Knowles: Watch out, it may be hamburger with staphylococci.


John Napier Turner: Take him to
McDonald's.


J. Judd Buchanan: I intend to run over a few figures. In the federal schools there are 1,480 elementary school teachers of which 151 are Indian people, so we are well above the hon. member's 50. There are 172 teacher aids, of whom 160 are Indian people. There are 2,064 other staff employed, of whom 603 are Indian people. In the band and school board employ, there are 175 social counsellors, assistant counsellors and home and school co-ordinators of whom 151 are Indian. Of child care workers, 26 out of 27 are Indian. Of teacher aides, 383 of 383 are Indian. Of native language instructors, 19 out of 19 are Indian. This means that of 4,320 people employed in the school system, 1,493 are Indian people.


David Orlikow: I will stand by my promise. I will buy the minister his dinner.


Walter David Baker: Why don't you let Marc Lalonde cook it?


David Orlikow: But I want to say this: I was not too far wrong. I never doubted for a moment that the caretakers in the school would be native people or that the untrained social workers would be native people or that the teachers' aides would be native people. I said there would not be more than 50 out of 1,500 teachers. The minister tells me there are 150, and so technically I am wrong.
I want to say, however, that if one takes into account the large number of Indian students who are now attending schools in all parts of Canada, not on reserves but in school divisions where there are virtually no native teachers, my percentage would not be too far wrong. Even to the extent that I was wrong, if we have one in 10 native teachers on the reserves, not in Winnipeg, not in LePas,
October 24, 1974

not in Kenora, not in Regina or Vancouver where large numbers of native children are going to school, that is not a hell of a thing to be proud of.


John Napier Turner: Perhaps you'd better buy him a smoked meat on rye.


J. Judd Buchanan: I share the hon. member's concern, and I think we are moving in the desired direction. I recall there were roughly 400 Indian students receiving university education when I was working as parliamentary secretary to my predecessor. Today the figure is in excess of 1,200. I am optimistic that, as many of these young people work their way through university, we shall find the ratio moving up very substantially. I look forward to the day when we can say that 100 per cent of the total represents native teachers.


David Orlikow: Of course we are all happy that more Indian people are attending universities. Let me just summarize the statistics and I shall be finished. Among Indians and Inuits only 1.7 per cent are receiving a university education compared with 11.9 per cent nationally. So we have done one-tenth as well as for the rest of the population.


Flora Isabel MacDonald: Madam Chairman, may I say at the outset that I appreciated some of the new ventures that seem to accompany the new minister as he takes on this portfolio. Some of the statements he made certainly lead us to hope that there will be a new line of action within the department, one that is long overdue. We welcome his plans for integration of programs and incentives, and approve of them. I might say that at this point in time an effort is being made to place an emphasis on incentive and self-help, which is very commendable. But it has an underlying note to it which, as far as I am concerned, is questionable, that is, that it would be very easy to take a hard line and say that the native people have to help themselves to resolve their own difficulties, that if they just do that everything will be well.
That is not going to happen, and I should like to warn the minister that such an approach, carried to the extreme, could be detrimental to the cause of the native people, and that a heavy emphasis on incentives should not imply that unless they meet such and such a requirement they will not get any help from the government.
For example, the minister mentioned the Enoch band and the value of the land base that the Indians hold across the country. The fact is that the economic opportunities to develop the land base are not the same for all Indians across this country, just as they are not the same for all other Canadians. One cannot expect a band in northwestern Ontario, or in some northern community in the prairie provinces or Northwest Territories, to have the same economic opportunities as the Enoch band have possessed. They should not be placed in the same category, or even considered in this way.
While the minister assured us that the administration of his department accounts for only 7 per cent of the over-all estimates of his department, he will have to do a much
Estimates
better P.R. job in getting this story across not only to the native community but to Canadians as a whole. In view of the tremendous bureaucratic structure that the minister ranges over, 7 per cent of the over-all expenditure on administration seems to us to be somewhat out of context.
I want to raise a few questions in regard to housing. The housing situation has been mentioned on many occasions by native people who lack even the most basic amenities and shelter, by Indian leaders who have submitted countless briefs and proposals with little sign of response, by concerned Canadians everywhere who feel that the native housing situation constitutes a blatant act of discrimination in this country, and finally by officials of the department. The following quotation is not from the brief of the National Indian Brotherhood but are the words of the assistant deputy minister at a committee hearing on October 15. He said:
We do know that the need exists in forthcoming years for somewhere in the vicinity of 20,000 homes for Indian people-20,000 houses in roughly the next five years.
He went on to comment on the amount allocated per house, and he said:
Firstly, the quality of the shelter is not adequate because it is virtually an impossibility to build an adequate house for $10,000; and secondly, to cope with the quantum of the need it would be necessary for the government to appropriate a sum of money far in excess of the $27 million per annum which is voted today.
He went on to explain two other points. He said that "in the current fiscal year approximately 2,000 new units will be built and a further 900 renovated. A simple extrapolation would indicate that at this rate it is not a catching-up, it is a falling-behind situation". He also estimated the figure needed at $400 million to bring the housing situation up to par. So we are talking about an estimated need of 20,000 units, whereas this year we are building 2,000. We are talking about a total expenditure need of $400 million, whereas this year we are allocating $27 million, or approximately one-twentieth of the total need.
I know the minister said he is engaged in long-range building proposals and discussion with native leaders, but the situation is such that I do not believe we can rely on long-term planning solely on that basis. There is an emergency, a crisis situation, which exists now. This crisis situation is going to build bitterness, frustration and anger on the part of the native people; this will not be a longterm buildup, we will see it breaking out in the next few weeks, months or a year.
What emergency steps is the minister planning for this winter to cope with this crisis situation? What is he going to do now, in addition to these long-term programs, in the immediate weeks and months ahead to meet the demand of the people who will not have adequate housing this coming winter?


J. Judd Buchanan: In relation to the earlier remarks of the hon. member for Kingston and the Islands, I hope I did not leave the impression that I was suggesting a sort of abandonment, because that certainly was not my thought. The emphasis I hope I made was on the idea of co-operation, jointly solving the problems of the Indian people.
On the question of priorities, I made myself rather unpopular with a group of Indians from northern Ontario

October 24, 1974
Estimates
who were down recently asking for additional funds for their lunch program. This is a band which, according to my information, finds itself in the top 10 per cent economically of bands throughout the country. I suggested that I did not see how I could justify giving them additional funds in that area when there were so many other bands in the country who found themselves in very destitute conditions-bands in areas such as northern Saskatchewan and other parts of northern Ontario.
I feel strongly that we in this department should be moving in the direction of establishing priorities. There are some bands relatively well to do, and I do not think we should be providing them with anything like the same funding we are giving the more poor bands. This is the sort of rearranging of priorities I would like to see.
In regard to housing I think the 20,000 figure the hon. lady mentioned compares very closely with the figure suggested by the National Indian Brotherhood. As I said in my earlier remarks, I do not find that figure shocking if you look at it in combination with other programs. The hon. member mentioned 2,000 this year, and 700 or 800-I have forgotten the figure-for upgrading. The program of the native brotherhood proposed 4,000 over the next five years, or a total of 20,000. The 2,000 figure represents roughly half, so we are looking at a little better than double the funding.
If one looks outside the straight grants for housing at other programs, for instance we have been discussing senior citizens' homes, I think he will not find the construction of 4,000 units per annum over the next five years as being unreasonable or out of reach at all. This is something that I should like to move toward. This is the approach we should be taking.
Similarly in upgrading, I think we should be following the program of the Minister of State for Urban Affairs. I am convinced that the meld of these programs, plus the grants given in our department, will go a long way in the next five years in an attempt to bring the Indian housing program into reasonable condition.


Flora Isabel MacDonald: I asked what is to be done to provide for this winter to cover special necessities. That has not been answered. Can the minister tell me how this figure of $27 million for housing has been determined? Why is the amount limited to $27 million? Also can he tell me how the need has been established? On what basis are we to accept a figure of 20,000, 10,000 or 2,000 houses that are to be built this year and in the year ahead? To what areas are these to be allocated? Who makes that decision? How can we be sure that some of the areas most in need of housing will not be overlooked? How are these decisions reached?
In the remarks of the minister I have not heard anything about an adult training program which, it seems to me, would be of great help to the native people themselves. I wonder whether the minister has had discussions with his colleague, the Minister of Manpower and Immigration, with regard to the whole question of an on-site adult training program on every reservation where needed, so that the native people may be trained not only as carpenters-not everybody should be trained as carpenters if

there is no work for them-but also as electricians, plumbers, and bookkeepers to keep the accounts in respect of everything that goes on in the band.
These people should be trained in all these fields, not only so that they may be able to carry on construction work on the reserves in order to make themselves more self-sufficient, but also to provide a pool of employment which could be used in other areas.
We have already heard that there is a shortage of 40,000 employees in Alberta. What has the department been doing in this past year to help the native people equip themselves for those 40,000 jobs? What is the department planning in the coming winter months to train the native people, so that they will be ready and available for jobs in the Athabasca oil sands when development starts next spring? The minister can talk about CMHC and the senior citizens' program, but what about integration with departments which train people to be self-employed and make a contribution both on the reserves and outside?


J. Judd Buchanan: I was asked where these funds come from. The $27 million figure literally evolved as it was increased. Originally I think the amount was $1,500 per unit, then $5,000 per unit, then $8,500 per unit and now $10,000 odd. I should like to move away from the question of so much per unit.


Flora Isabel MacDonald: Apart from the concept of so much per subsidy, how do you determine the need each year? For instance when you say that 20,000 units are required, how do you determine in any one year that there will be only 2,000 built? How do you arrive at the 2,000 figures?


J. Judd Buchanan: There have been studies on this, but basically I think the major restraint is financial, how much in additional funds can be squeezed out of my predecessor now the president of the Treasury Board, to be allocated to this program. I am hopeful that we can squeeze out something above the $27 million figure to which the hon. member referred a few moments ago, for the coming year.
As I said, I want to get away from this concept of so much per unit. We should be looking more in terms of funds going to band councils as regional housing authorities that are assuming more and more responsibility of the kind which the hon. member was asking about, for allocating priorities within their area. This is the direction in which I would like us to move so that it is the Indian people themselves who will be taking the responsibility in this regard. This is being done now in some areas. As I mentioned earlier, this is a subject on which I want to canvass later this month-and I am sure it will take many meetings-the representatives of the National Indian Brotherhood.
Let me get back for a moment to the way in which some of the Indian bands apply this program. The other day I was signing documents for the Fort Alexander band in Alberta, in the riding of the hon. member for Provencher. They had received an allocation of some $30,000. Instead of building three $10,000 homes they divided the whole amount. Six of their members came to me and asked me to sign their guarantee documents with CMHC because they

October 24, 1974

want to borrow $12,000 per unit. A $10,000 house is simply not adequate, and instead of building three inadequate $10,000 houses they will build six $17,000 houses. This is the direction which I would like to see more Indian bands and housing authorities taking.
The hon. member asked about manpower and what we are doing in the area of the oil sands. There is a program currently under way with the Great Canadian Oil Sands operation in McMurray where they are putting a group of people through a 16 week program. In addition, in combination with Alberta manpower, native students are being enrolled in the Alberta vocational centre in Fort McMurray so as to assist in training these people for jobs in the tar sands operation.
I mentioned earlier, when replying to the previous questioner, that there are roughly 1,200 native students taking
Estimates
university courses, and roughly another 8,800 in other forms of post secondary education, a lot of it vocational training of various kinds in community colleges, and so forth. We are not making the progress we would like to see, but we are certainly making far better progress than we made half a dozen years ago, and I hope that half a dozen years from now we will be infinitely better than we are doing now.


B. Keith Penner: It being eleven o'clock, it is my duty to rise, report progress, and request leave to consider the bill again at the next sitting of the House.
Progress reported.


The Acting Speaker (Mrs. Morin):: It being eleven o'clock, I leave the chair until tomorrow at 11 a.m.
At 11 p.m. the House adjourned, without question put, pursuant to Special Order.

Friday, October 25, 1974