1974-04-11

BIRTHDAY CONGRATULATIONS TO HON. ROBERT L. STANFIELD

Right Hon. P. E. Trudeau (Prime Minister):: Mr. Speaker, our presence here today is sufficient proof that good intentions are not always sufficient to produce the desired result. It had been the hope of those of us in this party that this House would not be making demands today on the Leader of the Opposition (Mr. Stanfield), thus freeing him for leisurely activities more appropriate to this date. The fact that we are here, however, gives me the opportunity to extend to him our very best wishes and to tell him what we propose in order to mark this occasion.
The hon. gentleman knows that no statistics have emerged today which would be disturbing to him apart of course from his own accelerating annual adjustment over which the government has no control. We also continue to hold out the invitation to recess the sitting at an early hour. Finally, I wish to assure the hon. gentleman that we will understand completely should he decide to refrain from participating in the question period to enjoy a well deserved rest. But whatever his choice, the basic aspect of this message is not negotiable-we wish him a very happy birthday.


Some hon. Members:: Hear, hear!


Mr. David Lewis (York South):: Mr. Speaker, there is nothing very much I can add to the humour the Prime Minister put into his best wishes, except to say that the Leader of the Opposition (Mr. Stanfield) has now reached the age where I expect him to join with us in seeking a reduction in the age of eligibility for the old age pension. As you know, Mr. Speaker, the Leader of the Opposition and I have been engaged for a year and a half-


An hon. Member:: Engaged?


Some hon. Members:: Oh, oh!


Some hon. Members:: Hear, hear!


An hon. Member:: Explain.


David Lewis: -and that the Leader of the Opposition has been seeking a marriage for the same 18 months. On behalf of my colleagues, I want to wish him the very best on his birthday and whether or not he participates in the question period today or any other day, to wish him many years of active public life with the same sincerity and pleasantness he has shown so far.


Some hon. Members:: Hear, hear!


Mr. Gerard Laprise (Abitibi):: Mr. Speaker, I hope we are not here today for the sole purpose of celebrating the birthday of the hon. Leader of the Opposition (Mr. Stanfield). However, I believe it is customary and I am very pleased to do so on behalf of our party and wish him a very happy birthday. We hope that since we are here the day will be fruitful for the Canadian people.


Hon. Robert L. Stanfield (Leader of the Opposition):: Mr. Speaker, I am almost overcome. I wish to thank the Prime Minister (Mr. Trudeau) and the leaders of the other parties who have expressed good wishes to me for the future. I am all the more touched when I realize how deeply sincere these wishes are, Mr. Speaker. I am, of course, pleased that everybody now recognizes why we are here today. The only thing I should like to make very clear is that, of course, the celebrations continue all next week.
Finally, may I say that I realize it would be very difficult for anybody, judging from my physical vigour, the rapidity of my speech in English and my eloquence in French, to believe that I have reached the sixth decade.


An hon. Member:: The seventh decade.


Robert Lorne Stanfield: Whether it be the sixth or seventh, I am sure it does not compare at all with the tenth. The only real warning I should give the Prime Minister and his friends, the Leader of the New Democratic Party and my friends in the Social Credit Party of course is that on this anniversary, the achievement of this great age, and with the recognition that the time ahead of me is that much shorter, I have become more hungry for power than ever before.


Some hon. Members:: Hear, hear!



ROUTINE PROCEEDINGS


[Stage Direction]
First report of Standing Committee on Finance, Trade and Economic Affairs in English and in French-Mr. Trudel.
[Editor's Note: For text of above report, see today's Votes and Proceedings.]
[Stage Direction]
April 11, 1974
Elections and Holidays Dates

Mr. Don Mazankowski (Vegreville):: Mr. Speaker, I rise on a matter of urgent and pressing necessity under the provisions of Standing Order 43 arising from the very serious situation which prevails in the grain industry, as critically outlined by the chairman of the Canadian Wheat Board, Mr. Vogel at the National Transportation Conference yesterday. I therefore move, seconded by the hon. member for Calgary North:
That the federal government take immediate steps to ensure that the Canadian grain producers will be relieved of all costs and charges caused by contractual default by the Canadian Wheat Board for failure to meet sales commitments, and further, that all abnormal demurrage charges be paid for by the federal treasury since Canada's transportation system has failed to move sufficient quantities of grain to export position.


Mr. Speaker:: The motion requires the unanimous consent of the House. Is it agreed?


Some hon. Members:: Agreed.


Some hon. Members:: No.


Mr. Speaker:: There is not unanimity.


SUGGESTION GOVERNMENT SET FIXED DATES FOR ELECTIONS AND HOLIDAYS-REQUEST FOR UNANIMOUS CONSENT TO MOVE MOTION
Mr. Henry Latulippe (Compton):: Mr. Speaker, I rise under Standing Order 43, to ask the unanimous consent of the House to present a motion of urgent and pressing necessity.
Since nobody knows when elections will be held, that all Canadians are on the alert and that newspapermen are forever announcing elections I move, seconded by the hon. member for Abitibi (Mr. Laprise):
That the government consider the possibility of having elections and holidays on set dates so we may know where we stand.


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


Some hon. Members:: Yes.


Some hon. Members:: No.


Mr. Speaker:: There is not unanimous consent; therefore the motion cannot be put.


VETERANS AFFAIRS
Mr. Dan McKenzie (Winnipeg South Centre):: Mr. Speaker, I rise, pursuant to Standing Order 43, to propose a motion in a case of urgent and pressing necessity, namely, that without federal support the sum of $20,000 for the construction of the women's triservice monument in Winnipeg cannot be raised. I therefore move, seconded by the hon. member for Victoria:
That the Prime Minister give federal support to the women's triservice veterans association in Winnipeg for the construction of a monument.


Mr. Speaker:: The motion requires the unanimous consent of the House. Is it agreed?


Some hon. Members:: Agreed.


Some hon. Members:: No.


Mr. Speaker:: There is not unanimity.


AGRICULTURE
Mr. Leonel Beaudoin (Richmond):: Mr. Speaker, I rise under the provisions of Standing Order 43 and request the unanimous consent of the House to discuss an important matter of pressing necessity.
As eastern producers are now losing $20 to $25 per pig, because of the very high cost of production, I move, seconded by the hon. member for Bellechasse (Mr. Lambert):
That the government study this very ticklish and urgent matter to prevent the producers going bankrupt and to keep them in production in the greater interest of both producers and consumers.


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


Some hon. Members:: Yes.


Some hon. Members:: No.


Mr. Speaker:: There is not unanimous consent; the motion of the hon. member cannot therefore be put.


CANADA ELECTIONS ACT
Mr. Terry O'Connor (Halton) moved: the first reading of Bill C-278, to amend the Canada Elections Act.


Some hon. Members:: Explain.


Mr. O'Connor:: Mr. Speaker, this bill is designed to clarify discrepancies in the timing of the negotiations which are required under the act to take the place between the parties and broadcasters prior to an election.


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

Mr. Len Marchand (Parliamentary Secretary to Minister of Indian Affairs and Northern Development) moved: for leave to introduce Bill C-279, to amend the Broadcasting Act (review of policy decision of C.R.T.C. by Governor in Council).


Some hon. Members:: Explain.


Len Marchand: Mr. Speaker, the purpose of this bill is to give the Governor in Council the scope to review and, where necessary, amend policy decisions made by the Canadian Radio-Television Commission. It does not affect the commission's independence, but will restore to the elected representatives of the people, a say in the broadcasting policy decisions of Canada.


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


Robert Lorne Stanfield: Mr. Speaker, I have a question for the right hon. the Prime Minister, and I am sure that on this day of all days I will get a very full and satisfactory answer. Yesterday, the Minister of Finance said that one of the basic causes of rapidly rising housing costs is that Canadians are buying houses to "protect themselves against inflation". In light of this apparently belated discovery by the Minister of Finance who has been previously attributing inflation to international phenomenon and shortage of supply, I should like to ask the Prime Minister whether the govern-
Oral Questions
ment has any specific measure in mind to break this inflationary psychology to which the minister referred yesterday?


Pierre Elliott Trudeau: Mr. Speaker, I would refer the Leader of the Opposition to the statement of the minister. He indicated that this was one cause amongst many. It is reasonably well known that in inflationary times, and nobody denies that inflation is now higher than we would like to see it, people tend to go into commodities or into goods, away from money. The Minister of Finance added that they were choosing housing because of the exemption of capital gains on housing. That is a fair statement of the position of the Minister of Finance. In so far as specific measures are concerned, Mr. Speaker, yes, they are being contemplated by the government and will be announced in the appropriate manner.


Robert Lorne Stanfield: A supplementary question, Mr. Speaker. Now, that we have this disclosure that inflationary expectations are an important factor in the increases in prices that are taking place, at least in some areas of the economy, has the Prime Minister prepared a new approach and has the government really got anything in mind to curb these inflationary expectations or is it just content to let things go on?


Pierre Elliott Trudeau: Mr. Speaker, much of our action has been an attempt precisely to kill this inflationary psychology but we cannot hide from the Canadian people the fact that inflation is also largely caused by events beyond the control of the Canadian government and people. To this degree, we can only point out to them signs of an easing of international commodities prices which are becoming evident. Wholesale prices of grain, cattle, hogs, wool and cotton have already turned down, some very significantly. Metal prices will remain at a high level but the prices of such commodities as coffee and sugar have levelled out recently after a sharp rise. We hope that people will notice this, rather than responding to the panic which is encouraged in some quarters.


Robert Lorne Stanfield: Mr. Speaker, the Prime Minister would not be old enough to remember, but I am just old enough to remember that this is the way a lot of people talked in the thirties about prosperity being just round the corner. Seriously, Mr. Speaker, I gather from what the Prime Minister said to me that it is simply the intention of the government to wait and hope that this situation will straighten out. Since the Prime Minister's explanation of inflation is that too many people are trying to take too much out of the economy, and since he said recently that organized labour is not responsible for this, can he tell the House who is taking too much out of the economy and what he proposes to do about it.


Pierre Elliott Trudeau: Mr. Speaker, on the premise of the question to do with prosperity, I refer the Leader of the Opposition to the Wall Street Journal of this week, which says that the economy of Canada expands, outpacing most other nations, and that it is leading the pack.


Some hon. Members:: Hear, hear!

Oral Questions


Pierre Elliott Trudeau: We certainly agree with the opposition that everything is not perfect in the Canadian economy, but where we do disagree with them is that we think it is not bad to be best in the world.


SUGGESTED EXTENSION OF TWO-PRICE SYSTEM TO COMMODITIES OTHER THAN OIL AND WHEAT-GOVERNMENT POSITION
David Lewis: Mr. Speaker, I am not going to ask questions about inflationary psychology and how to curb it, because I have never been able to understand what that phrase means and I suspect that those who use it do not understand it either.


Mr. Alexander:: The Minister of Finance certainly does not understand what it means.


David Lewis: It was the Leader of the Opposition who used it, Mr. Speaker. May I address my question to the Minister of Finance. As both he and the Prime Minister have rightly insisted that one of the causes of rising prices in Canada is the international shortage of some basic commodities and the international price increase of those commodities, including commodities produced in Canada in abundance for meeting the needs of Canadians, has the Minister of Finance given consideration to extending the principle and policy of the two-price system beyond oil and wheat, to cover other basic commodities produced in Canada, which should be made available to Canadians at a reasonable price rather than at the exorbitant international price?


Hon. John N. Turner (Minister of Finance):: Mr. Speaker, I think one of the topics which should be before the House at the moment is the psychology of the hon. member for York South and his followers. While we have a two-price system on wheat and, to a certain extent, on petroleum, this two-price system, if carried to great lengths and supported by export controls and other types of mechanisms which would be needed to reinforce it, might well be considered as a new style of protectionism whereby this country would seek to protect its own price and supply structure at the expense of other nations, developing and developed. In terms of international trade, as this nation depends for one quarter of its gross national product on its relationships with other nations, I am not sure that it would be an unqualified advantage to accept the suggestion of the hon. gentleman.


David Lewis: Mr. Speaker, setting aside what the Minister of Finance has to say about my psychology, I cannot understand his logic let alone his psychology. My suggestion has nothing to do with controlling in any way prices outside this country. I did not suggest that we should interfere with or control the normal export market, so that there would be no interference at all with what goes out of this country. I ask the Minister of Finance to tell this House and the people of Canada why Canadians should pay more for their commodities merely because other parts of the world are pushing up the price on what they produce.


John Napier Turner: Mr. Speaker, let me try
to get this on a logical basis. The hon. member and I will

then be on the same plane. If we are to have a two-price system on commodities whereby there is a lower domestic price than international price, then basic commodities would inevitably seek the higher international price unless we were to put export controls to ensure that that supply remains here. Export taxes or export control would be a new style of protection for our pricing and supply structure, which would be subject to retaliation by other nations, because it would be as potentially dangerous for Canada as an international trader as tariff barriers or invisible barriers were to protect our employment situation in the thirties.


Mr. Speaker:: The Chair will recognize the hon. member for York South for a supplementary.

-I shall then allow the hon. member for Abitibi to put a supplementary, after which I shall give the floor to several other hon. members who wish to put supplementaries.


David Lewis: Mr. Speaker, I will try to see if I can word this question so that Your Honour will not object to it as being debate. If there is any validity in what the minister said, will he explain to the House why he does not apply it to oil and wheat? Also, will he explain to the House and the people of Canada why protection for the Canadian consumer and the Canadian economy is something he rejects?


John Napier Turner: Mr. Speaker, I am interested in protecting the consumer and the Canadian economy, but in ways that will not jeopardize the long term trading interests of this country. The reason it was done for oil, of course, is that the price was not set domestically in Canada. It was set internationally by quasi-monopolistic practices in the Persian Gulf and by OPEC nations. Our two-price situation in oil was a defensive mechanism. The hon. member knows that full well.


REQUEST FOR MEASURES TO INCREASE PRODUCTION OF CONSUMER GOODS TO CURB INFLATION
Gérard Laprise: Mr. Speaker, I should like to put a supplementary question to the right hon. Prime Minister.
At the present time, nearly all the papers published by the government say that the inflation is in part caused by the shortage of consumer goods. Since everything that has been done up till now has not been effective, could he tell the House if he has truly effective action to suggest to increase the production of consumer goods and reduce their cost?


Pierre Elliott Trudeau: Mr. Speaker, for once the hon. member and myself certainly share the same theories and if he refers to the Speech from the Throne, he will note that probably the most important legislation considered for adoption is the one aimed at ensuring a greater production of goods to fight against long term inflation.
April 11, 1974


Gérard Laprise: Mr. Speaker, I should like to put another supplementary to the Prime Minister.
Can he assure the House that the bill suggested in the Speech from the Throne will be introduced soon instead of making it an electoral promise?


Pierre Elliott Trudeau: Mr. Speaker, we believe that many years will pass before we have to make any more electoral promises.


EXTERNAL AFFAIRS
Mr. G. W. Baldwin (Peace River):: Mr. Speaker, I have a question for the Prime Minister. When the Secretary of State for External Affairs addresses the United Nations today giving the Canadian position on inflation, will he be expressing the same defeatist policy of the government enunciated yesterday by the Minister of Finance that inflation is inevitable and this government has neither the wit, will nor capacity to deal with it?


Pierre Elliott Trudeau: Mr. Speaker, the Secretary of State for External Affairs will certainly be expressing government policy, but fortunately not seeing it through the jaundiced eyes of the hon. member for Peace River.


Some hon. Members:: Hear, hear!


THE CANADIAN ECONOMY
Mr. James A. McGrath (St. John's East):: In view of the fact that the economy has been running a 9 per cent rate of inflation consistently for nine months, the highest such consistent rate since 1913, may I ask the minister what steps the government intends to take to break the mood of inflationary expectation in the country? The indications are there will be a series of strikes and a great deal of labour unrest throughout the country this summer.


John Napier Turner: By trying to deal with the facts as I see them in a realistic way.


James Aloysius McGrath: The minister has had the facts before him for some time, now. May I ask him exactly when the Canadian people can expect some relief from this government, based on the facts presently before him and the experience of the last five months?


John Napier Turner: I dealt with that question as fully as I could under the rules when I replied to the hon. gentleman yesterday.
Oral Questions


ACTION TO HELP WORKERS NOT PROTECTED BY UNIONS OR LARGE CORPORATIONS TO FIGHT INFLATION-GOVERNMENT POSITION
Lincoln MacCauley Alexander: A further supplementary to the minister arising from a very serious situation which has developed. It is based on the fact that average weekly wages have risen by 7.4 per cent while inflation is now running at 10.4 per cent, a difference of three percentage points. Can the minister tell us what immediate plans he has to protect the workers, who seem to get further and further behind?


John Napier Turner: The action we took last year and this year in increasing the disposable income of wage earners has worked, and in terms of disposable income workmen in this country have improved their standard of living.


Lincoln MacCauley Alexander: I am sure that answer is not acceptable to those who are trying to buy food, clothing and housing. The Steel Company of Canada, Westinghouse and Dofasco now realize that inflation is primarily domestically induced and they have looked after their workers. Can the minister advise us what specific plans he has in mind to help those who are not supported by big unions and big business?


John Napier Turner: Since the beginning of the current rate of increase in the cost of living, the government has done its best to increase the disposable income of Canadians least able to protect themselves, and will continue to do so.


INFLATION-REQUEST FOR OPPORTUNITY TO TEST CONFIDENCE IN GOVERNMENT MEASURES TO COMBAT
Hon. George Hees (Prince Edward-Hastings):: I have a supplementary for the Prime Minister. The Prime Minister having in the last two days expressed great confidence in the policy of the government as it affects inflation, I would ask the right hon. gentleman whether he is prepared to put those policies to the test in this House by allowing a motion of confidence next week or at the latest a week after.


Pierre Elliott Trudeau: Yes, and no, Mr. Speaker. If the hon. member consults his memory he will appreciate that there were seven or eight such tests in the month just concluded and, of course, there will be something like 10 or 12 such tests before the end of June, compared to very few legislative days. The opposition was entitled to all the opposition days it had in March, but it must surely understand that the government would like to use some days for the purpose of governing. What surprises us on this side is the fear of the opposition with regard to letting the government present its budget, a budget which apparently the opposition is afraid will be good for the Canadian people.


Some hon. Members:: Hear, hear!


George Harris Hees: The government is putting off the presentation of the budget until as far into the future as it can, and
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April 11, 1974
Oral Questions
since this is by far the most important question in the minds of all Canadians, I challenge the Prime Minister-


Mr. Speaker:: Order, please.


George Harris Hees: There will be four extra days next week.


THE BUDGET
Mr. Frank Howard (Skeena):: Inasmuch as the Minister of Finance now has an extra week at his disposal, namely next week-the parliamentary timetable has been advanced by one week-can he tell us when the budget will, in fact, be presented?


John Napier Turner: I cannot expand on the definitive answer I gave the Leader of the Opposition.


FOOD PRICES
Frank Howard: Yesterday, the Minister of Agriculture indicated with respect to inflation that the farmer, as far as poultry, pork and beef production are concerned, was not the culprit responsible for the consumer paying high prices, leaving the implication that it is obviously groups such as Canada Packers and the meat processors-the recipients of the generosity of the tax cut allowed by the Minister of Finance and by members of the Conservative party-which are involved, will the minister take this indication that groups like Canada Packers, like Burns and Company, in the area of food processing, are really the thieves, and will he do something about this?


An hon. Member:: Talk about logic!


AGRICULTURE
Mr. Jack Murta (Lisgar):: Mr. Speaker, I should like to direct a supplementary question to the Minister of Agriculture. It arises from a reply given yesterday by the Minister of Finance as reported on page 1335 of Hansard. The minister said:
The only way of equalizing the forces of supply and demand is by increasing agricultural production and industrial capacity in the country and those are the responses we have made.
In view of the fact that intentions to plant, according to a survey put out by Statistic Canada, shows that in Western Canada the acreage sown to barley, grain and oil seeds is likely to decrease by comparison with what the government has projected, or requested, may I ask the minister

what specific policies the government has in mind to increase the supply of food products in Canada?


Hon. E. F. Whelan (Minister of Agriculture):: As far as
I am concerned, those figures do not tell the whole story. We do know that the acreage does not have to be increased very much to increase production substantially in Western Canada. We know that in Western Canada they are going to use 25 per cent more in fertilizer, so those same acres will be correspondingly more productive. If I remember the figures correctly they are not as bad as the hon. member is trying to indicate.


Jack Burnett Murta: A further supplementary to the minister, in view of his failure to answer my first question. Since he is responsible for a beef subsidy which in the process of being applied has virtually ruined the cattle industry, and is responsible for a feed grains policy which is just about as bad for the grains industry in Canada, what specific proposals does the minister have in mind to increase the amount of food available to Canadians?


Eugene Whelan: The hon. member I am sure is aware of the measures announced in the Speech from the Throne in the area to provide security as well as incentives to agriculture, which would assure farmers of the necessary guarantees so they would increase production. We are working toward that end and I hope the hon. member will acknowledge our efforts by his actions in this House.


Some hon. Members:: Hear, hear!


Mr. Speaker:: The hon. member for Lisgar is rising on a point of order. I see several other hon. members rising on supplementaries. I am quite disposed to spending the entire question period on this subject, if that is what hon. members wish. I hope, however, that there will not be too many points of order. To my mind many of the points raised are much more debate than questions. Questions asked of ministers as to what action is to be taken, and requesting ministers to announce policies, are normally invitations to a minister to make a statement on motions. I do not think they are productive in the sense of questions which ought normally be asked in the question period. The hon. member for Lisgar is at the moment seeking the floor on a point of order.


Jack Burnett Murta: My point of order is that the Minister of Agriculture has had ample time during this session to bring in legislation pertaining to the stability of the industry in Canada. I further charge that the Minister of Agriculture and the government do not have an agricultural policy.


Mr. Speaker:: Order, please. That obviously has nothing to do with a point of order and I do not think members should rise on alleged points of order to score points of debate.
April 11, 1974


REQUEST FOR STATEMENT ON MEASURES TO AID HOG PRODUCERS-GOVERNMENT POSITION
Léonel Beaudoin: Mr. Speaker, I should like to put a question to the Minister of Agriculture.
A few days ago the hon. member for Bellechasse asked the minister if the government intended to help the Canadian hog producers to save them from bankruptcy. He answered that he would take care of the matter today when he met with the representatives of the hog producers' associations. Could he tell us what has been done?


Eugene Whelan: Mr. Speaker, we received a brief in respect of what should be done about the plight in which the hog industry finds itself at the present time and we are considering it.


THE CANADIAN ECONOMY
Hon. Paul Hellyer (Trinity):: Mr. Speaker, I have a further question in respect of the matter of the supply of food which I should like to direct to the President of the Privy Council. At a press conference immediately after the Speech from the Throne was presented the President of the Privy Council indicated that within two weeks legislation would be presented to the House for the specific purpose of encouraging the increase in the supply of food and I wonder whether the minister can now tell us the date on which this legislation will, in fact, be introduced?


Hon. Allan J. MacEachen (President of the Privy Council):: Mr. Speaker, for what has been introduced the hon. member has a ready reference in the order paper. I am not in a position today to indicate precisely the future dates but I can assure my hon. friend that such legislation will be introduced.


An hon. Member:: You just don't have any policy.


Paul Theodore Hellyer: I agree, at this stage there is none of which I am aware. In view of the fact that many people in my constituency are having to pay 40 or 50 per cent of their income for rent, and the Minister of State for Urban Affairs has no effective policy to improve that situation, and now that we find food prices rising at an alarming rate, will the minister not guarantee to this House-


Some hon. Members:: Order.


Mr. Speaker:: Order, please. I was going to suggest to the hon. member that he should ask his question, and I think I interrupted him just as he was going to do so.


Paul Theodore Hellyer: Mr. Speaker, perhaps, under the circumstances, rather than directing another supplementary to
Oral Questions
the government leader in the House, which I am afraid would result in a repetition of the answer he gave me the first time which was totally unsatisfactory to the House and to the Canadian people, I should direct my supplementary to the Prime Minister.


An hon. Member:: And you will get the same kind of answer.


Paul Theodore Hellyer: In view of the fact that no effective action has been taken in respect of either housing costs or increasing food prices, and that today small investors who invest their money-


Some hon. Members:: Order, order.


Mr. Speaker:: Order, please. Since the hon. member has had the floor for sometime, perhaps he should ask his question now.


Paul Theodore Hellyer: Yes, Mr. Speaker. I really felt the preamble was necessary to lay the basis for the question. I will put the question directly to the Prime Minister. In view of this unprecedented inflation which is now squeezing the little Canadian, can he tell the House any logical reason, on the basis of morality, why he and members of his government should not be indicted for larceny?


Some hon. Members:: Oh, oh!


An hon. Member:: You are someone to be talking about morality.


Some hon. Members:: Oh, oh!


An hon. Member:: You tell us about morality.


Some hon. Members:: Hear, hear!


An hon. Member:: Impeach Trudeau; down with the czar.


Some hon. Members:: Hear, hear!


FINANCE
Mr. Lome Nystrom (Yorkton-Melville):: Mr. Speaker, if I can get his attention I should like to direct my question to the Prime Minister.


An hon. Member:: Let's have a trial.


Some hon. Members:: Order, order.


Mr. Speaker:: Could we have order please.


An hon. Member:: Impeach the government; we could have a hell of a trial.


Mr. Speaker:: Order, please. The hon. member for Yorkton-Melville has been trying for a few moments to ask his

April 11, 1974
Oral Questions
question, and it is very difficult for him to do so with this noise in the House.


Lorne Edmund Nystrom: Mr. Speaker, my question is directed to the Prime Minister and relates to something that is not squeezing big Canadians, namely very high corporate profits. I should like to ask whether he can give the House a commitment that within the next two or three weeks there will be some action to curb excessive profiteering, whether in the form of an excess profits tax, a tax on wealth or something of that nature? Can he give us a general commitment that some action will be taken within the next few weeks in that area?


Pierre Elliott Trudeau: Mr. Speaker, surely the hon. member does not expect me to tell him what will be in the budget. All I am suggesting to the combined opposition parties is that if they have the courage to let us present this budget rather than trying to defeat us on some specious motion before that-


Some hon. Members:: Oh, oh!


Lorne Edmund Nystrom: Mr. Speaker, I was very careful to draft my question in general terms, not asking him to be specific. What I want to know is whether he can give us a commitment that within the next few weeks there will be some measure, in the budget or before that, regarding excessive profiteering in this country. There is no reason he cannot answer that, Mr. Speaker.


Pierre Elliott Trudeau: Yes, I can give a very firm commitment that there will be a budget which will be good for the Canadian people and for the Canadian economy.


An hon. Member:: When?


Pierre Elliott Trudeau: I think it is because the opposition suspects this that they do not want to let us present the budget.


Some hon. Members:: Hear, hear!


George Harris Hees: Bring it down next week.


Some hon. Members:: Hear, hear!


Mr. Speaker:: Order, please. Is the hon. member for York South rising on a point of order?


David Lewis: Yes I am, Mr. Speaker.


An hon. Member:: Lewis is going to call the election.


David Lewis: On a point of order, Mr. Speaker, the Prime Minister has twice referred to a budget which he thinks will be good for Canada, and has made cracks about the combined opposition, or the opposition not wanting to face it because of that reason. What he has to explain to this House and to the people of Canada is why he is deliberately delaying bringing down the budget.


Some hon. Members:: Hear, hear!


David Lewis: If he is so sure that the budget will be good for Canada and Canadians in their present difficulties, then it is immoral of him to delay presenting it.


George Harris Hees: Little David speaketh true.


Some hon. Members:: Hear, hear!


Mr. Speaker:: Order, please. I again doubt very much that this is a point of order. The Chair will recognize the hon. member for Mackenzie on a supplementary question.


REGIONAL ECONOMIC EXPANSION
Mr. S. J. Korchinski (Mackenzie):: Mr. Speaker, my question is directed to the Minister of Regional Economic Expansion. The throne speech makes reference to incentives for the production of livestock, and the Minister of Finance indicated yesterday that the government was moving in that area. However, a look at the main and supplementary estimates would indicate that no amount of money is being allocated for the development of community pastures, even though representations have been made to the minister for several years. Does the minister intend to put some funds into that area which would be very helpful in providing incentives to increase production?


Hon. Donald C. Jamieson (Minister of Regional Economic Expansion):: Mr. Speaker, I am not quite sure, without going over the blue book, which vote my hon. friend makes reference to, but certainly there are substantial sums both for the maintenance of community pastures, which have indeed been established over the last two or three years, and for extra ones. There is also a presentation under the PFRA presently in the final stages, which would have the effect of substantially increasing the amount of community pasture, particularly in my hon. friend's province. I would expect that the details in regard to that will be published in a very short time.


Stanley James Korchinski: I have a supplementary question for the minister. Do the present amounts as allocated in the blue book represent the entire amount that will be spent, because this seems to be just for general improvement and certainly not for bulldozing, clearing and seeding.


Donald Campbell Jamieson: Mr. Speaker, again I apologize to the hon. member in that I should like to go over the figures with him, but my recollection is that there is an adequate sum for an expanded program this year, but it might not necessarily be under the particular heading to which he refers.


POST OFFICE
Mr. Charles E. Haliburton (South Western Nova):: Mr. Speaker, my question is directed to the hon. Postmaster General. Can he tell the House what is the latest status of the work stoppage in Montreal by his government mail
April 11, 1974

employees and, furthermore, what action he is taking to prevent a further disruption of that mail service?


Hon. Andre Ouellet (Postmaster General):: Indeed, Mr. Speaker, we are now having some difficulties at the Montreal Post Office. However, I hope that things will get back to normal within a few hours. I would like to assure the hon. member that I find it most regrettable that a mere handful of employees can thus keep most of their colleagues from doing some good work.
Oral Questions
any strike action, which is an unprecedented feat in the history of the postal service.
I wish also to point out to the hon. gentleman that it is perfectly normal for an organization with some 50,000 employees to experience difficulties occasionally. For this reason I have regular meetings, nearly every week, with representatives of one or the other of the four unions of the department.


Charles E. Haliburton: I have a supplementary, Mr. Speaker. In view of the obvious decline in morale among postal employees across this country during the minister's term of office-


Some hon. Members:: Oh, oh!


Mr. Speaker:: Order, please. Would the hon. member kindly resume his seat. I really think hon. members should try to observe the rules. The hon. member who prefaced a question in this way ought not to be recognized for a supplementary, but I will recognize him and seek the co-operation of hon. members to ensure that questions and supplementary questions do not involve debate, argument and charges which merely invite responses which are not very helpful to all of us in our attempt to recognize as many questioners as possible.


Mr. Nielsen:: On a question of privilege, Mr. Speaker. With great respect may I say that the accusations by the Prime Minister on two distinct occasions today should be equally referred to by Your Honour.


Some hon. Members:: Hear, hear!


Mr. Speaker:: The hon. member for South Western Nova.


Charles E. Haliburton: Thank you, Mr. Speaker.


Pierre Elliott Trudeau: Mr. Speaker, on the same point raised by the hon. member for Yukon I feel I owe the House an apology, particularly the opposition. I am afraid I hit a raw nerve when I made those remarks.


Charles E. Haliburton: Mr. Speaker, I want to assure you that it was not my intention to delay getting an answer to my question. I attempted to do it as rapidly as possible in the first instance. I must say there is a growing concern about the decline in morale within the postal service. Perhaps I may be permitted to say there is a growing question across Canada about the morale in the Post Office and about the speed with which letters are being delivered from one end of the country to the other. In view of that, I wonder whether the minister could tell us approximately how long it has been since he sat down at the table face to face with members of all the unions of the post office in order to discuss the problems which are facing that institution.


André Ouellet: Mr. Speaker, I wish to remind the hon. member that since my appointment, the collective agreements of all our employees have been negotiated without


INQUIRY AS TO OFFERS TO PURCHASE ROUMANIAN OIL FROM GOVERNMENT
Right Hon. J. G. Diefenbaker (Prince Albert):: Mr. Speaker, I should like to direct a question to the Minister of Supply and Services.


An hon. Member:: Tar baby.


John George Diefenbaker: It has nothing to do with indecent exposure over the tar sands. I wish to ask him whether or not there have been any offers received for the purchase of the Roumanian oil. Have there been any offers?


Hon. Jean-Pierre Goyer (Minister of Supply and Services):: Mr. Speaker, all avenues have been explored for making use of this oil and the government came to the conclusion that it was wiser to use it in its own buildings.


John George Diefenbaker: That still does not answer the question. Did the government receive an offer of 15 cents a gallon as reported and is the minister not aware of the fact that this oil is so full of sulphur that it cannot be used for home consumption-


An hon. Member:: We will send some over to you.


John George Diefenbaker: -because it stinks. Might I suggest that it is not in that particular alone that this purchase stinks.


Jean-Pierre Goyer: Mr. Speaker, as usual, the right hon. member is basing his questions on hearsay. He will never change. I should like, however, to reassure him on the sulphur content. As I have already told the House, this content is 0.15 per cent while the tolerable rate can be as high as 1 per cent. So, the sulphur content of this oil is very low.


Mr. Speaker:: The Chair will recognize the right hon. gentleman on a supplementary and then the hon. member for Vancouver Kings way.


John George Diefenbaker: Mr. Speaker, would the minister kindly give the House the information concerning what offers he received and at what price, not generalities but facts.

April 11, 1974
Oral Questions


Jean-Pierre Goyer: Mr. Speaker, when crazy offers are made to the government, they are, of course, turned down right away.


FOOD PRICES
Mrs. Grace Maclnnis (Vancouver Kingsway):: Mr. Speaker, my question is directed to the Minister of Consumer and Corporate Affairs. In view of the threat by the president of the Food Processors Association that the price of processed vegetables will go up by 20 per cent to 30 per cent by this fall, will the minister see to it that the Food Prices Review Board makes an immediate investigation of the need for such a whopping increase, which will seriously affect the nutrition of millions of Canadians?


Hon. Herb Gray (Minister of Consumer and Corporate Affairs):: Mr. Speaker, I read the same article as the hon. lady and I did not regard it as a threat. In any event I will draw this to the urgent attention of the board.


Winona Grace MacInnis: Mr. Speaker, will the minister at the same time see to it that the board investigates ways and means of getting these vegetable products to the consumer by some method other than the present profit-hungry food chain?


Herbert Eser (Herb) Gray: I will also draw this to the attention of the board.


Mr. Speaker:: The hon. member for Frontenac-Lennox and Addington.


AGRICULTURE
Mr. A. D. Alkenbrack (Frontenac-Lennox and Addington):: Mr. Speaker, I have a question for the Minister of Agriculture which arises from complaints I received from milk producers in my constituency who state that there is a critical need for help in that industry which is not available. Manpower offices are unable to provide qualified and experienced help for these dairymen and persons out of work will not apply for this work. Has the minister any plan for a solution of this problem.


Eugene Whelan: Well, Mr. Speaker, in our society as yet we do not indenture anybody into any position at all. All we can do is ask them, coax them and beg them. I think also, Mr. Speaker, the hon. member could point out some of the problems to his colleague from St. John's East and point out, that this fact is to some extent why some of the dairy products are going up in price.


Mr. Speaker:: Perhaps the Chair might be allowed to recognize the hon. member for Brandon-Souris for a supplementary, because I failed to see him a moment ago, after which I will call orders of the day.


PUBLIC SERVICE
Hon. W. G. Dinsdale (Brandon-Souris):: Mr. Speaker, my question is directed to the President of the Treasury Board. It relates to the questions asked by the hon. member for South Western Nova and arises from the growing number of strikes in the public service. In view of the fact that the problems in the Post Office Department arise from sagging morale which is directly related to the emphasis on machines rather than men, as indicated by the difference in the pay classification between sorters and coders, would the President of the Treasury Board now review this discriminatory classification so that we might restore good morale to the Post Office Department.


Hon. C. M. Drury (President of the Treasury Board):: Mr. Speaker, I was interested in the analysis to which I just listened. It does not happen to correspond with the facts.


Walter Gilbert Dinsdale: In view of the fact that there is a wage differential in the classification laid down by Treasury Board of about 71 cents between sorters and coders, and the fact that this is like paying a person who drives an automated bus a lower wage than one who drives a manual bus, would the minister look into this very vital and important issue?


Charles Mills (Bud) Drury: Unquestionably there is a problem. I am not sure I would agree with the hon. gentleman's perception of it, but we will look into it.



GOVERNMENT ORDERS


[Stage Direction]
The House resumed, from Wednesday, April 10, consideration of the motion of Mr. Turner (Ottawa-Carleton) that Bill C-14, to amend the Farm Improvement Loans Act, the Small Businesses Loans Act and the Fisheries Improvement Loans Act, be read the second time and referred to committee of the whole.
April 11, 1974
Mr. Bill Kempling:: Mr. Speaker, yesterday I had just started my remarks on this bill when we were interrupted for the purpose of going to the other place to attend some of their deliberations, and when we returned it was six o'clock. Therefore, I will continue my remarks now. As I recall, I had read a letter from one of my constituents in which he recounted the problems he had when he went to the bank to try to get a loan under the Small Businesses Loans Act. I believe I related the fact that I had sent a circular to all the small businesses in my riding acquainting them with the Small Businesses Loans Act and telling them that if they so desired they could get a loan from the banks at 8V4 per cent interest. Of course, when I did that I realized that no bank manager in my riding would be friendly toward me, but I thought that that information would be of assistance to small businesses in my community.
I found, on talking to businessmen, that chartered banks use various tactics to discourage them from borrowing money under the Small Businesses Loans Act. As I read from the letter I had received, one bank manager said he had never heard of the act. I found that some of the chartered banks use other tactics. For instance, in some areas they will assign one of the branches, perhaps in the most remote residential part of an urban area, to handle small business loans. The object, of course, is to make it as difficult as possible for the businessman, to put another obstacle in his way and to make him change the bank with which he deals.
We know that bank managers come back in a hurry and say, "We will lend you money at 11 VS per cent or 12 per cent." We also know that some bank managers may be frightened of the risk and will direct the customer to the Industrial Development Bank, where a person will pay 11'/2 per cent, 12 per cent or 13 per cent. It is usually higher than the going bank rate. We must look into these matters carefully.
In the 1972 bank report, in the column setting out loans under the various banks, we find that the Bank of Montreal-which advertises on television that it helps people- made 433 loans in the whole of Canada under the Small Businesses Loans Act. The Bank of Nova Scotia made 134 loans. It seems that the Royal Bank outdid everybody and made 952 loans. The Toronto-Dominion Bank found it in their heart to make 181 loans. The Mercantile Bank of Canada made one loan, so it must have made a mistake there. The Canadian National Bank made 741 loans. The Provincial Bank of Canada made 41 loans. The Canadian Imperial Bank of Commerce made 358 loans. The Bank of British Columbia made 4 loans. Credit unions made one loan. This is a total of 2,846 loans in all of Canada in 1972 under the Small Businesses Loans Act. I submit that in any city in Canada with a population of 200,000 or more any one bank could have made 2,846 loans.
It is all very well for the government to make loans available at a low interest rate, but the fact is that banks have not been interested in this program. I have asked the Minister of Finance (Mr. Turner) many questions in the House and in the committee regarding this matter and I have always received one of his usual cryptic replies, the type to which I think we can almost assign a number-it could be called reply No. 27: I will take the matter up with
Loans Acts Amendments
the chairman of the Canadian Bankers' Association when we have lunch next week.
That is the type of practice that we would like to see stopped. We would like to see the minister and bank managers get together. I appreciate that one of the problems the banks are facing is lack of liquidity: they are short of funds. I am sure that if they have money to lend, they want to lend it at the highest possible rate of interest; and as a businessman I cannot fault them for that because it is the normal course of commerce. But the liquidity situation has not always been as it is today. If we go back to 1971 and 1972 and look at the statistics produced in the report, we see that the highest number of loans ever made under the Small Businesses Loans Act is 2,977, and that was in 1961. Eleven years later, in 1972, the latest report that we have shows the banks only made 2,846 loans. This makes me question the sincerity of the minister and of the banks.
Something should be done for small businesses in this country. I am sure that all hon. members recognize weaknesses in small businesses. Some of them are specialists in everything but financing. I also recognize that they have many problems. But, as I said at the beginning of my remarks, small businesses are the backbone of and provide stability to Canadian commerce. They create over half of Canada's gross national product and employ over half of the working people in Canada. They rarely have lay-offs; they rarely have strikes. They pay their taxes and they pay their employees. They are the ones who keep the country going when other things go wrong.
When you look at the facilities that are available to small businessmen in the conduct of their businesses, you understand that if the government is really going to make a meaningful contribution toward helping small businesses it will have to amend the Bank Act in the near future. One of the problems of small businessmen is acquiring working capital. Small businesses are not labour-intensive and are usually not capital-intensive. But they are working capital-intensive. This is particularly important today in a situation of tight supply of materials. I have discussions with many small businessmen regarding the supply of steel, for instance. We find that the standard angles, channels and shapes are not available in the normal course of events, and in part this is because wholesalers are using the shortage of supply and tight money situation to their own advantage.
The small fabricator finds that if he places a c.o.d. order with a supplier, he gets the material right away; but if he places an order under the normal terms, in most cases the warehouse tells him to call back tomorrow and they just might have something for him. This all relates to the problem of working capital. The small businessman cannot exist unless he has money available, and if the prevailing situation requires him to pay cash for the supplies he needs in order to operate, he is soon in serious trouble.
I am glad the suggestion made yesterday to deal with this bill in committee of the whole, rather than sending it to the standing committee, was adopted. This will ensure getting the legislation into operation sooner than if it

April 11, 1974
Loans Acts Amendments
went to the finance committee, in view of the backlog of work of that committee. I hope the minister will read the remarks made by members of his own party regarding the difficulties encountered by fishermen, farmers and small businessmen when they apply for bank loans. It is all very well to increase the limit to $50,000, but with the present limit of $25,000 the average loan across Canada is only $9,500. I hope we will see a substantial increase in this respect and that many small businesses will be able to take advantage of the Small Businesses Loans Act provision for new businesses which is not available in the act as it now stands.
With those remarks I shall conclude, Mr. Speaker. I hope we can bring this debate to an end before whatever is going to happen, happens-I think you know what I mean-so that we will be able to pass on to the small business community whatever advantages will accrue to them from this amendment to the Small Businesses Loans Act.


Frank Howard: Mr. Speaker, I just want to make a couple of very brief remarks with respect to this bill. Because it is divided in three, part of my remarks will relate to that section of it which deals with the Fisheries Improvement Loans Act. At the outset I should say that I wonder why the House is taking this tack and exerting its energy and consideration on something so insignificant and of so little value to fishermen as this bill. It just seeks to amend in a very slight way the amount of money that a fisherman may borrow from a bank or other lending institution for the purposes contained in the act. It seeks to extend from $25,000 to $50,000 the limit that a person can borrow. Anyone not familiar with the fishing industry could argue that this is a substantial alteration, but let me make a few comments with regard to the salmon fishery on the west coast for the sake of argument.
Five or six years ago the Minister of Fisheries instituted a licensing limitation program in the salmon industry. With the continual "early morning upon arising" changes that the minister announced respecting that initial program, to the point that very few fishermen knew what it was all about-because the change obviously was the result of a heavy meal before bedtime, which produced a rather nightmarish situation for the government-things have gradually cleared to the point that on the west coast there is a limitation on these licences: only a certain number are issued and no new ones are allowed. This has been the case in the taxi industry, in the forest industry and in every other industry where franchises are involved.
In the case of the fishing industry, the cost of the licence is more than the value of the boat to which it applies. The current selling price for a salmon licence on the west coast ranges from $3,500 and $4,000 per ton of fishing vessel. A very small troller of 36 feet to 38 feet which has a salmon licence can cost a fisherman from $65,000 to $75,000. He pays more for the licence than for the boat: the larger the boat, the greater its tonnage and therefore the higher the price. In that type of atmosphere a $50,000 limit under the provisions of this act is meaningless to the average fisherman. Therefore, it is hardly worth the House taking the time to listen to what the government has to say on the matter.

The other matter I want to mention is broader in application and relates to interest rates. All three of the acts being amended by this bill, the Farm Improvement Loans Act, the Small Businesses Loans Act and the Fisheries Improvement Loans Act, contain a provision relating to the rate of interest a financial institution or chartered bank may charge on a guaranteed loan. The rate may fluctuate. I do not know the current rate: one can ascertain this by 'phoning the bank. Probably the current rate is in the neighbourhood of 714 or 7Vi per cent.
Because interest rates are limited, the government guarantees the loan. No matter whether the default is by reason of insolvency or any other reason, the loan is guaranteed absolutely by the government of Canada. Therefore there is no possibility of the bank losing any of the capital involved. Originally, I suppose, the saw-off came in this way; the government said to the banks, "If you will agree to limit the rate of interest you will charge on these loans, we will guarantee the loans unconditionally."
I would argue that we should limit interest rates on moral grounds rather than on financial grounds. What are these moral grounds? The people with whom these acts deal are probably in the most vulnerable position in the business world. Being farmers and fishermen, they are primary producers who are subject to a great deal of economic pressure. They have little control over the price they receive for their produce and no control at all over the price they must pay for materials, commodities and services which are necessary if they are to maintain their farming, business or fishing operations. In short, they are at the mercy of large forces in society and are caught in this squeeze. Somebody else dictates what they will pay for their supplies and somebody else dictates, to a great degree, the price for which they can sell their produce, whether it is the produce of the farm, of the sea or of our fresh waters.
The small businessman is in the same position. He is not so much a producer as a provider of services which involve, for instance, retail distribution and things of that kind. He is at the mercy of the large pressure groups in our economy. My argument is this: because these people cannot exercise much leverage in the economy, it behooves us to pay greater attention to their economic position. Therefore we should limit the interest rates they must pay. Because interest rates are limited, banks, other lending institutions and credit unions-which, although more sympathetic perhaps than chartered banks, are still caught in the cost squeeze for money-are reluctant in some cases to lend. Lending institutions say to themselves, although not in public, "Why should we lend money under the Fisheries Improvement Loans Act at 7 !4 per cent when we can lend money to the fellow next door at 11 per cent?"- or whatever the going rate is.
If the prime bank rate is 9 Vi per cent, the most advantageous rate for a borrower would be 1 per cent higher. We are talking about a rate in the 10 Vi to 11 per cent bracket. The bank says to itself, "Why should we lend money under these acts at 7!4 per cent when we can lend it to somebody else at 10 Vi per cent? Why should we forgo 3 per cent interest?" Considering the fact that banks were estab-
April 11, 1974

lished in the first place to lend other people's money and not to provide any beneficial service except to themselves, one can understand that attitude. Why should they not operate on that basis? The person who suffers from that attitude is the individual fisherman, small businessman and farmer. The acts may guarantee loans and limit interest rates, but the farmer, businessman or fisherman finds it difficult to obtain money.
In a previous session, and again in this session, I brought forward a bill which would establish a different principle and concept with respect to lending under these acts. I submit that if it is public policy, and good public policy

which I submit it is-to limit the interest which lending institutions can charge, then we as the parliamentarians who have imposed that limitation must make sure that lending institutions do not discriminate against those entitled to borrow under these acts.
The bill I introduced contains a provision which ought to be incorporated in the bill before us. That provision is that lending institutions should be required to make available sums of money for lending under these acts which are not less than the average they have lent, say in the last five-year period. It really does not matter what period you use so long as you are consistent. That is to say, they should be required to make money available under these acts to potential borrowers, and they should not be allowed to refuse to lend money on the basis that they are not making a large enough profit on the loan. If an individual entitled to borrow under these acts goes to the bank, applies for a loan and on a logical and reasonable basis is refused a loan, that individual should have the right to appeal the decision of the bank to the Department of Finance or some structure within it. This body would assess the potential of the borrower and either say he was a poor risk and the bank was right, or he was a good risk and the bank was wrong, in which case it would direct the bank to make the loan.
It must always be kept in mind that these loans are underwritten and guaranteed by the people of Canada through the minister of finance and the government of Canada.
Unless we make some kind of effort in this direction we will find that the higher interest rates-and they will go higher-will work to the disadvantage of potential borrowers under these three acts. It will be more attractive for the banks and lending institutions to lend money at the higher going rate than under these acts.
At the moment, a number of banks are engaged in the practice of borrowing money from private individuals by means of term deposits. The banks borrow this money for a term of five or six years at an absolute guaranteed rate of 8'/2 per cent. There was an ad in yesterday's Ottawa Journal by some trust and loan companies. In letters six to eight inches high they guarantee an interest rate of 9 per cent for term deposits of up to five or six years. If lending institutions are going to commit themselves to carrying an 8 'A or 9 per cent liability on money that they borrow for five or six years, they are also going to commit themselves to charging higher interest rates on the money they lend.
Loans Acts Amendments
This will be necessary in order to obtain the money with which to pay the high interest rate.
The longer this situation is permitted to continue, the more we will be looking at a continuation of potentially higher interest rates. The more that happens, the more the general public will suffer with regard to interest rates on loans for housing and other things. However, because this bill is before us we have to relate our concern to it. The more that happens, the more our farmers, fishermen and small businessmen will be disadvantaged. They are now disadvantaged more than any other group in the entrepreneurial field which produces by its own efforts. In spite of the limitation increase from $25,000 to $50,000 for fishermen-regardless of how little value that is with today's costs, the value of fishing boats and the like-they will still be disadvantaged by the banking and lending institutions.
I have not considered the bill in any detail. I will do that at the committee stage. Because of the recommendation of His Excellency which confines the area to be considered in committee, I am not sure whether procedurally we can move amendments. I do not know whether the concepts I have included in a bill now before the House, and which I advanced a moment ago can be fitted into this bill. If it can be done at the committee stage, or possibly at the report stage, I hope to introduce these types of amendment so that the House and the committee will have an opportunity to express a view about the concepts I have advanced. That is supplementing the morality aspect and the recognition this parliament is giving to the needs of farmers, fishermen and small businessmen by the guarantee procedure and saying they will not be disadvantaged because some loan shark thinks it is more profitable to lend money other than under this act. If I can fit those amendments into the committee stage or the report stage, I will certainly do so.
I hope that with that brief introductory comment, members will give some thought to the ideas I have put forward. Hopefully, something of this nature will be written into the legislation to further protect the position of people who borrow under these acts.


Charles E. Haliburton: Mr. Speaker, I intend to speak only briefly on this bill. However, often when one intends to speak briefly he gets carried away. Certain aspects of this bill are beneficial. On the whole, it is legislation we can endorse in principle and I hope it will be speedily passed by this House.
I would echo some of the remarks of the hon. member for Skeena (Mr. Howard) with regard to lack of real content in the bill in terms of what it will do for the fishermen of Canada. This legislation was first put into place in 1955 with a lower lending limit to fishermen. That limit was increased, and is to be increased again so that fishermen may obtain a maximum loan of $50,000. I suspect that with the degree of inflation we have experienced in this country, that increase in the ceiling is not as beneficial as the amount was when the legislation was originally conceived, in terms of total buying power.
As the hon. member suggested, the limitation does not take into consideration the changing nature of the fishing industry since 1955. In this day and age, fishermen operat-
1370

April 11, 1974
Loans Acts Amendments
ing a $50,000 boat are really confined to the inshore fishery. By "inshore" I mean within about 15 miles of the sea coast. On the coast of the part of Canada from which I come, fishermen find it necessary to range 200 to 300 miles in order to make a year's pay in dragging and long-lining operations.
The Department of the Environment enunciated a program for the fisheries that seems to be at cross-purposes, to some extent, with the measures proposed in this bill. The department is attempting to encourage fishermen on the east coast to think in terms of more far-reaching vessels in order to fish off the coasts of Labrador, Greenland, the Flemish cape and in southern waters where there are species of fish available which are not being harvested to the fullest extent. Such a vessel costs from $1 million to $1.5 million.
A fisherman interested in engaging in the fishery that is now the major push of the Department of the Environment would be excluded from participating in it if he were to rely for his financing upon commercial banks lending money under guarantees authorized by this act. If the resources of the fishermen are limited and there are very few who can put up the difference in capital between what they can borrow under this act and what such a vessel costs, then to that extent they are precluded from owning such a vessels in which to fishing.
It is encouraging to see that this government which has been prone to regulating and restricting production and unable to assist farmers, fishermen and small businessmen, that has been so intent upon regulating the fishery to the point where it is very difficult to make a living or to have the diversification necessary, because of restrictions on licences, and so on, is at least thinking in terms of making credit a little easier for the fishermen to obtain.
There may be a substantial gap in the intent of the statute and the result it will produce. One of the members of the party to which I belong spoke yesterday of the success, if you like, of this plan as a means of financing fishermen in the Atlantic region. I would point out that each of the Atlantic provinces has its own loan board which advances money to fishermen at various rates of interest. In Newfoundland the rate of interest is very low. In Nova Scotia it is high in relation to the income a fisherman borrowing money under this proposal could earn.
In Nova Scotia there has been a dramatic increase in the amount of money lent to fishermen under this scheme in the past year compared to the previous year, but even in that province more than twice the amount of money was lent by the Nova Scotia fishermen's loan board to fishermen as was lent by commercial banks under this program. It has been suggested by speakers before me, and I think it is an easy conclusion to draw, that there are good reasons for this situation. One is that the banks are more willing to lend at a much higher rate of interest to other borrowers, or to fishermen borrowing on a straight loan. And, of course, as far as loans by the Nova Scotia fishermen's loan board are concerned, the arrangements are a little more realistic. The repayment term under this legislation is ten years, but a slightly longer term is provided under the

Nova Scotia fishermen's loans act. The time during which the debt can be repaid corresponds more or less with the productive life of the fishing vessel.
Under this legislation, though, only fishermen acquiring small boats, or prepared to carry out no more than minimal repairs, are able to borrow funds adequate enough for their purposes. Under the Nova Scotia fishermen's loan act a fisherman is able to borrow whatever money he needs, less 25 per cent. Thus, in the case of a vessel costing $1 million, if a fisherman is able to scrape up $200,000 or $250,000 he can purchase a ship capable of ranging in the offshore areas.
Under this scheme, if he arranged for a loan from the bank repayable in ten years, he would still be looking for a further $950,000. It follows that anyone who is interested in this kind of fishing would find such arrangements prohibitive. To give hon. members some idea of the costs involved in my area, let me say that the cost of a motor alone, of the kind commonly installed on an inshore fish dragger, is about $40,000. This alone would exhaust the amount one might borrow from a bank, even taking the present amendments into account. The provision of salt water cooling facilities in the hull of a vessel would account for $75,000 or more. A boat capable of fishing in a number of fisheries, sufficiently diversified to enable it to operate as a midwater trawler engaging in the herring and groundfish fisheries, would cost between $300,000 and $500,000.
Thinking in these terms, the act is obviously way behind the times. It will not help in any meaningful way fishermen such as I have just mentioned. I suggest it runs at cross-purposes with an objective which the Department of Fisheries' is seeking to achieve, since the act will not help our fishermen to compete with foreign vessels which are fishing in inshore areas and stripping our fisheries of their marine resources.
A striking divergence exists between amounts loaned under the act in various areas. Nova Scotia and British Columbia have fishing fleets which I assume are of approximately the same size. The value of fish landed is approximately the same in Nova Scotia as in British Columbia. Yet British Columbia fishermen had borrowed under this act, up to December, 1973, more than $2 million, while Nova Scotia fishermen had borrowed only $420,000- approximately 15 per cent of the amount of money loaned. Almost 80 per cent has been going to the coast of British Columbia.


Mr. Barnett:: Would the hon. member permit a question on that aspect?


Charles E. Haliburton: By all means.


Thomas Speakman Barnett: Is the hon. member aware that figures under the Fisheries Development Act, which is a grants program, show that the proportions of funds received as between Nova Scotia fishermen and British Columbia fishermen are reversed? In point of fact, most of the fishermen in British Columbia are not eligible to receive grants under the Fisheries Development Act. This may explain their resort to borrowing.
April 11, 1974


Charles E. Haliburton: I thank the hon. member for drawing this to my attention. The point I was attempting to make in my timorous way was this: aside from any other legislation, the need to borrow on the east coast under guaranteed loan provisions is surely as great as it is on the west coast, yet for some reason fishermen on the west coast have been taking greater advantage of this act.


Thomas Speakman Barnett: British Columbia fishermen have no alternative.


Charles E. Haliburton: I would suggest that the alternatives provided for the benefit of fishermen are not as numerous as they might be. It is encouraging that the government should be considering ways of enabling fishermen to finance the upgrading of their equipment and to purchase new equipment. It is, however, discouraging that the minister should have acted in such a penny-pinching way. The object should be to put into fisheries as much money under the provisions of this act as is currently being put into small businesses of other descriptions.
The concept put forward by the hon. member for Skeena would require the banks to lend money to the fishermen. That is an interesting concept. It would have an obvious difficulty in that it would require additional regulation, and it is apparent to everyone that the banks are reluctant to lend money under guaranteed lending schemes with fixed interest rates. Bank managers and the banking institution as a whole are reluctant to make such loans because they know low interest rates limit the amount of profit they can generate.
I suggest to the minister that in considering revisions to this act it would be worth while to consider making money available under its provisions for the purchase or upgrading of equipment used by fish dealers and small fish plant operators. I suppose they can qualify under this legislation, but such provision would seem to fall more readily, for administrative purposes, under the provisions of the Small Businesses Loans Act.
This bill does contain encouraging aspects and I hope it will be dealt with by the House in the manner suggested by other members of this party.


Henry P. Latulippe: Mr. Speaker, I am pleased to say a few words on Bill C-14 which is divided into three parts and is designed to promote small businesses.
Mr. Speaker, I must say that small businesses like many other business enterprises, are in a most desperate situation. They provide many jobs for Canadians. I think that a high percentage of the labour force is employed by small industries which contribute a great deal to the transportation sector, because they are usually located rather far from large centres and have very high transportation costs.
Federal and provincial governments make fantastic amounts of money in transportation.
In my opinion, small businesses are needed and should exist. Moreover, I am one of those in favour of helping small businesses because they operate in all areas. You
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should see all the goods manufactured by small enterprises. At present, most small businesses are facing financial problems due to an imbalance in the economy.
As the cost of living increases and the cost of transportation and labour doubles or triples, small industries, like all other industries, have to raise their prices because they have to buy machinery and equipment. They must also double or triple their prices. Therefore, small businesses lack capital. Banks or financial institutions used to advance $25,000 to small industries under the legislation adopted by the government. Those $25,000 are not worth anything now because of the increase in the cost of living. About ten years ago, industries could buy machinery for $5,000 or $6,000, but today the same machinery costs $25,000. What can they do with a $25,000 loan? Because this small loan is granted to some industry by a bank, guaranteed by the government and by a first mortgage, the industry is cornered and can no longer operate, because $25,000 are not enough. Since it is a first mortgage, the industry can not borrow more and is caught by this very system. In the past, the $25,000 loans system for small business was better than nothing. It was convenient then for small businesses, but today it is ridiculous, it is clearly inadequate because if a man wants to buy one single piece of equipment for $15,000, $20,000 or $25,000, he will have to settle for second best. One single piece of equipment can cost that much and we know that an industry needs more than one.
The bill proposes to increase the loans to $50,000. Once again it is better than nothing, but it is inadequate for small businesses would need loans of at least $100,000 because everything is so expensive. What can anyone build with $50,000 when employees are paid $8 or $9 an hour and materials sell for prohibitive prices? Thousands of dollars do not last long. With four or five employees, any building can cost $25,000 to $30,000. What can you do with that? Mr. Speaker, some small businesses will be crippled with loans of only $25,000.
All hon. members and all Canadians know that small businesses are not allowed capital stock. Businesses with capital stock can operate because there is no need in this case to repay interests. We do not have to pay back but 75 per cent of small industries in the province of Quebec are unable to issue any capital atock. So they have to borrow, pay interests, and pay back. This paralyses them.
Mr. Speaker, this type of loan should be increased to at least $100,000 and should be payable over a period of 20 years at an interest rate lower than 3 per cent since the government backs them up and it is for the good of the people of this country.
Mr. Speaker, all sorts of measures are introduced, such as the Opportunities for Youth Program and the Local Initiatives Program, millions and millions of dollars are spent to subsidize useless things, and 75 per cent of those amounts are being wasted. Some industries could use them and hire young unemployed students who want to earn money. But no, they are given loans and grants of $1,000, $50,000 and even $100,000, Mr. Speaker, which in 80 per cent of cases are simply being wasted and do not benefit the economy.
This does not create any asset for the economy whereas if those monies were given to small and medium industry
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to hire those people, show them how to work, make men out of them, small industry would benefit from it and working people or students would be learning something. We would be building something for this country, we could have cheaper products and consequently bring prices down.
If interest rates in small industry were only 3 per cent we would not have today an unprecedented increase in the cost of living, daily increases in all sectors. What I ask for small industry I also ask for farming and all sectors of society because if funds were made available at low interest rates they would produce a lot, and more cheaply. Society would then feel much better and we would enjoy price reductions as well as a lower cost of living instead of incurring price increases.
In connection with inflation, Mr. Speaker, it is easier to have a full purse than pay more at each purchase.
Price increases hurt, but a well-lined purse is nice. We should keep alert and one day set up a system which would enable the citizens to be self-sufficient in a wealthy country.
We are told it cannot be done because there is a shortage of commodities. If there is a shortage of commodities at the present time in various sectors of the economy, strikes and unions are crippling production. This is why there is a lack of goods and the cost of living is increasing. At the present time, unions are going too far and it is the duty of the government to cope with those conditions.
There are no longer any limits, Mr. Speaker. It is quite well to increase wages, to increase this and that. It is quite well to say the boss is making money, but 75 per cent of the bosses earn less, while working 10 to 15 hours a day, than some of their employees. The bosses earn less despite all their responsibilities.
Mr. Speaker, those small industries are providing the federal, provincial, municipal and school funds. Small firms are overtaxed to the extreme by school boards and municipalities alike.
A large number of municipalities entice small firms with promises. No sooner are they established that they are choked by taxes. A few years later, they are forced into bankruptcy.
Moreover, Mr. Speaker, small firms are being exploited-nobody mentions this, so I will tell you myself-by insurance companies. They are forced to mortgage their assets to buy insurance. These insurances choke industrialists and small businessmen alike. The premiums are much too high, Mr. Speaker. Nobody cares to say anything about this. We behave as though this was a trifle, like financing or 10 to 12 per cent interest rates. This seems somewhat sacred. When there is an increase in interest rates, nobody bats an eye. This seems somewhat sacred too. Mr. Speaker, there should be a limit to the exploitation of society.
We know that our ten Canadian financial institutions made more than $15 billion. This year, the increased their assets to more than $15 billion apart from another $15 billion which was concealed in some reserves. So we can say that our financial institutions increased their assets

by some $30 billion. No one says a word about that. The NDP particularly does not say anything. They wish to cut the throat of producing corporations that make profits but they have nothing against the financial institutions which are fleecing Canadians and make excessive profits.
So, Mr. Speaker, in order to balance our economy we need certain fair standards because there must be some justice. Everywhere, in every part of society we are exploited to death to such a point, that I could foretell, even if I am not a prophet, that if our present system continues to operate as it does now, terrible disasters are bound to occur within ten years. It will surely break somewhere if we do not act to stop inflation, reduce interest rates and the cost of living to allow Canadian to have a decent living. If we do not act, the present system will not survive a long time. The debts and the deficits we are now accumulating cannot past for ever. Out of 20 years of administration, all governments, whether they were red or blue, did finish two fiscal years with two small surpasses and 18 years with deficits. This year, and the Minister of Finance (Mr. Turner) knows it very well, we will have another deficit as usual. And in order to balance the government's budget we have to debalance the budget of taxpayers and then, in order to balance a little the budget of taxpayers we debalance that of the government. This means that our economy is badly organized and directed. This means also that in all sectors of society, we ought to apply remedies, and we have been suggesting some for a long time. And as long as the Minister of Finance does not find anything other than what we have now, things will keep on getting worse. Our economy keeps on tumbling down. Indeed, there is no balance in it.
Mr. Speaker, Canada is like a big company. We are all shareholders in that firm and we have to participate in it through taxes. But we are pressurized by taxes and our company is always in the red. Are there any private firms or financial institutions which would work this way? I do not think so. If we have a company into which we keep on investing money and which never shows any profit and if we keep on showing a deficit, our society is sick and needs some remedies. Mr. Speaker, we have suggested several adjustments: lower interest rates, compensated discounts on prices, on transportation, discounts for farmers, compensated discounts on tractors, on railways. To pay for this, Mr. Speaker, to give these compensated discounts on prices, we would have to collect the money from the profits of large comtjanies and large financial institutions.
When we have an overproduction of $25 or $30 billion, we are certainly able to provide compensated discounts to distribute this overproduction which belongs to everybody. Since Canada belongs to the people to each Canadian should receive his share of the assets that nature and the work of man have produced.
The small business sector needs many reforms. Even with a $50,000 loan to the small industry, we will not be able to save it. It would provide a certain stimulus, it would help the small business, extend its years of operation, but it would not solve the problem. The small business would still be in stagnation just like agriculture is in stagnation.
A few years ago, the hon. Mr. Duplessis had saved agriculture thanks to farm loans and the federal govern-
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ment had also saved agriculture thanks to its farm loans, assistance plans and subsidies of all kinds.
More than ever today, agriculture is in stagnation. Industry faces the same problem. Since big business can automatically finance its operations by issuing shares or social capital, small business has much difficulty in competing against these large corporations. They need the help of politicians because otherwise, they will close down, which will increase the number of unemployed in our country by hundreds of thousands.
If we want the people to work instead of just receiving unemployment insurance or social assistance benefits, if we really want to have them work logically, loyally, to have them build what has to be built throughout the country, to demolish what no longer works, we will modernize Canada.
We need loans at very low interest rates. This government can grant those loans, if it so wishes. Instead of accepting higher interest rates as we can foresee now, it can make them go down. Why does it not guarantee a 3 per cent interest rate for our industries and other sectors of our economy? We would then have a new boom and the economy would be better balanced. There would be more motivated people willing to build more than to demolish, as is the case today.


John Napier Turner: I rise on a point of order, Mr. Speaker. Pursuant to discussions I have had with certain members of the House, I wonder whether we might return to motions for two minutes so that I might table a document.


Mr. Deputy Speaker:: The House has heard the suggestion of the Minister of Finance (Mr. Turner). Is this agreed?


Some hon. Members:: Agreed.



ROUTINE PROCEEDINGS


John Napier Turner: Mr. Speaker, the Secretary of State for External Affairs (Mr. Sharp) in announcing this afternoon before a special session of the United Nations in New York that Canada will implement the Canadian system of tariff preferences for developing countries on July 1, 1974.
Under the terms of Standing Order 41(2) I wish to table documents setting out the details of the system as developed under the legislation approved by parliament last year.


Mr. Deputy Speaker:: I take it there are no comments on the announcement by the Minister of Finance (Mr. Loans Acts Amendments
Turner). Accordingly, the House will return to the business that was interrupted a moment ago.



GOVERNMENT ORDERS


[Stage Direction]
The House resumed consideration of the motion of Mr. Turner (Ottawa-Carleton) that Bill C-14, to amend the Farm Improvement Loans Act, the Small Businesses Loans Act and the Fisheries Improvement Loans Act, be read the second time and referred to committee of the whole.
Mr. Norval Horner (Battleford-Kindersley):: Mr. Speaker, I am pleased to take part in this debate on the amendments to the Farm Improvement Loans Act. This act has been of great benefit to the farmers over the years as a source of readily available money. It has been accessible to the farmers through the banking and other lending institutions in every area.
Everyone would agree with the amendment raising the amount of a loan from $25,000 to $50,000: it is just keeping up with inflation and farm input costs. The price of tractors has gone up from $10,000 to as high as $25,000. The same is true of combines. It does not take very long to eat up the present maximum of $25,000. Also, the amendment to the act will allow farmers to borrow for the overhaul of tractors and farm machinery. It will be welcomed by many as the cost of overhauling large tractors is sometimes in excess of $2,000.
Other amendments allow the removal of limits and permit a person to borrow the whole amount on land and use it in the way he sees fit. This might create a problem because if each farmer can borrow up to $50,000 on the purchase of land, a tremendous amount of money will be funnelled into the purchase of land and there will be a heavy drain on the money supply. Since the inception of the act nearly 30 years ago, $3 billion have been lent and in the next 12 months, if the money is made available, $1 billion could be lent. In fact, the $1.1 billion which the government will guarantee to banks could easily be used up before June, 1977, the date mentioned in the bill.
I see a conflict between borrowing under the Farm Improvement Loans Act and under the Farm Credit Corporation Act, and I am pleased that the government has seen fit to bring in this legislation before its other very high priority, football legislation. I would rather have seen amendments to the Farm Credit Corporation Act brought in first and then the Farm Improvement Loans Act amendments to add to the farmer's credit requirements. I think there will be a heavy drain on this fund for land because at present under the Farm Credit Corporation Act

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money can be lent only on the appraised value of land, which amounts to about 60 per cent or 65 per cent of its actual market value, and under the Farm Improvement Loans Act money can be lent on 75 per cent of the market value.
Therefore, all these people who are refused loans under the Farm Credit Corporation Act will be heading back to the banks and other lending institutions and demanding loans under the Farm Improvement Loans Act for the purchase of land. This may have the effect of increasing the cost of land, which is rising rapidly as it is, and the result could be disastrous.
One of the shortcomings of the legislation is that one does not know where the money will come from. I cannot see banks or lending institutions advancing money for the purchase of land at 814 per cent or, for the other purposes outlined in the act, at 8 per cent. I have spoken to quite a few banks and credit unions in my area. They are not having any trouble lending money for equipment and quite a variety of things to farmers at 1014 per cent or 954 per cent, which is the prime rate. The government is guaranteeing loans by banks at 814 per cent, and banks are lending all the money they can at 914 per cent and 1014 per cent. Banks and credit unions in Saskatchewan are offering depositors a return of 814 per cent on their deposits and the government agrees to back loans at 8 per cent. It does not seem possible that banks will make money available at these low interest rates.
In discussions with various chartered bank managers in my area I have found that some of them have been discouraging FILA loans and some have been reserving the money for certain of their customers. Some banks are not even willing to lend money under the FILA. It is easy to see why, since they can make a loan on equipment at a much higher interest rate. Farmers have the equipment in their possession and the banks are not worried about security. So guaranteeing loans at 814 per cent is not advantageous to the banks.
The hon. member for Saskatoon-Biggar (Mr. Gleave) suggested that this bill would be doing a great favour to the banks, but quite a few of the bank managers to whom I spoke did not see it that way at all. In fact, they thought quite the reverse. One of them suggested that they would probably require $100 million in the next 12 months to make loans which people would request in that short time. The bill suggests that loans be made for cattle purchases. Of course, in Saskatchewan under certain conditions farmers are able to borrow for the purchase of cattle at a 7 per cent interest rate. I do not expect many farmers will borrow money under FILA at 8 per cent if they can get it at 7 per cent.
I agree with the amendment, Mr. Speaker. I can see that it removes some of the problems, but I am afraid the money will not be made available unless at a higher interest rate, which is probably coming anyway.
One reason for the heavy drain on money is the cost of machinery and labour and the shortage of people on the prairies trained in the repair of machinery. If more labour had been available in my area in the past there would not have been such heavy expenditures of capital. In France,

for example, there are about three million migrant workers, and in Switzerland one million. If the government is anxious to help farmers and small businessmen they can do it by helping overcome the labour shortage on the farms and small businesses in the west.


Mr. Jack Marshall (Humber-St. George's-St. Barbe):: Mr. Speaker, I want to add just a few remarks to the debate on Bill C-14 which amends the Small Businesses Loans Act, the Fisheries Improvement Loans Act and the Farm Improvement Loans Act primarily to allow for increasing the maximum amount of loans to $50,000 from the present $25,000. Nobody can quarrel with the amendment, but I have been very concerned about government guaranteed loans as they apply in my province. The increase in the maximum amount of the loans to half a million dollars is all very well, but my province is not receiving any benefit from this. I should like to quote from the latest reports. For example, under the Fisheries Improvement Loans Act in the period October 1, 1973, to December 31, 1973, Newfoundland received 14 loans amounting to $35,000. So what difference does it make whether the maximum amount is $25,000 or $50,000? Even Prince Edward Island received 40 loans amounting to $89,000. Something is wrong, Mr. Speaker, and I know what it is.
According to the latest report of the Small Businesses Loans Act for the period October, 1973, to December, 1973, Newfoundland received two loans amounting to $50,000; from January, 1973, to December, 1973, there were six loans. There must have been a good bank manager at that time. Under the Farm Improvement Loans Act, for the same period, Newfoundland did not receive any loans, and from January to December, 1973, there were three loans amounting to $8,788. In 1972, Newfoundland received four loans under the program, amounting to $6,500. The reason is that the agency responsible for carrying out the programs, the chartered banks, did not trust the small man to whom these programs are directed. I have evidence to show that they steer fishermen, farmers and small businessmen away from government loans because of the preferred rate of interest and, instead, guide them toward conventional loans which carry a high rate of interest.
Just recently I gave the Minister of Finance (Mr. Turner) an example where a fisherman, having taken his loan over three years, started out paying 8 per cent interest. In the half-year adjustment the rate of interest dropped to 6 'A per cent, but he was charged 8 per cent for the duration of the loan. I can name 18 or 20 loan programs designed either by the federal government or the provincial governments, or under the auspices of both on a co-ordinated basis, directed toward the farmer, the fisherman, the sawmill operator, storekeeper or small businessman-and all they do is cause confusion.
Just a few days ago we gave first reading to a bill introduced by the Minister of Industry, Trade and Commerce (Mr. Gillespie) to establish a new federal bank. It apparently is going to take over from the Industrial Development Bank. Industrial Development Bank loans are a last resort. If you cannot get anything from the mean bank manager, you go to the Industrial Development Bank. But before you can get a loan there-and you spend two or three years in the effort-they want to take your wife and
April 11, 1974

family and everything else as security. So you give up in frustration.
Under the federal and provincial governments a new corporation was recently formed in Newfoundland, called the Newfoundland and Labrador Development Corporation. It was also designed to grant loans to small businessmen. It has a big staff, a board of directors and offers consultative services and management advice, the same as the Industrial Development Bank and, I am sure, the new bank proposed by the Minister of Industry, Trade and Commerce. All that happens is that the borrower becomes more frustrated, and in the end he gets a letter saying that he does not qualify for a loan. These programs are there just because it is politically advantageous at some time or other to announce them.
An agricultural capital assistance program was announced recently in Newfoundland, where a prospective farmer can borrow up to $6,000 plus $200 per acre of eligible farm land and money for other purposes. This is another program just to confuse the issue. Under agreement with the federal government and the province of Newfoundland, there is the rural development loans program under which a small businessman may borrow $10,000 interest-free. Under the general development agreements there are many other programs and development incentives, all substantially directed to the small businessman, the farmer and the fisherman; but still most applicants are told that they do not qualify for any loan. I wish the government would consolidate all these programs that are directed toward the one borrower, instead of designing so many different ones. Banks should be made to realize that they have a duty to Canadians.
This is all I have to say on the bill, Mr. Speaker, because many of my colleagues have dwelt on other areas. I counted 18 programs, all with the same purpose but all working against each other to the detriment of the persons they are supposed to help. The government should examine their programs very carefully.


Mr. Mark Rose (Fraser Valley West):: Mr. Speaker, as I learned we are not going home I thought I might as well make a speech. My remarks will be as brief as I can make them. Being the ninth or tenth speaker in this debate it is safe for me to assume that if pertinent points have not been made, they have at least been implied. It is important for those representing smaller communities in which there are farmers, fishermen and businessmen, to take an interest in this bill. There are sizeable numbers of such people in my constituency and therefore I am interested in the sort of federal assistance which is suggested by this bill.
I was in the House when we debated in the fall of 1968 the Farm Improvement Loans Act, the Fisheries Improvement Loans Act and also, I believe, the Small Businesses Loans Act-that troika of bills designed to assist people who do not have resources for self-help and need to rely on government programs. I was interested in the remarks of the hon. member for Humber-St. George's-St. Barbe (Mr. Marshall). I feel that he illustrated very well the basic difficulty with this troika of assistance to small businessmen, farmers and fishermen. He suggested that, sure the legislation is before us, but few people ever get
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the loans. I think most of us have had the experience of constituents writing and asking about the kinds of services, the kinds of programs which are available to meet their particular needs. You write back and send them a whole portfolio of pamphlets dealing with ARDA, AIDA, PAIT, the IDB, and so on. You search through this great plethora of programs and when you want to find out if they are eligible, too often you find that they are not. You search through this great maze of programs in order to find out if there is one under which they qualify.
In my office we have a volume of pamphlets describing these programs, which we call the "money book". If somebody writes and asks about grants of one kind or another, we thumb through the "money book", fish out the relevant material, the advertising pamphlet promoting the program which best suits the constituent's needs, and send it out. I do not recall one of my constituents ever getting one of these grants, but at least we send out the literature. That is not good enough. If these programs are not to be mere tokenism, a mere pretense for helping the small businessman, farmer or fisherman, they ought to be consolidated as previous speakers have suggested. Further, the government should, like CMHC, make direct loans. This program should be handled as loans are now being handled by provincial corporations and the Farm Credit Corporation, rather than by way of guaranteed bank loans. Direct lending might help many people who need the service, because those who make use of these government programs are people without the kinds of resources which are needed for guarantees: the government acts as their guarantor.
In theory, this program works out nicely except when an individual goes to the bank and tries to take out a loan under the Farm Improvement Loans Act, the Fisheries Improvement Loans Act or the Small Businesses Loans Act; then he is usually deflected away from such a loan by the bank manager. I can understand this. The bank manager explains that the banks have only so much money to lend, and so on. Naturally, the bank prefers to lend at the higher interest rate of 12 per cent for a personal loan than at the guaranteed 8 per cent rate under this legislation. So the bank manager steers the prospective borrower to one of these higher-priced loans and away from the guaranteed loan as described in Bill C-14 because the bank is in the business of making profits.
My party has suggested that some of the funds of financial institutions should be devoted to mortgages at 6 per cent. That proposal was not embraced enthusiastically or affectionately-I think the latter word is preferable-by the Minister of Finance (Mr. Turner). He is not embracing anybody affectionately at the moment but seems to be consulting himself in dark seclusion.


Frank Howard: He is on the side of the profiteers.


Mark Willson Rose: As the hon. member for Skeena (Mr. Howard) suggests, he is not on the side of the angels but on the side of the profiteers. Let us not kid the public about this program. It does not really matter if you raise the guaranteed ceiling to $50,000 for the period 1974 to 1977, if the banks will not lend money. And we are not speaking only of the banks. Something very interesting came to my attention when the fisheries committee was holding hear-

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ings in Vancouver in 1969. I will not name the particular institution. Representatives of a credit union run by fishermen came before us. Do you know what their chief complaint was? This is a credit union which accepts deposits from fishermen, is run for the advantage of fishermen and makes loans to fishermen, presumably in the interest of fishermen. Their chief complaint was that the level of interest they could charge under the Fisheries Improvement Loans Act was too small to permit them to pay the kinds of dividends their depositors wanted. This happened with an institution which lends to fishermen. I do not know the situation with regard to the Alberta Treasury or the near-banks, or whatever they are called, in that province; I am sure, nonetheless, that the same thing happens with other financial institutions authorized to make loans under these acts.
We say that if we are to provide this money, why not provide it through a Crown corporation such as CMHC, or lend it directly as is the case with the Farm Credit Corporation? At least there should be a provision in this bill demanding that financial institutions make available some portion of their funds to people who apply for loans under these acts. If we do not do that, what will we have? We will have filled this chamber with hot air for another afternoon and passed another bill-but nobody will really benefit. What is the use of the bill if the banks decide they do not want to lend money under the act?
The hon. member for Humber-St. George's-St. Barbe gave us an explicit breakdown of the scale of lending in Newfoundland under the Fisheries Improvement Loans Act over past years. If what he said was not a devastating attack on the futility of the nonsense, I do not know what is. Here we are, ready to deal with this bill in committee of the whole this afternoon. We think that if we pass it we will really have done something. But we will really not have done anything. That is what upsets me, because it seems that we are debating irrelevancies. Merely because we have provided guarantees does not mean that the banks will lend.
What happens if a borrower is not eligible for a loan from the banks under ARDA, AIDA, PAIT or any other provincial or federal corporation? We say, "Why do you not visit the friendly bank of last resort, the International Development Bank?" Instead of lending the borrower money at 8 per cent, in all probability it will charge between 10l/2 and 12 per cent because the risk is greater. Why can we not limit the risk with regard to loans made by the IDB in the same way as we limit risks with regard to ordinary loans made under this program? If we can guarantee loans made under this program by private banks, why cannot we enlarge the idea and extend the same sort of guarantee to the Industrial Development Bank?
Perhaps my last remark reveals my naivete and lack of familiarity with the workings of the IDB, but the question is pertinent. The banks, of course, prefer to lend at higher interest rates. Even if the interest rate were increased, the banks would prefer to steer borrowers to higher-rate-of-interest personal loans or to revolving credit accounts at 18 per cent. I think it is essential for us to come to grips with this question. If there is a trend in this country and in the country to the south of us, it is the trend of bigness.

We see it in many aspects. We see it when we fly in 747s. We see it when large supermarket chains come into a town and put the small grocery stores out of business.
Someone once said, and I cannot confirm whose words they are, that if you nationalized all businesses in this country having over 500 employees, after the nationalization or takeover most people would still be working for small businesses. Therefore, small businesses are a much larger employer in this country than large businesses. If we cannot stimulate small business in this country, we are destroying an opportunity to stimulate employment. I assume that is an objective of the government, although I sometimes wonder about it with unemployment running around 600,000 people, or 6 per cent, for the past year. Whether another government could do anything about that, I do not know. However, it seems that if it were possible to stimulate more small businesses, and if the logic that small businesses are the greatest employers of people in Canada is correct, we would be doing something to assist the unemployment problem.
I am not particularly dazzled by this legislation. I do not think it will do much good. It certainly will not do any harm. I think the agreement we reached to pass this bill by ten o'clock tonight is very good.


Mr. John Wise (Elgin):: Mr. Speaker, it is indeed a pleasure for me to join other hon. members in this debate on Bill C-14. This bill introduced by the Minister of Finance (Mr. Turner) does one basic thing: it raises the maximum of ceiling on the amount of money that chartered banks in this country can loan to small businesses. This includes loans to fishermen and farmers for improvement and possible enlargement of their respective enterprises.
I welcome this piece of legislation because it appears to be one of those rare occasions when this government recognizes the need for assistance and attention to these important segments of our economy. Small business establishments are, without question, the very lifeblood and backbone of our communities, our provinces and indeed our country. I am deeply concerned that so little consideration has been given to such an important group who not only individually but collectively contribute so much to our economy and social well-being. I have tremendous respect for these businessmen and businesswomen. Upon investigation, you will find the best managerial skill, the greatest efficiency and real determination, dedication and initiative in this group. Most of these people established their businesses over the years, not with government assistance or grants but with faith in their communities, faith in themselves, faith in their country-and few dollars.
My main criticism of this bill-and I am certain it is a criticism shared by many other hon. members-is that the ceilings, although increased, are still far too low and unrealistic. They are unrealistic, Mr. Speaker, when you take into account the serious financial difficulties being experienced in these areas and the tremendous increases in the price of production equipment, buildings and machinery. Small businessmen in Ontario, as well as elsewhere in Canada, in part because of present government

programs, have been increasingly discouraged from investing, expanding and establishing new enterprises. In many cases, taxation policies have encouraged businessmen to pull up stakes rather than solidify or enlarge their base of operation. Small businesses particularly have been looking to government to provide the help and incentives to not only compete but to grow and thrive. When one examines the bankruptcies and rapidly dwindling numbers employed in these segments of our economy, it becomes apparent that government action has been lacking and is greatly needed now.
If we read the minister's press release on these three loan acts dated Wednesday, November 21, 1973, we note that the Small Businesses Loans Act which came into effect in January, 1961, lent from that time until September, 1973, approximately $283 million. This appears to be a lot of money, and indeed it is. However, upon looking a little closer we find that about the same amount was lent this year as was lent last year, that is, about $15.5 million. Fewer loans were granted. Indeed, quite an insignificant number of the 268 loans made between April and September of 1973 went to the province of Ontario. The Fisheries Improvement Loans Act which came into effect December, 1955, has lent from that date to the end of September, 1973, $29.5 million. Since the amount of money lent nearly doubled from $2.5 million to $4 million during the April to September period from 1972 to 1973, it would appear that this program more adequately meets the financial requirements of the fishing industry than it does small businesses.
One begins to wonder just how useful the program is when no loans were granted in five of Canada's ten provinces and total loans granted amount to only 577. The province of Ontario, which has a sizeable inland fishing business involving nearly 2,000 people and some 106 million pounds valued at $13.5 million, was granted only eight loans. In fact, the inland fishing industry experienced a 12 per cent decrease in volume of catch and a 7 per cent decrease in value of stocks taken in 1970 over 1969.
The $50,000 ceiling place on the Fisheries Improvement Loans Act by Bill C-14 is unrealistic by today's standards. Fishermen are a breed of their own. I am certain that my friends in this House representing ridings in the Atlantic and Pacific regions would agree. I have the pleasure of representing some of these fishermen in the Lake Erie area of Port Stanley and Port Burwell. Fishermen are a hardy group. They are hard working and are willing to risk their lives in the everyday pursuit of their duties in order to provide food for Canadians and to secure a very modest income for themselves and their families. They, too, have experienced increased input costs in their industry for boats, diesel engines, buildings, refrigeration and other equipment necessary for continued operation of their business enterprises.
When we study the performance of the Farm Improvement Loans Act we find that significantly more loans were granted and considerably more money was lent. Since its inception in March, 1945, until the end of September, 1973, nearly $3 billion has been lent and a marked increase is noted, from $105.5 million in 1972 to $125 million in 1973 during the April to September periods. However, about the same number of loans were granted during
Loans Acts Amendments
the year 1972-73. The real information that is lacking from all three of these government programs is the total number of applications and inquiries made to the chartered banks and the number refused for various reasons. I would be willing to admit that some of the applications were rejected for good reason, but this information should be available if we are to develop the kinds of programs and policies that will best meet the needs and financial requirements of these industries.
It is a well known fact that people, and in particular young people, are leaving these segments of our economy. Most noticeable are those leaving the fishery and farming areas. I am sure that, along with other reasons, this is the result of the difficulty they encounter in securing the capital necessary to enter or continue these businesses. It is true that to some extent the shortcomings in loan programs have in recent times been remedied by amendments to the Farm Credit Corporation Act.
I welcome the fact that small businesses are now defined as businesses worth up to $1 million. No doubt the current rate of inflation played its part in the consideration leading to this decision. I am reminded in this connection of a remark of my hon. friend from Mackenzie (Mr. Korchinski), "Thank God for inflation: we shall all be millionaires!" A number of sound recommendations were made in the brief of the Canadian Federation of Agriculture presented to the cabinet and to opposition parties. Realising the need for an increase in the ceiling level, the federation recommended a maximum of $50,000 in respect of farm machinery and land, and a total maximum of $100,000. In my opinion, this is certainly in order. Taking into account the fact that a similar situation confronts both the fishing industry and those engaged in small business enterprises, I submit that if Bill C-14 is to have any effective impact, corresponding increases should be made in amounts available under the programs designed to assist small businesses and the fishing industry.


Mr. J. R. Ellis (Hastings):: Mr. Speaker, I am pleased to be able to speak on Bill C-14 for a few minutes toward the close of this debate. I am sure the fact that I introduced a private member's motion on January 22 of last year, shortly after the opening of the session, asking that the ceiling under this legislation be increased from $25,000 to $75,000 in no way influenced the government in reaching its decision. I am pleased to find, however, that the government is only 15 months behind the thinking of the people of Hastings county.
The idea of an omnibus bill is probably a good one. I should like to say two things with regard to the portion which deals with loans for farm improvement. Specific allowance is made, now, for those acquiring new businesses, but I should like to point out that no one can start in the farming business with $50,000. In fact, a man cannot start in southern Ontario with $100,000; he probably needs $150,000.
Second, there is a crying need to revise our conception of the term "farmer". Some provision ought to be made to enable a young man to work at a job which provides cash for his everyday necessities while still operating a farm. Surprisingly enough, despite all the criticism of young

April 11, 1974
Loans Acts Amendments
people which we hear today, there are still many in my area who are prepared to work at jobs which provide the dollars indispensable for their daily needs while preparing for a future on the farm. They wish to be farmers, and I think the rules ought to be changed to make this possible.
I propose to devote the remainder of my remarks, in the limited time available to me, strictly to the small business aspect of the legislation before us. The reasons for the amendment are more valid today than they have ever been. Since 1961, when the legislative machinery was first set up, costs have risen to such an extent that it is not sufficient to substitute a ceiling of $50,000 for $25,000. What piece of construction equipment can a man entering the construction business buy for $25,000? If he is engaged in manufacturing, raw materials alone would cost in the neighbourhood of $50,000. In the wholesale business one can hardly get a decent stock of cigarettes and chocolate bars for less than $50,000. Take transport: with the big highway rigs it costs more than $30,000 for the tractor alone, quite apart from the trailer. So there is very little one can do with $50,000 in the way of starting a small business in Canada these days.
The Industrial Development Bank, which supposedly should be looking after these areas of concern, has not been doing its job. I have spoken at some length on this subject on other occasions. The intention was that it should lend in areas of high risk at a somewhat higher interest rate. Well, they charge the high interest rate but they rarely get into the high risk area. As a result, businessmen have to rely on legislation such as we see before us.
I am pleased it should now be possible to buy land under these provisions. I am interested in finding out how this section will work, because it will really amount to a form of mortgage and with interest rates as they are today I am curious to know what arrangements will be made with the first person who borrows money under these terms. I am pleased that new businesses are now covered. These are changes which are beneficial. The Small Businesses Loans Act was intended to be of help to businessmen. The increase in the loans ceilings and in the size of eligible companies constitutes an advance, but the government has not gone far enough. While we are disposed to pass the bill, I urge the ministers concerned to reconsider these measures in the near future.
Mr. Speaker, I see it is close to five o'clock, and since I know we wish to move forward I will resume my seat.


[Stage Direction]
Motion agreed to, bill read the second time and the House went into committee thereon, Mr. Boulanger in the chair.
Mr. Knowles (Winnipeg North Centre):: Five o'clock.


The Assistant Deputy Chairman:: Shall I call it five o'clock?


Gerald William Baldwin: Call it six o'clock, if you like.


An hon. Member:: Call it Easter.
Progress reported.



PROCEEDINGS ON ADJOURNMENT MOTION


The Acting Speaker (Mr. Boulanger):: Order. It is my duty, pursuant to Standing Order 40, to inform the House that the questions to be raised tonight at the time of adjournment are as follows: The hon. member for Hillsborough (Mr. Macquarrie)-External Affairs-Possible opening of mission by Saudi Arabia in Ottawa and Canadian embassy in Iraq; the hon. member for Winnipeg South Centre (Mr. McKenzie)-Pensions-Railway employees-Inquiry as to appointment of commissioner to conduct inquiry.

It being five o'clock p.m., the House will now proceed to the consideration of private members' business as listed on today's order paper, namely, notices of motions.


PRIVATE MEMBERS' MOTIONS FOR PAPERS
[Stage Direction]
Mr. Jack Marshall (Humber-St. George's-St. Barbe moved:
That an order of the House do issue for a copy of all material resulting from the first meeting of the VLA senior management team convened by the Director General of the Veterans Land Administration in Ottawa from March 26 to 29 as follows (a) operational plans in the periods before and after the March 31, 1974 deadline for new loan applications (b) further implementation of MBO as the VLA style of management.
He said: Mr. Speaker, there must be something radically wrong here.
This is the second time I have risen to my feet-I think that is the first time it has happened in six years-to speak twice on the same day. At least not everybody has gone home.
I missed one thing when I was talking on the Fisheries Improvement Loans measure. The hon. member for Winnipeg North Centre (Mr. Knowles) reminded me of it. He said I should have asked the Minister of Finance (Mr. Turner) whether he would increase the maximum loan ceilings under the Veterans Land Act to $50,000.
The debate today is the result of my notice of motion for the production of papers requesting a copy of all material resulting from the first meeting of the Veterans Land Act senior management team which was convened by the Director General of the Veterans Land Administration in Ottawa from March 26 to March 29, and also the operational plans in the periods before and after the March 31, 1974 deadline for new loan applications, and in respect of fur-
April 11, 1974
[Stage Direction]
ther implementation of MBO, whatever that is, as the VLA style of management.
It is very difficult for ,ne to understand why the production of these papers was denied. It is a well-known fact that as a result of a notice of motion introduced by an hon. member of this party the government, even though it was reluctant to recognize the wishes of the majority of veterans, said it was prepared to phase out certain parts of the veterans' charter on the basis of the fact that nine years ago, in 1965, the parliament of Canada agreed that it should be phased out. My only comment in that regard is: so what? I should like to ask members of the House how many amendments to legislation have come about over the years, and how many changes have had to be made because of changing conditions?
I am sure the members of the House of Commons who were here in 1965, and agreed with the decision to establish deadline dates, now realize that this was a wrong decision. Is that not why we are sitting here in the House of Commons as members? We are sitting here to legislate, and to change legislation for the benefit of the people we represent. To use an argument such as the one used by members on the other side of this House is ridiculous and even un-Canadian.
In dealing with this motion for the production of papers,
I think it was yesterday I was told by the minister that since the papers for which I asked were confidential documents they should not be produced. I wonder how ridiculous that is, and what was so confidential at the meeting of the Veterans Land Act Administration that we, as members of parliament, should be denied the right to know the operational plans for the period before and after the March 31 deadline for new loan applications, and in respect of further implementation of MBO as the Veterans Land Act style of management?
Now that the government has extended the March 31, 1974, deadline is it not that much more important that veterans know about the operational plans of this administration? That seems only to be commonsense. This debate allows me to place on the record the attitude which has been taken by government members opposite in respect of extending the deadline for one year.
During a TV program last week the Prime Minister (Mr. Trudeau) was asked about the vast increase in government expenditure, and gave as an excuse the fact that the extension of the VLA deadline had contributed to this increase in government expenditure. Let me refer to the transcript which indicates that the Prime Minister, in response to a question, said that just last week the government was trying to phase out a program for veterans which had been brought in after the second world war, and applicable to the Korean veterans, according to a schedule determined many years ago by parliament, but when the government acted on phasing it out people said it should be prolonged for another year.
The Prime Minister went on to say that another reason was the result of pressure groups supported by the opposition, and he added that by extending the program it would cost several millions of dollars. Another misconception which should be corrected was in relation to a statement made by one of the newsmen that there are 10,000 civil servants in this department. There may be 10,000 civil
Veterans Land Administration servants in the entire Department of Veterans Affairs, but there are fewer than 500 administering the Veterans Land Act.
Having regard to the pressure groups referred to by the Prime Minister, this used to be referred to as involvement and participation by the people of Canada. Now these have become pressure groups. When it suited the government to invite Canadians to get involved in government, this was known as involvement and participation, but now these people are "pressure groups supported by the opposition".
Let me take a few moments to answer the questions about the cost of operating the Veterans Land Act administration. The best way I can do that is by reading from questions and answers reported in the Proceedings and Evidence of the Standing Committee on Veterans Affairs, Issue No. 4 for April 4, 1974. I said:
-I would like to go on to the estimates. I think I was questioning Mr. McCracken about the budget, and I hear certain figures bandied around. I want to clarify in my own mind and in the mind of the Committee, the Veterans' Land Administration expenditures for the operation of the Veterans' Land Administration Program. Am I correct in assuming that the amount in the estimates is $11,570,423?
Mr. McCracken answered as follows:
Yes, Mr. Chairman. That includes an amount of about $4,400,000 which is a reserve that is set aside every year to meet the conditional grant benefit of the loans that are made to veterans, so that at the end of 10 years, there is an amount available from this reserve in the case of a veteran, for instance, who has a small holding loan.
He has a $1,400 conditional grant of the first $6,000. At the end of 10 years when he has fulfilled the terms of his settlement contract, $1,400 is taken from the reserve and it is applied in effect to his debt. So of the 11 million and some odd dollars, $4.4 million of that is an amount that is set aside and it remains fairly constant... It is set aside each year to build up this reserve so that we can write off the conditional grants at the end of the 10-year period.
I then asked:
So, in other words, the cost of operating a department is not $11 million, it is more like $7 million.
His answer to that was:
The actual operating costs per se are about $7.2 million, yes.
I then asked:
-if the deadline in the Veterans Land Act was not extended, you indicated at the last Committee meeting that the Veterans' Land Administration would remain intact at least until 1977, and you went on to say there would have to be some semblance of a Veterans' Land Administration in the year 2000.
In other words the Veterans' Land Administration would not be phased out even if the deadline had not been extended. Mr. McCracken went on to say:
There would have to be staff somewhere and I conceive it remaining as a unit whether it was in the Department of Veterans Affairs or some other department, where the staff involved would be handling the loan management workload, the agreements of sale, conveyances and this type of thing. The people and the staff in the regions would be there in regard to matters of collections and this type of thing. Loan management workload is the name we normally give to it.
I then asked:
In other words, even if the extension of a year was not imposed or agreed upon or brought in, that staff would still remain and the cost would be the same?
Mr. McCracken replied:
Some staff, yes. I envisage that in about three years' time, we would be down from about 490 now to around the 400 mark.
[Stage Direction]
April 11, 1974
Veterans Land Administration
Let us then correct the misconception that there are
10,000	civil servants operating the Veterans' Land Administration, as there is a staff of less than 500 which will be down to 400 by the end of the year. I then asked Mr. McCracken:
Therefore, from what I can see there would be no great increase in cost to maintain the present staff to take care of the extension of the deadline for a year; there would be no undue, unreasonable cost to the public.
Mr. McCracken said:
Well, I am not going to comment on the question of whether it is undue or otherwise. I can say this: that relating to the amount we have in the estimates for 1974-75, I anticipate an additional requirement of not less than $1 million this year.
In other words, to satisfy what they suggest will be another 10,000 veterans by extending the deadline by one year, this will cost $1 million. So let us correct that misconception. I then asked Mr. McCracken:
For what reason?
Mr. McCracken said:
Increased operating costs.
To confirm that again I asked:
It would be just $1 million?
Mr. McCracken replied:
A minimum of $1 million.
Then the deputy minister said:
Mr. Chairman, may I interject? The estimates were prepared on the assumption that the act, as it then stood, would continue to apply. That is to say that during the fiscal year that has just begun, loans would not be made. Since the act has been amended, As Mr. McCracken said, there is an additional expense involved.
Certainly there is an additional expense involved, but it is only $1 million and not the many millions quoted by the minister, the Prime Minister (Mr. Trudeau), and many others who do not know what they are talking about. I then asked this:
Mr. McCracken, in the short time since the legislation was passed, have you had any information from your district authorities indicating that there is an influx of applications?
He said he did not because he did not think there was enough time.
Then I asked him if he was getting a rush because the deadline was approaching, and he said that that would be putting it mildly. I said:
It has been indicated by the department or Veterans' Land Administration that of the 140,000 veterans qualified only between 5 and 10 per cent would seek applications under the act. Up to the March 31, 1974 deadline, has that proven true?
Then Mr. McCracken said:
Mr. Chairman, I think that would be about right. Since October 1968, new establishments have been running around 3,000. I think we hit 4,000 in 1968-69, if my memory serves me correctly, but it has been running around 3,000 to 4,000. This year the number of loans actually approved for veterans who were seeking establishment, exclusive of the backlog we have, would be around 5,500. That would work out to around the 20,000 mark, somewhere in that area.
Just because there was agreement nine years ago in this House of Commons that the deadline would be established does not preclude the possibility that it was the wrong

decision to make. Since the nine years have passed the facts are clear, and the chairman of the Veterans' Land Act administration, an honourable and very capable man, has told us what the situation is. We have performed a service for at least a few thousand veterans over the next year who will be able to take advantage of the legislation. Let me say once more that it will not cost the millions of dollars mentioned, but rather $1 million.
The staff will be in existence at least until 1977, so the necessary staff will be available either through the Department of Veterans Affairs or through some other department up until the year 2000. I do not know where the suggested heavy expenditure comes from, because it certainly will not be due to the extension of the deadline. I think it could be shown in respect of a cost-benefit analysis of the value of any government agency that the VLA is as good an example as any of proper government spending.
There are many other areas in which spending could be cut but not in the area of the veterans charter. In order to show the type of amendments my party suggests-and in this I include the hon. member for Winnipeg North Centre (Mr. Knowles)-I should like to refer to a motion I introduced before the committee, which for some reason or other was not acceptable. This amendment stated:
That this Committee recommends the government consider the advisability of introducing legislation to provide:
1.	That Section 31 of the Veterans Land Act be repealed;
2.	That the mortgage loan ceiling be increased to $30,000 from the present $18,000 to meet realistically today's needs;
3.	That the minimum lot requirement be reduced from the present one-half acre less 20 per cent, or 17,424 square feet, to a lot commensurate with CMHC requirements, for those veterans desirous of acquiring building lots in urban areas;
4.	That the down payment be equated to 5 per cent of the loan ceiling; and the Chairman be instructed to report this recommendation to the House later this day.
For some reason or other my motion was not considered correct and was turned down. However, the government and everybody here know that these factors I have mentioned are consistent with the extension of the deadline. We will continue to press for this over the next 12 months. I am sure all members on the other side now realize this is the only justifiable and proper thing to do for the veterans.
When we introduce a motion in a new form I hope these amendments will receive approval, and will not be considered out of order under the rules of the House. In the meantime my motion for the production of papers should be answered, and the papers should be produced so that what the veterans administration management team does will be within the knowledge of each member of this House who has veterans in his district, and who represents veterans' organizations, so that those veterans may be helped rather than kept in the dark as they have been for so long.
Mr. Maurice Dupras (Labelle):: Mr. Speaker, this motion for the production of papers put by the hon. member for Humber-St. George's-St. Barbe (Mr. Marshall) gives us another opportunity to bring new matter to the continuing debate on the veterans' land program.
April 11, 1974

We had several occasions, Mr. Speaker, to consider the requests, perhaps legitimate requests of certains veterans associations concerning the extention of the implementation period of the program announced in 1942, to provide veterans returning from the front mortgages at easier terms than those offered in 1945.
As was said before, Mr. Speaker, the spirit prevailing at the time was to provide veterans with a mortgage market which was non-exiting from 1945 to 1952 and greatly different from the present market where, as soon as a worker gets a steady job, he can apply to the Central Mortgage and Housing Corporation and benefit from a very advantageous mortgage program well known throughout Canada. This enabled the government to have construction started on no fewer than 260,000 housing units in 1973.
This debate, Mr. Speaker, gives us nonetheless the opportunity to refute some points raised only a few minutes ago by the hon. member for Humber-St. George's-St. Barbe (Mr. Marshall), when speaking of the cost of the amendment he wished to move in committee. Therefore, since he has opened the debate on what happened in that committee, I will also take leave, Mr. Speaker, to discuss the proposed amendment.
The hon. member talked of a cost of $1 million and has quoted at length from the proceedings of the April 4 meeting and he quoted Mr. McCracken as having said that the extention of the program would cost about $1 million only, that is to say what it would cost to keep a staff of 490 and carry on other obligations.
But to be honest, I must say that this sum of $1 million does not include the requested benefits. If the ceiling of mortgage loans were raised from $18,000 to $30,000, it is quite sure, as one can figure out by very simple calculations, that such a program would not be possible with only $1 million.
Besides, one has to consider that as many as 110,000 veterans have a certificate and that they could probably use if it the benefits were increased from $18,000 to $30,000.
Then, after calculations, we must conclude that since 1967 approximately 20,000 veterans took advantage of the government's proposal, of whom 99 per cent are said to have first chosen the settlement or university training programs.
They have repaid what they had already received from the government to accept the offer made to them in 1967. Some 110,000 have done this since 1968 and no fewer than
20,000	have used their certificate to take advantage of the veterans' land program.
Of course, if the ceiling were fixed at $30,000 rather than $18,000, it is most certain that a great number of the remaining 110,000 would come to the Veterans Affairs Department to benefit from this program.
Anybody who will try to convince me that this kind of program would cost no more than $1 million yearly cannot be taken seriously, because he is not good at figures. As to the administration costs, and I am sure the hon. member agrees on this, they would be of about $1 million, according to Mr. McCracken, director of the program. But if the ceiling were to be raised, program costs would greatly exceed $1 million; indeed, a figure of $50 million has been
Veterans Land Administration
suggested. I am not in a position, Mr. Speaker, to see whether that $50 million is correct, but I trust those who figured it out and consider that it could in fact cost as much as $50 million.
Another point I should like to raise in this debate, Mr. Speaker, is that certain innuendoes were made in this House and elsewhere that about March 12, the hon. member for Edmonton West (Mr. Lambert) said, and I quote:
... I have heard reports from some of them that they are finding an extraordinary working-to-rule in some VLA offices with regard to this matter.
He went on:
I hope those reports are wrong, because I think this House would severely castigate any officials of VLA who in any way dragged their feet in order to have this deadline pass and applications thus disqualified.
And later on, Mr. Speaker, on March 28, similar allegations were made in committee by another hon. member, namely that it was rumoured that the staff was still working to rule in receiving and processing applications. Mr. Speaker, there could not be anything more untrue than such allegations. I am told by the administrator of the program that the 490 persons working in the Veterans' Land Act administration are honest civil servants, honest employees of the department. The great majority, 75 per cent of the employees, are veterans themselves, and about 100 per cent of them are male employees. Mr. Speaker, to give you an example of their dedications to their work, I should quote the words spoken on March 23 by Mr. McCracken, which are published on page 114 of the committee proceedings, and I quote:
In a management decision last year, we agreed that in the months of January, February and March of this year there would be no holidays for field staff, district managers, and others so that we would have a full complement of staff available to take care of the anticipated increase in loan applications that we would receive in that period. We anticipated that we would have an increase in the number of veterans who would be coming in for counselling purposes.

In my opinion, Mr. Speaker, this intention and these steps taken by department officials to ensure that all applications would be considered in time to meet the deadline of March 31, 1974, clearly demonstrate that there had been absolutely no decline in effectiveness of department employees who did not even hesitate to sacrifice their winter holiday to which they were duly entitled to ensure that all veterans' applications would be processed in time.
This is another statement which causes us to question the seriousness of those who came forward with these figures, statements and unfounded information.
The minister was even accused of not having done the utmost to contact all Canadian veterans so that they could take advantage of the benefits made available to them.
Mr. Speaker, in 1967, Mr. McCracken fully explained all the measures that had been taken that year and gave them intensive publicity, mainly in the newspapers, for the sake of the veterans. For instance, in the Canadian Legion

April 11, 1974
Veterans Land Administration
bulletin and in all the veterans newspapers. Posters have been displayed in many Canadian legions across the country, in post offices, in public places familiar to the veterans to inform them of the new provisions, the extension date of the applicability of the act which they were granted and the new provisions covering the extension of their benefits. As a consequence, Mr. Speaker, no fewer than
140,000	veterans took advantage of this offer and reimbursed the benefits they had already received to obtain the new publicized ones.
So, how far do we have to go? In Europe, and in France, for example, in early June every year they celebrate the liberation anniversary date, and so will they this year. In early June, they celebrate Europe's liberation by the allied nations.
This year European countries, and especially France, decided that after 30 years it would be proper to commemorate in a special way that 30th anniversary of the liberation of Europe but that in later years that event would be much less important for the good reason that after 30 years it is becoming more and more difficult for veterans to participate in the commemoration of that major event in our history and especially that of Europe.
When one considers that veterans are 58 or 59 on the average, naturally, it is becoming more and more difficult for them to go back to the battle fields and recall the difficult hours they went through 30 years ago.
It is not any easier, Mr. Speaker, for a man of that age to make plans and I say so as a man who discussed this with his former brothers-in-arms. Since I too attend quite regularly the meetings of my local Canadian Legion I am in constant touch with veterans who agree with me and say: Well, listen, after so many years those who wanted to go into farming, those who wanted to settle have already done so, and at our age-58 or 59 on the average-it has become quite difficult to make such plans.
For those reasons, Mr. Speaker, the government decided to extend the provisions of the Veterans' Land Act for another year. New facts might prompt the government to extend that cutoff date. Those are facts that we are yet to discover. In this debate and others those facts might be brought to surface.


Mr. Hal Herbert (Vaudreuil):: Mr. Speaker, the motion for the production of papers now before the House once again gives us an opportunity to review the legislation to which it pertains. We have heard the mover of the motion suggest the amendments that he would look for, and several of us, speaking previously on the same subject, which seems to be repeating itself so many times in this session, have suggested that the legislation should have been phased out long since and, if necessary, different legislation introduced for our veterans. However, in order that we may make an assessment before voting on this motion it may be well to review the subject. I think it would be relevant to quote the following parts of the preamble to the act:
Whereas many men now serving in the active forces of Canada have recorded their desire to settle on land or engage in farming when

hostilities cease, and it is desirable that suitably qualified veterans be encouraged to seek rehabilitation in the agricultural industry;
And whereas part time farming coupled with other employment is an increasingly important aspect of rural and semi-rural life in Canada;
And whereas it is in the public interest as a measure of rehabilitation to assist in acquiring the ownership of farm homes by qualified veterans-
In relation to the purpose of assisting to rehabilitate veterans in civilian life, as hon. members know every veteran has had at least 20 years to make his application, and most have had as long as 30 years. The other two alternative rehabilitation plans were concluded quite some time ago. I think it is clear that the orientation of the Veterans Land Act was directed principally to those veterans interested in agricultural utilization of farm land in rural and semi-rural areas. The financial provisions of the act were founded on this type of settlement, and I think we should not lose sight of those basic factors when we discuss the act.
When we look at some of the facts we see that in the eight fiscal years up to March, 1973, after the lending deadlines and revised loan ceilings were established in 1965, approximately 32,000 veterans were settled under the provisions of the act. In the majority of those eight years the annual number of new establishments has been less than 5,000. In the current fiscal year, however, and more particularly in the last six months, there has been a significant increase in the number of loan applications. It is expected that the number of veterans who will have been settled this year will approximate 5,500-and there are a further 1,400 loan applications on hand awaiting appraisal.
It was in the light of this data on comparative settlement activity and the increased interest which veterans have shown in the current fiscal year-due undoubtedly to recognition by them of the scheduled lending deadline- that I reached the conclusion that an extension of one year, as has been approved by the minister, would be appropriate. In my analysis of the facts it became evident that some well-intentioned veterans would have been deprived of a right, which they had so gallantly earned, if the March, 1974, deadline had been final.
When there is a reasonable doubt, we should not hesitate to decide in favour of the veterans. We must not forget that, some years ago, they did not hesitate when the survival of freedom was in doubt. The extension that has been granted will provide many veterans with an opportunity to take advantage of a program which was designed for them.
The Veterans Land Act was designed neither as a program of urban housing nor as part of a retirement program for persons reaching the end of their productive careers. Its basic purpose was to provide loans for the purchase of agricultural land, to be used on a full or part time farming basis by veterans who were interested in this form of rehabilitation program on their return to civilian life following wartime active service.
It was recognized that many veterans would neither wish nor find it practical to settle under the Veterans Land Act. Two other programs were enacted: university training under the Veterans Rehabilitation Act, and reestablishment credits under the War Service Grants Act. The benefits under all three programs were alternative
April 11, 1974

one to the other. Each veteran had the right to choose whichever plan he considered would best serve his needs and desires.
The department's university training program was concluded in the 1950s; and October 31, 1968, was the final date for veterans to use re-establishment credit benefits.
In 1965 parliament established deadlines to phase out VLA lending operations in a reasonable and orderly manner. Almost 30 years have elapsed since the end of World War II, and 20 years in the case of the Korean conflict. In the context of a rehabilitation measure to assist veterans to pick up the thread of civilian life following wartime active service, those genuinely interested in land settlement assistance have had ample time to find properties suitable for this purpose.
Mr. Speaker, there have been suggestions, by hon. members reading such implications into the motion, that possibly the government's concern for veterans is lessening. Surely nothing could be rurther from the truth.


Mr. Paproski:: Then what are you talking it out for?


Harold Thomas Herbert: The hon. member wants to know why we are talking it out. With the number of members there are in the House I think the issue could very easily come to a vote to decide the question right now.


Steve Eugene Paproski: Why don't you stop then?


Some hon. Members:: Question, question!


Harold Thomas Herbert: Mr. Speaker, it is interesting to note, when we discuss whether we are still concerned about veterans, that Bill C-148, passed last March, authorized a 25 per cent increase in war veterans allowances rates and ceilings for single recipients, and a 28 per cent increase for married recipients. In addition, Bill C-202, passed last June, provided an increase of 24 per cent in basic rates under the Pension Act. May I also remind hon. members that the recently tabled estimates of the Department of Veterans Affairs for 1974-75 amount to $597 million compared with $480 million in the main estimates for the past year. This indicates clearly that the government's commitment to veterans is not reducing but is growing.
I think the problem is that in spending many days debating the Veterans Land Act we have been using the poor veterans for our political purposes and motives. We have done that instead of coming to grips with the question and recognizing that, possibly at this late date, veterans legislation should be introduced to take care of veterans now reaching retirement age. I feel, because of their service to their country, that there should be programs in which they can participate which will enable them to settle in retirement with benefits somewhat above those available to the average citizen.
This is a debatable point. The consensus of opinion seems to be that a little more should be given to the veteran in view of the service he has performed for his country. I do not oppose that. We are calling for these extensions to an act which should long since have been phased out. The allegation which is made that by calling
Veterans Land Administration for the conclusion of the act we shall do something which is against the interests of veterans is hypocritical. We should face the issue. In lieu of inadequate legislation we should introduce legislation that we feel is necessary and which will benefit veterans who are now reaching retirement age.
I feel that the motion before the House, like all similar motions, is the type of probing motion designed to make public confidential departmental papers. These, like all similar confidential papers, will become absolutely valueless once they have been made public or tabled. I cannot imagine it being possible to provide confidential reports, or to receive meaningful reports from departmental officials, if the authors of the reports must word their work in such a fashion as to guard themselves from criticism in the event that at some later date their reports are publicized.
That situation would render the reports completely meaningless and a minister, in that situation, could never be in the position to use and trust the materials provided to him. I will go a little farther. We may find ourselves in this position because if a civil servant does not know for certain if any of his material is likely to be publicized in future, he will find it extremely difficult to put on paper any comments for which he, as an individual, is likely to be publicly criticized later. For that reason I oppose this motion for the production of papers.


Stanley Howard Knowles: Mr. Speaker, I shall be brief. After the House of Commons- not the government or the minister-had passed the bill extending the Veterans Land Act for another year, we had discussions in the Standing Committee on Veterans Affairs on other changes and improvements which might be made. For example, we pressed strongly for the lifting of the deadline of October 31, 1968, the date by which qualification certificates had to be secured. The Minister of Veterans Affairs (Mr. MacDonald) assured us in the committee that this would be considered. Other points have also been raised, which have also been met with the response that they will be considered.
I make the plea, Mr. Speaker, that if other changes in the Veterans Land Act are being considered, we are entitled to have all the information there is about the administration of the Veterans Land Act. That is what the motion before us today is all about. A study has produced certain material. I suggest that Members of Parliament in general, and members of the Standing Committee on Veterans Affairs in particular, at this time when matters relating to the Veterans Land Act are still being considered, have a right to that material. As I say, that is what the motion is all about, and I think the House ought to pass it.
The last speaker referred to the act and to the way in which it satisfied him. He says that it was set up to enable veterans to go on the land, and not for the purposes of housing or retirement. I remind him that if he was here on November 9, 1973, he was party to a unanimous decision of the House of Commons that the minister be asked to consider extending the provisions of the Veterans Land Act, even if the main purpose of most of the older veterans now applying for loans under the Veterans Land Act is to meet their housing requirements. After all, the situation affecting veterans today is not what it was 30 years ago.

April 11, 1974
Veterans Land Administration We think these other changes we are seeking are thoroughly justified.
I said I would be brief, Mr. Speaker, and I shall conclude my remarks. I stand very strongly for the changes in the Veterans Land Act which we have asked for in the Standing Committee on Veterans Affairs. I hope the consideration of the minister, still going on, relating to this question will produce favourable results. In the meantime I think we are entitled to all the material available and that is why, in the name of democracy, I ask for an affirmative vote on the motion for the production of papers moved this afternoon by hon. member for Humber-St. George's-St. Barbe (Mr. Marshall).


Mr. S. Victor Railton (Welland):: Mr. Speaker, I am glad to have this opportunity to speak on this important matter. The hon. member for Winnipeg North Centre (Mr. Knowles) described the motion of the hon. member for Humber-St. George's-St. Barbe (Mr. Marshall) as a motion for the production of papers. This is really not a motion for the production of papers; this is a request for a record of conversations and quiet discussions in which members of the Veterans Land Act administration took part. I have talked to those people and I understand that in any event this demand for material would not have elicited anything significant.
We must realize that an important principle of democracy is involved. The hon. member for Winnipeg North Centre talked about democracy. It is about time we gave some democratic expression to the idea of protecting people who work in the civil service and who engage in such conversations. They advise and talk to the minister, and it is up to the minister to accept or reject recommendations made in this way.
I went to the trouble of discussing the matter of the production of papers with the President of the Privy Council (Mr. MacEachen).
On March 15, 1973, the House resumed consideration of a private member's motion moved by the hon. member for Winnipeg North Centre for the production of certain papers. In the debate that day the House heard of suggested guidelines governing the production of papers. For instance, Guideline No. 10, as approved by the President of the Privy Council, reads:
Papers relating to negotiations leading up to a contract until the contract has been executed or the negotiations have been concluded.
No. 14 reads:
Papers that are private or confidential and not of a public or official character.
No. 15 reads:
Internal departmental memoranda.
If you read this exemption list you realize the motion should be out of order without even debating it.


Stanley Howard Knowles: Were those exemptions approved by this House?


Samuel Victor Railton: I believe they were.


Stanley Howard Knowles: Oh, no!


Samuel Victor Railton: I will not make that claim. You should know much better than I. I think it was the proposed list. What was done with it I cannot say, but I think it is very well worked out. I subscribe to the content.
I referred earlier to Section 15-internal departmental memoranda. If you run a department you should certainly have the right to send private notes to and receive the same from a certain section, such as the director of the Veterans Land Act. I do not see any reason why these private slips of paper should be brought out. They deal with the minister and his directors working out a program. Until the program has been decided on, it is no one else's business.
There is plenty of opportunity in the committees to dig out all sorts of official documents. That is done all the time. Nobody can object to that. However, the idea of looking for private memoranda between a minister and people in his department is abhorrent. The word democracy should be used in its proper context.
Although I may feel strongly about that one point, I have nothing but praise for the two members who brought in the original suggestion regarding the extension. The hon. member from Newfoundland and the hon. gentleman from Manitoba are to be congratulated. I think there are 50 veterans in this House. They are all behind these two members in trying to get the best possible deal for veterans.
On the other hand there is something to be said for phasing out the operation. The advice the minister received from the Royal Canadian Legion, and I am sure it was correct, was that they did not think there would be any real reason to continue it. I think there were isolated branches, isolated letters and other representations about which these two members spoke, which made them feel it was not that important.
I took this matter up with the minister and the Prime Minister (Mr. Trudeau). I agreed with the idea that it was not the time to phase out the Veterans Land Act. I will stick to that.
I have a letter, which I am sure all members have seen, from Senator Hazen Argue. He thought we should continue the program. He suggested it might be changed, or put under different auspices such as the Farm Credit Corporation or Central Mortgage and Housing Corporation. I think that is worth considering.
Credit must be given to the old Veterans Land Act. It was really the springboard from which came legislation for the Farm Credit Corporation. This matter was raised by the hon. member for Timiskaming (Mr. Peters). I could read some of the good arguments he made about the legislation. He said that prior to that time the legislation for farm credit was so bad, and the Farm Loan Board got into so much trouble that the ideas behind the Veterans Land Act were applied to new legislation for the Farm Credit Corporation. He also pointed out that there was a lesson in the Veterans Land Act on small holding legislation that could be applied to housing legislation.
All those are things of the past. It was a good act, but it must be revised. We have a year to do that. I certainly feel there will be further discussion in committee among members representing all parties. We either have to amend the
April 11, 1974

act, or see that some things we want done are done by some other agency. Sometimes it is good to tear down a building and put up a new one. Sometimes it is worth renovating the old one. That is what this is all about.
I do not think there is any doubt that this parliament will make changes that are proper and that will assist veterans. I feel veterans can change their minds. They may be 55 to 58 years old on the average, but what is the difference? I think things should be left open in some way. There must be modifications. These should be discussed, either as amendments or a new bill. I am sure these will be brought before the House in a few months. We should either have a new bill or amendments, or else extend the cutoff date.


The Acting Speaker (Mr. Boulanger):: Order, please. Before calling it six o'clock possibly the House will permit resumption of the committee of the whole. Is this agreed?


Some hon. Members:: Agreed.



GOVERNMENT ORDERS


[Stage Direction]
The House resumed consideration in committee of Bill No. C-14, to amend the Farm Improvement Loans Act, the Small Businesses Loans Act and the Fisheries Improvement Loans Act-Mr. Turner (Ottawa-Carleton)-Mr. Boulanger in the chair.
At six o'clock the House took recess.

AFTER RECESS

The committee resumed at 8 p.m.
On Clause I.
Stanley Howard Knowles: Mr. Chairman, I rise on a point of order. I realise we are in Committee of the Whole and that the matter I wish to raise can only be dealt with when Mr. Speaker is in the chair. However, I thought I should mention it now so that there would at least be time to think it over.
As hon. members are aware, there have been negotiations about whether the House should sit next week. I believe those negotiations have been concluded, and that we are sitting. What I now suggest would not interfere with that decision, and that is why I waited until now to make it. I wonder whether there could not be agreement later tonight for an order of the House that we not sit on Monday, having in mind that it is a government holiday and that it would be a courtesy to our own staff. I say this as one who will be here. I offer the suggestion now, and
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perhaps before ten o'clock tonight we can settle the matter.


Mr. Bell:: I should like to support that suggestion. At least I say we would consider it very seriously and, I hope, favourably, having in mind consideration for the staff.


Mr. Reid:: We would not be prepared to say yes at this time. We would, however, be prepared to sit down and discuss the whole matter. As I say, we would not be prepared to make any arrangements of an interim nature at this time.


Gérald Laniel: As the hon. member for Winnipeg North Centre has said, this is a matter which can only be settled when Mr. Speaker is in the chair. For this to be done someone would have to move that I report progress. Until such time as that is done, I suggest we continue the study of Bill C-14.


Stanley Howard Knowles: May I simply add that perhaps there could be some discussions about the matter during the evening.


Some hon. Members:: Agreed.


Mr. Gillies:: To return to the bill, Mr. Chairman, we on this side of the House have little quarrel with these measures in general. We welcome the bill. We support it. We recognize the need for increases in the size of the loans because of the inflation which is taking place in the country. We welcome these proposals to extend aid to the fishermen, farmers and others, and to broaden the base upon which the relevant acts will operate.
We have certain reservations with regard to the revisions related to land acquisition, but by and large the position of the Conservative party is that this legislation is much needed, and we support it.


Eugene Whelan: Mr. Chairman, I wish to say a few words on this bill. I want to thank the Minister of Finance for being so responsive to all the requests which have been made to him on behalf of the small businessmen, the farmers and the fishermen of this nation.


Some hon. Members:: Hear, hear!


Eugene Whelan: A number of misleading statements have been made about this bill, so I think I should state for the record that the amount of money lent by the Farm Improvement Loans Board last year was $230.1 million.
The suggestion has been made that the price of farm machinery has gone up by between 100 and 200 per cent. Our inquiries show that this is not the case. We would really not have very much to complain about if the price of everything else had gone up as little as the price of farm machinery expressed in terms of a percentage of the income farmers receive, the extra horsepower provided, and so on.
It seems to me as though some hon. members have their facts and figures mixed up. From the checks the department has made, we know the price of farm machinery has risen. But we also know that greater horsepower and added convenience have made these machines much more

April 11, 1974
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efficient. Bearing these factors in mind, the increase in price has not been as great as some people claim.
It was also stated that the farmers of this nation were not going to produce and supply more food, as we had asked them to do. This is not so.
That is why we value this bill so much, why we are asking that it be passed so quickly, and that is why I do not intend to take very much time of the committee. However, I should like to put on record certain figures in respect of agricultural production this year. It was stated earlier that farmers are not going to increase production. Let me make it clear at this time that acreage to be put in cereal grains in this nations this year will be increased by 2.5 million. It is estimated that growers will use 25 per cent more fertilizer than last year. This will mean an estimated total increase in acreage of 4 Vi per cent, and will result in the greatest cereal crop we have ever had.
I will not hold up the committee any longer but I thought I should put those facts on the record. I could of course take much longer to outline the facts in detail in respect of farm machinery, in order to correct some of the things that have been said.


Mr. McKinley:: Following what the Minister of Agriculture has just said in respect of farm machinery, Mr. Chairman, let me point out that as a result of inflation the price of sugar in Canada has increased by 30 per cent in the last month. The minister gave some indication about a year and a half ago that he was prepared to initiate the establishment of a sugar industry in southwestern Ontario. That created quite a furore. What was needed at that time was an agreement, on the part of the government, to guarantee a fair price to the sugar beet producers in order that they could carry on these operations over a sufficient period of time that would warrant the purchase of the necessary equipment.
The price of sugar has now reached a point where such a policy on the part of the government to establish that industry and to guarantee production is no longer necessary, but what we do not know now is whether the situation will remain the same or worsen because of rising inflation, so that farmers are still not in a position to know whether the industry would last in order that they would be warranted in purchasing equipment.
The increase in the limitation in respect of loans under this legislation will help to some degree in the establishment of such a sugar beet industry in southwestern Ontario, but after this little resume by the minister about the benefits of this legislation to farmers, will he now tell us what has happened to his proposed sugar beet industry as a result of the increase in the price of sugar by a full 30 per cent in the last month?


Eugene Whelan: Mr. Chairman, I should just like to say that I did inform the House several weeks ago that a world sugar agreement was the subject of consultation and active consideration, so we are making progress toward the adoption of a real sugar policy for this nation which will benefit the sugar beet industry in Canada.


Robert Elgin McKinley: I thank the minister for the reply, but he has not told us very much about the progress being made toward the establishment of a sugar beet industry in southwestern Ontario. Is that project any further off the ground than it was when the minister asked the farmers in that area of Ontario to make a commitment in respect of the number of acres they would be prepared to put into sugar beets?


Eugene Whelan: I would say it is very much further off the ground, Mr. Chairman.


Robert Elgin McKinley: Just how much further? Can the minister give us any definite indication as to whether there is a plant in the offing, and whether this will be initiated under the auspices of the federal government within the near future?


Eugene Whelan: Mr. Chairman, I made a commitment that we would be on the way to establishing a full-fledged sugar policy, and re-establishing a sugar industry within two years. I made that commitment about a year ago, so I still have a year.


Stanley James Korchinski: Mr. Chairman, I should like to make a few brief comments about this bill. There is no doubt that there is need for the extension of greater credit in the farming community and in the small business community, and this has been caused by inflation, as stated a few minutes ago by the hon. member for Don Valley.
During meetings of the Standing Committee on Agriculture we discussed this matter with representatives of the Federation of Agriculture, at which time everyone seemed to agree that because of the increase in prices there was a need to increase the limitation in respect of the amount of loans available. It was generally agreed that $15,000 was a ridiculously low figure, and that credit to the extent of at least $25,000 must be made available to farmers to cover production costs as well as the cost of machinery. Hon. members will realize that the price of machinery has been skyrocketing in the past few years, and it is generally understood that the cost will go up another 25 per cent in the next year. This is horrifying to the farmers.
During our discussions about this matter I ventured to state, with tongue in cheek, that as a result of inflation we will soon all be millionaires. This is exactly what will happen within a very few years. None of us will be worth any more or own any more property, but perhaps we will all be millionaires. This puts me in mind of stories about the people in Germany having to push a wheelbarrow full of marcs to the store to purchase a loaf of bread. That is the point we are rapidly moving toward at this present rate of inflation.
Because the land a man might have purchased in the 1930's for $500 would now cost $25,000 many people seem to think that all farmers are rich. Let me point out that the same acre of land produces no more food. Perhaps I should correct that by admitting that greater production is now possible through the use of fertilizers that were not available in the 1930's. We are able to produce a few more bushels of crop per acre, but this increased production is soon gobbled up.
April 11, 1974

In my experience I have never met a farmer who has purchased his machinery with cash. I was the reeve in a municipality for about six years, I am in my seventeenth year as a member of this House, and I can honestly tell hon. members that I know of not one farmer who has purchased machinery with cash. They have always had to go to the bank first to make arrangements for the money. Perhaps they do not do this because they want to, but it seems that savings are a thing of the past nowadays. I think the younger generation has the right idea; that is, use somebody else's money and live off the fat of the land. This is what causes the inflation. I believe there is a need for this type of loan for those who are left on the farm and who provide the needs of this country and other countries.
The minister has been making some strange noises in the last couple of days. He has been suggesting that if the farmers wish to be treated like everybody else they should pay high interest rates such as 10 per cent or 12 per cent. I am referring to the Minister of Agriculture (Mr. Whelan), not the Minister of Finance (Mr. Turner).


Eugene Whelan: Get your facts straight. I never said that.


Stanley James Korchinski: I have all the minister's speeches in front of me. I also have the records of the Standing Committee on Agriculture. When the minister appeared before the committee he suggested that the interest rates should go up because he wants the farmers to be treated equally. Although I am directing my comments to the Minister of Agriculture, the Minister of Finance must listen to this also because he may be forced to bring in legislation along this line.
I suggest to the Minister of Agriculture that he should look very carefully at the situation, and realize that he should not make a speech suggesting that the farmers should have greater profits and a higher return, and then turn around and suggest that these farmers should pay a higher interest rate because they want to be like their city cousins. This is nonsense. If we are to keep costs down we must keep the interest rate at the lowest level. The government should not take the position that this is a high cost economy and that the solution is to do something for the farmers by way of subsidies.
The Minister of Agriculture pours millions of dollars into the dairy industry, for example, because he knows everybody drinks milk. Then because the government assumes everybody eats bread a subsidy is placed on wheat. The idea is to leave the impression that the farmer is being subsidized while the consumer is being helped, If the government wants to help the consumer this can be done by cutting down the cost to the lowest level. The same principle applies to the home builder. The government could help him by cutting down the tax on building materials and so on. The cutting down should begin at the lowest level so that everybody does not get on the gravy train.
Although there has not been too much discussion about the interest rate I suggest to the Minister of Finance that that rate should be maintained at a very stable level. I understand that interest rates, like everything else, are going up, but I think there is a time and place to do
Loans Acts Amendments
something about this so that everybody in the country does not get in on the 10 per cent act as we go along.
I ask the Minister of Finance to be very careful not to listen to the speeches of the Minister of Agriculture as he travels throughout the country suggesting that everyone wants to pay high interest rates. This is nonsense. No one wants to pay high interest rates. The Chairman of the Standing Committee on Agriculture also knows this. I suggest that the Minister of Finance should attempt to establish a lower level of interest rates. Because of the fact that farm improvement loans carry a low interest rate many bankers do not give farmers the advice they often require.
The banker asks the farmer to come to his bank. The farmer is sucked in, just as people are sucked in who assume that the local grocery store has the cheapest prices. All of a sudden people realize that perhaps the banker across the street can give them a better deal if given a chance. I have advised some of my people not to be taken in by a banker because he is nice. He is a nice guy because he wants their business.
So long as one beats a path to a banker's doorstep one will be taken in and will have to pay the price. So long as you keep on paying the price the banker will smile more broadly because he thinks you know no different. I suggest that farmers should shop around when dealing with banks and bankers. Incidentally I have a brother-in-law who is a banker. I have had many arguments with him.


John Napier Turner: Many of your best friends are bankers.


Stanley James Korchinski: Sure, and I have had arguments on that score. The point I am making is that many bankers will not allow a farmer a farm improvement loan for farm equipment repairs, for example, which I believe are essential to his farming operation. I believe a part that is required for a piece of equipment should qualify for a farm improvement loan. A banker, however, will not tell a farmer this. He will tell the farmer he must obtain a loan at an interest rate of 10 per cent. I suggest that this applies to many things, including fertilizer.
A banker will never tell a farmer that he is entitled, under the provisions of this legislation, to obtain a loan at a reduced rate for these items. I am glad the Minister of Agriculture is here because I believe he has a certain responsibility. He makes so many speeches I wonder how he finds time to be here. I think there is a responsibility on both the Minister of Agriculture and the Minister of Finance to ensure that the farming community is informed on this subject. Perhaps it is time the minister made one more speech to farmers to tell them that they are entitled to loans for repairs and various other items at a reduced interest rate.
I operate a farm, and when I send in a payment to the bank the banker applies it to the farm improvement loan rather than to my regular loan because that way he receives an additional 3 per cent in interest. Of course I play the game with him. I give him a tongue-lashing. I suggest that if there is to be a campaign in respect of this legislation it should be carried on by the Minister of Finance, because it is his legislation, and I am sure he wants to take full credit for it.

April 11, 1974
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If there is a reduced rate, let the minister go out and sell that to the farmers. Let him tell them where they are entitled to get the reduced rate. Let him tell them of their rights, and what they can put into their banks. Let him send out a few civil servants to instruct farmers on the banking business. Banking has become a tremendous business. What struck me recently was that during the depression years in the farming community, when incomes were low, all the new banks throughout the country were opening up because that was the healthiest time for banks. That is when they flourished. They were making profits, and they were putting up buildings in all the small communities.
All those banks such as Toronto-Dominion, Bank of Commerce, Bank of Montreal, Bank of Nova Scotia-you name them-all have new offices, and these new offices are paid for. When you look at the statistics you find that their profits today are higher than they were ever before. For them to say that they cannot give us a lower interest rate, that they cannot do so with respect to certain sectors of the economy-at a time when we are so concerned about inflation and everybody here badgers the Minister of Finance or badgers the Minister of Agriculture about the cost of living-is ridiculous, because if we did not have to pay such high rates of interest our cost of living would not be so high.
I suggest that this is one area where the government can act very forcefully without injuring anybody. Banks will continue to exist.


Lorne Edmund Nystrom: You are a socialist.


Stanley James Korchinski: I am not a socialist, I am a realist.


Some hon. Members:: Hear, hear!


Stanley James Korchinski: I did not suggest that banks should not be making any profits. Does the hon. member, my friend and my neighbour in Saskatchewan, think for a moment that I would enjoy seeing all businesses closed down? Maybe he would. I like these little communities. They are great places. I myself come from such a little place "numbering 175 hunting dogs." This is the way you describe the size of the population there.
To come back to what I was saying, let me point out that banks would be able to survive even under the difficult conditions and restrictions that the government might impose. I am sure that these are very difficult times for the government. The minister speaks about external problems and external costs. Let me say to him that this is an area in which he can act very forcefully. He can keep the interest rates down. I ask the minister in all seriousness: was it necessary, at a time when we could not sell grain, when many of the farmers were selling out, dropping out of the business, for the banks suddenly to come out with new, flashy buildings, with all this comfort at the expense of the farmers?
Every farmer realized, as he walked past such a building-because he could not go in there to make his payment-that it was his money that was paying for the building. It is not that we begrudge the people who work in these buildings the normal comforts that everybody else

has, but the people who constructed these buildings were denying farmers their livelihood in order to have the buildings.
There are times when one is generous, and there are times when not everyone can move as fast as his neighbour or as fast as the Joneses.
I think the Minister of Finance realizes that he can do certain things for certain segments of the economy. Because of the fact that food is so essential, and that everyone is so concerned about inflation, he should be wary of the advice that the Minister of Agriculture is giving him, advice which was contained in his speeches as well as in what he said at meetings of the Standing Committee on Agriculture when he said that interest rates should go up. I suggest to the Minister of Finance that he should keep them down.


Eugene Whelan: Mr. Chairman, I just want to put on the record a couple of things to clarify some of the things that the hon. member said. Never have I said that interest rates should be at 12 per cent. We kept farm credit interest rates at 7 per cent for over $400 million in loans last year when all other loans were at a much higher interest rate. The bill that the Minister of Finance is bringing in at present actually cuts the interest rate from what it was the year before.


Some hon. Members:: Hear, hear!


Eugene Whelan: I am sure that the hon. member would want me to correct the implications in his remarks to the House.


Stanley James Korchinski: I would accept the fact that the minister did not say 12 per cent. At least we know the rate will not go up to 12 per cent, or above it anyway. This much we know now. At the same time let me point out that he did mention that farmers wanted to be treated the same way as all other segments of the economy are treated, and he did mention the fact that interest rates should be the same as those applied by CMHC.


Eugene Whelan: I did not.


Stanley James Korchinski: We have a record of that in the proceedings of the Committee on Agriculture. The Minister of Agriculture suggested this in his speeches. I have copies of them stacked up just waiting for me to show them to the minister one day. He suggested-and I will try to paraphrase him-that he does not know how long they can keep the rate at that level. Is he trying to suggest that it was 7 per cent? The former government increased the rate, and the Minister of Agriculture will increase it still more. Can he assure me that the rate will stay at 7 per cent?


Mr. Whicher:: No, he will lower it.


Stanley James Korchinski: You cannot be sure of anything. I want the Minister of Agriculture to answer me.


Eugene Whelan: We all know that at present the interest rate on farm credit is 8!4 per cent. But we also know that the income of farmers has gone up, especially in the area from which the hon. gentleman comes. At the time when the interest rate was 6 per cent you could not even get rid
April 11, 1974

of your wheat or other cereal grains, vegetable oil seeds, or anything else. The programs we have initiated, and will initiate in the future, will put farmers on the same level as all other people, and farming on the same level as other industries. They will not have to worry about the interest rates they pay once we get our agricultural policy really working.


Some hon. Members:: Hear, hear!


Some hon. Members:: Oh, oh!


Mark Willson Rose: Mr. Chairman, I wonder if I can heckle in the middle of these speeches? I did not quite hear the figure given for farm improvement loans. I think the Minister of Agriculture said it was $231 million.


Eugene Whelan: $230.1 million.


Mark Willson Rose: Could the minister tell us over what period that was?


Eugene Whelan: Mr. Chairman, for the calendar year 1971, $147.4 million, for the calendar year 1972, $181.1 million and for the calendar year 1973, $230.1 million.


Mark Willson Rose: Mr. Chairman, since I am a bit confused about the recommendation of the Governor General which stated that the limit, from 1974 to 1977, was going to be something like $60 million plus another $10 million, I wonder if the Minister of Finance or the Minister of Agriculture could explain how this figure has been exceeded, as it has according to the figures given by the Minister of Agriculture?


John Napier Turner: Mr. Chairman, I think that the hon. gentleman has to look at the limit on the present act as $1.1 billion for a three year period, so it is within the limits.


Mark Willson Rose: Mr. Chairman, I have one further observation. With respect to the figure I got of $31 billion, according to the hon. member for Bruce, as the total amount loaned by the chartered banks, I think it is fair to point out that farm improvement loans amount to less than 1 per cent of the total lending. This indicates support for the position that someone took this afternoon, that it is frequently difficult for a person applying for a small business loan or farm improvement loan to get it from a bank.
This program covers less than 1 per cent of the total borrowing of the country. I am certain that many of the people who are borrowing are farmers, small businessmen and fishermen, and they are not borrowing under this particular plan but under personal note, or some other plan encouraged by the banks which bears a higher rate of interest.
I have one further observation, Mr. Chairman. A number of people in my riding, and certainly in others too, are very interested in the new trout farming industry. In order to get start-up funds or expansion funds, if they apply for fisheries improvement loans they find that they do not qualify because, according to the Fisheries Department, they are farmers, and when they apply under the farm improvement loans scheme they do not qualify
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because they are fishermen. Has any consideration been given to this new and growing industry?


John Napier Turner: Mr. Chairman, I think there has to be some way that they qualify under one or other, or all three acts. Perhaps the hon. gentleman will bring some details to my attention so that we can look at the problem, which I think is an administrative one.


Mark Willson Rose: I will be pleased to do that, Mr. Chairman, and I thank the minister for his offer. Unfortunately, we have been through this a number of times, but not with the Department of Finance. As someone observed, these people are neither fish nor fowl and that is their problem.


John Napier Turner: It might be a bird of a different colour! We will look at it.


Eugene Whelan: Water fowl!


Mr. Peters:: Mr. Chairman, I wonder if the minister in listening to this debate that has taken place for several days-


Eugene Whelan: That is too long.


William Arnold Peters: It may seem long to the minister but the point I am-


John Napier Turner: A point of order, Mr. Chairman. Since I have my colleague, the Minister of Agriculture, who is in fine form, here tonight, I wonder if the hon. member would specify which minister is interjecting.


William Arnold Peters: Mr. Chairman, I am particularly interested in the agricultural aspect of this, so I was not really reflecting on the Minister of Finance. The Minister of Agriculture has been listening to the debate, but it would seem that all he got out of it is the fact that horsepower has increased in farm machinery and that larger equipment is necessary. Surely he has missed the whole point, Mr. Chairman. The reason farmers have to buy bigger farm equipment is because they cannot make a living off the land these days the way they could 20 years ago, and so they have had to expand.
The minister indicated that more fertilizer will be used this year, but he must know that that is not necessarily so. Less than the optimum amount of fertilizer will probably be used because it is so expensive. In order to get satisfactory results in Canada, fertilizer should be applied for a number of years. This has not happened, so the maximum production cannot be achieved.
The minister must be aware that the input to agriculture has been higher than ever before. Every time there is an increase in price he finds himself faced with expenditures beyond those he had anticipated.
A good example of this is the changes that took place in the Ontario dairy industry. As soon as farmers were able to enter the industrial milk market where there was a guaranteed price, they had to buy bulk tanks and a new type of milking machine. They also had to upgrade their buildings. Usually they had to get a loan, which ate up any profit from the expanded operation.

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I hope the minister is not as satisfied as he appears to be that there is no problem in the farm machinery industry. I hope he is not satisfied that there is no problem in the fertilizer industry. I hope he is not satisfied that there is no problem in the binder twine industry, the fencing industry, to say nothing of the basic problem that faces all farmers, the cost of land. Whether it is purchased outright, or through ARDA, or rented, it is still expensive. I hope the minister is not satisfied that the inputs have to be left alone and that, if we pass this legislation, a satisfactory solution has been found for agricultural producers.
I have found that farmers are in almost the same category as workers, Mr. Chairman. When the cost of production rises or the worker's cost of living rises, then either his standard has to be reduced or his production has to be reduced. The farmer has to curtail either his production or standard of living, or he has to borrow more money.
I suggest that the problem is not so much one for the Minister of Finance as it is for the Minister of Agriculture. The Minister of Fisheries should also be involved, I think, and so should the minister responsible for small businesses. The reason the Minister of Finance is being asked for this kind of legislation, and the reason the government is answering the call of the farmer, the small businessman, and the fisherman to increase the amounts of the loans, is that in order to stay in business these people must modernize; they must put more in to get more out.
As production costs increase we must raise lending ceilings to enable farmers to keep up and extend production. It is the case with almost every commodity, but whereas farmers have increased their production, their returns have decreased. Take the case of grain, a matter with which I am not overly familiar. The western farmer found that the price of his product rose almost overnight from $1.95 to about $6.00; yet the futures market in the last two or three months has dropped $1.50. If the farmer operates in a totally uncontrolled free enterprise market, he must consider carefully any move to increase production because, unless the government guarantees a floor price for his product, he may find that he is overproducing, that his return has decreased, but his expenses have not been reduced in line with his decreased return.
I am sure the minister does not really believe that it is enough to provide extended financing to farmers to enable them to expand their operation. He does not believe, I am sure, that farmers across Canada are using enough fertilizer. I am sure he knows that many farmers growing wheat in western Canada were only able to keep production costs down by using less than the optimum amount of fertilizer. I am also sure he knows that many farmers who grew corn in his area and sold it for reasonable prices were not applying adequate fertilizer.
In addition, I am sure he knows that although one segment of the farm industry has grown, and although it could be claimed that the price per horsepower of machinery has not increased significantly, this does not correct matters.
The government has advocated, in the last five or six years, the acquisition of larger farm units. It has suggested that we need to develop viable agricultural farm units.

This has meant that the farmer has had to buy his neighbour's farm. He has bought more land and expanded. Because he has expanded he has had to increase the machinery horsepower at his disposal. Unless the minister pays attention to methods of reducing input costs he will be doing the farmer a disservice. Only in that way can we strike a reasonable balance between the price at the farm gate and the price to the consumer. If we do not lower input c$>sts, which include the cost of borrowing money, we will not have served well the farmers of this country.


Mr. Hargrave:: Mr. Chairman, I want to make some comments about the Small Businesses Loans Act. First, I suggest it was well worth while to include as lending agencies the Treasury Branches of Alberta. Also it was good to raise lending ceilings, for obvious reasons. It has been my experience, from talking to borrowers and bankers, that the Small Businesses Loans Act has not been used as much as it might have been.
It seems people genuinely interested in getting a small business loan have been talked out of it, and put off, by the bank manager, who obviously is pushing other types of bank loans which carry a higher rate of interest. I wonder if the minister could comment on this. If this practice is to continue, this legislation will be of doubtful benefit. I think the small businesses loans provisions should be used far more than they have been hitherto. Can the minister comment on this? Are these funds really available, or is the banker using a legitimate excuse when he pushes other types of bank loan?


John Napier Turner: Mr. Chairman, we have just issued a quarterly release having to do with these three programs. During the last quarter of 1973, $8,506,000 odd was lent under the Small Businesses Loans Act, compared with $7,459,000-odd in the same period of the previous year. The volume is still up, and money still appears to be available. The total figure for last year was $30.3 million.


Mr, Hargrave:: I do not doubt that the volume of loans has gone up. In view of prevailing business conditions in the last year and a half, if the total had not gone up something would be seriously wrong with the program. I still maintain that the program is not being used to its fullest extent. Perhaps there is something inherently wrong in the approach that is evident when the borrower goes in and talks to the banker. I think more use should be made of the program.


John Napier Turner: Mr. Chairman, I think the program announced by my colleague, and now before the House, the Federal Business Development Bank, and the Department of Industry, Trade and Commerce, should diversify and decentralize these services across the land.
We are adding the management counselling service. One of the best pieces of advice I suppose one could give a businessman is that this legislation is available on a decentralized basis. I think the hon. gentleman's comment was relevant.


Mr. O'Sullivan:: Mr. Chairman, I want to add to the comments made earlier by my colleague and, hopefully, hear the minister's response. I congratulate him for
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improving the Small Businesses Loans Act, an act first brought in by the government headed by the right hon. member for Prince Albert. My concerns are similar to those of the hon. member for Medicine Hat. Businessmen in my constituency are not aware of the provisions of the act or, if they are aware of them and approach the banks, they are, in the words of my colleague, "put off". The minister suggested that decentralizing the activities of a certain government department will help to correct this condition. I am sure the minister knows, from dealing with businessmen and others, that people in this country are under the impression the federal government is far too centalized, far too big and, once you start dealing with it, far too bureaucratic.
Therefore, they are not at all willing to come to the government looking for assistance, if for no other reason than it runs against the grain of the free enterprise system and those involved in small business in this country.
I wonder if the minister can comment on the situation, which I am sure he will admit exists and on whether, as part of the condition in which the government enters into agreement with the banking institutions across this country, it might be made mandatory for these banking institutions, which have just reported record profits, to advertise and get out and push this act as one of the services they are providing in co-operation with the government of Canada. I wonder whether the minister would comment on that.


John Napier Turner: Mr. Chairman, I agree with the thrust of the hon. member's remarks. The Department of Industry, Trade and Commerce and the new federal development corporation will have as part of their mandate within the proposed statute, decentralization of functions of this type of government service. I agree with the hon. member. I think there has been too much centralization.
When I was Attorney General of this country I decentralized the Department of Justice. I opened regional offices across Canada. There is now one in virtually every provincial capital to bring the services of the federal government and parliament closer to the people. I will ask one of the page boys to bring a little pamphlet I have here to the hon. member. We can stock him up with it. It is published by the authority of the Minister of Finance and that other great institution, Information Canada. It is entitled Small Business Loans and is in two languages. Every bank in the country has this on the counter.


James McPhail Gillies: At least under the counter.


Jack Marshall: They hide them in Newfoundland.


Stanley James Korchinski: Does it have your picture on it?


John Napier Turner: I knew the cynical member for Mackenzie when he was a bachelor.


Stanley James Korchinski: Those were the days!


John Napier Turner: I want to assure him that these pamphlets are available in the banks of this
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country without the minister's picture, and with no signature. I am prepared to send this over.


Mr. Oberle:: Mr. Chairman, I just want to make a few general comments. This will allow the minister to relax somewhat because I will not be confronting him with direct questions. Anyway I do not think he would be ready this evening to implement the suggestions I will be making to help farmers and small businessmen in Canada.
I am one of that group who grew up in the small business world. I even have a small farm. It is big in land mass, but small in turnover and profit. I became a politician through the many experiences I gathered going to the bank and convincing my banker that he should make me another loan.
It usually happens in this way. You have an idea. You think it is great. You think it is going to make you rich. You go to your banker and tell him it will cost $15,000 to get you going. Your name is pretty good and your face looks alright, so the banker says he has the authority to loan you $15,000. Three months later you go back to the bank and tell your banker that if he wants his $15,000, you need another $25,000 because that is what you need to make this thing really viable.
The banker phones the regional office in a distant city and gets the approval to loan you another $25,000. Usually a small business makes a profit after the first year. This is contrary to big business. They do not make profits for generations.
In April of the following year, the small businessman invariably goes to the bank to borrow money to pay his income tax. He then wonders where all the profits went. At that time the bank knows the chances of success. The banker then decides whether you should close your doors or whether he should loan you the additional money.
I started quite a few small businesses. A lot of them are still going. In fact, some of them are now big. I ended up with very little for my share. Most of them were pretty sensible and pretty successful. I have analysed some of the programs the government has for helping small businessmen and farmers. I wonder about the reasons for some of these programs, and whether these people would not be better served with other programs that would make more sense.
Earlier this year I listened to the Minister of Agriculture talk about the farm succession legislation. In order to preserve the family farm he wanted to be sure that the poor son taking over the farm did not have to pay income tax on the capital investment. When I listened to the minister I wondered whether the act was designed to preserve the family farm or to expedite the death of the farmer.
The Farm Improvement Loans Act and the Farm Credit Act are wonderful. I want to congratulate the minister for making the Farm Improvement Loans Act more sensible, more in tune with our time, more in tune with inflation, and a little more meaningful. I am certainly in favour of it. It is all we have to work with. However, I wonder whether it would not better serve these people if the act, more ambitiously and in a more meaningful way, provided farmers with a means of getting their product to market.

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Farmers do not like big statistics tables. They use practical statistics. I came across a statistic the other day which stated that 20 per cent less boxcars were loaded in Canada in 1973 than in 1972, and that in 1973 the production of alcohol in Canada went up by 15 per cent. That proves only one thing: There were more people loaded in Canada last year than there were boxcars! Did I miss something?


An hon. Member:: Five per cent.


Frank Oberle: Was it 5 per cent? It does not make that much difference. I think we would be better served if our government would provide us with transportation facilities to get our products to market, and storage facilities whereby we could store a year's production of grain.
I learned that in small business you cannot sell from an empty shelf. That is what the marketers have been doing in Canada. When they travel around the world they either sell from an empty shelf or one that is running over. Either they have nothing to sell, or they have to sell at firesale prices to get rid of the production because there is no place to store it.
Instead of all these so-called subsidies, we would be better off if the government provided us with a transportation system. We would also be better served if the government would recognize the need for a proper place for the farmer to sell his product. By that I mean that sooner or later the farmer will have to get paid for what he produces and he will have to get paid a decent price.
Many of my colleagues have touched on statistics regarding other parts of the world. They have pointed out that some people have to pay up to 50 per cent of their disposable income for food, whereas in Canada we pay less than 20 per cent. The time has come when the government must decide whether we should allow the same situation to exist in Canada, or whether we should subsidize the farmer in another way. We hear from the government benches that it is not feasible to implement some kind of wage and price controls in Canada. Well, the farmer in Canada has lived with price controls on his commodities for the past 25 years, yet no one has ever controlled his input cost. I think it is high time we decided either to subsidize the farmer or to allow him to charge for his products what they are really worth.
If we are serious about decentralization and moving away from big and cumbersome urban centres, one way of helping the farmer would be to rid him of the burden of property taxes. After all, people who live in cities are helped to surmount the high cost of urban transport and so on. We could devise various ways of helping to improve the quality of rural life by building community facilities, town halls, roads and so forth. A program of this nature would, in my opinion, be more meaningful than anything the minister has laid before us to date.
Another way of helping farmers would be to make available to them, or to community organizations, or regional districts as they arc called in British Columbia, a per capita grant comparable with the grants provincial governments pay in respect of citizens living in municipalities. Farmers and others living in rural areas do
[Mr. Oberle.)
not benefit from such assistance, nor do they benefit as a result of proper representation on municipal or regional governments.
If we could find a way of placing the farmer on an equal basis with Canadians who live in towns and cities we would be doing a great deal to preserve the rural way of life with all its importance to our economy. Property taxes are the means by which institutional facilities such as hospitals and schools are paid for. The time to remove this burden from farmers is long overdue, and the federal government could play a definite role in assisting the provinces to take action along these lines. The Prairie Farm Assistance Act is a good act, but its terms are not broad enough-too few people are eligible to participate and, besides, it is not sufficiently regional in character.
Parts of the rural area I represent are in an early stage of development. None of the programs under the minister's jurisdiction are available to those who are just starting out to be farmers-those who derive a major portion of their income from some other source. They are all dreamers. For the time being they are working as lumbermen, or on oil rigs, or in sawmills. But eventually they would like to be full time farmers. An official of the Farm Credit Corporation will, nevertheless, tell such a person that he is not eligible because he is not a farmer. Nor will he ever be, unless we recognize that there is a need for a change in the legislation.
Were it not for the pioneers, the farm community would not be as well developed as it is today. I believe the act should be amended so as to allow such people to share in some of the benefits of these programs. I realise I am digressing at this point, but for the record it must be said that there are many people in Canada desirous of starting a small business, or upgrading their farming activities, who do not have access to these programs because they are not committed on a full time basis.


Jack Marshall: Strangely enough, Mr. Chairman, there are farming communities in Newfoundland. On second reading I spoke of the benefits of the wonderful loan plans available to farmers, fishermen and those wishing to enter business, or expand their existing businesses. However, I am wondering whether the Minister of Finance can explain why we, in the Province of Newfoundland, cannot get the benefit of such programs and there are many such programs, about 18, I believe, directed to the small businessman, whether he be a farmer, a fisherman, a hotel operator or a storekeeper.
I can only draw attention again to the reports which have been issued in connection with these loan programs. In the period between January and December, 1972, of loans made in the ten provinces amounting in all to $181 million, four only were made in Newfoundland to a value of $6,546. From January to December, 1973, only three loans were made in the Province of Newfoundland to a value of $8,788 out of a total of over $230 million. And I would remind hon. members that there are areas in my province which have great potential for agricultural production, land which can produce almost all the food requirements of the isolated province of Newfoundland.
I have suggested, Mr. Chairman, that the minister carry out an investigation to determine why bank managers,
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who are responsible to the Canadian public for carrying out this program, are performing that task in such a way as to produce figures of the kind I have drawn to your attention, with far fewer of these loans going to the province of Newfoundland than to any of the other provinces of Canada.
Hon. members may care to look at the latest report of the activities carried out under the Small Businesses Loans Act. In the period from October to December, 1973, only two loans were granted in Newfoundland amounting to $50,000. From January, 1973, to December of the same year, six loans were granted in the amount of $77,000. And back in 1972, five loans were made to the amount of $58,000. Something has to be wrong, Mr. Chairman. I am sure the minister has received representations from other members of the House, beside myself, pointing out that these loans are not being directed to Newfoundlanders in anything like the proportion allocated to other Canadians. I need hardly add I have no wish to deny to other Canadians the advantages they may derive from this, or similar legislation.
The fishing industry is the mainstay of the Newfoundland economy. But even when it comes to loans under the Fisheries Improvement Loans Act we in Newfoundland are at the bottom of the scale when compared with other coastal provinces. In the period from October to December, 1973, only 14 loans were granted in an amount of $35,000, a sum which does not even reach the maximum figure which the amendment to the act seeks to establish. Even the province of Prince Edward Island, in which the agricultural industry is of major importance, secured 40 loans in an amount of nearly $90,000. In that province, in the period from October to December, 1973, there were 40 loans amounting to $89,000, and in 1972 there were 32 loans amounting to $59,000.
I am hoping that the Minister of Finance, even though he does not listen to the appeal we are making, will realize that something is wrong. I suggest again that this is the fault of the agents who are making these loans, and they are in effect the managers of the branches of the chartered banks. They could not care less for Newfoundlanders. Somebody has to give them a slam over the head, or a kick in the behind, to remind them of their responsibility to Canadians. I hope the minister will take my words of advice and direct that this action, so necessary to the people of Canada, is taken.


John Napier Turner: I'll tell you what we are going to do. I'm going to send Claude Passy here, who is chief of the guaranteed loans administration, down to St. John's on Wednesday to find out what's going on. However, in respect of fisheries the provincial fisheries loan program guarantees loans at 3V4 per cent. That is a highly subsidized program and it is pretty hard to compete with that type of subsidization. I realize that fishing is an important industry in Newfoundland, perhaps the main industry as the hon. member has said, and I understand his concern.
In terms of the Small Businesses Loans Act I cannot understand the figure being so low in Newfoundland. I cannot understand there only being two loans in the
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amount of about $50,000 for that period the hon. member mentioned. Mr. Passy will be going down on Wednesday to find out what's going on there, but I might make a suggestion to the hon. member that we both have a duty to try to publicize this federal program in Newfoundland, and I hope I have his co-operation.


Mr. Neil (Moose Jaw):: Mr. Chairman, I should like to make one or two very brief comments in connection with the amendments to the bill as they relate to the Farm Improvement Loans Act. The increase in the ceiling on loans from $25,000 to $50,000 will be particularly welcomed in the west, as well as the fact that there is no restriction in respect to the use of the money as between land and machinery. I know of many instances when farmers would have welcomed the opportunity to borrow up to $50,000 for the purchase of land, but because they have been tied up with the Farm Credit Corporation they were not able to negotiate a further loan from that source. This will be of considerable help.
One thing that has been brought to my attention from time to time, and this was referred to by the hon. member for Mackenzie and others, is the fact that bank managers seem to discourage the borrowing of money under the Farm Improvement Loans Act. It has been brought to my attention on a number of occasions that when a farmer goes into a bank to borrow money, by the time the manager is through talking to him there are so many obstacles in his way that he borrows the money on the bank's regular plan rather than taking advantage of the lower interest rate available under this act.
As the minister has suggested, it is important that we as members advertise this program, bringing it to the attention of the people concerned. As was suggested by the hon. member for Mackenzie, we should bring the provisions of these acts to the attention of the farmers. Goodness knows, the minister travels from coast to coast and makes I don't know how many speeches a week. As a matter of fact, notes on speeches sent out by the minister's office cross my desk with as much regularity as the daily newspaper from my own constituency.
I would suggest to the minister, when he is speaking around the country, that he point out to the farmers that they can utilize the provisions of these acts. He should go into detail rather than just talk in generalities, as he did in respect of the savings to farmers as a result of changes in the Income Tax Act. He promised to circularize a list of these savings among members, but as yet that has not been done.
I hope that active steps will be taken by the Minister of Agriculture and his colleagues to publicize these programs, and perhaps to bring to the attention of the bank managers that it is their responsibility to encourage borrowing by those eligible under these provisions.


Mr. Towers:: Mr. Chairman, I think there are one or two points that should be cleared up, some of which were touched on by the hon. member for Moose Jaw. I should first like to know what constitutes a major repair. Will this be open to debate between the borrower and the manager of a bank, or is there to be a certain figure established? Having regard to the $50,000 which an individual can borrow in respect of land and machinery,
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April 11, 1974
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does this mean that an individual can borrow up to $50,000 to be used entirely for the purchase of land, or can it in turn be used entirely for the purchase of machinery?


John Napier Turner: Mr. Chairman, I think I can answer those two questions very quickly. Major repairs will be defined by regulation as over $400 when this bill receives the approval of this House and the other place. In respect to the second question of the hon. member, the $50,000 can be used in any way within the purview of this act. The sub-limits are deleted.


Mr. Reilly:: Mr. Chairman, at the outset I should like to congratulate the minister for proposing amendments to this act. One thing that appeals to me is that for the first time this will allow businessmen to enter the money market with the expectation of a certain amount of government assistance. One thing loans under this act are to be used for is the acquisition of land necessary to carry on. At first blush it looks as though this measure might enable the Toronto Northmen, for example, to acquire a football playing field and thus frustrate the desires of the minister's colleague in the Department of National Health and Welfare.
There are a couple of anomalies that have struck me. Several days ago Bill C-20 was introduced to set up the Federal Business Development Bank under the aegis of the Minister of Industry, Trade and Commerce. According to Clause 4(1) of that bill the objects are as follows:
The objects of the Corporation are to promote and assist in the establishment and development of business enterprises in Canada by providing, in the manner and to the extent authorized by this Act, financial assistance, management counselling, management training, information and advice and such other services as are ancillary or incidental to any of the foregoing.
Then Subclause (2) states:
The Corporation in carrying out its objects shall give particular consideration to the needs of small business enterprises.
I must say I began to be curious because there is no discernible link between this bank which is set up to give assistance to business-as the bill says to give particular consideration to the needs of small business-and the bill which we are now being asked to consider which changes in some respects the Small Businesses Loans Act. I would be pleased if, at the conclusion of my remarks, the minister would clear up what would appear to be an anomaly in the government's approach to small business.
There are other programs which apply to small business. There is a multiplicity of such programs. I shall list some of them. The Federal Business Development Bank, which I have just spoken about, is to take over at least two existing programs.
One is the counselling assistance for small enterprise, the acronym for which is CASE. Another is the business management training program now under the manpower department. It will be taken over by the Business Development Bank. In addition to those two programs there are a few others which are not perhaps widely known to the community. One is called GAAP, the general adjustment assistant program. It was set up to help companies to take advantage of tariff cuts during the Kennedy round of

negotiations. It has now been expanded to include all companies which wish to improve their competitive international situation, or which are faced in the domestic Canadian market with stiff foreign competition.
Under the government's program to broaden aspects of GAAP it has undertaken in some cases to become a partner in the GAAP assistance projects and to take a considerable amount of risk in the process.
There is another program called the program for export market development. Under that program the Department of Industry, Trade and Commerce will provide up to half the cost of forming a consortium of small businesses to trade in foreign markets, as well as some of the initial operating costs. It hopes to get the money back through a share of future sales.
I have outlined just a few programs which apply to small business. One of my colleagues said earlier there were something like 18 in all. I suggest through you, Mr. Chairman, to the Minister of Finance and to his colleagues that despite the fact that he was kind enough to send to my colleague, the hon. member for Hamilton-Wentworth, an attractive and concisely articulated pamphlet, this is a pamphlet which never sees the light of the day in any branches of the chartered banks which I have visited, and that the small businessman .in this country is confused by the multiplicity of programs administered by a variety of departments, ministers, deputy ministers and departmental assistants. What is really needed is a rationalized approach by the establishment of a department of small business under a minister who would administer all the variety of programs which are directed toward the assistance of small business.
When I say "small business" I am talking about medium or smaller enterprises, and it must be remembered that three-fifths of the people of this country, 60 per cent of the working force, work for medium and small business. In the aggregate this is a large sector of the economy. I think the time has long passed when the people who trade in the market and pass as small business should have their relations with the government recognized through the establishment of a separate department. Lord knows how many different departments and ministers they have had to deal with for a long time. I think they deserve a special minister, ministry or department. Our party has pledged that it will set up such a department when we form the government.
I hope, Mr. Chairman, that the exuberant members across the way, who dined well earlier this evening, are having a chance to get it all out.
Mr. Chairman, the breakdown of loans granted in the various provinces during the period January, 1973, to December, 1973, shows that there is no coherent approach to the manner in which the federal government gives assistance to small business. For example, in the provinces of Nova Scotia, Prince Edward Island and Newfoundland there were during that period 163 loans for a total of $1,605,000. That is for three provinces. That compares with $12,587,290 in the province of Quebec, $6,324,986 in the province of Ontario, and $5,268,859 in the province of British Columbia, the three richest provinces in this country. I suggest that there is no per capita justification for this discrepancy.
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I am not suggesting that there are as many small businesses in the Atlantic provinces as in the other three provinces, but I do suggest it appears, as several of my colleagues have pointed out, that perhaps the government has not done as efficient a job as it might in making small businessmen aware of the facilities and services available to them.
It may very well be that the proper approach, as I have suggested, is a department of small business. I urge this as a consideration for the minister. These are all my remarks except that I would like an explanation from the minister concerning the apparent anomaly I mentioned at the beginning, that is, the connection or lack of it between this bill and the business development bank measure which was introduced a couple of days ago.


John Napier Turner: Mr. Chairman, I should like to respond. The difference in the scope of this bill will become more apparent when the new Federal Development Business Loans Corporation gets underway. It is meant to split off the Industrial Development Bank, as the hon. gentleman knows, from the Bank of Canada. It will be a more active concern than the Small Businesses Loans Act, which has merely a guarantee function for the chartered banks and other financial institutions. The Federal Business Development Corporation will be making larger loans, and loans of longer term. It will be making loans involved with perhaps an equity participation in the interests of the small businessman.
I recognize, as does my colleague, the Minister of Industry, Trade and Commerce, that there must be co-ordination between these loan programs and the information programs for small businessmen. The decentralization under the Federal Business Development Corporation, and the field staff of Industry, Trade and Commerce throughout the country will be co-ordinating these programs under the management counselling service of the department. I think the hon. gentleman's points have a lot of merit, and the Federal Development Corporation will try to meet them.


Peter Reilly: Mr. Chairman, would the minister agree that what he has just said goes at least part way toward meeting what I contend, which is that there is a demonstrable need perhaps to put these under one separate department, and perhaps a separate minister?


John Napier Turner: One could have a separate department for youth, one for sports, one for small businesses. But I will say this to the hon. member: I agree that the small businessman has a legitimate grievance in this country. He has seen that big government deals with big labour and big business, and he really does not have a segment of the government looking after him. The hon. member mentioned that 60 per cent of employment in this country is supplied by small business, that is, by firms employing around 100 employees. He is quite correct in this-they are the ones that make up 60 per cent of employment in this country.


Mr. Hamilton (Swift Current-Maple Creek):: Mr. Chairman, I would just like to draw the minister's attention to the fact that in the area of the country I represent
Loans Acts Amendments
government loans, no matter how generous, work against that part of the country. The effect of these loans has tended, over the years, to depopulate that region. You still have to pass the banker's test to be able to qualify under this legislation; and the more generous the loans are, the more generous the government programs are, the easier it is for established persons to take advantage of them to the detriment of the younger fellows trying to get into business. I would like to see the government consider some scheme to induce younger people to take part in those programs.
I think that more stress should be put on character, and a little less stress on collateral. I am thinking of a situation where a young chap could get four or five of his neighbours to sign a statement saying that he is of good character, and this would be all that was required when he approached a bank manager for a loan.
This $50,000 limit is very welcome. I would just like to point out that now farmers are dealing with very large sums of money. One hopper car of flax returns about $35,000 to the producer. There has been some talk about box cars in the House. I wonder whether the Minister of Agriculture could tell me whether the Chief Commissioner of the Canadian Wheat Board was expressing government policy when he suggested that farmers buy 4,000 hopper cars out of their proceeds in the Wheat Board.


John Napier Turner: I want to respond briefly to the hon. gentleman. I agree with him. A generation ago bankers, both in towns and in the rural parts on the country, used to lend money on the strength of good character rather than on the amount of collateral. I think they are getting a little cozy on the collateral and rely more on how big his barn is, and such things that add up to quantity. When my colleague and friend, the Minister of Agriculture, brings in amendments to the Farm Credit Corporation Act, the hon. member will find that this is part of the tone of that bill.


Mr. McCain:: Mr. Chairman, while this bill is intended to take into consideration the inflationary tendencies which have been evident for a little while, it seems to me that it is virtually out of date before it can be implemented. I know this is not new-it has been said before.
There are a couple of other weaknesses in the bill, as I see it, and one of them as has been pointed out by the last speaker from the opposition is the lack of inclination on the part of banks to consider properly the type of individuals who apply. There is the fact that banks are not obligated to accept all applications for farm improvements, fisheries improvement or home improvement loans, and to forward them to the government. The government therefore has no idea how many loans the banks may have declined to make. Therefore the principal behind the loans is not being properly exercised by the banks, and the government does not necessarily know what is going on under the provisions of this act.
In the community in which I live it happens that there was a bank manager who said that under no circumstances would he make home improvement, farm improvement, or any other comparable type of loan because of the difference that existed between interest rates on the free market and interest rates under government guarantee on
27451-25!

April 11, 1974
Loans Acts Amendments
this type of loan. What policy does the government have in mind so that it will know how many loans are refused, what type of loans are refused, and what banks are refusing to make loans, because perhaps their earning opportunity may be restricted by the ceiling on interest imposed under the act?


John Napier Turner: One of the advantages of this program is that it does not have a great deal of bureaucracy tying it up. If we are going to get a list of every refused application, the implementation of the provisions under the act would be much slower, and the whole process more cumbersome. I suppose that the best way to know what is going on in terms of refused applications is for members, when they are approached by their constituents regarding refused loans, to inform me of these complaints, and I will make inquiries directly from the bank concerned to find out what the reasons were for the refusal. I am prepared to do that on a continuing basis.


Fred Alward McCain: This is a statement which needs a great deal of publicity, because I want to emphasize again to the minister that a bank manager in New Brunswick utterly and totally refused to make home improvement or farm improvement loans because he said that the interest discrepancy was such that his little branch could not afford it, and that even the parent bank could not absorb it. He made great excuses, but no loans. Without some reasonable obligation imposed upon the bank, this is not going to work.
Another thing that I would like to point out is that if one were in the feed business for instance, in 1970, one might have been in real business, but a man who is in the feed business today who is not selling $1 million worth of feed is not selling very much. If a man is in the automobile business today and does not have a $1 million turnover, he is probably not doing very much. It seems to me that this particular aspect of small business loans is not realistic in the light of today's normal sales and that $1 million will not make many sales for small businesses.
This bill is pretty restrictive. Unless the next bill which will divorce IDB from its present parent is very effective and includes the business structure from $1 million up, on a much better basis than in the past, there will be a gap here. I implore the minister to try to create some kind of communication between the applicant, the bank, and the department so that there cannot be discrimination by individual bank managers against those who make applications for any of these loans.


John Napier Turner: I think a better way is not to build up bureaucracy but to have the individual member of parliament, when he recieves a complaint from his constituent, bring it to my attention and I will get in touch with the bank concerned. That is what I do, and it is the general policy of all chartered banks to promote these guaranteed loan programs. There may be a manager of a bank who is not implementing that policy and, if so, I would like to know about it. That is our business as members of parliament. I would be glad to hear the specifics in the case mentioned by the hon. member.


Thomas Gordon Towers: Mr. Chairman - I have a question about the appeal. Is this going to be the only type of appeal that the applicant will have?


John Napier Turner: It is not really an appeal, Mr. Chairman. A bank has jurisdiction to make, or not make a loan, but I would like it drawn to my attention if an individual bank manager, in the opinion of a constituent of the hon. member, has not treated him fairly. I would be prepared to look into that for him.


Thomas Gordon Towers: I have a further question, Mr. Chairman, with regard to the small business loans. Is this going to allow for the operation of the business, or is it strictly for the purchase of property and machinery?


John Napier Turner: It is not for working capital, Mr. Chairman.
Clause 1 agreed to.
Clauses 2 to 7 inclusive agreed to.

Clauses 8 to 10 inclusive agreed to.


[Stage Direction]
Title agreed to.
Gérald Laniel: Shall the bill carry? [English]


Thomas Speakman Barnett: I am sorry, Mr. Chairman, but the interpretation was not keeping pace with you and I was waiting to hear you call clause 9. Before I could get to my feet I heard you call clause 10. Under the circumstances I should like consent to deal with clause 9, which has to do with fisheries.


Gérald Laniel: Do hon. members agree to revert to clause 9?


Some hon. Members:: Agreed.
On clause 9.


Thomas Speakman Barnett: Mr. Chairman, I realize there was some reference to the proposed amendment to the Fisheries Improvement Loans Act in the general discussion under the Farm Loans Act, but I thought the point I should like to raise could be more appropriately dealt with whilst dealing with the specific proposal to amend the Fisheries Improvement Loans Act.
I have one or two questions which I should like to address to the Minister of Fisheries, but as he is not here I will put them to the Minister of Finance. The question of the applicability of the assured lending program under the act for use by fishermen in re-financing loans that they already have, has been raised before.
Generally speaking, as I understand the operation of this act, the lender, in effect, requires a chattel mortgage on a fishing vessel even though there is an assured loan. I have never been able to understand why a fisherman, who may have had an unfortunate financial transaction, should not be able to take advantage of the assured lending
April 11, 1974

program which this act provides, in order to refinance his boat under more favourable terms which he may be able to secure through a bank or credit union.
If the minister would turn his mind to some earlier discussions on this subject he would recall the concern expressed by the hon. member for Skeena and myself. Long before this act was passed, the fishermen of British Columbia in many cases were almost perpetually in debt to the fish processing and manufacturing companies because of the type of lending agreement which tied them to those companies.
Since we are now opening up this act I should like to ask the minister whether this matter has been under consideration, and if the regulations will be changed to give more flexibility to this program, so that fishermen who wish to get out of an unfavourable agreement through refinancing, can do so under this program.


John Napier Turner: Mr. Chairman, the purpose of the legislation, of course, is to facilitate and encourage by direct financing and private lending, term loans for fisheries improvement. That is the way the guarantee functions under the bill. Refinancing of existing debts or working capital are not eligible under this bill, or the farm improvement loans bill or small business loans bill. I will look at it and get in touch with the hon. member privately, but certainly it is not covered under this program.


Fred Alward McCain: I would like to ask the minister if he has any influence with the banks so that working capital loans could be considered as separate and apart, and would not be influenced by an improvement loan under this act?


John Napier Turner: Mr. Chairman, this bill does not provide any accommodation for working capital.


Fred Alward McCain: If the bank, having made the improvement loan, reconsiders the working capital loan which it may have made to the operator and is inclined to downgrade the amount it is prepared to lend to a businessman or fisherman for operating purposes after having made the improvement loan, is this still the case?


John Napier Turner: No, Mr. Chairman, that is a separate loan. There is no way we could exercise leverage over the bank in that case.


Fred Alward McCain: Do the best you can.


John Napier Turner: You bring the incident to my attention and I will.


Thomas Speakman Barnett: The hon. member for Carleton-Charlotte raised the question on which I thought the minister was confusing working capital and capital for construction of boats. I am not suggesting that we enter into a situation where it should include working capital. I agree with the minister on that point, but a few moments ago the minister said that this parallels the Small Businesses Loans Act and Farm Improvement Loans Act. If I recall correctly, the Farm Improvement Loans Act was the first of the three to be enacted. Perhaps the people in the department naturally may have felt it desirable and simpler to create a parallel piece of legislation as it applied to fishermen.
Loans Acts Amendments
I may be wrong, but I do not know of any situation in the farm industry which parallels the situation I have tried to outline in the fishing industry. I have heard farmers say they are owned by the bank, but I have not heard farmers suggest that they are owned, for example, by Canada Packers. As far as I know, Canada Packers is in business on the prairies. That firm, so far as I know, has never been in the habit of financing the capital requirements of beef growers. I may be wrong. In British Columbia there is an organization parochially known as B.C. Packers. I mention these two firms, not to single them out, but to point out that there has been in existence a different basic practice in the industry. To say arbitrarily that the Farm Improvement Loans Act-


Gérald Laniel: Order, please. I must inform the committee that we must work in accordance with the rules. Either I should see the clock at ten o'clock, or not see it. Does the House consent to continue?


Some hon. Members:: Agreed.


Gérald Laniel: Shall clause 9 carry?


Some hon. Members:: Agreed.


Gérald Laniel: Shall the bill carry?


Some hon. Members:: Agreed.


Gérald Laniel: Shall I rise and report progress?


Thomas Speakman Barnett: On a point of order, Mr. Chairman, I thought I heard you call it ten o'clock.


Some hon. Members:: No.


Thomas Speakman Barnett: Am I to assume that you were going to rise and report progress?


An hon. Member:: Yes.


Thomas Speakman Barnett: Mr. Chairman, if that assumption is correct let me say that I have some further questions I wish to address to the minister on the subject of the Fisheries Improvement Loans Act, and I would be quite prepared to do so if the House were to continue sitting in committee.


John Napier Turner: On the same point of order, Mr. Chairman, I think the House might be willing to accommodate the hon. member for a few minutes because, unless I mistake the mood of the House, there is a general feeling that we might dispose of this matter tonight.


Gérald Laniel: Does the committee agree that we not see the clock and that we revert to clause 9?


Some hon. Members:: Agreed.
On clause 9.

April 11, 1974
Loans Acts Amendments


Thomas Speakman Barnett: Mr. Chairman, I have no objection to sitting for a little while but I do not want to impose on other hon. members. I have two or three questions to address to the minister. I hope, if I sit down while waiting for the minister to reply, that the committee will not disband.
I was making a point with regard to refinancing. The minister said that the bill, as drafted, and the act as operated, were designed to finance new vessel construction through direct lending, and vessel improvement. This raises questions which have arisen in connection with the Fisheries Development Act. That act, as the minister is aware, provides under certain circumstances grants in aid for accomplishing the same purposes as are provided for under this legislation.
The Minister of Fisheries, when discussing the Fisheries Development Act and when dealing with estimates in committee, where this subject matter has also come up, has repeated a number of times that the Fisheries Development Act, so far as it applies to fishing vessels, is designed not to assist fishermen but to assist the shipbuilding industry. He has advanced the argument that if it were not for the grants in aid which apply to small fishing vessels under the program he operates, fishermen on the Atlantic coast would go outside Canada to have their vessels constructed.
I would like to ask the minister whether the operation of this act is designed to assist the fishermen or to assist the boat building and repair industry.


John Napier Turner: The fishermen.


Thomas Speakman Barnett: I am anxious to get the distinction between the two programs. If the minister looks at the report on the money spent under the Fisheries Development Act he will see that the bulk is spent on the Atlantic coast, even though one member from Nova Scotia pointed out this afternoon in committee that the weight of the spending appears to be on the Pacific coast. Under this program are fishermen free if they wish to have their boats built or improved in a non-Canadian yard?


John Napier Turner: I hesitate to comment on that at this stage, Mr. Chairman, because really it is not within the purview of this particular piece of legislation. The purpose of this legislation is to help the fishermen. I can undertake to discuss this with my colleague, the Minister of Fisheries, and give the hon. member a fully reply, but I am not able to do that tonight.


Thomas Speakman Barnett: I will not press the minister for a detailed answer to this question tonight. I realize there may be some responsibilities in this area that are under the Department of National Revenue. However, I would appreciate if the minister or one of his colleagues would undertake to provide me with an outline of how this operates.
I have another question. Is there a rule against the importation of fishing vessels into Canada? I am trying to get a picture of just how this operates in relation to the two programs. What substance is there in the suggestion that, if we did not have a subsidy program, the fishermen would go abroad to get their fishing vessels, whereas with
[The Assistant Deputy Chairman.]
an assured lending program, with a rate of lending somewhat below what might otherwise be available, this is purely a program for the fishermen?


John Napier Turner: I will give the hon. member that undertaking.


Thomas Speakman Barnett: I have one other question I wish to address to the minister.


Thomas Miller Bell: Mr. Chairman, I rise on a point of order. We are quite willing to be reasonable, to show some progress and try to get some things done around here. However, we do not want to go so long that we lose our two men who have been waiting for the late show. That should be understood.


Thomas Speakman Barnett: Mr. Chairman, one matter that is often raised, not only with regard to this but other programs also, is the unwillingness at times of lenders to approve loans because they can lend money more profitably elsewhere than under the assured lending program because it is restricted as to the interest level. I have had something on that reported to me, and I say this with some regret because I am one of the advocates of having credit unions included in the insured lenders under this program.
I understand that credit unions representing a large number of fishermen have not deemed it advisable to do much lending under this program. In these circumstances I should like to ask the minister whether any consideration is being given to introducing some form of direct lending in cases where official lenders are not ready to make sufficient funds available?


John Napier Turner: I will draw that suggestion to the attention of my colleague, but any such direct lending program would be a matter for the Minister of Fisheries to consider.


Thomas Speakman Barnett: Will fishermen be considered eligible for this kind of loan under the proposals for reforming the Industrial Development Bank?


John Napier Turner: I would think so.


[Stage Direction]
Clause agreed to.
Clause 10 agreed to.
Title agreed to.
Bill reported.
Mr. Speaker:: When shall the bill be read the third time?


Stanley Howard Knowles: By leave, now.


Thomas Miller Bell: No.


BUSINESS OF THE HOUSE
Thomas Miller Bell: Mr. Speaker, may I ask about the business for Monday, without any comment?
April 11, 1974


Allan Joseph MacEachen: On Monday we shall call item No. 20, the bill to amend the Canada Pension Plan, to be followed by the bill in the name of the Minister of National Health and Welfare.


Some hon. Members:: Hear, hear!


Stanley Howard Knowles: The government House leader having announced the business for Monday, does that mean that our discussions earlier this evening about the possibility of not sitting on Monday came to naught?


An hon. Member:: Right on.


Allan Joseph MacEachen: Before I answer that question directly I should mention that before we begin on Monday with the Canada Pension Plan bill we shall deal with the third reading of the loans guarantee measure.
I would reply to the hon. member's question by sayir" this: I think his idea, in essence, is a splendid one. I shoulu like to extend it and suggest that maybe the House would agree to rise until next Thursday. That would be an improvement on the suggestion made by the hon. member for Winnipeg North Centre.


Some hon. Members:: No.


Mr. Speaker:: Obviously there is not agreement.



PROCEEDINGS ON ADJOURNMENT MOTION

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

Mr. Heath Macquarrie (Hillsborough):: Mr. Speaker, the question which I asked of the Secretary of State for External Affairs (Mr. Sharp) on March 12, and his regrettably inadequate and illusive reply, demonstrate all too clearly and painfully the present government's deplorable disregard of the Arab world over many, many years.
At the moment, in what might be called a deathbed repentance, but which I, with my usual charity, will dub an oilfield repentance, there seems to be some slight indication that there is now a tendency in the government to recognize that there is such a part of the international community as the Arab world. Noting that the United Nations General Assembly some time ago added Arabic to the list of official languages at the premier international body, this is a realistic recognition of the fact that some 130 million people in this world speak that language.
But in its dealing with the Arab world, especially the Middle East areas and the oil producing states, the government has shown an appalling coolness and lack of goodwill to people with whom there is no reason for Canadians
Adjournment Debate
to be on any terms other than friendship. At the moment, for instance, the only Arab countries receiving CIDA aid are those which have French as their second language. There is apparently no thought of programs for such countries as Jordan.
In this particular aspect the government has stumbled with more than usual clumsiness. After the Minister of Energy, Mines and Resources (Mr. Macdonald) went through a depressing charade of misinformation regarding Canada's status vis-a-vis the Arab oil embargo, there was an obviously hurried and harried decision to seek closer contacts, diplomatic and commercial, with that very important oil producing country, Saudi Arabia. There was even a move to establish contact with the Emirate States on the gulf. I will not reflect upon the decision to have our ambassador in Tehran at this stage.
I happen to know, through many years of contact and appraisal, that Ambassador George is one of our very best diplomats abroad, but a little thought might have decreed that the designation of an ambassador credited to Iran, which is not an Arab state, might not have been the most astute or felicitous move.
But the major blunder, oversight, slight or affront is the government's obvious panicky decision to open a mission in Saudi Arabia before establishing one in Iraq. Of course we should be in Saudi, should have been there long ago, but we need not have affronted the Iraquis in the process. Iraq has had a well staffed mission with two prestigious ambassadors in Ottawa over a period of many months, but the government has refused to open a mission in Bagdad.
With my colleagues, the hon. members for Selkirk (Mr. Rowland) and Cochrane (Mr. Stewart), I spent 10 days in Iraq and saw at first hand the opportunity for close and more meaningful commercial, cultural and social contacts between our two countries. I saw, too, the representatives of other nations "beating us to the punch" in making meaningful arrangements with Iraq.
I think it most unfortunate, highly irregular and totally unwise to denigrate Iraq by placing in a lower category the opening of a Canadian embassy in Bagdad, after that in Jiddah. Our position is doubly embarrassing when, as I am informed, Saudi Arabia has no early intention of opening a mission in Canada or accrediting its Washington ambassador to Ottawa. We are thus out of alignment in an important sense with both countries.
This reveals not only a low priority for the Arab Middle East, a lack of appreciation of the area to Canada, but also a diplomatic blunder which puts the minister in charge of our foreign policy in the same inept and insensitive category of most of his colleagues, leading us from mistaken judgment to worse in the domestic field.


Mr. Charles Turner (Parliamentary Secretary to the Minister of Labour):: Mr. Speaker, I am grateful to the hon. member for raising the question of Canada's representation abroad and, in particular, our policy in this respect toward the Middle East.
The government has carried out a policy of expanding Canada's activities abroad in as orderly a manner as is consistent with this country's rapidly evolving and grow-

April 11, 1974
Adjournment Debate
ing interests in the international community. Quite naturally this program of continuing expansion requires increased human and financial resources; expenditures must be controlled and the program necessarily must be phased over a period of time.
In general, we have tried to program openings on a three-year forward planning basis, reconciling competing demands of all the departments of government active overseas. This planning process is under constant review, in order to account for rapidly changing situations. While we attempt to keep the system as responsive to changing requirements as possible, it is obvious, given the restraints I have mentioned, that we cannot always satisfy every requirement immediately.
Hard decisions must be taken and unfortunately these sometimes involve sacrifices we would otherwise prefer not to make. For many years Canada had four diplomatic missions in the Middle East; Beirut, Tel Aviv, Cairo and Tehran. These posts responded to our interests at the time which were, with the exception of UNEF, much less important than they are today or can be expected to be in the future. Consistent with the evolution of the region and Canada's interests in it, the government has attempted to organize its relations with the area to take new realities into account. Thus in recent years we have opened missions in Tunisia, Algeria and Morocco, and recently announced the opening of one in Saudi Arabia. In addition we have taken steps to establish formal diplomatic relations with all other countries in the region; this is now virtually complete.
Recent events have dramatically underscored the importance of the countries of the region for the international community, including Canada. The energy crisis has given added impetus to our planned expansion of representation in the area. The government has, I believe, acted quickly in this regard.
Priorities were in some cases reordered, and our decision to open an embassy in Saudi Arabia was announced in December. No one would deny Saudi Arabia's pivotal role in international affairs, particularly in energy matters, and thus the urgent necessity for Canada to be represented in the Saudi Arabian capital. I can confirm that a Canadian representative is now in Jeddah and that the Department of External Affairs is actively pursuing the necessary administrative arrangements to complete the opening of a fully-staffed embassy by this fall. Similarly, we are giving active consideration to the matter of opening an embassy in Baghdad, Iraq in the near future. We attach considerable importance to our relations with that country, as we know the Government of Iraq does with Canada. Iraq has had an embassy in Canada for more than a year.


Mr. Speaker:: Order! I have to interrupt the hon. member because his time has expired.


PENSIONS-RAILWAY EMPLOYEES-INQUIRY AS TO APPOINTMENT OF COMMISSIONER TO CONDUCT INQUIRY
A. Daniel McKenzie: Mr. Speaker, I wish to speak tonight on the subject of railway pensions, specifically the government's inertia in resolv-
ing the Canadian National Railways' pension problem. In this context I also intend to make mention of Bill C-139, to amend the Pension Benefit Standards Act. This is a private member's bill designed to pave the way for employees of CNR to get the same pension benefits as members of the public service.
Since the back to work bill of last summer which ordered striking railwaymen back to work, the Minister of Labour (Mr. Munro) has repeatedly assured parliament that the government is studying the plight of the railway pensioners and that the situation is, to quote the minister in an April 1 answer to a question of mine, "under consideration". For almost eight months now the situation has been under review. Only recently the Minister of Labour assured this House that he would be making significant moves in the direction of appointing a commission to go into all aspects of railway pensions.
When does the minister plan to fulfil these commitments? The pension problem is one that will not go away. It must be dealt with immediately. The minister's appointment to Dr. John Deutsch to examine and report on certain aspects of the pension plan is not the way to go about finding a solution to the problem. What is needed in this situation is a committee to look into all, not just some, aspects of the Canadian National pension plan.
It seems to me that any committee or commission would arrive at several conclusions, and should make at least a few of the following recommendations.
First, that all participants in the CN pension plan be entitled to equal benefits, and to this end support should be given for extension of the 2 per cent formula, retroactive to the first day of service, as an objective of future collective bargaining.
Second, that CN pension survivor benefits be equivalent to the public service plan.
Third, that the principle of the cost of living index escalation in CN pensions be on the same basis as pensions payable by the federal government generally, and that this escalation be extended to retired railway pensioners in the same way as it has been extended to other federal pensioners.
Fourth, that the widows of all CN pensioners be entitled to survivor benefits, and that immediate action be taken to provide survivor benefits to widows of members of the 1935 plan.
Fifth, that a full evaluation at regular intervals of the benefits, structure and financing of the CN pension fund be made by an independent commissioner. Such evaluation should pertain as well to the situation facing retired railway pensioners. It would determine the moneys available for the financing of its benefit recommendations and suggest positive measures, where necessary, to keep the fund on a sound footing.
It is time the minister gave a committee of the House the opportunity to make such recommendations, all of which would drastically improve the situation of the CNR pensioners. Or will the government do anything to improve the situation? One has to wonder in view of Bill C-139, a bill which, in fairness to my friend, the hon. member for St. Boniface (Mr. Guay), is one of noble intention.
April 11, 1974

That bill, which would give the same pension benefits to CNR employees as those received by public service employees has, as is the case with most private members' bills, little chance of passing into law. This is unfortunate because amendments to the Pension Benefits Standards Act would result in a distinct improvement in CNR pensions. The amendment would remove the CNR from the scope of the act. Such a move, without adding substantially to CNR's annual deficit, would improve its pension plan by providing pensions for its existing and retired employees on a basis similar to that applicable to the public service.
So much for the content of the bill, but the interesting thing about it is the manner in which it has been presented, for here we have one off those rare birds, a government backbencher, introducing a private member's bill with the apparent backing of his entire party. To me this is rather peculiar. After all when a government wants certain legislation passed in parliament, is it not the usual practice for the appropriate minister to introduce it? Is it not true that the government has a much better chance to pass legislation when it is presented in that manner and not via a private member's bill? Is it not true that private members' bills have a notoriously low record of success?
The conclusion one draws from this sham relating to Bill C-139 is obvious. The government does not really want to improve the lot of CN pensioners and, in an effort to cover up this fact and save face, the hon. member for St. Boniface has been delegated to introduce a private member's bill which, however admirable, has little chance of passing. It is indeed unfortunate that the Minister of Labour (Mr. Munro) has chosen to confront the entire problem of CNR pensions in this manner. What is needed is sincerity and a fulfilment of those commitments which were made to CNR pensioners. If the best the government can do is this private member's bill, then by all means let us pass it, but I think the Minister of Labour can and should do more immediately.


Charles Robert Turner: Mr. Speaker, as has been explained recently in this House and elsewhere, the matter of railway pensions is one under close review by the government of Canada. It is a complex problem, cutting across departmental responsibilities and, since the last round of labour negotiations in the industry, involving a collective bargaining relationship.
As the Minister of Labour (Mr. Munro) has said in response to questions in the House on previous occasions, he has had under serious consideration the appointment of an inquiry commission with broad terms of reference to examine both the costs and benefit structure of railway pension plans. However, he did state that he was of the view that the parties, that is, the railways and the various bargaining groups of railway unions, should perhaps be afforded an opportunity to look at the matter of pensions themselves prior to making a final determination as to
Adjournment Debate
whether or not he should recommend the appointment of an industrial inquiry commission into the matter.
As you are no doubt aware, Judge Hall, in his arbitration award, reserved final decision on several matters that were in dispute. The most important of these, of course, is the question of job security based on the principle of attrition.
I am sure that members of the House will appreciate that most of the railways and the unions involved are, and will continue to be, very deeply involved in meetings concerning the various studies that have to be made in respect of a job security plan, because they must be in a position to report back to Judge Hall by the end of June, at which time they will have to report to Judge Hall on whether or not they have been able to negotiate an agreement on their own.
From the above one can see that officials of the railways and the unions are heavily involved in continuous meetings with the parties for further discussions on the matter of pensions.
As the minister said on March 11, he has some further information that he is checking into for accuracy, but all of the facts and information have been made available and assessed in depth, and I am sure that the minister will be only too pleased to make a further announcement on this extremely important matter.
The government attaches great importance to the question of pensions in the railway industry. That is precisely why a good deal of thought and consideration is being given to it, not only in the Department of Labour but in other concerned departments such as the Department of Transport and the department of insurance. However, as important as the problem is, it should not be allowed to obscure a number of improvements which have been made recently.
As the Minister of Labour has stated, the railway pension plan following the last bargaining round has now become among the best in Canada. In some aspects it surpasses the pension plan of the Public Service of Canada. Successive plans have helped to do away with many of the anomalies and inequities that are virtually inevitable in any scheme the size of the railways plan. Everyone is aware, of course, of the tremendous efforts made when the House of Commons Standing Committee on Transport and Communications dealt with the question of the CN pension fund in September, 1970. Improvements were made both during and after the time that the committee hearings were held.
Some problems, of course, still exist. The concern of many long service railway workers that the improved 2 per cent formula should have been applied for since prior to 1956, is an example. However, we are confident that, with the help of experienced and responsible railway union leadership, as well as with co-operation from the companies, problem areas can be resolved to the benefit of railway workers.
Motion agreed to and the House adjourned at 10.35 p.m.

Monday, April 15, 1974