1975-07-25

ROUTINE PROCEEDINGS


Mr. Yvon Pinard (Drummond):: Mr. Speaker, pursuant to the terms of Standing Order 43, I request unanimous consent of the House to discuss an important and urgent matter.
In view of the tragedy that occurred yesterday at Saint-Bonaventure, in the riding of Drummond, when a tornado caused the death of at least three persons, some fifteen others being still unaccounted for, and over a million dollars' worth of damages by destroying a large number of houses, businesses and various municipal buildings, and as the provincial authorities are said to have been asked to declare the area a disaster area, I move, seconded by the hon. member for Saint-Hyacinthe (Mr. Wagner):
That the federal government immediately offer all available assistance to the victims of Saint-Bonaventure and assure them of the co-operation of all departments concerned.


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


Some hon. Members:: Yes.


Mr. Speaker:: As the House is unanimous, I shall put the motion. Seconded by the hon. member for Saint-Hyacinthe (Mr. Wagner), the hon. member for Drummond (Mr. Pinard) moves:
That the federal government immediately offer all available assistance to the victims of Saint-Bonaventure and assure them of the co-operation of all departments concerned.
Does the House adopt the motion?


Some hon. Members:: Agreed.


[Stage Direction]
Motion agreed to.

Mr. Cyril Symes (Sault Ste. Marie):: Mr. Speaker, I rise under the provisions of Standing Order 43 to move a motion of urgent and pressing necessity. In view of the fact that Canadian Pacific Railway is arbitrarily reducing main line railway and yard crews by one brakeman thereby jeopardizing railway safety and having no regard for employee tenure, I move, seconded by the hon. member for Brant (Mr. Blackburn):
That this House instruct the Minister of Transport to conduct a full scale investigation into the safety and labour practices of the CPR.


Mr. Speaker:: Pursuant to Standing Order 43, the motion requires the unanimous consent of the House. Is there unanimous consent?


Some hon. Members:: Agreed.


Some hon. Members:: No.



INDIAN AFFAIRS


Mr. Cecil Smith (Churchill):: Mr. Speaker, I rise under the provisions of Standing Order 43 on a matter of urgent and pressing importance. This is the same motion I proposed yesterday and I again seek Your Honour's permission to present it. Inasmuch as articles of a treaty, known as The Lake Winnipeg Treaty No. 5, were made and concluded at Berens River and Norway House in 1875 on September 20 and 24 respectively between Her Majesty the Queen and the Saulteaux and Swampy Cree Tribes of Indians, I move, seconded by the hon. member for Parry Sound-Muskoka (Mr. Darling):
That congratulatory messages be sent from this House to those bands of Treaty Indians adhering to the provisions of the said treaty and who, early in August, will be celebrating the one hundredth anniversary of the signing of The Lake Winnipeg Treaty No. 5.


Mr. Speaker:: The motion is proposed pursuant to Standing Order 43. It cannot be presented without the unanimous consent of the House. Is there unanimous consent?


Some hon. Members:: Agreed.


Mr. Speaker:: The hon. member for Churchill (Mr. Smith) moves:
That congratulatory messages be sent from this House to those bands of Treaty Indians adhering to the provisions of the said treaty and

July 25, 1975
Oral Questions
who, early in August, will be celebrating the one hundredth anniversary of the signing of The Lake Winnipeg Treaty No. 5.
Is it the pleasure of the House to adopt the said motion?


Some hon. Members:: Agreed.


[Stage Direction]
Motion agreed to.
Mr, Speaker:: Yesterday I indicated that by virtue of the rather extraordinary importance and implication during the question period of certain questions of privilege that were outstanding, the House might agree to deal with those prior to the question period. We did that once in order to clarify what might be done in the question period. I do not think we ought to do that on a daily basis. There are still outstanding questions of privilege, but I think we should take them in the ordinary course of procedure at the end of the question period.
[DOT] (mo)



ORAL QUESTION PERIOD


Mr. James A. McGrath (St. John's East):: Mr. Speaker, I should like to direct a question to the Secretary of State. Has he now had an opportunity to check his memory with respect to my question yesterday with regard to a telephone conversation between himself and the President of the Outboard Marine Corporation of Peterborough, Ontario in which the president of the company, Mr. McMillan, informed the minister that he had been told there was to be a 10 per cent excise tax coming up in the budget two weeks hence?


Hon. James Hugh Faulkner (Secretary of State):: Yes, Mr. Speaker, I had a chance to talk to Mr. McMillan yesterday on the phone. He confirmed that he had talked to me and I apparently replied to him in the vein that I was not in a position, as a member of cabinet, to discuss that issue with him, and that is where it ended. I think he elaborated on that in the news yesterday.


James Aloysius McGrath: Did Mr. McMillan, in the course of his conversation with the minister, identify the source of the information and what did the minister do with the information he received with Mr. McMillan?


James Hugh Faulkner: Mr. McMillan yesterday contended that he had received some information from his dealer-he could not remember, or he did not specify, which dealer it was in Kenora. What was the second part of the question?


James Aloysius McGrath: The second part of the question was: Did Mr. McMillan identify the source of the information and what did the minister do with this information?


James Hugh Faulkner: I did not do anything with the information of a particular kind. I simply told Mr. McMillan that

as a member of the cabinet I could not discuss this issue with him.


James Aloysius McGrath: In view of the public statements which have already been issued by Mr. McMillan in which he identifies the precise terms of the conversation and in view of the fact that Mr. McMillan has sworn to an affidavit in which he recounts his version of the conversation, may I now ask the minister once again whether he recalls the precise terms of the conversation, which took place two weeks prior to the budget? Further, did the minister, when he received that information discuss it with the Minister of Finance, and if not, why not?


James Hugh Faulkner: I don't remember discussing it with the Minister of Finance, Mr. Speaker.


Some hon. Members:: Oh!


James Hugh Faulkner: Well, it seemed to me at the time to be a piece of speculation on the part of Mr. McMillan based on a contact he had with a dealer in Kenora and I told him I was not prepared to discuss it.


FINANCE
Mr. Sinclair Stevens (York-Simcoe):: Mr. Speaker, my question would be for the Minister of Finance. Can the Minister of Finance tell the House whether during the period between his May and November budgets of last year he had any written communication with the member for Kenora-Rainy River on the subject of specific excise tax proposals and would he be prepared to table any and all such correspondence in the House?


Hon. John N. Turner (Minister of Finance):: I would have to ascertain whether there was any such correspondence. As I said yesterday, I had representations from all over the country after the May 6 budget, particularly after the government was returned on July 8, as to the excise tax on boats and motors. I also received representations from all quarters of the House on the same issue. But I will have to look into the question of whether there was any correspondence.


INQUIRY AS TO CONVERSATIONS BETWEEN MINISTER AND MEMBER FOR KENORA-RAINY RIVER CONCERNING EXCISE TAX ON BOATS
Sinclair McKnight Stevens: In view of the minister's answer today and also of his answer as reported in Hansard yesterday when I asked him whether he had had any personal conversations with the hon. parliamentary secretary concerning the proposed amendment to the Excise Tax Act, which appeared in the House on January 28, I should like again to ask the hon. gentleman, who yesterday stated he could not distinctly recall that, whether he had any conversation with the hon. parliamentary secretary with respect to the proposed amendment to the
July 25, 1975

Excise Tax Act referred to yesterday and, second, whether he had any personal conversations with the parliamentary secretary prior to the introduction of the budget itself with respect to excise tax matters?


John Napier Turner: Mr. Speaker, I cannot recall specific instances in either case, but I repeat what I said yesterday. Neither before the budget, which is not in issue because the tax was reimposed at an accelerated rate in the November 18 budget-


James Aloysius McGrath: An accelerated rate? It was the same tax.


John Napier Turner: Well, it was 3 per cent in the May 6 budget and 10 per cent in the November 18 budget. The allegation, I understand, was that the tax was going to be removed on boats, and of course it was not removed on boats. I said quite categorically yesterday that neither before the budget nor between the budget and the introduction of the amendment which relieved the tax on boats, did I give any indication to any member of this House, other than cabinet colleagues when the matter came before cabinet, of the introduction of the amendment. That procedure I have used in five budgets and five sets of budget bills.


POSSIBILITY OF LEAK BY DEPARTMENTAL OFFICIALS CONCERNING EXCISE TAX ON BOATS-REQUEST FOR REPORT
Sinclair McKnight Stevens: A final supplementary question, Mr. Speaker. In view of the fact that the affidavit referred to by my colleague the hon. member for St. John's East specifically states that the 10 per cent excise tax in the November 18 budget, as compared to the 3 per cent tax in the May 6 budget, was known or communicated to the deponent of the affidavit two weeks before the budget was introduced on May 18, and alleges that the information arose from the hon. member, the parliamentary secretary, would the minister indicate whether he has checked if there was any leak within his department with respect to this information?


John Napier Turner: Mr. Speaker, I have checked with senior officials of the department and I have had it confirmed to me that in no event was any information given either to the parliamentary secretary or to any other member of parliament.


MR. REID-REQUEST FOR CLARIFICATION OF STATEMENT CONCERNING FOREKNOWLEDGE OF CHANGE IN EXCISE TAX ON BOATS
Mr. Edward Broadbent (Oshawa-Whitby):: Mr. Speaker, I should like to address a question through the President of the Privy Council to his parliamentary secretary, the hon. member for Kenora-Rainy River, which follows directly from what the Minister of Finance has just said. I should like to have the hon. member clarify for the House the accuracy of the quote attributed to him, in terms of his knowledge as a parliamentary secretary, of forthcoming changes in the November budget which came about in
Oral Questions
January. He is quoted as having foreknowledge of the changes before they were introduced in January. The quotation is:
We put on a lobby and we knew about six weeks before it was announced that it was coming off the boats but not the motors.
I ask the hon. member whether that is an accurate quotation, and if he knew precisely, how did he come to know precisely?


Mr. John M. Reid (Parliamentary Secretary to President of the Privy Council):: Mr. Speaker, the answer is that I did not know precisely that the tax was going to come off the boats. I did know, and I think a great many members of the House knew at the time, that there were going to be changes in that particular tax. Hon. members who have read Hansard yesterday, though not the edited transcript that appears in the Gazette this morning, will realize that I quoted the evidence of a member from the other side who also confirmed that he had knowledge, based on his being a member of parliament and paying attention to the debates in the House, that the tax would be coming off. For those members who would like to look it up, I would suggest they read Hansard of yesterday and then go back to the evidence given in the privileges and elections committee, I believe on page 12 or page 15 of the report for March 6, 1975, where they will see the evidence quoted. I do not want to give the hon. member's name.


John Edward Broadbent: Why not?


John Mercer Reid: The other question was whether I had any information that the tax would be changed as a result of my being Parliamentary Secretary to the President of the Privy Council. The answer is no. The only inside information that I have as Parliamentary Secretary to the President of the Privy Council concerns what the House leaders say among themselves at different times.
[DOT] (U20)


MR. REID-POSSIBILITY OF CONVERSATIONS WITH CONSTITUENTS CONCERNING EXCISE TAX ON BOATS PRIOR TO INTRODUCTION OF BUDGET
John Edward Broadbent: Mr. Speaker, in view of the related fact that members of the New Democratic Party, who have checked their correspondence and their memories concerning conversations they have had with the minister and officials when some of them were making the same kind of appeals the hon. member was making, found that their correspondence in fact indicated no knowledge whatsoever of the certitude of the tax change coming-in fact they got quite clear answers from the Minister of Finance to the effect that such matters were confidential and they in turn conveyed to their constituents that uncertainty and did not indicate they had any knowledge, and in fact none of our members had any knowledge of the kind the hon. member refers to-I should like to ask a question related to the letter he sent on December 19 to Mr. Nelson which reads in part:
-I understand they are likely to relieve the excise tax against boats, although not on motors.
In addition to this letter to Mr. Nelson, prior to the date of this letter or after but prior to the introduction in the House of the budgetary changes, did the hon. member

July 25, 1975
Oral Questions
have a telephone conversation either with Mr. Nelson or with any private individual concerning the forthcoming budgetary changes, and did he indicate a knowledge of those present or forthcoming changes in such conversations.


John Mercer Reid: Well, Mr. Speaker, so far as the matter of the members of the New Democratic Party not seeming to have any indication that the change was possible or likely to come is concerned, that is a question for them to decide with regard to how effective they are in the House of Commons and how knowledgeable they are. The point I want to make is that if the hon. member will look at Hansard at page 7891, he will note that a member on the other side made the same judgment I had and had come to it independently because we had not talked about it beforehand.
Insofar as the question about Mr. Nelson is concerned, I believe, after I received his letter dated December 3, which I think is the first indication I had he was concerned about it, I phoned him to find out his concerns and have him elucidate more fully the effect this tax would have on his business and then I proceeded to make my inquiries and judgments. There was, to my recollection another company in my constituency, the Naden Boat Company Limited of Vermilion Bay, from which I received a phone call in about three or four days of the budget delivery putting the argument to me that the way the excise tax was imposed could do irreparable harm to their manufacturing operation since they had been in business for only six or eight months and did not have the cash flow and marketing situation to be able to sustain that kind of a blow. There were also from my constituency a number of other retailers who got in touch with me, either personally or in writing, and I added these to my files and made representations on behalf of all of them.


John Edward Broadbent: Mr. Speaker, I should like to point out, first, that the people whose judgment is being questioned are not members of the New Democratic Party. I responded with care yesterday I thought to the hon. member opposite and would like him to exercise the same care in some of his responses in the House today.
I would ask him now if he would answer the question more precisely. In his telephone conversations with people in his constituency or elsewhere, did he convey with any greater degree of certitude than he expressed in his letter of December 19 his knowledge of forthcoming budgetary changes?


John Mercer Reid: Mr. Speaker, I want to apologize to members of the New Democratic Party. I merely wanted to point out that the certitude of the knowledge I had that there was a possibility of a change was shared by me on this side at least with a member on the other side. So there were two of us who had some certitude, some insight, into the proceedings.
To answer the hon. member's question, I could say that from the reaction of Mr. Nelson when I phoned him and when I wrote him I judged that he had no confidence at all in the judgment which I had expressed that I thought that there would be changes. He tended to be very dubious

about it and he told me that he simply did not believe me. I simply reiterated to him at the time, as I did in my letter, that the chances were good, the likelihood was there that there would be a change because of the nature of what the minister was attempting to do in the tax. I made a judgment on my own. I had made this judgment on bills of all nature and I make that judgment continually in my work as Parliamentary Secretary to the President of the Privy Council as to how the House will behave and how we will move business along.


AGRICULTURE
Mr. Leonel Beaudoin (Richmond):: Mr. Speaker, I should like to ask the Minister of Agriculture a question.
Since the Department of Agriculture has authorized the Egg Marketing Agency to increase from 8 to 10 cents the price of grade A eggs, which will enable the producer to make a reasonable profit of 6 per cent, I wish to congratulate him. My question is as follows: does the minister believe that the 45 cent export levy for the industrial milk producer will be revised during the summer holidays?


Hon. E. F. Whelan (Minister of Agriculture):: Mr. Speaker, any policies for which I am responsible will be fair policies. We are reviewing the policy that is in accordance with the agreement with the dairy farmers of Canada for industrial milk. They understand that policy and they also understand the reason for the 45 cents per hundred pounds cost because the European Economic Community dumped so many thousands of tons of skimmed milk powder on the world market at no cost to their producers. So we are reviewing it and hoping to come up with a program that will not force industrial milk producers in Canada to take a cut in income.


Léonel Beaudoin: Mr. Speaker, I should like to put a supplementary.
Can the minister tell the House whether he knows anything about the subsidies received by the producers of nine European countries, which were to be 28 cents a hundredweight? These subsidies represent dishonest competition for Canadian producers. Is the minister contemplating action to change that situation?


Eugene Whelan: Mr. Speaker, we reviewed the subsidies paid by the European Economic Community to their dairy producers and we reviewed our subsidies, then we explained to Canadian dairy farmers that the discrepancy is not as great as some people think it is.
July 25, 1975


MR. FAULKNER-INQUIRY WHETHER MR. McMILLAN MENTIONED MEMBER FOR KENORA-RAINY RIVER AS SOURCE OF INFORMATION CONCERNING EXCISE TAX ON BOATS
Hon. Robert L. Stanfield (Leader of the Opposition):: Mr. Speaker, my question is for the Secretary of State and it is in order perhaps to clear up something relating to the conversation with Mr. McMillan approximately two weeks before the November budget. I am sure that the Secretary will recall if Mr. McMillan had mentioned the name of the hon. member for Kenora-Rainy River in the conversation. Is the Secretary of State prepared to assert flatly or deny that Mr. McMillan during that conversation, in referring to the source of his information that the tax on motors and boats of more than 20 horsepower would be increased to 10 per cent, mentioned the proprietor of Leisureland Marine of Kenora, a firm in Kenora, and that Nelson in turn had received this information from the hon. member for Kenora-Rainy River? Is the Secretary of State prepared to deny that?


James Hugh Faulkner: On
the contrary, Mr. Speaker, that was the tenor of the conversation yesterday with Mr. McMillan. He recalled the conversation, but as I remember conversations like this-I received many inquiries about the potential change in the tax-since I have been in cabinet I have always taken the view-and this is shared by all my colleagues-that those issues are not discussed, so I tended to give that element of the conversation rather short shrift.


Robert Lorne Stanfield: It would be helpful if the minister were prepared to assert categorically that this information about the alleged increase in the tax to 10 per cent was not attributed to a John Reid, the federal Liberal member for Kenora-Rainy River. Mr. Speaker, I am sorry, I do not enjoy this very much, but I would like to get to the bottom of it. I would like to ask the Secretary of State whether he is prepared-whichever way he wants to put it-to assert categorically that this information was not attributed to a John Reid, the federal Liberal member, in this conversation two weeks before the budget.


James Hugh Faulkner: As I pointed out to the House yesterday, I do not remember the conversation. I promised the hon. member for St. John's East that I would go back to Mr. McMillan, which I did, and I asked if he did telephone me. He said he did, and I asked him what the conversation was and what my reply was. He said that he had heard it from a dealer in his area, and I cannot precisely remember whether he introduced Mr. Reid's name. I take it that in the affidavit he contends he did. That is something the Leader of the Opposition should take up with Mr. McMillan. I do not remember the conversation. I told him that I was not prepared to discuss budgetary matters.


MR. REID-SUGGESTION BY MR. McMILLAN P.1EMBER FOR KENORA-RAINY RIVER SOURCE OF INFORMATION CONCERNING EXCISE TAX ON BOATS
Robert Lorne Stanfield: In my pursuit to get to the bottom of this and perhaps
Oral Questions
have the matter cleared up, I will ask through the government House leader whether there are any comments his parliamentary secretary would care to make about the charge made by one Thomas McMillan, the proprietor of an outboard firm in Peterborough, that he was informed by the proprietor of Leisureland Marine of Kenora, Ontario, that the tax was going to go up in the budget and that the source of this information was the parliamentary secretary.


John Mercer Reid: Mr. Speaker, I spoke to Mr. Nelson yesterday after the question period. He confirmed that he had not discussed this matter with me until after the budget had come down. He confirmed that the only information he had concerning this came from me after the budget was brought down, and it was contained in my letter to him of December 19, 1974. He then confirmed that he had reported this information to a representative of Outboard Marine, for which company he is a dealer, after he had received this information in writing from me.
I have not seen the document, but from what the Leader of the Opposition has read, it seems to me that there is some confusion because, as I understand it, the tax was coming off, not going on, and I do not want to comment any further because I have not seen the document. I do think from what was said that there is a contradiction in terms of what was actually proposed in the budget and what was actually done.


Robert Lorne Stanfield: Through the government House Leader to the parliamentary secretary, my question relates not to the tax being modified after the budget, but to the budget and to the proposed increase from 3 per cent, as was proposed in May of 1974, to 10 per cent as proposed in the budget of November. The charge is that information originated from the parliamentary secretary, about two weeks before the budget, that the tax was going to be increased from 3 per cent to 10 per cent, and it is contained in an affidavit attributing the source of this information to the parliamentary secretary. The Secretary of State is unable to deny that the name of the parliamentary secretary was mentioned in the conversation, which I would have thought he would have remembered. It relates to two weeks before the budget.


John Mercer Reid: Mr. Speaker, then I must say that I categorically deny that. Mr. Nelson and I had no conversations about sales tax until after the budget came down, and then, as hon. members who have looked at the correspondence I tabled yesterday will note, he made very strong and forceful representations about the injustice of it and how it was hurting his business.


MR. REID-SUGGESTED INQUIRY INTO ALLEGATION MEMBER FOR KENORA-RAINY RIVER GAVE OUT INFORMATION CONCERNING EXCISE TAX ON BOATS PRIOR TO BUDGET
Mr. Lincoln M. Alexander (Hamilton West):: Mr. Speaker, I would like to direct a question to the Prime Minister. Mr. McMillan has publicly indicated, I believe by way of the CBC, that he had prior knowledge which came from Mr. Nelson. The statements made by the parliamentary secretary now do not deny the truth of that, but in

July 25, 1975
Oral Questions
light of the conflict which is apparent at this time as to what really did happen, and I do not want to say who was telling the truth, but in order that we determine-


John Napier Turner: Wait a minute.


Lincoln MacCauley Alexander: I say that with a great deal of respect. I am not criticizing what the parliamentary secretary said but I am emphasizing what Mr. McMillan has indicated. Does the Prime Minister not think that as a result of this confusion there should be an inquiry with respect to this matter, or that the matter should be put to the Standing Committee on Privileges and Elections in order that the whole matter can be considered?


An hon. Member:: Make a charge.


Lincoln MacCauley Alexander: My hon. friend says make a charge. I am not making a charge. I am just trying to determine what went on.


Some hon. Members:: Order.


Mr. Speaker:: Order, please. With all due respect to the hon. member, his question clearly anticipates a ruling which the Chair has to make on at least three outstanding questions of privilege. That ruling will take place at twelve o'clock. Whether individual members feel that that course should be followed will perhaps be reflected by the way the Chair deals with it and the way hon. members take it after that, but to ask individual members whether the matter should be referred to a committee when in fact three questions are before the House under reservation today for decision as to whether a prima facie question of privilege exists, which would be referred to the standing committee, I think puts an improper light on the question.


EXPORT DEVELOPMENT CORPORATION
Hon. Herb Gray (Windsor West):: Mr. Speaker, I have a question for the Minister of Industry, Trade and Commerce. On May 8 the Prime Minister, referring to the Arab boycott, made the encouraging statement that this type of practice is alien to everything the government stands for and that he would hope no specific directive to this effect to departments and agencies would be necessary. However on June 2 the Minister of Industry, Trade and Commerce said that the government as a whole will be considering the matter in the very near future, and the view of the government will be communicated to all departments and the Crown corporation. I therefore want to ask the minister whether he can say whether the government has completed this consideration, and if so, what view the government now has of the matter and whether it is communicating this to the Export Development Corporation and other Crown corporations, agencies and departments.


Hon. Alastair Gillespie (Minister of Industry, Trade and Commerce):: Mr. Speaker, this matter is still under cabinet consideration, but in answer to the hon. member I 
would say that the answer I gave on a previous occasion, June 2, 1975, still stands until we make a further decision and announcement.


FISHERIES
Mr. T. C. Douglas (Nanaimo-Cowichan-The Islands):: Mr. Speaker, I wish to direct a question to the Minister of State (Fisheries). When he made his statement last Wednesday that the government was closing our eastern ports to the Russian fishing fleets, did he have in his possession the report of Mr. Ernest Weeks, a government departmental report, which said that the closing of the ports to Soviet ships would have little effect on the overfishing? That statement has now been fully corroborated by Mr. Louis Day, Secretary General of ICNAF. I ask the minister, further, if he agrees that, apparently, the government has closed the ports to the Russian business, which we want, without closing fishing areas to Russian overfishing, which we do not want?


Hon. Romeo LeBlanc (Minister of State (Fisheries)):: Mr. Speaker, I certainly had in mind the report of Mr. Weeks, which is over one and a half years old and which was looking at the long-term development of Canadian ports, if and when Canadian jurisdiction were extended. The subject raised by the hon. member, that of the inconvenience to the Soviet Union, also was not covered in Dr. Weeks report, but at that time the level of visits was not at 400 a year, as it was one year ago. There were almost 200 in the first six months of this year.
As for the latter part of the hon. member's question-I am sorry, my memory fails me at the moment.


ABILITY OF PORTS ON ST. PIERRE AND MIQUELON TO SERVICE RUSSIAN FISHING FLEET-REPORT OF MR. WEEKS
Thomas Clement (Tommy) Douglas: Mr. Speaker, may I ask the minister if his memory failed him on something else, when he told the House on Wednesday that the French islands, St. Pierre and Miquelon, did not have the capacity to service the Russian fleet. Was he aware that Dr. Weeks says in that report that both those islands could service the Russian ships adequately? Is Dr. Weeks in error, or has the capacity of these ports shrunk in the meantime?


Roméo LeBlanc: Mr. Speaker, when I said my memory failed me, it was in relation to the third point the hon. member had made. I say again that Dr. Weeks was talking about a situation which existed roughly two years ago. Also, we have indicated to the French government the reasons for our closing. We invited them to consider our friendly relations and that we would find it difficult to understand if they did not support our point of view.
July 25, 1975


CLOSING OF PORTS TO RUSSIAN FISHING VESSELS- POSSIBILITY OF SERVICING BY OTHER COUNTRIES
Thomas Clement (Tommy) Douglas: A supplementary question, Mr. Speaker. Has the minister received any indication from the government of France or the government of any other country which might service the Russian fishing fleet as to whether they will follow the Canadian example or undertake to service the Russian fleets which will now be denied access to Canadian east coast ports?


Roméo LeBlanc: Mr. Speaker, the representative of the government of France was invited in and discussed this question with officials of the Department of External Affairs. He undertook to inform the Canadian government of any increase in the normal level of business at St. Pierre and Miquelon.
Speaking on the point on which my memory failed me, if I remember correctly, the hon. member was suggesting that the closure of the ports should have the effect of removing the fleets off our shores. That was never intended and that was never indicated in my statement, and it is totally irrelevant to the subject. Port closure is related directly to violation of ICNAF regulations.


PROPOSED REDUCTION OF ICNAF QUOTAS BY FORTY PER CENT-POSITION OF CANADIAN QUOTAS
Mr. Fred McCain (Carleton-Charlotte):: Mr. Speaker, my question is directed to the Minister of State responsible for fisheries. In view of the unanimous support provided by this House to his negotiations for a 40 per cent decrease in international quotas on off-shore fishing grounds, will the minister explain to the House exactly the position in which that will leave our quotas vis-a-vis the quotas of the international fleet which have been involved in the negotiations?


Roméo LeBlanc: Mr. Speaker, I am grateful to the hon. member for raising that question. After reading carefully the motion, which, unhappily, I received just as I was coming to the House, I realized that, inadvertently, the hon. member for St. John's East was talking about a 40 per cent reduction of quotas. We have asked ICNAF for a 40 per cent reduction in fishing effort by all nations, except Canada. We want to maintain the Canadian catch at its present level.


Fred Alward McCain: A supplementary question, Mr. Speaker. Is the House to understand that the minister's position entails only the reduction of quotas for foreign fleets and no reduction of quotas for Canadian fleets?


Roméo LeBlanc: Mr. Speaker, I say to the hon. member, who I am sure supported the Canadian position at ICNAF last June and will support it at the coming meeting, that that is precisely the intent. The reduction would be to the foreign fleet's effort not to the Canadian fleet's.
Oral Questions


BASIS UPON WHICH ICNAF QUOTAS ESTABLISHED- SUGGESTED INCREASE IN ALLOWABLE HADDOCK CATCH
Mr. Lloyd R. Crouse (South Shore):: Mr. Speaker, mine is not a supplementary question. I have been hoping to ask it since Wednesday and it is directed to the Minister of State (Fisheries). Last week, five trawlers operating out of the port of Lunenburg, Nova Scotia, reported that they dumped 94,000 pounds of prime haddock caught in excess of quota in a ten-day period. Will the minister inform the House if the quotas were established as a result of Canadian surveys, and by whom, or on information supplied by foreigners; and, since the present policy is not that of conserving haddock, will the minister immediately take steps to increase the allowable haddock catch, in order to prevent this unnecessary waste of fishing effort, money and food?


Roméo LeBlanc: Mr. Speaker, my hearing aid is not working very well. I believe the hon. member was raising the question of fish discards. We have asked the representatives of the industry, mainly the large trawler operators who are most directly involved in these incidents, to meet with us. I know that the leader of this group was in Europe. I understand that officials are to meet him early next week. We want to find a solution, but we want a solution which will be equitable to all, primarily to small and medium sized boats which cannot travel as far offshore as can the larger trawlers involved in these incidents.


Lloyd Roseville Crouse: A supplementary question, Mr. Speaker. Since 94,000 pounds of haddock were reported as having been dumped by five ships, and as more than 40 large trawlers operate out of Nova Scotia alone, not counting those operating from New Brunswick, Newfoundland and Prince Edward Island, the quantity of haddock being dumped must equal or surpass the landed volume. In light of this tremendous loss of prime food, will the minister take steps to permit all fish once caught by Canadian fishermen to be landed at Canadian ports until the 200-mile economic zone is either determined internationally or unilaterally by this government?


Roméo LeBlanc: Mr. Speaker, the hon. member's suggestion is very appealing, but there is one serious disadvantage. It could re-open the whole area. This would mean that we do not recognize the ICNAF regulation and the quotas to which we have agreed. This could open the whole area to foreign fishing fleets, which is exactly what we are trying to avoid.


NORTHERN AFFAIRS
Mr. Harvie Andre (Calgary Centre):: Mr. Speaker, my question is for the Minister of Indian Affairs and Northern Development and arises from discussions and exchange of correspondence between the minister and myself respecting the extent to which Canadian engineers will be used on major technical projects in the far north.

July 25, 1975
Oral Questions
Will the minister indicate what progress has been made to ensure that Canadian engineering will be used in future large-scale engineering projects in the far north?


Hon. Judd Buchanan (Minister of Indian Affairs and Northern Development):: Mr. Speaker, the hon. member is quite correct. There was considerable concern felt when the contract let by Imperial Oil for the Taglu plant went to the Fluor Company. As a result the government has, therefore, decided to clarify its Canadian participation policy in the key area of engineering and project management by setting an objective that such services must be carried out by firms which are beneficially owned or controlled by Canadians, or else performed or serviced by Canadians, unless it is clearly demonstrated that the necessary capacity does not exist in Canada. We feel that the appropriate figure should be at least 90 per cent. Most of the work should be done here, in Canada.


Harvie Andre: A supplementary question, Mr. Speaker. Can the minister clarify whether this matter will be put in the form of guidelines or in the form of legislation; and, if there are guidelines, is the minister prepared to table them in the House, or table them as soon as they are available?


J. Judd Buchanan: Mr. Speaker, there is an inter-departmental committee, chaired by the Department of Industry, Trade and Commerce, to which an application for work of this nature should be referred and the committee will make the decision on it.



TRANSPORT


Mr. Hugh A. Anderson (Comox-Alberni):: Mr. Speaker, my question is to the Minister of Transport. On July 18, replying to my question, the minister stated that he believed the railroad abandonment freeze applies to all western provinces. My question is this. What action can the government take when a rail line, such as the Esquimalt-Nanaimo rail line on Vancouver Island, is abandoned, contrary to the government's stated policy?


Hon. Jean Marchand (Minister of Transport):: Mr. Speaker, when I answered the hon. member's question, I said that I believed the policy applied to all western provinces, including B.C. I ought to clarify. I have learned that it does not include B.C.; it includes only Alberta, Saskatchewan and Manitoba.



EXTERNAL AFFAIRS


Mr. Bill Clarke (Vancouver Quadra):: Mr. Speaker, my question is for the Secretary of State for External Affairs. In light of the answer given Monday to the hon. member for Kingston and the Islands that preparations for the United Nations Conference on Human Settlement in Vancouver next year will continue and in light of the reaction of the United Nations to Canada's postponement of the Toronto conference, will the minister now say what is the government's intention on admission of delegates to the Vancouver conference, keeping in mind that delay similar to that in the Toronto decision will put Canada in another embarrassing position and place Vancouver in a very difficult financial position in relation to the ongoing development done at the urging of the federal government.


Hon. Allan J. MacEachen (Secretary of State for External Affairs):: Mr. Speaker, the situation is simply this. Preparations for the conference in Vancouver are going ahead. There has been no balk in that respect. That was stated by myself in the House and I am happy to confirm it today. With regard to the admission of members of the PLO, I have stated elsewhere the situation. It is properly a matter for the Minister of Manpower and Immigration, but I think it ought not to be put in context with regard to this question. The government has decided that members of the PLO who are non-terrorists will be admitted to Canada under ministerial permit for attendance at the invitation of reputable Canadian organizations or at UN conferences.


William Hillary (Bill) Clarke: Mr. Speaker, I will direct my supplementary question to the Secretary of State for Urban Affairs. Is it still the view of the minister that the 1976 conference in Vancouver is viable? Also, does the government plan to carry on with preparations for the conference in Vancouver in spite of the withdrawal of the urban demonstration program and in view of the answer of the Secretary of State for External Affairs?


Hon. Barney Danson (Minister of State for Urban Affairs):: Mr. Speaker, not only are plans going ahead, but they are being accelerated to the extent they should at this stage of the preparations for that conference within the parameters indicated by my colleague, the Secretary of State for External Affairs.



DISASTERS

[Stage Direction]
FEDERAL AID TO VICTIMS OF TORNADO AT SAINT-BONAVENTURE	.
Mr. Claude Wagner (Saint-Hyacinthe):: Mr. Speaker, I wish to direct a question to the right hon. Prime Minister.
With reference to the joint motion introduced earlier by the hon. member for Drummond and the hon. member for
July 25, 1975

Saint-Hyacinthe, could the Prime Minister assure the House that the Saint-Bonaventure disaster victims can count on immediate assistance from the federal government, through all its departments concerned?


Right Hon. P. E. Trudeau (Prime Minister):: Mr. Speaker, as indicated by the hon. member, the House has agreed to the motion of the hon. member for Drummond that the government should assist as much as possible the disaster victims of Saint-Bonaventure. I should like merely to remind the House that the federal government is always willing to help. There is a procedure we must follow whenever the province of Quebec or some other province submits an application in respect of a disaster area. There exist all sorts of means to assist disaster victims. It is the responsibility of the hon. member for Drummond, within which the disaster area is situated, to see that the Quebec government submits a formal application to the federal government.


Claude Wagner: Mr. Speaker, I should like to put a supplementary question to the Minister of Regional Economic Expansion.
Has the minister received a request for assistance from the Quebec government and if not has he already taken some steps to help that disaster area?


Hon. Donald C. Jamieson (Minister of Regional Economic Expansion):: Mr. Speaker, I have not been in my office for a couple of hours. Before that, there certainly had not been a representation, which I think is understandable. I suspect the province would want some time to assess the damage. I will be glad to do whatever I can in conjunction with other departments and the province to see what we can do to assist in that area. I might point out there is a disaster formula program which, I believe, is administered by other departments of government. However, we will certainly supplement those efforts if we are asked.



PROPOSED FEDERAL FEASIBILITY STUDY OF ENRICHED URANIUM PLANT AT JAMES BAY

Miss Flora MacDonald (Kingston and the Islands):: Mr. Speaker, I have a question for the Minister of Energy, Mines and Resources. Now that the federal government has decided to proceed with its own feasibility study of an enriched uranium plant in the James Bay area, will the minister tell the House what aspects will be looked into by the federal study that he feels were not dealt with by the Canadif report to which the government has access?


Hon. Donald S. Macdonald (Minister of Energy, Mines and Resources):: Mr. Speaker, the conversations are not completed with the province of Quebec with respect to a mutual study of this question. The important concerns that we feel should be studied are firstly with regard to the suitability of the diffusion process for the purpose of uranium enrichment. As the time for the centrifugal process comes with, of course, much lower cost, does diffusion
Public Service
still represent the best method of achieving this? What would be the impact of this particular development if it were to go ahead on the availability of energy, not just in the province of Quebec but within an eastern grid, which is one of the objectives of this government? What would be the impact of this kind of investment on availability of funds and of real resources, such as equipment and manpower, compared to the other demands that will occur throughout Canada to meet energy needs and, above all, what will be the availability of foreign as opposed to Canadian uranium to be serviced by such a plant so that there will not be in the future any insistence on a higher level of Canadian exports of enriched uranium take place than we regard as within the national interest from the standpoint of the reserve formula.



PROPOSED ENRICHED URANIUM PLANT AT JAMES BAY- REQUEST FOR TABLING OF CANADIF FEASIBILITY STUDY

Flora Isabel MacDonald: Mr. Speaker, I thank the minister for his reply. Since on July 11 the minister undertook to inquire if the parties involved in the Canadif study were prepared to have it made public, is he now in a position to make this available to members of the House of Commons? If not, when does he anticipate being able to do so?


Donald Stovel Macdonald: I am sorry, Mr. Speaker. I apologize to the hon. member. The inquiry has been made. I cannot report this morning on the response or if indeed there has been a response. I will inquire about a response.



AIR TRANSPORT


Mr. Stan Schellenberger (Wetaskiwin):: Mr. Speaker, I have a question for the Minister of Transport with regard to the Panarctic airplane crash. Will the minister request that another inquiry be sought in Alberta so that the co-pilot and flight engineer may be subpoenaed to attend and this whole matter can be cleared up?


Jean Marchand: Mr. Speaker, I will study this question and give an answer to the hon. member.



ROUTINE PROCEEDINGS


Pierre Elliott Trudeau: Mr. Speaker, I should like to table, in both official languages,

July 25, 1975
Business of the House
under Standing Order 41(2), the fourth report of the advisory group on executive compensation in the public service.


EXTERNAL AFFAIRS
Allan Joseph MacEachen: Mr. Speaker, I should like to table a copy of the agreement between the International Atomic Energy Agency and the government of the republic of Argentina on the application of safeguards. I have asked for an authenticated French translation from the energy agency, which I will make available. Because of the possibility of an early closing of the House, I have departed from established precedent in not tabling this agreement in both official languages. I hope this will be understood.


John Edward Broadbent: Mr. Speaker, I rise on a question of privilege.


Mr. Speaker:: Is the hon. member rising on a question of privilege with regard to the tabling of documents?


John Edward Broadbent: No, Mr. Speaker. Your Honour suggested earlier today that those who had questions of privilege arising out of the alleged activities of the hon. member for Kenora-Rainy River (Mr. Reid) should raise them at twelve o'clock, and I do so.


Mr. Speaker:: I propose to take all outstanding questions of privilege with respect to that matter under Motions, which will be called very shortly.


WEIGHTS AND MEASURES
Hon. Mitchell Sharp (President of the Privy Council) moved:: That the order numbered Government Business No. 9 be discharged: and
That the Standing Committee on Finance, Trade and Economic Affairs be authorized to consider the government's program of guideline dates for metric conversion.


Mr. Speaker:: Pursuant to Standing Order 21(2), this notice of motion is transferred to and ordered for consideration under government orders later this day.


BUSINESS OF THE HOUSE
[Stage Direction]
On the order: Motions:
Mitchell William Sharp: Mr. Speaker, there have been some discussions among the House leaders dealing with Bill C-2, and I am prepared to move a motion under Standing Order 75A. However, I would like to be certain of the support of the other House leaders. There have been some exchanges which relate to a statement by the Minister of Consumer and Corporate Affairs. I would therefore invite you, Mr. Speaker, to ask the other House leaders whether they are in agreement to proceed with a motion under Standing Order 75A today.


Mr. Baldwin:: Mr. Speaker, I am always prepared to support the President of the Privy Council when there is justice and equity involved. If the Minister of Consumer and Corporate Affairs is prepared to make a statement, as I understand he is, with regard to one item which has been contentious, I am sure this would facilitate our giving the government the kind of order about which the President of the Privy Council is speaking.


Mr. Knowles (Winnipeg North Centre):: Yes, Mr. Speaker, it was our understanding that agreement had been reached for a motion under Standing Order 75A specifying that later in the session, in other words, when we come back, the debate on the remaining report stage motions and on third reading would be limited to a total of two days.


Some hon. Members:: Hear, hear!


Léonel Beaudoin: We have had some discussions, Mr. Speaker, and we have agreed to let Bill C-2 pass within two days.


Mr. Ouellet:: Mr. Speaker, if the House is prepared to restrict the debate on Bill C-2 to two days this fall, in a spirit of co-operation, I am willing to assure hon. members that I will move, in due time, an amendment to clause 31.4 which could partly satisfy the hon. member for York-Simcoe (Mr. Stevens) on the matter of franchises. This amendment would partly include the terms of motion No. 5 now appearing on the order paper.


Mitchell William Sharp: I now move:
That in relation to Bill C-2, an act to amend the Combines Investigation Act and the Bank Act and to repeal an act to amend an act to amend the Combines Investigation Act and the Criminal Code, two sitting days shall be allotted to the consideration of the report stage and the third reading and passage stage of the said bill;
That, after the disposal of the report stage of the said bill, the House shall proceed forthwith to the consideration of the third reading and passage stage of the said bill; and
That, on the second of the said days, at fifteen minutes before the expiry of the time provided for government business in such sitting, any proceeding then before the House shall be interrupted, if required for the purpose of this order, in turn, every question then necessary in order to dispose of the report stage and the third reading and passage stage of the said bill shall be put forthwith and successively without further debate or amendment.


[Stage Direction]
Motion agreed to.
Mitchell William Sharp: I should add that it would not be our intention to call Bill C-2 before we recess. Might I also ask whether there could be agreement, or perhaps an order of the House, that after we have disposed of Bill C-66 today-
July 25, 1975

it is the only government business which remains, as far as the government is concerned-we should revert to motions for the purpose of putting the motion for the adjournment of the House later this day?


Mr. Speaker:: It has been proposed by the President of the Privy Council that the House revert to motions later in the day. However, the terminology leaves a number of open-ended factors. First of all, it is conditional upon the passage of a bill and, second, no time is specified. I am not at all sure it is possible for the House to make an order with both these factors unresolved. Perhaps the House could simply indicate that it agrees in principle that the President of the Privy Council might return to the House at a later hour, under other conditions, and apply to the House at that time for permission to revert to motions; the House having given its agreement in principle at this time would not then interfere with the intentions of the President of the Privy Council.


Stanley Howard Knowles: We agree to that, Mr. Speaker. I would point out that the manner in which the government House leader put forward his proposition reminded us of what happens to us when we ask hypothetical questions.


Some hon. Members:: Oh, oh!


Mr. Speaker:: Is that consensus of intention agreeable to all members?


Some hon. Members:: Agreed.


PRIVILEGE
John Mercer Reid: Mr. Speaker, there are two points I wish to make at this time. The first is that I have instructed legal counsel to take all appropriate action against the Montreal Gazette as a result of the statements which were published yesterday and the lack of an adequate retraction. I have also asked that the same action be applied to La Presse of Montreal which carried a verbatim translation of the article which appeared in the Gazette of yesterday morning.
The second point I wish to make is that I have been informed, through my office, that Mr. Nelson of Kenora informed my office that the only communication he had with Outboard Marine Corporation concerning this tax was that he sent the sales manager a copy of my letter to him on December 19.
These are the only two points I wish to make, Mr. Speaker, in addition to what I said yesterday. I am prepared to hear your decision and abide by it. If you find there is a prima facie case of privilege, personal privilege in my case, I have a motion which I would be prepared to move.


Mr. Speaker:: Perhaps before making a decision I might hear the terms of the hon. member's proposed motion.
Privilege


John Mercer Reid: Mr. Speaker, the motion I would move is as follows:
That all articles contained in the July 24, 25 and any subsequent editions of the Montreal Gazette relating to the conduct of the member for Kenora-Rainy River vis-a-vis the November 18 budget, including most especially the allegations that the said member had advance knowledge of the said budget and conveyed that knowledge to businessmen, and the discrepancy in the editing of the Gazette's purported transcript of the proceedings of this House as compared to the report in the House of Commons Debates for yesterday be referred to the Standing Committee on Privileges and Elections.


Mr. Speaker:: Order, please. I might, in passing, express some concern about the words "and subsequent editions" because it might appear that we are dealing today with events which could take place on an unending basis. However, I asked the hon. member to read the motion in order that I might have some guidance as to the precise matter which he wanted to have referred to the committee. There are other members who have given the Chair notice, and I take it they ought to be given an opportunity to develop his own question of privilege or to comment on the one which is before the House before I try to make a decision.


Sinclair McKnight Stevens: Mr. Speaker, we believe that this is a bigger question than the simple one whether the parliamentary secretary has a matter of personal privilege that should or should not be referred to the standing committee. I note that the parliamentary secretary indicated that he intends to take legal action against the two newspapers to which he has referred. However, I would point out that perhaps that confirms the fact that not only in most members' minds, but also in the mind of the parliamentary secretary, the Gazette did not withdraw or retract in a substantial way the version in their report which appeared on July 24. I say that because I would draw to the attention of hon. members the statements made in this House yesterday by the parliamentary secretary, as reported at page 7887 of Hansard. He said:
I have asked the Gazette to publish a retraction and apology. If they fail to do so, I can only conclude that it was malicious. If there was malicious intent, then there are serious implications for all members of this House-
He continued:
-if the Gazette refuses to make a retraction tomorrow, and thereby makes it clear that this false and misleading story was published as a r.esult of conscious and malicious intent... I would propose then to move-
He then recited his proposed motion. I think I should be put on the record exactly what the Gazette said in their editorial today. Under an editorial headed "Yes, but..." the editorial reads:
John Reid, Liberal MP for Kenora-Rainy River and Parliamentary Secretary to Privy Council President Mitchell Sharp, disclosed advance information not about last November's budget itself but about a later amendment to the budget.
The editorial continues:
The divulgence of inside information on tax change prior to public announcement is, however, just as serious whether that tax change is included in the budget or in an amendment.
From reading the statement of the parliamentary secretary and the apology that appears in the editorial of the Gazette, I believe it is clear that there has been no retrac-
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Privilege
tion in substance, that there is no apology to speak of. I also believe that the malicious intent to which the parliamentary secretary referred yesterday has serious implications for all members of this House. That malicious intent, if it exists, is still not resolved, and I feel that the failure to examine this matter leaves a public cloud over the integrity of every member of this House, if not of parliament itself.
I also point out that in statements made in this House and in letters tabled there appear to be certain conflicts of evidence. I refer specifically to a letter that was tabled by the parliamentary secretary in which he stated:
I have spoken to the Department of Finance officials as well as the minister, and I understand they are likely to relieve the excise tax against boats, although not on motors.
That letter is dated December 19, more than a month before the actual amendment removing the tax was introduced on January 28 of this year. On questioning, however, we find that the Minister of Finance (Mr. Turner) is relatively indecisive whether he ever discussed this matter specifically with the parliamentary secretary, and I would say that he was indecisive whether any departmental official was involved.
I would also point out that in the statements made by the Secretary of State (Mr. Faulkner) today there seem to be certain conflicts with the subsequent statements made by the parliamentary secretary concerning evidence and statements made and given to the Secretary of State either about pre-budget or pre-amendment leaks.
Having indicated those conflicts in certain statements, once again I would emphasize that this is surely a matter for the entire House to be concerned with. I believe that the only proper way of having the matter dealt with is by a reference to the Standing Committee on Privileges and Elections. If Your Honour does not feel it in order to refer the matter in the context that the parliamentary secretary has requested it be referred, I would move, seconded by the hon. member for St. John's East (Mr. McGrath):
That the question of advance knowledge by the hon. member for Kenora-Rainy River, certain of his constituents and others of the January 28 amendment to the excise tax bill, and in particular the subject matter of the articles and editorial in the Montreal Gazette concerning the hon. member for Kenora-Rainy River, published July 24 and July 25 of this year, be referred to the Standing Committee on Privileges and Elections, and that the committee sit at the earliest opportunity, have power to adjourn from place to place in Canada, that it sit while the House is not sitting, and that it have full power to call for persons and papers.


Mr. Speaker:: Order, please. Hon. members might be concerned about the presence of two or more motions being moved at the same time. Any proposed motion that has been put forward is put forward conditionally upon the Chair finding a prima facie question of privilege; the motion cannot in fact be moved but, rather, is a contribution to the question of privilege that is being raised alternatively by the hon. member for Kenora-Rainy River (Mr. Reid) or to the question raised by the hon. member for York-Simcoe (Mr. Stevens). I have also received notice of a question of privilege from the hon. member for Oshawa-Whitby (Mr. Broadbent) and the hon. member for Okana-gan-Kootenay (Mr. Johnston), but I see the Minister of Finance (Mr. Turner) is seeking the floor on a point of order.


John Napier Turner: Mr. Speaker, I rise on a point of order arising out of what the hon. member for York-Simcoe (Mr. Stevens) has just said. He alleges indecision regarding my ability to be precise about conversations with the hon. member for Kenora-Rainy River (Mr. Reid). That, of course, is so, but I did declare quite categorically to the House that on no occasion was either the hon. member for Kenora-Rainy River, or any other member of the House for that matter, given any advance information of the excise provisions in the budget of November 18, or for that matter any other provision.


John Edward Broadbent: By yourself?


John Napier Turner: By myself, or, to the
best of my knowledge, by my officials.


An hon. Member:: To the best of your knowledge.


John Napier Turner: Yes, to the best of my knowledge.


Mitchell William Sharp: What more can you get than that?


John Napier Turner: Nor was any advance information given to the hon. member for Kenora-Rainy River or to any other member of the intention to present that amendment to the House, other than my cabinet colleagues.


Mr. Speaker:: Order, please. It is probably premature to give an indication of the stand that I propose to take respecting the point raised by the hon. member for Kenora-Rainy River. However, I would ask other hon. members who wish to make a contribution at this time to make it as brief as possible.


John Edward Broadbent: Mr. Speaker, I too rise on a question of privilege. My question arises from articles published in the Montreal Gazette both yesterday and today, and from statements made in the House by the hon. member for Kenora-Rainy River (Mr. Reid) both yesterday and today. My question of privilege pertains to the fundamental importance of the principle of the maintenance of total secrecy of concerning tax changes in our system of government.
Claims have been made that the hon. member for Kenora-Rainy River not only had prior certain knowledge of changes that were to be made to the budget in the fall of 1974, but that he conveyed such knowledge to others who may or may not have stood to gain personally from such knowledge. Although the hon. member for Kenora-Rainy River denies the accuracy of those claims, the Montreal Gazette stands by its original substantive contention. Specifically, that newspaper reiterated in today's issue that the hon. member for Kenora-Rainy River confirmed that he told their reporter, with reference to the forthcoming budgetary change at issue here:
We put on a lobby and we knew about six weeks before it was announced that it was coming off the boats but not the motors.
Mr. Speaker, if accurate, this in itself constitutes a serious breach of privilege which goes to the root of the parliamentary system. Serious questions must be asked
July 25, 1975

and answered. The very important matter of confidentiality and responsibility in our system of government involving not only the member for Kenora-Rainy River but also the Minister of Finance (Mr. Turner) is at issue.
If Your Honour should rule that I have a prima facie case for a question of privilege, I would move:
That charges relating to the release of confidential information concerning tax changes as set out in the Montreal Gazette of July 24 and July 25, 1975, and statements made in relation thereto in the House of Commons on the same two days, be referred to the Standing Committee on Privileges and Elections, that the said committee be instructed to call the hon. member for Kenora-Rainy River, the Minister of Finance, Mr. Jacques Hamilton, officials of government departments with whom the member for Kenora-Rainy River is alleged to have had conversations concerning tax changes, and any other persons alleged to have had prior knowledge of forthcoming tax changes, and that the committee be authorized to sit during any recess of the House of Commons.


Mr. Howard Johnston (Okanagan-Kootenay):: Mr. Speaker, in proceedings yesterday the hon. member for Kenora-Rainy River (Mr. Reid) quoted comments of mine in part that appeared in the Minutes of Proceedings and Evidence of the Standing Committee on Privileges and Elections, issue No. 12 of Thursday, March 6, 1975. Reference was made to those comments again today, and the hon. member rather graciously refused to name the source of them. I would not want an impression left that there was any wish on my part to shelter under a cloak of secrecy nor any reason why there should be. In order to set the record straight, I should like to quote the entire paragraph referred to by the hon. member for Kenora-Rainy River.
Mr. Speaker, I might say that in what the Gazette called an unabridged but edited version of what happened in the House yesterday there was an unfortunate abridgement which left the impression with any reader of that page that my remarks had actually come from the hon. member for Kenora-Rainy River.


Some hon. Members:: Hear, hear!


Howard Earl Johnston: I know the hon. member is loquacious enough that he does not need any help from me in this regard, but this is what has been said, and it was in reference to what I think all members at the time assumed was a hypothetical case. I said:
I am just surprised at how wide the thing is being east in the example that our witness from Kenora-Rainy River has given us, the particular example that he took. Much of what is involved in this whole business of conflict of interest is how the public sees it and interprets it. I for one on that very precise example said to various people, the Minister is going to withdraw this excise tax provision. And I had no confidential information whatsoever. It was just a good guess on my part, an intuition. I have no stock in any small boat company of any kind, nor did I rush out to purchase any following my statements. But I have no way of knowing whether some of the people who were petitioning me, as you suggested, immediately went out and altered their course of action and when my words turned out to be prophetic, again, I would have no way of knowing. But if anybody did I would hate to think I somehow was now in conflict of interest, or presumed to be, or seemed to be in conflict of interest, simply because I was a bit intuitive.


Some hon. Members:: Hear, hear!


Mr. Les Benjamin (Regina-Lake Centre):: Mr. Speaker, I rise on the same matter but a different aspect. As a
Privilege
private member of this House, I should like to raise a question of privilege. Yesterday and today at various points in his remarks and answers, the hon. member for Kenora-Rainy River (Mr. Reid), by direct reference, implication or inference lumped other members of parliament in with himself in terms of representations on the issue of the tax on motors and boats. I submit, Mr. Speaker, that by implication, inference and direct statement he implied that other members of parliament had advance information and knew that such a tax change was going to occur before it did occur.
On December 9, 1974, I wrote to the Minister of Finance (Mr. Turner) and made a submission on behalf of three people who had written to me representing two different companies in my constituency. I asked the minister if he would give consideration to exempting the sales tax for people living in remote areas. The minister replied on January 13, and I will quote the meat of his letter as follows:
I have noted your concern related to the impact of the proposed tax on persons living in remote areas. You may be assured that this matter will be reviewed prior to parliament's final consideration of the proposed legislation to implement the special excise tax.
That is all the information I was able to elicit from the minister-the minister only, and from nobody else. I feel, Mr. Speaker, in the context of the issue you are deciding as a matter of privilege, that by inference, implication and direct statement other members of parliament are included in this matter of prior knowledge.
I also feel there is a question of privilege involved in the manner in which the hon. member for Kenora-Rainy River replied to the hon. member for Oshawa-Whitby (Mr. Broadbent) today, saying in effect that if members of the New Democratic Party did not know of this in advance, by implication they were not doing their job. Mr. Speaker, we made the normal recommendations that other members of parliament made. The hon. member also implied, I submit, that we had advance information, and that if we did not have it we were not doing our job. To add to the injury for other members of this House, as my leader reported to Your Honour earlier today the Montreal Gazette in an editorial today reports:
Mr. Reid has confirmed to us he told our reporter, "We put on a lobby and we knew about six weeks before it was announced that it was coming off the boats but not the motors."
I submit, Mr. Speaker, that "we knew" implies that he and other members of parliament knew. I sure as hell did not know, and the Minister of Finance quite rightly made sure I did not know and indicated that in his letter of January 13. I think the hon. member for Kenora-Rainy River should rise in this House and make it abundantly clear that this involves him and him only, and no other member of this House.


Some hon. Members:: Hear, hear!


Leslie Gordon Benjamin: If he has any reason to think otherwise, he had better damned well say so and he had better say it now. That is my question of privilege, Mr. Speaker.


Mr. Speaker:: Order, please. Dealing with the easy part first, perhaps, the alleged question of privilege raised by the hon. member for Regina-Lake Centre (Mr. Benjamin)
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July 25, 1975
Privilege
is a question of difference, of disagreement. The hon. member can take it up in the way he has, or in some other way. For the hon. member for Kenora-Rainy River now to stand in the House and endeavour to say that he was the only one in possession of that information would certainly discount the remarks of the hon. member for Okanagan-Kootenay (Mr. Johnston) who has indicated that he was in a similar position. I think this might be clarified in some other way. This could be a matter for debate or discussion, but to my way of thinking it does not in any way constitute a question of privilege. The hon. member for Greenwood (Mr. Brewin).


Mr. Andrew Brewin (Greenwood):: Mr. Speaker, I just want to say, very briefly, that I urge upon Your Honour that indeed there is a question of privilege here. I am much assisted in that conclusion by the words of the hon. member for Kenora-Rainy River (Mr. Reid) in the Standing Committee on Privileges and Elections.
We are all familiar with the ancient parliamentary tradition, maintained with great strictness, about the secrecy of budgets and budgetary matters resulting from the actual budget. This matter is discussed by the hon. member for Kenora-Rainy River in the committee on privileges and elections. Several very interesting points are raised by him in the Minutes of Proceedings and Evidence, issue No. 12, of that particular committee. I do not wish to read the whole of the very interesting passages. The hon. member raised the question of changes in income tax and went on to say:
If you have a fairly good idea, based on information that came to you in a confidential way, that the Minister of Finance might and is likely to take that step, and you arrange your affairs so as to take advantage of it or tell people who can arrange their affairs so as to take advantage of it, then it seems to me that you are in conflict of interest.
That is the precise allegation we are discussing here. If one is in conflict of interest, this parliament is the place and the committee on privileges and elections is the committee which should inquire into the alleged conflict of interest. Perhaps I am labouring the obvious, but I suggest there is no possible doubt that there is indeed a prima facie case of breach of privilege. I say "prima facie" because the committee may make very different findings and the House may reject any such case. But I ask you, sir, to rule that there is indeed a prima facie case of privilege.


Mr. Speaker:: Order, please. In terms of the basic question which I have to decide, I do not think it is necessary to hear any further representations. The proposed motions that have been put forward by the hon. member for York-Simcoe (Mr. Stevens) and the hon. member for Oshawa-Whitby (Mr. Broadbent) are similar in two very fundamental respects. Both relate to the subject of an investigation by the Standing Committee on Privileges and Elections as to conflict of interest in general terms.
I would remind hon. members that if they seek consideration of a general question of that sort, there is nothing to restrict them in their ability to put down a substantive motion at any time and to ask the House to consider the advisability of examining the question of conflict of interest or even the actions in a particular instance of what might be an example. I differentiate in the fact that what

is sought by way of a question of privilege, if it relates to the conduct of an individual member, must be a specific charge that that member has in fact done something that abuses the privileges of the House, and the member who puts forward such a motion ought to have the burden of taking it before the committee.
This is not to say that no member in a situation of this sort-I want to repeat and emphasize this-has the power to say that because of this examination, or because of the possibility that exists, we ought to be able to examine the question of conflict of interest or leakage of budget secrets, or whatever the general subject may be. Any hon. member who wants to move the House to that effect is able to do it by way of a substantive motion.
Procedurally, what I have to decide is whether such a request for a general investigation into the grounds of a specialized motion of privilege gives it precedence over other general motions. My general impression, without going into the details, for reasons which I will elaborate later, is that I will probably not find in favour of a request for a general investigation of the case by the committee, in other words, that the Standing Committee on Privileges and Elections find the facts and that the committee find out whether such an abuse of the practices of the House has taken place. I would think that a motion, to be a privilege motion, would have to be much more specific than that in respect of the conduct of any member. I think that is a long established precedent of the House and we have to remain with it.
On the other hand, I am spared some of the agony that the decision would involve, in my opinion, by virtue of the fact that it is not another member who seeks to charge the hon. member for Kenora-Rainy River (Mr. Reid) with a breach of conduct. Rather, in the circumstances it is the hon. member for Kenora-Rainy River himself who, in his own motion for privilege, seeks to have the committee examine the conduct of the Montreal Gazette and another newspaper, obviously inviting, in the examination of that, an examination of the veracity of their statements and therefore an examination of his own conduct as a member by the standing committee.
An article has been described in the House as having accused an hon. member of a breach of the Official Secrets Act and of a breach of his privileges or rights or an abuse of his rights as a member of this House. The hon. member stood in his place and denied the accuracy of that article. Therefore, what is at issue is an alleged use of a national newspaper to accuse, falsely, a member of a misuse of his privileges as a member of this House.
Certainly, there has been a disposition on all sides of the House to say that, if there is a suggestion that such a thing has taken place, it is a fundamental interference with the rights of every member of the House of Commons to operate freely and perform his functions freely. If that question exists in general terms-and in the circumstances which are before me I can scarcely decide otherwise-I cannot see in any way that the Chair ought to interpose itself, from a procedural point of view, and prevent the House having an opportunity to take a decision in respect of the matter. I do stress, that it is, in the final analysis, a decision of this House which will say whether or not the matter goes to the committee on privi-
July 25, 1975

leges and elections where the matters that have been discussed and raised by almost all members who have participated can be dealt with.
Therefore, I have no hesitation, under the circumstances, to say that in my opinion the hon. member for Kenora-Rainy River does, in fact, have a prima facie case of privilege and the House ought now to decide on the disposition of that prima facie case of privilege in the terms of the motion he has put forward, which is as follows:
That all articles contained in the July 24th, July 25th and any subsequent editions of the Montreal Gazette relating to the conduct of the member for Kenora-Rainy River vis-a-vis the November 18th budget, including most especially the allegation that the said member had advance knowledge of the said budget and conveyed that knowledge to businessmen, and the discrepancy in the editing of the Gazette's purported transcript of the proceedings of this House as compared to the report in the House of Commons Debates, be referred to the Standing Committee on Privileges and Elections.
In that motion, I presume the hon. member for Kenora-Rainy River is supported by the hon. member for Glengar-ry-Prescott-Russell (Mr. Ethier). I suggest the House ought to take a decision. There is a question of whether or not the members ought to be called in before the House takes a decision on the matter, or whether it is possible to simply put that question to the House now.


Stanley Howard Knowles: Mr. Speaker, I rise on a point of order in respect of our procedure from this point on. In view of the fact that this motion is debatable, it seems to me it would only be fair for members to have copies of it in their hands. The fact that two other members have indicated motions they would like to move, in different terms, may result in one or the other of them wishing to move an amendment to the motion in the name of the hon. member for Kenora-Rainy River (Mr. Reid).
I therefore suggest to the House that we use the time between now and one o'clock on something else, perhaps Bill C-66, and that the debate on the motion of the hon. member for Kenora-Rainy River be postponed until two o'clock.


Howard Earl Johnston: Mr. Speaker, I have a point of order arising out of your remarks in which you were separating my position from that of the hon. member for Regina-Lake Centre (Mr. Benjamin). I would also like to make abundantly clear that there is a separation between my position and that of the hon. member for Kenora-Rainy River (Mr. Reid). At no time had I had any private conversations whatsoever with the Minister of Finance (Mr. Turner), and any intuitions that came to me came simply from observing this chamber and the course of the debate.


Mr. Speaker:: I am dealing, now, only with points of order. Standing Order 17 requires that in such a circumstance the question shall be put forthwith. I am prepared to delay it on the suggestion of the hon. member, but that is the only question to which we are addressing ourselves at the moment, whether we should proceed forthwith, whether the debate should commence now, or whether it should commence at two o'clock.
Order Paper Questions


Mr. Woolliams:: Mr. Speaker, I would like you to consider very seriously the following question, and I will be brief. If this matter goes to committee, and if we are to accept what the hon. member for Kenora-Rainy River (Mr. Reid) said, namely, that he intends to take action-I assume in a high court-then I want you to consider very carefully, sir, as the head officer of this chamber, whether there can be an investigation going on in the committee at a time when legal action is being taken in a high court of the land.


Sinclair McKnight Stevens: Mr. Speaker, I simply rise to indicate my general support for the suggestion brought forth by the hon. member for Winnipeg North Centre (Mr. Knowles). I think it would be proper to resume the debate on this motion at two o'clock.


Mr. Lawrence:: Mr. Speaker, I simply rise to seek clarification from you of the terms of reference that you indicated. I presume that under the general clause in the terms of reference, the committee would also have the power to send for persons and papers relating to this matter, and that this would be addended. If so, sir, I merely seek clarification, as well, in respect of those terms of reference, as to whether they would also give the committee the power to send for Cabinet ministers as witnesses before the committee, so that they could give the facts in relation not only to themselves but also to the people for whom they have a responsibility.


Mr. Speaker:: Order, please. Perhaps those are considerations that should be taken up privately among members between now and two o'clock. Those are matters to which consideration should be given and on which there should be consultations, and at two o'clock the House can see what motion might be presented to the House for consideration at that time. Is the House agreed that the matter be taken up at 2 p.m.?


Some hon. Members:: Agreed.


QUESTIONS ON THE ORDER PAPER
[Stage Direction]
(Questions answered orally are indicated by an asterisk.)
Mr. Charles Turner (Parliamentary Secretary to Minister of Public Works):: Mr. Speaker, the following questions will be answered today: Nos. 1,336, 2,478, 2,542, 2,577, 2,578, 2,675, 2,683, 2,748, 2,863, 2,864, and 2,906.
I ask, Mr. Speaker, that the remaining questions be allowed to stand.

July 25, 1975
Order Paper Questions


Mr. Firth: 1.	How many copies of the report entitled "An investigation of the health status of inhabitants of Yellowknife, Northwest Territories" by de Villiers and Baker have been sent to individuals and agencies?
2.	(a) To whom were such copies addressed (b) on what date were they sent?


Hon. Marc Lalonde (Minister of National Health and Welfare):: 1. 108 (approximately).
2.	(a) and (b) Commissioner and Deputy Commissioner of Northwest Territories-Copies sent 1971; Chairman, Technical Committee, Northwest Territories Water Board,
I.N.A., Yellowknife-Copies sent 1971; Regional Director, Northern Region, Medical Services Branch, Department of National Health and Welfare-Copies sent 1971; Town of Yellowknife-Copy sent 1972; Parliamentary Library, Copies sent 1975; National Health and Welfare Library, Copies sent 1975; Medical Services Library, National Health and Welfare, Copies sent 1975; On January 30, 1975, copies were sent to: Mr. Brian Colli, 2241 Princess Avenue, Brandon, Manitoba; Mr. Ken Shields, Eastern Forest Products Laboratory, Department of the Environment, 800 Montreal Road, Ottawa, Ontario; Mr. R. T. Dancer, 1311 Albany Drive, Ottawa, Ontario; Mr. Kenneth B. Peoples, 251 Bleeker Avenue, Belleville, Ontario; Mr. W. G. MacLeod, 2386 West 14th Avenue, Vancouver, British Columbia; Mr. T. Feller, Phase III, McMaster Medical Centre, Hamilton, Ontario; Dr. J. A. Arsenault, Professor, Department of Human Sciences, CEGEP; P.O. Box 590, Gaspe, Quebec; Dr. Carl J. Cuneo, Assistant Professor, Department of Sociology, McMaster University, 1280 Main Street West, Hamilton, Ontario; Miss Heather Mitchell, Barrister and Solicitor, 467 Church Street, Toronto, Ontario; Mr. L. W. Hollingshead, Chemistry Instructor, Southern Alberta Institute of Technology, 1301 16th Avenue N.W., Calgary, Alberta; Mr. J. R. Marier, Environmental Secretariat, National Research Council, 100 Sussex Drive, Ottawa, Ontario; Mr. David T. McCann, Box 1327, Yellowknife, N.W.T.; Dr. David F. Aberle, Professor of Anthropology, Department of Anthropology & Sociology, University of British Columbia, Vancouver, British Columbia. In addition, some 70 copies of the report were made available to various individuals and groups, including media representatives and government departments; however, specific records stating on what date and to whom these were sent, were rot maintained.


Mr. Kaplan: For each year since the signing of the auto pact (a) what was the automotive payroll of the automobile manufacturers of North America (b) what percentage of the total was paid to employees in Canada?


Mr. Gaston Clermont (Parliamentary Secretary to Minister of Industry, Trade and Commerce):: Statistics Canada reports the following information on the automotive payroll of the automobile manufacturers of Canada.

Data is not available from Statistics Canada for the remainder of North America.
(a)	Total Annual Payroll*1) for Motor Vehicle
Manufacturing*2) among Larger-Firms*31,
Canada, 1957 to 1974, in dollars
1957	51,385,553	1966	121,504,673	1958	44,509,799	1967	125,019,162	1959	55,219,666	1968	140,935,987	1960	54,679,973	1969	161,035,952	1961	57,291,421	1970	158,625,661	1962	66,268,258	1971	195,898,766	prel.1963	80,154,855	1972	227,317,106	prel.1964	94,909,412	1973	274,446,420	prel.1965	115,986,746	1974	295,458,246	prel.
Notes: (1) Refer to catalogue 42-209, Motor Vehicle Manufacturers which will provide more detailed information.
(2)	The sum of the payroll reported during twelve monthly reference periods each of one week's duration (see no. 4 below).
(3)	As defined in S.I.C.'s 323, 324, 325 in catalogue 12-501, Standards Industrial Classification Manual, 1960 Edition.
(4)	Refer to catalogue 72-002, Employment Earnings and Hours of survey concepts and methods.
(b) Cannot be answered.
* The catalogues referred to in parts (1) and (4) are available from Information Canada.


Mr. Diefenbaker: Are Canadians employed by the United Nations or any of its agencies or any organizations under its aegis subject to income tax on their earnings?


Allan Joseph MacEachen: Canadians who work for international organizations and at the same time maintain residence in Canada within the meaning of the Income Tax Act are subject to income tax on salary and allowances they receive from the international organizations. Certain organizations reimburse the employees the amount of Canadian income tax paid by them, which results in an indirect reduction of Canada's assessed share to the organization; other organizations do not follow this policy. In the latter cases, beginning with the tax year 1973, the Secretary of State for External Affairs has been authorized to reimburse, in appropriate cases, those international organizations of which Canada is a member for the full amount of the compensation which is paid to Canadian employees on fixed-term appointments of one to five years to cover their liability for Canadian federal and provincial income tax on the salary, allowances and other compensation they receive from the organization concerned. To date this has been done only in the case of two Canadians employed in senior positions with international organizations. Employees not in the professional categories are subject to income tax on their earnings, but are not subject to the staff assessment. Employees of the International Civil Aviation Organization in Montreal of this category would be subject to Canadian income tax on their
July 25, 1975

earnings. As Canadian residents pay income tax to regional offices, it is impossible to obtain statistics of those working for international organizations outside of Canada either full time or on short contracts, who actually pay Canadian income taxes.


Mr. Herbert: 1.	What are the total costs included in the 1975-76 Estimates of the Ministry of State for Science and Technology for language training?
2.	How are such costs divided between (a) salaries of personnel receiving instruction (b) salaries of instructional staff (c) additional or supplementary services to be purchased from the Public Service Commission (d) other costs?


Hon. C. M. Drury (Minister of State for Science and Technology):: 1. Nil.
2.	(a) Nil. (b) Not applicable, (c) $14,000 to the Public Service Commission, (d) $8,230 for other expenses such as Berlitz.


Mr. Herbert: 1.	What are the total costs included in the 1975-76 Estimates of the Department of the Secretary of State other than the Public Service Commission for language training?
2.	How are such costs divided between (a) salaries of personnel receiving instruction (b) salaries of instructional staff (c) additional or supplementary services to be purchased from the Public Service Commission (d) other costs?
3.	What are the applicable costs for the Public Service Commission?


James Hugh Faulkner: In so
far as the Department of the Secretary of State is concerned: 1. Nil in departmental Main Estimates but $159,000 to be sought in Supplementary Estimates plus Treasury Board allocation of $128,700.
2.	(a) Because of the many unknown factors involved in the language-training process, such as the length of training time required, the salaries of the individuals involved and the number of individuals who will require language training during a given period, it is not possible to estimate the total salaries of those who will receive instruction during the 1975-76 fiscal year. However, the Treasury Board has allocated the amount of $128,700 to the department from vote 15 for the employees who will replace those on continuous language training, (b) The salaries of the instructional staff employed by the Public Service Commission's language schools are paid by the commission, not by the individual departments. The salaries of the monitors and teachers working within this department are included under item (c). (c) Services to be purchased from the Public Service Commission amount to $159,000. (d) Nil.
In so far as the Public Service Commission, as a department, is concerned: 3. (a) as in 2. $366,600. (b) Nil. (c) $43,200. (d) Nil.
Order Paper Questions BLUMA APPEL


Mr. Robinson: What criteria will be used and what programme will be carried out by Bluma Appel in urging male executives of large companies to appoint women to their boards of directors?


Marc Lalonde: Bluma Appel is visiting executives of large companies as liaison officer for the minister responsible for the Status of Women to bring the question of equal opportunity for women to their attention in International Women's Year.


Mr. Grafftey: 1.	Was a mercy ship named the Atlantic Eagle commissioned to transport Canadian wheat from the Port of Montreal to Ethiopia and/or Samalia and, if so (a) how many tons of wheat were involved (b) on what date was it to be delivered (c) how many and which government agencies have been involved to date (d) what was the original cost estimate of the shipment (e) what is the revised cost estimate?
2.	Apart from strikes at the Port of Montreal, have there been any other factors involved with the delay of the shipment and, if so (a) what are they (b) have they involved any revised and increased cost estimate?
3.	Did the men at the Port of Montreal loading the Atlantic Eagle cease work because bags containing wheat were vermin infested and, if so (a) what action is now under way to rectify the situation (b) is an investigation being carried out by the government to see how and for what reason this situation developed?
4.	How many bags of wheat were filled in the first instance?


Allan Joseph MacEachen: 1. The ship Atlantic Eagle was chartered by Canadian Commercial Corporation for and on behalf of the Canadian International Development Agency to transport Canadian wheat from the port of Montreal to Ethiopia and/or Somalia, (a) Tonnage involved 10,262 net metric tons, (b) The wheat was to be delivered to meet vessel lay days March 15 to 31, 1975. (c) The government agencies involved to date are: (1) The Canadian Wheat Board, (2) The Canadian International Development Agency, (3) The Canadian Commercial Corporation; (d) Original cost estimate of shipment was: Wheat, $2,196,068.00; Transportation, $554,148.00; Total, $2,750,216.00; (e) The revised cost estimate is the same as (d) above plus out-of-pocket expenses, estimated $200,000, which have been incurred by the vessel's owners for ships time, extra bunkers, dockage, extra stevedoring, fumigation, survey fees, overtime and sundry expenses.
2.	(a) Apart from strikes at the port of Montreal, the shipment was delayed when the union safety inspector was called in and ordered the stevedores to cease working on the ship as vermin had been reported seen, (b) Increased cost estimate outlined in 1 (e) above.
3.	The men at the port of Montreal ceased loading the Atlantic Eagle on orders from their union safety inspector because the bags containing wheat were considered to be vermin infested, (a) The actions taken to rectify the situation were as follows: (1) The vessel and cargo that had been loaded (approximately 400 tons) was re-fumigated; (2) After fumigation the cargo on board was unloaded and the contents of all bags that were torn or holed were

July 25, 1975
Order Paper Questions
screened and re-bagged; (3) All cargo in sound bags was palletized and then loaded on the vessel, (b) Yes.
4.	205,240 bags of wheat were filled in the first instance.


Mr. Francis: What is the maximum permissible level of radioactive concentration in drinking water and how is the permissible level determined as there is little knowledge of the effects of long range low-level radioactive exposure on human beings?


Marc Lalonde: The government has not established maximum permissible levels of radionuclides in drinking water. The maximum permissible doses scheduled in the Atomic Energy Control Regulations relate to exposures from radionuclides ingested in water as well as to exposures from other sources.


Mr. Forrestall: Can the Minister of National Defence give any assurances with respect to the continued employment by the government of DND civilian employees presently operating the communications system after the full introduction of SAMSON, particularly those resident now in Atlantic Canada?


Hon. James Richardson (Minister of National Defence):: The SAMSON program will not be fully implemented until at least 1977 and the number of civilian employees required for the system has not yet been determined.


Mr. Brisco: 1.	How many airports in Canada do not have AES presentation technician staff?
2.	Who is providing the Aviation Weather Briefing Services at Aera-dio Stations at such airports?
3.	Which airports are involved in Parts 1 and 2?


Mr. Len Marchand (Parliamentary Secretary to Minister of the Environment):: 1. The number of airports in Canada that do not have AES presentation technician staff is very large and is changing continuously as additional offices staffed with presentation technicians are located at 57 principal airports in Canada.
2.	AES certified pre-flight weather information services are provided at designated Aeradio stations by MOT CATA staff.
3.	Part 1-Airports with AES presentation technicians: Brandon, Man., Calgary, Alta., Castlegar, B.C., Churchill, Man., Dauphin, Man., Edmonton, Alta., Edmonton/Indus-trial, Alta., Fort Nelson, B.C., Fort St. John, B.C. Fredericton, N.B., Frobisher, N.W.T., Gander, Nfld., Goose, Nfld., Halifax, N.S., Hamilton, Ont., Inuvik, N.W.T., Kamloops, B.C., Kelowna, B.C., Kingston, Ont., Kitchener/Waterloo-Wellington, Ont., Lethbridge, Alta., London, Ont., Mataga-mi, Que., Moncton, N.B., Montreal, Que., North Bay, Ont., Ottawa, Ont., Peace River, Alta., Penticton, B.C., Peterbor-

ough, Ont., Port Hardy, B.C., Prince Albert, Sask., Prince George, B.C., Quebec, Que., Regina, Sask., Resolute, N.W.T., Saint John, N.B., Sarnia, Ont., Saskatoon, Sask. Sault St. Marie, Ont., Sept lies, Que., St. Catharines, Ont., St. Hubert, Que., St. John's, Nfld., Sudbury, Ont., Sydney, N.S., Terrace, B.C., Thunder Bay, Ont. Toronto, Ont., Toronto Island, Ont., Val d'Or, Que., Vancouver, B.C., Victoria, B.C., Whitehorse, Y.T.; Part 2-Airports with pre-flight weather information services provided by CATA staff: Lynn Lake, Man., Timmins, Ont., Wabush, Nfld..


Mr. Forresstall: Will the $5 million reduction in expenditures by the Department of Transport on the R Class icebreakers delay the programme and, if so, for how long?


Jean Marchand: After consideration of program priorities within the ministry and the capability of the shipyard in regard to delivery schedules, the ministry has sought and obtained Treasury Board concurrence to have the required $5 million reduction spread across Marine Capital Appropriations rather than applying this reduction wholly to the R class contract. It is anticipated, therefore, that the required spending cut will not affect the R Class icebreaker programme.



GOVERNMENT ORDERS


[Stage Direction]
The House resumed, from Thursday, July 24, consideration in committee of Bill C-66, to amend the Excise Tax Act-Mr. Turner (Ottawa-Carleton)-Mrs. Morin in the chair.
On clause 1-"gasoline."
Mr. Towers:: Madam Chairman, I suggested yesterday that we would be presenting an amendment to the bill before us, Bill C-66. I think it is a very important amendment. On two occasions which come to mind, the Minister of Finance changed policy he had announced on the suggestion of the Official Opposition, for which we are particularly grateful.
The first time was when he brought in legislation exempting the capital gains tax on farms transferred from father to son on the death of the father. At that time the minister felt that he was fulfilling our request. When we pointed out to him that the alteration was inadequate because the exemption should apply when such a transfer took place during the lifetime of a father and son, the minister complied. Another example was in the June 23 budget when the minister removed the duty on hymn books with or without printed music under tariff item 17210-1.
We now trust that the amendment which we are submitting, to add dyed or marked gasoline to the list of eligible
July 25, 1975

exemptions, will receive the minister's approval. This is a very important and reasonable proposal concerning the well-being of the agricultural economy which would have a significant bearing on the finances of all those involved. I cannot stress too vehemently the merit of this amendment. I do not condemn the Minister of Finance for omitting dyed gasoline when the legislation was formulated because, being a resident of Ottawa and representing an urban riding, he might not be aware of the situation. While the minister has stated that there is no significant difference between imposing this gasoline tax on diesel fuel and imposing it on gasoline used for farming, I suggest there is.
I should like to refer to page 7132 of Hansard, where the following exchange took place between the minister and me:


Thomas Gordon Towers: Mr. Speaker, I have a question for the Minister of Finance. Is it correct to assume that diesel fuel will not be affected in any way by the ten-cent tax on gasoline?


John Napier Turner: Your people were right.


Thomas Gordon Towers: Would the same answer hold true with regard to bulk sales of gasoline to farmers?


John Napier Turner: If the fuel is being used for farm purposes, yes.
The difference lies in the fact that diesel fuel is in no way, shape or form affected, while purple gas, which the minister says is to be treated in the same way, is affected because it is included with gasoline, even though it is totally refundable. This means that the bulk dealer must pay the ten cents a gallon tax to the supplier, and the farmer is compelled to pay the tax to the bulk dealer and then make application to the federal government for total reimbursement. To me, this is a futile exercise which does not benefit anyone, yet creates a headache for bulk dealers and for farmers who must apply for total refund, and eventually for the government to administer the refunds without receiving one penny in tax. Today retailers and consumers have too many problems without having to bear another burden of extra financing and bookkeeping, leading to more frustration.
As I said earlier, I am not criticizing the Minister of Finance for not including this gasoline, because apparently he did not realize there was such an oversight. But I do blame the supposed great champion of the farmers, the Minister of Agriculture, and the minister in charge of the Canadian Wheat Board who, if they are to be classed as responsible ministers competently representing producers of agricultural products, should be aware of this fact. I also place blame on the Liberal backbenchers because they failed to bring up this point. The hon. member for Scarborough West said that government backbenchers are 100 per cent behind this tax. This can only mean that the backbenchers, along with the two ministers just mentioned, either do not care about what is happening or they do not know, or both.
I have discussed the ten cents a gallon tax with several bulk dealers in my constituency, one of whom handles approximately 600,000 gallons of gas per year. He will have to provide an additional $60,000 to finance his operation. Another dealer sells about 1,200,000 gallons, which will result in a pay out of $120,000 extra during the year. I also
Excise Tax Act
spoke to the manager of a small, totally Canadian-owned oil company with a business amounting to $750,000 per year. He explained to me that he does not make a big profit, that his finances are limited and that this tax will place a severe strain on his company because most of the bulk dealers are compelled to extend credit; if they run into bad debts, not only do they lose the value of the product but the total tax as well.
In view of the fact that there are about 326,804,000 gallons within this category of marked or dyed gasoline, representing in the vicinity of $33 million in additional financing without one dollar being returned to the federal treasury, does this not prove my point? I should explain at this time that the figures I am using are the latest available from Statistics Canada. They are for the year 1973, and I presume the figures for the current year would be higher.
This manoeuvre is completely senseless if the bill is not amended. It is unacceptable, and it will be inflationary. While I know that some of this turnover will be on a monthly basis and part yearly, this extra cost can only add to the inflation factor. In view of the fact that this tax has a direct effect on all the western provinces, Nova Scotia and Prince Edward Island which have marked gas, could the minister not make provision to include the other provinces so that all gas used for agricultural and industrial purposes would be exempt from this tax entirely?
I certainly hope the Minister of Finance will accept this amendment. I know that the hon. member for Vegreville will make some supporting remarks, and perhaps others from our side. I trust that the minister will listen to them to ensure that this gross error is corrected. The amendment I would like to propose at this time is couched in the terminology of the act as implemented by the statutes of the province of Alberta. I move:
That Bill C-66, to amend the Excise Tax Act, be amended in clause 1 by deleting line 10 on page 1 thereof and substituting therefor the following:
"other than aircraft engines, but does not include any fuel oil which has been marked by any dye. agent or other substance under the authority of a provincial statute.


Mr. Peters:: Madam Chairman, the hon. member, in moving his motion, referred, if I am correct, to aircraft engines and marked fuels. If that is correct, there is a new dimension which I wish to bring to the attention of the minister because I presume he has overlooked much of the travel that is done on highways by diesel-driven vehicles.


John Napier Turner: Diesel fuel is not included.


William Arnold Peters: As I understand it, the amendment has added other fuels and I suggest that we are giving an unfair advantage to Peugeots and Mercedes, both of which are operating now with a ten-cent federal sales tax at the pump. If we only use the word "gasoline" in this amendment we are including a new category. I am not in the least opposed to exempting marked gasoline because I am sure all the provinces accept and understand its exemption, but I would ask the minister if he will also give consideration to extending the definition to diesel fuel used for highway purposes.
Madam Chairman, may I call it one o'clock?
7946

July 25, 1975
Privilege

Progress reported.


The Acting Speaker (Mrs. Morin):: It being one o'clock, I do now leave the chair until two o'clock p.m.
At one o'clock the House took recess.


[Stage Direction]
AFTER RECESS

The House resumed at 2 p.m.


Mr. Speaker:: Order, please. Just before one o'clock the House was in committee of the whole and would at this time ordinarily be resuming consideration of Bill C-66 in committee of the whole. However, it was agreed that we should give consideration at two o'clock to the question of privilege raised previously, and to the motion of referral of that question to the Standing Committee on Privileges and Elections. I understood that there were to be discussions about the possibility of amending the proposed motion.


Mitchell William Sharp: Mr. Speaker, there have been discussions among the House leaders concerning the terms of the motion to be proposed by the hon. member for Kenora-Rai-ny River (Mr. Reid). He is agreeable to an amendment which I believe will be proposed by the hon. member for Oshawa-Whitby (Mr. Broadbent).


John Edward Broadbent: Mr. Speaker, I wish to propose an amendment which will make it possible for the committee to consider certain aspects of this matter. When I proposed my motion earlier today I indicated, on behalf of my colleagues, that we think this is desirable. As the President of the Privy Council (Mr. Sharp) said, there have been discussions involving this party, the government and the official opposition. Three parties, at least, are unanimously willing to accept the proposed amendment.
I therefore wish to move:
That the motion be amended by deleting therefrom the words "most especially", and also by inserting therein, immediately after the word "businessmen", the following words: "and that the said member had advance knowledge from official sources of amendments to be proposed to a bill emanating from the said budget and conveyed that knowledge to businessmen.


Mr. Speaker:: Order, please. There has been some indication that the said amendment, which I presume is seconded by the hon. member for Winnipeg North Centre (Mr. Knowles), has been discussed among all parties. If that is so, I presume the House is ready for the amended motion to be put. Is that agreeable?


John Edward Broadbent: Mr. Speaker, I should like to speak briefly to the motion, including the amendment.


Mr. Speaker:: Order, please. We agreed that we would not put the motion. It is a debatable motion. At least, we agreed that we would not call it in the ordinary way. Perhaps the motion ought to be put at this time. The hon. member and others can then speak to the motion, and he can put his amendment.
The motion is the following: Mr. Reid, seconded by Mr. Ethier, moves:
That all articles contained in the July 24th, July 25th Montreal Gazette relating to the conduct of the member for Kenora-Rainy River vis-a-vis the November 18 budget, including most especially the allegations that the said member had advance knowledge of the said budget and conveyed that knowledge to businessmen, and the discrepancy in the editing of the Gazette's purported transcript of the proceedings of this House as compared to the report in the House of Commons Debates, be referred to the Standing Committee on Privileges and Elections.


John Edward Broadbent: Mr. Speaker, I wish to speak briefly to this important motion. The issue is this: it is the tradition of parliamentary governments, a tradition in which we share, that all matters pertaining to tax changes, whether introduced before a budget, in a budget or after a budget, shall be kept absolutely secret until introduced. The principle is that such changes in tax law shall be kept secret and shall be kept within the confines of the minister of finance and the cabinet.
Most serious allegations have been made. A newspaper article in the Montreal Gazette of two days ago alleged that a member of this House violated that principle, namely, that the hon. member for Kenora-Rainy River (Mr. Reid) had advance knowledge of the details of the budget of last fall and had advance knowledge of changes that were to be made subsequent to that budget, and that in each instance he conveyed that information, which ought to have been kept secret, to other parties, in this case outside the House of Commons.
The principle we are considering does not distinguish between information conveyed to people outside the House and information conveyed to people within the House. It is alleged that the hon. member did convey such information to a businessman, outside the House. Without doubt, if the allegation that the business firm was so informed is accurate, that firm had a substantial financial interest in obtaining such information in advance.
There are two points to consider. One is the general and important matter of maintaining budgetary secrecy. The second is that in the particular instance of the alleged breach of this principle, the breach itself involved the conveyance of information to a person or persons who could have gained in a substantial financial way by obtaining such information.
The allegation that is involved is of fundamental importance to our whole tradition of government in Canada. I do not intend to elaborate in much greater detail; enough points have been made on the issue in the House in the past two days without the necessity of extended discussion today. I am sure the House will pass a motion to have a standing committee of this House investigate the serious
July 25, 1975

charges, charges which, incidentally, involve not only a member of this House but, on the other side of the coin, the Montreal Gazette as to whether it should be held responsible for a serious breach.
It would be presumptuous of anyone in the House to reach a conclusion at this stage as to who ultimately must be held responsible in the situation we are now discussing. Did the hon. member for Kenora-Rainy River commit the serious breach of which he is accused, or do the Montreal Gazette and others who have made the allegation have to be held responsible for making that allegation if it turns out to be incorrect?
As I understand the procedure, I will have to formally move the amendment that I discussed briefly when we came back at two o'clock. Before moving the amendment, I wish to suggest five areas of concern related specifically to the motion that the New Democratic Party believes must be gone into in a most thorough fashion.
First, there is the question of knowledge of the fall, 1974, budget by the hon. member for Kenora-Rainy River. Did he or did he not, have foreknowledge of the details of that budget? Related to that, did he, or did he not, have knowledge of changes which were going to be made subsequent to the budget? Second, assuming that the hon. member had such knowledge, from whom did he obtain it? Did he obtain it from officials in the ministry of finance or in other departments, or did he get it elsewhere? Again, on the assumption that he had the information, we must find out the source.
Third, again assuming that the hon. member had the information, did he communicate the details of the fall, 1974, budget to anyone, and did h.e communicate details of proposed changes in that budget between last November and January of this year? Assuming he had the information, was there any subsequent communication of it?
Fourth, again on the assumption that such information was conveyed to a businessman or businessmen, to what extent would this knowledge have proved to be financially advantageous to such businessman or businessmen? That must also be considered by this committee.
Finally, on the broader range of ministerial responsibility we would like the committee to look into the question of what limits, if any, there are to the responsibilities of the Minister of Finance for any breaches of the secrecy principle concerning budgetary matters that may be involved in this particular case.
I wish to quote briefly from two sources which suggest the framework from which ministerial responsibility might be assessed in this particular case. The first quotation is from a study by Geoffrey Marshall and Graeme C. Moodie entitled "Some Problems of the Constitution". The most recent is the fourth edition, published in 1967. These two constitutional authorities have the following to say about ministerial responsibility in this kind of matter:
If culpable action within a department clearly falls into the sphere where reasonable diligence on the minister's part in controlling his department would have led to his being personally aware of the issue then a failure to act can be construed as a personal fault. If, on the other hand, it does not fall within such a class of matters, or if deliberate disobedience has occurred, then the minister may properly disclaim fault on behalf of himself.
Privilege
That general description of ministerial responsibility is one with which my party is in full agreement. I wish to quote another authority who reaches a conclusion which basically is a corollary of this principle, if accepted, that is assuming the minister is not directly responsible for a breach that exists within his department. If there is a breach which exists beyond the personal area of responsibility, what should be the guideline which sets out the course of action the minister must take in such a situation? The authority in this case is N. H. Brasher. I wish to quote from his publication "Studies in British Government". He sets out a position with which we are in general agreement:
The minister cannot be held responsible for every peccadillo committed by the thousands employed in his ministry. He must, however, explain the position to parliament and take the necessary corrective action. The same principle applies if a major fault in the working of a government department is exposed.
I took longer to deal with the possible responsibility of the Minister of Finance in this case because that aspect of the matter in the past couple of days has not been dealt with to any degree. I repeat, it is an important matter to be looked into by the committee. Having made those points about the seriousness of the issue, I move, seconded by the hon. member for Winnipeg North Centre (Mr. Knowles):
That the motion be amended by deleting therefrom the words "most especially", and also by inserting therein, immediately after the word "businessmen", the following words: "and that the said member had advance knowledge from official sources of amendments to be proposed to a bill emanating from the said budget and conveyed that knowledge to businessmen".


Mr. Speaker:: I am sure the hon. member will oblige the Chair by writing out the amendment. One has been provided to the Chair; it is an amended version of the original motion. It does not constitute an amendment; it is an indication of what the motion would be if adopted. The amendment has been repeated twice. I have the language in front of me. I can at least indicate that it has been moved by the hon. member for Oshawa-Whitby (Mr. Broadbent), seconded by the hon. member for Winnipeg North Centre (Mr. Knowles):
That the motion be amended by deleting therefrom the words "most especially", and also by inserting therein, immediately after the word "businessmen", the following words: "and that the said member had advance knowledge from official sources of amendments to be proposed to a bill emanating from the said budget and conveyed that knowledge to businessmen".


Robert Lorne Stanfield: Just a word on this matter, Mr. Speaker. We agreed to the amendment which has been put forward since it does clarify the original proposal in a couple of important respects.
I do not intend to take the time of the House by suggesting directions the committee might take; I assume it will take its responsibilities very seriously and will hear arguments from all sides as to precisely what those responsibilities are. In view of the obvious importance of the questions involved-the leader of the New Democratic Party has mentioned three or four points, but there are some others, too-I should like to urge that the committee adopt the broadest possible interpretation of its reference and its responsibilities. I call on the government side of
29669-20)4

July 25, 1975
Excise Tax Act
the House to recognize what those responsibilities are and, without being offensive about it, I urge that the committee should in no way take advantage of its majority of government members to restrict the breadth of depth of the inquiry or to restrict in any way the witnesses to be called.
I hope that the chairman, who I believe is in the chamber this afternoon, will facilitate to the fullest extent the calling of witnesses including ministers, if it be the wish of any significant number of members on the committee to hear such witnesses. I express the hope-and I know this is the wish of all members of the House, including the parliamentary secretary-that the committee will get down to work as soon as possible and pursue its task as vigorously as possible to a conclusion.


Léonel Beaudoin: Mr. Speaker, as agreed this morning at the meeting of the spokesmen for the four parties in the House, where we requested that the motion be more complete, we agree, as requested by the hon. member for Kenora-Rainy River (Mr. Reid) that the matter be referred to the Standing Committee on Privileges and Elections. But we would like to add that we insist that all documents, requested both by the majority and the minority, must be produced at the committee if those documents exist, and all persons who are called before the committee do appear before it.


Mr. Speaker:: Is the House ready for the question?


Some hon. Members:: Question.
Amendment (Mr. Broadbent) agreed to.
Motion (Mr. Reid) as amended, agreed to.



GOVERNMENT ORDERS


[Stage Direction]
The House resumed consideration in committee of Bill C-66, to amend the Excise Tax Act-Mr. Turner (Ottawa-Carleton)-Mrs. Morin in the chair.
The Assistant Deputy Chairman:: Order. When the committee rose at one o'clock an amendment to clause 1 was under consideration.


William Arnold Peters: Madam Chairman, when the committee rose we were considering an amendment to exempt what is commonly known in a number of provinces as purple gas intended for farm use. Gasoline marked for farm purposes is, I believe, used in five provinces including Ontario. The amendment would, it seems to me, commend itself to attention by the minister because it would eliminate the necessity of supervising rebates to farmers who in any case would be exempt under this legislation. There would be no need for them to make applications for refunds and to receive rebates. Thus, if he were to accept this amendment, the minister could, in co-operation with the prov-

inces, eliminate a large number of people from the bureaucratic process in this respect.
There is another advantage attached to this proposition, and it is that the provinces are already supervising the use of coloured gas. Readiness to issue such gas means the provinces are willing to define the terms "farmers" and designate those who are eligible to use this gasoline. In addition, it means the provinces are willing to supervise the bootlegging which inevitably follows the issue of any concession which the majority does not enjoy. The provinces are already cautious about young lads who are caught on the highway with coloured gasoline in their automobiles when it should really be in the farm tractor, and they are ready to impose certain penalties. Indeed, they have developed some expert methods of ascertaining when gasoline is being used for a purpose other than that which has been designated. Although, again, co-operation with the provinces would be required, I am sure all provinces on behalf of the farmers would be willing to introduce marked gasoline so that the farmers will not have to pay the tax and then ask for a rebate.
The hon. member for Red Deer mentioned that not only will the individual farmer be inconvenienced by having to apply for a rebate but the distributors, the bulk plants, under the minister's legislation will have to pay the full amount of the tax and then apply for a rebate themselves. Many farmers have an arrangement with the bulk plants under which they do not make any payment until late in the fall. In such cases the bulk plant will have to pay the extra tax, which it is true will be rebated, for a period of time during which the farmers are not reimbursing them. If coloured gas were used, we would eliminate much of this difficulty.
I would also like to ascertain from the minister why a very small number of people were allowed to get this advantage. It is a fact that gasoline is in a little different category from diesel oil, kerosene or other products used for aviation purposes or in trucks. However, some cars driven for pleasure, such as Peugeots and Mercedes, use those products too, and it seems to me their owners are receiving an unfair advantage.
The minister might say that he did not want to give this advantage to that particular category, but already we are putting a ten cents tax on fuel used for highway driving, whether it be gasoline or diesel oil. This would mean a second ten cents would have to be paid. Obviously, it would apply to truckers as well and would mean that the truckers would have to pay the ten cents a gallon when they went to the pumps for their diesel fuel and would have to request a rebate.
It seems to me that the minister is being quite inconsistent. If he does not want the truckers to have to apply for a rebate, why should the farmers? It cannot be said that in the one case it is too complicated whereas the gas used by the truckers does not have the ten cents applied to it. The truckers do not even have to apply for a rebate.
As far as the farmers are concerned, their gasoline would carry no tax, either provincial or federal. The gas is coloured and put into the tanks by the oil company. The company is willing to certify that it has supplied so many
July 25, 1975

gallons of coloured gasoline to the farmer, and this is done on the basis of an annual report. It seems to me that the minister's officials have not advised him very well because he has two programs, one for the truckers who do not have to apply for a rebate because they use diesel oil, and another for the farmers who use a specific product that is already marked. They are not exempt and will have to request a rebate. As I say, this seems to me to be inconsistent.
I hope the minister does not do what almost every government agency has been doing, and that is to employ people to supervise collection of revenues. In many cases these jobs are simply created so as to avoid putting people on the unemployment insurance rolls. Most farmers and farm organizations understand the use of marked gas and have operated in five provinces with marked gas for a number of years. Even in Ontario they used it for a number of years and are quite familiar with the regulations and penalties. The province is willing to supervise the collection of the first ten cents, and I suggest that the second ten cents that we are now applying could be dealt with similarly. It would provide an opportunity for the federal government to get some service out of the provincial governments. Certainly under this legislation the federal government will not be collecting one cent more tax in the federal field than the province of Ontario will be collecting in the provincial field.
I hope the minister will be fair and equitable in his treatment of the two categories, those using diesel oil who are exempt, and the farmers who use marked gasoline and who are also considered exempt by the provinces as well as by a previous federal administration. I think both categories should be treated the same way in this legislation.


Mr. Mazankowski:: Madam Chairman, I rise simply to support as vigorously as I can the amendment presented by my colleague from Red Deer. The excise tax as applied to farm fuel can best be described as a nuisance tax. It really does not provide any appreciable benefit to the treasury or to other budgetary provisions put forward by the finance minister. I think the proposal advanced by my colleague is sound, logical and sensible and I hope the minister will give it serious consideration.
I think the minister will probably suggest that, this being a manufacturer's tax, it may be somewhat difficult to identify. But we have ample precedent. A farmer who is engaged in the production of agricultural products is exempt from federal sales tax. When he buys an article that he requires for that purpose, he simply files an end user's certificate and does not pay the tax at the time of purchase.
The hon. member for Timiskaming outlined the manner in which purple or coloured gas is handled in the provinces. That, too, is a tax that can be applied at source with the manufacturer, and any administrative difficulties are quite minute. As I say, I think this proposal is logical and sensible and will certainly be most helpful to the farmer and particularly to the bulk dealers, who on this particular issue are going to be caught in a squeeze.
Excise Tax Act
I was quite amused by the speech of the Minister of National Revenue. He used averages that suggested the western farmer burns about 1,000 gallons of gas per year. That may be an average, but I would suggest to the Minister of Finance and his colleagues that it is misleading. I checked with a couple of bulk dealers in my constituency. The amount of purple gas used by a farmer is more likely to be 3,000 gallons. Nearly every farmer has a second tractor which burns purple gas, certainly not diesel oil.
A farmer with a half-section would use 45 or 50 gallons a day for combining and probably about 1,000 gallons in total. The second tractor, used for spraying, fertilizing, cutting and baling hay, and probably a half-ton pick-up truck or delivery truck, would probably use another 1,000 or 1,500 gallons in a year. Conservatively speaking, the average half-section farm would consume about 3,000 gallons per year.
There is a problem in that the tax applies in respect of the bulk dealer. The bulk dealer in my constituency of Vegreville indicated to me that half the gas used on farms is purple gas. He expects that it will take about $40,000 or $50,000 additional operating capital for him to maintain his accounts receivable because most deliveries are on a net 30-day basis or sometimes 60 days, 90 days or even six months. He told me that the oil companies are claiming 1 'A per cent interest on all accounts past due, so he is faced with paying interest on funds that are just being transmitted through the system. There is no sense in this exercise whatsoever, Madam Chairman.
If the proposed amendment is not acceptable to the minister, I am sure my hon. friend would be prepared to make a change in the wording. I think the principle is well enunciated, however, and I hope the minister will give it serious consideration. This morning I spoke to representatives of the Canadian Federation of Agriculture and was told that just this week they had passed a resolution asking the government to develop a suitable system, in consultation with them, to provide exemptions from the excise tax at the point of sale. That is precisely what this amendment attempts to do.
I think the other area that we should be concerned with is the possibility of an exemption certificate for commercial trucking concerns who will have hundreds of thousands of dollars tied up in excise tax while it goes through the hands of the dealers, the government and back to the transportation industry. I think the provincial government procedures in such cases are quite elaborate and could probably be followed here, and any abuses could easily be found. I am not sure if the provisions of this bill allow enough flexibility for the issue of exemption certificates, and I hope the minister will clear up that matter. If the bill has that flexibility, I think certificates should be issued and, if not, I strongly suggest that such a provision be incorporated in the bill. I would be glad to move an amendment to that effect.
We are not looking at small sales here; we are looking at tank wagon sales. I think the general application as it applies to commercial trucking, to tank wagon sales, should be considered as exempted purchases. If that provision of flexibility is not already contained in the bill, it should be. If the minister were to incorporate it he would

July 25, 1975
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be doing a great favour to the trucking industry and the agricultural industry and also to the Department of National Revenue. It would certainly streamline and modify the cumbersome bureaucratic procedures that will otherwise have to be followed. I hope the minister will clarify this point so that we can further consider all the amendments we may be advancing to future clauses.


Leslie Gordon Benjamin: Madam Chairman, I want to congratulate the hon. member for Red Deer on this amendment and welcome hon. friends to my right back to the fight. I cannot understand why the advisers to the minister did not realize the implications of clause 1 when they were drafting the bill. As a matter of fact, I cannot understand why the minister accepted their advice. The dummy that advised him on this one should be fired tomorrow-even today. The bill exempts farmers and fishermen who, in several of the provinces, use gasoline as described in the amendment-"which has been marked by any dye, agent or other substance under the authority of a provincial statute."
Since they are exempted already in this legislation, I do not understand why the Minister of Finance and the Minister of National Revenue want them to apply for rebates. Think of the administration costs involved in processing the tens of thousands of applications. Think of the thousands of complaints members of parliament will get from farmers and fishermen if the rebates are late, and the trouble they will have trying to get extra copies of receipts and bills to submit in support of their applications.
All the minister has to do is agree that gasoline as described in the amendment should be exempt from the tax at the point of the 20 refiners and 13 importers. There would then be no necessity for the farmers and fishermen to apply for a rebate on gasoline that has been "marked by any dye, agent or other substance under the authority of a provincial statute." Alberta and Saskatchewan have these exemptions. I believe this is also the case in British Columbia, Quebec and, I think, Nova Scotia. In any case, five or six provinces have these exemptions and mark the gasoline with a dye agent or other substance.
Why would the minister want people to buy the gas that is exempt, under provincial statute, from gasoline tax, pay the ten cents a gallon excise tax and then turn around and apply for a refund, when he could eliminate all that administrative effort by just accepting the amendment? He would be exempting that gasoline at the source. It seems to me eminent good sense. I do not know why we should try to be so helpful to the government on a bad piece of legislation, but since we are conscientious, hard working members of parliament we will be as helpful as we can to the Minister of Finance.
I would like to hear whatever logical reason the minister can give this committee as to why he would want to unnecessarily duplicate the effort if he could eliminate the necessity for applying for rebates by accepting the amendment. If he is worried, as the hon. member for Timiskam-ing said, about policing at least five and maybe six or seven of the provinces which have exemptions on marked or dyed gasoline, and already have the machinery in place

for policing any violations for bootlegging of purple gas or gas that is marked for some specific purpose, I am sure that he and his officials-the Minister of National Revenue in particular-could arrive very quickly at understandings, agreements or regulations at the federal-provincial level that would include, in the provincial policing of these exemptions, policing pertaining to the excise tax.
In the case of undyed or unmarked gasoline which would be used in a farm truck, when a farmer has other than a farm licence plate and he is doing commercial trucking, he must use gasoline that is unmarked or undyed and he will have to pay the ten cents a gallon. But if he is in a commercial enterprise as spelled out in the legislation, he will be eligible to apply for and get a rebate when he satisfies the Minister of National Revenue that he has provided sufficient and proper evidence. So there is no problem on that score.
A farmer who has a truck with a commercial licence rather than a farm licence plate, and buys orange or red gas for it, is still eligible for the rebate because he is in a commercial enterprise and he hauls grain, cattle or agricultural products for someone else, not for his own farming operation. He is treated in the same way as any other commercial or business enterprise. But for the purposes of the farmer's own farming operation, whether it is his tractor, half-ton truck or his bigger truck, by exempting purple gas or any marked or dyed gas the minister will have eliminated the necessity for applying for rebates. We must remember that there are over 300,000 family farm operations in Canada, and goodness knows how many tens of thousands of fishermen who may be using purple, marked or dyed gasoline in their boats.
I am sure the Minister of National Revenue could forget about adding the 200 or 300 people to his administrative staff to process the applications and send out cheques for rebates if this amendment were adopted, unless of course one of the purposes of the bill is to help solve unemployment. But if that is one of the purposes, the minister should say so. Perhaps we would have some sympathy for this measure, although I do not think we would even then. Surely to goodness, if for no other reason than administrative good sense and efficiency, and to obviate what I predict will be a whole host of letters to members of parliament who have farmers, fishermen, or both, in their ridings to equal the number of unemployment insurance letters that we get in the middle of winter, reading, "I applied for a rebate on August such-and-such and it is now January and I have not received it. Why can't I get a rebate on my boat or truck?"
The minister should ignore the idiots in his department who drafted this bill and accept an amendment that is eminently sensible. Perhaps the minister could stand up quickly and say he will accept the amendment and thus shut me up, at least on this amendment. If there are some hon. members in this place who are still in a hurry, accepting this amendment would speed things up a little, at least on this clause.
Madam Chairman, I submit to the minister very seriously that the thrust of the legislation he has put before us, even though I disagree with it, can be better served if he eliminates the need for applying for rebates for those who are eligible for exemption. It seems to me that it is so
July 25, 1975

simple and obvious that it should appeal to the good sense of all hon. members, particularly my friends on the government side. I hope the minister will now rise and tell us he accepts this amendment or else try to give us some reasons for not accepting it.


Stanley Kenneth Schellenberger: Madam Chairman, while not wanting to repeat all the good and valid arguments that had been made in favour of the amendment, which I have the honour to second, I should like to bring forward one added comment that I think the minister should take into consideration in accepting this amendment. It is that this tax will place an extra burden on farmers during two seasons in their working year which already place a burden on them, that is in the spring and in the fall.
When you look at the statistics, you find that every person who lives on acreages of land suitable for farming, and whose income is higher than $50, is considered to be a farmer. If you divide that figure into the 326 million gallons of purple gas used, you find that each farmer has only 1,000 gallons. But the situation is that a farmer who is really in the business of agriculture has a much higher income than $50 a year, and as a result this burden of ten cents a gallon on his agricultural fuel costs will be a significant increase, especially in the spring and fall.
I might add that farmers are already burdened with interest on their credit of some $1,500 a year. If we add the interest that they may have to pay in extra working capital to satisfy the extra cost of gasoline, that figure may escalate more and place an extra burden on people who already have a difficult time. I support the amendment on behalf of farmers and bulk dealers.


Stanley Howard Knowles: Say yes.


John Napier Turner: Madam Chairman, I have to be very careful about how I respond to proposed amendments. I do not want to convert the committee into a whole group of insiders.


Some hon. Members:: Hear, hear!


John Napier Turner: Our problem is that only eight of the provinces utilize marked gasoline. If this amendment were accepted there would be an exemption for such gasoline in eight provinces and not in two others. Therefore a federal tax in its operation would be discriminatory as among various provinces. We have always tried to arrange a tax which has equal application all across the country. If the bill is accepted by this committee and goes through parliament, that does not preclude our attempting to see what we can do and whether we can get some uniformity. I do not exclude that. I am just saying that in the current situation we have this problem.
I understand the force of the amendment; the approach illustrated in the amendment would mean that exemptions from a federal tax would be dependent upon provincial legislation. Provincial legislation is not necessarily uniform among the provinces. Of course that legislation can be changed at any time unilaterally by the provinces.
This is the same situation which dictated my having to change our approach on the characterization of equaliza-
Excise Tax Act
tion as it related to additional revenues from oil and gas. Originally we had proposed that if the producing provinces of Alberta, Saskatchewan, and British Columbia were to put the revenues into a capital fund, we could exclude those additional revenues. It became quite apparent to the federal government and the other provinces that this would really put the equalization formula at the mercy or at the unilateral discretion of the producing provinces, or particular provinces, so we had to come back to the House to ask for a federal uniform statute. The same situation prevails here.
In addition, the effective control of the exemption would be transferred to a very considerable number of distributors of coloured gasoline, and we would have lost the potential for direct control by means of audited refund claims to assure the gasoline was used for exempt purposes. The Department of National Revenue would lose that control.
We are continuing to look for more streamlined ways of administering this tax, but it does demand some uniformity on the part of the provinces, and further consultation.


Donald Frank Mazankowski: The minister seems half receptive to the proposal put forward by the hon. member for Red Deer. Will the minister give an undertaking to the House that he will establish ways and means to provide for exemptions at the point of sale, particularly for gasoline used for agriculture or farm purposes, and perhaps for commercial purposes in bulk tank wagon lots? Does the bill provide sufficient latitude for the minister to allow for such a provision to facilitate a more streamlined, economical, and efficient method of administration?


John Napier Turner: We have a wholesale tax here and it is difficult to transfer it up to the retail level, even for bulk sales at the wholesale level, but then I would be in the position of recommending exemptions for large purchasers to the detriment in egalitarian terms of the average small purchaser in the country. But I do give the undertaking that we will be looking for ways to streamline the operation of the bill as we see it in operation, and I have already made comments in that respect.


Leslie Gordon Benjamin: Mr. Chairman, the minister lost me there, and I am quite prepared to admit that it is my fault. When he talks about the provinces and that one or more provinces may take unilateral action at any given time in terms of their law as to exemptions, whether for farmers of any other group within provincial jurisdiction, from gasoline tax, I do not see how that interferes with what this legislation does. Let us suppose for a moment that the province of Alberta decided no longer to allow farmers to use tax free purple gas. Under this legislation it seems to me that the twenty refiners, thirteen importers, etcetera, automatically then charge the ten cents per gallon excise tax, so that any province which unilaterally changes its own law will not inhibit or complicate the objectives of the Minister of Finance and the Minister of National Revenue in terms of collecting the ten cents per gallon. I just do not see how the argument of the minister holds water.
Second, the minister is still overlooking the main point. He is already exempting farmers and fishermen. Why go

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through the process of collecting the ten cents from them and sending it back when there is a mechanism for keeping track of gasoline which has been dyed or marked, or has some other substance in it according to provincial statute? The minister need not bother with the rebate. He is still overlooking that. He can talk about streamlining it all he likes, but he is overlooking the exemptions for those two major groups of gasoline consumers. He makes them pay the tax at the retail level. Then he makes them apply for a rebate. He has a beautiful short cut by accepting the amendment. He wants it streamlined, and accepting this amendment will do exactly that.
Any provinces which do not presently have exemptions or do not allow farmers or fishermen to use purple gas in their operations can pass that law tomorrow; the minister's legislation applies. Where any province may unilaterally decide no longer to allow farmers or fishermen to use purple gas tax free, the minister's law still applies.
The refiner and the importer then have to apply automatically the ten cents per gallon at their level on that gas whether it is marked, dyed, or has some other substance in it. Then the farmer or the fisherman will have to go through the process described in other parts of the bill for applying for a rebate. The argument of the minister that the provinces can take unilateral action is specious, and it has no effect whatsoever on the thrust of his legislation. The amendment of the hon. member for Red Deer in no way harms the minister's purpose of collecting the given amount of revenue.


John Napier Turner: In response to that, the amendment is clearly drafted. The following words are added: "but does not include any fuel oil which has been marked by any dye, agent or other substance under the authority of a provincial statute." Under its jurisdiction a provincial government would have the discretion to decide the ambit of the exemptions or the refunds under a federal tax, and there would be clear lack of uniformity, or potential lack of uniformity across the country.
Two provinces do not colour or mark gasoline. Moreover, some provinces decide to mark and colour gas for different purposes. For instance, some provinces permit the use of coloured gasoline in pleasure boats, which would be quite inappropriate given the objective of the special excise tax on gasoline now before the committee. I am just saying that a federal tax and the refunds and exemptions from that tax have to be uniform and have to be under the control of parliament and the regulatory authority granted by parliament. That is my problem.


Mr. Yewchuk:: Mr. Chairman, I would like to clarify with the minister whether he can provide any figures concerning the cost of the extra bureaucracy which will be required to collect and rebate this tax. I know the Minister of National Revenue touched on this and said there would not be any extra cost. If that is the case, I suggest there is a certain amount of bureaucracy sitting around doing nothing at all. I cannot accept the explanation that it will not take much extra staff to process the rebates. The minister should tell us how much it will cost to administer the program. I submit that these costs could be avoided if the amendment were accepted.


John Napier Turner: Mr. Chairman, I have looked into the question of costs. My colleague, the Minister of National Revenue, dealt with them in his speech. Our best estimate at this time is that the cost of administration, including the receiving of claims, the reviewing, the issuing of cheques to claimants, and the implementation of a post-audit procedure, will be in the range of 1 per cent of the revenue involved. This is comparable to the cost of administering the federal personal income tax, which is about 1.2 per cent of the revenues generated by the personal income tax. In other words, the cost of administering this tax will be 1 per cent, compared with 1.2 per cent of the cost of administering the personal income tax.


Mr. Mclsaac:: Mr. Chairman, before we leave the amendment to clause 1 may I ask the minister does he think it advisable to amend clause 5 of this bill, to accommodate the points raised by the mover of the amendment and other hon. members opposite? Regardless of the minister's arguments, the fact remains that we shall be putting a lot of people through a needless procedure. Could the minister not meet objections by some other means, say, by making some agreement with the provinces with respect to purple gasoline, or by moving an amendment to clause 5 or to some other clause? What are the minister's reactions to my suggestion?


John Napier Turner: Mr. Chairman, clause 5 deals with refunds and clause 1 with the definition of gasoline, which relates to the exemption. These are different matters. If the hon. member is talking about bulk buying, I tried to deal with that situation when replying to the hon. member for Vegreville.


Donald Frank Mazankowski: Mr. Chairman, the parliamentary secretary's point is well taken. I have presented a draft amendment which I propose to move at a later stage. I hope the minister will study it, as I think it will serve the purpose. I suggest that the Parliamentary Secretary to the Minister of Transport will heartily endorse it, as he represents a large agricultural area. I suggest that the amendment would cover more than corporate consumers. It would apply to farmers as well, to trucking concerns, commercial concerns and others whom the governor in council may see fit to include.


Thomas Gordon Towers: Mr. Chairman, the minister suggested that no amendment he can bring in will make this bill non-discriminatory. I point out that, at the moment, many diesel burning cars will be subject to this tax. The minister suggested that diesel cars could be exempt because they burn a minute quantity. I suggest that this thinking should also be extended to boats.
May I raise another question? The minister referred to discrimination between provinces. I point out that there are lots of dye tablets in Alberta which can be used to colour gasoline used in other provinces. Such gasoline can be put to specified uses by Monday morning. The point is this. The gasoline is not manufactured in that coloured form. It is coloured afterwards, when it goes to the farm, when it is put in bulk tanks, or when it is to be applied to other uses.
July 25, 1975

The administration of this measure will be expensive. I understand that the government will spend $3.5 million in administering the program. In addition, it will be an extra cost to farmers and fishermen when they apply for rebates and they will need to do a lot of extra work to apply for rebates. Farmers and fishermen will need to keep records of the amount of gasoline used which is eligible for rebate.
Considering our difficult economic position, and as the well-being of a large percentage of the Canadian public is involved, will the minister take a second look at this measure and do something constructive for the benefit of a very important sector of our community?


Paul Yewchuk: Mr. Chairman, I am amazed at the minister's apparent lack of concern. He said the program will cost 1 per cent to administer. I suggest that that $3.5 million could be put to much better use in agriculture. It could help farmers who must pay inflated costs for farm machinery parts, and so on. I submit that the millions of dollars the government will waste can be put to much better use in society. People are taking money out of one pocket and the government is to put it back in another. I suggest that the program is wasteful and the $3.5 million could be put to better use.


William Arnold Peters: Mr. Chairman, I was interested to note the minister's allusion to gasoline used off the highway. The province of Ontario did not levy tax on that gasoline, but now it does. I point out that some people drive diesel automobiles, and this bill will discriminate against them. At present when you pull up to the pump in a diesel automobile, you pay the provincial tax. If a trucker pays it, he is entitled to a rebate when he turns in his receipt. I understand that people driving diesel automobiles will pay one ten cents tax, and perhaps the other. This is discriminatory.
I know that an hon. member, after seeing a diesel automobile advertised in Montreal, said he intended to buy it this afternoon. As he is not in the House I presume he has bought it. He drives a lot and will save much money. I am not arguing against his interests, but it seems to me that if motor boats are exempt, diesel automobiles ought to be exempt also. There is no reason why those who pull up at the diesel pumps should not apply for an exemption. At present some are entitled to it, and others are not. It seems to me that we should not discriminate in our treatment of people. At present the bill discriminates against one group of people using diesel fuel, but not against another. How can the minister justify such different treatment in the same piece of legislation?


John Napier Turner: Mr. Chairman, I want to assure the hon. member that even though my eyes were not focusing on him, my ears were beamed in on what he had to say. He knows that. The difficulty with the diesel question is that 99 per cent of diesel oil is used commercially. Talking about administration costs, the cost of isolating that 1 per cent would be prohibitive. There is some merit in what the hon. member says, but there is no reasonable way of trying to isolate that. In that sense there is some discrimination. There is discrimination in favour of an owner of a small automobile as against the
Excise Tax Act
owner of a larger automobile. That is my answer there. The personal use involved is just too small a percentage to allow us to administer it properly.


The Chairman:: Is the committee ready for the
question?


Some hon. Members:: Question.
Amendment (Mr. Towers) negatived: Yeas, 42; nays, 59.


Gérald Laniel: I declare the amendment lost.


Mr. Baker (Grenville-Carleton):: Mr. Chairman, I would like to ask if the hon. member for Comox-Alberni, the hon. member for Ottawa Centre, the hon. member for Pontiac, the hon. member for York West, and the hon. member for Saint-Denis were included with this vote. If they were, they ought not to have been. They would have breached the rules of this House and they know it, particularly the hon. member for Pontiac because of his long years of service in this House.


Mr. Lefebvre:: Mr. Chairman, I hope I was counted because I was in the House. I refute categorically the allegations put forward by the hon. member for Grenville-Carleton.


Walter David Baker: On a point of order, Mr. Chairman-


Gérald Laniel: Before again recognizing the hon. member Grenville-Carleton, I should recognize the hon. member for Ottawa Centre.


Mr. Poulin:: Mr. Chairman, it was very inappropriate of the hon. member for Grenville-Carleton to comment on a vote after it was taken. That was against the rules and procedures of this House.


Some hon. Members:: Hear, hear!


Fabian Hugh Poulin: However, since he chose to name me and my constituency, I may say that I had come back into the House and I was behind the curtain, on the line. I stayed out. I honoured that commitment. I did not come across that line. It was petty and small for the hon. member for Grenville-Carleton to make that comment.


Mr. Fleming:: Mr. Chairman, I simply want to make the same point. I thought that I moved in on time. There was some shouting from the other side at that point, and I looked to Your Honour for direction.


Some hon. Members:: Oh, oh!


James Sydney Clark Fleming: My name has gone into the record with the suggestion that I tried to act wrongly. I want to clear

July 25, 1975
Excise Tax Act
that up. I do not want that on the record. I went out. The hon. member for Grenville-Carleton is fully aware of that. He should not have suggested that I acted wrongly.


Leslie Gordon Benjamin: Mr. Chairman, I rise on the same point of order. The hon. member for Grenville-Carleton asked a question, namely, whether certain members were included in the vote.


Walter David Baker: That is all.


Leslie Gordon Benjamin: He named certain members who, in his opinion, were not in the chamber on time for the vote. At no time did the hon. member for Grenville-Carleton claim that they tried to vote improperly. He only asked if they were counted. I want to verify whether the hon. member for Ottawa Centre and the hon. member for Saint-Denis were included in the vote. In my opinion, they were not in the chamber in time for the vote. I ask the same question of the Clerk, through you, Mr. Chairman, whether those two members were included in the vote. That is all.


Mr. Prud'homme:: Mr. Chairman, I rise on a point of order.


Gérald Laniel: The hon. member for Saint-Denis (Mr. Prud'homme) on a point of order.


George Albert Proud: Mr. Chairman, I do not understand at all the unbelievable nervousness of the hon. member for Regina-Lake Centre (Mr. Benjamin). When you put the question, he was looking at you. I was then speaking with the hon. member for Champlain (Mr. Matte) in the fifth row. Casually, the hon. member for Regina-Lake Centre seems to apply what is called one law for one's friends and another for one's foes. He does not object to the vote of the hon. member for Champlain, with whom I was speaking in the corner of the House, since the latter voted in the same way as he did. He does not oppose to his vote, but to mine, because I was supposed to be on the other side. But he is perfectly aware of the fact that we are allowed to sit anywhere. He does not object to the vote of his colleague for Champlain, with whom, I repeat it, I was speaking. Mr. Speaker, I think we should certainly proceed with more serious things and stop playing games.


Lincoln MacCauley Alexander: I think the confusion arose because of members who will not stand clear of the curtains. I am not pointing a finger at anyone, but if this ball game is to be played the way it should be, members on both sides will have to stand back from the curtains so as not to confuse the Clerks at the Table. In this way we may be able to expedite the passage of this bill-I understand there is some semblance of an agreement-


William Arnold Peters: Oh!


Lincoln MacCauley Alexander: All right, then. I will cancel that statement. But surely we can now proceed to the consideration of the bill.


Walter David Baker: Mr. Chairman, it was imputed to me that I had said that certain members I had named were absent. I did not say they were absent. If I did, I would apologize to those members. What I did was to ask whether their votes had been counted. If there was any statement made as to the absence of those members it came from the hon. member for Ottawa-Centre. I was careful not to use the word absent. But, of course, now it is out.


Gérald Laniel: Order. The question has been aired long enough. All members are aware that when we are in committee of the whole members are not identified while a count is being taken. The Clerk who took the count assures me that the only members he counted were the ones who were clearly within the confines of the chamber. He did not count any who were behind the curtains. This leads me to conclude that only those who were in the chamber at the time the vote was called were counted.
It is, of course, difficult for the Chair to see what is happening on both sides of the committee at the same time, and if hon. members come in after a question has been put it is not easy to identify them. This bring me to the point I wish to make.
I realize we do not very often sit in committee of the whole, but hon. members might take time once in a while to read Standing Order 12(2) which says that when the Chair is putting a question no member shall enter, walk out, or cross the floor of the House, or make any noise or disturbance. We have had all of this. I am not talking only about coming into the House. I am talking about noise and disturbance. This does not help the Chair and it does not help the proceedings of the committee. I might add that those members who were behind the curtains and who, by bending over, did not help the Clerk to count the votes, making it more difficult for him, are to be blamed.


Mr. Munro (Esquimalt-Saarvich):: On the point of order, Mr. Chairman-


Some hon. Members:: Enough!


Mr. Munro (Esquimalt-Saanich):: about those two who came in after the vote was called, it is distinctly my impression, sitting where I am, that the hon. member for Mississauga came in and was counted.


Gérald Laniel: Order. A ruling has been made, the amendment has been defeated, and I an now putting the question on clause 1.


Stanley Howard Knowles: May I put
another question to the Minister of Finance with respect to the wording of clause 1? I have in mind in particular the last four words, "other than aircraft engines". Could the minister explain the meaning of this to me? I take it to mean that gasoline which is used in airplanes is not subject to this ten cents a gallon tax. I can understand that this might as well be the case as far as commercial airlines are concerned because if they pay the tax they would be able to obtain a rebate since they are operating a commercial or business enterprise. But I should like to ask whether this also applies to the private owners of small aircraft. I suspect there are certain persons who use their aircraft
July 25, 1975

to get to work, and they would not be obliged to pay the tax. Yet those who use their automobiles to get to work will have to pay it. Does the minister think this is fair?


John Napier Turner: The same considerations apply here, really, as apply in the case of diesel fuel. Over 95 per cent of the type of gasoline sold for use in aircraft is supplied to commercial or chartered airlines which would be exempt in any event. The price of administering such an exception as the hon. member is suggesting would be unduly high. I might point out that in a previous budget a 10 per cent tax was imposed upon the purchase of private aircraft, which has a complementary effect when the two are put together; there is already a 10 per cent excise tax on the purchase of private aircraft.


Donald W. Munro: On a point of order, Mr. Chairman-


Some hon. Members:: Oh!


Donald W. Munro: -I wish to make a correction to the point of order I raised a few moments ago. It was not to draw attention to the absence from the chamber of the hon. member for Mississauga but to say it was the hon. member for Peel-Dufferin-Simcoe-I had the impression he came in through the curtain to be counted after the vote was called.


Mr. Milne:: On that point of order, Mr. Chairman, I happen to be the hon. member for Peel-Dufferin-Simcoe and I was sitting here writing a couple of letters, rather amused at the antics of the people opposite me.


Mr. Railton:: Mr. Chairman, I can confirm that my hon. friend was here all the time.


Some hon. Members:: Withdraw!


Gérald Laniel: Order. I do not think we should pursue this matter. A decision has been rendered, the vote has long been taken. I do not think we ought to return to a discussion of who was in the chamber and who was not. I made my decision, and I invited the co-operation of hon. members when votes are taken in the future.


William Ross Milne: I think, in the circumstances, it would be appropriate for the hon. member for Esquimalt-Saanich to withdraw.


Donald W. Munro: I certainly withdraw.


Some hon. Members:: Hear, hear!


William Arnold Peters: Will the exemption in regard to gasoline used for private aircraft be based on octane rating? I know of many small fields where aviation fuel is delivered by an entrepreneur from the community, who also delivers other fuel. Is the exemption based on type of fuel used or does he apply for the exemption after having serviced the aircraft?


John Napier Turner: Aviation gasoline is exempted to begin with, and the reason is that 95 per cent of the fuel is used in commercial aircraft. I would remind
Excise Tax Act
the committee that in the previous budget a 10 per cent special excise tax was levied against private aircraft.


William Arnold Peters: I am also aware that many small aircraft use ordinary gasoline rather than a specific type of commercial aviation fuel. It is high octane fuel which is also used for high compression engines in automobiles. My point is, how is the exemption applied for gasoline supplied to a commerical flying club?


John Napier Turner: It is my understanding that the overwhelming amount of gasoline used for aviation purposes is so designated. If a gasoline could be used in an aircraft, it would be exempt if used in an aircraft. I really think this is a matter for National Revenue Canada, but its use is fairly restricted.


William Arnold Peters: I agree it is restricted, but this would apply to all flying clubs. On every field there are two or three dozen aircraft, and I want to get the answer to this question before two or three other people ask it of me. How is the person who delivers the gasoline going to certify that it is exempt? Is the distributor going to be given a form that will allow him to apply for an exemption?


John Napier Turner: Mr. Chairman, as I have said, I think we should leave this problem to National Revenue Canada. If it is ordinary gasoline it is subject to the excise tax. If it is delivered to a commercial flying club and is used for commercial aviation purposes, the purchaser is entitled to a refund. The great majority of the gasoline that is available for aircraft is aviation fuel which is used for the internal combustion engine of an aircraft.


Mr. Rodriguez:: Mr. Chairman, I have a few questions to ask the Minister of Finance. I realize he was faced with the problem of compensating eastern consumers and that he has to raise $500 million. When he was faced with this problem, surely he must have considered alternatives. Can he tell the House what the alternatives were that he considered, why he rejected them, and why he selected this particular tax?


John Napier Turner: Mr. Chairman, I set that forth in the second reading speech and in the budget speech. Primarily the tax was applied against users of gasoline because I felt that was in the fairest way of apportioning it. An alternative might have been through the personal income tax system, but even progressively imposed there are a good many income taxpayers who do not own, drive, lease, or operate an automobile.
The Leader of the Opposition suggested that we could have achieved our objective by cutting expenditure further, but there again we have already tried to cut expenditure by $1 billion. So we felt that in order to maintain a national price for the general use of oil and gas other than for personal use-that is to say, oil and gas used for home heating, industrial use and commercial use-right across the country at $8 a barrel as against the world price of $12 a barrel, we thought it fair to impose the tax on the users of personally consumed gasoline. As I say, we thought that was the fairest way to do it, fairer than using personal income tax since the average payer of tax might not be equated with the average driver of an automobile.

July 25, 1975
Excise Tax Act


John R. Rodriguez: Did the minister consider the fact that there are $7 billion of deferred corporate taxes outstanding? Did he consider applying a 10 per cent interest charge on this deferred tax, which would raise $700 million? If he did, why did he reject it?


John Napier Turner: At this stage we had to encourage the continuance of capital investment in this country to provide industrial capacity and job potential for the next few years.


John R. Rodriguez: Considering the fact that, in effect, this is an interest free loan which all the people in Canada who do not own businesses are lending to the corporations, would it not have been very fair to apply even a 5 per cent interest charge? On that amount this would have brought in considerable revenue to offset the deficit.


John Napier Turner: Mr. Chairman, I disagree with that interpretation. This money is only deferred from tax, because it is eventually paid, on condition that the businessmen or corporations involved increase capital plant, which increases industrial capacity in the country and the job producing potential.


John R. Rodriguez: Most reports indicate that that tax is never paid anyway. Let me ask the minister another question. Can he tell us why he exempted doctors and lawyers? Why would he give a rebate to doctors and lawyers? If it is because they are using their cars in pursuit of their work, why not exempt other working people who use their cars to get to work, such as miners in my area?


John Napier Turner: The hon. member is incorrect. Doctors and lawyers are not exempt. They will pay the ten cents tax on their gasoline when going to their places of work, just as any other citizen will. If a doctor is out on a call, however, this gasoline is being used for the purpose of earning income and will be deductible. But the doctor would have to pay the ten cents per gallon on gas used when going from his residence to his place of work, just as any other citizen.


John R. Rodriguez: In view of the fact that when doctors are called out they are going to a job for which they are compensated-they do not do it for nothing-why does the minister not treat miners in the same way when they are called out to go to work?


Leslie Gordon Benjamin: Mr. Chairman, I should like to pursue this with the minister a little further. There are a couple of other alternatives. The minister said he decided against using the income tax as an alternative, particularly on an individual basis, because some people do not drive cars. Would it not be easier if the taxpayer indicated on his income tax form whether or not he drove a car? This is a lot easier to check on than policing applications for rebates. Would it not have been simpler to exempt individual taxpayers whose income was below a certain amount? This would include most if not all of the people who do not drive a car but do pay income tax.
Another option is open to the minister. On the $15.4 billion corporation taxable income, last year the effective

tax rate was 32.4 per cent. Would it not have been easier to assess a 5 per cent increase in the effective tax rate in order to collect part of the money for the oil compensation fund and collect the other half from income tax on high wage earners? Another alternative would be a 10 per cent increase in the effective tax rate on taxable corporate income, which would have brought in the $525 million. Surely individual income tax and corporation taxes, or a combination of the two, would have done the job rather than going through all this nonsense of exempting occupations and classifications and then policing the rebates?


John Napier Turner: Mr. Chairman, there are about 9 'A million personal taxpayers as against about one million people who are eligible for rebates. The hon. gentleman is wrong in his estimation of the administrative difficulties.


Donald Frank Mazankowski: Mr. Chairman, may I ask the minister a question in regard to the tax as it applies to commercial trucking concerns. Has the minister had any discussions with the Canadian Trucking Association with respect to the administration of the tax? Also have the minister and his officials explored ways and means of minimizing the administrative procedures in the collection of the tax, such as an exemption certificate or some consideration for tank wagon lots at the wholesale level?


John Napier Turner: Yes, Mr. Chairman. We received representations from the Canadian Trucking Association and I am exploring ways to satisfy those representations.


Donald Frank Mazankowski: If the legislation as it stands is not flexible enough to provide for exemption certificates or minimizing administrative procedures, will the minister be introducing an appropriate amendment to allow that to take place?


John Napier Turner: The hon. gentleman has rephrased the question put to me earlier in a more flexible way. We are looking at it closely.


Thomas Gordon Towers: Mr. Chairman, the minister mentioned that a doctor could get a rebate on gas used for going out on a call. How is this going to be regulated? Is it just going to be by the word of the doctor, or will a schedule be used or a table referred to?


John Napier Turner: It will be done in the same way as it is under the Income Tax Act. A doctor is required to declare, and prove if necessary, what percentage of his mileage is used on house calls, what percentage for personal use, and what percentage for going to his office. Personal use will not be subject to rebate nor will travelling to his office. Only house calls are eligible.


John R. Rodriguez: Mr. Chairman, it is rather interesting that the minister has said that doctors who are called out beyond the distance from their homes to their offices would qualify for the rebate. What about plumbers and electricians who go out on emergency calls beyond the distance of their work from their homes? Will they also be able to collect a rebate.
July 25, 1975


John Napier Turner: If the plumber is an independent contractor he will qualify.


Gérald Laniel: Shall Clause 1 carry?


John R. Rodriguez: I just want to continue that, Mr. Chairman. There are many electricians and plumbers and other skilled tradesmen who are not on a private contract. They work to a contract, but when there is an emergency they are called out. Why should they not qualify on the same grounds as doctors and lawyers?


John Napier Turner: In a good many instances that expense is covered by the employer.


Gérald Laniel: Shall Clause 1 carry? The hon. member for Regina-Lake Centre.


John R. Rodriguez: Mr. Chairman, I have another question-


Gérald Laniel: Order, please. I recognized the hon. member for Regina-Lake Centre.


Leslie Gordon Benjamin: Mr. Chairman, this is the most ridiculous-


Some hon. Members:: Hear, hear!


Leslie Gordon Benjamin: This is one minister I always thought would not allow himself to be party to such outrageous nonsense as this. The plumber, electrician, or a similar tradesman who is an employee of a firm or is on a special contract, is paid a salary and maybe called out. What about the foreman at the steel plant who is called out on an emergency at three o'clock in the morning and has to make a 40-mile round trip? He does not get the rebate.


Stanley Howard Knowles: Four o'clock.


John Edward Broadbent: Four o'clock.


Leslie Gordon Benjamin: Mr. Chairman, I hope it is beginning to dawn on the minister how ridiculous this move is that he is using to try to collect $525 million. We are not going to hold still for it.


Gérald Laniel: Order, please. It being four o'clock p.m. it is my duty to rise, report progress, and request leave to sit again at the next sitting of this House.
Progress reported.


Mr. Deputy Speaker:: It being four o'clock the House will now proceed to the consideration of private members' business as listed on today's order paper, namely, notices of motions, public bills, and private bills.


Thomas Lefebvre: Mr. Speaker, I think there is agreement to proceed to the consideration of notice of motion No. 40 in the name of the hon. member for Richmond (Mr. Beaudoin).


Mr. Deputy Speaker:: Order, please. Is it agreed that we proceed to the consideration of notice of motion No. 40
Milk Producers
appearing in the name of the hon. member for Richmond (Mr. Beaudoin), and stand motions Nos. 2, 15, 19, 20, 34 and 37, at the request of the government?


Some hon. Members:: Agreed.



PRIVATE MEMBERS' MOTIONS


Léonel Beaudoin: That, in the opinion of this House, a study should be made on industrial milk-producers in order that the government take the necessary steps to guarantee to these producers prices that would take into account production costs in view of reducing the number of industrial milk-producers who abandon their activities.
He said: Mr. Speaker, I am very pleased today to take part in the House in a debate on the motion I have introduced and which is very important. I even sugggest that it is of utmost importance to Canadian agriculture and especially to the dairy industry. My motion reads as follows:
That, in the opinion of this House, a study should be made on industrial milk-producers in order that the government take the necessary steps to guarantee to these producers prices that would take into account production costs in view of reducing the number of industrial milk-producers who abandon their activities.
However, Mr. Speaker, I must mention that I moved this motion in the House on October 10, 1974. Which means that the government dragged its feet heavily before allowing it to be debated and this in spite of the problems facing dairy producers, whom I mean to defend this afternoon.
It is a pity the government should let situations such as this deteriorate. Nevertheless, I am glad my motion is debated today. Not only is the issue still relevant, it is still more so in view of all problems which have compounded the situation since last fall, as well as those which the government has created through its incompetence and lack of initiative in the area of industrial milk production.
Not only has the Department of Agriculture failed to take adequate steps to support our dairy milk producers, it has made life even more miserable for them by doubling from 45 cents to 90 cents a hundredweight, effective July 1, 1975, the costs which Canadian dairy producers must pay for their exported products. Anyway, the Agricultural Producers' Union and the Federation of Industrial Milk Producers of Quebec wasted no time in reacting, and rightly so, because the situation is becoming increasingly critical.
In fact, those 90 cents that are withheld from the producers on powdered milk, exports, will mean that every industrial milk producer will lose an average of $2,000 annually. To my mind, that is utter nonsense. One does not need the brains of Papineau nor those of several ministers put together, the majority of whom are lawyers, to know that this step will simply ruin again hundreds of our milk producers. And all the more so because produc-

July 25, 1975
Milk Producers
tion costs rise constantly with costs going up for feed, fertilizers, chemical products, energy, fuel, farming equipment and so on.
In other words, the situation has become a catastrophe because, on the one hand, the cost of production goes up continually, while on the other hand, the producers see their income decrease. No one can suffer losses and stay in business especially in the milk industry, because the production of milk requires huge investments, it entails numerous risks such as cattle diseases, and the weather on which good crops and the cost of feed depend.
I see that the hon. member for Richelieu (Mr. Cote) is listening. Since he is a producer, he must be quite interested. During the six-month period alone extending from the third quarter of 1974 to the first quarter of 1975, production costs have increased by 8.95 per cent, that is 84 cents a hundredweight. If we add those 84 cents to the set price for the third quarter of 1974, that is $9.41, we get a net price of $10.25 a hundredweight of milk, while the producer actually gets $9.97, less the 90 cents which the federal government must withhold for that famous export of powdered milk, less the transport cost of his milk to the dairy averaging 75 cents a hundredweight, which leaves a gross amount of $8.32 a hundredweight and this for 3.4 of fat matter.
This suggests, as indicated by the APU in its brief dated July 15 last, that the producer was in a better posture last year. Mr. Speaker, if the minister does not react as a result of such serious conclusions, I wonder when he will do so and what could make him move.
For instance, in January last, a press release from the Department of Agriculture on the outlook of the industry for 1975 indicated that gross farm income would increase by 4 per cent, but that, on the other hand, net farm income might tumble down by 12 per cent, due mostly to the rising costs of production. The Department of Agriculture itself admitted by this statement that there was real cause for concern. And at that time, there was no mention of this illogical rise in export costs nor of the price increase of gas that the government might pass on Monday.
Let us be realistic, Mr. Speaker, even if the Minister of Finance (Mr. Turner) indicated that farmers could recuperate at the end of the year the 10 cents tax on gas, they will nevertheless suffer from the increase in fuel prices on account of all petroleum by-products used on the farm.
Therefore, it is obvious that the imbalance is increasing in an intolerable manner in the area of industrial milk and that the efforts undertaken to stabilize the prices in this industry have collapsed merely on account of the last increase of 45 cents per hundredweight of powdered milk to cover export costs.
The situation being such, Mr. Speaker, I therefore strongly recommend that my motion be agreed to because it is absolutely necessary and even vital for industrial milk producers. It is imperative that the House realize that, deal with those problems and immediately correct them before it is too late.
If the situation is left uncorrected and things are allowed to deteriorate from day to day, farmers will leave

their farms and those who will dare stay on will accumulate deficits for as long as they will have the courage to keep on feeding the population and after a while, they will go bankrupt because there is not any manufacturing or other business where one can sell products below the cost of production and stay in business.
Today a purebred cow costs approximately $1,000, a half-bred cow about $700. I am referring to a dairy cow and the way cows are looked after today, the average milking period lasts about six years, which means that the farmer has large investments with regard to his dairy cows only. That also means that a good herd takes years to get established and requires very particular attention and care.
In addition, the dairy producer has the responsibility for coverings that must be done at the right time to get a continuous production and he must take the risks. Dairy production is really a profession.
A farm that works well must spend each year about $4,000 on general repairs and maintenance, exclusive of machinery depreciation. A farm with a dairy herd of 100 requires an investment of $200,000 approximately. At an interest of 8 per cent, this means $16,000 in interest charges only. However, you have to add $4,000 for maintenance and upgrading, and $6,000 for cattle turnover, including heifer breeding to replace cows, that is breeding and buying young cows. This means approximately $26,000 of unavoidable expenses, not including municipal and school taxes, seed costs, harvesting expenses and so on. All in all, the cost of operating a farm with 100 dairy cows amounts in fact to approximately $40,000 a year.
Mr. Chairman, in my opinion, those figures deserve consideration, and I would like to have that matter debated if my motion is agreed to by the House. There are a number of particulars I would like to mention and a number of remarks I would like to make in that respect, since I happened to be in the dairy business for several years, and I am familiar with the question. I would also like other members with experience in that area of production to speak up and contribute to the debate after the motion has been agreed to, in order to make the House fully aware of the real nature of the problem and to help it take appropriate corrective measures.
One must admit that today, industrial milk producers as well as farmers in general no longer have a net income that would merely match the interest on their investments, especially since the government, in 1969, allowed interest rates on agricultural loans and machinery to go up through bank loans. Input costs keep on rising, and income is being cut down while powdered milk export costs are left to increase immoderately. I dare say most industrial milk producers would be better off and would have a happier life with both feet in the stove, Mr. Chairman, as they say in Quebec, content with the interest of their money instead of working themselves to death night and day on their farm only to get the results that we know.
Just to show how serious the problem is, allow me to say that over the past ten years, the price of corrugated iron for instance and the cost of repairing buildings increased by 400 per cent, while the prices of machinery went up by 450 per cent. And what about salaries for farm hands?
July 25, 1975

Over the same ten-year period, the price of milk doubled only. At such a rate, those who are still producing industrial milk are no longer doing production work, but missionary work to feed the people at any cost. Industrial milk producers are not fools, far from that. They may have more sense than most members here. One day one of them will get up in the morning, sit down with his good wife and solemnly say, somewhat bitterly: "Well, that is the end of it! We sell everything." And then we are less another producer. Everybody will agree on that. Some might say: "Well, he will sell to another producer". And again: "What can be gotten out of it with another producer?" Even if he can sell his farm to someone who will go on producing industrial milk, milk production on the farm will decrease by 50 per cent. That is automatic. And I can prove it. Those are important explanations to give to the House in order that the Minister of Agriculture (Mr. Whelan) may act accordingly. With a new owner there is a 50 per cent drop in production. Where the former owner produced one ton of milk per day, three or five years later, the new owner will be producing half a ton only, for a number of reasons, due to inexperienced help or simply because of milking procedure changes, different grazing quality, or "commuting" cows from one field to another, which directly affects the volume of milk given by the cows, etc. Such are the facts, they cannot be ignored. When the day comes when we have to pay butter at $1.50 a pound, milk at 70 cents a quart, meat at $2.00 a pound and when we have to depend more and more on imports from other countries to feed Canada, when farmers are deliberately strangled, then it will be too late for the government to recognize its errors. They will have what they asked for. I introduced the motion in order to put a stop to that situation, to protect industrial milk producers in view of the seriousness of the present situation. I therefore ask for this House's attention, and the non-partisan cooperation of every member and minister, so that the motion be agreed to and that the proposed review may be conducted, in order to save our dairy industry if it is not too late. I am not trying to act smart but I wish to draw the attention of the government to this problem, so that in the future there will be still farmers left on our farms and we can be sure to eat three times a day fresh produce of our land, which have been grown by our gallant and courageous brothers, the Canadian farmers.
In conclusion, Mr. Speaker, let me give the government a bit of advice. At present, the government through the board of officials from the Department of Industry, Trade and Commerce imports, every year, 50 million pounds of cheese, as well as eggs, beef and porks, from the United States or other countries, with the Department of Agriculture or its Minister having no say in the matter. The importation of any farm product from any country should come under the jurisdiction of the Agriculture Department, therefore that of the Canadian Minister of Agriculture. Working in cooperation with Growers' Association and Farm product Marketing Boards he is familiar with the problems, the costs of production in each field, the Canadian consumers' needs and the amount of production which should be encouraged through subsidies or other means.
Milk Producers
Therefore, Mr. Speaker, when we come back here in the Fall, after the summer recess which, in my view, all members really deserve, I would like the government to introduce a bill which would allow or enable one department only, namely the Department of Agriculture, to control the exportation and importation of agricultural products. This would have the effect of guaranteeing a sufficient output for the consumer, as well as a fair price to the producer, so that we may plan a long-term policy with a view to setting prices on the basis of production costs, so that our farmers take heart and remain in the farming business and that the young people who will become the farmers of tomorrow be assured of a decent living.


Mr. Leopold Corriveau (Parliamentary Secretary to Minister of Agriculture):: Mr. Speaker, as Parliamentary Secretary to the Minister of Agriculture (Mr. Whelan), I should like to clear up the situation with regard to the dairy policy. All of us have long since recognized the importance and special character of the dairy industry in Canadian agriculture. Last year, the dairy industry accounted for 15.5 per cent of agricultural revenues. These figures do not take into account everything that milk and its by products represent for the other sectors of our economy. As in several other countries, the Canadian dairy industry operates under a price control system. As a result, the government has resorted to different ways of controlling production. Our programs have had great influence on dairy production and on the decisions of dairy producers. The latter want to obtain adequate guarantees as to the stability of their production so as to be able to make the investments required by modern and viable dairy enterprises. Indeed the government has adopted measures to give such guarantees. One of the objectives of the dairy policy is precisely to guarantee milk producers adequate income. Thus, we hope to witness the disappearance of the climate of uncertainty caused by the recent period of rapid increases in production costs.
Please allow me to repeat certain statements made by the Minister of Agriculture last April 18 before representatives of the dairy industry. Mr. Whelan had then announced a new formula for the adjustment of milk prices, which enabled to adjust the income of dairy producers. This formula takes into account production costs, and the remuneration of the producer and of the family manpower. The formula was developed as a result of several studies and discussions between the people concerned.
In April 1974, the Canadian Dairy Commission was authorized to meet the producers' associations and develop a program to achieve better balance between production costs and income. As a result, the Commission held a series of most useful meetings with representatives of the industry, whose recommendations were included in the new policy.
On November 29 last, the minister met the representatives of the Dairy Farmers of Canada. They presented him with a brief which was also used in developing a formula for the readjustment of prices. The members of the Canadian Dairy Commission, the representatives of the producers and the officials of the department worked hard, together, in an effort to find a sound formula. It may

July 25, 1975
Milk Producers
be easy to calculate the cost of feeding the cattle, the cost of labour, of fertilizers or fuel, but the value of the land, pastures and buildings, is much more difficult to assess. In short, we tried to find a formula that would be effective and fair to everyone and would enable us to develop an advanced dairy policy.
All the details of that formula were announced in the past few months. I would simply like today to go over the main lines and clarify certain details. According to the legislation setting up the Canadian Dairy Commission the objects of the long term dairy policy of the government are:
1,	to provide efficient producers of milk and cream with the opportunity of obtaining a fair return for their labour and investment;
2,	to provide consumers of diary products with a continuous and adequate supply of dairy products of high quality.
Pursuant to those objectives the government raised, effective April 1, the level of support prices by $11.02 per hundredweight. That amount represents the basic price implemented under the new policy. I must remind you that this price included all adjustments made in recent years by the government to offset increases in production costs and bring producer revenues back to suitable levels. The basic price will be adjusted on the basis of changes in production costs under a formula that came into effect last April 18.
In that price adjustment formula 45 per cent was allocated to the current expense index for adjusting production costs. The different components of that 45 per cent are defined as follows: concentrates and fodder, 13.4 per cent; insemination, 0.6 per cent; herd health related expenses, other transportation expenses and miscellaneous cattle expenses, 7.8 per cent; repairs to machinery and automobile expenses, 3.1 per cent; gasoline and oil, 2 per cent; rental of machinery or contract work, 0.4 per cent; lime and fertilizers, 3.1 per cent; seeds and other crop related expenses, 1.9 per cent; maintenance, land and buildings, 1.4 per cent; property taxes and insurance, 2.8 per cent; electricity and telephone, 1.9 per cent, and lastly, monthly paid farm workers, excluding the salary of the family, 6.6 per cent. It makes a total of 45 per cent.
The second index considered in the formula is the consumer price index as it modifies producer and family revenues. It represents 35 per cent of the formula. If we add those who indices we obtain 80 per cent.
By indexing only 80 per cent, the government keeps a margin of 20 per cent which leaves room to adjust prices according to future needs. This is an advantage that allows us to consider a number of factors, for instance significant changes in domestic and international stocks, changes in the revenue of dairy producers in other countries or major changes in competitive costs inherent in processing.
The percentages of 80 per cent and 20 per cent were defined from an analysis made by government experts and based on farm accounting statements for 1972-73. The next programs of the Canadian Dairy Commission will adjust

the support level from this formula. We know that the indices must vary by minus or plus 4 per cent to warrant a readjustment of milk prices. Provisory adjustments will be made only if needed and when a period of at least three months has elapsed since the last adjustment. This percentage of 4 per cent seemed to us the best way to avoid too many changes in a same year and excessive price increases for the consumer.
As I said earlier, changes can only be made at three month intervals. We should therefore have been able to adjust the prices on July the 1st. There has been no change because the calculation of indexes has shown a margin of less than 4 per cent. As regard the duration of the policy, the government, yielding to the producers' representations, has decided that the new policy would be set up for a five year period. This lapse of time is about what is needed to help the producers plan in advance their investments. After the first two years, the government may see fit to review the formula itself in order to ascertain the validity of the ponderation factors.
There is still a major point to clarify: exports. In order to do that, I have to set forth the trade situation. On the world level, stocks of powdered skim milk are increasing and prices are sagging. At the beginning of 1975, the price for skim milk was 45 cents a pound. In April, when the European Economic Community increased its export subsidies, the price went down to 36 cents a pound, and it has kept going down ever since. It is now 26 cents a pound. It is therefore important to realize the whole extent of this problem. Faced with such a decrease, Canada has two alternatives: either accept competition and sell at the international price, or accumulate stocks. Obviously the second solution must be eliminated, because it would be too expensive. If we sell at the international price, we must support the ensuing losses.
Thus, for every pound of powdered skim milk, whose price was fixed at 64 cents, we must figure a loss of 37 cents. If we calculate total exports set at 200 million pounds, we obtain an exorbitant price-$74 million. The government is therefore forced to intervene and raise the deduction on exportation of industrial milk. Since July 1 this deduction is 90 cents a hundredweight. Although it is strongly criticized, this increase is necessary to maintain sales of powdered skim milk at the current levels of international prices. I explain. We were fully justified to announce an objective price when the international price was normal. In April, that price still allowed competition, with the deductions we had at that time. Unfortunately, the situation changed completely, and the Canadian government is not responsible for it. You know our department is much interested in exportation. We always trie,i to find new markets for Canadian products. The present situation leaves us with very few alternatives.
We have already considered the impact of government financing, but it would create many more problems than it would solve. Producers have already committed themselves to Canada to pay export costs according to a supply management program under GATT. Any government interference might have adverse effects and would merely be prejudicial to producers.
That is why we must levy the required amount at the production level. Be assured that we will try to devise the
July 25, 1975

best means to solve this problem. To that effect, we have received proposals from industrial milk-producers. We should like to protect Canadian producers against international market fluctuations and we shall look fully into all the proposals submitted to us.
Let us now examine the matter of the decreasing number of producers. One of the goals of our policy is to provide adequate supplies to meet the needs of the Canadian consumers. Shall we reach that goal? Necessarily, with more producers. We have already noted an upward trend in production in the last few months. The only way to understand the decline in the number of producers is to rely on figures. It is true that the number of producers has decreased in the last ten years, but one should not jump to conclusions too quickly.
As a matter of fact, there is a significant increase in newcomers. In 1971-72, 1,500 young people entered agriculture and 1,600 farmers' sons carried on the work of their father. In 1974-75, the number of beginners amounted to 3,000, that is twice as many as three years before, and 1,900 carried on the work of their father. You will agree with me that these figures are significant. Within three years, the number of beginners doubled. Is the increased interest of young people in agriculture not a guarantee for the future? Let us keep in mind that the decrease in the total number of producers is mainly due to age. Even at times when the price of milk was quite favourable, the number of producers kept decreasing. Now we must review the situation.
If the number of producers is on the decline, how is it that supplies remain about the same? The answer is quite simple: producers are more and more effective. In 1971-72, each producer delivered an average of 150,000 lbs. of industrial milk. Today, they are delivering about 175,000 lbs. Here again, figures speak for themselves.
In the general interest, we must promote an increase in the number of deliveries by producers. It is a means of improving the productivity and efficiency of the undertaking. A study made in 1971 on industrial milk production in Quebec and Ontario has shown it. It appears that the production costs for farmers who have cows giving an average of 6,000 to 8,000 pounds of milk are almost double those who have cows giving from 8,000 to 11,000 pounds of milk.
Some changes are now taking place indicating some progress. The decreased number of producers has given rise to the growth of the undertaking. For example, in 1966-67, 61 per cent of Canadian farmers were producing less than 100,000 pounds of milk per year and 2.6 were producing over 300,000 pounds. During the daily year 197475, only 31 per cent produced less than 100,000 pounds of milk and up to 14 per cent produced over 300,000 pounds.
I know that it is useless to insist further, these figures are quite significant. Future will tell us the rest. The government does it utmost to offer an attractive income to encourage young people to get into farming. We offer not only grants and adjustment formulas but also improvement programs which have already give Canadian farmers the reputation they deserve. The development of dary farms did not come by itself, nor overnight. Among other
Milk Producers
things, about $3.5 million have been provided for the dairy control program and this is a program which Canada can be proud of. Since 1960, the annual yield per head increased by 300 pounds. The government is responsible for a good part of this increase. We encouraged the genetic improvement of dairy herds, notably through artificial insemination, the judicious choice of bulls, the upgrading and sound management of dairy farms. Free services are available to producers which enable them to increase their efficiency. I think that this new policy will put the industry back on the right track again and that the next few years will be for both producers and processors a period of stability and expansion.
I want to be clearly understood. I do not claim that the new policy will solve all the problems in the dairy industry. A policy can only provide for a framework enabling producers to make progress and to find by themselves solutions to the production and marketing problems. The government has been committed for a long time in the development of a comprehensive and long-term dairy policy. We have fulfilled our task completely. It is now up to the industry to assume its responsibilities and to contribute to the success of the dairy policy.
Mr. Speaker, I wanted to put things straight on this motion.


Mr. Roch La Salle (Joliette):: Mr. Speaker, first of all, I would like to congratulate the mover of the motion in view of the present situation, especially that of the last few days. I believe that this motion is most welcome. I therefore congratulate the mover and tell him that we have no hesitation in supporting a policy which would correspond much better than the present one to the aspirations and the needs of dairy producers. Mr. Speaker, I would like to emphasize the intervention of the Parliamentary Secretary to Minister of Agriculture (Mr. Cor-riveau). Like the hon. member who spoke before him, he quoted very interesting statistics. He also talked about the efforts of the government as concerns agriculture.
To remain quite positive and objective, I would like to agree immediately with the fact that the government has made some efforts, that it has introduced several measures, and that it has been doing so for a long time, but this should not lead us to believe that the dairy industry is now in a comfortable poition. Again, I would like to say that we would support measures aimed at providing stability and the necessary income to dairy producers.
Statistics may be quoted and we may be reminded of the measures introduced by the government, but it still remains that we cannot forget the present situation. This is the main issue. I believe that this is why the hon. member for Richmond (Mr. Beaudoin) found it appropriate to move this motion in view of the difficulties, and, I know perfectly well that our colleagues opposite are also aware of these difficulties. In closing, the Parliamentary Secretary mentioned that it is time for the dairy industry to take its responsibilities.
Mr. Speaker, I believe that the dairy industry has taken its responsibilities according to the programs introduced by the government through rather extraordinary modifications and massive investments, and we recognized this; the statistics prove it. Production has reached a very

July 25, 1975
Milk Producers
interesting level and people have specialized and have become more knowledgeable as concerns management and administration, and we recognize this fact. We know also that, thanks to the Farm Credit Corporation, funds have been earmarked to help producers get organized. They did, they are prepared to make a living out of that, but there is the matter of inadequate income. I hope the Minister of Agriculture, for whom I have great respect and who is an expert in farm matters, will find solutions. We hope he will find solutions. I remember in April last, the Milk Producers Federation made representations and studies, and presented a brief establishing production costs which called for additional subsidies. They had promised, they were committed to find formulas as good as those the parliamentary secretary talked about a moment ago, on a long enough period to meet the required minimum to prevent the milk producer from vegetating and to ensure a continuity and to get him interested in taking over the family operation.
But we know full well than in April last they did not meet requirements and production costs which had been established and recognized by the Prices Review Board. The government did not meet all the demands of the milk producers and what, as demonstrated by serious studies, were the actual cost. But when the minister promised some changes, the Milk Producers' Federation relied on him and hoped that finally they would get that basic income. I think we must see it that way. But we do know that recently, because of an unexpected situation concerning powder milk, the milk producer happens to be penalized and suffers a direct income lost. And we will never repeat that enough.
Of course we could say that things are not all that bad, our milk producers are better organized, our milking cows also increased their production. Certainly there are plenty of statistics pointing to improvement. But when we talk about essential income to allow those producers to have a decent living, as any other individual in our society, milk producers are far from feeling that secure. And this is why I, as many others, would urge the government if only to reply to the brief they received from FPU, to the representations made by the Dairy Farmers Union of Canada and the Canadian Federation of Agriculture.
So those organisations are now asking the government to take position and immediate corrective action, that is to say that the government must intervene in a hurry to precede the time when the contribution for the month of July will be reduced and we ask for your support; that is a letter that was sent to all members of this House. We hope the Minister who refused this week to commit himself to an affirmative answer on those briefs will have a change of mind. We also hope that all members of the House will succeed in convincing the minister of the urgency of this situation.
So if we look at the revenues we could have imagined for dairy producers in April last, we are now taking a step backwards when we limit ourselves to say that it is time for the dairy industry to face its responsibilities. I think that it is unfair to leave the dairy industry alone to defend itself against that situation at this time. The European Economic Community took its stand and the Canadian government might take some measures by setting up a

fund, for a given period in any case, to meet and correct that situation, without letting the dairy producer pay for it. It will be understood, of course, that it is not only the government, especially not the Canadian government, which is responsible for an actual situation, but it does not have the right to let the dairy producers fend for themselves.
In my opinion, the request made by the Milk Producers Federation for the immediate withdrawal of the additional 45 cent contribution is fair. The Federation also urges the government to establish a fund to cover the costs of additional export grants which will be necessary for the remainder of the year, that is until March 31, 1976. In the meantime, producers should develop longer term alternatives to cover the export costs of powdered milk. The Federation should arrange without delay special meetings to that end.
Mr. Speaker, once more we will see after a number of years demonstrations by the dairy producers who have done a great deal and have responded in a positive manner to the government measures available to milk producers.
We readily agree that the government has made efforts, but we say that the government's silence with respect to the present difficulties is unacceptable, unfair and offensive to milk producers. I am convinced that not only the parliamentary secretary and other members who are more familiar with this matter will succeed in convincing the minister of the necessity of giving a positive answer to the dairy industry, but also that the minister will manage to get an interesting answer from the cabinet with respect to the establishment of a fund for the period specified in the brief submitted by the Canadian Federation of Agriculture. Mr. Speaker, I know some of my colleagues would like to speak on this matter, and I will therefore conclude my remarks.
I should like once again to congratulate the hon. member for Richmond (Mr. Beaudoin) for giving us this opportunity to comment on this delicate situation, and I also hope the minister and all the members of the House will understand how important it is to solve this problem and therefore make it unnecessary for milk producers to hold meetings at the regional and provincial levels and to come to Ottawa, which entails further expenses.
I think those organizations are responsible and their studies and analyses have been carefully prepared. The statistics provided by the parliamentary secretary are not questioned, but no one can come and tell milk producers: You are in a good situation. Hon. members know it is not enough. We ask them to make an extra effort in order to correct an injustice to words milk producers.
I said earlier this week that it was a public lie to dairy producers to talk about the additional subsidy they were granted in April and the deduction imposed to them. We gave them with one hand a grant which, again, did not amount to a sufficient income. Through the bill, we deprive them of an immediate profit with the other hand.
Given the circumstances, and I do not intend to repeat myself, I hope that the government will understand the most difficult situation dairy producers have to face. We talk about stability and development in the dairy indus-
July 25, 1975

try. We favour all that. One thing is sure, the dairy industry is not in an easy situation and government can very easily deal with that matter. Once again, dairy producers are quite ready to offer their long-term co-operation in order to find a formula which could be fairer for everybody.
Therefore I hope that the government will answer positively to the brief submitted to them and I challenge anybody to question these briefs. I have not prepared them myself, I do not have the ability to do so. I have considered them and I believe that they are worthwhile. Some members applaud when I admit that I do not have the ability to prepare such brief I only told the truth. I have nothing against someone who tells the truth.
The figures quoted by the hon. Minister of Agriculture (Mr. Whelan) come certainly from his office. They are well prepared, well documented, and his officials are capable to provide him with the required documents. They have been set forth by my hon. friend from Richmond (Mr. Beaudoin). They have been repeated by my hon. friend from Frontenac (Mr. Corriveau). And both have told the truth. I do not contest those data. I am sorry for the situation, I deplore those data and I urge the government to take action on this situation which hurts and about which the dairy producers are expecting action from the government.


Mr. Claude Tessier (Compton):: Mr. Speaker, by making speeches at this period of the year and at such an hour, we raise questions in this House and throughout Canada. I am wondering about procedures, because at a time when we should be in summer recess, and at least outside Ottawa, if we must sit, let us limit ourselves strictly to urgent matters. Moreover, I believe this involves politicians' credibility, and also opposition and government capability. One thing is certain, there must be a problem of procedure-


Mr. Deputy Speaker:: Order. I must stress to the hon. member that the time imparted to private members' business is limited. Other members did show an interest in the matter under debate, and I would invite the hon. member to come to the subject matter, as quickly as possible in order that other members may also bring their contribution.


Claude Tessier: Thank you, Mr. Speaker. Coming to the motion, I would first concur with the Parliamentary Secretary to the Minister of Agriculture (Mr. Corriveau) who in my view eloquently stated the policies, as far as milk is concerned.
I believe the hon. member for Joliette (Mr. La Salle) had an excellent preamble. Unfortunately, I am afraid his conclusion was somewhat overstated, because I feel the government did not cheat producers far from that when they offered, at the beginning of April, $11.02 for their products.
I feel the present milk policy-


An hon. Member:: No one got that.


Claude Tessier: No one got that, but the government offered it. I also believe that the milk policy is appreciated in the whole when it is fully understood.
I would mention the very positive contribution the Agricultural Producers' Union and the producers' associa-
Milk Producers
tions have been very regularly making to hon. members. I believe their representations add something, and the development of a milk policy for milk producers is a matter of team work. They came here, we heard them, we made our own representations, and finally comes the time for a decision and that decision must be based on a milk policy.
As for the statements made by the hon. member for Richmond (Mr. Beaudoin), they do not contain any coherent policy as far as I am concerned. In my opinion, they represent a caricature of I know not what kind of agriculture, but one thing is sure, they do not even represent a caricature of Canadian agriculture, being so distant from the realities our own type of agriculture.
I also feel it is appropriate to remind our friends on the other side that once again today they are giving us the opportunity to decry what they have always been decrying haphazardly as being political partisanship. They are always telling us: "We are nor offering you miracle solutions without any partisanship." But when we refuse to play the same game, then we are accused of being members of old parties, either "red" or "blue". There are and there will always be some who accept to play that game.
At this moment, I am presenting the problem fairly and squarely-


Mr. Alkenbrack:: On a point of order, Mr. Speaker, does the hon. member think that, just because we oppose a penalty of 90 cents a hundred on industrial milk powder resulting from the inefficiency of the marketing programs of the government, we are playing politics?


Claude Tessier: I am sorry, Mr. Speaker. I did not hear the beginning of the comments of the hon. member, but I would like to use my time to go on putting forward my views about the dairy policy.
I was just about to say that what we are suggesting to the Opposition is a serious administration, a sense of responsibility which Canadians can be proud of and also a sense of decision which, I agree, do not go with unapplicable political theories, nurtured illusions, lies, and half truths which cause Parliament to suffer from a lack of credibility on occasion and become a monumental joke.
I believe that there are accomplices of this joke, and they are not on this side of the House, but on the other side.
I am definitely opposed to the proposal of the hon. member for Richmond (Mr. Beaudoin), because it does not take into account the present agricultural policy. The principle he wants to defend seems well founded and valid, but I believe that if we want to talk about the true issue at this time, we must do so in terms of over-production and marketing.


Mr. Deputy Speaker:: Order, please. I must interrupt the hon. member. The hour appointed for the consideration of private members' business has now expired. It being five o'clock, this House stands adjourned until Monday at two o'clock.
At 5 p.m., the House adjourned, without question put, pursuant to Standing Order.

Monday, July 28, 1975