1975-01-23

ROUTINE PROCEEDINGS


Hon. James Hugh Faulkner (Secretary of State):: Mr. Speaker, I wish to advise the House that the government intends, during this session of parliament, to introduce legislation amending section 19 of the Income Tax Act by deleting from it subsections 2 and 4.
The effect of these subsections as they stand is to accord to certain foreign magazines-of which the most important are Time and Reader's Digest-advantages in the field of advertising which are otherwise reserved to Canadian magazines and denied to all other foreign magazines. Canadian firms advertising in Canadian magazines are allowed, in calculating income tax, to deduct the costs of those advertisements at 100 per cent. Under the present law they can do the same with the cost of their advertisements in Time and Reader's Digest which are foreign magazines.
The intent of section 19, in the first place, was to support the Canadian magazine industry-then, as now, weakened by the virtual domination of the market by American publications. Instead of legislating against the entry of the American material, which would have been an interference with the free flow of information and ideas, the framers of section 19 legislated an advantage, or incentive, for actual and potential Canadian magazines. However, the addition of subsections 2 and 4, now to be deleted, vitiated the intent of the section by exempting from its requirements the two main competing foreign magazines. The proposed amendment to the Income Tax Act will, as of January 1, 1976, restore to section 19 the force and intent which its authors had in mind. I am confident that the enterprise and skill of the Canadian magazine industry will seize this opportunity. It is my hope and expectation that this decision of the government will result in the creation of a Canadian news magazine.
I should also like to take this opportunity, Mr. Speaker, to inform the House, on behalf of my colleague, the Minister of Communications (Mr. Pelletier), that the government also intends to recommend to the House a similar amendment to the Income Tax Act in his area of responsibility, to the effect that no deduction against income be permitted for advertising time on a non-Canadian broadcasting station for an advertisement directed primarily to a market in Canada. Such an amendment would not, of
course, come into effect until sufficient advertising time is available on Canadian stations to satisfy Canadian needs adequately.
The purpose of this amendment is to constrain the significant outflow, estimated at some $20 million a year, by Canadian firms purchasing advertisements on U.S. border stations. These stations, Mr. Speaker, are not licensed in Canada, but in many cases they are designed and exist to serve the Canadian market. I should note that this amendment has been recommended to the government by many organizations including a committee of this' House and a committee of the other place. We believe that this amendment will have the effect of redirecting funds to Canadian broadcasters and as such will make Canadian broadcasting outlets economically more viable. Their economic strength, in turn, will ensure viewers a broader selection of Canadian programs, make possible better programming and improve the prospects of new or proposed Canadian stations. In short, it is our belief that this proposed measure will assist in improving the over-all quality of the Canadian broadcasting system.
In taking these steps, we in the government are really not so much concerned with certain of the nation's industries as we are deeply committed to the nation's integrity. What happens in the area of Canadian books, magazines and broadcasting, as in other areas of Canadian cultural expression, is not a matter of marginal interest or importance: the strength, originality and vision we find therein is the true measure of what constitutes our national life.


Some hon. Members:: Hear, hear!


Mr. Sinclair Stevens (York-Simcoe):: Mr. Speaker, in responding to the statement just made I would first like to say, on behalf of the official opposition, that we are pleased the government has clarified this matter at long last. We believe that the move to eliminate the income tax advantage shared mainly by two magazines, Time and Reader's Digest, is a good one. It is rather unfortunate that the Secretary of State (Mr. Faulkner) said he hopes this move will result in the creation of a Canadian news magazine: we would have preferred that to be in the plural-"news magazines". At committee stage when this matter is being considered we must find out whether or not it is probable, that more than one Canadian news magazine will be established. We sincerely hope it will be more than one.


Some hon. Members:: Hear, hear!


Sinclair McKnight Stevens: It is not the intention of this party-and I hope this applies to the House in general-that through eliminating these advantages we inadvertently create a monopoly in the news magazine field in Canada. That


Income Tax Act
would not be good for democracy nor for our national integrity to which the Secretary of State has referred. I believe, also, that it is wise that the government is proposing that the measure not be effective until January of next year. During the interim I hope the committee will be satisfied with the arrangements to be made respecting the employees of the magazines concerned who now work in Canada. I believe we should also be satisfied in committee, before endorsing this proposal, with the arrangements to be made regarding the suppliers and the print shops which have been supporting these two magazines.
In committee we should also ask the government to indicate the extent to which they have tried to get these magazines to assume a stronger Canadian orientation, a stronger Canadian national position not only in content but with respect to their shareholders. I also believe, Mr. Speaker, that we would be in agreement with the thrust suggested by the Secretary of State in eliminating advertising that is now being put through foreign broadcast stations. I am a little nervous about the precise wording of the minister's statement. He said: "Such an amendment would not, of course, come into effect until sufficient advertising time is available on Canadian stations to satisfy Canadian needs adequately."
Mr. Speaker, I hope this will not result in the situation we have often had with this government, where the statement is the best part of the proposal. We must ask what that statement means. What does "sufficient advertising time" mean, to be available to Canadians and to "satisfy Canadian needs adequately"? I trust we will be given a full explanation if the matter goes to committee.
In summary, Mr. Speaker, we are pleased that the government has at last acted, subject to what I have said, in the fashion indicated in the statement.


Some hon. Members:: Hear, hear!


Mr. Cyril Symes (Sault Ste. Marie):: Mr. Speaker, the New Democratic Party welcomes, at long last, the announcement by the government to end the special tax concessions for advertisers in Time and Reader's Digest. I am amazed at how long it took the government to recognize the need to protect the Canadian magazine industry: it took two royal commissions, and over ten years. The decision is long overdue and we welcome the government's recognition of this important problem.
We would also like to see the government take some steps to help the Canadian magazine and book publishing industry, especially in the realm of distribution in this country. Many of our distributors have an unenviable reputation of marketing, primarily, books written by non-Canadians. I think we need some stimulation for our writers. We also welcome the proposal to end the advantages to advertisers using American stations, who get tax breaks. I think it is important that the government should not only prohibit these kinds of advertisements on foreign stations, advertisements beamed to the Canadian market, but should also begin to reduce the number of such ads appearing on the CBC television network. The minister speaks of making revenue available to Canadian broadcasters by this amendment, but if he listens to book publishers and magazine companies he will recognize that a great deal of the advertising dollar goes to television. If
[Mr. Stevens.)
he really intends to stimulate the magazine and book publishing industry, reducing the number of advertisements on television will free revenue for the industry. We welcome the announcement, and in committee we will argue for improvements along the lines I have mentioned.


Mr. Andre Fortin (Lotbiniere):: Mr. Speaker, on behalf of the Social Credit Party of Canada, I should like to thank the Secretary of State (Mr. Faulkner) for his statement which has finally given birth to his long awaited policy.
It would seem that a breath of cultural nationalism to protect Canada's integrity animates the minister and finally incites him, after many hesitations, to now abolish the fiscal advantages granted the magazines Reader's Digest and Time.
His statement, Mr. Speaker, also touches upon the use of American waves and the entry of American broadcasts into Canadian territory to the detriment of the Canadians who spend millions of dollars on publicity.
On the one hand, Mr. Speaker, we agree with the purpose of the government since we believe in Canada. We are Canadians, we feel that it is important to preserve the cultural integrity of Canada and enable all Canadians to have access to sources of information, entertainment and culture that are typically Canadian. This does not mean, however, and this is where I see window-dressing in the statement of the minister, that by setting up a customs tariff on the cultural level, by doing away with the fiscal advantages granted Reader's Digest and Time the quality of our Canadian magazines will improve. That is not guaranteed.
When an initiative is discredited or killed, whether it be Dutch, American, French or English, the quality of information of Canadian magazines do not necessarily and automatically fill the void. In other words, Mr. Speaker, for the statement of the Secretary of State to be of value, the minister will have to announce, and soon, a policy designed to stimulate coverage of events political and cultural, economic and social in Canada, instead of leaving it exclusively to magazines, solely on their initiative and with the meagre available financial resources, to do so.
On the other hand, Mr. Speaker, at a time when in Canada we suffer from an inflation psychosis, which the government seems totally unable to check or to fight off, even in its own will, in his statement the minister forgot to justify or to clarify the fate now reserved to present employees of Reader's Digest and Time.
Even though I am pleased that the Canadian integrity and broadcasting industry are protected by the source of information and programs with regard to Americans, that does not mean that we must turn the page and forget about the plight awaiting the hundreds and thousands of employees currently working for Reader's Digest and Time.
Mr. Speaker, it seems to me that the Secretary of State, while promoting a feeling of nationalism acceptable at the Canadian level, should also give this House some guarantee or help in order that those who worked dedicatedly in the publishing sector, in those magazines which, after all, are of international quality, be assured of a job on the American market without undue delay.


That is why I find that the great weakness in the minister's statement is to say that Reader's Digest and Time might be removed from the Canadian market and replaced, as he said on page 2 of his statement, by a single Canadian information magazine.
It seems to me, Mr. Speaker, that there are in Canada several means of expression. There are several ideologies, and the government should give it further emphasis by setting up a typically Canadian policy in the field of publishing, in order that not only the opinions of Liberal and Conservative parties be expressed in those big magazines, but also the views of Social Crediters and NDP's.

[English] '


TRANSPORT
Right Hon. J. G. Diefenbaker (Prince Albert):: Mr. Speaker, I rise under the provisions of Standing Order 43 on a matter of immediate, urgent and pressing necessity and request consent of the House to move a motion, seconded by the hon. member for Saskatoon-Biggar (Mr. Hnatyshyn):
That this House do consider the stand to be taken by counsel for the government of Canada on the hearing of the appeal by the CPR beginning tomorrow in the federal court against the order made by the Canadian Transport Commission, whereby 15 per cent of the 30 per cent increase in freight rates asked by the railway companies was allowed, with the balance of 15 per cent being held in abeyance for sixty days, and furthermore to secure the assurance that counsel appointed by the Minister of Justice shall not again take the unwarranted and irregular course of choosing to fight the provinces on the issue by giving their support as they did to the application of the CPR for leave to appeal the order of the Canadian Transport Commission.


Mr. Speaker:: Order, please. The House has heard the terms of the motion being proposed pursuant to Standing Order 43. It cannot be debated without the unanimous consent of the House. Is there unanimous consent?


Some hon. Members:: Agreed.


Some hon. Members:: No.


Mr. Speaker:: There not being unanimous consent, the motion cannot be debated at this time.


John George Diefenbaker: It is the Liberal members who once again said no.


PROPOSED AUCTION BY PRIME MINISTER OF CERTAIN
Mr. Tom Cossitt (Leeds):: Mr. Speaker, I rise to ask permission of the House to move-


Some hon. Members:: No.
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Thomas Charles Cossitt: -the following motion, seconded by the hon. member for Red Deer (Mr. Towers):
In view of the urgent and pressing necessity for the government to show restraint by curtailing government expenses in the fight against the galloping cost of living, the House requests the Prime Minister to set an immediate example to the Canadian people by holding an auction sale on Parliament Hill to dispose of many lavish and luxurious items of paraphernalia acquired by him at public expense including Cadillac cars, Hepplewhite consoles and suede covered chesterfields.


Some hon. Members:: Oh, oh!


Mr. Speaker:: Order, please. Regrettably, I cannot accept the matter proposed by the hon. member as containing sufficient urgency or pressing necessity to qualify under the Standing Order.


HEALTH AND WELFARE
Mr. Bob Brisco (Kootenay West):: Mr. Speaker, I rise under the provisions of Standing Order 43 on a matter of urgent and pressing necessity, namely the embarrassing position in which two women members of this House have been placed by being associated with a sexist Minister of Health and Welfare (Mr. Lalonde) whose office, and I quote, "is full of surrogate wives". I move, seconded by the member for Saskatoon-Biggar (Mr. Hnatyshyn):
That the Minister of National Health and Welfare be instructed to withdraw the "Why-Not" buttons and to reduce his complement of surrogate wives to give equal opportunity to men in his office.


Some hon. Members:: Hear, hear!


Mr. Speaker:: Order, please. While the hon. member has certainly raised a matter of great interest and great importance, it is difficult for the Chair to appreciate the urgent and pressing necessity of the action contemplated in the motion. Accordingly, the motion will not be put.



ORAL QUESTION PERIOD


Hon. Robert L. Stanfield (Leader of the Opposition):: Mr. Speaker, I should like to ask a question of the Minister of Transport.
Could the minister explain the statement he made yesterday that the government has no overall transportation policy and that the situation is even worse than we on this side of the House had thought. Is the minister suggesting that he cannot answer to the House and the country for the present transportation situation and that the govern-
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ment has no overall approach on which to base its decisions at this time?


Hon. Jean Marchand (Minister of Transport):: Mr. Speaker, I am ready to repeat the statement I made yesterday. I believe that since Confederation, the Canadian government in general has never had any overall transportation policy, that is a policy covering rail, truck, water and air transportation. Taking into account the Crown corporations, namely the CNR, Air Canada, the Northern Transportation Company, very important things have been done and extremely important developments have occurred even under Progressive Conservative administrations, but all this has never been integrated.
There is no overall policy since part of the jurisdiction belongs to the CTC. No one in particular is responsible for this situation. It is due to the normal development of transportation. There have been situations such as the one Westerners are complaining about. They say, for instance, that it costs more to send a ton of steel to Calgary than to Vancouver. There are some inconsistencies, in the Mari-times, for instance, where Stanfield products are more expensive in Halifax than in Toronto. There has never been an overall policy. The problem of distance affects pricing.
I did not say that there was no policy in the field of transportation. I said that there was no overall policy and that we would work at it and that we hope to be able to make one public as soon as possible.


Robert Lorne Stanfield: A supplementary question, Mr. Speaker. I want to assure my hon. friend the minister that I think we will probably be able to market Stanfield's despite the mess we are in. I want to ask the minister this question. He has just made what seems to me an extraordinary statement respecting the transportation policy of a government that has been in power for ten years, namely that we are now in the position where we have no overall transportation policy in this country. We are now in the position that the government cannot make any decisions, does not know what decisions to make; only the CTC can make decisions based on legislation which the minister has said is inappropriate. Is that the situation we are actually in in this country?


Jean Marchand: Mr. Speaker, I have too much respect for the intelligence of the Leader of the Opposition to say such a thing. I did not say there was no policy, on the contrary. There is one. I said that the means of transportation had not been integrated. I am not surprised that in 1950 or 1960, container shipping had not been provided for. I am not surprised that what we call unit trains had not been provided for either, although this has caused the development of the Halifax harbour where may lay ships of 200 to 300,000 tons.
Nobody had foreseen that, and it is really a revolution in the shipping field. It is, therefore, a matter of integration of all shipping facilities in order that we may take the most advantageous course for all Canadians. It is a very complex matter and I hope that we may be able to offer 
very soon new ideas to the House. I am not criticizing the entire past since 1867; there has never been a global transport policy in Canada.


Robert Lorne Stanfield: A final supplementary question, Mr. Speaker. When the minister speaks about no one foreseeing this and no one foreseeing that, did not he and his leader, the Prime Minister, foresee that they were talking through their hats during the election campaign when they made all these fancy promises? When will the minister put before this House, let alone before the government, all these solutions that the Prime Minister and he talked about during the campaign? When is the minister going to put a policy before the country instead of simply talking about things being in a mess that no one foresaw? He seemed to have plenty of foresight during the election campaign.


Jean Marchand: Mr. Speaker, we have done a lot in the last year. I do not think that such complex problems will be solved by screaming. We are seriously discussing them with the western provinces and they are also aware of the very great difficulty of transportation, especially with regard to railways facilities for instance.
We have discussed with Ontario the whole question of urban and suburban transport. We have looked into it with the province of Quebec. We have started another inquiry with the Maritimes. All this takes a lot of time. I know that the opposition has already planned something and entertains forward-looking ideas. I think they are meanly depriving Canada of enlightened ideas by keeping quiet on such an important matter.


BASIS FOR DECISION IN VIEW OF ALLEGED LACK OF POLICY
Mr. Jack Murta (Lisgar):: Mr. Speaker, I should like to direct a supplementary question to the Minister of Transport. Since the minister has stated that there is no overall transportation policy, I should like to ask him on what basis he made the decision to embark upon a $1 billion airport program, to provide freight rate equalization for livestock producers, which was recommended by the minister responsible for the Wheat Board, and finally to freeze freight rates and then remove the freeze? If we have no basic overall policy, can the minister tell the House on what grounds he made the decisions that are being implemented at the present time?


Jean Marchand: Mr. Speaker, I think the decisions in the field of transportation were made as honestly as possible by all succeeding governments in Canada. On the matter of airports, inquiries might be made of Mr. Hellyer, a former Progressive Conservative member who decided to build the Pickering airport in the Toronto area. He could also be asked why he made that recommendation to cabinet. As for the price freeze, Mr. Speaker, I said yesterday why we had not extended it. I know that annoys opposition members because they have nothing to do except criticize a complex


situation for which they have no solution to offer. Therefore, they need not reason but simply holler.
In any event, Mr. Speaker, I said yesterday why we had lifted the partial price freeze. It created considerable disparities in the railway rates, an unjust situation for trucking companies and furthermore, since we had undertaken to compensate railway losses, it would mean that all Canadians would be burdened with the accumulated deficits we would pay.
We believe it would be better to find a formula through which we will readjust all railway rates as required.


BASIS FOR INTERVENTION OF JUSTICE DEPARTMENT IN FREIGHT RATE INCREASE CASE
Jack Burnett Murta: Mr. Speaker, may I direct a final supplementary question to the Minister of Justice in his capacity as Attorney General. Would the minister inform the House at this time as to the grounds upon which he intervened in the proceedings before the Federal Court of Appeal concerning the Canadian Transport Commission ruling on the freight rate increase?


Hon. Otto E. Lang (Minister of Justice):: Mr. Speaker, a full statement of the grounds of our intervention is available from the Court, and members who are interested I am sure can see it there, or I can supply them with an extra copy of it. The specific questions before the Court, ones important enough to require fairly early resolution by that body, include whether the Canadian Transport Commission has the power to make the particular order that they did make, including certain directions in the negotiations between the railways and the provincial governments under the statute. These are important questions and ones that we certainly want resolved. It is also important to consider whether or not a different form of order might have been possible. This question is also before the Court.


PRIME MINISTER'S OFFICE
Mr. Edward Broadbent (Oshawa-Whitby):: Mr. Speaker, I had two questions concerning International Women's Year, but since neither of the ministers principally involved in this area of policy is in the House I will direct other questions on another important matter to the Prime Minister. My questions concern the private advisory group on economic matters in the Prime Minister's office. I should like to ask the Prime Minister whether, in addition to the names of those working under the direction of Mr. Jack Austin which have been provided, he would provide the House with the name of the commercial banker on his advisory group, the names of business executives who are providing him with this private advice, and would he also inform the House of the names of the companies for which they are working?


Right Hon. P. E. Trudeau (Prime Minister):: Mr. Speaker, I will gladly take notice of that question. There
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seem to be implications in it of which I am unaware. I know of no banker or manager of companies working on my staff or under contract, but I will gladly look into the question and see whether I can provide an answer.


POSSIBLE ACCESS OF ECONOMIC ADVISORY GROUP TO BUDGETARY INFORMATION
John Edward Broadbent: A supplementary question, Mr. Speaker. While the Prime Minister is looking into the matter, would he also check and find out whether such individuals are providing advice to him directly or indirectly on budgetary and other financial matters? In anticipation of our obtaining further names than those we already know, I should like to ask the Prime Minister this question. Did this group specifically have access to information about the budget before it was brought in last fall and, if so, what kind of information?


Pierre Elliott Trudeau: The
answer is no, Mr. Speaker.


John Edward Broadbent: Mr. Speaker, when the Prime Minister is checking into the names of the people in this group will he also provide the House with information as to whether the government pays any of the expenses for these men or women to come to Ottawa to attend the meetings that presumably have taken place, and will continue to take place, on the grounds that they are having an input to the Prime Minister's office? If they are being paid in any way by the taxpayers of Canada the people have a right to know.


Pierre Elliott Trudeau: Mr. Speaker, I understand it is on this basis that the hon. member asked his question and I said I would look into it.


MONTREAL OLYMPICS, 1976-PARTICIPATION OF FEDERAL GOVERNMENT IN PROJECT
André-Gilles Fortin: Mr. Speaker, I would like to put a question to the right hon. Prime Minister.
After his very recent statement concerning the Canadian government's position on the financing of the Olympic games, can he tell the House if the government took part directly or indirectly in the development of the project itself, in the assessment of costs and in a study of the projected profits or deficits? Can the right hon. Prime Minister also inform the House whether the government has been for a certain time, or is now represented at the level of the supervising of the implementation of the preliminary works for the Olympic games and, finally, is the Canadian government assured that the province of Quebec has guaranteed the financing of a deficit, if there is one?


Pierre Elliott Trudeau: Mr. Speaker, having regard to the first part of the question, I
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would like to say to the hon. member and to the House that before introducing in the House the bill which has been supported by hon. members from all parties, a bill providing for certain self-financing methods relating to postage stamps, lottery and coins, surely at that time the Canadian government had given general consideration to the projects of the Olympic games, and had tried to reach by itself to a cost estimate to know whether the selffinancing projects were realistic.
Having regard to the third part of the question, Mr. Speaker, the facts speak for themselves too. I have tabled in the House a copy of the correspondence between Premier Bourassa and Mayor Drapeau which clearly stated that the federal government would not be held responsible for the deficits incurred by those two authorities. I forget, Mr. Speaker, what was the second part of the question; perhaps the hon. member would like to put it again.


André-Gilles Fortin: Mr. Speaker, I now rise as a Quebecer, and mainly as a Canadian, on the occasion of a Contemporary Research Center Limited survey indicating that 81 per cent of Canadians believe the federal government should take part in the financing of the Olympic Games, 84 per cent believe the games are an asset to Canada, and 67 per cent of Canadians are willing to contribute to their financial success.
The right hon. Prime Minister indicated the federal government is already contributing in some way. However, there is now extreme concern in Quebec about the possibility of the overall financing of the games, and especially about the completion of the work on schedule.
Would the right hon. Prime Minister be ready to table copies of studies that have been made, and also to give, together with an estimation of the cost, the assurance that these international games on account of which Montreal's reputation might be compromised internationally, and since the obligation there is not strictly that of Quebec or Montreal but of Canadians as a whole, would the Prime Minister assuYe Canadians that these games will not be the occasion of shame before the whole world but rather of success and joy for every young Canadian with a faith in sport in our country?


Pierre Elliott Trudeau: Mr. Speaker, the federal government and myself have said on numerous occasions we hoped the games will be held, and indicated we believed it was an excellent opportunity for all sorts of reasons on the national and international level. I cannot but agree with a good deal of what the hon. member just said. As far as participation by the federal government is concerned the hon. member knows that this House, and I repeat all parties in this House fell in agreement to vote bills that ensure not only maximum participation, but that also cover the major part of the cost of the Olympic Games. Clearly the Canadian people, and especially those interested in the Olympiads must know, they must remember it is because of a federal bill passed by all the parties that the games could be considered as a possibility.


Mr. Lambert (Edmonton West):: No, no.


Pierre Elliott Trudeau: I see that the hon. member for Edmonton West (Mr. Lambert) has a supplementary, but if he allows

me to answer this one I shall listen to his supplementary, supposing of course he has something to express.
As to the last part of the question, it is hypothetical. I do not see why the hon. member takes the trouble to plead in favour of federal assistance since neither the premier of Quebec nor Mayor Drapeau asked me for further assistance. I think they realize perfectly well the very big part the Canadian government and Parliament took in these games.


ADMINISTRATION OF JUSTICE
John George Diefenbaker: Mr. Speaker, my question is directed to the Minister of Justice. Having regard to the fact that the appeal of the CPR will come before the Federal Court tomorrow, I should like the minister's assurance in respect of the stand to be taken by counsel, appointed by the government or by himself, who at a hearing of the question as to whether leave should be granted took a stand in favour of granting the right to appeal, a stand that was criticized as unwarranted by Mr. Gordon Blair, a former member of this House and counsel. I would ask what stand these counsel are going to take tomorrow. Are they going to join in doing their part again, contrary to every rule of the courts of our country, to permit the crucifixion of the economy of the west, the western farmers and the consumers by the double-cross of expediency, supported by the government, in doing that which is contrary to the agreement of the 1973 Western Economic Opportunities Conference?


Otto Emil Lang: Mr. Speaker, the counsel will be making it very clear that they are in no way taking a side in respect of a particular level of rates, but rather dealing with the specific question of the power of the CTC which, under current legislation, is really rather limited. The real salvation of the interests of western Canada will come when the Minister of Transport develops and puts into place the major policy on transportation.


Some hon. Members:: Hear, hear!


John George Diefenbaker: Mr. Speaker, we in Saskatchewan look to the minister to endeavour on occasion to protect the rights of the west. Is it not about time that he did something along those lines? I would ask whether he will assure that the representatives of the government, the counsel, will speak for western Canada and not for the CPR? Will the minister not now realize that he represents the province of Saskatchewan and western Canada, yet in every case recently he has turned his back on western Canada?


Some hon. Members:: Hear, hear!


Otto Emil Lang: Mr. Speaker, the people of Saskatchewan and of the west know very well that they can count on this minister.


An Kon. Member: They can count on you to upset everything.


Some hon. Members:: Hear, hear!


An hon. Member:: What a joke!


Otto Emil Lang: They will also see from this government some important action on this subject on which all they got from the right hon. gentleman was a seven year royal commission.


Some hon. Members:: Oh, oh!


John George Diefenbaker: This government waited seven years before doing anything, and today it produces the minister of transport as the hope eternal for western Canada clad in a leather jacket, apparently afraid of the freeze.


TRANSPORT
Hon. George Hees (Prince Edward-Hastings):: Mr. Speaker, I have a question for the Minister of Transport regarding his answer to the Leader of the Opposition earlier which expressed the great need for a clear, concise, well directed transportation policy.


An hon. Member:: Question.


Mr. Speaker:: Order, please.


George Harris Hees: Mr. Speaker, obviously the natives are restless. My question is as follows: Is the government considering disbanding The Canadian Transport Commission, because this provides a divided jurisdiction within the department which makes it impossible for the minister to carry out the job that he has to do, and is he considering, by bringing back the operations now under the Canadian Transport Commission, giving the government the direction of these matters once again and thereby bringing order out of chaos?


Jean Marchand: Mr. Speaker, I do not exactly know what the government will decide.


Some hon. Members:: Oh, oh!


Jean Marchand: We on this side of the House are ordinary human beings. We have to think before we do something.


Some hon. Members:: Oh, oh!


Jean Marchand: The matter is under review. There is no doubt that there should be better coordination between the regulatory body, the CTC, and the Department of Transport.


George Harris Hees: Mr. Speaker, as one ordinary person to another-
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Some hon. Members:: Oh, oh!


George Harris Hees: -may I honestly and sincerely suggest to the minister, as one who had to do the job he is trying to do now, that the only way he can do his job is by disbanding the CTC and doing it fast.


DATE OF PUBLICATION OF RAILWAYS' COSTING FIGURES
Mr. Frank Hamilton (Swift Current-Maple Creek):: Mr. Speaker, my question is for the Minister of Transport. In view of the very large subsidies paid to the railways, can the minister indicate when the costing figures will be made public?


Jean Marchand: Mr. Speaker, maybe the hon. member was not here when we tabled a bill providing us with the legal power to require that the railway companies divulge their freight rates ana tne oasis ot such rates. It will be possible to reveal both confidentially to all provinces willing to know why some rates have been increased to the present level. Later, we will introduce in the House a general bill requiring that almost all freight carriers in Canada release all information we need to elaborate logical transport policies.
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IMMIGRATION
Marcel Joseph Aimé Lambert: Mr. Speaker, my question is for the Minister of Manpower and Immigration. Would he advise the House whether he has formulated a decision, or the cabinet has reached any decision, following a reported comment by his colleague, the Minister of National Health and Welfare, concerning some rather backward and restrictive views of the Minister of National Health and Welfare concerning the admission to and allocation in Canada of foreign doctors, and has he devised any system of control of foreign students with regard to their further studies in medicine? Does he propose to police any such restrictive policy in the years following their admission, or will they be subject to the sword of Damocles of eventual deportation?


Hon. Robert K. Andras (Minister of Manpower and Immigration):: With regard to the entry of medical doctors, which was the subject of discussion by the provincial health ministers with my colleague, I have agreed with the position they have taken to the extent that where it is identified that the demand for the services of doctors is low and the occupational forecasting guide is being used as part of the process of determining their access to Canada, then we will recognize that low demand as we would for any other occupation. However, we would temper this by the recognition that there may be local designated vacancies, and this would require regional measures. There are certainly areas in this country where obviously medical doctors and services are still required,


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so I will be guided by the advice of the provincial governments in terms of the demand. I think we will lean more towards dealing with this matter on the basis of local demand than on the occupational demand system.
With regard to the access of foreign students to Canada, I do believe that the question of space for foreign students in our universities is very much a provincial matter. I have written to the provincial ministers to ask them to verify, or help find a better way of verifying, the legitimacy of spaces given to foreign students because I do not like to see the immigration law used as a method of controlling matters under provincial jurisdiction.


Marcel Joseph Aimé Lambert: Would the minister advise the House how he and those people who support this restrictive and backward step in so far as medical services in Canada are concerned, intend to police the continuation of practice by a foreign doctor in any particular area? Will it be by the sanction of potential deportation, or just how do he and his colleague, as well as some of the provincial ministers who, frankly, have not thought out this problem, intend to see it carried out? Is this not just some more hot air?


Robert Knight Andras: In so far as my activity is concerned with regard to this matter, it will be strictly limited to the question of deciding, on the advice of provincial governments and other assessments about the demand for this kind of skill, as to the access to Canada of people applying. We would have no part, nor could we have any part of the ongoing requirement, by whatever method it was administered, whether a doctor stays in a certain place would have to be decided purely by the provincial authorities on the basis of provincial licensing and regulation.


Marcel Joseph Aimé Lambert: With your connivance! This is terrible.


AIRPORTS
Mr. Francis Fox (Argenteuil-Deux-Montagnes):: Mr. Speaker, I want to put a question to the Minister of Public Works.
Since there are still over a hundred farmers at Ste. Scholastique whose expropriation cases have not yet been settled, can the Minister of Public Works say to the House whether he intends to accept the recommendations of the conciliation board as made at the end of December at the request of the expropriated, and settle all cases outstanding according to the recommendations made by the board?


Hon. C. M. Drury (Minister of Public Works):: Mr. Speaker, the government already accepted the report of the conciliation board, it continues to do so and is seeking approval of the report by the selected typical owner so an inquiry can be made into that.
We are first seeking to have it accepted and have all other cases accepted in a similar way.

We feel this is a fair and generous settlement, and if it is not accepted we should call upon the courts of justice.


ENVIRONMENTAL AFFAIRS
Mr. Wally Firth (Northwest Territories):: Mr. Speaker, in the absence of the Minister of National Health and Welfare may I direct a question to the Minister of Environment. This question arises out of a report made public recently concerning a situation which could be dangerous to the health of the citizens of Yellowknife. This concerns arsenic pollution in the air, land, and water. In view of the fact that the government has known of the situation for at least nine years, what is the government prepared to do now about that situation?


An hon. Member:: Royal commission.


Hon. Jeanne Sauve (Minister of the Environment):: Mr. Speaker, as soon as the danger was made known to us, the Department of National Health and Welfare stepped up its analysis of the water that had been contaminated. The Department of National Health and Welfare does of course have the responsibility of establishing whether that water is harmful to health. There has not been any evidence that there is a relationship of cause and effect in the deaths of the two persons who allegedly consumed some of that water, and the contamination of the water, but that is being looked into. In Environment Canada, we are stepping up our programs and reviewing them completely in view of all the reports that are coming out about contaminated water. We are trying to link ourselves as efficiently as possible with the research which is going on throughout the world because of the new dangers that are being reported to us.


AIRPORTS
Mr. John Reynolds (Burnaby-Richmond-Delta):: Mr. Speaker, I have a question for the Minister of Transport. In view of the fact that the government expropriated citizens' land on Sea Island for the expansion of the Vancouver international airport, and in view of the fact that the courts have ruled that the government cannot take possession of those homes and move the people out of them until they have proved the need for the land, can the minister advise whether his department has estimated how much delay this will cause to the expansion of the Vancouver international airport?


Jean Marchand: The part of the question relating to expropriation should be referred to the Minister of Public Works.


John Douglas Reynolds: Mr. Speaker, my question had nothing to do with the expropriation. I was asking the Minister of Transport whether his department had advised him how much delay this court order will cause to the expansion of the Vancouver airport. The courts have said that the people do not have to leave the land because the government has no need for it. Can the minister tell the House how long the expansion of the Vancouver international airport will be delayed by this?


Jean Marchand: I am not in a position at this moment to say what the delay is going to be, but I hope to be able to do so in a very short time.


COPYRIGHT ACT
Mr.  R. Gordon L. Fairweather@Fundy-Royal: I have a question for the Minister of Consumer and Corporate Affairs. I wonder if the minister is proposing to introduce on an urgent basis an amendment to the Copyright Act which would provide essential protection against importing American editions of books by Canadian authors, and on which these Canadians do not now receive a royalty. The situation, if I may editorialize, seems to me ethically and morally reprehensible and should be stopped by the government.


Hon. Andre Ouellet (Minister of Consumer and Corporate Affairs):: I am well aware of that matter, Mr. Speaker. I discussed different avenues open to the government with my colleague the Secretary of State. Later tomorrow there would be talks with those concerned to see what can be done not only to improve that legislation but also to protect the interests of Canadians.


REQUEST FOR AID TO SUBSIDIARIES OF UNITED STATES COMPANIES IN SEEKING EXPORT MARKETS
Mr. Alan Martin (Scarborough West):: My question is addressed to the Minister of Industry, Trade and Commerce. In view of the minister's strong record in the area of encouraging Canadian manufacturers to seek new and expanded export markets, and bearing in mind the difficulties, and perhaps even disincentives, that appear to exist at the present time for heads of Canadian manufacturing subsidiaries of U.S. parent companies to seek such export markets in those countries that do not enjoy friendly relations with the U.S.A., will the minister continue to pursue methods of eliminating this potential trading barrier rather than waiting for proclamation into law
Oral Questions
of Bill C-2, a process that could conceivably extend over a period of several weeks or perhaps even months?
Mr. flees: You had belter sharpen up those questions, Alastair.


Hon. Alastair Gillespie (Minister of Industry, Trade and Commerce):: Yes, Mr. Speaker.


Mr. Speaker:: I thought the answer might be in the affirmative The hon. membei fur-Richmond.


ADMINISTRATION OF JUSTICE
Mr. Leonel Beaudoin (Richmond):: Mr. Speaker, since the Solicitor General is not in his seat, I would like to direct my question to the Prime Minister.
Considering the sharp increase in the number of assaults and crimes and murders we have been witnessing since the beginning of 1975 throughout Canada and especially in Montreal, does the government consider bringing to the attention of the Parliament of Canada that section of the Criminal Code which deals with the death penalty, and if so, could the Prime Minister tell us if that will be done shortly and if the government proposes to put that question to the House as regard singular or principal offences?


Pierre Elliott Trudeau: Generally speaking, Mr. Speaker, I would not say so, but I remind the House that the opposition parties are entitled to a certain number of days and that if they want to debate that matter the government obviously will have no objection.


CONSUMER AFFAIRS
Mr. Allan Lawrence (Northumberland-Durham):: Mr. Speaker, my question is to the Minister of Energy, Mines and Resources. I wonder if he could tell the House if within his department, or for that matter even within the government, there has been a study contrasting the mileage performance in Canadian automobiles of non leaded gasoline as compared to leaded gasoline.
Hon. Donald S. Macdonald (Minister of Energy, Mines and Resources). Mr. Speaker, I would have to consult with my colleague the Minister of Transport on that, and to see if within the department that has been studied.


Allan Frederick Lawrence: I would like then to ask a similar question of the Minister of Consumer and Corporate Affairs. Is he aware within government whether there has been an evaluation study, especially in respect of misleading advertising, for instance, in comparing performance of leaded versus non-leaded gasoline?


Oral Questions


André Ouellet: Mr. Speaker, I will take notice of that question.


EXTERNAL AFFAIRS
Mr. Claude Wagner (Saint-Hyacinthe):: Mr. Speaker, in the absence of the Secretary of State for External Affairs, I will direct my question to the head of the government.
Considering the reservations expressed by the Minister of Finance about the contemplated CIDA loan to Cuba, could the Prime Minister inform the House whether the government intend to agree to that loan and if they contemplate asking CIDA to review its loan policy?


Hon. Mitchell Sharp (Acting Secretary of State for External Affairs):: Mr. Speaker, as the Acting Secretary of State for External Affairs I would like to take notice of the question.


ALLEGATION CIDA ATTEMPTING TO BOLSTER ITS CASE FOR MORE FUNDS
Claude Wagner: A supplementary question, Mr. Speaker. The first question related to government policy, and I thought that it should receive an answer from the Prime Minister. My second question is also addressed to the Prime Minister and is as follows: is the Prime Minister willing to ask his Secretary of State for External Affairs to make a full statement to the House concerning the alleged attempts by CIDA to spend $117 million before the end of the fiscal year to bolster its case for more funds?


Mitchell William Sharp: Mr. Speaker, if I may be permitted to answer this question, too, I would draw the attention of the hon. member to the answer that was given by the Secretary of State for External Affairs yesterday when he said that he hoped that the standing committee would look at the estimates of CIDA and their expenditures, either a general reference to the report or on the estimates.


ROYAL CANADIAN MINT
Mr. Walter Baker (Grenville-Carleton):: Mr. Speaker, I would like to direct a question to the Minister of Supply and Services. Is the minister in a position to advise the House what, if any, steps he may be taking to reopen and continue the negotiations which have broken down between the management of the Royal Canadian Mint and the mint employees, members of the Public Service Alliance of Canada?


Hon. Jean-Pierre Goyer (Minister of Supply and Services):: Mr. Speaker, there has been no change in the mediator's role since last week.


Walter David Baker: A supplementary question. I take it that the minister is not aware of the fact that despite the suggestion-


Some hon. Members:: Order.


Some hon. Members:: Question.


Walter David Baker: -by the mediator Mr. Bartenbach, which was designed to continue those negotiations and to which the PSAC employees have agreed, that the officials of the mint have not agreed to those reasonable suggestions and that negotiations-


Some hon. Members:: Order, order.


Walter David Baker: -have in fact broken down. What is this minister going to do about it?


Mr. Speaker:: Order, please. The hon. member for Wellington-Grey-Dufferin-Waterloo.


ALLEGED SECRECY IN RECALL OF DEFECTIVE BIRTH CONTROL PILLS-GOVERNMENT ACTION
Mr. Perrin Beatty (Wellington-Grey-Dufferin-Water-loo):: Mr. Speaker, my question is for the Prime Minister, and I believe it is timely after the discussion yesterday respecting the rights of women in Canada. My question arises from the recent revelation that the recall of some two million defective birth control pills two years ago was done in secret-


Some hon. Members:: Oh, oh!


Henry Perrin Beatty: Apparently some members on the other side think an insulting advertising campaign is the answer to the complaints of women. My question arises from the fact that the recall of two million birth control pills two years ago was done in secret because the government felt no health threat was posed to women, that they would simply get pregnant.


Some hon. Members:: Oh, oh!


An hon. Member:: "Why not?"


An hon. Member:: So what!


Henry Perrin Beatty: Has the Prime Minister instructed the Minister of National Health and Welfare and officials of the Department of National Health and Welfare in no uncertain terms that he finds their secrecy reprehensible and that he will not stand for this sort of action to be repeated?


Mr. Speaker:: Order, please, the hon. member for Sault Ste. Marie.


FINANCE
Reginald Cyril Symes: Mr. Speaker, my question is directed to the Minister of Finance. Has the minister indicated, either formally or informally to any of the Syncrude partners that he is considering or prepared to grant Syncrude special tax concessions or to exempt the company from the resource tax measures in the November budget?


An hon. Member:: Agreement has already been reached.


Hon. John N. Turner (Minister of Finance):: Mr. Speaker, prior to both budgets, the one that was defeated in the former parliament and the one presented on November 18, I had conferred with my colleague the Minister of Energy, Mines and Resources that the regime entered into with Alberta and the Syncrude consortium would be exempt from those budgetary provisions.


NATIONAL DEFENCE
Mr. Steven E. Paproski (Edmonton Centre):: Mr. Speaker, my question is for the Minister of National Defence. In view of the minister's newly announced plan to establish an Air Command headquarters, can the minister now advise the House whether there will be a compensating reduction in the strength of National Defence headquarters? In view of the fact that Edmonton is being proposed as the new Air Command headquarters, can the minister advise the House approximately how many persons of all ranks he visualizes at Air Command headquarters and when he plans to make the announcement of the transfer of the new unit to Edmonton?


Hon. James Richardson (Minister of National Defence):: Mr. Speaker, there will be savings in numbers of personnel as a result of the consolidation of Air Transport Command and Air Defence Command into the new Air Command. The location for the command is being determined in light of the best interests of the armed forces and on the advice of the Chief of the Defence Staff, and his senior air officers.


Mr. Speaker:: Order, please. Orders of the day.


BUSINESS OF THE HOUSE
Walter David Baker: Mr. Speaker, I wonder if I might ask the government House Leader to specify the
Customs Tariff
business of the House for tomorrow and Monday and the plans for next week?


Mitchell William Sharp: Mr. Speaker, we will proceed this afternoon with the debate on Bill C-39, the "customs" tariff. This will be followed by Bill C-40, the excise tax bill which is in committee of the whole. If that is completed before Monday, we will proceed to Bill C-49, the amendments to the Income Tax Act. On Monday, the Minister of Finance (Mr. Turner) will be absent on government business, so I intend to call Bill C-46 on housing which may also be the subject of business on Wednesday. There may be some other bills on which we could make progress at various stages. I should like to talk to House Leaders about that later.


Mr. Knowles (Winnipeg North Centre):: Mr. Speaker, with respect to business of the House and in view of the reference made today by the Minister of Transport (Mr. Marchand) to Bill C-48, which has to do with disclosure of certain information by the railways, will the government consider bringing that bill before the House at an early date? Perhaps an agreement can be made to deal with it quickly. Would the minister also consult with the Minister of Veterans Affairs (Mr. MacDonald) concerning the possibility of an early reference of the Hermann report to the Standing Committee on Veterans Affairs.


Mitchell William Sharp: Mr. Speaker, I can assure the hon. member for Winnipeg North Centre (Mr. Knowles) that the government would be very happy to proceed with Bill C-48 as long as there is some understanding that it can be dealt with speedily on second reading so that it can get into committee. The other measures I have spoken of are very urgent also.


Mr. Marshall:: Mr. Speaker, I wonder if the government House Leader could indicate if there is any intention on the part of the government to introduce, as promised by the Minister for Veterans Affairs (Mr. MacDonald) and the Minister of State for Urban Affairs (Mr. Danson), a bill concerning veterans' housing, since this was not mentioned?


Mitchell William Sharp: Mr. Speaker, I will inquire of my colleagues.


Mr. Speaker:: Orders of the day.



GOVERNMENT ORDERS


[Stage Direction]
The House resumed, from Wednesday, January 22, consideration in committee of Bill C-39, to amend the Customs Tariff (No. 2)-Mr. Turner (Ottawa-Carleton)-Mr. Laniel in the chair.
The Chairman:: When the committee rose last evening schedule I was allowed to stand. It is not clear whether the committee had completed examination of schedule II. The parliamentary secretary stood up to answer a question on


Customs Tariff
schedule II, although it would seem the schedule had already been carried.


Mr. Cullen:: Yes, Mr. Chairman, schedule II was carried. Reference had been made to one of the items by the hon. member for Dauphin and I undertook to have a comment made on it today or at least bring it to the attention of the minister. But schedule II was carried.


Gérald Laniel: The committee will now revert to consideration of schedule I. Shall schedule I carry?
On clause 1-Schedule A amended.


Marcel Joseph Aimé Lambert: On a point of order, Mr. Chairman, I think it is apparent from the record that schedule I and clause 1 were stood in order to permit the government to give an explanation pertaining to item 87500-1 and to tell the committee why this particular course is being followed. The government is following an unusual type of procedure whereby commodities under a particular item can be designated by order in council. This is a new point and one with which I am not satisfied.


John Napier Turner: Mr. Chairman, I thank the committee for allowing this bill to make considerable progress yesterday, and I thank my parliamentary secretary for handling it so skillfully before the committee. From reading Hansard, I gather that the hon. member for Edmonton West is concerned about what he terms a dangerous precedent in that the tariff item to which he referred would delegate some tariff legislative authority to the government which should be reserved for parliament. I think the hon. gentleman knows me well enough to know that I share with him a jealous regard for the legislative supremacy of parliament, and that delegation beyond proper parameters should be carefully scrutinized by the House and the committee. Perhaps I could provide some background for this proposed item which will shed some explanatory light on it.
For some years, as the hon. gentleman knows, developing countries have been requesting duty free entry for their handicrafts. A number of Canadian organizations, such as OXFAM Trading Limited and the YWCA, have made similar representations in support of these countries. The definition of "handicraft" products has presented real difficulties. Since as far back as the early 1960s, GATT, the UN Conference on Trade and Development and the Customs Co-operation Council in Brussels have been trying to develop an acceptable definition for "handicrafts" which could be easily administered.
As a minimum, all these organizations are agreed that handicrafts are products which are substantially handmade and which have certain traditional or artistic characteristics which are typical of the geographic region where they are produced. For many products it may not be too difficult to agree that they are bona fide handicrafts; for example, Eskimo carvings, ivory carvings, hand-made decorative articles of ceramic or pottery. There are numerous articles which would qualify under that definition, but clearly there are numerous other articles which could meet the broad definition of "handicrafts" but which may not generally be considered handicrafts.
[The Chairman.]


Marcel Joseph Aimé Lambert: From GPT countries?


John Napier Turner: I wish to give the committee some examples. For example, one could include some jewellery made by recognized professionals, brooms and brushes, some toys, and other items.


Marcel Joseph Aimé Lambert: From GPT countries?


John Napier Turner: Yes. Many of these would be competitive with Canadian-made products. Even for those products which are generally recognized as being bona fide handicrafts, some concern has been expressed by associations representative of Canadian craftsmen to the effect that the indiscriminate duty free entry of handicrafts made under industrial processes could have a serious impact on the sale in Canada of some Canadian-made handicraft products. For these reasons I decided that a cautious approach was required. The governor in council, if the item is approved by parliament, would initially designate a short list of products which are clearly recognized as handicrafts and which would not adversely affect the sale of Canadian handicrafts. In establishing this list we would consult Canadian craftsmen organizations. We would also intend to ask developing countries to make known to us the specific handicrafts they would like to export to Canada on a duty free basis. After a careful examination of these requests, additions could be made periodically to this list as circumstances warranted.
It is for these reasons that I am asking parliament to delegate to the governor in council authority to establish the list of specific products which would be allowed duty free entry under this item. I would stress that this new authority which is being requested is not significantly different from other tariff-making authority which has been delegated by parliament in the past. In this respect, my parliamentary secretary yesterday mentioned section 273 of the Customs Act.


Marcel Joseph Aimé Lambert: Has the minister read it?


John Napier Turner: craft products; that is, according to the accepted definition they must be substantially hand-made and must have traditional or artistic characteristics which are typical of the geographical region where they are produced. Second, they must be products of developing countries entitled to the benefit of the general preferential tariff which was passed by this House last year. Third, the products must have been certified by a competent authority in the country of production as being handicraft products, and in case certifying authorities have some doubt as to what are handicraft products, the agreed definition is spelled out in the tariff item.
I hope the committee will agree that with these various limitations clearly spelled out in the tariff item itself- limitations on the discretion of government-the government is merely asking for the minimum flexibility needed to deal with a very limited area of our import trade. Where the definition is vague, a subjective interpretation is necessary. Finally, I should like to stress to the committee at this point that any order promulgated pursuant to this authority would be subject to the controls and restrictions of the Statutory Instruments Act and would clearly be reviewable by the committee and the House.


Marcel Joseph Aimé Lambert: Mr. Chairman, I am surprised at the minister's last argument: it does not even beg the question, because the minister was the one who introduced and carried through the debate on the Statutory Instruments Act. He suggested that the order in council to be made under this item shall not be one that may be subject to affirmative approval or negative approval as may be provided for in the act. Let me point out that any review by the statutory instruments committee shall not be on the merits of any question but merely on its legality. The question, then, is whether something can be done retroactively. Will it go beyond the powers contained in the act?


John Napier Turner: Or does it go beyond delegated authority.


Marcel Joseph Aimé Lambert: Will there be delegated authority to add to or subtract from any item?


John Napier Turner: One would be entitled to examine the definition.


Marcel Joseph Aimé Lambert: A matter of principle is involved here. There is a right way to do these things under the Customs Tariff. The minister referred to section 273 of the Customs Act which allows the governor in council to make certain regulations. They beg the question and frankly they are a red herring because the powers given under section 273 of the Customs Act relate to materials entering into the manufacture of Canadian articles. We understand that. That only relates to the transfer of raw materials and not in any way to the extension or reduction of the list of commodities which may appear under any item.
The minister is asking for double power in this item. Not only does he say that the commodities, by number or designation, may be changed by order in council; there is
Customs Tariff
also the usual phrase at the bottom as to quantities. The Minister of Finance has long had power under the Customs Tariff to impose quotas on a variety of goods. With that we all agree. In this particular instance the minister says "under such regulations as the minister may prescribe". That is all right. For example, the regulations shall prescribe a certificate of origin specifying that these are true handicrafts and are from a country where the general preferential tariff applies as provided for in the item.
There is the matter of Eskimo carvings coming from a country that is trying to put in substitutes. This is not from any GPT country. You have to come in with a proper handicraft, not something that is subject to an industrial manufacturing process. Places such as Hong Kong, Singapore, Japan and Taiwan cannot export to Canada, even though the quality may be very high, manufactured articles that bear resemblance to handicrafts. The regulations already provide for that. What I am against is that if this is used once, we will be asked to use it again somewhere else. The minister can protest all he wants. He is as innocent and as blameless as-


John Napier Turner: As a newborn baby.


Marcel Joseph Aimé Lambert: All right, I will make him a newborn baby, but that is a long time ago for the minister. The next budget will come along. These things have a bad habit of recurring. We will be told that the House gave approval to this provision, and we will be giving approval to it if we pass it without objection or contrary indication.
Frankly, I do not know why the minister wants the power. I can understand why he wants to encourage the production of handicrafts. We do not object to that at all. The minister may find me a little stubborn about this. However, the situation was better before he came into the House. There was a very famous, or should I say notorious, debate in 1961, a type of definition that now exists in a limited way-class or kind. The declaration of a minister of national revenue as to whether there is a sufficient quantity for it to have a determination as a class or kind should be exempt from any right of appeal. Perhaps the minister remembers that debate because he probably took advantage of the subsequent election campaign in 1962 to refer to it. I will say this, the principle is much the same. From an administrative point of view, the argument of the then minister was impeccable.


John Napier Turner: You were then
Speaker.


Marcel Joseph Aimé Lambert: No, I was the minister's parliamentary secretary and I participated in the debate. I still think that from an administrative point of view the argument at that time in favour of the amendment by the government was impeccable. The longer I have been a member-and I have been one for a few years-the more I respect the rights of parliament. Yesterday I used a phrase which the parliamentary secretary found rather intriguing; I said that every time we turn around we find that the cord is wrapped once more around our ankles. It is just a little more binding or restricting of the authority of parliament.


Customs Tariff
I am not going to argue this point until the cows come home, but I argue it as a matter of principle. I am opposed to the particular item in this form. If the minister removes the words "designated by order of the governor in council", I am with him 100 per cent. Other than that, I say no.


John Napier Turner: Mr. Chairman, I do not argue the hon. member's thesis in principle. I had a good deal of trouble with some of my colleagues at the time I brought in the Statutory Instruments Act to limit the power of delegation, and when the power of delegation was authorized by parliament, to ensure that under the Statutory Instruments Act-the hon. member and I, as well as the hon. member for Peace River and the hon. member for Fundy-Royal, had a good deal to do with it- delegation was properly exercised and did not abuse the definition or its parameters. The publicity which the Standing Committee on Statutory Instruments can focus on this element will provoke some self-discipline on the part of the government as a regulation-making authority and the exercise of that authority.
The problem I am faced with is that there is no accepted definition of "handicraft". On the one hand, I think it was parliament's view-certainly as it was reflected by the passage of the general preferential tariff last year-to accord duty free entry to some legitimate primary products and some legitimate handicrafts. At the same time, we want to ensure that this duty free entry is not abused by the countries concerned by boot-legging into Canada under the guise of its being a handicraft, a machine or industrially-fashioned process to the detriment of our own handicrafts.
Because of the difficulty of definition it is impossible to define "handicraft" with precision in the tariff. For that reason I am asking the committee to give the government authority, in negotiation, to ask the developing country to prove that it is a bona fide handicraft, and in consultation with our own handicraft industry from time to time to regulate the entry of handicrafts. If the hon. member could suggest a better way, I would be open to suggestion.


Marcel Joseph Aimé Lambert: At the risk of monopolizing the floor, I am prepared to compromise if the minister will introduce an amendment which will provide that such an order of the governor in council shall be subject to affirmative approval of the House under the Statutory Instruments Act. I can tell the minister that in Britain practically all of this kind of thing is subject to the affirmative approval of the House. It is a matter for the statutory instruments committee whether it should recommend to the House that there be affirmative approval. The minister may want to consider that point.
The world will not come to an end if the minister has to come back here on a matter, no matter whether it is a handicraft or not, on which there are negotiations. It is basically a question of what is, in effect, a legislative change, authority for which is being given, under an item in the Customs Tariff, to the government to change by order in council. I say, in a spirit of compromise, that the way is open to make it subject to affirmative approval. If the minister is in agreement, fine; otherwise I will keep arguing this matter.


Mr. Mazankowski:: Mr. Chairman, I wish to associate myself with the representations made by my colleague, the hon. member for Edmonton West, in the House yesterday on behalf of the agricultural industry. They had to do with the tariff treatment of combine cab coolers and air conditioners. Combine cab air conditioners and tractor cab air conditioners are basically the same unit.
I reiterate and re-emphasize my support of the representations put forth by the hon. member for Edmonton West, and point out to the minister and his officials a very obvious and glaring anomaly that prevails in the treatment of cab air conditioners. In effect, a cab is a cab whether it is mounted on a combine or on a tractor. These cabs are basically used for the same purpose and the same individual rides in the cab, yet we have a situation where air conditioners for tractor cabs come into the country tariff exempt whereas the tariff is applied in respect of coolers used for combine cabs. It is a simple matter but a very aggravating anomaly.
This is not a new question. Representations have been made by various people involved in the industry, and the manner in which the Department of Agriculture, the Department of Finance and the Department of National Revenue have received these representations clearly illustrates the kind of run-around that this government gives very simple anomalies. I should like to put on the record some of the exchange of correspondence which took place on this subject. I see the Minister of Finance shaking his head. If he can give me a legitimate reason why an air conditioner for a tractor cab should be tariff free, while an air conditioner for a combine cab should have a tariff applied, then I will accept it-but I very much doubt that he has ever ridden in either.


John Napier Turner: The hon. member is right.


Donald Frank Mazankowski: Then I am glad. On May 31, 1974, the Canadian Federation of Farm Equipment Dealers wrote to the Minister of Agriculture.


John Napier Turner: What date did you say?


Donald Frank Mazankowski: May 31, 1974, which is when the representations commenced.


John Napier Turner: You were pretty busy at that time, were you not?


Donald Frank Mazankowski: Probably not as busy as the minister. I noticed that the minister had someone in his constituency who kept him there close to home, and that he was running a little afraid. However, I must say we were looking forward to the minister's smiling face and to seeing him politicking out in western Canada. But to no avail; he had better things to do in his own constituency. We were really sorry about that because we always welcome his attendance in our part of the country.


John Napier Turner: I went to Calgary.


Donald Frank Mazankowski: I want to be serious, but obviously the minister does not, because I think he realizes that this


is an issue which perhaps with the stroke of a pen can be straightened out. However, in view of the bureaucratic nature of certain individuals and the propensity of people involved in government to complicate issues, this is a matter with which they are unwilling to comply.
The letter of May 31, 1974, sent to the Minister of Agriculture by the Canadian Federation of Farm Equipment Dealers draws attention to this anomaly. I should like to refer to it because I think the representations made therein have a certain amount of significance regarding the manner in which this matter has been casually looked into. It was forwarded by Mr. William Armstrong, secretary to the Canadian Federation of Farm Equipment Dealers, and reads as follows:
I am taking the liberty of writing to you to enlist your support to correct what we believe to be an obvious case of discrimination, and one which the farmer finds difficult to understand.
The problem referred to is the duty and sales tax presently charged by the Department of National Revenue, Customs and Excise, on air coolers for mounting in the cabs of combines and harvesters.
These same air coolers qualify for exemption of duty and sales tax when sold to bona fide farmers for mounting on tractors used in their farming pursuits, under certificate.
In my opinion, an error was made in establishing tariff item 40916-1 and can be easily rectified by amending this item to include accessories.
Your assistance in having this matter rectified by the Department of National Revenue will be much appreciated.
The letter was acknowledged by the office of the Minister of Agriculture on June 4, with an indication that the matter would be looked into. The minister was obviously busy in June and July, but on July 30 Mr. Armstrong reminded him of his original representation and asked whether he was going to take action upon it. Mr. Armstrong then received a reply dated July 25, 1974, signed by the Minister of Agriculture, which read as follows:
I have pursued the matter raised in your letter with my colleague, the Honourable Robert Stanbury, the Minister of National Revenue ...
That is a "has been".
. . . and he has advised me that air coolers are classified under tariff item 42700-1 at 15 per cent ad valorem, most-favoured-nation tariff and also are subject to the federal sales tax of 12 per cent calculated on the duty paid value.
Your suggestion that the amending of tariff item 40916-1 to include accessories could solve the problem has been noted. However, as you may be aware, amendments to the Customs Tariff come under the purview of the Department of Finance. Your suggestion has therefore been forwarded to the Honourable John Turner, Minister of Finance, for his consideration.
Then on August 26 another letter signed by the Minister of Agriculture was sent to Mr. Armstrong indicating that "such amendments are considered during budget preparations, and Mr. Turner has assured me your representations will be carefully reviewed at the appropriate time". I do not know whether the Minister of Finance will still be around at the time of the next budget; he may have taken off for more lucrative fields and challenges. They tell me that he may be taking on a larger portfolio. Nevertheless, these representations have been made and I must say I am somewhat disappointed that this very simple anomaly, though very glaring, has not yet been rectified.
My colleague the hon. member for Edmonton West followed the matter up in a letter to the Minister of Finance on December 24, and we were again assured that any
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amendments to the Customs Tariff Act would have to be approved by parliament; that such amendments are considered during the preparation of a budget, but that our representations would be carefully reviewed. That is all well and good if the present Minister of Finance still is Minister of Finance at the time of the next budget. Whatever happens in the interim, I hope we will be able to get some assurance that this glaring anomaly will in fact be rectified.
I have another point with which I would like to deal. It is similar in nature. I refer to the application of tariff and sales tax on various types of cattle-handling equipment manufactured from steel, again for agricultural use. In my view, there are a number of anomalies in this area as well, largely, I contend, as a result of questions of semantics or interpretation and perhaps because of judgments based on historical precedents and relics of the past.
I suggest that the provisions relating to steel corrals and various types of cattle-handling and livestock-handling equipment used for purposes of agricultural production should be reviewed and in fact updated. For example, portable steel corrals are manufactured in 16-foot sections. I may say I have had experience with this sort of item. A group of individuals who sell these items approached me in connection with the application of sales tax on these products. During my investigation of this subject I learned that pens constructed of the component parts of the fabricated 16-foot sections were in fact sales tax exempt, whereas corrals were subject to sales tax. Therefore, I would simply ask the officials to explain the difference between a pen and a corral. It is quite obvious that it cannot be called a corral, because a corral is simply a continuation of a pen; you just add more sections and you have a corral. Perhaps this is the difference between western and eastern interpretation: we call them corrals in western Canada and you may call them pens here in eastern Canada. In any event, we were successful in getting that little idiosyncrasy resolved to the benefit of the agricultural producers in western Canada.
In respect of tariffs, however, we find that the 1714 per cent duty still applies to cattle-handling items such as corrals, portable feeders, stock watering troughs, bunker feeders, and so forth. I am told by the people engaged in this business that there is no reliable or continuing supply of such items on the Canadian scene. Of course, the steel shortage which has been prevalent in this country has made matters even worse. It has been found that these items are very difficult to fabricate locally by small entrepreneurs.
On the other hand, we have a situation in which stock chutes, squeezers, calf-tipping tables, bull-trimming tables and head stanchions are all items manufactured in this country and carry no tariff. I would point out to the minister that herein lies a glaring anomaly. I do not believe there is any rhyme or reason in the application of taxes and tariffs to these particular items. Surely some clarification should be given. These items should undergo a complete review and updating based on the reality of current conditions. Perhaps during this upgrading process the appropriate recommendations should be instituted to remove these anomalies.


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I would urge the minister to encourage his officials who are responsible for the application and administration of this act to get together with agricultural representatives of various organizations, beef producer groups and stock growers, and work out some meaningful, uniform and equitable application of these tariff items. In this way we could be assured of a continuous supply of these items to meet our needs. In view of the condition of the cattle industry at this time, there is no need for further strangulation. These are cost items which occur in the over-all financial position of beef producers in this country. I hope I have the support of the minister and his parliamentary secretary, who I know is very interested in this particular proposal. I hope they will render unto the cattle industry a certain amount of sympathy in order that these anomalies might be resolved, rectified or corrected.


John Napier Turner: Mr. Chairman, the hon. gentleman has a point. There are anomalies. As a matter of fact, when you get down to individual items you find tariff inconsistencies in various sections. Tariffs, in general terms, should represent logical instruments, but many of these tariffs are the result of international negotiation and bargaining. In respect of some of the agricultural implements the hon. member is talking about, we have a situation in which the entry of many Canadian-manufactured goods to the United States is tougher than the entry into Canada. We are hopeful of remedying some of these anomalies at the forthcoming negotiations at Geneva. When we review the agricultural implements sections we will not only keep in mind what the hon. gentleman has suggested, but will try to add some logic to the negotiations. I think the hon. member should be quite happy and satisfied as a member of parliament in that he will go down in history as the man who convinced the Department of Finance that a corral is a pen or a pen is a corral, depending on which way you argue, the geography and the size.
Having regard to air conditioners for combines, the lack of consistency here relates to the same problem, in that this is one of the items for negotiation at the coming tariff negotiations. I am led to believe by my officials here who are listening to what members of the committee have to say and will take due note of their comments at the next review, that air conditioners for combines are covered by the machinery program and the Customs duty is remitted since the advisory board considers that these devices are not available from Canadian production.
The problem arises when you have the importation of only one or two air conditioners at a time, in that they do not or might not qualify for a remission of duty since the machinery program does not provide for remission of the first $500 in value of goods covered by the application for remission. When the air conditioner comes in on a machine, there is no problem; but when it comes in as an individual item that is where the inconsistency arises. As my parliamentary secretary, the hon. member for Sarnia-Lambton, said yesterday, we have directed our officials to review this matter, to report back and to consider it at the negotiations under GATT.


Mr. Roche:: Mr. Chairman, I would like to bring the minister's attention back to the subject of handicraft items which we discussed to some extent yesterday, so

much so that I asked the parliamentary secretary how important the question of handicraft items was in that we were spending so much time on it. During the excellent presentation which the parliamentary secretary gave yesterday afternoon, on the minister's behalf, in response to the point I raised, he said that the subject of handicraft items was a small or insignificant factor in over-all trade relations with developing countries. He went on to say that many other products are of more importance and of more direct concern in our trade relations with developing countries, and of much more importance in terms of helping the developing countries. I can only assume from the minister's supplementary comments today on the subject of handicraft items that the motivation behind Canada taking these steps is one of helping developing countries.


John Napier Turner: Certainly. And the more flexible, they are, the more helpful they are.


Douglas Roche: As the minister knows very well, it is extremely important, in helping developing countries, that we consider better ways in which they can plug into international trade and monetary systems. Let me suggest that the time we spend talking about handicraft items is time wasted as compared to time spent discussing the real emergency in the world today caused by events which supersede trade in importance, namely, the recycling of petro-dollars. Yesterday the minister brought to the House the communique issued following his chairmanship of the interim committee in Washington which examined the international monetary situation. That communique emphasized the need for decisive action to help the developing countries most seriously affected by high oil prices. As the minister knows, the committee agreed to set up a special fund to reduce interest payments on oil paid by those developing countries, to which appropriate contributions should be made by oil exporting and industrial nations.
Let me suggest to the minister, in relation to the items of trade and tariffs for developing countries that we have before us, that it would be better if the minister brought in concrete proposals reflecting Canada's position in response to this call by the interim committee for this fund, and an assurance that Canadian response to that call will be such that our contribution to the fund will assist in strengthening the developing countries. I urge, therefore, that we quickly consider these items which I suggest are time-consuming. We could make a much more substantial contribution to the developing countries, especially those most affected by the oil crisis, by strengthening and improving international financial mechanisms, for which the International Monetary Fund has been asking. I would ask the minister to respond to that point.


John Napier Turner: I am very pleased to respond to the hon. member's question. With regard to the over-all picture, the hon. member is perfectly right. However, in a good many of these countries, handicrafts are a means of bringing in family income and they provide more self-sufficiency at the family and village level.
As to the wider picture, Canada supported the initiative of the managing director of the fund in providing a vehicle


within the International Monetary Fund's oil facility whereby the proposition is now approved by the interim committee for subsidized interest rates to the developing world. As to what our contribution will be, I will have to discuss that with my colleagues. I would remind the hon. gentleman and the committee that in 1974 there were only two industrialized countries which contributed to that facility: Canada, for $300 million, and the Netherlands. The other countries were the OPEC, oil producing nations.
In the development committee, which was a sister committee of the interim committee, which met last Friday- we did not have the final draft of the communique which was drafted late in the afternoon, but I hope to receive it and table it in the House-Canada supported the establishment proposition put forward by Mr. Robert McNamara, president of the World Bank, for the third window, this being a technique very similar to AHOP here in Canada whereby moneys are used to subsidize interest rates in the aid program. The first window is direct grants under the World Bank, the second window is concessional financing, and the third window will be subsidized interest rates in terms of allocation.
We also supported the study of the American idea of a trust fund and whatever initiatives the World Bank may have in conjunction with the fund for ensuring aid to areas suffering from the current dislocations in foreign aid provoked in part by the quadrupling of oil prices in the last 18 months, and by providing whatever help we can to the most seriously affected nations which are in a position, not of being inconvenienced in the sense that Canadians may be by a lower standard of living, but of having to survive a potential famine or a potential crisis of inadequate supplies of fertilizer or fuel, the very necessities of life.


Douglas Roche: Mr. Chairman, I thank the minister for responding. It seems to me that he has accepted the central point which I tried to put across, namely, that in the motivation of Canada in taking these steps to help the developing countries the picture is changing, both substantially and rapidly, from a matter of taking small steps in providing aid to taking very big steps in changing international systems. It seems that the minister has accepted that viewpoint, although in saying that Canada supported the managing director's report to set up this special fund to help countries most hurt by the oil crisis, the minister has not yet said in what way Canada will carry out the support-in other words, how much money will be made available to that fund.
That brings me to the next point. I wonder if the minister will participate more actively in this enlarged picture of Canada's international aid for development by not just letting CIDA carry the ball for this country in accordance with the old concept of foreign aid that there has never been enough aid but, rather, will adopt the concept of today that aid is no longer enough. It seems to be that this calls for active intervention by the Minister of Finance for the precise reason that the problems now centre around the question of international financial mechanisms.
I leave the minister on this point. If what I have said is right, I would like to know from the minister what position Canada will take with regard to the transformation of
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the interim committee that he has been chairing into a permanent body.


Gérald Laniel: Order, please. I do not wish to limit the hon. member, but he is opening wide the debate. We are on the schedule I tariff items. I think that if we start a debate on external aid and also allow the minister to open a debate on some of the functions that he has outside the House in connection with the International Monetary Fund, we will not make progress and it would be against the rules of the House.


Douglas Roche: Mr. Chairman, I thank you for your comments. Indeed, I anticipated that you would try to cut me off when I moved from the subject of tariffs on handicraft items to the larger picture of international financial mechanisms. In your attempt to cut me off-which I respect, and I will not speak more than half a minute-you have helped me to make my point, namely, that what we are talking about in improving tariffs for handicraft items is a small matter compared with the real issue of the way in which Canada can become involved.
I want to make the following point about moving from the interim committee to a permanent committee. I wonder whether or not the developing countries, those countries which we are ostensibly trying to help through items in the bill before us, will be given voting rights on the permanent committee so that they can share in decisions respecting international monetary financing and the recycling of petro-dollars to their own advantage, rather than being subject to the benign considerations of assemblies such as the Parliament of Canada. That is what I want to know from the minister.


John Napier Turner: I can relate my comments to the subject of handicrafts within this context. Yes, Canada supports the genesis of the interim committee as a permanent council of the International Monetary Fund. The council is composed of 20 ministers, representing 20 constituencies involving 106 nations. Of those 20 constituencies, almost half are predominantly third world constituencies. A good many of the others, even those represented by members from the developed, industrial world, also have within their constituencies members of the developing world. That is where the voice of the LDCs and MSAs is strongly heard.
In Canada's own constituency, both in the IMF and in the World Bank, we represent the Bahamas, Jamaica, Barbados, Ireland, and in the World Bank, Guyana. So that in representing our constituency I am in fairly frequent consultation with my constituents on those positions. We take the view of the developing world, on some issues more particularly, that part of the developing world has reached the threshold of having a varied economy. I want to assure the hon. gentleman that there is nothing in his remarks with which I disagree.


Sinclair McKnight Stevens: Mr. Chairman, I believe earlier the Minister of Finance indicated that he would respond to some of the comments made by my colleague with respect to item 87500-1. Is the minister now in a position to respond, particularly on whether the government will consider an amendment to allow reference to the House of Commons


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of any order in council contemplated under this tariff item?


John Napier Turner: Mr. Chairman, there are other examples of delegation in the Excise Act, the Excise Tax Act, the Customs Act and the Customs Tariff Act. I am a little hesitant in setting a precedent without looking at the whole field. I would do this if the Standing Committee on Regulations and other Statutory Instruments in its review as these instruments are published- and they have to be published-had felt there was an abuse of the delegatory process or of interpretation of definition. I would then be willing to consider the matter and move toward a wider range for either negative or affirmative resolution. However, I hesitate to do this on one particular item, particularly at this stage when we have further negotiations with the developing countries who want to export into Canada, and the Canadian Handicraft Association, as to what the ultimate definition will be. It is because of the difficulty of definition that I just cannot reduce it to statutory form.


Marcel Joseph Aimé Lambert: Mr. Chairman, if there is difficulty in reducing it to statutory form, how can the minister reduce it to any form of writing under an order in council? If the problem is in reducing it to words, surely the statute presents no greater obstacle than an order in council.


John Napier Turner: Mr. Chairman, it is because the definition is so difficult to attain that there is difficulty in reducing it to words. This is why I am suggesting to the committee that I need the flexibility of a schedule which can be changed from time to time by order in council.


Marcel Joseph Aimé Lambert: I return to the Statutory Instruments Act. The minister was very persuasive, on a previous occasion, of its value. He said it was breaking new ground to have an order in council subject to the approval of the House. So much has been done in Westminster with regard to this matter; it is standard practice there. I am asking the minister to follow his fond hopes and his strong aspirations when he was minister of justice that this would become the practice of this House. But the first time we propose it, the minister balks. The Statutory Instruments Act and provisions whereby an order in council is made subject to the approval of the House is far better than negative approval, particularly on this matter of determining what is a handicraft. Honestly, I think the minister is making a pretty small case.


John Napier Turner: Mr. Chairman, perhaps I am not as enamoured of the precedent of Westminster as the hon. gentleman is. If I were, I would recommend the guillotine in our proceedings here. I would be interested in his view on that. Let me say that when we brought forward the Statutory Instruments Act, the hon. gentleman and I, and the hon. member for Peace River, had hoped that the regulations and other statutory instruments committee would be a formidable arm of the House. If that committee, in its judgment, in reviewing the operation of this item and other items in the Excise Act and Customs Tariff Act, feel that amendments ought to be

made, then I will certainly abide by those recommendations.


Sinclair McKnight Stevens: Mr. Chairman, unless the minister can give more satisfactory precedents where he feels there has been a similar type of delegation, I shall put an amendment before the committee concerning this matter because I believe we have not been satisfactorily advised by the minister as to what exactly is his province in this regard. We agree that there may be a question of definition as to what would be included in the item "handicrafts," but surely it is not impossible, after the definition has been arrived at, after the order in council has been made, to have a reference to this House, at which time, either by affirmative or negative resolution, the House can decide whether there has been a proper tariff.
This matter was dealt with by my hon. friend's colleagues in 1961. It is referred to in the Senate Debates of 1961, at page 848. Senator Hayden covered the point, I think quite well, as did some of his colleagues. I believe this is an important matter. It is a constitutional question. Before I propose an amendment, if the minister accepts our suggestion of having a reference with respect to this matter in future to the House of Commons, I would like him to give us a little more insight as to where the precedent is and the possible conflicts to which he refers.


John Napier Turner: Mr. Chairman, the point which the hon. member said arose in the Senate related to using an order in council to fix rates of duty. It has no reference to the problems which are found throughout the statutes. The hon. gentleman was not in the committee when I replied to the hon. member for Edmonton West on the completely valid point he has brought out. I am just saying to him, and I echo the words of the member for Edmonton-Strathcona, that the purpose of flexibility is to ensure as far as possible duty free entry of handicrafts from developing nations. If the committee were to insist on a straitjacket of definition, I am afraid we would not get the flexibility which reflects the thrust of the general preferential tariff.


Sinclair McKnight Stevens: Mr. Chairman, in that event I would move:
That schedule I, tariff item 87500-1 on page 6 be amended by inserting therein the words "subject to affirmative resolution of the House of Commons" next after the words "by order of the governor in council" in the first and second lines of the said tariff item and next after the word "regulations" in the last line of the said tariff item.


Gérald Laniel: Is the committee ready for the
question?


Some hon. Members:: Question.
Amendment (Mr. Stevens) negatived: Nays 44; yeas, 18.


Gérald Laniel: I declare the amendment defeated. The hon. member for Fraser Valley East.


Mr. Patterson:: Mr. Chairman, I was in error in seeking the floor. I understood we were on schedule II, but apparently we are still on schedule I. What I have to say has reference to schedule II.


Jack Sydney George (Bud) Cullen: Schedule II was passed.


Gérald Laniel: It is correct that we are on schedule I. The difficulty we are faced with is that schedule II has already been carried. If the hon. member seeks the unanimous consent of the committee, he might be allowed to make his comments. Shall schedule I carry?


An hon. Member:: On division.


Mr. Haidasz:: Mr. Chairman, I should like to ask the Minister of Finance what consideration is being given to representations from various ethnocultural groups in Canada who wish to receive some relief from import duties on national costumes and rare musical instruments that are being used by dance and music ensembles in performing their cultural functions.


John Napier Turner: Mr. Chairman, there has been a good deal of thought in the correspondence I have had with the hon. gentleman on this subject. A good deal of ethnic dress is manufactured in Canada, and one has to consider the balance of the Canadian as against the foreign interest. I think the hon. gentleman will recognize that in eliminating the sales tax on footwear and clothing we have gone some way toward satisfying the quite legitimate requests that associations across Canada have put to us through the hon. gentleman.


Gérald Laniel: Shall schedule I carry?


An hon. Member:: On division.
Schedule I agreed to.


Gérald Laniel: Shall clause 1 carry?


Sinclair McKnight Stevens: Mr. Chairman, taking up your suggestion concerning schedule II, I wonder if we might have unanimous consent to revert to it, not only for questioning by my colleague but because there are one or two questions that I hoped to put yesterday.


Gérald Laniel: As I mentioned, this would need unanimous consent. Does the committee give consent to our reverting to schedule II?


Some hon. Members:: Agreed.


Gérald Laniel: It is agreed. The hon. member for York-Simcoe.


Sinclair McKnight Stevens: Thank you, Mr. Chairman, and I thank hon. members for giving unanimous consent. I would refer the minister to an item appearing on page 8 of the bill, item No. 8717-1, onions. As I understand it, some concern has been expressed by the onion producers of Canada in that they feel two things are unfair to their industry: one is that the IV2 cents per pound tariff which is shown under the tariff item is lower than the 1 % cents tariff that now prevails in the United States with respect to the exportation of onions from Canada to that country.
I wonder, first of all, if the minister could give some explanation of why these two tariffs are not comparable, and secondly, has consideration been given to having a shorter free period for the importation of onion? I am informed by spokesmen for the industry that they feel they can supply the Canadian market for the entire 12 months, and they feel the eight-week free period contem-
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plated here is a serious matter in regard to their current production. I understand they have almost 1,200,000 bags in storage at the present time, and they are fearful that if this matter is not tightened up they could have a serious carryover problem in the industry and importation would be higher than they think is desirable.


John Napier Turner: Mr. Chairman, of course, there is not any necessary symmetry between the American rate of duty on a particular item and the Canadian rate of duty. They are not reciprocal. They depend on market conditions, negotiating procedures, and so on, concerning the items. We received representations from the Canadian Horticultural Council and I referred to the Tariff Board a complete review of current Canadian tariffs on fresh and processed fruits and vegetables. The tariff on onions is among them.


Alexander Bell Patterson: Mr. Chairman, in view of the courtesy of the committee in permitting us to revert to schedule II, I should like to call attention to one other item which I do not think has been discussed in the debate. Late last fall I had communication from a number of those engaged in the mushroom growing industry in my province of British Columbia who are greatly disturbed by the threat to the viability of their industry by the importation of mushrooms from the Far East. I made inquiries of the department regarding this particular matter and was advised that they were aware of the situation and had been successful in achieving an understanding with Korea that that country would voluntarily limit its exports to Canada during the year 1974. That is the reply I received in November or December. The department also said that they had failed to achieve a similar agreement with other exporting countries.
I would ask the minister if the agreement with Korea has been renewed for 1975, and if he has been successful in achieving similar agreements with some of the other countries who export mushrooms to Canada.


John Napier Turner: Mr. Chairman, mushrooms, of course, do not appear on the schedule and I cannot give the answer off the top of my head. I will undertake to write the hon. member and give him details on that question.


Gérald Laniel: Shall schedule II carry?
Schedule II agreed to.


Gérald Laniel: Shall clause 1 carry?


Marcel Joseph Aimé Lambert: On division.
Clause 1 agreed to.


[Stage Direction]
Title agreed to.
Bill reported.
John Napier Turner: that the bill be read the third time and do pass.
He said: Mr. Speaker, I undertook, through my parliamentary secretary, that when we reached third reading I would give the House a report on behalf of the Minister of Industry, Trade and Commerce (Mr. Gillespie) and on my

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own behalf on the current state of the multilateral trade negotiations. At this time, may I thank my parliamentary secretary for having yesterday carried this bill successfully through the committee stage.


Donald Frank Mazankowski: He will make a good replacement for the minister.


John Napier Turner: I say to the hon. member for Vegreville (Mr. Mazankowski) that there is lots of bench strength on this side of the House and it will be many years before he will exercise the responsibilities of which he is capable.
Let me now speak about the arrangements and prospects for the multilateral trade negotiations now being undertaken in Geneva under the auspices of the GATT. These negotiations were formally launched in Tokyo in September, 1973, by the ministers of some 90 countries. However, the start of substantive negotiations had been delayed until the United States government could obtain a negotiating mandate from congress. The American administration has now received the required authority in the Trade Act which the President signed earlier this month. The other major participants, notably Japan and the European Economic Community, have already given their negotiators the authority they need to sit down at the negotiating table. Indeed, a meeting of the GATT trade negotiations committee is to be held in Geneva next month to begin this new and substantive phase of the so-called Tokyo round.
In these circumstances, the government decided that the time had come to appoint a Canadian negotiating delegation to Geneva. As hon. members are aware, the appointment of the delegation was announced by the Prime Minister (Mr. Trudeau) on Monday. It is to be headed by the Assistant Deputy Minister of Finance, Mr. Rodney Grey, who will be ably supported by members of the Department of Industry, Trade and Commerce and others. As in past international negotiations of this type, the departments which carry the main responsibility or expertise in trade policy matters are represented on this delegation. The delegation, however, will receive its instructions from the government itself. It will report directly to a trade negotiations co-ordinating committee in Ottawa. That committee, which has been established at the deputy minister level, will, I hope, be supervised by the committee of ministers and will advise the government on the progress of the negotiations and make recommendations as to the positions Canada should adopt on particular issues.
I wish to emphasize that any decisions as to the objectives which we should pursue in these negotiations and what our negotiators should be authorized to offer in return will be made by ministers. The government has also established a Canadian Trade and Tariffs Committee which is to receive the views of individual firms, industry associations and farm, labour and consumer groups. The CTTC, which is composed of officials from the departments most concerned with the negotiations, will also be ready to receive views from the provincial governments either on the negotiations in general or on particular subjects. In addition, some ministers have already had discussions with their provincial colleagues on this subject and I expect that these discussions will be pursued. Of

course, reports will be presented to the House from time to time either by myself or by the Minister of Industry, Trade and Commerce.
Let me say a word about the scope of the negotiations and their timing. These are matters, of course, which my colleague, the Minister of Industry, Trade and Commerce,* may wish to deal with in more detail at some future date and on an appropriate occasion. The scope of the negotiations, naturally, will depend upon the ability of the participating governments to find common areas of mutual advantage. The negotiations are potentially far reaching and will cover non-tariff as well as tariff barriers, and agricultural as well as industrial products. They must also lead in some areas to a rewriting, or at any rate a review, of existing international trade rules. For these reasons I do not think we can expect the negotiations to be completed quickly. Moreover, in the tariff area the United States administration, under the provisions of the Trade Act, will not very likely be in a position to put a tariff offer on the table in Geneva until the beginning of July. It is doubtful, therefore, if meaningful negotiations on tariffs at least can begin much before next autumn. I should also point out that any tariff reductions which are agreed to will probably be phased in over a period of years.
This, plus the fact that congress will have to approve most, if not all, agreements on non-tariff barriers to which the United States is a party, indicates that the impact of the negotiations will not be fully felt for a number of years. I must emphasize this because there are those who claim it is not realistic to talk about further trade liberalization at a time of slower economic growth in the industrialized world. My belief is that we should press forward with these trade talks despite the conditions that now prevail in many countries. It seems to me that negotiations of this type offer the best prospects for renewed growth in world trade. They can pave the way for future expansion in the economies of both the developed and the developing countries. Canada, as one of the world's major trading nations, clearly has an important stake in the negotiations and we intend to pursue our interests vigorously throughout these discussions.
This, I think, is a fair summary of where matters now stand. I assure the House that as Minister of Finance, particularly as the minister responsible for the Customs Tariff, I intend to participate actively, as does the Minister of Industry, Trade and Commerce, in the preparation and direction of these negotiations.


Marcel Joseph Aimé Lambert: Mr. Speaker, I realize that I was on the verge of being out of order when I asked the minister to make a comment yesterday or in the previous debate. But I did this deliberately because, if the minister had not spoken, our first opportunity of hearing and questioning the appropriate minister would only come in committee in two months time or so during consideration of the estimates. I particularly want to highlight the dissatisfaction of members on this side, and of some on the government side, with our present method of handling estimates in committee. There is absolutely no way of bringing public attention to a ministerial statement of the type we have heard if it is made in committee. The media just misses such statements, unless attention has first been drawn to them.


We have now heard the minister's statement and I agree largely with him. It may be important to allow for more flexibility in the participation of interested bodies and provincial governments in certain negotiations. I am referring, of course, to the personnel of negotiating teams. That is about my only reservation. I agree wholeheartedly with the minister when he suggests that the present time is opportune for the beginning of trade liberalization negotiations. As we know, there is under way a slowdown in the economies of Europe and the United States and there has been a call for a return to the sort of economic nationalism some of us saw in the 1930s-economic nationalism which, frankly, led to economic warfare and ultimately carried us into World War II.
It would be tragic indeed if the world once again drifted into the pattern of the 1930s. I hope that Canada will, through its delegation and through its government, keep up the pressure for continued negotiations under GATT- and I think I speak on behalf of all my colleagues-so that the world will be kept, shall we say, in the right frame of mind and not embrace economic nationalism of the sort which may take place in countries presently experiencing economic slowdown. Having said that, I thank the minister for his statement.


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


Some hon. Members:: Question.


Mr. Deputy Speaker:: Is it the pleasure of the House to adopt the said motion?


Some hon. Members:: Agreed.


Marcel Joseph Aimé Lambert: On division.
Motion agreed to and bill read the third time and passed.


EXCISE TAX ACT AND EXCISE ACT
[Stage Direction]
The House resumed, from Wednesday, December 11, 1974, consideration in committee of Bill C-40, to amend the Excise Tax Act and the Excise Act-Mr. Turner (Ottawa-Carleton)-Mr. Laniel in the chair.
Gérald Laniel: When the committee rose on Wednesday, December 11, 1974, clause 19 was under consideration.


Marcel Joseph Aimé Lambert: Clause 18 had been stood. I wonder whether the Minister of Finance can now advise whether we can proceed with clause 18, or does he wish to have further consideration on the particular point raised by my colleagues from British Columbia which appears in Hansard at pages 2176 to 2178.


John Napier Turner: Yes, I think we can, Mr. Chairman.
On clause 18-Refund on goods for use in water distribution, sewerage or drainage systems.
Excise


John Napier Turner: Mr. Chairman, recognizing the good sense of the observations of some members from British Columbia, and indeed some from Ontario- that is not mutually exclusive-I feel we should accommodate the concerns of hon. members by eliminating the word "incorporated" from the definition of a municipality, so that it will read:
(b) such other local authority as the governor in council may determine to be a municipality for the purposes of this act...
By eliminating the word "incorporated", the problem is solved. I would ask my colleague, the Minister of Energy, Mines and Resources, to propose the appropriate amendment.


Mr. Macdonald (Rosedale):: Mr. Chairman, the amendment is one that immediately came to my mind as well. I would now like to place it before the committee as an amendment to the bill. I move:
That Bill C-40, to amend the Excise Tax Act and the Excise Act, be amended by adding thereto immediately after clause 18 thereof the following subclause:
(a) Paragraph (b) of the definition "municipality" in subsection 2(1) of the Excise Tax Act is repealed and the following substituted therefor:
"(b) such other local authority as the governor in council may determine to be a municipality for the purposes of this act;"


Walter David Baker: Mr. Chairman, am I to assume we can still go on with consideration of clause 18? The clause was stood the other day.


Gérald Laniel: The hon. member for Edmonton West suggested that if the minister was ready, we would go back to clause 18. I assume we are ready to consider clause 18. Following that, we will proceed to clause 19. Has the hon. member a contribution to make on clause 18?


Mr. Wenman:: Mr. Chairman, I have a question. It relates to making this a matter of regulation for the lieutenant-governor in council. We have the assurance of the minister that he will proceed with this matter. When?


Stanley Howard Knowles: The "governor in council".


John Napier Turner: I did not quite catch the commitment the hon. member wants me to make.


Robert Lloyd Wenman: We just want assurance that this will be carried through the governor in council to regulation, and so forth; this amendment for British Columbia, for definition.


John Napier Turner: We do not really need it. We have loosened up the definition of "municipality." I hope the statute will take care of the problem.


Marcel Joseph Aimé Lambert: Certainly the minister has loosened up the strict, limited definition of "municipality." The amendment reads:
... such other local authority as the governor in council may determine to be a municipality for the purposes of this act...
Fire districts, water districts and what-have-you in British Columbia, as well as related types of unincorporated districts in Ontario, must be defined by governor in council. Therefore, there will have to be an order in council.


Excise
Otherwise I can say to my colleagues from British Columbia that if they were to go to the Minister of National Revenue, he would say that the appropriate order in council has not been passed and therefore he is restricted by the definition of "municipality". All they are trying to do is see that the appropriate order in council is passed and does not take five months to get through, as is the case now.


John Napier Turner: Mr. Chairman, I will certainly fulfil the intent of the amendment. I will talk to my colleague, the Minister of National Revenue, under whose authority the regulation comes. I think I can give that undertaking, subject to my colleague's sanction.


Walter David Baker: Mr. Chairman, before we leave clause 18 I want to put a proposition to the minister with regard to water distribution, sewerage and drainage systems which are the subject of the clause. The clause provides a refund in the event that by agreement the person who installs the systems transfers them without charge to the municipality. There is provision that this transfer must take place within two years of completion.
What I am seeking is relatively simple. I wonder whether the minister would consider changing the time period from two to three years. My reason for asking that is because of the habit of building large sewerage installations, usually at the expense of a developer, which service not only the initial development but over a longer period all development which will be ongoing; therefore, the system is considered as a whole. Because of the vicissitudes of planning, zoning and land control which are not within the competence of the Minister of Finance or the developer, the period of time might well run beyond the two-year period. There are instances of this within the areas which the Minister of Finance and I have the honour to represent.
I do not think it is the intention of the minister to in any way restrict time: I think it is his intention to give as much relief as he can to either the municipality or the developer. I think that is reasonable, particularly in view of the fact that in the event the rebate is not received, the amount of the sales tax is passed on to the purchaser of the house or the land and buildings within the subdivision. I am not going to quarrel with the theory that the minister has advanced, but in modern times I think the time is a little short and there would be a welcome change to the system if the period were altered from two years to three.


John Napier Turner: If that is agreeable to the committee, Mr. Chairman, then I see no difficulty in asking my colleague, the Minister of Energy, Mines and Resources, to amend line 37 on page 9 of the bill by changing the word "two" to "three". I do not have an amendment to that effect in writing, but it is a fairly simple one and I think Hansard will carry it. I am sure my colleague will stand up and make that motion.


Walter David Baker: I am delighted to see that the Minister of Finance can pull the right strings.


Mr. Jones:: I should like to ask the minister why a distinction is made in clause 18 between-


John Napier Turner: Mr. Chairman, may I interrupt the hon. member? I take it that the committee has agreed to amend line 37 of page 9 of Bill C-40 so that the appropriate word is "three" instead of "two".


The Deputy Chairman:: Is that agreed?


Some hon. Members:: Agreed.


Leonard C. Jones: Mr. Chairman, I was asking why a distinction is made in clause 18 between "water distribution" and "sewerage or drainage system". The clause does not refer to a water distribution system, including transmission lines and all the other items that go along with that, but it does refer to a sewerage or drainage system, which includes the entire system. Might I have an explanation of that? In many cases these days developers own the transmission system as well.


John Napier Turner: I think the hon. member ought to read the wording again. It says "any water distribution, sewerage or drainage system".


Leonard C. Jones: The minister is missing the point entirely. There is a difference between a distribution system and a transmission system. I want to know what the differentiation is here.


Mr. Kempling:: Don't you know what a transmission system is, John?


John Napier Turner: Mr. Chairman, I am not yet convinced that the word "distribution" does not meet the situation, despite the efforts of my hon. friend from Halton-Wentworth to enlighten me.


Leonard C. Jones: A transmission system is part of a reservoir, and the distribution is the various feeders concerned. Whoever prepared this clause should know the difference between a transmission and a distribution system. There is a difference, and it is not being made clear in this case to the municipalities. Transmission is the trunk line; distribution is the little lines branching off.


John Napier Turner: Mr. Chairman, I think the matter is covered. Not that my words in Hansard would influence the interpretation of a bill, but if we run into any problems I am sure the administration will seek a subsequent amendment. I think the wording is wide enough here.


B. Keith Penner: Shall the motion to amend carry?


Marcel Joseph Aimé Lambert: Mr. Chairman, I suggest that this stand until eight o'clock so as to get clarification from National Revenue as to whether there should be a distinction between "transmission" and "distribution". I think we are all agreed about this, and certainly the minister is, but for purposes of clear language, and so there are no legal problems for National Revenue, perhaps we should wait and all be a lot happier.


Leonard C. Jones: Would the minister be agreeable to amending the clause to say "water and distribution system" instead of just "water distribution"? Those words are underlined in my copy, which set me wondering.


John Napier Turner: Mr. Chairman, I should like to examine the subtleties of the hon. member's suggestion.


B. Keith Penner: Is it agreed that clause 18, as amended, shall stand?


Some hon. Members:: Agreed.
Clause 18 stands.
On clause 19-"certified institution".


Marcel Joseph Aimé Lambert: Mr. Chairman, just as we were closing our discussions the other day I raised a point regarding the proposed amendment of clause 19, which is amending section 45 of the act and, hopefully, widening the meaning of "certified institution." The reason I am particularly anxious about this is that a certificate is issued by the Department of National Health and Welfare to relieve certified institutions from sales tax. I was explaining to the minister the other day the case of a boys' school which has been in existence for about 50 years. I am a member of the advisory board, and as a matter of fact I was its first chairman 20 years ago. It is a residential school and formerly the students were made children under the care of the the child welfare authority of the province of Alberta. These children were maintained entirely, both as to shelter and as to care, by the government of the province of Alberta. This institution, St. Mary's, qualified under section 45 of the act.
However, this is no longer the case. The province of Alberta child welfare authority has abandoned the maintenance of such children in large institutions and now sends them to foster homes. The students now attending this school are all, shall I say, resident students who perhaps are square pegs in round holes within the ordinary school system; the school is a special school and in many cases the students come from single-parent families. No correctional treatment through the juvenile detention authorities is administered at the school; there is nothing of that kind. However, the school has lost its certificate although it provides, in the modern context, the same type of care as it did previously for children who are in need of this special kind of training. The school has moved forward but the definition of "certified institution" has not.
Is the minister satisfied with the present definition which reads "to provide shelter and care for children or aged, infirm or incapacitated persons"? The same thing can be said of certain senior citizens' homes that may be licensed; again it is a question of shelter and care.


John Napier Turner: Mr. Chairman, might I answer that question at eight o'clock? In the meantime, we have researched the matter raised by the hon. member for Moncton and I am assured by National Revenue that the exemption includes everything that the hon. member wants. It includes the transmission system to which the hon. member referred.
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An hon. Member:: Does it include reservoirs?


John Napier Turner: The item refers to water distribution systems and it includes transmission.


An hon. Member:: How about the fish in the reservoir?


John Napier Turner: I wonder if we could
pass clause 18?


B. Keith Penner: Order, please. It being five o'clock, it is my duty to leave the chair in order that the House may proceed to the consideration of private members' business as listed on today's order paper, namely, notices of motions (papers), private bills, public bills. Progress reported.



PROCEEDINGS ON ADJOURNMENT MOTION


The Acting Speaker (Mr. Penner):: Order, please. It is my duty, pursuant to Standing Order 40, to inform the House that the questions to be raised tonight at the time of adjournment are as follows: the hon. member for York-Simcoe (Mr. Stevens)-Finance-Offer of mortgage loans by Arab countries-Suggested reference to department for approval; the hon. member for Sault Ste. Marie (Mr. Symes)-Industry-Steel-Reason for restrictive terms of reference for Judge Estey's inquiry into prices and profits; the hon. member for Okanagan-Kootenay (Mr. Johnston)-Weights and measures-Suggested aid to schools in converting to metric system.


PRIVATE MEMBERS' MOTIONS FOR PAPERS
Mr. David Orlikow (Winnipeg North) moved:: That an order of the House do issue for a copy of studies prepared for the Advisory Group on Executive Compensation in the Public Service comparing salaries paid to senior public servants and salaries paid to senior executives in private industry.
He said: Mr. Speaker, the motion tabled yesterday read: That an order of the House do issue for a copy of studies prepared for the Advisory Group on Executive Compensation in the Public Service comparing salaries paid to senior public servants and salaries paid to senior executives in private industry.
The Parliamentary Secretary to the President of the Privy Council (Mr. Reid) in his reply yesterday, during

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the course of which he refused to table the motion, said in part:
Data taken from these surveys is considered to be proprietary and I, therefore, ask that the motion be withdrawn.
In other words, the government felt that the information I was asking for should not be given to me or made public. I am sorry the new President of the Treasury Board (Mr. Chretien) is not in his seat. We have seen a number of articles by very respectable commentators of some of the largest newspapers in Canada indicating that this minister is going to be a new broom, is going to be tough in watching over these expenditures, and is not going to agree to new programs involving large expenditures unless he is certain they are justified. I cannot think of any other subject in respect of which the public needs more explanation in view of what has happened in recent years.
I am not suggesting necessarily that the salaries, pensions and other benefits that senior civil servants working for the Government of Canada receive are too high, or are in fact higher than those received by senior executives working in private industry. What I am suggesting is that these civil servants have now reached numbers which require, and indeed demand, that the public be given full details as to how their salaries, pensions and other benefits compare with those of executives in similar positions in private industry.
The last increases were effective April 1, 1974, and were made on the advice of the Advisory Group on Executive Compensation in the Public Service, chaired by Mr. A. T. Lambert, chairman and chief executive officer of the Toronto-Dominion Bank. The members of that group were Dr. Deutsch, principal and vice-chancellor of Queen's University; Dr. Gaudry, rector of the University of Montreal; Mr. de Granpre, president of Bell Canada; and Mr. A. S. Leach, chairman of the board of Federal Industries Limited. That group studied this question for the government and apparently seconded government staff to help obtain information. The group had studies prepared for it, and it is in respect of those studies that I believe information should be made public.
We are not talking about a few people. According to an answer to a question I asked during the last session, in 1968 there were 381 senior executive officers in the public service and by 1973, five years later, the number had increased to 895. This represents a threefold increase, so there are certainly at least 2lA times as many as five years ago. We are talking about a group of senior officers in the SX-1 category whose salaries ranged from a minimum of $25,500 to a maximum of $60,000 as of April 1, 1974. We are talking about 895 people, and I think the public is entitled to know how their salaries compare with the salaries of senior executive officers of comparable rank in private industry.
It is not just the salaries that we should be considering. We should be considering pension and other benefits. I hope we can persuade private industry to change pension plans voluntarily. If we cannot persuade them to do that voluntarily, I hope the federal and provincial governments can pass legislation requiring that all pension plans be indexed so that retired individuals will receive pensions in real dollars. I do not know of any pension plan that is
[Mr. Orlikow.J
indexed except the pension plan of the Government of Canada. We have indexed those pension plans and thereby done something necessary in these times of very rapid increases in the cost of living. What we have done is and will be of great advantage to people who work now or have worked in the past for the government.
The press has made a great deal of the fact that five, six or eight top civil servants retired in December, 1974. I do not know precisely why each of those individuals retired, but I do know what retiring in December meant for them. These individuals will receive pensions based on 2 per cent times their years of service up to 35 years, using the average of their best salary for the past six years. These senior civil servants have probably retired with a pension of between $20,000 and $30,000 a year. By retiring in December they were entitled in January to an increase in pension, because of the increase in the cost of living of 10.1 percent, of between $2,000 and $3,000 a year. If the cost of living in 1975 goes up by another 10 per cent, they will be entitled to a similar increase, and so on.
Compare that with what the old age pensioners get, compare it with the fact that virtually no pension plan of private employers is at present indexed, and you can see that we are not being very hard on our senior public servants. Perhaps we ought to be doing more for them. I think the Government of Canada should be as good an employer as any employer in the country, public or private. I think the people of Canada have a right to know how the provisions we make for our employees, in salaries, pensions and other benefits compare with the provisions made for other employees whether they be in the public or in the private sector.
However, it is not just the salaries and pensions about which I am concerned. I have before me circular No. 55 issued by the Treasury Board in 1975. I do not have anything newer than that: we may have improved on this since. If one studies it and looks at the vacation leave which senior executive officers are entitled to, one finds the following, and I quote from the circular:
... a senior executive officer is entitled to four weeks of annual vacation leave irrespective of the length of his continuous employment.
I doubt if any other private or public corporation gives its people four weeks' vacation after two, three or five years. The circular goes on:
Compensation in lieu of unused vacation leave.
On termination of employment, a senior executive officer is entitled to compensation in lieu of the unused portion of his accumulated vacation leave ...
Recall from vacation leave.
A senior executive officer who is recalled to duty from vacation leave or whose vacation leave is cancelled without notice shall be reimbursed for expenses incurred by such recall.
Then there is generous sick leave and management leave. It reads:
Management leave.
The deputy head, at his discretion, may grant a senior executive officer management leave with pay in recognition of excessive hours of work and work or travel on a designated holiday ...
Special leave.
There is no longer a requirement that a senior executive officer earn or


accumulate special leave credits. Instead, the deputy head, at his discretion, may grant a senior executive officer special leave with pay in whatever amount he considers appropriate in circumstances where there is illness or death in his family ...
Severance pay on lay-off.
A senior executive officer who has one or more years of continuous employment and who is laid off is entitled to be paid severance pay at the time of lay-off.
Then it goes on to specify conditions under which he can get that. I am not objecting to these things, as I said before and will continue to say. I think that the Government of Canada should be a good and fair employer. It should be a generous employer. It does not have to be miles ahead of every other employer in this country.
To my knowledge-and I am sure I do not know more than a small fraction of the people who are appointed-the government has been successful in persuading economists who have worked for trade unions to come to work for the government. It has succeeded in persuading economists who teach at universities to come to work for the government, and it has succeeded in persuading economists who work in private industry to come to work for the government. I think the government needs to get the best people in every field and it needs to pay whatever is necessary. But I have been told by people who are much more knowledgeable than I am, people who work in private industry and who have worked for the government, that the government is now paying senior public servants substantially more than private industry, universities, trade unions or any other organization can. My colleague interjects that some of them get three times as much as members of parliament. That may well be true, and they may be worth it. That is a separate question which I am sure we will be debating on another occasion.


An hon. Member:: Why not now?


David Orlikow: Any time the government wants to bring the question on, I am sure that members of this party will be prepared to debate it.
The point I have tried to make in this motion is not that senior public servants are being paid too much, but that the Government of Canada should be prepared to tell Canadians why they pay any person what they pay them, and how that salary compares with other sectors of the economy, with other governments, provincial and municipal, with the academic community and with the private sector of the economic life of this country. If the President of the Treasury Board (Mr. Drury) believes, as I am sure he does, that what he has agreed to for senior public servants is a fair rate of compensation, then there is no reason why he should not be prepared to table the studies for which I have asked.
It is just and fair that the public should see that the Government of Canada, in agreeing to the salary rates and to the rates of pension and other benefits which public servants get, in agreeing to the levels of pay which they have, dealt with the question fairly, keeping in mind what other sectors of the economy have done and not paying senior public servants too much or too little. I hope that even at this late date the government and the President of the Treasury Board will agree to what I think is a very reasonable and moderate request.
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Mr. Guay (St. Boniface):: Mr. Speaker, would the hon. member for Winnipeg North (Mr. Orlikow) permit me to ask him a question? In view of the comment that he made a few moments ago with regard to members' salaries, would the hon. member be willing to repeat what he said to me when he sat next to me last December prior to the bill pertaining to members' salaries being presented to the House? Would he tell the House what he said to me at that time?


The Acting Speaker (Mr. Penner):: Order, please. I doubt that the question is in order. We are now on private members' business relating to the production of papers: that is the question with which we are dealing.


David Orlikow: I will answer the hon. member.


The Acting Speaker (Mr. Penner):: I regret to interrupt the hon. member, but this is not the question under debate and I think it would be improper for us to pursue this line of questioning.


Mr. S. Victor Railton (Welland):: Mr. Speaker, I think the question of the parliamentary secretary, although out of order, might have evoked quite an interesting answer. I would like to say that the hon. member for Winnipeg North (Mr. Orlikow) in his motion makes a very interesting point. I am going to try to show why it is impossible to produce the information that he requested at this time, or at almost any time, because of the character of the information he requests.
The hon. member has access to the salary scale, and there is no reason for that to be withheld. He has stated that senior executive officers receive a minimum of $25,000. He has stated that other groups, Governor General's appointees, receive a maximum of $60,000. The figures he has produced are according to his information, and I am no better informed. The point is that although the hon. member has access to the substance of the report by the advisory committee, how they arrived at their decision is not necessarily material which can be tabled. This is similar to cabinet discussions: we know the results of cabinet discussions but we do not necessarily have before us all the arguments which took place in cabinet. I think this is the important thing.
On the question of these salaries, the performance of all these people is reviewed annually and they are rated as satisfactory, good, excellent or outstanding and their salaries are adjusted accordingly. In regard to the recent retirement the hon. gentleman cited, referring to a deputy minister, the Prime Minister (Mr. Trudeau) himself said that it was to allow more flexibility in those offices. I do not think there is any doubt that the Prime Minister is a good judge of that. I doubt that the salaries and benefits these people receive are better than those of the private sector. I do not think the hon. gentleman can produce figures to prove otherwise. I do not think anything has been said about the salaries and emoluments given to officers of trade unions. That information does not appear to be available to us either. I think it would make very interesting reading if someone could produce that information.


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I think the reference to the comparison with members' salaries was a very good point. We do not receive salaries in this House comparable with that of junior executives. I think it is about time we did.


Some hon. Members:: Hear, hear!


Samuel Victor Railton: I quite agree with the hon. member for Winnipeg North, and it is about time that he and his party became realistic on this point. So, Mr. Speaker, to give some background to the reason these papers cannot be introduced I would refer the House to two Hansard references. I refer, first, to March 15, 1973, when several general principles were brought forward in Appendix B, to which I will refer later. There were 16 in all, and at least three of them refer to this request for the production of papers. On the same date, on the following page, the hon. member for Winnipeg North Centre (Mr. Knowles) made a request for the production of papers and a lengthy debate ensued. Of course, the hon. member took a prominent part in the debate. The then House leader also spoke very fluently on the subject.
The discussion on that day showed all of us why it is impossible to produce certain papers and why those papers should not be requested. We have to follow guidelines, and they are well defined. In another Hansard reference of July 26, 1973-the House was again debating a private member's motion-the hon. member for Abitibi (Mr. Laprise), for the hon. member for Bellechasse (Mr. Lambert), again requested papers "relating to a grant by the Department of Regional Economic Expansion to the newspaper Le Soleil of Quebec". A great deal was said in the discussion that followed, and finally the hon. member for Nipissing (Mr. Blais) replied. His remarks irrefutably showed why these papers came within the category of those which could not be tabled in the House or read into Hansard because of their private character.
When this motion was first brought forward on October 1, near the opening of the present session of the thirtieth parliament, the answer was:
The studies prepared for the Advisory Group on Executive Compensation in the Public Service contain salary data taken from several surveys on the movement of executive salaries, both within and outside-
I repeat, "outside".
-the federal public service. Data taken from these surveys is considered to be proprietary-
That is why the mover of the motion was asked to withdraw it. However, he did not see fit to do so. I would like to say, further, that when the memorandum for the advisory group was prepared, a great deal of survey data had to be used as a comparison for the establishment of rates for other occupational groups and the surveys were acquired from organizations in the private sector such as Hay and Associates as well as the pay research bureau. Surveys are provided on condition that their contents remain confidential and are not given publicity. Circulation within the recipient organizations must be strictly limited to those concerned with salary and wage administration. If the Treasury Board or the advisory committee were forced to make the survey results public, we would be denied access to surveys in the future. This would make the task of pay comparison with the private and other

public sectors most difficult, if not impossible. In these circumstances, I feel that the House should support this refusal.
Further, there is a quotation from the personnel policy branch procedures manual with respect to the handling of cabinet documents. The general principle is as follows:
To enable members of parliament to secure factual information about the operations of government to carry out their parliamentary duties and to make public as much factual information as possible consistent with effective administration, the protection of the security of the state, rights to privacy and other such matters, government papers, documents and consultant reports should be produced on notice of motion for the production of papers unless the paper or document falls within any of the categories outlined below; in which case, an exemption from production is to be claimed.
As I said, there are about 16 categories of exemptions from the rule for production of papers. They are legal opinions for the use of government; papers which would be detrimental to the security of the state; papers dealing with international relations where consent should be received from the originating country; papers which might be detrimental to the future conduct of federal-provincial relations or even relations between two provinces-consent must be obtained in such cases; papers containing information the release of which could allow a result in financial gain or loss by a person or group of persons; papers reflecting on an individual's character; papers of a voluminous character which would involve too much cost or time to print; papers relating to Senate business; papers which might embarrass Her Majesty or the Royal family or official representatives of Her Majesty; papers relating to negotiations leading up to a contract until the contract has been executed; papers excluded by statute; cabinet documents and those which include a Privy Council confidence; proceedings before a court or a judicial inquiry of any sort; papers that are private or confidential and not of a public or official character; internal departmental memoranda and, last, papers requested, submitted or received in confidence by the government from sources outside the government.
There are many other groups, but I think there is enough here to show that there are at least three categories of exemption which apply to this request.
Now I come to reasons why studies prepared for the Advisory Committee on Executive Compensation should be exempt. I should like to mention a few of them. Some utilize private surveys conducted by the American Management Association, H. V. Chapman, Hay and Associates, and the Pay Research Bureau. The surveys provided by Hay and Associates and the Pay Research Bureau are made available to the advisory group on the condition that the contents are not made public and, in fact, are reviewed only by those people directly involved in the compensation function. If this information were to be made public, either willingly or unwillingly, we would not have any access to such information in the future. It would be a breach of confidence. We have to realize that salaries in the private sector are extremely confidential at the executive level. Many employers are reluctant to divulge executive salaries and do so only under a guarantee that the information will be kept confidential.


I would say that both the private sector and trade union sectors are very, very jealous about divulging information on the pay of their executives. I think we have to respect that at the present time, unless legislation is brought in putting everything right on the table.


Stanley Howard Knowles: Why not?


Samuel Victor Railton: Bring it in!


Stanley Howard Knowles: With that crowd over there?


Samuel Victor Railton: Finally, Mr. Speaker, there are two surveys, very large and very general in nature, that are available to the public. These are prepared by the American Management Association and H. V. Chapman, and may be purchased directly.
I think I have gone into this in enough detail. Mr. Speaker, that the House will realize the request cannot be accepted. There are good reasons for this, the main one being the confidentiality of some of the information which went to make up the report of the committee.
If anything else is needed, Probably other members of the House will be making comments.


Mr. Albert Bechard (Bonaventure-Iles-de-la-Madeleine):: Mr. Speaker, my first reaction, on reading the request of the hon. member for Winnipeg North (Mr. Orlikow), would be to support his motion.
Indeed, at first glance, for a parliamentarian whose duty it is to watch closely how the taxpayers' money is spent, all taxes including the parliamentarians', it is quite normal that he should know how much money the mandarins are paid. Those who provide sustenance to those mandarins are the taxpayers, the voters of Winnipeg North Centre and all the ridings in Canada. It is quite normal for the people who pay those mandarins to want to know how much money they receive for their performance in administrating their business.
As for me, as a result of the lifting of shields provoked by the introduction of a certain bill sometime in December ensuring more decent remuneration to the people's elected, provoked and inflamed especially by the press which is more prone on such occasions to descend upon those who work almost night and day for the Canadian voters, Mr. Speaker, I should be very much interested, just as my electors are and those of all the parliamentarians sitting here, to know how much those servants of the people, those senior civil servants are paid. As the hon. member for Winnipeg North Centre requests it so well in his motion, it would certainly be most interesting to know those figures, to compare them with the income of the officials and leaders in the private sector, for instance. I will even add that in the debate which started in December and, I hope, will soon resume and come to an end, it might be interesting to use those data for comparisons, but members of parliament, those servants of the people, are always forgotten. If you believe the news media, they just do nothing at all. I have read a newspaper article which quoted a female journalist from the Pontiac riding as
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saying: "Do not beat about the bush, those people want pay increases, so call them over the weekend, bother them, ask them for anything, for this and that".
But, Mr. Speaker, it is exactly what is being done. Very often I am called by constituents who want some information, even after midnight. I have never slammed the phone in anybody's face, my phone number is well known by everybody here in Ottawa, as well as in my riding.
It would be interesting to compare the best salaries in the public service and the private sector, for example, with the salaries we get, we, the servants of the people, whom unfortunately the news media tend more and more to disparage.
That kind of publicity more and more put serious people off entering public life.
Mr. Speaker, I did not want to linger over a topic that has appeared so delicate and still appears so delicate anytime we speak about it, but I suggest that it should be a good thing to make those comparisons with those people who work from 9 to 5, and those who work from 8 to midnight.
The motion of the hon. member for Winnipeg North Centre raises the full question of production of papers. Is it appropriate, useful and even necessary to provide all the information in the government's possession? Is it necessary or appropriate to provide all the required information? If you answer to that first question that, in some occasions, it is not appropriate or even proper to provide all of it, which information will the government be required to release?
Mr. Speaker, in 1973, and more specifically on September 15, 1973, there was a very important debate on that question of production of papers. The government at that time, through the House leader, the present Secretary of State for External Affairs (Mr. MacEachen), set forth the general principles guiding the government in its policy on production of papers.
The hon. member for Winnipeg North (Mr. Orlikow), of course, participated in that debate. It would be useless to recall all that was said at that time but I would particularly like to refer hon. members to that debate on September 15, 1973, and the guidelines which were set forth by the government on production of papers.
My hon. colleague who spoke before me earlier listed what are called in English the guidelines, and I think that in the motion now before us the paper requested falls under one of the guidelines set forth in item 5-Papers containing information. That is in English. I am sorry, but the French translation is in the French Hansard, and that was published in 1973, but I think all hon. members in this House being bilingual will certainly understand if I read the English version: Papers containing information, the release of which could allow or result in direct personal financial gain or loss by a person or a group of persons.
I think that item 5 constitutes an objection to the production of the paper the hon. member would like the government to produce. Indeed, Mr. Speaker, it has always been the policy of the government, and that also exists in the world of business, not to disclose those things because it would be detrimental to the government or private enterprise, or detrimental to both. That is why it is abso-
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lutely necessary to continue that policy because it would be detrimental to those who, for example, work in private enterprise. Indeed, the hon. member for Winnipeg North said he knew nothing but he nevertheless submitted a series of figures pertaining to senior officials salaries. On the other hand, he is asking us to produce all that when he already knows those things.
An article was published in the November 2, 1974 edition of the Financial Post, entitled: "Executive salaries keep up with inflation, too" and here is what follows: "What top executives earn:" in private enterprises for instance, under the heading "position", "Chief executive officer (president)": His salary increased by 9.7 per cent in the year 1973-74 and since he was eligible for a bonus of 23.3 per cent, his average salary was $41,226, plus the bonus of $11,410, which makes a total of $52,636. I shall spare the House the other figures mentioned, and I see there is no possible comparison with the salaries of the members of the House of Commons of Canada. These figures are given in this article of the Financial Post.
As for making public the confidential information requested by the government from the business sector, what confidence could people have in the government of their country if it revealed tomorrow morning figures which were given on a confidential basis.
If such a thing happened in the future, the private sector would never agree to send the government this information it finds most useful to determine the salaries of its own employees.
For those reasons then, Mr. Speaker, I think it is normal that we follow the same policy applied until now by the government, that is that we preserve the confidentiality under which the information have been given.


Mr.   J.-J. Blais@Nipissing: Mr. Speaker, I am pleased to deal with such an interesting problem, because ever since I have been in the House I have been concerned with the matter of production of papers and I found out that the policy already adopted by the government and that we follow is an ideal one in that it creates a balance between what is available to members and what must be kept secret for public security reasons.
I am pleased to note that the hon. member for Winnipeg North (Mr. Orlikow) has chosen this opportune time to draw attention to the salaries being paid to senior civil servants. Of course salaries have been in the public mind and under public scrutiny since before Christmas, and this scrutiny has not always been flattering to public servants and members of this House. I think the hon. member, in view of his party's position, was astute in bringing in through the back door what he could not bring in through the front door. He did a wonderful job in presenting his argument.
In addition to discussing the upper and lower limits of senior civil servant's salaries, it might be of benefit to hon. members and the public generally if I were to describe the salary ranges of various civil service posts. Before I do this let me correct an impression left by the hon. member for Winnipeg North, namely, that there has been a three-fold increase in the number of people being paid the top salary range.

It is true that in 1968 there were roughly 300 SX's. However, subsequent to 1968 there was a reclassification at the senior level. In effect one of the reasons why there was a three-fold increase was because the reclassification took people away from other groups and put them into the SX group. Therefore, to say that there was a three-fold increase is slightly misleading. One of the reasons there was that change was because of the report of the Advisory Group on Executive Compensation in the Public Service, which was formed as the result of a recommendation of a prior joint Senate-House of Commons committee studying employer-employee relations in the public service.
I now wish to deal with the classifications. There are two classifications at the upper level. There are the public servants who come through the ranks and are usually referred to as SX's. These are people of considerable experience. This group is subdivided into four classes. SX-1 is paid $25,500 to $32,500; SX-2, $29,000 to $37,000; SX-3, $33,000 to $42,000 and SX-4, $38,000 to $48,000. These are not the order in council appointments. That is a separate category called DM's. A DM-1 is paid $37,000 to $47,500. No one in the DM class is paid less than 37,000 smackers. Class DM-2 is paid $44,000 to $54,000 and DM-3, $50,000 to $60,000.1 suggest that is a substantial sum.
How is this sum arrived at? The advisory committee in its latest report indicated it had examined the salary structure in the private sector. It established these rates based upon what is being paid in the private sector. That is quite apart from the issue the hon. member has brought to the attention of the House.
A cabinet minister, who sits on the treasury benches, is paid $18,000 a year. He receives an additional amount as a minister of between $17,000 and $18,000. Therefore the minister, who is in charge of the executive, in charge of the direction of this country, who is subjected to the opposition every day, who is in the public eye and is disrobed by the public and the opposition constantly, receives a maximum of $35,000. The minister receives less than the lowest paid DM.


Stanley Howard Knowles: It is $43,000. Get your figures right.


Mr. Blais:: Those are the irreversible facts. There is no one in the classes we are discussing, executives, who earn anywhere close to the $18,000 which members of parliament earn. Each of the 895 senior civil servants earn no less than $25,500. In addition all their expenses are paid as long as they submit a chit. They travel first class. They get the best hotel accommodation.


Stanley Howard Knowles: Mr. Speaker, I rise on a point of order. I would like your ruling as to whether this kind of debate is in order on a motion for the tabling of documents. Are we debating Bill C-44?


The Acting Speaker (Mr. Penner):: The point of order raised by the hon. member for Winnipeg North Centre (Mr. Knowles) is well taken. The Chair is troubled from time to time when we have a notice of motion for the production of papers. The purpose of the debate is to show cause on the one hand why the papers ought to be pro-


duced and, on the other, to show cause why the papers should not or may not be produced. When the debate ranges widely, the rule of relevance is certainly being disregarded, and in some cases with a considerable amount of abandonment. The Chair has a duty to members to call this to their attention and request that they restrict their comments to the contents of the motion.


Jean-Jacques Blais: I fully agree, Mr. Speaker. All I was trying to do was follow in the footsteps of the hon. member for Winnipeg North. He brought the topic to the attention of the House at this time. He talked about salaries of public servants. I thought I could do the same in a more detailed manner. I say that because the hon. member for Winnipeg North knows full well that the information he is seeking is documentation that is obtained from the Pay Research Bureau. He knows that all information deposited with the Pay Research Bureau is confidential. If not, it would dry up. He also knows that without the Pay Research Bureau there cannot be honest labour negotiations. The hon. member supports that. If he recognizes that, why is he bringing this motion?


The Acting Speaker (Mr. Penner):: Order, please. The hour appointed for the consideration of private members' business has now expired.



ROUTINE PROCEEDINGS


Mr. John M. Reid (Parliamentary Secretary to President of the Privy Council):: Mr. Speaker, there have been discussions through the usual channels resulting in unanimous consent to move the following motion and to have it put to the House:
That the Standing Committee on Indian Affairs and Northern Development be authorized to hear representations from the Manitoba Indian Brotherhood.
I so move.


Stanley Howard Knowles: May I second the motion, Mr. Speaker?


John Mercer Reid: Mr. Speaker, I would be delighted to have the hon. member second the motion.


The Acting Speaker (Mr. Penner):: Is it the pleasure of the House to adopt the said motion?


Some hon. Members:: Agreed.


[Stage Direction]
Motion agreed to.
The Acting Speaker (Mr. Penner):: Before calling it six o'clock, is it agreed that the House return to committee of the whole in order that we might facilitate procedures for this evening?


Some hon. Members:: Agreed.
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GOVERNMENT ORDERS


[Stage Direction]
The House resumed consideration in committee of Bill C-40, to amend the Excise Tax Act and the Excise Act- Mr. Turner (Ottawa-Carleton)-Mr. Penner in the chair.
B. Keith Penner: It being six o'clock, I do now leave the chair until 8 p.m. this evening.
At six o'clock the committee took recess.


[Stage Direction]
AFTER RECESS

The committee resumed at 8 p.m.
Gérald Laniel: Order please. When the committee rose at six o'clock it was considering clause 18 of Bill C-40, an act to amend the Excise Tax Act and the Excise Act, to which an amendment had been moved by the Minister of Energy, Mines and Resources which was stood at that time. I imagine the committee is still considering clause 18 of the bill. Is the committee ready to proceed?


Marcel Joseph Aimé Lambert: Mr. Chairman, though the interpretation of clause 18 may still lend itself to discussion, we could perhaps go on to clause 19. The minister's reply satisfies me. Unless someone else wants to pursue the discussion of that clause ... As for me, I am satisfied. I shall bring it up again some other time. So, we could now go on to clause 19, pass it, then move on to clause 20 which merely provides for the abrogation of the present act. From there we could go on to clause 21, and avoid holding up the business of the House.


Jack Sydney George (Bud) Cullen: Mr. Chairman, I understand clause 18 was stood because there was some apprehension about it when we reached it. It might be that we should carry clause 18. I may say to the hon. member for Moncton that, on checking over the supper hour, I have been informed that reservoirs are also included within the category to which he referred. The clause refers to complete water distribution systems.


Leonard C. Jones: If that is true then perhaps the parliamentary secretary and the minister are cognizant of the difference, but is the bureaucracy in the Department of National Revenue aware of the situation?


Jack Sydney George (Bud) Cullen: Yes, Mr. Chairman. I understand the interpretation was received from that department, so there is no confusion. We felt that if the clause were phrased so as to include such things as feeder lines, and so on, the whole page would be full of terminology. Therefore, we think the general words cover the whole situation, and this is confirmed by the department.


Gérald Laniel: Is the parliamentary secretary suggesting that we proceed with clause 18 or stand it?
28626-27'/z


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Marcel Joseph Aimé Lambert: It was carried, Mr. Chairman.
On clause 18.


Gérald Laniel: There is an amendment before the committee which I will first have to put. It is moved by the hon. member for Rosedale:
That Bill C-40, an act to amend the Excise Tax Act and the Excise Act, be amended by adding thereto immediately after Clause 18 thereof the following subclause:
(2) Paragraph (b) of the definition "municipality" in subsection
2(1) of the Excise Tax Act is repealed and the following substituted
therefor:
"(b) such other local authority as the Governor in Council may determine to be a municipality for the purposes of this Act;"


Marcel Joseph Aimé Lambert: That has been put and passed, I believe.


Gérald Laniel: Not according to the record before me. Shall the amendment carry?


Some hon. Members:: Carried.
Amendment (Mr. Macdonald (Rosedale)) agreed to.
Clause 18, as amended, agreed to.


Jack Sydney George (Bud) Cullen: Mr. Chairman, there were two amendments and I thought you were referring to the second one. There was a request from the acting House leader for the opposition that we change "two years" to "three years".


Marcel Joseph Aimé Lambert: That was put through.


Gérald Laniel: I am told that that amendment was carried. So clause 18, as amended, is carried. The committee will now proceed to consideration of clause 19.
Clauses 19 and 20 agreed to.
On clause 21.


Mr. Munro (Esquimalt-Saanich):: Mr. Chairman, on a point of order, I wish to address my remarks to section 11 of the amended schedule in clause 21, but I am prepared to cede my place, if that is your desire, to members who wish to address themselves to sections 9 or 10. I have some comments to make about sections 11 and 12, and if you want us to take them in any order I am quite prepared to continue my remarks on section 11 and subsequently on section 12.


Gérald Laniel: There is nothing to prevent the hon. member from proceeding now. We are considering the whole of clause 21 and he may refer to any part of the clause. It is for the hon. member to decide whether he wants to make his comments now or later.


Donald W. Munro: I am glad the minister has now come into the chamber because there were two or three questions of fact that I wanted to be sure of, Mr. Chairman. Just to put the minister in the picture, I am addressing myself to section 11 of clause 21, appearing on page 11 of the bill. I should like to ask the minister whether the purpose of this particular modification in the schedule is to raise revenue, or is it designed to impose restraints on the use of energy? That is my first question and I have three or four questions to ask subsequently.
[The Chairman.]


John Napier Turner: The answer, Mr. Chairman, is both. It primarily relates to an energy conservation program.


Donald W. Munro: Having established that, my second question is to ask whether the minister can give us some notion of the amount of revenue expected from this particular measure?


John Napier Turner: That is what we are trying to get for the hon. member, Mr. Chairman, the usual precise answer, and perhaps somebody else would like to get up while we are getting that.


Donald W. Munro: I have a couple of other questions which I should perhaps ask at this stage. I wonder if it is correct to assume that the imposition of this 10 per cent in respect of this matter of boats will be added to the federal sales tax now in existence on the books, namely 12 per cent, so that the total tax on boats of this sort will be 22 per cent.


John Napier Turner: It is 10 on 12. The 12 per
cent is the basic sales tax and the 10 per cent is on the 12 per cent.


Donald W. Munro: That means we would have 11.2 per cent altogether; the 10 per cent and the 12 per cent?


An hon. Member:: No, it is 22 per cent.


John Napier Turner: I do not want to challenge the hon. member's mathematics too severely but-


Marcel Joseph Aimé Lambert: It is 23.2 per cent.


Donald W. Munro: I appreciate that smart answer, but I was being quite serious. When the minister says it is 10 on 12, that could mean 10 per cent of 12 per cent, and that is 1.2 per cent. If you add 1.2 per cent to 10 per cent you get 11.2 per cent. Is it 11.2 per cent or 22 per cent?


John Napier Turner: It is 10 per cent plus 12 per cent, Mr. Chairman.


Donald W. Munro: All right, it is 10 per cent plus 12 per cent. Now we have some facts before us.


Marcel Joseph Aimé Lambert: It is 12 per cent plus 10 per cent; 23.2 per cent altogether.


Donald W. Munro: Is it 22 per cent altogether?


Marcel Joseph Aimé Lambert: No, it is 23.2 per cent.


Donald W. Munro: All right, 23.2 per cent.


An hon. Member:: Now you are in the ball park.


Donald W. Munro: I wonder if we have an answer now to the other question about the amount of revenue expected from this particular measure.


John Napier Turner: The total figure in respect of the energy aspect of this sales tax is $30 million. At the moment we have not broken it down in respect of boats, airplanes, etc.


Donald W. Munro: It is $30 million altogether from this particular bill?


John Napier Turner: Yes, in respect of cars, boats and airplanes.


Donald W. Munro: I am wondering whether the minister is aware that there is more involved here than just conservation of energy and the raising of taxes. We also have the matter of employment involved. This matter was raised by my colleague, the hon. member for South Shore, during an earlier discussion of this particular item on, I think, second reading of the bill. He pointed out the difficulties that some boat builders are having, if I may continue the metaphor, in keeping afloat with the heavy charges being levied against boat building.
One of my constituents wrote and told me about orders he had concluded amounting to almost $500,000 for two yachts before the budget was brought down. The order was concluded on the understanding that the cost of these yachts would be approximately $250,000 each. Now he and his customer find that they have another 10 per cent to add to the price. My constituent is not absolutely sure now that he will be able to sell the boats, but they are on the stocks and in the process of being constructed. He had to go to the bank to raise the funds to get these vessels on the stocks, and he now wonders what is going to happen. The upshot of the whole thing could very well be that he will go out of business.
There are a lot of small industries of this sort in my riding, boat builders and others, and I wonder if the minister really took this whole situation into account when he decided to impose another 10 per cent on the already fairly heavy sales or excise tax that applies to boat building. In order to make it easier for boat builders who are doing their best to contribute to the employment situation in this country, and to enhance the industry and improve the craft, the minister could have provided that this additional tax would not come into effect until the law was passed.
In this country we have a tradition of boat building on the east and west coasts. I have a feeling that there was a time when the minister was not so preoccupied with budgets that he enjoyed sailing.


John Napier Turner: We are not taxing sailboats.


Donald W. Munro: I also have in mind powerboats. I am not sure the minister now has the time to indulge this particular fancy, but is it not possible that this imposition of additional tax could be made effective when the law is passed, so that boat builders and customers will know exactly what charges they will have to pay?
I have a feeling that I raised this question with the minister during the last days of December. I asked whether he could look into the matter to determine if there is a possibility of a rebate in respect of orders already on the books for powerboats of this size. This would apply as well
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to the provision of motors that go into these boats. I would be pleased to know whether the minister can say now that a rebate might be within the realm of legal possibility, or that this is completely ruled out under the provisions of some act or other.


John Napier Turner: Mr. Chairman, the hon. gentleman has raised some of the logical points that were raised in correspondence from all quarters of the House. I have had two or three meetings with representatives of most of the boat industry in the country. If we are going to face a conservation program in respect of energy in the western world it is inevitable that some adjustments will have to be made.
The measures introduced by the President of the United States will undoubtedly affect the sale of heavy cars, private airplanes and recreational motor boats. I will not deny that there will be some negative employment effects. Until we re-establish our reserves and reach a balance between the oil producing and consuming countries of the world I feel that conservation measures are necessary. New sources of energy will also be necessary, as well as some sort of financial solidarity among the consuming nations.
On the subject of inventory, it is very difficult to protect the industry either in respect of the imposition of tax or the release of tax. Certain representations have been made in the House about releasing the tax inventory from the sales tax which is delivered after imposition. The hon. member is in the opposite situation when he makes certain representations on behalf of the boat building industry in the country.
We have a good many firms which, I suppose, will have to sharpen their sales procedures and tighten their belts until we get through this situation. They did have some notice in the budget which was brought down on May 6, and which was defeated in the House in the last parliament. On May 8 we issued a release to the country that if we were returned the budget would be reintroduced and the sales tax on these items would apply from the date of the next budget. Admittedly we raised the rate of the tax from 3 per cent to 10 per cent from May 6 to November 8, but in any event we made our position clear that if the people of Canada renewed our mandate we would be bound by these obligations.


Robert Lorne Stanfield: Just like your transportation policy.


John Napier Turner: The hon. gentleman does not expect me to get into that situation tonight. I have given the frankest explanation I can to the hon. member.


Donald W. Munro: Thank you, Mr. Chairman, that does clarify some of the matters, and I am most interested to learn that between May 6 and the next presentation of the budget the tax was more than tripled. I think it is well worth having on the record in Hansard that the undertakings were more than fulfilled on the second occasion.


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The third comment I wish to make in relation to this particular item-and I propose to speak on item 12 later when other hon. members have had an opportunity to record their problems-is to suggest to the minister, since he seems determined to risk losses in industry through the imposition of this tax, that there should be a great deal more coordination within the government on a number of programs which defeat the purpose of this item in the bill.
I consider it as a sort of right hand-left hand syndrome, where the right hand does one thing and the left hand something else.


Walter David Baker: Both are blind.


John Napier Turner: You had a good metaphor until Baker got into it.


Donald W. Munro: For example, the Minister of Industry, Trade and Commerce, who sits immediately behind the Minister of Finance, through his department promotes tourism and industry, while on the other hand tourism and industry are being cut back by the Minister of Finance.
Another example is that of the Minister of the Environment who is respoasible for a particular program, ably assisted by the Minister of State for Fisheries, namely, the small harbours program. This program promotes tourism and encourages the power boat group in this country who are able to enjoy the outdoors-and of course the Minister of National Health and Welfare does a great deal to promote the proper use of leisure. Power boating on the east and west coasts and on lakes is certainly a means of enjoying our great outdoors. However, the Minister of Finance cuts it back.
I wonder why there should be such poor coordination within the government. Perhaps if what the minister wants is coordination with his colleague in the Department of Energy, Mines and Resources, he might promote the causes of the Minister of Ehergy, Mines and Resources but run counter to three other ministers. I think they should get together when they meet from time to time, and work out some of their priorities. They should decide exactly where they want to go.
Taking into account the answers we have just received, I honestly believe in connection with twenty horsepower vessels, that those that are on the stocks might very well continue being sold without the tax. Boat builders will be aware of the fact that a heavier tax will be imposed and they will be quite happy to continue working with smaller vessels requiring smaller motors, and engine builders will reduce the size of the engines, having been given notice, first of the imposition of the three per cent tax and subsequently of a ten per cent tax on top of what is already known to be a 12 per cent tax.
All things considered, there should be at least a remission of this tax on orders that were undertaken before the date of the passage of this bill. This will serve notice to the boat builders and engine manufacturers in this country that smaller types of vessels should be built with smaller motors.
I see that I am not making any sort of impression on the Minister of Finance, so I shall resume my place and allow other hon. members to have their say.


André-Gilles Fortin: Mr. Chairman, at the risk of repeating some of the arguments that were just given, I wish to draw particularly the attention of the hon. Minister of Finance (Mr. Turner) on clause 11 that affects very seriously and radically some industries in my riding.
I was listening to the Minister of Finance when he said that he maintained this tax with a view to save energy and to divert $30 million into the coffers of the state.
Mr. Chairman, I wish to tell him without any comments that I have received a letter dated November 26 and which is aimed at attracting the attention of the minister so that he amend clause 11. It should be noted that those are industries which received economic development grants from the Department of Regional Economic Expansion and which now may have to close their doors or seriously reduce their activity precisely because of this tax that will increase the price of non commercial boats to a prohibitive level.
Mr. Chairman, this is the view expressed to the Minister of Finance. He received a copy of this letter. It was sent by Espadon Industries Inc., of Princeville and I quote:
After reading the budget resolutions of last November 18, we wish to ask you to withdraw the 10 per cent surtax on boats.
It seems that the surtax was advocated to save energy, but we suggest that the $30 million that you intend to recover through this measure will have negative and not positive consequence because we are going to lose our market...
-and this in fact is going to occur-
. .. and then our only alternative will be to stop the activity of our business.
Anyway, it has been proven that boat operators consume only about one half of 1 per cent of the total energy consumed (see statistics of BIA and NAEBM of the United States), which means that this surtax will have no effect on the national energy consumption.
We are certain that the effects of this surtax will be much more unfavourable than otherwise for the country, for many other reasons that are too numerous to list in this letter.
You should therefore abolish this surtax ...
This letter is signed by Mr. Gilles Letourneau, secretary-treasurer of Espadon Industries Inc.
Mr. Chairman, I hope that this will be food for thought for the minister. This is a typical French Canadian industry with a good reputation in Canada and the United States, which will now be unable to compete against a similar American industry and which moreover will see the price of its boat increase by 10 per cent because of this surtax. And all this supposedly to save energy, when statistics show that boats do not consume more than one half of 1 per cent of all energy consumed.
I have here, Mr. Chairman, another representation from the company Placements Suzor Ltee, which I will not read. It is signed by the president of Placements Suzor Ltee, Mr. Albert Audet, who owns a branch of the company called Sunray Boats Inc., a new, prosperous, well-structured, well-organized industry producing boats of excellent quality and which now risks disappearing sooner or later because of this surtax. Many employees of these industries will be laid off because the price of boats will become excessive with the 10 per cent surtax. In fact, this has already begun. Sales will go down, production will be


at a standstill and employees will have to be laid off as in other fields.
Mr. Chairman, if the minister really wanted to act effectively against the present inflationary crisis, in developing these bills, he would impose an additional tax on American boats imported into Canada, to protect the Canadian market instead of helping destroy the Canadian industry.
The Sunray Boats Inc. company is the product of the competent people who built it. As I said earlier, it is an outstanding industry. It is worth visiting because it did a tremendous job. It did so with French-Canadian capital, in somewhat the same manner as Prince Craft, for instance, acquired its good reputation. It consistently produces good boats, it is renowned across the country and in the United States, and now with this surtax, the Minister of Finance, who says it will produce $30 million, will help destroy what his colleague the Minister of Regional Economic Expansion has successfully created through a development grant paid out of taxpayers' money.
Mr. Chairman, may I ask the Minister of Finance (Mr. Turner) if any representations were actually made by those French Canadian corporations. If so, did any meetings take place? Did he check the effective energy consumption rate of pleasure boats? Could he tell us the impact of that amount insofar as energy savings are concerned?
Did the minister not carefully consider other ways of saving energy instead of crushing down our Canadian industries? What was the minister's answer to those industries? Did he, and this is an important question, confer with his colleague, the Minister of Regional Economic Expansion (Mr. Jamieson) who contributed in creating employment in our country before that surtax was announced, owing to which more factories will close down in our country? If he did, what was the outcome of that consultation? If not, why did he not convene with his colleague?
Mr. Chairman, before proceeding further with the study of that bill, I think it is important to take our time and check to what purposes the taxpayers dollar was used in the past and what its proposed uses in the future are.
A number of expenses, of energy wastes in numerous sectors of our economy are not necessarily to be attributed to the government, but stem from our habits, as we used to have plenty of everything. We are now faced with the threat of an energy shortage. And yet some sectors are still allowed to go on wasting in a shameful way. In some areas, people have to pay more for the same energy sources as in others, and that means having one law for the rich and another one for the poor Canadians.
And on top of it all, Mr. Chairman, more factories will be led to close down in Canada on the pretext of saving energy whereas other sectors will be allowed to go on wasting. Now, I am saying that if the Minister of Finance is really interested in this country's finances, he will confer with his colleague the Minister of Regional Economic Expansion and tell us if he really assessed the economic impact of the 10 per cent surtax which comes on top of the taxes which already apply to those boats.
Mr. Chairman, if the minister does not change clause 11, the price Of boats will go up 10 per cent. In addition, we
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must bear in mind the increase in the cost of raw materials which are also by-products of oil the cost of which is already prohibitive. Mr. Chairman, I agree with my colleague for the Northwest Territories (Mr. Firth) who uses those boats: the minister's decision is not reasonable. He was probably influenced especially by his officials.
To my mind, Mr. Chairman, it is imperative that the minister adopt a rational position in this matter and accept our suggestion, seeing Parliament is the place to legislate: he should revise his position with regard to clause 11.


Jean-Jacques Blais: Mr. Chairman, I merely wish to say a few things in view of the fact that clause 11 is considered important. The minister indicated a while ago that he had received representations with regard to it from all parts of the House, representations with which I agree. I urge the minister to reconsider that clause because arguments have been brought up which to my mind are quite enlightening and convincing.

I come from an area that is basically a poor area. I have been saying this in the House for the past two years in a number of representations that I have made to this House and to various ministers. I have indicated that regional development was one of the essential ingredients in the government's policies aimed toward my area and its betterment.
I agree that there is an approaching shortage of the commodity that we call oil. I am vice-chairman of the Standing Committee on National Resources and Public Works, and I am in a position to know that the thrust of the legislation in this instance is one that must be accepted. I agree that with the shortages we are going to be facing, we have to look at conservation. I think that Canadians as a whole recognize that conservation is essential. However, I would like to refer to a letter I received from my provincial counterpart, Richard Smith, who is an MPP, and I quote a paragraph in that letter. I think he puts the position to us succinctly with reference to regional development. He states as follows:
Although, I agree with the principles behind the position of the tax, the problem lies in the fact that the tax will be effective in the slower growth areas of Canada which are most dependent on tourism because if one looks across this country at tourism and slowgrowth and low incomes are synonymous and of course the sale of this type of merchandise is limited primarily to those tourist areas of the province.
I cannot but agree with that particular position in view of the fact that primarily in my area we have a very short season. We are not lucky like Nova Scotia where they have a very long summer. In my area we have a relatively short season, and the tourist operators have a very short period of time during which they can make their money. However, their capital outlay is relatively high because they have to cater to the tourist trade and, as we know, the tourist has been spoiled in past years and requires the best. He needs the best accommodation, he needs the best guides, and on top of that he needs the best equipment.
Because of the demands that are made on me with reference to encouragement of the tourist industry, I fail to see how the marginal operators-and that would


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encompass most of the tourist operators in my area-will be able to survive a 10 per cent addition on their pleasure craft.
This affects not only recreational facilities in my area. I live on the shores of Lake Nipissing and Nipissing is the name of my riding. It is a relatively shallow lake, 130 feet on the average; it is 65 miles long and 25 miles wide. It is not possible to cross that lake with a 20 horse power motor and the sort of equipment that is envisaged in this particular item. There is also an Indian reservation at each end of the lake, and the Indians use their boats for transportation.


An hon. Member:: On the lake?


Jean-Jacques Blais: Yes, on the lake. I have not seen a boat on the highway for some time.


An hon. Member:: You walk on the lake.


Jean-Jacques Blais: I am told that in certain areas of Manitoba that are short of water they have to go around in those prairie sailboats.


An hon. Member:: Prairie schooner.


Jean-Jacques Blais: We are using these boats in my area not only for leisure but for essential transportation.
The third point that I should like to bring to the minister's attention is that we are trying to stop this trend toward urbanization by offering attractive living conditions to people who reside in the non-urban areas. There are individuals in my area who work for $3.25 an hour, which is relatively better than the average wage-more than I get I am told!


An hon. Member:: You are not worth more.


Jean-Jacques Blais: These individuals cannot afford to take long trips to Florida in the wintertime, like some members, nor can they afford to go to Toronto for the culture that city can offer. Peterborough is even out of the way. Mr. Chairman, they have to use the area they live in and for that they need the equipment. If that sort of equipment and access to it are removed, we are telling them they cannot use the facilities which surround them for their leisure. We are telling them it is no use going to those areas, that they had better stay in Toronto. I think this is a serious matter and one that has to be considered. In effect what we are asking people to do is face economic difficulty at a time when there is knowledge-


An hon. Member:: Why don't you leave the party?


An hon. Member:: Come on over.


Jean-Jacques Blais: Mr. Chairman, some members are suggesting that I join them over there, and that is making my throat awfully dry.
I want to conclude by saying that, according to all indications, we are not facing comfortable times. That will go doubly for the tourist industry. If we penalize it with an additional burden we will see catastrophe in certain areas, even some areas that other government departments
are attempting to encourage through direct federal grants. I feel the minister ought to reconsider his position, and I strongly urge him to do so.


Gérald Laniel: The hon. member for Capilano.


Reginald Cyril Symes: On a point of order, Mr. Chairman, it has been my experience that it is traditional in standing committees and committee of the whole that the chairman recognize a spokesman from each party. You have recognized Conservative, Creditiste and Liberal spokesmen. I would ask you to recognize a spokesman from the NDP.


Gérald Laniel: Order, please. I will invite the hon. member to be persistent and be present. Some hon. members have been standing up perhaps ten times, and I think one of them is the hon. member for Capilano.


Mr. Huntington:: Mr. Chairman, I have been most interested in the minister's reply to questions about the reason for this tax. He has pointed out that $30 million in revenue is involved. I should like to point out that with a little belt tightening the government could surely guard against $30 million worth of waste in its programs.
The minister also pointed out that in this age of diminishing non-renewable energy resources, this is a conservation measure. I have to say in all sincerity that that is a phony answer. We have heard from the Atlantic side of the country about the importance of the boating industry to their way of life and industries, both the construction of boats and their recreational use.
In British Columbia in 1966 there were 87,000 pleasure boats, in 1974 there were 161,800 and the estimate for 1980 is 229,400. This expansion in recreational boating has come about because of reduced hours of work and increased remuneration for work. We have gone through an era of government which has encouraged us to make use of idle time, and in almost all areas of the country boating has become a very desirable and accepted way of doing so.
In the greater Vancouver area in 1966 we had a shortfall in public wet berths of 5,170; in 1974, the shortfall in public wet berths for pleasure boats was 9,580. The government has given us the small harbours assistance program and pays 50 per cent of the cost of development of breakwaters to meet this shortfall in wet berths. On the one hand it acknowledges there is a problem, and on the other hand it says, this tax is a conservation measure.
The 10 per cent excise tax to be applied to new boats built from now on in no way encourages owners of boats to conserve fuel. If the minister is serious about conserving fuel he should gradually lift the price in Canada to world market levels in order to create a consciousness that would conserve fuel. This tax is a totally negative measure, and I submit will not produce $30 million in revenue.
I have copies of letters sent by responsible people in the industry to the minister, Mr. Chairman, which point out the difficulties and confusion being created in the industry. It will be an administrative nightmare. A tax is put on boats driven by a motivating force over 20 horsepower. If the boat has accessories, those accessories are subject to tax. If the hull, drive, and motivating force are built separately, and the accessories are bought separately, there is no tax on the accessories. All that is being done is



to shatter industries that have been built up over the years to service this part of the market in Canada. People in the small boat industry on the west coast are trying to compete in a very tough market with very capable boat builders in the northern United States.
May I point out that boat builders on the west coast are finding it difficult to compete with United States boat builders. It costs about 50 per cent less to buy a boat in the United States. The boat which costs $20,000 in Seattle costs about $30,000 landed in Vancouver. The minister is making it impossible for the boat-building industry on the Pacific coast to compete with the boat-building industry south of the border. If ever there was a bad tax, a tax that will bring negative effects, it is this excise tax as it applies to boats.
I have in my possession a copy of a letter from a good Liberal who worked hard to defeat me and prevent my coming here. It is directed to the minister and points out the hardship that this proposed excise tax will bring to the pleasure boat industry. Apparently such correspondence from people in the industry has no impact on the minister. The person of whom I speak is involved in the tourist industry on the lower mainland, and sells many boats. He says that the average 18-foot boat in the Vancouver market sells for between $4,500 and $5,500, and that the average boat used in Vancouver is about 21 foot long and sells for between $8,000 and $12,000.


John Napier Turner: We are not taxing them.


Arthur Ronald Huntington: I beg your pardon? The minister might listen and hear something worthwhile.


John Napier Turner: I have the letter.


Arthur Ronald Huntington: Has the minister read it?


John Napier Turner: That is right, yes. I read the letter.


Arthur Ronald Huntington: Has it made no impact on the minister?


John Napier Turner: It is a good letter.


Arthur Ronald Huntington: Apparently the minister ignores good ideas. I do not know if there is much point in reviewing other good letters which the minister has received on this topic. One thing is sure: this tax will affect detrimentally the recreational boatbuilding industry. People will prefer to buy their boats offshore. Already more and more people prefer to buy their boats in Europe, take their sabbatical on them in the Mediterranean, Carribean or other areas, and bring them back to this country duty-free and without paying sales tax. Who can estimate how many payrolls will be lost to this country as a result of this tax?
The minister says that he is imposing this tax to conserve fuel. To that I say, baloney, Sir. The minister's reason for imposing this tax is not valid. I wonder what type of mind can countenance legislation of this type which will destroy the fruits of hard work, destroy what
Excise
people in the boatbuilding industry have worked hard to build up since World War II.
The government has tried to encourage the boatbuilding industry with subsidies and contracts. The Department of Transport carefully places contracts with small boatbuild-ers, to encourage them to develop their technology for the advantage of Canada. What kind of mind could consider legislation which will eliminate the manufacture in this country of boats of more than 20 horsepower? The United States manufacturers will have the entire market.
The minister's contention that he is doing this in order to conserve fuel just does not wash. I plead with him to remove this particular item from the bill. If he wants to conserve fuel, let him increase the cost of non-renewable fuels to the people of Canada so that demand can be brought into balance with world supplies. That is the only way to make people conscientious about fuel conservation.


Robert Lloyd Wenman: Mr. Chairman, although I have been critical of the Minister of Finance may I commend him for the way he has handled certain matters which have arisen in the House and for his promptness in dealing with correspondence which has been sent to him.
I, too, am prepared to be idealistic, because the minister has attempted to be idealistic in answering me. If I were a cynic I would say that the minister's attempts to conserve energy by increasing taxes are a red herring. I am not being facetious when I say that I assume the government, in imposing certain taxes, is trying to do more than garner as much revenue as possible. There must be some idealistic reason behind this decision to impose taxes which will affect the aircraft and construction industries.
I think the government's enthusiasm for conserving fuel used by light aircraft is misplaced. According to statistics provided by Aviation Planning Services of Montreal on general aviation in Canada, the sector facing a 10 per cent excise tax increase consumed only .3 of one per cent of the total petroleum consumed in Canada in 1972. Let me repeat the figure: it consumed .3 of one per cent. Yet the minister wants to attack the private aircraft industry. As I said, the petroleum consumption of light aircraft is minimal.
In addition, as letters and information indicate, small aircraft travel more miles to the gallon than the average family car. For example, if we want to curtail excess use of energy, let us consider that a light aircraft can carry four people at about 200 miles an hour and consume less than 10 gallons per hour. Such aircraft travel about 20 miles to the gallon, and most domestic automobiles go considerably less than 20 miles to the gallon. If the minister were to tax heavily those cars which go less than 20 miles a gallon he would recover a lot more than he will than by taxing the private aircraft industry. Perhaps that is an idealistic argument.
Unfortunately the minister is a southeastern Canadian, a Bay Street Canadian, and considerations I have raised are not reflected in his thinking. Let him look behind him, at his backbenchers, and ask what they want. Let him talk to the Minister of Indian Affairs and Northern Development, to the good member for Skeena and to other backbenchers who represent remote constituencies and travel to places other than New York and Toronto, and then tell
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the committee if I am being idealistic in asking him not to tax small aircraft.
Just as the railways united Canada and made possible the reality of Confederation, so aircraft are instrumental in the development of northern Canada, by which I mean that part of our country 100 miles north of the border. So, encouraging private aircraft to take part in the development of northern Canada is sound. The Minister of Manpower and Immigration has suggested that we should encourage people in Toronto, Montreal and Vancouver to move to northern areas. How can they get there if the roads only go half way up Canada? They will need to use aircraft, commercial as well as private, if they are to develop the area. Those who are doing exploration and so forth, or who are just making forays into the north to open it, will be penalized by this tax. The minister should again look at this.
I hope more backbench members will support the aircraft industry in Canada. As they travel on some of these private planes throughout their constituencies, they realize the great importance of this service, particularly to undeveloped Canada.
The minister should come at least part way. If on the basis of consumption he is going to divide cars into two groups, those which consume a large amount of energy and those which do not, he should at least consider applying that to small light planes compared with the larger, heavier consumption planes. For example, a 300 horsepower motor gets about 20 miles a gallon. Should a plane with this size motor not have the same exemption, especially in view of the fact it will aid northern development and help disperse the population throughout the country, instead of leaving people concentrated in the narrow belt across the southern part of Canada? I ask the minister to reconsider the aircraft tax in particular, on the basis of the arguments I have presented tonight.
The second area I wish to deal with this evening concerns construction and agricultural equipment. In his budget speech the minister indicated he wants a thrust forward in the development of housing. He indicated his interest through assisting municipalities by removing the tax on water systems, not the equipment but the transmission and distribution. In addition we must consider the equipment that will do the work to put in the transmission and distribution lines for water and sewer systems.
The cost of servicing land is one of the biggest expenses of municipalities and housing enterprises. This cost will be emphasized by the tax on construction and agricultural equipment. I disagree with the principle of taxing construction and agricultural equipment at a time when we are trying to encourage housing in particular, and the construction industry generally and, more specifically, the inventory.
The minister, through some extensive lobby, has been moved to recognize the trucking industry. Somehow someone was able to get to him and explain the situation regarding inventories. I commend the minister on his enlightenment and understanding. However, if that analogy exists, why are construction and equipment dealers being discriminated against? They are in the same basic

situation as the truckers. They play an equally vital role in the development of our country. If the minister will not consider eliminating the tax on these particular items, will he at least consider stepping back and cover the matter of inventories?
In conclusion I thank the minister for the replies he has provided to me. While I disagree with them, they have been thoughtful and prompt. I thank him for that cooperation. When he responds in that way, I try to do the same. I look forward to his reply.


Reginald Cyril Symes: Mr. Chairman, I wish to address a series of questions to the minister on this clause concerning the imposition of a 10 per cent excise tax on outboard motors over 20 horsepower. The minister used two arguments to justify the tax; first, that it would promote energy conservation and, second, that it would raise revenue for the government.
I do not have the figures for Canada, but I know in the United States the consumption of gasoline by snowmobiles, lawnmowers and boat motors amounts to less than one half of 1 per cent of the total gasoline consumption in that country. The minister says he wants to impose the tax to reduce gasoline consumption in Canada. Can he give the committee his estimate of what the savings will be for gasoline as applied to boat motors?


John Napier Turner: I will wait until you have finished.


Reginald Cyril Symes: I wish to draw to the attention of the minister that new outboard engine models are much more efficient than the older models with regard to gasoline consumption. The 1975 Mercury outboard motor has a fuel economy improvement ranging from 25 to 40 per cent over older models. In light of the improvement in new outboard engines, how does the minister justify this tax being effective in reducing gasoline consumption?
It is interesting to note that 70 horsepower engines use less gas per mile than 40 horsepower engines. Even though the larger engines are more efficient with regard to fuel consumption, the minister wants to impose this tax.
Other members have pointed out that the 20 horsepower engine is not sufficiently powerful to power boats on the market today, and that the majority of sales by marine dealers are engines above 20 horsepower. This tax will be ruinous for them.
I would like the minister to answer this question. How do small businessmen get around the problem of having to raise about 10 per cent extra capital because of the imposition of this tax, since they buy their motors in December and do not sell them until summer? This indeed poses a real cash flow problem for the outboard motor dealers.
The minister has imposed a tax on high energy consuming vehicles over a certain weight. The outboard motor averages about 100 hours use per year. The minister is imposing a 10 per cent tax on it. This is only a drop in the bucket compared to the amount of gasoline consumed by high energy automobiles. The minister is imposing a 10 per cent tax on outboard motors for 100 hours' use per year, but for the year round consumption of gasoline by heavy vehicles, he is imposing a tax of either $20, $25 or $30,


depending on the weight. According to rough calculations I have made, that is a tax of about 5 per cent on the high energy consuming cars. This is blatantly discriminatory, when a high energy car is taxed at approximately 5 per cent and an outboard motor used 100 hours a year is taxed 10 per cent. How does the minister justify that kind of discrimination?
On the point of revenue raising, in the May 6 budget the minister was content to impose a tax of only 3 per cent. I would like him to explain why he considers it necessary to more than triple the tax to 10 per cent. What are the reasons behind this?
I think the tax is discriminatory. During the second reading debate I pointed out how this will create hardship and unemployment for marine dealers and tourist operators, especially in northern Ontario. I would like some answers to the very broad questions I have asked with regard to justifying the tax.
I posed some questions on conservation. I think this is a red herring. It will not improve energy conservation but instead will create high unemployment. And how the minister justifies the increase from 3 per cent to 10 per cent in his revenue raising, I do not know. I wonder whether the minister would answer those questions.


Mr. Douglas (Bruce):: Madam Chairman, we have heard from the hon. member for Fraser Valley West about the tax on aircraft, and I should like to support some of the statements he made.


Some hon. Members:: Hear, hear!


Crawford Douglas: You will notice, Madam Chairman, I said some. I do so particularly since I come from an area of Canada where it is not a problem to get people to it, but there is an amazing problem in getting people from it due to the lack of proper rail transportation in western Ontario. Many people find themselves a long distance from the larger urban centres and they turn to the use of aircraft in their daily lives.
As I look around this chamber I see a number of members who also use aircraft to travel throughout their ridings. The hon. member for the Northwest Territories would, I am sure, be in dire straits were it not for the use of a small, what is termed private, aircraft to get across his constituency.
I agree that the use of an aircraft as a high energy consumer is not a point in favour of the 10 per cent tax that is put on these aircraft. The fact is that a Cessna 172 or similar small aircraft can probably be trimmed so as to cut fuel consumption easily to 10 gallons per hour and, as has been mentioned, this will mean a fuel consumption of 20 to 25 miles per gallon.
In addition the aircraft industry in Canada is on a slow growth pattern, and the type of tax we are talking about will do nothing to help that industry to re-establish itself. The Fleet Aircraft Corporation in Fort Erie was one such company, but it was forced to close because it couldn't get enough orders to make production of Fleet aircraft a viable proposition in this country.
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I have received some correspondence about this from private pilots in western Ontario, particularly in my own riding. While we do not have adequate train transportation, and bus transportation is not what it is supposed to be-it takes 7V4 hours to go 200 miles from the town of Wingham to the city of Toronto-we do have a large number of small, locally-owned and locally-kept airports, such as those at Port Elgin, Southampton, Hanover, Wing-ham and Goderich in Huron riding, as well as in many other areas.
I know the department has received a number of representations from the Canadian Owners and Pilots Association, of which I am a member, as are two or three other members here tonight. I should like to ask the minister what reply has been given the Canadian Owners and Pilots Association, and what is the reason for his stand regarding the light aircraft industry in particular, since this is an industry that is not a prime energy consumer?


William James Kempling: Madam Chairman, we have heard a lot about boats, airplanes and that sort of thing, and I now want to get down to some real equipment, transport equipment. We are in such a transportation mess that perhaps with some goodwill from the minister we will be able to straighten things out a little.
Various associations in the trucking industry have made representations to the minister, and I believe he has been listening to them very carefully and has a disposition to be of assistance to them. I want to talk for a few moments about the equipment side of the trucking industry. I made a few remarks about this on second reading, but I want to be sure that we clearly understand where we are going.
A truck is not a truck until some equipment is put on it. A variety of equipment can be put on the chassis. When a manufacturer builds a truck, he puts the cab and the motor on the frame, and someone else completes it. It is a very big industry in Canada, spread from coast to coast. A chassis can become a school bus, or be mounted with just a platform, a crane, ready-mix equipment or any one of a number of bodies.
One of the problems the truck equipment industry has is to get some recognition from the people in National Revenue that it is an industry. Part XVII, paragraph 8, refers to the fair sale price by the Canadian manufacturer or the fair duty paid value of the imported article exceeding $1,000 per unit. The truck equipment industry feels this provision is not clearly defined. Inquiries have been made from various parts of the country. For instance, a call was made to National Revenue in Montreal asking for an interpretation of this $1,000 per unit provision, and the interpretation given was entirely different from that received from Toronto, which again was different from the ruling received from Kitchener and London. We would like to have this matter cleared up to the satisfaction of those in the industry, so the industry will know where it is going, and will not have to depend on interpretations from local National Revenue offices.
Another matter of concern to the industry is that, under the auto pact much of this equipment can be imported from the United States with a vehicle, which would mean the Canadian industry would suffer. We want to see the
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matter taken care of so that this equipment is installed in Canadian plants.
There is also a question of terminology here. Under the terms of the auto pact, a piece of equipment mounted on a truck is called a part to complete the vehicle. But in Canada it is called a vehicle. A body mounted on a vehicle imported from the United States is termed a part required to complete that vehicle. Under the terms of the auto pact that body manufactured in Canada is called a vehicle.
What can happen is that much of this equipment is installed in the United States, completely by-passes the Canadian process, and takes quite a bit away from our industry here. The industry is very concerned about this. I am involved in this industry but I have no conflict of interest in that I declared my position. I do not consider I am any different than someone in the lumber industry speaking on a bill pertaining to construction materials.


John Napier Turner: But Grafftey wants you to sell it, you know.


William James Kempling: This is a very serious matter and I have three amendments I should like to move. I think I gave the minister copies of two. Before proposing those amendments I have another point I should like to make in respect of Part XVI, construction equipment.
We exclude motor vehicles under construction equipment, but when we come down to Part XVII dealing with transportation equipment what do we do about a concrete mixer that is mounted on a ready-mix truck? That is construction equipment. Under the preceding part it refers to repair and replacement parts designed for the above equipment being exempt from sales tax. If a cement mixer is mounted on wheels then the parts required would be exempt from sales tax. If the mixer is mounted on a truck that provision would not apply.
The same applies to cranes, hoists and derricks in paragraph (c) in Part XVI, which refers to the repair or replacement parts designed for the above equipment being exempt from the tax. That same crane mounted on a motor truck would not be exempt from the sales tax, or at least the parts or repairs would not be exempt.
One of the amendments I would like to propose is to Part XVII, and would refer to repair and replacement parts designed for the above equipment. This would cover those items to which I have referred.


John Napier Turner: This is somethig new. You were talking about aggregate pricing.


William James Kempling: This is something else, not aggregate pricing. I want to refer to aggregate pricing, and I took the definition of "aggregate" from the Oxford Dictionary on the table here so that we will know we are both talking in the same language.
The point I want to make is that many of these items of equipment mounted on motor trucks are of a value of less than $1,000, but they are required to complete the vehicle making it an operational truck. One of the amendments I have would in fact rewrite Section 8 of Part XVIII, bringing in the principle I refer to as aggregate pricing. It
(Mr. Kempling.]
would be to the effect that when the sum total of the article being installed on a motor truck by a manufacturer or producer, or the fair duty paid value of the manufactured article exceeds $1,000 in aggregate or in total, it would in fact be exempt from the federal sales tax.
The second amendment pertains as well to parts and equipment under Part XVII, Section 8. This has to do with the situation in which people in the transportation or trucking business are required to install equipment on motor vehicles and have to apply a certificate under the Motor Vehicle Safety Act. If that equipment came in from the United States and can be certified by the manufacturer, when the Canadian truck equipment or installation is supplied, the Motor Vehicle Safety Act requires that equipment to complete the vehicle. The manufacturer, producer or installer is then deemed in the eyes of the National Revenue Department to be a producer for the purpose of tax.
With the indulgence of the committee I will put these three amendments now. Are you ready to hear them, or would you like to make some remarks?


John Napier Turner: Read them into
Hansard.


Robert Lorne Stanfield: Do you want them moved now?


John Napier Turner: No. You could give us notice by reading them into Hansard, and we would then be in a position to consider them.


William James Kempling: I will read the three amendments I propose into the record. The first is:
That Bill C-40 be amended by inserting therein, next following line 20 on page 14 thereof, the following:
"10. Repair and replacement parts designed for the above
equipment."
and by renumbering the next following paragraph accordingly.
The next amendment would actually replace Section 8 of Part XVII and would read as follows:
Parts and equipment designed for permanent installation on the tax exempt goods mentioned in sections 1 to 7 of this Part where, in the opinion of the minister, the fair sale price by the Canadian manufacturer or producer or the fair duty paid value of the imported articles exceeds $1,000 in the aggregate.
The third amendment I would read into the record would go between Section 7 and 8 in Part XVII and would read as follows:
Parts and equipment designed for permanent installation on new highway truck tractors, trucks, truck trailers, tractor trailers and semi-trailers within the meaning of sections 1 and 2 of this Part, where the manufacturer, producer or installer is completing the vehicle and is required to apply a certificate thereto under the Motor Vehicle Safety Act.
This would require renumbering of subsequent clauses accordingly.
Those are the three amendments I would propose and I have copies here.


John Napier Turner: We will take a look at those.


Mr. Marceau:: Madam Chairman, I should like to take this opportunity to submit a few brief comments to the Minister of Finance (Mr. Turner) with a view to inciting him to reflect on some of the provisions in this bill, and more particularly on that which deals with the 10 per cent tax on boats and aircraft.
I believe the Minister of Finance knows quite well, for having visited it, although not enough to my mind, but as often as circumstances allowed perhaps, the Saguenay-Lac-Saint-Jean area. The minister knows full well that that region is well known for its tourist attractions; boats and aircraft are indispensible tools in our area.
Madam Chairman, although this tax is not intended to be discriminatory, it is in a fashion since it deprives our area of the right to practice a sport, both most interesting and useful, if I may say so, in a region such as ours, namely, the use of pleasure craft. I feel that a provision such as the one we are dealing with will have serious consequences for the Saguenay-Lac-Saint-Jean area and similar tourist areas, because those people who wish to spend their leisure in our area, as well as its inhabitants who after working hard are entitled to some leisure going out boating, will no longer be able to do so and take advantage of the endowments of nature in our area in terms of scenery and water expanses.
So, Madam Chairman, I merely want to say to the minister that that 10 per cent tax on boats could in an area like ours have a disastrous effect and deprive several people of a sport to which they are entitled. Madam Chairman, why for that matter should we tax those who use boats, and why should we not tax those who practice other sports?
Madam Chairman, I think it is an indication that that 10 per cent tax applies to a category of people who do not deserve to be deprived of a right to enjoy a pleasure and a sport they want.
Second, Madam Chairman, I would like to speak on behalf of a category of people in my riding who own private aircraft. I will not say that the legislation totally lacks common sense, far from it, but I think nevertheless that one aspect was not brought to the attention of the minister, and it is the following; private aircraft owners are under the impression that the purpose of his legislation is to do away with private aircraft in areas like ours but such is not the case because I know the minister has an open mind, and that is certainly not his intention. I would like him to reassure perhaps the people in my area, and perhaps people in general, that the purpose of this bill is not to do away with private aircraft because in an area like ours that is not only a leisure but a necessity. In areas remote from large centres urgent needs can come up in cases of illness or help which often force the owners of private aircraft to use those aircraft to render precious services to people in need.
Madam Chairman, I think it can be said that a lot of people come from out of town. Private aircraft owners come to visit the Saguenay-Lac-Saint-Jean area. They come there as tourists, and this bill could stop them from
Excise
coming down to visit us, thus depriving the area of substantial revenues.
It might be said that the aim of this legislation is to stop people from using fuel. Madam Chairman, I am told and I have no reason not to believe this, that using a car to drive to this area requires as much fuel as flying in with a private plane of small size. If we want to curtail the use of fuel, I think that according to the information I have this legislation does not really seem to meet our objective.
Finally, Madam Chairman, I would like to explain perhaps that the owner of a private plane feels that the legislation discriminates against him because it does not apply to private corporations such as large companies that make use of private planes and are favoured to the extent that the owner of a private plane, when he buys his plane, has already paid tax on the money with which he buys it, while corporations can deduct the purchase price of aircraft. This means that the private owner is at a disadvantage relative to corporations, since the latter enjoy tax privileges he does not have.
Lastly, Madam Chairman, I would simply add that the act should include a provision for private owners using an aircraft for their business. In my area, people use private airplanes to get to remote worksites where no other means of transportation exist. There is no provisions at present for those using aircraft for their work or for providing essential services not otherwise available. These people are penalized and they will probably not be able in the future to get the aircraft needed to provide these services to the people while earning a living.
In summing up my remarks, I feel this legislation, as far as boats are concerned, should be directed rather to more powerful boats, and that private aircraft owners should be excluded. In areas such as mine, private aircraft play an absolutely vital role in catering to the tourist industry and maybe to the young people looking forward to a career in that industry. In areas where employment is limited, we must strive to create jobs and opportunities in other fields. I believe this legislation, if it were to apply in full, might do great harm to the Saguenay-Lac-Saint-Jean population. I know this is not the minister's intention, so I simply ask that he consider and weigh the matter, and hopefully give an answer I will promptly convey to the citizens in my area, knowing full well the minister's sense of fairness and justice will allow him to find a compromise on this problem facing not only the people in my constituency, but also Canadians across the country.


Robert Hylton Brisco: I do not wish to become lengthy and involved in the debate on the part of Bill C-40 which we are discussing this evening, but I do wish to draw some things to the minister's attention, as has every other member who has spoken on this bill tonight. They are concerned because of involvement in their own ridings.
I think that the minister has some memories, as he has been fortunate enough to go fishing in Kootenay Lake. He knows the area. He probably did not catch any fish, and that is why he is imposing the tax. However, be that as it may, the concern of the small boat owner is very real.


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The waters of Kootenay Lake, the waters of Arrow Lake and many of the major bodies of water in British Columbia, the Yukon and the Northwest Territories are waters that see the tragedy of drowning every year. These drownings are very frequently associated with under powered boats, or boats of inadequate dimension.
We also notice that similar boats and boats of a larger dimension, larger than 20 feet, are being used by the logging industry to transfer loggers from one point to another across major bodies of water. Are we to witness similar tragedies and similar drownings because of the imposition of a 10 per cent tax? I can recall a tragedy on Kootenay Lake a few years ago just north of Creston, where a company boat overturned with the loss of several lives. That is one consideration.
The other consideration which I think the minister should take into account is that there are many average working men and women who have looked forward for some time to the opportunity of owning their own small pleasure boats. I am not talking about luxury yachts. I am talking about the average fellow who lives in my riding who wants a pleasure boat to entertain his wife and his children, and who wants to go water skiing. I cannot imagine anything more incongruous than a boat with a 20 horsepower motor lifting the Minister of Agriculture out of the waters of Kootenay Lake. It is a virtual impossibility!


John Napier Turner: You are talking about 150 horsepower.


Robert Hylton Brisco: I did not want to mention the horsepower. I am glad the minister did. In any event these people are now faced with the sudden imposition of a tax which is going to increase the purchase price of that boat by $500 or $600, and put it out of their reach. This is perhaps their sole source of pleasure in the summer months.
If the purpose of the tax was precisely to attack luxuries, then I would say it was an excellent idea. If the purpose of the tax is to save energy, then let me give you the figures for Kootenay Lake to demonstrate how shallow is the argument. In fact eight hour's cruising on Kootenay Lake with a 65 horsepower motor at trolling speed will consume five gallons of gas at the maximum. Kootenay Lake is a very popular body of water. What was the total gasoline consumption for Kootenay Lake in 1974, if we are interested in conserving energy? All those boats, all that fuel, consumed 32,000 gallons.


John Douglas Reynolds: Three hours in a 747.


Robert Hylton Brisco: That is a valid point. The other thing of concern to me is that if I were in a position to afford a small pleasure boat, I could purchase one today in my riding brought in from the United States for considerably less than one made right here in Canada by, for example, Starcraft, or some other manufacturer. In effect what we are doing is creating a penalty for being Canadian and buying Canadian, and I rather resent that.
In 1974 in my riding a 16 foot Starcraft with a 65 horsepower motor cost $3,650. That same unit today costs $5,500. The basic price of the hull has gone up from $1,350 to $2,227. That is pretty darned rough. I would think that

there are many independent loggers on Kootenay Lake who must move back and forth across that lake and who must haul their fuel, their oil, their chainsaws and various logging equipment by boat, which is their only means of access to logging areas on Kootenay Lake. These loggers are going to suffer as a result of this tax. Certainly the boating industry in Canada is going to suffer.
The hon. member for Esquimalt-Saanich asked why we have a small craft harbours program. He also asked why any member of parliament should take the trouble of advising communities bordering on a large body of water within his riding that there is an excellent federal program available, and that if application is made it may be considered favourably and a small craft harbour established. That is an excellent scheme. I do not question the need, but why bother making the effort if, in turn, we are going to reduce the boating industry?
This brings me to another point because we are talking about the conservation of energy, and we are talking about the imposition of the tax, but we are not taxing the boats that are already on the water. There are thousands of them across Canada. The only boats that we are taxing are the boats that are waiting in the shipyards to be sold to the Canadian consumers. They are the ones that we seem to be concerned about in connection with the conservation of energy.
I heard a remark earlier to the effect that if we are really concerned about energy there should be a gradual increase in the cost of petroleum products. I think that that is a valid suggestion. I think it is one that many Canadian consumers could probably accept, but not when they see that the fellow next door last year bought a small pleasurecraft to go fishing, to entertain his family and to go water skiing, which is not subject to an energy tax per se, whereas the same boat today is taxed. With the imposition of this tax the consumer who has saved $3,500 is still unable to purchase because of the 10 per cent tax. Really, it is just not fair. That is the thing we have to consider.
I should also like to thank the minister most sincerely for his reconsideration of another section of clause 20 that we have dealt with tonight, with reference to the removal of the tax on certain medical equipment, supplies for diabetics, for people who require heart monitoring devices, and others similarly incapacitated. I am sure they appreciate this particular clause.
I should also like to thank the minister for reviewing the terms by which an abatement would be given to municipalities for sewage systems, water drainage systems and the like. The minister has informed us that this will apply to regional districts, such as we have in British Columbia, to unorganized areas and to water boards. I think he has established his credibility in regard to acceptance of suggestions from the opposition. I hope he will also establish his credibility with reference to boats and to aircraft.
I am sure the minister is more aware than I of the facts and figures pertaining to the aircraft industry and aircraft fuel consumption. I am sure he knows that an aircraft can fly from Castlegar to Penticton for one-third less fuel, and one-tenth less oil consumption than an automobile.


After 20 years it is strange to see federal funds being spent to pave an airstrip in my riding-we are grateful for it-only to face the imposition of this 10 per cent tax which is a hardship on pilots and others using aircraft in their business. If it is luxury we are taxing, let us tax luxury. If it is business and items such as the small pleasure boat and aircraft, and if energy is our main concern, let us attack the consumers of energy.
I may be treading on some toes but I should like to suggest to the minister that he compare the amount of energy consumed by small boats on Kootenay Lake- Comprising hundreds of them last year it was only 32,000 gallons-with the amount consumed by enormous mobile homes travelling the highways at four miles to the gallon-or four gallons to the mile is more likely in some cases. Maybe somebody has adjusted the carburetor and is actually getting four miles to the gallon! Now I will probably get letters from that particular industry, but these things are major consumers and wasters of energy and they have not been touched. Let us tap them with 5 per cent, maybe. The matters covered in Bill C-40 are addressed to energy. I think the clause with reference to boats and the clause with reference to aircraft should be reconsidered.


Mr. Anderson:: Madam Chairman, the fact that I do not agree 100 per cent with the Minister of Finance on the question of the excise tax on boats and aircraft does not diminish my personal respect for a man whom I consider to be one of the most able finance ministers in the free world today.


Some hon. Members:: Hear, hear!


An hon. Member:: Are you sneaking in a paid political announcement?


Hugh Alan Anderson: When looking at the economies of other countries I think this fact becomes evident even to those members sitting on the other side. Madam Chairman, after saying a few kind words about the minister-


An hon. Member:: Now tell him.


Hugh Alan Anderson: -I should like to comment on this matter of an excise tax on boats. I feel it is not a regional item but something which concerns all provinces. The boat industry is important to the maritime region, and it is important to the central part of Canada such as Ontario and Quebec. Even in Saskatchewan they have stoneboats and I understand that in Alberta they use boats to cross their pools of oil.
In the province of British Columbia, of course, boating is not a luxury, it is a way of life. In British Columbia as well as in many northern parts of Canada-and I consider anything 100 miles north of the 49th parallel to be northern Canada-boats are used for transporting children to school, people to work, and as a means of providing continuity in industry. They are used in logging operations, by trappers, and by so many people that they cannot be considered a luxury item.
When boats are used as a luxury item I think the minister is correct in imposing a tax. However, I believe that in 99 per cent of Canada where they are a necessary
Adjournment Debate
item, a tax at this stage in our economy would be the same as taxing bread and milk 10 per cent or 15 per cent.
I do not wish to be parochial, Madam Chairman, but unfortunately our provincial government has not provided roads in the riding I represent and, as a result, boats are a major means of transportation. Any form of taxation would increase the difficulty that people already suffer in regard to inflation, and would affect the industries that have been carefully set up and nurtured over the past ten or 20 years which cannot afford a tax at this time. As the saying goes, when a man is down you do not kick him, and when an industry is not as healthy as it has been in recent years surely it should be our object to encourage that industry and provide incentives to make it stronger.


B. Keith Penner: Order, please. I am sorry to interrupt the hon. member, but as it is now ten o'clock it is my duty to rise, report progress and request leave to consider this bill again at the next sitting of the House.
Progress reported.



PROCEEDINGS ON ADJOURNMENT MOTION

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

Sinclair McKnight Stevens: Madam Speaker, I rise this evening as the result of an inadequate answer which the Minister of Finance (Mr. Turner) gave yesterday to a question and supplementary that I asked. I am sorry the minister has not chosen to stay in the House and answer in a more satisfactory way the questions I put to him yesterday. I say that because I feel the present minister, who has occupied his present portfolio for almost three years, has many things to answer for in this House.
The hon. member for Comox-Alberni (Mr. Anderson) obviously has not long been a member of this House, judging from the tone of his recent remarks, and he has obviously not reviewed the minister's record or he would not have spoken this evening in such glowing terms about the minister.
During the three years the minister has been in office, inflation has risen from 2.9 per cent in 1971 to the current rate of 10.9 per cent. Government spending has jumped by 67 per cent during the minister's tenure in office. Yesterday I attempted to ask why this is happening. I asked, for example, if it is true that he has said in private meetings with people in industry that his cabinet colleagues vote him down every time he tries to restrain government spending programs. I asked if the efforts of the Minister of State for Urban Affairs (Mr. Danson) to obtain about $1


Adjournment Debate
billion from Arab oil interests have been referred to him for his attention. I also asked him to give some indication about the troubles he has been having with the Secretary of State for External Affairs (Mr. MacEachen) concerning a certain loan to Cuba. To all these questions the minister's answer has been, "There are no problems".
I suggest that the Minister of Finance himself is the problem which this country must endure. Are there no difficulties concerning the loan to Cuba? If there are not, why did the Minister of Finance write a certain letter to the Secretary of State for External Affairs?
I have gone further and asked, if there are no problems, why did the Minister of Finance write the letter to the Prime Minister (Mr. Trudeau) which is mentioned in the current issue of the Financial Post dated January 25, 1975? The Financial Post carries an article, which says in part:
Turner won't talk about this, but it seems he has written a strong letter to Trudeau, making it clear either things change or he is leaving.
If there are no difficulties, why is he thinking of leaving? I suggest that there are difficulties. It is time the minister stopped drifting, stopped saying there are no problems and came clean with the Canadian public.
I hope that the parliamentary secretary in answering will tell the House about a letter sent by the Minister of Finance to the Prime Minister in which the minister indicated he is fed up about the appointment of a private economic advisory group which is to advise the Prime Minister. The House has the right to know if there is friction between the Prime Minister, the Minister of Finance and certain other cabinet colleagues. The Prime Minister, too, has the duty to tell the House exactly why he appointed such an economic advisory committee. Was that advisory group appointed for his own private benefit? Or was it done against the wishes of the Minister of Finance? The House is entitled to know the answers to these questions.
I sincerely hope the parliamentary secretary has come prepared to give, in the three short minutes available to him, a more detailed and candid reply to the questions I raised yesterday.
In statements later yesterday the Minister of State for Urban Affairs indicated that any Arab mortgage funds would be routed through the Minister of Finance. The Minister of State agreed it was the Minister of Finance who should be dealing with such a matter. The Minister of Finance at least owes it to this House to tell us whether funds were proposed to him. Did he have chats with the Minister of State for Urban Affairs, or has that minister simply gone on a wild goose chase of his own?
I see my time is almost up. I would again indicate that it is unfortunate for any Minister of Finance to evade, in the way this minister has done, the questions I put to him yesterday.


Jack Sydney George (Bud) Cullen: Madam Speaker, when the hon. member began his address I thought we were back in the election campaign. It was the same hashed up, tired old story we have been hearing from that party since two months before July 8. Further, the hon. member indicated that the Minister of Finance (Mr. Turner) is a problem. I suggest, with respect, that the Conservative party would love to

have such a problem on their side of the House. They are sadly looking for one to do that particular job.
There is one other small item. The situation around here, as I have seen it the past six years, is that rumours seem to begin in the corridor. It is seldom that a member uses the floor of this chamber to spread gossip. Now the gossip columnists are handing stories to the hon. member, and having him use the time of this House to spread that kind of bunk.
The federal government has received numerous offers of foreign funds over the past two years from a variety of sources. These offers have not been pursued for three reasons. First, it continues to be government policy to encourage Canadian borrowers to seek funds in the Canadian capital markets before borrowing from foreign sources. Second, the federal government has encountered no difficulty in borrowing in the domestic markets. Third, it has long been government policy to borrow abroad for exchange fund purposes only, and with foreign exchange reserves of about $6 billion such borrowings are clearly unnecessary at this time. Cash balances are between $4 billion and $5 billion.
The minister last referred to the borrowing guidelines in a January, 1974, press release removing all other guidelines with respect to flow of funds into and out of Canada.


INDUSTRY-STEEL-REASON FOR RESTRICTIVE TERMS OF REFERENCE FOR JUDGE ESTEY'S INQUIRY INTO PRICES AND PROFITS
Reginald Cyril Symes: Madam Speaker, on November 29 I directed a question to the Minister of Industry, Trade and Commerce (Mr. Gillespie) concerning the Estey steel profits inquiry. I directed subsequent questions to the minister and have not been satisfied with the answers. I wish to pursue the matter this evening.
Very briefly, it will be recalled that on May 15, 1974, at the beginning of the last federal election campaign, the steel companies announced further price increases. Recognizing the implications of steel price increases in the Canadian economy, and because of pressures of an election campaign and public concern, the government initiated a steel profits inquiry headed by Judge Estey who, it is interesting to note, was a registered member of the Liberal party before becoming a judge. Nevertheless, Judge Estey was given terms of reference to look into recent steel price increases to determine whether profiteering was taking place. His conclusion was that the margin of profit of the steel companies was not excessive. I challenge that conclusion.
I wish to deal briefly with some of the price increases.
During 1973 the average price for all steel products marketed by the three large steel companies, Stelco, Dofasco and Algoma, rose by 10 per cent. During 1974 there were 12 price increases between January and October, and October was the month in which the report was concluded. These 12 price increases ranged anywhere from 7 per cent to 12 per cent on various steel products. Then in December, 1974 the Steel Company of Canada and Algoma Steel announced further price increases on various prod-


ucts, ranging from 7 to 15 per cent. In January, 1975, there are indications of further price increases, with more to come in February. So that prior to the Estey inquiry the companies raised prices, and have continued to raise prices following the conclusion of that inquiry in October, 1974.
Meanwhile the profits of the companies have risen at a fantastic rate. In 1973 Stelco profits were $87,684,000, an increase of 31 per cent over the 1972 figure of $67,089,000. Dofasco's profits were $52,541,000, an increase of 45.5 per cent over the 1972 figure of $36,127,000. Algoma's profits in 1973 were $28,556,000, an increase of 55 per cent over the 1972 figure of $18,441,000.
So 1973 for all three companies was a banner year, and in 1974 profits likewise rose astronomically. In the first nine months of 1974 Stelco's profits increased 31.3 per cent over the same period in the previous year. As for Algoma Steel, during the first nine months of 1974 its profits registered an increase of 121 per cent over the same period in the previous year. We can see that as prices have gone up, so have profits.
What concerns me is that the terms of reference of the Estey inquiry were so limited that the judges' conclusions are suspect. First of all, the terms of reference were so limited that he could only examine price increases from May to October, and thus ignored the price increases I have listed from January to May of 1974, and likewise since October of 1974. The judge noted the problem of price leadership, but again this was beyond his terms of reference.
The fact is that 80 per cent of the industry's raw steel capacity is controlled by only three companies. Estey observed that the steel industry does not have real competition but follows the practice of price leadership by Stelco. I wonder why there was not a full inquiry into this oligopolistic practice.
In addition the judge made no reference-because it was not within his terms of reference to do so-to requiring individual companies to establish a standard method of calculating individual gross profit margins so that the inquiry could make valid comparisons. I think the most important and significant point the judge made is as follows:
-any future price increases should be linked directly to cost increases, otherwise the profit margins which customarily obtain in the industry will be exceeded-


The Acting Speaker (Mrs. Morin):: Order, please. The time alloted the hon. gentleman has expired.


Mr. Gaston Clermont (Parliamentary Secretary to Minister of Industry, Trade and Commerce):: Madam Speaker, as the hon. minister stated in the House on November 26, 1974, the mandate was very broad. The government was most anxious to get a quick estimation of the profit margins of the steel industry. An extension of the mandate would have lengthened the inquiry, thus delaying governmental action which might have been necessary.
Adjournment Debate

Perhaps Judge Estey's conclusion has been somewhat misinterpreted. He did not state that future price increases not related to costs will be profiteering. He did state:
The steel producers have now achieved a general price structure that is producing profit margins at or approaching levels equal to previous high plateaus in the industry's recent history. Future increases in prices should, to avoid driving earnings to levels beyond those attained by the industry in past periods of prosperity in the steel business, be closely attuned to actual cost increases, otherwise profit margins will exceed those which customarily obtain in the industry.


WEIGHTS AND MEASURES-SUGGESTED AID TO SCHOOLS IN CONVERTING TO METRIC SYSTEM
Mr. Howard Johnston (Okanagan-Kootenay):: Madam Speaker, I raised a question on December 19 regarding the program to implement the metric system throughout this country. I should like to compliment the Minister of Industry, Trade and Commerce (Mr. Gillespie) on the variety of steps that have been taken, and on the amount and clarity of the material being prepared to explain this changeover and program to the Canadian people.
There has been considerable interest in the program in the constituency I represent, but there is one aspect which I think is being overlooked. I have in mind the educational institutions and their cost of eventual conversion to the metric system. I am wondering about the failure to obtain co-operation between the Department of Industry, Trade and Commerce and the Secretary of State's department which looks after educational support programs of the federal government, programs which are applied and extended in a variety of fields in this country. Co-operation here could be very useful.
It is one thing to tell the major industries that their profits will increase, that their sales will be better and that they will be in a more favourable trading position compared with other countries in the world if they change over, but you cannot hold out this sort of incentive to school boards in provinces across this country.
Because of inflation school boards are fighting very rapidly rising budgets without the resources to maintain the standards of education they have been able to maintain up to now. I should like to know whether conversations have taken place with ministers of education in various provinces regarding the timetables proposed for implementation of the metric system. If there is not a larger share of the cost assumed by the federal government the implementation of this program will be uneven across this country and, I am afraid, uneven within the various school districts in each province.
The metrication program is a national one, but education is a provincial concern. There is precedent for federal co-operation in the field of education, whether it be in vocational training or in the bilingualism and bicultural-ism program. It is unfortunate that the Department of Industry, Trade and Commerce should be saddled with this whole thing at the present time, but if the program is to continue in this way I think the minister must be prepared to sit down with the provinces and consider a support program for the implementation of metrication in the educational systems of this country.


Adjournment Debate


Gaston Clermont: Madam Speaker, the Canadian government's official policy on the matter has been clearly stated in the White Paper on metric conversion in Canada, of January, 1970.
The Metric System Commission first launched an information campaign aimed at the general public. The success of this campaign has been clearly shown by the result of two surveys which were conducted after that campaign, and proved that in February, 1972, 57 per cent of the population knew what the metric system was, whereas in March, 1974, a new survey sponsored by the Metric System Commission indicated that 77 per cent of the general public was aware of it. The Metric Commission is strongly pursuing its campaigns in order to bring that percentage up to a maximum.
In the field of education there has been complete cooperation so far from the provinces. In British Columbia, the 4th, 5th and 6th grades were taught the metric system in 1974, whereas the 1st, 2nd and 3rd grades were learning it since 1973.
In Manitoba, since September 1974, primary grades have adopted the metric system. In Ontario, from September 1974 on, the 1st, 2nd and 3rd grades could be taught the metric system provided the school boards so wished. Several elementary schools, as well as some high schools, taught the metric system. In Saskatchewan and Alberta, the metric system will be taught starting in September
1975. In Nova Scotia, all classes up to the 8th grade adopted the teaching of the metric system. In Quebec, the metric system teaching program is going ahead. To this day, the Metric Commission has received no complaints. Co-operation is excellent.
With regard to the titles to properties, the program will be a long term one, and will doubtless require several decades. Titles will not become obsolete instantly but will be changed when properties are sold.
In 1977, all road signs will be changed. The provinces unanimously approved this program during the meeting of deputy ministers of highways which was held in Halifax in October 1973. In addition, road signs have, in our climate, a rather short life and must regularly be changed. It does not cost more to indicate kilometers than miles.
The point concerning the cost of metric tools was considered by the Metric Commission from the beginning and to that effect, the commission formed a task force composed of employers and unions, to study this problem rationally and to prepare recommendations on this matter as soon as the study will be completed.
In conclusion, the government of Canada believes that good planning, on the basis of the four stages recommended by the Metric Commission, will ensure that the conversion will be made as flexibly and economically as possible.


The Acting Speaker (Mrs. Morin):: The motion to adjourn the House is now deemed to have been adopted. Accordingly, this House stands adjourned until tomorrow at eleven o'clock. Motion agreed to and the House adjourned at 10.27 p.m.

Friday, January 24, 1975