1975-01-24

ROUTINE PROCEEDINGS


Hon. E. F. Whelan (Minister of Agriculture):: Mr. Speaker, I would like to announce to the House that the target support price for manufacturing milk is being increased immediately to $10.02 per hundred pounds from the $9.41 that has been in effect since August 1 of last year.
The increased returns to producers will be achieved by increasing the support price of butter by 5 cents a pound to 90 cents and by raising the support price of skim milk powder by 5 cents a pound to 59 cents per pound.
However, as hon. members are aware, the federal government subsidizes skim milk powder packaged for consumer sales by 24 cents a pound. In view of the importance of skim milk powder as a staple food, particularly for low income families, the federal government will absorb the price increase by raising the consumer subsidy by 5 cents a pound.
The dairy industry is an important one in this country. The best assurance of top quality dairy products at reasonable prices is a healthy dairy industry, and the dairy industry can only remain healthy if producer returns are kept in line with increased costs.
Last April 1, at the start of the new dairy year, I assured producers that support prices would be reviewed periodically during the year. In June this government made a commitment to dairy farmers that their returns would be related to costs of production. On August 1 a policy change was announced in line with that commitment. This further change is also in line with that commitment. Also last April I announced that a thorough review of the industry would be undertaken by the Canadian Dairy Commission with a view to formulating a national, long-term dairy policy. That review is now complete, and work is advancing towards that long-term policy. I believe that the changes announced today are necessary to meet our commitment to the dairy farmers for adequate returns and to the public for equitable prices.
The only increased costs to the consumers resulting from this policy change will be the 5 cents a pound for butter. As hon. members are aware, the price of margarine has gone up substantially in the last 12 months, and this will tend to restore the competitive position that existed between the two products when the price was last increased.
I think all hon. members are aware that these policy changes apply only to manufacturing milk and will not affect the consumer prices for fluid milk.


Mr. John Wise (Elgin):: Mr. Speaker, it is indeed a pleasure for me to reply to the minister's statement today on behalf of my party. I regret that I cannot express my sincere thanks and appreciation to the minister for advance notice or a copy of the report. On that count, I must express my appreciation to my own party whip.


Some hon. Members:: Hear, hear!


John Wise: Although we generally support the contents of this statement, we on this side of the House have felt for some time that such a reaction would fall far short of meeting the requirements of those in the dairy industry, and it would fall far short of meeting the rising costs of production in that industry. Representations by dairy farmers have been to a large extent overlooked and ignored in the past.
In Ontario, one of Canada's two main producing provinces, representing about one-third of the production of industrial milk, some 2,200 producers representing 8 per cent of the total, left the industry between 1972 and 1973. In the province of Quebec, which is responsible for the production of about 50 per cent of all industrial milk, over 3,000 producers representing 10 per cent of producers in the province, felt there was no longer room for them in the industry. The total number of dairy farmers decreased from 220,000 to 144,000 between the years 1966 and 1973. National production has decreased from about 19 billion pounds to about 16 billion pounds in recent years.
On June 20,	1974, a group of cabinet ministers
announced that a re-elected Liberal government would move immediately if re-elected to raise industrial milk prices high enough to offset increases in dairy production costs. The minister said in a statement issued in Ottawa that the government would respond to representation by dairy producers to "ensure that the commitment of relating producer returns to the cost of production be met."
Dairy producers have asked recently for $11.50. The minister today promises $10.02, thus his election promise has not been met or, at the very best, is related only to figures of one year past which are no longer relevant in this current period of spiralling production costs. It is thus urgent that the government act upon its responsibility to announce the types of programs and the general magnitude of the financial commitments it will authorize for the Canadian Dairy Commission over a long range period.
We have heard, and continue to hear, words from the minister that the government is looking at and working on a long term dairy policy, yet the numbers of cattle contin-

January 24, 1975
Milk Subsidies
ue to decline, total production continues to decline and an industry that contributes so much to the economy and health of a nation continues to suffer needless neglect. I earnestly request the minister, on behalf of all Canadian producers and consumers, to hasten his pace on the government's long term dairy policy so as to avoid, in the not too distant future, a similar situation in the dairy industry as happened in the sugar beet industry in southwestern Ontario.


Mr. Arnold Peters (Timiskaming):: Mr. Speaker, the Minister of Agriculture (Mr. Whelan) has reacted to the allegations of farmers who have been requesting a considerable increase in the price of industrial milk. In fact, the province of Quebec recommended a price close to $12, Ontario slightly less, and the minister reacted by increasing the basic price to $10.02.
I am surprised that the minister is now talking of an indexing formula when no agreement has been arrived at on what the basic price should be and there have been no indications of the intentions of the government with regard to developing that initial price nor consideration of the effect on consumer products.
The minister has said that by increasing the industrial milk price we are trying to establish a relationship between margarine and butter. I think it is a disgrace to this country to find that farmers receive less for butter than Canada Packers receive for margarine.
As the hon. member who spoke on behalf of the Conservative Party said, an agricultural committee will have to give deep and serious consideration to what we want to accomplish through our industrial milk production. The fact that we are importing butter and cheese to a larger degree than we are manufacturing them, and the fact that many of our farmers are going out of business and are faced with deciding whether to sell their herds and hay and grain or stay in business, are matters for very serious consideration. The minister has only mildly reacted to the demands being made by the farmers. I hope the minister is prepared to consider long-term difficulties facing Canadian farmers so that the industrial milk producer can receive an equitable price for his milk and the consumer can pay a fair and reasonable price.
The increases which the minister has provided for are smaller than necessary to keep farmers in business, and he knows it. It is essential for us to establish what are the price relationships between dairy products and other consumer goods, to enable farmers to make long-range forecasts and enable them to stay in the dairy industry. That industry is not one which farmers can enter or leave quickly. If large numbers of dairy farmers give up dairy farming, it is the consumer in Canada who will pay dearly. Before the minister considers seriously the indexing of industrial milk prices he ought to look closely at costs of production, the profit structure of the industry and the needs of the Canadian public for industrial milk. Before we make any decision in this area early next summer, we should consider carefully the problems facing the industry.


Mr. Real Caouette (Temiscamingue):: Mr. Speaker, the statement of the minister that the price of industrial milk
| Mr. Wise. |
will be increased by 61 cents will decidedly not satisfy Canadian milk producers, not only in the province of Quebec or Ontario, but throughout the country. The minister should have introduced amendments or a coherent policy with regard to production costs.
With regard to feeds, for instance, the minister should have granted subsidies to enable farmers to lower their production costs on the one hand and, on the other, the consumers to buy dairy products otherwise than as some ministers would have them do when they say, for instance: Instead of buying natural milk, drink powdered milk. That is no solution. If we were to keep on granting subsidies to the consumer while helping the farmer to lower his production costs, then people across the country would take the minister seriously and the farmers would rejoice in having at long last a Minister of Agriculture who deals with their problems.


Eugene Whelan: Mr. Speaker, I rise on a point of order. The spokesman for the official opposition made some comment about non-delivery of copies of the statement. Copies of the statement were delivered to the offices of the leaders of each party at 9.45 a.m. this morning. I am not responsible for distribution out of their offices.


INDUSTRY
Mr. Edward Broadbent (Oshawa-Whitby):: Mr. Speaker, I rise under the provisions of Standing Order 43, to ask permission of the House to move the following motion, seconded by the hon. member for Winnipeg North (Mr. Orlikow):
That, in view of the $70 million in federal grants accorded to the United Aircraft Corporation of Longueuil, Quebec, in view of the company's intransigence toward the just demands of its employees and in view of the Prime Minister's specific promise in this House last fall to make public the details of contracts existing between United Aircraft Corporation and the federal government, this House requests the Prime Minister to provide such details within the next seven days.


Mr. Speaker:: Order, please. The House has heard the terms of the motion. It 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 is not unanimous consent. The motion cannot be put.
January 24, 1975


NATIONAL INDUSTRIALLY CAUSED HANDICAPPED DAY ACT
Mrs. Ursula Appolloni (York South) moved: for leave to introduce Bill C-372, to honour industrially caused handicapped persons.	-


Some hon. Members:: Explain.


Ursula Appolloni: Mr. Speaker, in some countries the victims of industrial accidents receive a title denoting the special regard in which they are held by those who have in one way or another benefited from their past work. No such title exists in English, but it is my hope that by proclaiming a special day to honour injured workers we will attract public awareness to the contribution they have made to our industrial progress and we will give to them the dignity and recognition which monetary compensation alone cannot achieve.


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

Mr.   Sean@: for leave to introduce Bill C-373, to provide for the recognition of the Beaver (Castor canadensis) as a symbol of the sovereignty of the Dominion of Canada.


Some hon. Members:: Explain.


Mr. O'Sullivan:: Mr. Speaker, the purpose of this bill is to recognize the Beaver as one of the symbols of Canada's sovereignty. The importance of the beaver to the discoveries, explorations and settlements first made in Canada is, of course, basic to our history. Morever, the beaver, although never officially recognized, became and remains a symbol with which Canadians have identified. This bill does not, therefore, remove the beaver from popular use as a trade name or other symbol. Rather, the bill proposes to protect the beaver as a popular symbol reserved to Canadians by declaring the beaver a national symbol.


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


Hon. Robert L. Stanfield (Leader of the Opposition):: Mr. Speaker, I have a question for the Minister of Finance who, I believe, is commencing exploratory efforts to achieve a consensus. In the course of his talks with union representatives, for example, did the minister outline a proposal for labour participation in an effort to reach a consensus with the various groups in the country to stabilize the economy, a form of comprehensive social contract? Is that what the minister is attempting?


Hon. John N. Turner (Minister of Finance):: Mr. Speaker, the informal discussions continued this week with an informal meeting between myself, the Minister of Manpower and Immigration and the Minister of Labour and the executive of the Canadian Labour Congress. We discussed the inflationary and general economic situation and what responses were appropriate by the government and the private sector, including the organized labour movement. The discussions were without prejudice; they were informal and they were exploratory. I think there was a general feeling that we made a good beginning and had a good discussion.


Robert Lorne Stanfield: That is fine, Mr. Speaker, and it is very nice to know that the minister and representatives of organized labour had a good discussion. Can the minister indicate precisely what he is trying to accomplish? I am not asking him for figures or anything like that, but what is he seeking? Is he seeking a succession of pleasant discussions or is he attempting to achieve a consensus and, if so, what is the consensus all about? Is he seeking a comprehensive social contact kind of thing to stabilize the economy, or is this simply a device for stringing out a series of meetings to sort of fend off the public which wants something done about inflation?


Some hon. Members:: Hear, hear!


John Napier Turner: Mr. Speaker, this government is continuing to stay in very close touch with various sectors of the economy. I have heard the hon. gentleman when he was at his best suggest that dialogue with various segments of the community and the country is useful. Ministers are interested in discussing the inflationary situation and other related issues. We are concerned also with how each sector of the community feels the government might more appropriately deal with it in current circumstances.
In addition, we also want to explore with each segment of the economy what it feels would be an appropriate response for that segment in the current situation. We have suggested to each segment that the government has rejected deflationary and restrictive economic policies, which would have as their inevitable result a provoking of massive unemployment. We have rejected, and the Canadian people seem also to have rejected, price and wage controls. We are looking, therefore, for some style of

January 24, 1975
Oral Questions
mutual understanding and co-operation in conjunction with the private sector so that we can continue to come to grips with this problem.


Robert Lorne Stanfield: Mr. Speaker, I should like to ask whether this is a series of meetings to review government policy and to examine policy being pursued by this government, or has the government some aim, which we have been led to believe, to achieve a consensus? Has the government abandoned this aim of achieving a consensus with the principal elements of our economy, such as outlined in the Throne Speech? Has that all been abandoned or downgraded to a series of discussions, or is the government seeking to achieve a consensus? What is that consensus, that is what I am trying to find out? This is a democracy. Can the government not take parliament into its confidence?


John Napier Turner: Mr. Speaker, because this is a democracy, we are not only taking parliament into our confidence and will be making reports as the procedure matures, but we are also taking the country and every economic aspect of it into our confidence.


An hon. Member:: This is a confidence game.


John Napier Turner: I used the phrase today "mutual understanding" or "mutual co-operation". On occasion we have used the word "consensus". That is all right with us, but I should remind the hon. gentleman that there is no way in which we are going to achieve mutual understanding, co-operation or a consensus without the type of dialogue we are now having.


Robert Lorne Stanfield: Mr. Speaker, may I ask the hon. minister if he will tell us what kind of dialogue he is having? What is he trying to achieve by this dialogue? That is what we want to know. He says he needs this kind of dialogue, but what is the dialogue all about?


John Napier Turner: Mr. Speaker, the dialogue is about the economic situation, the root causes of inflation and how best in a co-operative way to restrict and ratchet down the inflationary situation in this country.


An hon. Member:: Just watch how you spell that, John.


John Napier Turner: That is not the first time I have used this term, either here or elsewhere, but it is the first time hon. gentlemen have heard it.


Some hon. Members:: Oh, oh!


An hon. Member:: It is better than wrestling.


Mr. Hees:: Pierre is wrestling and John is ratcheting!


John Napier Turner: Mr. Speaker, the country has rejected the type of restrictive, deflationary, compulsory, centralized policy that the hon. gentleman was recommending during the election. We are proceeding on another basis, and if we proceed in an exploratory fashion, with the understanding available in this country we have confidence in the way this dialogue is proceeding.
|Mr. Turner (Ottawa-Carleton).]


PRIME MINISTER'S OFFICE
Mr. Sinclair Stevens (York-Simcoe):: Mr. Speaker, I have a supplementary question which I wish to direct to the Prime Minister. While this dialogue referred to by the Minister of Finance continues, in view of the Prime Minister's reported establishment of his own non-governmental economic advisory group made up mainly of academics who are now sometimes referred to as "the group of seven", and in view of the Prime Minister's statement yesterday that he would attempt to give an answer to the House respecting the composition of this group, would the Prime Minister indicate why such a group of advisers has been created, on what basis they were retained, and whether they have taken the usual oath of secrecy?


Right Hon. P. E. Trudeau (Prime Minister):: Mr. Speaker, on the invitation of my principal secretary, a group of professional economists has been coming to Ottawa occasionally in order to keep my office informed on matters of economic importance which, in their opinion, indicate a true reflection of their view of the economic health of Canada.


ECONOMIC ADVISORY GROUP-KNOWLEDGE OF MINISTER OF FINANCE OF CREATION OF GROUP
Sinclair McKnight Stevens: Mr. Speaker, may I ask the Prime Minister a supplementary question. In view of the formation of this group, would the Prime Minister indicate whether the Minister of Finance gave his blessing to the establishment of this new, rather secret committee which reports only to the Prime Minister's office, and is the Minister of Finance at least an invited guest at some of the group's sessions?


Pierre Elliott Trudeau: Mr. Speaker, this is a group of outside economists and, of course, if the Minister of Finance wanted to attend he could. But their meetings are not attended at the ministerial level; I myself only dropped in once to meet them.


Sinclair McKnight Stevens: A final supplementary question, Mr. Speaker. Has the Minister of Finance in fact attended any of the group's sessions?


Pierre Elliott Trudeau: No, Mr. Speaker, not to my knowledge.


ECONOMIC ADVISORY GROUP-NAMES OF MEMBERS AND COMPANIES OR INSTITUTIONS REPRESENTED
John Edward Broadbent: Mr. Speaker, I have a supplementary question for the Prime Minister. In view of the answer he gave me yesterday that he would look into providing the names of the people who, on the one hand, represent certain companies, and a commercial bank on the other hand, and who were referred to in a newspaper report, is the Prime Minister in a position to supply these names and the companies and institutions they represent? Will he also inform the House whether or not any of their expenses are paid for by the government?
January 24, 1975


Pierre Elliott Trudeau: Yes, Mr. Speaker, I have the names of those who attend, and if the House will permit me I will read them. Professor Albert Breton of the Institute for Policy Analysis and the department of political economy at the University of Toronto-


Mr. Speaker:: Order, please. I appreciate the willingness of the right hon. Prime Minister to give this information today, but in the interests both of the House and of the question period, is this not information that ought to be sought on the order paper from the point of view of saving time? Perhaps the Prime Minister would be willing to table the information in the interests of brevity.


John Edward Broadbent: Mr. Speaker, we would be in full agreement with that if the Prime Minister is agreeable to tabling the names.


FINANCE
George Harris Hees: Mr. Speaker, I have a supplementary question for the Minister of Finance. In view of his expressed desire to bring stability and progress to the economy of the country through the steps he is taking, and in view of the fact that since the index of real domestic product has fallen for the fifth month in a row, indicating that this country is one step from, if not actually in, a recession, is the minister and the government considering taking the same kind of practical step which has been recommended to the United States Congress by President Ford, which is to revive the economy of that country by a substantial tax cut?


John Napier Turner: Mr. Speaker, I am going to ask the hon. gentleman to read the budget speech brought down on November 18, when he will recall to mind that it was in anticipation of the slow growth that is now becoming more visible as a result of the fall in our exports to the United States, Japan and the British market owing to the slack economies in those countries, and because of the falling off in housing, that the stimulus for the next fiscal year was increased to a net cash deficit of $3 billion. The hon. gentleman should also recall the posture taken by the President of the United States in October and the posture that is now taken by the President. Without accepting and having finally analysed the full implications of his recent message to congress in the state of the union message, the tax cuts that he is now recommending to the American people and to Congress, as against the surtax that he recommended in October, duplicate the tax cuts, taking into account the relative size of our economy, that we proposed to the House some months ago.


George Harris Hees: A supplementary question, Mr. Speaker. It is because I have read and re-read the budget that I asked the question today. Obviously, there is nothing in that budget that is going to revive the economy to the extent necessary. I ask the minister again whether he would consider getting his head out of the sand, as President
Oral Questions
Ford has been willing to do, and realize that we are facing a steadily deteriorating situation which requires imaginative measures to combat.


LABOUR CONDITIONS
David Réal Caouette: Mr. Speaker, I should like to put a question to the Minister of Labour.
Recently the minister received a letter from Frank Manoni, the business manager of the Labour's International Union of North America in which workers complain that they are not paid $2.30 an hour, that is the minimum wage, or a weekly gross salary of $92. Does the minister intend, since the cost of living in the Ottawa area is much higher than in Quebec or elsewhere in Canada, to look into the legitimate demands of those people working for the Labour's International Union of North America?


Hon. John C. Munro (Minister of Labour):: Yes, Mr. Speaker, it is the intention of the government to review the current minimum wage with a view to increasing it.


HOUSING
Mr. Jack Marshall (Humber-St. George's-St. Barbe):: Mr. Speaker, my question is directed to the Minister of State for Urban Affairs in charge of housing. In view of the fact that the neighbourhood improvement program and the supplemental residential rehabilitation program are not producing the results intended, would the minister indicate whether he will give a more direct thrust to these programs, in consultation with the various provinces? Have any problems come to his attention with regard to cost-sharing with the poorer provinces?


Hon. Barney Danson (Minister of State for Urban Affairs):: Mr. Speaker, I recognize that the program has been slower than we would have wished, but I suggest that it is producing the results intended. All provinces have now signed agreements. However, it is a rather long process and there are many complicated problems to deal with, which is why the government is dealing with them. Now the provinces are onside we are expecting things to move more quickly in 1975. I am meeting with the housing ministers from all provinces next Thursday, and this question will be one of our agenda items.

January 24, 1975
Oral Questions


RURAL NATIVE HOUSING PROGRAM-REQUEST FOR PROGRESS REPORT ON ABILITY OF RURAL RESIDENTS TO TAKE ADVANTAGE OF PROGRAM
Jack Marshall: Mr. Speaker,' may I ask the minister a supplementary question. Turning to the rural native housing program, would the minister indicate the progress being made to enable people in rural Canada, and particularly in the poorer parts of Canada, to take advantage of the residential rehabilitation portion of the program?


Barnett Jerome Danson: Progress is being made, Mr. Speaker. This is a question that is attracting increasing attention. Again this is a matter I will be discussing with the provincial housing ministers. We want to see more done in this area, subject to budgetary limitations.


FINANCE
Mr. Bill Kempling (Halton-Wentworth):: Mr. Speaker, I have a question for the Minister of Finance. On Wednesday, the Minister indicated that he saw no problem with the proposal to bring petrodollars to Canada as mortgage money and that he saw no problem with the terms of the CIDA loan to Cuba. Has the minister's department studied both the Arab mortgage money proposal and the CIDA loan to Cuba and is the minister satisfied, on the basis of the department's advice, that these actions are beneficial to the people of Canada, and would the minister explain to the House what he meant by "no problem"?


John Napier Turner: Mr. Speaker, what I meant when I said I saw no problem in recognizing the positions of the Minister of State for Urban Affairs and mine was that they have been reconciled. As to the other situation, the Secretary of State for External Affairs and I are still discussing the matter.


CANADIAN NATIONAL RAILWAYS
Mr. J. R. Ellis (Hastings):: Mr. Speaker, I could not help but notice, before the session started, the Minister of Transport and the Minister of Labour with their heads together. I presume that between the two of them they have some answer for the premature strike by the railway engineers which is shutting down railway traffic across Canada. I wish to direct my question to the Minister of Labour and ask him what he will do to ensure that the trains run again.


John Carr Munro: Mr. Speaker, I would advise the hon. member that if there have been
breaches here, there are remedies. The railway concerned seems to be the CNR. They are aware of the situation-


An hon. Member:: That is very good.


John Carr Munro: -and they are looking into what remedies are available to them at the moment.


John Raymond Ellis: Mr. Speaker, I have a brief supplementary question. I am aware of all that the minister has said, as I think are most hon. members, but could we have some timing as to when these trains might be running again?


Mr. Marchand (Langelier):: Do you have it?


An hon. Member:: You are the Minister of Transport. You should have the answer.


John Carr Munro: I do not have any futuristic view as to what will occur as the result of action now being contemplated by the employer, the CNR.


FINANCE
Mr. Alex Patterson (Fraser Valley East):: Mr. Speaker, I should like to direct my question to the Minister of Finance. In view of the fact that the funding for the winter job expansion program and, more particularly, the winter capital projects fund, ended with the expiry date for applications on September 30, 1974, can the minister tell the House what plans he has to either renew this very worthwhile program or to initiate a new program carrying the same provisions?


John Napier Turner: The program, of course, runs until May 31, 1975. At the moment, there are no plans to renew it.


Alexander Bell Patterson: In view of the great need experienced by municipalities and other agencies for programs of this nature, would the minister give active consideration to the renewal of the program and advise the municipalities so that they can proceed with their plans for the future?


John Napier Turner: I will certainly take that suggestion into consideration.


LABOUR RELATIONS
[Stage Direction]
POSSIBILITY OF SERIES OF STRIKES IN 1975-GOVERNMENT [DOT]	ACTION TO AVOID
Mr. Frank Maine (Wellington):: Mr. Speaker, my question is for the Minister of Labour, who is aware of my motion which appears on today's order paper. Would the minister agree that the prospect in 1975 of a continuing series of strikes is an extremely serious problem, as was reiterated this morning in the editorial column in the Globe and Mail-
| Mr. Danson. |
January 24, 1975

Oral Questions ENERGY


Some hon. Members:: Oh, oh!


Francis William (Frank) Maine: -in which it is stated that a union can bring the federal government to its knees? If the minister agrees that this is a serious problem, would he take action by bringing this matter before the House before we are subjected to the tragic prospect of nonstop strikes in 1975?


Some hon. Members:: Oh, oh!


John Carr Munro: Mr. Speaker, as hon. members may be aware, there have been informal discussions with leaders of the business community, management and labour, with respect to the number of work stoppages we have had in 1974 and with the prospect in mind of talking together to try to find some more acceptable way of settling labour disputes in 1975. I think that there is some basis for optimism that this end can be achieved, but there is no doubt there will be problems in 1975 with respect to work stoppages and strikes.


FINANCE
Mr. Cyril Symes (Sault Ste. Marie):: Mr. Speaker, I have a question for the Minister of Finance. The Minister, in reply to a question I put to him yesterday, stated that he had conferred with the Minister of Energy, Mines and Resources prior to the May and November budgets about exempting Syncrude from the budgetary provisions, but did not say when he informed the Syncrude partners of the exemption. Did the minister, prior to the budget, make a private deal with these oil companies, which have misled the government in the past, and is he now making promises of concessions before separate government studies are done as to actual costs of the project?


John Napier Turner: There was no private deal involving the federal government. The deal was between the province of Alberta and the Syncrude partners. The undertaking I gave to the minister of finance of Alberta, Mr. Miniely, was that the tax regime then in place involving that particular project would not be affected.


Reginald Cyril Symes: The president of Imperial Oil has stated publicly that he is aware of these concessions that were made part of the budget. What specifically are the special tax concessions that the minister has promised, and will they apply to other oil sands projects as well?


John Napier Turner: We are not talking about concessions; we are talking about the tax regime that existed when the Syncrude arrangement was signed.


Reginald Cyril Symes: Am I to understand that there are no other special provisions or tax concessions being contemplated for Syncrude?


SYNCRUDE PROJECT-GOVERNMENT POSITION ON PROPOSAL TO TAKE PUBLIC CONTROL
Reginald Cyril Symes: I would ask a supplementary question. In view of the suspicion of the Minister of Energy, Mines and Resources about the inflationary cost increase of the project, as claimed by Syncrude, and in view of Syncrudes desire to be able to charge world prices for the oil and have unlimited export rights, why does the government not undertake full public, or at least majority, control of this vital resource to protect Canadian interests?


Hon. Donald S. Macdonald (Minister of Energy, Mines and Resources):: It is really a question of financial availability. What would be involved would be something in excess of $1 billion for this particular operation, and we have some other priorities in this government at the same time.


SARNIA-MONTREAL PIPELINE-REQUEST FOR TABLING OF AGREEMENT ON CONSTRUCTION AND DATE OF COMPLETION
Mr. Jim Balfour (Regina East):: My question is for the Minister of Energy, Mines and Resources. Given the minister's announcement early in January that an agreement was reached between the Interprovincial Pipeline Company and the government for the construction of the Montreal pipeline, is the minister in a position to table the agreement? When will construction begin, and when will the pipeline be in operation?


Donald Stovel Macdonald: Legal advisers of the government and those of the company are in the process of completing negotiations of the detailed agreement. It is anticipated that if this can be achieved, the company will be going back to the National Energy Board to obtain approval to go ahead and, hopefully, to commence in the spring of this year. As to whether or not they would be able to complete construction by early December of 1975 or would go into the spring of 1976, that will depend on events.


James Balfour: Is the minister advising the House and the country that, in fact, no agreement has been reached between Interprovincial Pipeline and the government regarding construction, contrary to early published reports in January?


Donald Stovel Macdonald: The agreement at that time was on the discussion of the principles involved. It was subject to the preparation of a detailed document which is now under negotiation.


MANPOWER
Mr. Lincoln M. Alexander (Hamilton West):: I should like to direct a question to the Minister of Manpower and Immigration. A recent survey by the Ontario labour minis-

January 24, 1975
Oral Questions
try indicates a dramatic increase in the rate of rejection by employers of people referred by Canada Manpower. Has the minister discussed this very serious matter with his provincial counterparts, and have any conclusions been reached in order to reverse this trend, either by way of federal initiative or of provincial-federal initiative?


Hon. Robert K. Andras (Minister of Manpower and Immigration):: We have not precisely discussed that as an agenda item with the Ontario government, but general discussions are under way by my officials and the Ontario government and I am awaiting their conclusion before any decision is reached.


Lincoln MacCauley Alexander: The same reports indicate that the failure to utilize women, youth and minorities is the reason for the high number of job vacancies. I ask the minister: are programs being developed for the early introduction of measures to assist these employables and meet the needs of employers?


Robert Knight Andras: Mr. Speaker, many such programs have been introduced and others are about to be introduced, not the least of which is the program we hope to launch in final and formal form, namely, Careers Canada-Careers Province, which I hope will be available to young people in particular within the next two or three months. There are other programs to eliminate the job barriers to which the hon. member referred.


Lincoln MacCauley Alexander: Does the minister indicate now that we are abandoning the Opportunities for Youth Program and that Careers Canada will be taking its place?


Robert Knight Andras: No such thing, Mr. Speaker, and I really fail to understand how that conclusion could be reached, even on the short notice which the hon. member had. In one case we are talking about Careers Canada-Careers Province as a program to bring together more effectively the private sector's activities on hiring young people and women, whereas Opportunities for Youth is a direct job creation program of the federal government working to a degree in co-operation with the provinces.


AGRICULTURE
Mr. Roch La Salle (Joliette):: Mr. Speaker, I have a question for the Minister of Agriculture.
Following the additional grants announced this morning for industrial milk and considering that the increment will be quickly swallowed by higher production costs, could the minister say whether he is willing to introduce a measure or a production cost adjustment system and when he will do so?


Eugene Whelan: Mr. Speaker, I said that we have finalized the formula and an announcement will be made shortly on a new formula for
| Mr. Alexander. |
supplying industrial milk for Canada. This is something we have been promising for quite some time, and I realize that, but when it is announced, it will be something that no other nation in the world has.


Roch La Salle: Mr. Speaker, I would like to ask a supplementary question.
Since the minister has recently stated in Montreal that a proposition was submitted to the Cabinet to this effect, is he now in a position to announce to the House whether he is in favour of this formula of indexation system with regard to milk production?


Eugene Whelan: Mr. Speaker, I told that to the dairy farmers of Canada in the city of Montreal the day before yesterday, and that is our policy.


INQUIRY AS TO GOVERNMENT MEASURES TO REDUCE PRODUCTION COSTS
Mr. Gerard Laprise (Abitibi):: Mr. Speaker, I, too, would like to direct a question to the Minister of Agriculture.
Could he say to the House whether his department or the government will soon propose to take steps to help agricultural producers, especially milk producers, bring down their production costs to make their farms more profitable, without having to continually increase prices?


Eugene Whelan: Mr. Speaker, if the hon. member will check the facts, the industrial milk producers of Canada have been taken care of better than any group of industrial milk producers in the whole world. We have increased prices in the last 18 months by nearly 40 per cent, and no other country has done this. No other country is developing a formula pricing system as we are, and no other country has maintained its production as we have, regardless of what anyone has said. We are serious about maintaining this industry. We are working very closely with the dairy farmers of Canada. We are working very closely with the Dairy Commission to achieve the best policy this country has ever seen. It will encourage producers and provide stability so that they can plan their production and programming for milk production and still give the consumers the cheapest, highest quality product in the world.


Gérard Laprise: Mr. Speaker, I have a supplementary question. I am afraid the hon. Minister of Agriculture did not get my question right. The point is not whether to increase the prices paid to milk producers, but to find out whether the government had any policy to lower production costs. I thought and I still think that the government had made inquiries in the past into the excessive costs of farm machinery. The same applies to feed grain prices and to the interest rates milk producers must pay for their production. Has the minister or the government elaborated any policy concerning this?
January 24, 1975


Eugene Whelan: Mr. Speaker, I think that I should have been able to take for granted that everyone knew the feeding formulae that our scientists are working on at all times so that farmers can get more out of every pound of feed they use in milk production and a greater return. Also our breeding programs have made the Canadian cow, especially the Canadian Holstein cow, the super-cow of the world.


Mr. Fairweather:: Super bull!


Eugene Whelan: Mr. Speaker, it is a matter of fact, and the whole world knows it. I cannot understand why hon. members opposite do not. I can say this, Mr. Speaker, you have to have some super-bulls also.


Robert Gordon Lee Fairweather: We've got one.



NATIONAL DEFENCE


Mr. W. Kenneth Robinson (Toronto-Lakeshore):: Mr. Speaker, I have a question for the Minister of National Defence. In view of the fact that armed United States coastguard icebreakers soon may be escorting U.S. supertankers through the Northwest passage, will the minister advise what Canada is going to do about it and if Canada will obtain naval ships of icebreaking capacity and nuclear submarines to help guard Canadian sovereignty?


Hon. James Richardson (Minister of National Defence):: Mr. Speaker, I think the hon. member knows that our air patrols go over that area.


An hon. Member:: Once a year.


James Armstrong Richardson: The hon. member also knows that we are examining the kind of equipment that he has talked about.



IMMIGRATION


Mr. Jake Epp (Provencher):: Mr. Speaker, I would like to direct my question to the Minister of Manpower and Immigration. In a rare mood I congratulate officials of his department for having finally taken a stand on alien immigrants. Has the department stepped up its surveillance of people who are entering the country illegally, and are they being deported as quickly as possible, thus allowing those immigrants who are trying to enter the country legally by the regular channels a better opportunity to do so?


Robert Knight Andras: Mr. Speaker, that is quite a basket of questions. I think I will just say yes. The objectives that
Oral Questions
the hon. member has been putting before us are objectives that I share, and within reason we are stepping up our efficiency in an effort to achieve them.



ALLEGATION CERTAIN NATIONAL GROUPS INVOLVED IN SLAVE TRADE

Arthur Jacob (Jake) Epp: In respect of the incident in Victoria, was an official of the Immigration Department indicating immigration experience when he was citing specific national groups as being particularly involved in the illegal practice of "slave trade" in the immigration field?


Robert Knight Andras: Mr. Speaker, I have not had the opportunity to examine in detail the statement to which the hon. member refers. I would like to see it and obtain the facts before I respond.



MONTREAL OLYMPICS, 1976-DISCUSSIONS WITH QUEBEC MINISTER OF MUNICIPAL AFFAIRS-FEDERAL CONTINGENCY PLANS

Mr. Otto Jelinek (High Park-Humber Valley):: Mr. Speaker, my question is to the Prime Minister, although I am reluctant to interrupt his conversation with the Minister of Transport. Perhaps they are forming transport policy.
Would the Prime Minister be prepared to report to the House on the conversation regarding the Olympic games between his government and the minister of municipal affairs in Quebec, Mr. Goldbloom, and could the Prime Minister at the same time advise this House as to what, if any, contingency plans the government may have to assure a successful staging of the games.
Right Hon. P. E. Trudeau (Prime Minister)! Mr. Speaker, I thank the hon. member for being so sensitive about interrupting my conversation. I can assure him he does not have to apologize. I am here to answer questions and I am pleased to do so.


Some hon. Members:: Oh, oh!


Pierre Elliott Trudeau: I have had no conversations with Dr. Goldbloom about the subject for many months. As to contingency plans, I think it has been made clear by other ministers and myself that there are no such contingency plans.



MONTREAL OLYMPICS, 1976-POSSIBLE ESCALATION OF FEDERAL SHARE OF COST

Otto John Jelinek: Mr. Speaker, a supplementary to the Prime Minister. In view of the increasing costs of financing the Olympic Games, and because of the fact that the Prime Minister has consistently stated that there is, and shall not be, a federal involvement in the games other than through the Olympic

January 24, 1975
Oral Questions
bill dealing strictly with the sale of coins, stamps and the lottery, could he inform the House whether there is any anticipation that the already committed direct costs by the federal government to aid the Olympics are likely to increase? I am talking about diplomatic help from External Affairs, immigration costs, CBC coverage, use of the armed forces and RCMP for security purposes, CMHC involvement and other direct assistance.


Pierre Elliott Trudeau: Mr. Speaker, the various forms of assistance that the hon. member has stated were made clear in a statement to the House before the bill for assisting the Olympics in the way he has said was passed and supported, I believe, by all parties in the House. There may have been some escalation in costs. I have no calculations, Mr. Speaker, but obviously if the salary of an RCMP constable has gone up, for instance, I presume that will have some impact on the cost.



EXTERNAL AFFAIRS


Mr. Claude Wagner (Saint-Hyacinthe):: Mr. Speaker, I have a question for the leader of the government.
Given the magnitude of the CIDA budget and especially the ever increasing importance for Canada, according to the very spirit of his New Year message, to share with developing countries, is the leader of the government considering bringing, in the near future, CIDA activities under a separate department whose orientation and expenses would be submitted from day to day for the consideration of members of this House?


Pierre Elliott Trudeau: No, Mr. Speaker.



PROPOSAL TO EXAMINE OPERATIONS OF CIDA- GOVERNMENT POSITION

[Stage Direction]
Mr.' Claude Wagner (Saint-Hyacinthe): Mr. Speaker, my supplementary question is addressed to the Acting Secretary of State for External Affairs. In light of the numerous allegations concerning the operation, policies and direction of CIDA, many of which demand immediate answers, allegations of which we have only seen the tip, will the Secretary of State for External Affairs agree to make a full statement to this House early next week or seek an immediate meeting of the Standing Committee on External Affairs, to which no order of reference has been given since October and no sitting of such committee has taken place?
Hon. Mitchell Sharp (Acting Secretary of State for External Affairs):: Mr. Speaker, within a very short time the estimates of the government for the next year will be presented to the House, and there will be an immediate and automatic reference of the estimates of CIDA and external affairs to the standing committee. That is the
| Mr. Jelinek. I
time when members of the House can inquire. I am sure that the president of CIDA and, of course, the Secretary of State for External Affairs will be happy to be present.



AIRPORTS


Mr. Jim Fleming (York West):: Mr. Speaker, I should like to address a question to the Minister of Transport. Considering the continuing serious environmental problems in northwestern Metro Toronto as a result of the overload at Toronto international airport, can the minister indicate if the government will be making an early decision on the Pickering airport inquiry report?


Jean Marchand: Mr. Speaker, I hope that we can make this decision very early.



PROPOSED OIL REFINERY IN BRITISH COLUMBIA-ROUTE OF PIPELINE TO SERVE REFINERY

Mr. Benno Friesen (Surrey-White Rock):: Mr. Speaker, my question is for the Minister of Energy, Mines and Resources. At the recent meeting of the west coast tanker traffic group in Washington, United States officials inquired about the status of Canadian plans for additional oil refinery capacity in British Columbia. I should like to ask the minister if that includes a refinery plan for Surrey, B.C. and, if so, did the pipeline that the officials discussed involve a route from Cherry Point, Washington to Surrey?


Donald Stovel Macdonald: Mr. Speaker, I believe the proposal by the British Columbia corporation for a refinery in the lower mainland is a decision entirely within the jurisdiction of the province of British Columbia. While we have some indication that the corporation is considering such an establishment, we cannot be firm about whether it is likely to go ahead. As to the question of a pipeline, the discussion was, in general terms, about the possible development of Port Angeles as a site for landing Alyeska oil so as to avoid the heavy >
movement into Puget Sound. There are several options from that, including the possibility of reversing the flow of Trans-Mountain Pipeline and indeed serving the lower mainland refineries but there has been no precise proposition on that point.



TRANSPORT


Mr. Andy Hogan (Cape Breton-East Richmond):: Mr. Speaker, my question is to the Minister of Transport.
January 24, 1975

Members in the Atlantic provinces continually get requests from small businessmen in the Atlantic region who feel it is imperative to roll back the freight rate increase already granted. The minister has said that this is impossible, but surely he will consider that at the very least the proposed increase for March 1 should be stopped until the policy that he has announced is coming in April, comes before the House? Why does the minister reject this sensible demand of small businessmen in the Atlantic provinces?


Jean Marchand: Mr. Speaker, I think I answered that question many times.


Robert Lorne Stanfield: Oh, oh!


Jean Marchand: I know that the Leader of the Opposition would never be satisfied with any kind of answer coming from this side.


An hon. Member:: Not from you.


Jean Marchand: I think it would be worthwhile, Mr. Speaker, to underline that most of the goods moved in the west were not touched at all by the freeze, whether it was coal, wheat, potash or any other natural resource exploited in that part of the country. To make the statement that it is going to have a very serious effect on the economic life of the west is not true. I am just going to repeat what I said yesterday, that I do not intend to intervene to reimpose the freeze.


Andrew Hogan: Mr. Speaker, I asked the minister a question about the Atlantic region and he talks about western Canada.


Some hon. Members:: Hear, hear!


An hon. Member:: Answer the question.


Jean Marchand: On a point of order, Mr. Speaker. This is true-


An hon. Member:: Never the twain shall meet.


An hon. Member:: Don't you know right from left, Jean?


Jean Marchand: This is true for only one reason, and that is that I answered very extensively yesterday on the maritimes.


George Harris Hees: You are terrific.



NATIONAL DEFENCE


Mr. Allan B. McKinnon (Victoria):: Mr. Speaker, my question is for the Minister of National Defence. The minister has not been very definite about the future of Training Command. Could he tell the House if he intends to retain Training Command intact or divide it into three? Does he intend to transfer some of Training Command's training responsibility to the service commands?
Oral Questions


James Armstrong Richardson: Mr. Speaker, no change is contemplated for Training Command at the present time. It will stay as one unit, although it could be changed depending on the location of the new air command.



IMMIGRATION


Mr. Paul Dick (Lanark-Renfrew-Carleton):: Mr. Speaker, my question is addressed to the Minister of Manpower and Immigration. In view of the recent revelation that from 50 per cent to 60 per cent of Chilean refugees are alleged not to be Chilean citizens, and in view of the refusal of the government and the minister to reply in a meaningful way to order paper question No. 367, I wonder, now that the minister has announced that we are going to receive more refugees from Chile, if he will tell the Canadian people whether the original refugees were bona fide Chileans or a conglomeration of left wing activists who have found a haven in Chile under President Allende and will the minister answer question No. 367 on the order paper in a meaningful way?


Robert Knight Andras: Mr. Speaker, I will give consideration to the hon. member's concern and look at the answer to the question on the order paper.



AIRPORTS


Mr. John Reynolds (Burnaby-Richmond-Delta):: Mr. Speaker, my question to the Minister of Public Works is about a court case in Vancouver concerning the Sea Island airport. I wonder if the minister could advise the House whether his department is considering giving the people of Sea Island the $1 Vi million and more they want for their property, similar to the proposals he made to the people of Ste. Scholastique, so that these people can settle with the government and get off their property and the hon. Minister of Transport can get on with his airport?


Hon. C. M. Drury (Minister of Public Works):: Mr. Speaker, the hon. member's question or proposal is most interesting. The law officers of the Crown are now in the process of considering appealing the judgment to which the hon. member made reference.

January 24, 1975
Oral Questions TRANSPORT



FREIGHT RATES-INQUIRY AS TO IMPLEMENTATION OF PROMISES MADE BY MINISTER OF JUSTICE

Mr. Don Mazankowski (Vegreville):: Mr. Speaker, may I direct my question to the Minister of Transport and perhaps give him the opportunity to respond to a transportation question concerning the west. Considering the absence of an over-all national policy, the uncertainty surrounding the formulation of the policy and the time when it will be presented, and considering the obvious reluctance of the government to fulfill some of the commitments it had made previously, can we assume that the promise made by the Minister of Justice to equalize freight rates and so reduce the freight rate on processed beef moving from western to central Canada, a promise which forms part of an agreement and which induced the western provinces to agree to the feed grain proposal, will not now be fulfilled.


Jean Marchand: Mr. Speaker, so far as I am concerned, if the hon. gentleman has questions to ask of the Minister of Justice, he should ask them directly. Some of the western provinces wanted a number of set rates to be reviewed, and this matter has been referred to the CTC. We received a report and we are now studying those rates. As far as meat is concerned, I ask the hon. member to be specific, because I did not make any specific statement on that subject.


Donald Frank Mazankowski: A supplementary question, Mr. Speaker. The minister has not answered my question. I was referring to the commitment made by the Minister of Justice as part of an over-all transportation policy. May I ask the Minister of Transport whether any discussions took place between the two ministers about the freight rate equalization proposal which the Minister of Justice promised the western Canadian provinces to implement.


Jean Marchand: Mr. Speaker, all promises made by the Minister of Justice are going to be respected.



EXTERNAL AFFAIRS


Mr. Perrin Beatty (Wellington-Grey-Dufferin-Waterloo):: Mr. Speaker, my question is for the Acting Secretary of State for External Affairs and concerns the case of Thomas Martin who has been charged with criminal negligence in the hit and run death of seven-year-old Joey Belleni of Hamilton. As Martin apparently cannot be brought back from the United States to face trial in this country because criminal negligence resulting in death is not an extraditable offence, may I ask the minister whether Canada has served notice on the United States that we should like to amend the extradition treaty, to ensure that this sort of thing cannot take place again.


Mitchell William Sharp: Mr. Speaker, I am not aware of any such notice. I did have the privilege of signing a new
| Mr. Drury.|
extradition treaty with the United States early in my career as Secretary of State for External Affairs, which represented a considerable improvement. This particular point was not raised at that time, but I will take the suggestion under consideration.


Mr. Speaker:: Orders of the day.



GOVERNMENT ORDERS


[Stage Direction]
The House resumed, from Thursday, January 23, consideration in committee of Bill C-40, to amend the Excise Tax Act and the Excise Act-Mr. Turner (Ottawa-Carle-ton)-Mr. Penner in the chair.
The Deputy Chairman:: Order, please. When the committee rose last evening, the hon. member for Comox-Alberni had the floor. The committee was considering clause 21.
On clause 21.


Mr. Anderson:: Mr. Chairman, my remarks last evening were interrupted by the ten o'clock adjournment debate. Since then I have been approached by other members who have advised me of errors in my presentation. First, I have learned that stoneboats in Saskatchewan do not come under the excise tax laws, but the stones themselves are taxed under provincial mineral tax laws. Second, I learned that Albertans do not use boats to cross oil pools: I hear they walk on top of oil pools, singing Conservative hymns.


An hon. Member:: Very funny. Who is your joke writer?


Hugh Alan Anderson: Let me now refer to the coast of British Columbia. In the northern part of Vancouver Island, owing to the lack of highways, boats and aircraft often are the only means of transport. Taxing boats and aircraft will only increase transportation costs in an area already suffering from high costs. I do not think the provincial government is interested in the question of transportation in the northern part of Vancouver Island. However, I know that the minister in this House does not share that attitude and, let me say positively, neither does this member. Allow me to read some letters written by people in my area. Their letters concern the excise tax to be imposed on boats and aircraft. One letter reads:
I am writing this letter as a private citizen who is most concerned with the recent budget 10 per cent excise tax on pleasure craft over 20 h.p.
I believe this to be a tax that will completely discourage marine sales by now increasing prices to the consumer of approximately 20 per cent over last year.
This will drastically effect employment from the manufacturers level all the way through to the consumer level and personally feel that this will effect sales by a minimum of 25 per cent.
Since the budget was announced I have personally experienced heavy cancellations by consumers of boats that were tentatively placed for spring delivery. This tax plus the manufacturers 10 per cent cost increase is just more than the consumer will swallow in one year.
January 24, 1975

Excise
We in turn have reviewed our booking orders with our suppliers and have cut back approximately 40 per cent from last years marine sales.
I'm not sure what the governments intention was in instituting this tax but thought you should be aware of what the results are.
Everyone including myself is completely at a loss as to the reasoning behind this surcharge other than to create a decrease in sales and employment.
If the energy crisis was the reasoning, this does not make sense as the amount of fuel used in pleasure boating is so small it would be negligible.
If it was a luxury tax to tax the higher income brackets, they missed.
A 20 h.p. or over directly affects the average working man's marine recreational purchasing power and as you realize the marine recreation is very extensive in our area.
The decrease in marine recreation will only switch people over to highway travel which still consumes fuel and pulling trailers would consume as much or more than marine use.
There has been absolutely no publicity on this new tax structure and really is very unclear as to the details.
For your information the following shows what percentage of tax is now imposed on boats.
Canadian Manufacture
eg. Cost	$ 4,000.00 from manufacturing
12 per cent FST	480.00
4,480.00
10 per cent surcharge	448.00

Almost 25 per cent
American Manufacture
Cost	$ 4,000.00 from manufacturing
12 per cent FST	480.00
4.480.00
17 per cent duty	762.00
5.242.00
10 per cent surcharge	524.00
$	5,766.00
Almost 44	per cent
I would very much appreciate the details of this new tax structure and your comments on how the government justifies this increase.
Another letter reads:
-I am deeply disturbed by the reported introduction in the budget of a 10 per cent tax on boats with motors over 20 h.p.
I believe that this tax is regionally discriminating and selective to a portion of the population's leisure activities.
Boats of the type reported to be taxed are in the main located on the eastern and western coasts with some in use on the larger lakes and rivers near the coasts. For example there would be little impact of the tax in total on the residents of Saskatchewan.
Boats of the type selected for the tax are usually used by families and for vacation periods where horsepower is related to size and where size is related to safety. These people are being discriminated against. For example, one could buy a $20,000 motor home, paying no surtax. The same person, for value received, would pay $22,000 for a boat. If you clutter up the highways with a large motor home-no tax. If your relaxation is boating in some comfort and safety, you must pay a tax.
I also wish to quote from a communication received from a dealer in the boating industry in my area:
Although you undoubtedly have received much correspondence regarding the budget, I hope that you may value an opinion from a highly affected area.
I agree that the pace of the economy must be slowed in order to curb inflation, but I do question the wisdom behind the implementation of the luxury tax. First, may I question the difference between luxury and pleasure. Is not an almost unused executive apartment, unused hotel accommodations, or unoccupied travel reservations, all written off as expenses, more an extravagance than a weekend or two away from the world's problems in a boat, fishing, skiing, cruising, or whatever.
The American economists did extensive studies on energy consump-tiort during the "energy crisis" of last winter, and they pondered legislation regarding the pleasure boat users. Their findings showed that the fraction of 1 per cent that the pleasure boats used was miniscule.
The boat manufacturers have recently suffered cut-backs as so many increased costs have been incurred relating to the by-products of oil which are used in the fibre-glass and plastics necessary in their manufacture. These increases are reflected in our costs, which have gone up as much as 35 per cent in the last ten months alone. I wonder how much more the public will pay for so little material and such a non-tangible item as a few weekends of pleasure.
Is the luxury tax designed to curb inflation or is it to contribute to the lay-off of boat and motor manufacturing employees, retailers' staff, boat trailer manufacturers and the many more connected directly or indirectly with the industry? As well, this tax seems to contribute to the exaggerated class distinction that our forefathers came to this country to avoid.
Obviously this man is not a great lover of this tax.
Surely it would be more equitable and effective if the tax was placed on money lending. The banks in this country have enjoyed inobvious net profits over the past few years that would humble the financial statements of many of the exposed profiteers.
I will not continue further with that letter. I wish to make one other point. This tax was enacted on November 18. In many instances, boats and planes were ordered before that date. As a result, the orders have been cancelled. If this tax must stand, will the minister ensure that where there is positive proof, either by cancelled cheque or by order form, that orders were placed before November 18 but deliveries not made until after that date, this tax will not apply? It is an injustice to have ordered under one set of figures and have an item delivered under another. In this regard, I wish to quote from another letter as follows:
Enclosed are copies of orders for boats, ordered at the Fiber Form dealer meeting September 9, 10 and 11, which we found it necessary to cancel after the implementation of the new tax.
In our experience with the retail public, we felt that the additional tax would seriously impede and affect the retail marine trade this coming season; and therefore felt it wise to cut our projected sales volume forecast and our booking boat orders accordingly.
If this tax is going to be retained, as it now appears, the least that the government and the Department of Finance should consider is to allow previously committed orders to be received exempt of this additional tax. This measure would surely slow the almost disastrous impact of this heavy tax and act as a gradual staging to the depression this industry is going to experience. With a brief amnesty, the retailers and, more so, the manufacturers will be able to gear down in an organized and economically less disastrous manner, rather than an immediate major cutback.
He then signed his letter very nicely in this way:
Wishing you and yours a happier and more prosperous New Year than we expect, I remain,

January 24, 1975
Excise
Yours sincerely,
I have not yet said anything with regard to aircraft. I think it is the same sort of situation. In the northern part of Canada, which I believe is 100 miles north of the Canadian border, aircraft have traditionally held a strong position in our economy. For example, there is the bush aircraft. Many of us are not in the position of having the facilities of Air Canada, Pacific Western or some of the other large regional carriers. Most of the aircraft in the northern part of British Columbia and Vancouver Island are single-engine Cessnas and various other types. They play an important part in the economy of our country.
This tax will increase transportation costs. In northern areas, those costs are now high enough. I am sure it is not the intention of the government to impose a burden on those people fortunate enough to live in the northern part of Canada. With regard to the aircraft tax, I wish to quote from a letter received from a mining company in British Columbia:
We would like to take this opportunity to voice our strenuous opposition to the new special excise tax of 10 per cent on privately owned aircraft which was introduced on budget night, November 18, 1974.
This new tax was introduced on the grounds that private aircraft are "high energy consuming vehicles". Our company is the owner of a privately registered aircraft, a helicopter, that is by no means considered a luxury by management. It is used exclusively by our exploration personnel in the search for mineral occurrences in Canada and in the servicing of exploration programs in inaccessible areas. It is used only where its use will result in lower over-ail costs and therefore actually reduces energy consumption. This aircraft is not used for the private benefit of any staff member or business or other associates. It is not used for general personnel transport where public transportation is available or when cheaper private transportation can be arranged.
Considering this utilization, we feel that this new tax is an unfair additional burden on us and on others using aircraft for similar purposes. It would be just as practical to make such a tax applicable to bulldozers!
We earnestly solicit your serious consideration-


An hon. Member:: Then comes the small print.


Hugh Alan Anderson: Yes, Mr. Chairman, then there is the small print. The people of Comox-Alberni have only one spokesman in the House of Commons. Fortunately or unfortunately, that is myself. I must protest very strongly on their behalf regarding the proposed additional 10 per cent excise tax on boats and aircraft. To do less would be a dereliction of my duty as a member of parliament from a maritime constituency. I ask the minister to reconsider this tax and let his excellent judgment, which has been demonstrated on many occasions, come to the conclusion that the tax is not required and is in effect harmful to Canadians and Canadian industry.


Mr. Darling:: Mr. Chairman, there has been considerable talk about this proposed 10 per cent tax on boats. The minister has received considerable criticism from members of parliament from British Columbia, and very little from that "small and insignificant" province where I happen to represent the constituency of Parry Sound-Mus-koka. There are about eight million people, and twice as many boats, in the province of Ontario as in all the other provinces combined. Mine is the banner tourist area for the whole Dominion of Canada. I am wondering which of the great mandarins or masterminds in the minister's
| Mr. Anderson. |
department thought up the crazy idea of this additional 10 per cent tax on boats. The minister said yesterday this tax would generate an additional $30 million in revenue and was supposed to cut down gas consumption. He did not say it would increase unemployment, but certainly that is what it will do.
Let me say a word or two about gas consumption. This matter has been discussed by several hon. members. The amount of gas used by operators of small boats, on a percentage basis, I suggest, would be about three-quarters of five-eighths of you-know-what. It is certainly less than one-half of one per cent of the total consumption and is peanuts when we consider the total. This is one area which I hope the minister will consider further.
Soon after the budget was brought down, on November 28, I wrote the Minister of Finance indicating the many complaints I had received from boat builders, marina operators and distributors. This boat building industry is the lifeblood of the economy of the Parry Sound-Muskoka area, and it is very important to other areas of the country. Other hon. members have referred to the additional cost of boats, but let me point out that there has been little opposition from manufacturers of Lincoln and Cadillac cars. I suggest that is for a very good reason. Here we are talking about $6,000 boats and a surtax of 10 per cent. Let us compare this $600 surtax with the proposed surtax on a Lincoln or Cadillac car. The ordinary Cadillac weighs approximately 5,000 pounds, and the new tax will amount to $200. The Oldsmobile 98 and the Buick Electra are heavy cars, weighing about 4,800 pounds. The surtax is a measly $75, compared to $600 on a boat that sells for half the price. Cars are used 12 months a year, whereas boats for the most part are only used for three months. I consider the minister to be a man of considerable fairness. I think he has been led down the garden path by some of those slick birds in his office who slipped this tax increase in without knowing what it was all about.
Many of the boats in my area are required for transportation purposes. The minister, in his wisdom, announced on November 18 a reduction in the tax on building materials of 6 per cent. This was a good idea even though it was a little late. Does the minister realize that many people buy boats instead of summer cottages? The minister is soaking the hell out of these people and giving a break to the more affluent who can build a summer cottage: that individual gets a reduction in tax.
There are many people with expensive boats, but the minister is not worrying about them. There are a great many people in the average income class who would certainly like to own a small boat. There are some who own boats but cannot afford them. These people use the boats for fishing and other recreational purposes. They will not be operating them steadily. They use them to get so far out in a lake for fishing, and turn the motor off. This is another consideration in respect of gas consumption.
I should like to refer to another aspect of this matter as it relates to motors of 20 horsepower or greater. I assume the minister lives by the Ottawa River. Let me remind him that there are a great many lakes in this country on which it is unsafe to go out in a boat equipped with a motor of
January 24, 1975

less than 20 horsepower. Perhaps the minister will be indirectly contributing to the drowning of many people by forcing them to operate boats under unsafe conditions. I am sure that the outboard motor people are now scheming to design a super 19.9 horsepower motor to get around this tax. I hope the minister will consider reducing or cancelling this increase in the tax on boats.
The minister said yesterday that this tax increase was included in the May 6 budget. I think he said that the tax amounted to an additional 3 per cent. What changed the minister's mind, or the minds of his great mandarins, making this tax three times as high? If the minister really needs an additional $30 million, he should get it from the taxpayers through an increase in income tax. I cannot understand why the income tax was reduced in respect of the higher income brackets-a reduction amounting to $700. I suggest the minister could easily get this $30 million or more by changing that provision. Inflation continues to increase, wages continue to go up, and soon the minister will have money coming out of his ears and other parts of his anatomy.


Some hon. Members:: Oh, oh!


Stan Darling: My hon. friend from British Columbia read from about half a dozen letters. I could read 20 letters to the minister and send him copies of ten telegrams which I am sure he has already received. I talked with the general manager of the Toronto international boat show yesterday. I asked Mr. Harold Shield about the general feeling of boat manufacturers and distributors and he indicated that they are worried about this additional tax and the effect it will have on their businesses. Perhaps the minister is aware of the record attendance at that boat show: it was 162,000, up 32 per cent from the year before. It was a magnificent display. I attended the show for a couple of days, during which time I interviewed a number of people while some of my colleagues were basking in the sun in the south somewhere.
I heard a great deal of criticism in respect of this surtax. Mr. Shield pointed out in no uncertain terms the serious blow this would be to the boat industry. There was some $5 million worth of boats at that international boat show in Toronto. I am not speaking on behalf of the manufacturers of luxury yachts. I had the privilege of taking off my shoes and being allowed to board a $120,000 luxury cruiser. A 10 per cent increase in tax on that boat would amount to $12,000. I am sure the individual who could afford to buy that type of craft would not quibble at all about the increase. When you consider boats worth $4,000 and $5,000, that is where the increase will hurt, and this is a horse of a different colour.
While there are a few wealthy boat owners who come to my riding from Toronto, for the most part the people there who own boats use them for fishing and water skiing. That is another sport this tax will hinder. How far do you think you can get out of the water with a motor of less than 20 horsepower? Certain members of this House would sink like stones. Let me refer to the effect this increased tax will have on the economy of tourist areas like Parry Sound-Muskoka. The tourist industry employs a great many people, some of them year-round. Tourist operators have been actively improving facilities in order
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to keep their operations open all year. This increased tax will result in many lay-offs in the tourist industry as well as in the manufacturing and distributing industries. Many distributors are now throwing up their hands because of this increased tax. They are not as optimistic as I am in feeling that the minister will reconsider and cancel this tax.
Many distributors are now cancelling orders. One manufacturer told me during the international boat show that he had cancelled orders totalling $800,000. That was just one manufacturer. I concede that he was not the operator of a small business, but this gives hon. members an idea of how tough this increase will be on boat manufacturers, distributors and tourist facility operators. We have many excellent manufacturers of Canadian boats who, I am sure, will be moving to the United States. This, again, will have an adverse effect and will mean a tremendous loss of sales, to say nothing of an increase in unemployment.
I believe the minister said yesterday that he is a sailing enthusiast. This particular tax does not apply to sail boats, and I suggest that sailing is really a luxury sport as contrasted with ordinary working people who own a small outboard or inboard motor of average size. Again we are discriminating against people in this country who want to be able to use their boats and to trade them in. People who have saved up for a boat and can afford to buy one despite inflationary cost are now going to be soaked with an extra 10 per cent.
I received a letter, one among many, from the president of one of the principal manufacturers at Gravenhurst, in my riding, a well known boat company called the Grea-vette Boat Corporation. Mr. Bruce Wilson, the president, wrote me as follows:
Dear Mr. Darling:
I wish to vigorously protest the increase in the federal excise tax on power boats over 20 horsepower from 12 to 22 per cent.
Actually, I believe the tax is 23.2 per cent due to the crafty way the minister has added the 10 to the 12.
This increase in tax is discriminatory as it puts the boat manufacturers at a great disadvantage in the recreational field. The tax, if it was designed to slow down the sales of boats, and hence the sales of gasoline, will be very ineffective due to the number of power boats now on the lakes.
If this tax is carried for any period of time, there will be undoubtedly shutdowns in the industry, and resulting unemployment.
It would seem to me that the federal government has done very little long-term thinking as to the need for and implications of this tax. Through you, I wish to express my deep opposition to the increase of this tax.
I see one of the minister's "wise men" sitting over there, and I hope he is making notes. He may be one of those who conjured up this stupid tax. When the minister and his officials hear the amount of opposition expressed, a considerable amount coming from members on the government side, I hope they will think again. In fact, I do not know anyone who is in favour of this tax except the minister and his henchmen. I hope this is another item they will look at again and do something to correct.
I hate to talk about compromises, but if the tax went back to 3 per cent rather than 10 per cent it would be better than nothing. Let me re-emphasize that this tax is
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discriminating against the owners of boats and motors, compared with the tax on luxury or heavy cars weighing over 4,500 pounds. This is something I cannot rationalize. How even the most stupid official in the minister's department could figure this to be fair, I do not know. These cars are used 12 months in the year. In my own case, I drive a heavy car because it is necessary for me to drive 500 miles a week to return home, and I will be paying this tax. My car has already been driven 48,000 miles. I also have a boat that qualifies for the tax, but I do not think I have put 100 gallons of gas into the tank in the last two years. This just shows how absolutely ridiculous the situation is.
Mention has been made of the tax on private aircraft, and the situation has been well presented by several of my colleagues as well as colleagues from across the way. Again, this tax is unfair and I hope the minister will reconsider it. I see his parliamentary secretary sitting with an official. I hope they are going to do something about this. The important thing is to cancel the tax entirely and to get the money from some other area. Another factor that increases the price of a boat is that every province, outside of the great province of my friend from Calgary, to my right, has a sales tax. I checked with certain boat companies at the Toronto international show and learned that governments are making about twice as much on a boat as the manufacturer and the dealer's commission. For example, the average sized cruiser costing $19,500 carries a federal tax of about $3,200. Pretty nice, I say. Then there is the applicable provincial sales tax on top of that. A smaller boat costs $10,900, with a $1,900 federal tax. You would think that the government was in the boat building business, judging from the profit they make on boats.
Again I suggest this is an unfair tax, that it is too high. My hon. friend, the parliamentary secretary, who himself represents a riding in the "little" province of Ontario where there are a few boats indeed right on his doorstep, I am sure deep down agrees with me 100 per cent. I hope he will use his good offices to tell the "honourable John" and company, and, more important, those grand mandarins, that they are away off base in this case and that they should sniff around for the money in some other field.


Mr. Firth:: Mr. Chairman, I should like to make a few remarks on this excise tax bill and add to some of the comments made by members on both sides who have shown a lot of opposition to the tax on boats, private aircraft, outboard motors, motorized toboggans, and so on. I have listened to the remarks of members on all sides of the House and have heard nothing but opposition-and very well spoken words of opposition-to this bill. In fact, I have yet to hear anyone speak in favour of this particular tax, and with that in mind I should like to serve notice of two amendments that I wish to propose to the bill.
At this point perhaps I might read them into the record. My first amendment is that Bill C-40 be amended on page 11, line 24, by deleting therefrom the word "two" and substituting therefor the word "seven". My second amendment is that Bill C-40 be amended on page 11 by inserting in line 28, immediately after the word "Canada", the words "or boats purchased or imported by hunters, trappers, fishermen or prospectors residing north of the sixtieth parallel of latitude". I should like to address my
|Mr. Darling.|
remarks to these two amendments, as well as to reconfirm the wishes of, I think, a large number of people in this country, including members on all sides of the House, regarding the high energy use tax, the tax on small boats, private aircraft and other small vehicles, use of which is especially made in isolated areas of this country.
I do not accept completely the term "north" as being 100 miles north of the United States border. I think we have to choose a point a little farther north than that. There are isolated communities in all provinces where people have to depend on small boats and where the only means of outside communication is small aircraft. Use of small, privately registered aircraft normally is not a luxury, no matter how you look at it. Very few people in the northern part of this country use a small aircraft as a luxury item. Small businessmen use such aircraft to transport a small amount of goods as well as themselves. For the missionary who uses an aircraft in certain parts of the country, it is the only means of transportation.
There are farmers in that part of the country who control their wheat fields with small aircraft and use small aircraft for seeding. They can seed in this way much more economically and faster than with ordinary machinery. There are police forces who must use registered aircraft to do their work. There are ranchers, people who run large ranches, who use small, privately registered aircraft to patrol the ranches, and so on. There are hydro companies and provincial governments, as well as the federal government itself, which use small aircraft. In fact, the federal government uses them to move ministers across the country; therefore, the government knows the value of and the need for privately registered aircraft. If it is not right for the small businessman to use aircraft for the running of his business, then it is not right for the government to do so. There are hydro companies which use aircraft for patrolling their power lines, and in some cases they use privately registered aircraft for stringing out their lines. In the isolated communities in the northern parts of the provinces, and particularly in the Northwest Territories, this is a very important part of the communication and transportation systems.
Therefore, I am firmly convinced that this piece of legislation is very badly presented and I am glad that a large number of members from both sides of the House have expressed opposition to this measure. I certainly hope that after the minister has heard the number of people who oppose this tax on high energy small boats and privately registered aircraft, he will take it upon himself, being the minister responsible, to revoke this tax and will, as my friend just mentioned, try to raise the $30 million from another source. It is certainly not a just measure no matter how you look at it.
For example, I could fly from Yellowknife to Fort Smith, or drive a car. If I were going by car, I would have to travel on a gravel highway for approximately six hours. It would be a long drive of about 500 or 600 miles on the existing gravel highway. But if I travelled by my small aircraft, I would be at my destination in one hour and 20 minutes and I would burn less than half the gas that I would use if I travelled by car. There are many arguments in favour of dropping this tax. I certainly hope the govern-
January 24, 1975

ment will listen to the representations of hon. members and will consider them very seriously.


Mr. Cullen:: Mr. Chairman, I wonder if the hon. member has written out his amendments, so that we could study them over the lunch hour.


Mr. Knowles (Winnipeg North Centre):: Yes, he has them.


Mr. Benjamin:: Mr. Chairman, I just want to add a few words to the comments made by hon. members in support of their contentions. I do not have too much sympathy for those who will be subject to the tax because they buy small boats or aircraft for pleasure. If they can afford it, then I am not too sympathic to their complaints about the tax. Nor do I think that the wholesaler or retailer has much to complain about, because he passes on the tax to the purchaser. However, there is a very sound case to be made for the people who must have a small boat or a small, privately registered aircraft in order to move around in their day to day living. There are a number of large lakes in northern Saskatchewan, for example, surrounded by small communities where people take their children to school in a small boat and use privately registered aircraft for fishing. As I said, this is their only means of transportation to the nearest community where they can buy their groceries and other necessities. Surely in those instances the imposition of the tax is unfair. Surely we should favour people who live in those parts of Canada, namely, the northern parts of the provinces and the Northwest Territories.
I appreciate the fact that the government might find it difficult to carry out a program of exemptions from the tax, but surely it would be relatively easy to implement a system of tax rebate. When a person, in the circumstances I have just described, requires such a craft, not for pleasure but as a means of livelihood, he could apply for a tax rebate and get it. He could obtain an application form from the person from whom he purchased the craft and submit it for a refund. In almost all cases that would eliminate anyone getting an exemption who was not entitled to it.
I add my plea to the parliamentary secretary, in the hope that he will pass on all these requests and urge the minister either to amend the legislation or to accept appropriate amendments from private members to make what I consider to be a very appropriate change in the legislation. I repeat that I have little or no sympathy for people who complain about the tax and buy a boat for water skiing, for pleasure, or who buy an aircraft to fly around on holidays. Nor do I have sympathy for the corporation which buys aircraft to fly their board of directors around. Certainly they can afford to pay the tax and there is no reason why they should not do so.


B. Keith Penner: Order, please I regret to interrupt the hon. member but it being one o'clock, I do now leave the chair until 2 p.m.
At one o'clock the committee took recess.
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[Stage Direction]
AFTER RECESS

The committee resumed at 2 p.m.
B. Keith Penner: Order, please. When the committee rose at one o'clock, clause 21 of the bill was under consideration.


Leslie Gordon Benjamin: I just have a few more remarks to make in order to complete what I was saying when we adjourned for lunch. I believe the parliamentary secretary heard my remarks regarding small boats and aircraft. The only difference of opinion I have with my colleague from the Northwest Territories on his amendment is that, rather than the sixtieth parallel, I would like to have that line moved south two or three degrees so as to take in the northern parts of British Columbia, Alberta, Saskatchewan, Manitoba, Ontario, Quebec and Labrador as areas where it would be perfectly proper and legitimate to exempt or to allow a rebate of sales tax to purchasers of small boats and privately registered aircraft when they need them to earn their livelihood or it is their only means of transportation for taking the children to school or buying the groceries.
I would like to make one other point regarding industrial and construction equipment. A dealer from Regina met with me during the recess, and if I understood him correctly he made the point that an industrial or construction equipment dealer who is a wholesaler has not paid any tax on equipment that he has in inventory, but the distributor who is further down the line from the wholesaler and who had equipment in inventory prior to the budget is stuck for the tax on his inventory. It happens fairly frequently that a wholesaler will retail equipment, but in this instance the wholesaler will have an advantage over a competitor.
The dealer from Regina who spoke with me has several large 12-yard or 15-yard earth-moving machines on his lot, and it is impossible for him to compete with the wholesale distributor in attempting to sell that equipment to a private contractor. If he could sell it to a municipal or provincial government, which are tax exempt, he would have no problem, but this particular dealer has large sales to private contracting companies all over the province and in other provinces. I make a request on his behalf, and I suspect on behalf of many other distributors of industrial and construction equipment, for eligibility for a rebate on equipment that was in inventory at the time of the budget. I appreciate that there may be some administrative difficulties here which might require checking the franchise agreements of distributors with various manufacturers of industrial equipment; most of this equipment is imported. But it seems to me that this particular dealer is in an unfair position with equipment on hand worth $10,000 or $12,000 for each machine. That, obviously, is going to severely handicap, if not prevent him from competing in selling that equipment to a private purchaser. I would urge that that problem be taken into consideration by the parliamentary secretary or the minister and an amendment moved or, if this is something that can be done by regulation, we should be given the assurance that such action will be taken.
I would like to make one other point arising out of the remarks of a colleague to my right in the official opposi-
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tion. He urged that the sales tax be removed completely and the $30 million involved collected through income tax or some other method. I would support that suggestion provided the law required that the benefits of the removal of that tax be passed on to the consumer. We have had too many bitter experiences over the years, I think particularly in the case of drugs.
After many years of fighting, the government removed the sales tax from drugs. The saving just did not reach the consumer; it was absorbed by the wholesalers and retailers through the pricing system. There was no benefit to the consumer whatsoever in the removal of the sales tax from drugs. That is why I have always hesitated to agree completely with the Leader of the Opposition and his colleagues in their proposals to remove the sales tax from building materials. Unless there is adequate provision to ensure that the benefits reach the home buyer, there is just no point in removing the sales tax. It would be better to leave it on and then rebate it. We could deliberately discriminate in favour of those on low and middle incomes by rebating the tax to them and not to those on higher incomes. This could well apply, in this bill, to small boats and aircraft; that is why I hope the government will agree to make a rebate of the tax to people living in isolated areas. These are not always in the north but are isolated areas in the southern parts of Canada. It may be difficult to administer a system of rebates but certainly in the northern parts of Canada it should be applied. I hope the government will accede to the request of members of all parties because this is a proper, fair and logical thing to do.
I repeat, Madam Chairman, that I have no sympathy for those people paying sales tax on weekend pleasure boats, or corporations that buy executive aircraft to fly their executives around. As far as I am concerned, they can pay the sales tax. I hope the government will accept the submissions made by my colleague, the hon. member for the Northwest Territories.


Mr. Bawden:: Madam Chairman, a great deal has been said and some excellent points made by members from all sides of the House. I just hope that the minister will give as much attention to boats in the year 1975 as he did to votes in the year 1974.
Since some excellent comments have been made by hon. members about the sales tax on boats, I am going to deal with the subject of sales tax on aircraft as it applies in Bill C-40. The minister's proposals as set out in the bill have brought some good news and some bad news. The good news for the aviation industry was that the 12 per cent sales tax on aircraft purchases would be removed. The bad and very disturbing news to a special segment of the industry was that a special 10 per cent sales tax will be added to the 12 per cent regular sales tax when an aircraft is purchased by a non-commercial owner.
In the budget of last May, the Minister of Finance proposed a 3 per cent tax to be added to the 12 per cent. Between May and November this tax increased from 3 per cent to 12 per cent. If the minister is escalating his ideas on special taxes in this special area at this rate, I hesitate to think what might be in store in the next budget. Per-|Mr. Benjamin.|
haps the minister might enlighten us on whether, as energy becomes more scarce in this country, he intends to further escalate taxes in this area.
This is a one-time tax; in other words, if an aircraft is imported, the tax is paid once only, and so it has no direct relationship to fuel consumption. Heavy fuel consumers, even if their aircraft is already in this country, can continue to gulp fuel. If fuel conservation is the object of these measures, the point has been missed that there is no ongoing tax on those that continue to use large amounts. An aircraft visiting Canada would be exempted from any tax. I suggest, therefore, Madam Chairman, that this is clearly a punitive move against the private aviation industry in Canada and the minister has given no satisfactory explanation for it.
Private aviation is not an insignificant industry in Canada. Today it is doing a total sales volume of something over $100 million, and it employs over 5,000 people. I think the point that has been missed is that a large percentage of the aircraft being operated by this sector in Canada are operated by private businesses that depend on this mode of transportation to conduct their business in whatever part of Canada it may be.
A good deal of emphasis has been placed by members on both sides of the House-perhaps particularly by the hon. member for Northwest Territories, whose area falls into a very special category-on the fact that alternate modes of transportation just are not available. In fact, in the past, aircraft has been the most significant tool for opening up this important part of the country, and I suggest it will continue to be so in the future. This is especially significant when the cost of aircraft operation is compared to the construction of roads, railroads and other types of transportation.
The important factor is that if we impose this tax on what is a very essential business tool in many parts of our broad country, we merely add another tax on business and businessmen and people who must conduct their operations in areas where every other cost is so high. This only serves to increase the over-all cost of doing business and it will be felt significantly by resource-oriented companies where aircraft must be used for exploration in frontier areas. In the final analysis, it will be added to the cost of what is produced in those parts of Canada-energy, minerals or whatever.
This foolish action of imposing a 10 per cent special tax on top of the 12 per cent makes most aircraft in Canada at least 22 per cent more expensive than similar aircraft in the United States. In fact, if we add the provincial sales tax that would apply in most provinces, it would be a cost in the order of 30 per cent more than the aircraft owner in the United States faces. In most cases, their need is much less than ours because they have alternate commercial airlines and many more modes of travel.
This stupid provision in the budget discriminates against a particular section of the Canadian economy, and the moves made by the minister do not stand up to reason and good sense. Private light aircraft, in most cases, are as efficient or even more efficient on a per mile basis than alternate modes of transportation, particularly automobiles. I have a list of eight aircraft from light, singleengine craft to jet aircraft, and on a seat per mile basis all
January 24, 1975

but two are comparable to the seat per mile cost of a Chevrolet car. Madam Chairman, I wonder how the minister could have arrived at the conclusion that this segment of the industry is using more than its share of fuel, or an excess amount as compared to every other mode of transportation such as automobiles, boats, and so on.
Another important fact is that the latest aircraft engines and airframe designs are particularly directed at fuel economy. In many cases, engines for new aircraft are 20 per cent to 50 per cent more efficient than before. This tax is going to discourage the importation of new generation aircraft and engines, and this is going to be detrimental to the acquisition of aircraft which would bring the best fuel economies in the long-term picture of Canadian aviation.
This is an arbitrary and unjustified tax and I feel it might very well provoke retaliatory action from the United States. Such action would be disastrous for Canada's teetering aviation manufacturing industry, particularly the new STOL aircraft and the commuter aircraft which De Havilland of Canada is building and specializing in. Any such retaliation might well be against all areas of Canadian manufacturing.
The minister is under an obligation to answer some of the questions we have asked on this subject. I hope he will do so as soon as I have finished speaking. Will the minister tell the committee what studies were undertaken which led to the tax proposal? Will he table projections relating to aircraft which show how much tax will be collected? We have heard about the total tax to be collected. I have asked particularly about aircraft. Also, how much fuel is it estimated will be saved as a result of the tax, and have the studies shown the adverse effects on the economy resulting from the tax, and especially the adverse effects on the large number of Canadians employed in the aviation industry?
I place particular emphasis on the need for the minister to prove just how large these fuel savings will be, as fuel savings were given as the principal reason for the tax. My figures show that general aviation consumes only 8.6 per cent of net aviation fuel sales. This represents, when translated to basic production of oil, 4,000 barrels per day. That is the total amount of fuel consumed by that segment of the aviation industry. If the minister is right, if his department's estimate of a 20 per cent fuel saving as a result of these measures is correct, that still means that only 800 barrels per day will be saved. Compare the production of 800 barrels a day with the production of only one well in the frontier areas of Canada. A commercial well in frontier areas of Canada produces probably five times as much oil as is likely to be saved under this measure.
Let us remember that because of this government's budget a large number of holes, some of which could turn into potentially productive wells, have been cancelled. For the record, since the last federal budget, 55 holes have been cancelled in British Columbia. Hon. gentlemen in the party to my left should recognize that the adverse policies of the socialist government of Saskatchewan have reduced the number of rigs now working in that province to two, compared with 30, 40 or 50 a few years ago. Today they are
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drilling about 150 holes in Saskatchewan; they drilled 286 last year, compared with about 1,000 a year three or four years ago. Although the present proposed measures may lead to a saving of 800 or 1,000 barrels a day, the minister's last budget has worked completely against the attainment of the objectives he is seeking. The fact remains that literally hundreds of holes have been cancelled.
Yesterday the minister told the committee that until we re-establish our reserves and reach a balance between the oil producing and consuming countries of the world, conservation measures are necessary. He also spoke about new sources of energy. If the minister is truly concerned about re-establishing reserves, why did he in his budget virtually wipe out, kick the props out from under the important oil and gas producing industry of Canada? If the minister truly intends to use these special taxes as fuel conservation measures, why does he not increase the price of fuel? In this way he could achieve a more meaningful fuel saving and follow the lead shown by the President of the United States.
In conclusion, the minister must come clean with the people of Canada. He must come forward with evidence to prove he is not misleading the public by claiming his actions are a fuel saving measure. The minister is under the obligation of proving that this ill-advised tax proposal has been brought forward to save fuel. He must give us the facts. I do not think the minister can admit his advisers are ignorant, yet I am satisfied that the claimed fuel savings cannot be proved. I hope the minister will speak as soon as I have finished.
It may be assumed that the moves by the minister were a direct attack on the viability and future of general aviation in Canada. The minister is under the obligation of answering that question. Does he intend to eliminate this vital and significant industry from the Canadian scene? if so, he should say so and not cover up this policy, if that is what he really intends to do. But if he continues to maintain that fuel conservation is really the objective of this measure, I suggest he is perpetrating a fake and a deception on the Canadian people.


Robert Lorne Stanfield: Madam Chairman, I will gladly yield the floor to the minister if he wishes to answer the questions asked by the hon. member for Calgary South. As he does not seem to be in a hurry to rise, I am taking this opportunity to make some comments on the bill. First, if I may deal with aspects relating to fuel conservation, there has been a good deal of discussion about those parts of the bill relating to the additional tax to be imposed on boats with certain sized engines. I have had representations from manufacturers of these kinds of boats as well as from other people in the business. What strikes me is this: the minister, as he must realize, has taken a step which will create serious difficulties for people in business. It is bound to have serious consequences for businesses involved in this area and, consequently, for people employed in those businesses.
We all recognize that we need to conserve energy. It is one thing to put before the country measures which will cause inconvenience and damage to some; it is one thing to bring these forward as part of a comprehensive package to conserve energy so that all Canadians can share the load in implementing conservation measures; but it is quite

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another thing to be asked to vote in favour of tax increases which will apply, for example, to boats, as such measures are isolated from any overall program and, so far as one can judge, form no part of any comprehensive approach to conservation. The government itself has failed to take steps to conserve the energy that it uses itself.


An hon. Member:: You are speaking of government cars?


Robert Lorne Stanfield: I am not talking about cars; I am talking about buildings. The point is this: are these measures part of a comprehensive program? We should know what the comprehensive program is before we are asked to vote on isolated measures such as these which, as hon. members know, will cause hardship to individual Canadians. At present I am not complaining about the entire bill; I am only speaking about the controversial sections presently being discussed. How can the minister ask us to support these measures as part of a comprehensive program, when we have tried to find out from the Minister of Energy, Mines and Resources when he will present an energy conservation program? First this was to be done before Christmas; then it was not to be done before Christmas- and the program has not yet been released. Why is the Minister of Finance asking us to vote on what are essentially conservation measures-I am not expressing an opinion as to how effective they may be-when these measures are bound to do a certain amount of injury to firms and individuals? Why is he asking us to vote on them before we have the whole picture in front of us?
I ask the minister to refrain from seeking the opinion of this House until his colleague, the Minister of Energy, Mines and Resources, puts before us his comprehensive program. I say in all sincerity that it must surely be ready by this time. How can the minister expect us to accept these measures which seem simply to have been drawn out of a hat, when other Canadians are not being asked to bear any part of the load?
The other aspect of the bill I wish to refer to deals with an area in which the minister is trying to be helpful. Certain taxes are being eliminated on construction and transportation equipment. I also want to be helpful, and I want to be moderate. I hope the minister realizes that the way some clauses now stand, this has created a bit of a can of worms. It was pointed out in connection with transportation equipment, for example, that a truck is not built by one manufacturer; the chassis and cab are manufactured by one firm, and other firms which are spread across the country manufacture the rest. They build the body and, if necessary, a crane or other equipment.
The minister is creating considerable difficulty for these firms. He recognized that in reducing the taxation, he was subjecting some firms to very substantial inventory losses and he took an unusual step to provide some relief for them. However, all across the country there are firms engaged in truck-finishing operations, for example, which have substantial inventories of parts. Under the bill as it now stands, they will face very heavy losses. These firms will be severely prejudiced in comparison with other businesses in this country. The minister should not let this
sort of thing happen. It is my impression that one of the amendments put forward by the hon. member for Halton-Wentworth was designed to at least indirectly overcome this problem. In addition to the inventory problem, there is the manner in which the tax is to be applied to parts. What definition is to be followed? This is creating a great deal of difficulty. If a part is valued at less than $1,000, the tax is payable. When is a part not a part? When is it classified for the purpose of a ruling? There is an enormous amount of confusion here.
If this bill is enacted in its present form, there will be a great deal of inequity across the country and this will be very rough on relatively small businesses engaged in the building of trucks. It will be very difficult for them to compete with other manufacturers. Also, it will have the effect of increasing the competitive advantage of those who import parts into the country as compared with those who manufacture parts in Canada. I believe the hon. member for Halton-Wentworth put forward amendments which would take care of this problem. I have no means of knowing whether they are acceptable to the Minister of Finance. I know the minister was trying to be helpful in putting forward these clauses which grant tax relief. I recognize that he saw the severe financial loss that could be imposed, in terms of inventory, as a result of what he has done. The minister moved to correct that in part. Nevertheless, the result has been the creation of a very inequitable situation as between businesses in this country. The apparent definition of units and the probable manner in which the clause will be applied will make it exceedingly difficult for small firms which have built up a business to provide a valuable service in their regions. It will be very difficult for them to carry on.
I am most anxious to know whether the minister is prepared to accept the amendments put forward by the hon. member for Halton-Wentworth or some variation of them. It would be highly unsatisfactory for the committee to adopt the bill as it now stands. It would place many businesses in this country in a virtually untenable and uncompetitive position. I am sure that is not the intention of the minister who, as I said before, set out to be helpful. This legislation is a bit of a mess. I hope the minister does not think I am trying to be critical by saying this. I suspect this is always true in the case of tax legislation when you try to change something, even when you try to improve it. This is very difficult to do. It is even difficult to reduce taxes without creating some inequity. I understand that. However, I do not think things should be left as they are at present.
Some constructive suggestions have been put forward by the hon. member for Halton-Wentworth. I hope the minister can adopt them or perhaps even improve on them. Also, I hope the minister will not insist upon the opinion of this committee being taken on the conservation measures until we have the whole facts in front of us, assess them and judge whether the burden being imposed upon Canadians and Canadian companies covered by this legislation is being fairly apportioned among Canadians in general.


John Napier Turner: Mr. Chairman, I have not intervened to answer all the interesting contributions to the debate. I will do that at the appropriate time, when
| Mr. Stanfield.)
January 24, 1975

we come to the conclusion of this clause. Because of the position the Leader of the Opposition occupies in this House, I want to assure him I had a chance to review the arguments, both on second reading and in committee, of the hon. member for Halton-Wentworth. On the main thrust of his amendment affecting parts, I think we can satisfy the argument presented by the hon. member and as reinforced by the argument which the Leader of the Opposition has just made. We have the advantage, of course, of the experience of the hon. member for Halton-Wentworth in the business to which we are referring, namely, the trucking business.
The hon. member put forward two other amendments which do not bear on the point the Leader of the Opposition has been making which, by reason of explanation we have given and will give to the committee as a whole, are not as important to him nor would they achieve the results the hon. member wants to achieve. On the first point, dealing with the general conservation program, my colleague the Minister of Energy, Mines and Resources, will of course be presenting that program. I am, within the mandate I have over the tax law, doing what I can to supplement it in terms of the tax.
We have to start somewhere on energy conservation. We have to look for new sources of energy and we have to co-operate with other industrial nations within OECD to contribute toward conservation and provide financial solidarity among industrial, consuming nations of the world. We had to start with marginal uses of energy, such as recreational uses, exempting fishermen and others who need energy for commercial or livelihood purposes. Having said that, I should like to leave my other remarks on clause 21 so that I can deal with the whole panorama of suggestions that have been made.


Benno Friesen: Madam Chairman, the minister has now heard from members of all parties on the subject of the 10 per cent tax on boats and non-commercial aircraft. He must surely see the gathering resistance to this tax from the whole spectrum of industry in all parts of the country. I hope he gathers from this that the resistance is based on insight, experience and information from all segments of the economy. I also hope he will accept the conclusions of this sampling from around the country, as well as the representations made in this House on behalf of these segments, as the kind of information he needs to make a decision in this area. On that basis, I would hope the minister will entertain a change to this part of the bill, reducing this tax burden.
The irony of the situation is that the tax focuses on and hurts those people the minister ought to be helping. I am not concerned about the people who can afford $250,000 yachts. While this tax might be somewhat of an extra burden for them, this is not the most serious area of concern in respect of wasting fuel. I am very concerned about the thousands of people in the lower half of the income scale who wish to buy an average sized boat and what to them is an average sized horsepower engine for the boat. These are the people who look forward to weekends of recreation out on the lakes, rivers and offshore oceans. They may have well-used boats and now want to
Excise
upgrade them. These are the people who will be hurt. I am also concerned about the dealers across the country. Last week I talked to one who had six boats in inventory, representing about $6,000 in taxes. This is an extremely heavy burden for these dealers and their clientele to carry.
One other concern I have relates to non-commercial aircraft. I understand the minister when he argues that in many cases this is a frivolous luxury, but a number of members have already pointed out that for a large segment of our population a non-commercial aircraft is not a luxury but a dire necessity. Many non-commercial aircraft are used by business executives in a non-frivolous way: in fact, it is a rather efficient use of time. If we want to consider this a frivolous use or a luxury, then perhaps we should classify STOL aircraft in the same way.
It has also been pointed out that the energy conserved as a result of this measure will be negligible. I received a letter three days ago from a constituent, Mr. Verne McWilliams. He made a trip in a small aircraft last summer from the lower mainland of British Columbia to northern Saskatchewan. The aircraft consumed 96.6 gallons of gasoline. Had he used his car it would have consumed 150 gallons. Statistics have already been quoted to show that the fuel consumption of these craft is less than one-quarter of one per cent of the total energy consumption in Canada. When we consider that the tax imposed on these craft will be imposed on inventory yet to be sold, and let us suppose that the number of boats sold will be one-tenth of total inventory, we can easily see that the energy conserved will only be one-tenth of one-quarter of one per cent. This is the frivolous aspect of this bill.
A number of members have pointed out that this fuel conservation measure is self-defeating. Having regard to revenue, it is contradictory because the revenue it is supposed to raise is offset by other areas of the budget. Again I would ask the minister if he will entertain an amendment to this portion of the bill which would delete the 10 per cent tax on small craft and non-commercial aircraft.


Donald Frank Mazankowski: Madam Chairman, I should like to join in this debate to echo the sentiments and the remarks of hon. members who have preceded me in criticizing the 10 per cent excise tax on private aircraft. It seems to me the minister would rather I talked about corrals and pens. I think he had a lesson on ranching yesterday and some of the difficulties we have in respect of this bill which imposes burdens on the beef industry which is vitally important to the country. I might add tha't he did listen, and I would invite him to come out to Alberta to see just how many of these pens and corrals I referred to yesterday are in fact being used.


John Napier Turner: I will bring my super bull.


Donald Frank Mazankowski: Yes, bring your super bull. It seems to me that the general treatment of aviation and private aircraft is part of a continuing and over-all conspiracy or vendetta which this government is engaged in against the private aircraft owner. We know that a year or so ago the Ministry of Transport attempted to adopt the very discriminatory proposal of landing fees for small aircraft. In every respect this was a very inequitable proposal. Thanks

January 24, 1975
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to a minority government situation and the assistance of many members of the transport committee, we were able to have this proposal postponed or laid to rest for the time being. We see in this proposal a continuation of the vendetta which Ministry of Transport officials seem to have against aviation in general and the owners of private aircraft in particular.
Regardless of the rationale we formulate in respect of energy conservation, the simple fact remains that the position of this government is such that it does not care too much for or appreciate the general aviation segment of our economy. The government seems to have the illusion that those who own private aircraft are wealthy individuals and that this is a very luxurious hobby. In my opinion, nothing could be further from the truth. It is fair to point out that in the order of six million Canadians depend upon non-commercial aircraft for transportation. Many of these people use private aircraft in their businesses. We are all aware of the utilization of private aircraft in the agricultural industry. Private aircraft are also used in respect of fisheries and various industries in the northern parts of Canada, as well as by ranchers and farmers for crop spraying, etc. These are all very necessary functions of important industries in this country and I think Department of Finance officials have tended to overlook this fact.
It is unfortunate that the Ministry of Transport as a department is so unsympathetic to general aviation in this country. As I pointed out yesterday, I am not sure whether the Minister of Finance consulted the Minister of Transport before he introduced this particular provision in the budget. He may have, but then again he may have had some difficulty because, as we all know, the Minister of Transport is scarcely seen in the House and when he is in the House he is unable to refresh our minds regarding what is going on in his department, even at the best of times. So, very simply, this provision is a discriminatory and vicious blow to general aviation in this country and I hope the Minister of Finance will seriously reconsider it.
Another area I wish to refer to briefly is the sales tax applied to construction equipment held in inventory. I believe the treatment here represents another gross injustice, particularly toward unlicensed construction equipment dealers who, according to my information, face the prospect of losing in the neighbourhood of $3.5 million. A large number of dealers are not involved; I am told that there are in the order of 180 construction equipment dealers in Canada, roughly 60 or 70 of which are unlicensed wholesalers. They are carrying an inventory of new, unsold machines, the total federal sales tax element of which is approximately $3.5 million, which represents an average of $56,000 per company.
These companies are for the most part small businesses and the prospect of facing a loss of such magnitude is certainly very detrimental to them and unhealthy for their economic survival. It seems to me a precedent has been established in the case of transportation equipment stock held in inventory at the time of the budget: provision has been made to grant a refund. If it is fair to provide that sort of relief in the case of transportation equipment, the
| Mr. Mazankowski. |
same kind of relief should be given construction equipment.
I think this particular measure discriminates in two ways. It is unfair as between the two types of dealer, the licensed and the unlicensed dealer. We now have a situation where customers who have placed orders with unlicensed equipment dealers are virtually cancelling their orders, going across the street and buying from firms who offer the same equipment under the tax exemption provision. Secondly, it is unfair in relation to the treatment of construction industry equipment as opposed to transportation equipment; I think those two situations are identical.
I think the precedent that has been established goes back to the precedent established, I believe, in the days of the Conservative government in 1961 or 1962. I happened to be an automobile dealer at that time and remember very clearly that the excise tax on stock in inventory was removed; the opportunity was given to apply for relief from tax on stock on hand. It seems to me that what is good for transportation dealers is also good for construction equipment dealers.
I think it is fair to say that inequitable legislation is generally bad legislation. If this provision is carried on the basis put forward by the Minister of Finance, it will certainly have to be considered bad legislation. It seems to me that equal treatment should apply to the construction industry. The fact that the minister has been generous enough to make this allowance has certainly saved much hardship on the part of a number of truck equipment dealers in this country who faced the prospect of losing millions of dollars worth of orders. I therefore seriously urge the minister to consider the very severe blow that will fall on construction dealers in this country if this provision carries, and I am referring to those who are classified as unlicensed dealers.


Mr. Jones:: Madam Chairman, my remarks will be brief since much has been said about the same matters and there has been a great deal of duplication. We have heard about the boat industry, small aircraft and the fact that a number of dealers, distributors, and so on, hold stock in inventory. When we discussed the question of inventory yesterday, the minister alleged that these dealers were in fact given notice because the budget tax was presented last spring. I suggest, Madam Chairman, that this was not notice to dealers or distributors, because it is common knowledge in the industry that orders for heavy equipment have to be placed at least 12 to 18 months ahead of time. Therefore, the bill should be amended accordingly and the minister should compromise. In view of the fact there does not seem to be a compromise or amendments coming from the minister, I should like to propose two amendments. The first is as follows:
That section 21, subsection (2), of Bill C-40, on page 11, lines 26 to 39, be amended by deleting clauses 11 and 12, and that the figures "11" and "12" in line 40 on page 11 be deleted in clause 13 thereof.
Secondly, I move:
That section 21, subsection (2), of Bill C-40 be further amended by adding the following new subsection:
"(9) If taxes previously imposed by this act have been paid on items in hand and in inventory or stock in trade, then the distributor or dealer having paid such taxes shall have the tax refunded or remitted."
January 24, 1975


Mr. Johnston:: Madam Chairman, I represent an area in this country that considers itself rather hard hit by a variety of measures dealing with excise taxation following upon the budget. First of all, so far as excise taxation is concerned, one element that is missing from this bill is an increase in the basic exemption to persons selling articles of their own manufacture. This exemption still remains at $3,000, which in these inflationary days is a ridiculously low figure, one that a minister so aware of the problems of inflation might well have increased. One really cannot make anything with $3,000 any more.
I am sure there is considerable wastage in the attempt to collect from people who are operating at that small level. They tell me that the form is stupid, and they resent the fact that the figure is so low regardless of the product being manufactured. For those who are working in the field of artistic endeavour, this is particularly difficult.
From the constituency point of view there are a variety of problems. Other parts of the bill deal with the 5 per cent airport tax which is a burden, particularly at airports such as the one at Kelowna and the one in Cranbrook where already a civic tax is imposed on passengers leaving those airports. The newly imposed federal tax will amount to double taxation. Certainly one thing that the minister should do, I think, is to return to the cities, out of the new federal collection, a sum that would permit them to consider removing their portion of the tax, because the present situation is unsatisfactory. It hits at both ends of the constituency that I represent, namely, Kelowna and Cranbrook.
Of course, Kelowna airport is outside my constituency, but it serves north Okanagan and the town of Vernon. Airport officials there told me that passengers on flights leaving the airport are taxed doubly as a result of the policy that has been introduced. On top of that there is the problem grape growers face because of the added taxation. I realize that this comes earlier in the bill, but much has been said about the way in which this bill frustrates various other government endeavours and programs.
Throughout the years we have had a federal agricultural research station in the Okanagan. A great variety of federal programs have been set up to assist agriculture, and personnel has been sent out from the Department of Agriculture. Every so often a breakthrough comes, as it did with the planting of the vineyards in the Okanagan, but later there is a realization that, although something is finally being achieved with considerable federal expenditure, a hastily conceived new tax placed on a product is detrimental to all the earlier efforts. I know that the minister has had representations from a variety of people there, and I think that he should take another look at that tax.
Finally there is the tax on pleasure boats under item 11, with which we are dealing. For quite a few years under earlier administrations the Okanagan Valley was a designated area. At one time the government of the day set up a program to encourage industry to develop in the area. It was a reasonably successful industrial effort, and a variety of enterprises were begun under that program. Yesterday, in speaking about these programs and the industries
Excise
that were started, somebody said that a great many of the smaller companies had failed, and that the ones that were really successful may not have needed the incentive in the first place. I think this was a rather significant statement because the imposition of an unwise federal tax on small companies which do not have the economic finesse, or the resources to hire people to take care of the federal bookwork that is demanded, and to which the tax represents an enormously significant share of what should have been a company's profits, negates the effort and money that went into it in the first place.
Certainly the representations from the small boat industry at both ends of the Okanagan Valley should be carefully considered by the minister. He has heard the same story from a whole variety of people in other areas, on both coasts, and in the major lake areas in the country. When there is an economic turndown and when we begin to enter what might be called a recession, it is of course the leisure industries which are hit first.
In the north Okanagan alone, the payout in unemployment insurance has now reached a staggering figure. Some of the industries there are holding on, but confronting this kind of additional tax will be a cruel blow to the boat building industry of Lavington and Okanagan lake. Certainly it would be a rather stringent measure to save energy, if that is the prime purpose of this tax. It seems to me a strange way to tackle this problem. There must be methods which could be devised by the minister and the department to spread the load of energy saving a little more evenly across the country, if it is at present such a priority.
Anything that provides pleasure is a rather easy target to people when they are preparing a budget. They seem to think that such a tax will not be too greatly attacked by the general public. But in this area in particular I know that the minister has heard representations from the same people as I have, and he replied to them that he would take a very close look at this. Yet his words this morning must have been a disappointment to those people who have written.
Considering the volume of objections that he has heard in this debate and the enormous variety of sources from all across the country, surely he must recognize that this is a step that should not be taken lightly and that its effect, in terms of destroying industries that are well established, could be so far reaching and so detrimental in areas that have already been dealt other blows, that he should consider adopting the amendment put forward, or himself propose an amendment to withdraw item 11.
I believe that the minister's officials should gather some statistical information on how many additional people would be laid off as a result of this measure, and how much more the Unemployment Insurance Commission fund would be depleted as the unhappy result of proceeding in this fashion.


John Douglas Reynolds: Mr. Chairman, I am sorry to see the minister leaving the House because I wanted to speak to him regarding something he said publicly, namely, that this bill was meant to save energy. I think that the minister has been listening to all the comments, not only from this side of the House but from his side. Practically every
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speaker on the other side of the House has spoken against items 11 and 12, and if the minister realizes that even government members are speaking against the imposition of this tax, especially members from British Columbia, he will see that there is every likelihood that the bill will be defeated in any case. So, if he wants to save energy he should tell the House that he will withdraw the two items, and the bill might then go through the House much quicker and save us a lot of time. I did want to ask the minister one question.
We had some discussion yesterday, while the bill was being debated, on two areas that are of great concern to me because I have many fishermen in my riding, and I also have the B.C. ferry landing in my riding. My concern is whether this bill applies to the British Columbia ferry system or whether it applies to fishermen, and I have been assured by the minister that this is not so. Will the parliamentary secretary confirm, so that we have it on the record, that these two areas are not affected, or does he wish to wait until the minister makes his statement?


Jack Sydney George (Bud) Cullen: The minister will be commenting in a positive way when he makes his statement.


John Douglas Reynolds: I thank the parliamentary secretary. I know the people in my riding will be very pleased that the commercial fisheries are not going to be affected. Hopefully the whole bill will be changed and no private boat owner will be affected either.
I would like to put a couple of things on the record. I think hon. members from both sides of the House have received a number of letters and telegrams from people who are very concerned about this bill. I would like to read some paragraphs from the Vancouver Sun on boating, written by Don Tyrell, as follows:
As an answer to the fuel crisis, it's a fake. The amount of fuel consumed by every power boat in Canada would amount to a fraction of one per cent of the nation's petroleum fuel. As far as the fuel crisis is concerned it's a non-action. It may serve as a talking point for the government, which can point to the steps it has taken to stop fuel waste by the boating public.
It appears that most boats, with the exception of car tops, will come under the new tax.
This means an additional 10 per cent on the boat and an additional 10 per cent on motors. There's bound to be some confusion for the dealers. A customer may buy a boat that is designed to take 20 or more horse power and use only a 10-horse. How does the dealer know whether the buyer is going to use a motor smaller than that for which the boat has been designed?
Somebody in Ottawa failed to think the thing out and, from the looks of it, very little thinking of any kind was done. One class of boat that will pose a problem is the inflatable. They have become popular in B.C. in the last few years and many of them are powered by motors of far less than their designed capacity. This is done because the smaller motors are not only cheaper but a lot lighter.
The only sensible way to cut down on fuel use, in my opinion, is to put a tax on the fuel itself. Then everybody pays according to the amount used. To single out one small Canadian industry for action of this kind is poor judgment.
I certainly agree with all the comments of Mr. Tyrell. I would also like to read into the record a letter from one of my constituents, signed by Mrs. Susan A. Molberg, dated January 2, and addressed to me.
|Mr. Reynolds. |
Dear Sir: A Happy New Year to you and your family.
This is a small thing but when a family saves for a large item such as a boat then when they go to pick it up have to be told that another 10 per cent is needed for complete payment, it really hurts.
We realize very strongly that boating is a luxury but on the other hand there is more to life than working from 8 to 10 hrs. or longer every day coming home, going to bed, and getting up returning to work week in and week out. One has to have a little relaxation and in this family it happens to be just about every aspect of water or boating there is.
I am sure there is more than one way to solve the fuel crisis and being a minority, that is referring to the sport of boating, isn't going to solve it all by itself.
We feel very strongly about this new excise tax on boats and engines and would like to see this tax killed . . .
Thank you for your time.
I wanted to read that because these people are just average constituents, and I represent an area that has as many boats as any other area of this country. My area includes the Fraser River and Boundary Bay, great sport fishing areas. The people in my riding are concerned about this tax, as are the constituents of other hon. members from British Columbia. I cannot understand why the government wishes to attack them, especially when it is wasting money in so many other areas.


An hon. Member:: Your constituents are westerners.


John Douglas Reynolds: My constituents are concerned since this tax seems to be aimed at the people of British Columbia, because this is one area in this country where we have the use of our boats 12 months of the year, while the rest of the country is frozen solid. The government is imposing a tax on the people of British Columbia who will have to pay more than anyone else in Canada. I see the minister is laughing, but he has lived in B.C. and he knows that we go salmon fishing in October, November, December and all year round. That cannot be done in any other area except perhaps in the Maritimes, although the Atlantic gets a lot colder and is not as kind to people because it is wide open and not like our inland waterways.
The minister says that the government is going to collect $34 million. That $34 million could be collected much more quickly without affecting the average citizen, and especially the citizen who likes to boat for relaxation, by restricting some of the government areas of spending. The Department of Supply and Services bought $54 million worth of computers of which at the present time only 50 per cent are in use. If the minister spent more time looking at some of the purchases the government is making he might save this country much money. I know that that is not his responsibility, but he is the Minister of Finance.
Recently mention was made of the Prime Minister's car and it uses large quantities of gas. A second one was purchased for $84,000. The President of the United States, who I am sure deserves a comparable car to our Prime Minister's, leases his cars and drives a brand new Ford. It has all the security devices that our Prime Minister's car has, yet he only pays $12,000 a year for his car. He puts out a tender for leasing to all the major manufacturers. If the minister were interested in putting more money in the till, he should be going after his friend, the Minister of Supply and Services. We would like to know why the government is spending $84,000 buying a car when it could be leased
January 24, 1975

much more cheaply over a period of time, thereby saving taxpayers' money.
If we are discussing energy and saving taxpayers' money let us talk about the Pacific environment centre which the government, a little over a year and a half ago, was determined to set up in north Vancouver. It was the only place it could go. The employees protested that they did not want it there. They did not want to have anything to do with it. The government said that it must go there, and that it was a necessity. The minister happened to be defeated in that riding, and we no longer have the same necessity for the environment centre on the north shore.
These are areas that the minister should be looking at, rather than at the boat owner, if he wants to save taxpayers' money. We are not talking about the rich here. We are talking about many average Canadians, like the guy who wants to go fishing after a hard day's work. I must blame the minister because he is responsible. We always talk about the bureaucrats,-we have one sitting here now and I do not like to criticize anyone-but certainly these bureaucrats living in Ottawa do not understand that the people of Canada like to get out in their boats. They do not like to be increasingly taxed on their boats. It is becoming too expensive, and our Minister of Finance could advise some of his other ministers to save some money for the people of Canada instead of taxing one small segment of the population.
Another thing I would like to discuss briefly before I sit down is the effect that this bill will have on boat manufacturers. In my riding, and especially in the areas of Richmond and Delta, many boats are manufactured which come under this bill. It will have a great effect on these manufacturers. They have already told me that their sales are down for this month. The month is not over yet, and they do not expect them to improve. As the minister knows, people can go to Hong Kong, buy a boat, stay outside the country for a year, and save about two-thirds of the cost. That has had an effect on our large boatbuilding industry. This goes a little further and affects people with smaller boats. The minister must understand these problems.


John Napier Turner: First he was talking about his constituents; now he is talking about his friends.


John Douglas Reynolds: I just want to inform the minister that the boatbuilders in my riding are my constituents and they also voted for me, but I do not have one personal friend in the boat manufacturing business. I could not give you the name of one of them, but I think this is a problem affecting both boatbuilders and consumers. This bill affects people using boats and also people who manufacture them. The minister knows that British Columbia has one of the highest unemployment statistics in Canada. It also has the highest inflation in Canada. We need people working and ought not to be putting them out of business, something which this bill is going to do.
Excise


Mrs. Campagnolo:: Blame that on David Barrett.


John Douglas Reynolds: I think the minister and I agree that the Premier of British Columbia is not helping our province at all.


Some hon. Members:: Hear, hear!


John Douglas Reynolds: But I think the premier and I agree that the minister is not helping our province either.
I would close by predicting to this minister, who can sit there and smile, that he is going to have to withdraw those two items. Members from his side who have spoken against them cannot now get up in the House and vote for them. If members on that side who have spoken against this vote against it, the bill will go down in defeat. I think it is a good bill and I think that in order to save it the minister should withdraw those two items. Then maybe we could finish the bill off more quickly.


Reginald Cyril Symes: Madam Chairman, I raised some points with the minister in committee yesterday which I hope he will answer today. I find it very interesting to note that every speaker in committee yesterday and today objected to the 10 per cent tax on boats, boat motors over 20 horsepower, and on small aircraft. I am surprised that the hon. member for Algoma and the hon. member for Cochrane, those northern Ontario districts, do not realize what a detrimental effect this tax will have on marine operators, boat operators and tourist operators and that they have not raised an objection.
I have an amendment which I should like to move if the minister does not withdraw item 11 on page 11. I will read it into the record in order to give the minister advance notice of it:
That Bill C-40 be amended by deleting the word "twenty" in clause 21, subclause 2(11), page 11, line 29 and line 30, and substituting therefor the word "eighty-five" in lines 29 and 30.
This would have the effect of only permitting the 10 per cent excise tax to be applied on boats propelled by motors over 85 horsepower. As marine distributors have pointed out in representations to me, and as I tried to show in the House yesterday, the bulk of their sales are in the 20 to 85 horsepower range. The tax would put many of them out of business, or severely reduce their sales if it were applied to motors in that range. If we are to look at this as a luxury tax, then it should be applied to motors over 85 horsepower. My amendment would put that section in the context that we could apply the 10 per cent tax to boats propelled by motors of 85 horsepower and over, and actual outboard motors of 85 horsepower and over.
I hope the minister will consider seriously the argument advanced by members who object to item 11 on page 11 because this tax will not achieve what he hoped for, the conservation of energy. Instead, it will increase unemployment and discriminate against areas such as northern Ontario that depend on the tourist industry. It will also discriminate against people such as those mentioned by my colleague from the Northwest Territories, and people who depend on boats and small aircraft to get around.
While I am on my feet I should like to say how much I support the arguments of the hon. member for Vegreville,
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the hon. member for Moncton and the hon. member for Regina-Lake Centre in regard to the discriminatory aspect of another item in the bill, the unlicensed distributors and wholesalers of construction machinery.
I should like to read into the record, for the interest of the Minister of Finance, a letter which I received from Mr. R. R. Donaldson, Vice President, Algoma Truck and Tractor Sales Ltd. of Sault Ste. Marie. I think he made a very important point when he wrote:
In order to qualify for a federal sales tax wholesale licence, 50 per cent of a company's sales must be to tax exempt customers. Since our company's sales were below the 50 per cent requirement, we did not qualify for a licence. Because of this we have paid tax in excess of $100,000 on our construction equipment in inventory at November 18, 1974.
An equipment distributor who qualified for a wholesale licence was not liable to pay tax on his inventory until time of sale. Therefore, his inventory at November 18, 1974, was tax exempt.
This situation places not only our company, but many other distributors who are in a similar position at a distinct competitive disadvantage when competing against licensed distributors. We feel the government should allow unlicensed distributors the same consideration as distributors who are licensed, in order to avoid this unfair condition.
It would seem to us that all equipment distributors should be entitled to the same tax relief as that offered the transportation industry by the recent order in council.
It will be recalled, that the Minister of Finance received representations from the transportation industry which found it had many items in inventory prior to the budget, and he promised a special order in council to provide its existing inventories the same 12 per cent tax relief that he provided in the budget. I would urge the minister to take the representations of these unlicensed distributors very seriously as well, because they are at a distinct disadvantage. The government likes to boast about its many programs providing aid to small businessmen, but when it comes to the crunch it pulls the rug from under them. If the minister has given a concession to one group in the transportation industry he ought also to give it to this group in the construction industry.


Mr. Munro (Esquimalt-Saanich):: Mr. Chairman, I am glad the minister has returned because I should like to ask him a number of questions, and it would simplify matters if we could have a dialogue as we normally do in committee-the antiphonal type, we might call it.
I should like to follow up an inquiry made before lunch by my colleague, the hon. member for Calgary North, who asked the minister whether studies had been carried out in his department on the amount of energy to be saved as a result of this particular tax. While the minister might not be able to give the figures right now, I wonder if he would be prepared to make the studies available to the House before the end of discussion on this bill, or even give us some round figures on the amount of savings.
I do not get any sign from the minister that he is prepared to give me an answer on this occasion but I am prepared to risk sitting down in the hope that he will. If not, I shall immediately be on my feet asking more questions.
Very well, the minister does not have to answer, and I have a couple of other questions which I am prepared to put on the record anyway. I am sure the minister will help keep the record straight on this matter when I ask wheth-
| Mr. Symes. |
er budgetary revenues at the moment are running ahead of expectation, or whether they are falling behind the forecasts that he made when he presented his budget? Again I sense no inclination on the minister's part to answer.


John Napier Turner: I will answer in due course.


Donald W. Munro: I could build up certain hypotheses on the strength of these non-answers.


John Napier Turner: They could be just as good as hypotheses on the basis of non-facts.


Donald W. Munro: The impression one gains, from answers given during the question period and in committee of the whole, is one of deplorable arrogance on the part of the government. I suppose this is not to be wondered at, and I will go on asking my questions in the hope the minister will answer in due course. I would prefer him to answer right now.
Let me ask this: on the basis of budgetary revenues now coming in, does the minister foresee a surplus rather than the deficit he expected when presenting his budget? I see the minister making a note of that. Perhaps if I ask an outrageously phrased question he will stand up to correct it, although I am not too sure. Are national account revenues now running in the order of $30 billion a year? I wonder if the minister could confirm or amend this figure of $30 billion a year on national account.


John Napier Turner: That is the budgetary account; that is right.


Donald W. Munro: If that is so, the $30 million the minister can expect to raise from these particular increases in the excise tax represents one-tenth of 1 per cent of that amount of revenue. I wonder if the minister has taken this fact into account in making his calculations. I see an hon. member about to rise. I do not want to be interrupted if the minister is not prepared to answer my questions.


John Napier Turner: The hon. member is saying "What's $30 million?"


Donald W. Munro: In considering the relationship between $30 million and $30 billion, has the minister also considered the destruction of industries and reduction of employment in this country which will result from the imposition of the proposed excise tax? These are valid questions, and I am upset because the minister has not felt inclined to answer them.
Let me return to the minister's main argument. He claims that these taxes are being imposed in order to save energy. I agree with the hon. member for Sault Ste. Marie and with the hon. member for Parry Sound-Muskoka. They spoke about the discriminatory levy of about $600 on a $12,000 high energy consuming car which is used all year round, as compared with the levy of $2,784 on a $12,000 boat which is to be propelled for part of the year only by a relatively low powered motor. If there is any energy
January 24, 1975

saving in this particular equation the minister must really show this House how he arrives at that saving.
I wonder what the minister has against air travel and airplanes, particularly small aircraft. My colleague from Calgary South, who spoke a few minutes ago, produced figures which show how bad are the calculations of the department. He set the record straight, told us the cost per gallon and per passenger mile in flying in a light aircraft, and showed us aircraft are not, I repeat are not, the high consumers of energy which the minister's officials have led him to believe they are. The hon. member for Fraser Valley West placed on record how much petroleum consumption is attributable to small aircraft.
I do not know if the minister read the editorial which appeared in Canadian Aviation in December, 1974. Allow me to put some of the facts on record. Figures from the Aviation Statistics Centre analysed by Aviation Planning Services Ltd. of Montreal show that non-commercial general aviation in Canada, the sector faced with the 10 per cent excise tax, consumed .3 of 1 per cent of the total petroleum consumption in Canada in 1972. Cutting this amount out represents real energy saving!
Non-commercial general aviation consumed .7 of 1 per cent of the total petroleum used in transportation in Canada in 1972. Further, the aircraft included in this analysis comprised fully two-thirds of all aircraft in the Civil Aviation Register. If this is the sort of energy saving binge the Minister of Finance has embarked on, he had better consult aviation experts and transport experts-not the Minister of Transport-and, as well, perhaps the Minister of Energy, Mines and Resources.
We need to save energy, but the minister is going about this in a backhanded way, in a way which will not lead to much energy saving, as far as I can see.
In this connection I have some worries which are based on unfortunate past experiences and which prompt me to ask another question or two, because, I do not like being asked to vote on a bill which leaves so much undefined. May I refer the committee to subparagraph 12 on page 11 of Bill C-40, which reads:
Aircraft but not including gliders or aircraft purchased or imported for use exclusively in the provision of such class or classes of air services as the Governor in Council may by regulation prescribe ...
I think the committee has the right to know before voting on this measure what class or classes of air service are to be excluded from the tax. I suggest that the minister "ratchet" up some elucidation of this, as he has proved to be such a good "ratcheter".
On line 36 of page 11, also in subparagraph 12, we find the word "exclusively". This suggests that the minister's advisers are unaware of the uses to which small aircraft are put. The use of the word exclusively in this context is evidence that his department has no expertise in this matter.
The minister and his staff may not know that small aircraft, those most directly affected by this legislation, are seldom used exclusively for one purpose. They are business oriented and they may engage from time to time in business operations. These facts, I suggest, destroy any exclusive criteria which may apply.
Excise
Search and rescue is an automatic task for all private operators. Our licensed pilots in this country are at all times available to help in any search and rescue operation on which they are called for assistance. They do this as a matter of course. Therefore the exclusivity criterion that has been introduced here is a lot of nonsense. Another strange feature of this measure is the commercial aircraft that are exempted. I wish to quote from a brief that was prepared by an aircraft operator, as follows:
Commercial aircraft are exempted only if they remain commercial for five years. If they are sold before this time then the whole of the tax becomes payable-
This is the understanding of the industry. If it is wrong, let's correct it.
-i.e., 23.2 per cent of the original cost.
Am I correct, Mr. Minister?


John Napier Turner: It is 22 per cent, 12 plus ten.


Donald W. Munro: It is compounded, if I am not mistaken. I thought we got this straight yesterday.


John Napier Turner: That was the interpretation of the hon. member for Edmonton West. It was really 12 plus ten.


Donald W. Munro: Are you on your feet, or am I on mine?


John Napier Turner: You are on your feet.


Donald W. Munro: Fine. I continue the quote:
This amount when added to the depreciated value of the aircraft will be an excessively high percentage. The tax, I understand, is not to be prorated for the amount of commercial use. Many operators lease aircraft either for long terms, or for shorter periods to fill a peak demand, or to complete a particular contract. The inequities of this system are created by the source of the aircraft determining whether it shall be subject to tax or not. This situation also would apply when a commercial operator bought an aircraft from a private operator.
Why should an operator be forced into an arbitrary five-year ownership period when for many varied and good reasons he may be required to change aircraft?
This is an inequity. I would even suggest it is an iniquity. It is an imposition on private users of aircraft in this country. I am inclined to vote in favour of the amendment proposed by the hon. member for Moncton to have this provision withdrawn. However, since it was drawn up there should at least have been an element of proratedness for the sale and resale of aircraft.
We have heard the mess the Canadian transportation industry is in these days. This has been evident in the question periods of the last few days. In this connection I will read a further comment by my friend in the aircraft industry. This comes from one who is knowledgeable in this particular area. I quote:
The tax would discriminate against the aircraft user despite the fact that air transportation is more efficient in so many ways, in terms of fuel, savings in man hours, and the ability to operate over the vast reaches of our country, and where surface transportation is either difficult or non-existent.

January 24, 1975
Excise
This particular aspect of the matter was very thoroughly outlined by the hon. member for Northwest Territories.
Great care should be taken when we consider burdening our transportation system further because we should remember that Canada is a victim of its size and geography when transportation is considered.
The word victim is a little poor. We are a captive of size and geography in this country. Anything we can do to overcome this by rapid, economical and non-heavy energy consuming methods should be encouraged. I continue the quotation:
If any type of user tax is to be considered, the following points are important:
i)	As fair as possible
ii)	On use, not capital
iii)	Administrative ease and cost
On all three counts a tax on aviation fuel would best serve the aviation community and the country. Because it would be a volume tax it would bear an accurate relationship to the amount of services and facilities required.
That means more flying, more fuel, more tax.
With a charge against use, operators would pay as they produced, and so save crippling capital burdens. The tax could be levied as an increase of the amount of federal sales tax on the fuel and so there would be no administration and there would be no change except in the rate.
As the minister has been reminded more than once during this debate, the aircraft industry is an important factor in the Canadian economy. No tax of any kind in any area should be punitive, but that is exactly what this particular tax is, Mr. Chairman.
Transportation is a public service. It should be a responsibility of government to keep it healthy. We on this side of the House have tried in a variety of ways to persuade the government to produce a transportation policy. Now we have the Minister of Finance doing everything he can to destroy one aspect of a policy. Have pity on the man, let him get on with his policy, don't chop him down before he gets going. The proposed tax has so far spread confusion and fear throughout the industry and has caused an immediate plunge in the sales of new aircraft.
It is time the minister took another look at these particular measures. They have been criticized from all sides of the House. There are some amendments that have been proposed. I do not know whether the Chair is prepared to rule on and divide them. I certainly feel that most members who have spoken will be supporting the amendments proposed by the hon. member for Moncton insofar as they affect the removal of lines 26 to 39 on page 11. That covers subparagraphs 11 and 12 of this particular item. I conclude by indicating my full support for that particular aspect of the amendment moved by the hon. member for Moncton.


Mr. Huntington:: Mr. Chairman, 30 per cent of the people in my constituency own boats. We live on a mountain side. If it were not for this, airports for private aircraft would be involved as my constituency houses many west coast executives.
We have had a very good debate on these two items, subparagraphs 11 and 12 of clause 21. However, I am extremely concerned because we have not been able to convince the minister that this is a very negative type of legislation and is interfering with the passage of the bill. The minister stated that the reasons for these two items
are additional revenue and energy conservation. The additional revenue will amount to $30 million. It is hard to understand why this revenue is needed.
On returning home last night after a day's work here, I read that CIDA is in a rush to spend $117 million. They are trying to cram that into a year's budget spending. Let me quote from an article which appeared in yesterday's Ottawa Journal as follows:
"Your career in CIDA depends on how you spend," a former agency official said. "You are constantly being hammered over the head and told 'Spend Spend Spend'.
It's not how well you spend your money, but quantitatively. Can you spend the budget allocated to you? That's what counts."
A second official said: "The whole criteria here is spend. Anyone who says it isn't, doesn't know the facts."
Later in the article we have reference to the administrative turmoil in the agency's offices. When clauses like this are put into legislation affecting the country's business we are just adding further turmoil for the business community of the country.
The minister talks about conservation, but what does he say about swimming pools?


Some hon. Members:: Oh, oh!


Arthur Ronald Huntington: There are many swimming pools across this country, not just the one going in at 24 Sussex Drive. These swimming pools require heating. Do we have any excise tax on them? The minister picks on what he thinks is a small segment of the population, the recreational field of boating.
Mention has been made of mobile campers which increase fuel consumption to the extent of achieving only four miles per gallon. Increased consumption in this regard is far in excess of consumption by the average boat motor. May I point out that total boat energy consumption in this country is less than one quarter of one per cent of total energy consumption?
Another area in which we might save, removing the necessity for this type of imposition on the boat industry, particularly in my part of the country, is in respect of Information Canada. If one starts to look into that he will find areas there which, if corrected, would make this tax unnecessary as a source of revenue. There are three Information Canada offices which cannot even justify their cash flows in respect of costs of supplies and labour, let alone overhead. Why should these not be put into the private sector where they could be administered and operate at a profit rather than at a loss to the federal treasury?
As one reads through the Auditor General's reports he finds all kinds of areas of abuse by the government which could be tightened up. Why does the government not concern itself with tightening up these areas of government spending? I have in mind cash flows and accounting abuses, money not returned against grants, and other areas of wasteful expenditure.
Here we are imposing this negative legislation on a business community in British Columbia. This does nothing constructive in respect of unemployment. How can I go back and support or justify these two items in this bill
| Mr. Munro (Esquimalt-Saanich). |
January 24, 1975

to my constituents in the Province of British Columbia? A report by the Department of the Environment and the Department of Transport indicates that the service aspect surrounding this activity at the retail level in British Columbia alone amounts to $75 million a year, and $38 million in Vancouver. The minister is interfering with this type of cash flow from one activity in the Province of British Columbia. In my opinion this tax cannot be justified on the basis of additional revenue to the treasury, particularly when we have these other areas of waste that need tightening up.
The tax burden on the Canadian work force, particularly the middle-income earner, is already too heavy. It was Lenin who told us how to destroy the middle class; by grinding them between the two millstones of inflation and taxation. It really surprises me that a minister of this calibre would assist in furthering this type of political ideology. Is there no fun to be had by the working force of this country? Is there to be no leisure after a good hard season's work? Is there to be no play? The minister is removing this aspect of a climate that has taken years to create in our post-war reconstruction. For those who work hard and play their full part in the productive life of the nation this seems to be a part of the bleak future, this negative type of legislation.
We seem to have developed a welfare syndrome in this country. We take from those who save and give to those who spend. There are members of many families in this country for four generations who are on welfare. Why do we not spend money to correct this instead of bringing in legislative items that are negative in respect of productive industries paying taxes to help to fill the coffers of the country?
The reference by the minister to conservation of diminishing energy resources is the one that really got to me. We are dealing with two segments here, one that accounts for one-third of one per cent of total energy consumption in Canada, the other accounting for less than one-quarter of one per cent. I refer to private aircraft and boats. This is the first direct and supposedly meaningful measure of conservation the government has been able to offer.
If we are to have any meaningful measure to conserve our non-renewable energy resources we must lift the cost of energy in this country to the North American level. We must begin to conserve energy used in heating buildings. We must advocate extra insulation in the ceiling and walls of buildings, thermopane windows, and a consciousness of the fuel consumed by the car we drive down the highway. We must think in terms of vehicles that attain six to 12 miles to the gallon rather than those that attain 15 to 40 miles to the gallon. By picking on this one isolated area involving 350,000 people in the Province of British Columbia we are imposing on a minority who are working hard to enjoy the better life available in Canada.
Today we are losing about one-third of our produced electrical energy used in plants through the use of inefficient motors. If we increase the cost of energy in this country these plants would be able to justify the capital cost of installing more efficient energy using equipment. We would also improve the efficiency of energy consumption in our buildings. In this way we would have a mean-
Economic Study Group
ingful form of leadership in respect of conserving nonrenewable energy sources.


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



ROUTINE PROCEEDINGS


Hon. Gerard Pelletier (Minister of Communications):: Mr. Speaker, I will ask for the unanimous consent of the House to table a document namely a list of advisers, on behalf of the right hon. Prime Minister.


The Acting Speaker (Mr. Penner):: The House has heard the request of the minister that we revert to motions. Is that agreed?


Some hon. Members:: Agreed.


Stanley Howard Knowles: I rise on a point of order, Mr. Speaker. I wonder if the House would be agreeable to having this list printed as an appendix to today's Hansard.


The Acting Speaker (Mr. Penner):: Is it agreed?


Some hon. Members:: Agreed.
[Editor's note: For list referred to above see Appendix A]


The Acting Speaker (Mr. Penner):: It being four o'clock the House will now proceed to the consideration of private member's business as listed on today's order paper, namely, public bills, notices of motions, private bills.


Mr. Lefebvre:: Mr. Speaker, I think you will find there is unanimous agreement today to study private member's bill No. C-209, in the name of the hon. member for Saint-Denis (Mr. Prud'homme). Further conversations have been held in the usual manner and there is also general agreement, after a short debate, to let the subject matter of this bill go to committee.


The Acting Speaker (Mr. Penner):: Is that agreed?


Some hon. Members:: Agreed.

January 24, 1975
Canadian Citizenship Act



PRIVATE MEMBERS' PUBLIC BILLS


Mr. Marcel Prud'homme (Saint-Denis) moved: that Bill C-209, to amend the Canadian Citizenship Act (minimum residence requirement) be read the second time and referred to the Standing Committee on Labour, Manpower and Immigration.
He said: Mr. Speaker, my first words are to thank hon. ladies and gentlemen from all parts of the House for their courtesy in agreeing to send the subject matter of this bill, one I have always considered very important, to the Standing Committee on Broadcasting, Films and Assistance to the Arts.
At the outset of my remarks, Mr. Speaker, I should like to ask unanimous consent of the House to make a correction to page 12 of the Order Paper and Notices for today. As presently written, this bill is to be sent to the Standing Committee on Labour, Manpower and Immigration, but by consent I would ask that it be referred to the Standing Committee on Broadcasting, Films and Assistance to the Arts. I think that is a mistake, and it would be agreeable to send the bill to that particular committee.


Mr. Lambert (Edmonton West):: There would have to be a motion to that effect.


Marcel Prud'homme: I am asking for unanimous consent.


The Acting Speaker (Mr. Penner):: Is that agreed?


Some hon. Members:: Agreed.


Marcel Prud'homme: Mr. Speaker, I can at long last say that we have reached the stage where, thanks to the consent of the House and the understanding of the government, this bill which has now been before the House for four years, will soon be passed, for we know that this bill, introduced by a member will become a government bill and as such become law in the land.
Since we have agreed to speak as briefly as possible, I do not wish to keep the House for any length of time, but I should still like to point out the fact that it has always seemed logical and normal to me, as well as to hundreds of thousands of people in various countries, regardless of colour or origin, people who for various reasons have elected to settle in Canada thereby paying tribute to our country by adopting it as theirs, it has always seemed most illogical to me, as I say, to keep them waiting for as long a period as five years. In this day and age, three years should be long enough a period to determine whether, in the case of a landed immigrant, he wishes to remain in the country. After three years, it is clear that a person has decided whether or not to adopt our country on a permanent basis. I received hundreds of testimonies after introducing this bill. I do not wish to seem pretentious and claim that hundreds were received each time I introduced the bill; but if I add them all up together, since the bill has been introduced each year since 1970, I have all told
[The Acting Speaker (Mr. Penner).]
received hundreds of testimonies from all parts of the country.

I have a number of quotes I could give from Winnipeg, Edmonton and Toronto, and a few from Quebec-because unfortunately, as we all know, not too many people choose Quebec as their new adopted province-supporting the granting of citizenship in Canada after three years. [Translation]
Mr. Speaker, since my bill seems to differ perceptibly from government Bill C-20, I naturally agreed, and again I thank the hon. member for Edmonton West (Mr. Lambert) for agreeing to refer this bill to a committee because my suggestion requires three of the last five years, while the government proposal will require three of the last four years.
I hope the House will give its consent to refer this bill to a committee. I also hope that I shall have the opportunity to introduce it to the committee, because it seems more flexible than the government's measure and does not affect in any way the people who would apply immediately after three years' residence. It must be clear that when we say three of the last five years, this does not affect in any way the people who have obtained the status of landed immigrant and spent three years in this country, they will be able, of course, to apply immediately for Canadian citizenship. This is rather for the people who were absent for a period of time and who have come back to this country and are now applying for Canadian citizenship. It is in this sense that one must understand the explanation about three years out of five, the last five years, or three out of four, the last four years.
Mr. Speaker, I will dispense with all the evidence I could quote because I thought this bill would not be considered by the House today. So I will dispense with all the quotations I had prepared but I will be using them in committee when my bill is sent to it along with the government's.
But again I would like to stress the importance of this bill for the entire country. I would like to thank beforehand the officials of the Secretary of State for Canada- the whole bureaucracy which often bears the brunt of our attacks-for the excellent work they do because I know this bill will enormously increase their task in years to come since they will have to deal with thousands of applications from new citizens, not to say hundreds of thousands. I know that those officials will understand the spirit which prompts the House today to accept our proposal and that, as they are now doing magnificently, they will carry out the task of administering this bill with which we are entrusting them.
Again, Mr. Speaker, I thank you as well as my colleagues for agreeing to send this bill to the Committee on Broadcasting, Films and Assistance to the Arts.


Marcel Joseph Aimé Lambert: Mr. Speaker, I entirely agree that we refer this bill to committee because as could be seen there is a difference between the contents of this bill and Bill C-20, specially in clause 5 of the bill proposed by the government. I think when the committee determines the principles of Bill C-20 it will have to consider the alternative proposed by the hon.
January 24, 1975

member for Saint-Denis (Mr. Prud'homme) because his bill and his terms are more flexible than the government's. I do not want to go into their crux of that discussion but I would simply want to say that the major problem now is not only a reduction from 5 to 3 years of residence. I must say, and I already had a discussion with the registrar of citizenship in that regard, that it is a matter of determining what is meant by residence.
Unfortunately, some presiding judges contended in the past years that one month's absence to visit relatives in the native country constituted a partial surrender of residence and they insisted on a real physical presence in the country to determine the residence under the provisions of the Citizenship Act. That is nonsense, because a person could not even spend, for instance, a weekend or some time in the United States or elsewhere without compromising his residence period for citizenship purposes.
So we have been able to obtain, I hope, a flexible and more logical interpretation and now we shall have to insist however when Bill C-20 is debated so that we shall have no difficulty in that regard.
Mr. Speaker, I am pleased to agree with what the hon. member for Saint-Denis said, but since Bill C-209 and Bill C-20 differ, in my opinion we should rather refer the subject matter of Bill C-209 to the committee that will study Bill C-20. Subject to those considerations, I therefore do not hesitate to ask for the approval of this House.


Stanley Howard Knowles: Mr. Speaker, I was one of those involved in the discussions through the usual channels about this bill, and I am happy to confirm our agreement to the proposal that the subject matter of Bill C-209 be referred to the Standing Committee on Broadcasting, Films and Assistance to the Arts so that it can be considered there along with the provisions of the government's Bill C-20 which, at some point, will also be sent to that same committee.
In a moment I will have an additional suggestion to make. I do not know if there is anyone on the government side in the House at present in a position to agree to my request, but that does not stop me from trying. First, may I say that I believe that all of us agree with the desire of the hon. member for Saint-Denis (Mr. Prud'homme), namely, that persons who have been in Canada for 3 years, have landed immigrant status, and desire to become Canadian citizens, should be able to do so within that period of time rather than having to wait as long as the law at present requires.
As both of the previous speakers have pointed out, there is a slight difference between the provision in Bill C-209 and the provision in this respect that is contained in Bill C-20. This, of course, can be sorted out in committee, and I think it is a good idea to have the proposal of a private member go to that committee along with the government bill.
Therefore we are happy to support the motion which, I presume, will be made at some point by way of an amendment that the subject matter of Bill C-20 be referred to the appropriate standing committee.
Canadian Citizenship Act
The suggestion I would like to make relates to a couple of bills of mine that are on the order paper. One of them is Bill C-260 and the other is Bill C-317. Both of these bills also relate to changes that I think should be made in the Citizenship Act, and I hope that the House might also be willing to allow the subject matter of these two bills to go to the same committee along with the subject matter of Bill C-209.
They are Orders Nos. 60 and 117, or Bills C-260 and C-317. Both of these bills are particularly appropriate in International Women's Year. The first one, Bill C-260, has to do with the citizenship of a child born outside of Canada. As the law now stands, such a child can, under certain conditions, become a Canadian citizen if the child is the child of a father who is a Canadian citizen. This is not permitted if it is only the mother who is a Canadian citizen, except in the case of an illegitimate child. Surely it is time to straighten that out, Mr. Speaker. I have the feeling that Bill C-20 takes care of it, but just to make sure that this point was covered I gave notice of my Bill C-260, and I hope that the subject matter of it might also be referred to the standing committee.
The other bill, Bill C-317, has to do with another discrimination against females. As the law now stands, if a Canadian male citizen brings in a wife who is not a Canadian, she can become a Canadian citizen in one year. In other words the male Canadian citizen can confer a certain right on his spouse. But if a female Canadian citizen brings in a husband who is not a Canadian citizen, he has to wait five years. In other words a Canadian male can confer a certain right on his spouse that is denied a Canadian female.


Marcel Joseph Aimé Lambert: We need male lib here.


Stanley Howard Knowles: Therefore, Mr. Speaker, I gave notice, as I said, of my Bill C-317 which would simply change one word in the Canadian Citizenship Act. Where the word now is "wife" the word would be "spouse". I have searched through Bill C-20 and in some of its gobbledygook this point may be covered, but I have not found it. I have the notion that, along with the idea about the length of residence required in order to become a Canadian citizen, the committee should also consider correcting these two cases of discrimination against females.
I hope that the House at this point might be willing to make this motion broad enough to send the subject matter of all three of these bills to the committee. I want to make it clear that I do not make the acceptance of this request a condition with regard to the other. I have agreed that the subject matter of my friend's Bill C-209 should go to the committee, but I hope that in this International Women's Year we might send the whole package. I believe all hon. members are agreed that the ideas in these three bills are all good.


Gérard Laprise: Mr. Speaker, I also agreed on immediately sending Bill C-209 to committee, not only because we are studying Bill C-20, presented by the Secretary of State (Mr. Faulkner), but above all because it is a bill which in my opinion is necessary. Even if there may have been some misunderstanding between the hon.

January 24, 1975
Canadian Citizenship Act
member for Saint-Denis (Mr. Prud'homme) and the Secretary of State (Mr. Faulkner), this bill created a small problem which is, I think, a minor one, but which can very well be settled in the Committee on Broadcasting, Films and Assistance to the Arts. I believe this bill must be referred for consideration at the same time as Bill C-20 which, I think, will be studied soon.
This short debate allowed us, however, to hear some very interesting points. The hon. member of the Progressive Conservative party raised one that is worthy of much attention, because it is very important. So is the point raised by the hon. member for Winnipeg North Centre (Mr. Knowles). He put on the record two bills which are, in my opinion, also very important, and I think, even if he did not request it formally, that we could send these other two bills, together with Bill C-209, to the Committee on Broadcasting, Films and Assistance to the Arts.
In any case, this is my opinion, and I think this should be done immediately.


Thomas Lefebvre: Mr. Speaker, with all due respect to the hon. member for Winnipeg North Centre (Mr. Knowles), he and I have already had a private conversation on this very subject about his own bills C-260 and C-317. I advised him that I did not have the authority on behalf of the government to accept this, and that I was
sorry that he had spoken to the House leader or the deputy House leader earlier in the day. I would suggest to him that he do so early next week, and perhaps this could well be done, but I do not have the authority to accept it.


Stanley Howard Knowles: Mr. Speaker, during the first few remarks that the chief government whip was making I was disposed to remind him that there are three cabinet ministers in the House, and perhaps they could speak on behalf of the government but if they do not feel that they can agree to this reasonable request I would be prepared to go along with the suggestion that at some future private members' hour this request might be met without debate.


Marcel Joseph Aimé Lambert: You do have authority. Why else would there be a chief whip?


The Acting Speaker (Mr. Penner):: Is the House ready for the question.


Some hon. Members:: Question.


[Stage Direction]
Motion agreed to, bill read the second time and referred to the Standing Committee on Broadcasting, Films and Assistance to the Arts.
The Acting Speaker (Mr. Penner):: The hour provided for the consideration of private members' business has now expired. It being five o'clock, this House stands adjourned until Monday next at 2 p.m.
At 4.25 p.m. the House adjourned, without question put, pursuant to Standing Order.
January 24, 1975



APPENDIX &quot;A&quot;


[Stage Direction]
January 24, 1975
On the invitation of the principal secretary, a group of professional economists meets occasionally in Ottawa to keep the Prime Minister's office informed about matters of economic importance, which in their opinion are of outstanding interest to the private sector.
The objective of these meetings is to keep the government aware of the concerns of an informed and representative group of professional persons active in a study of the overall affairs of the Canadian political economy.
The following persons have been invited to attend such meetings:
Professor Albert Breton of the Institute for Policy Analysis and the Department of Political Economy of the University of Toronto, who serves as Chairman of the group;
Mr. Carl Beigie, Executive Director, C. D. Howe Research Institute;
Dr. Ben Gestrin, Vice-President, Economics Canadian Imperial Bank of Commerce;
Professor John Helliwell of the Department of Economics of the University of British Columbia;
Dean Grant Reuber, Vice-President, Academic, of the University of Western Ontario;
Professor Thomas Wilson, Director of the Institute of Policy Analysis and a Professor in the Department of Political Economy, University of Toronto.
The economists are paid an honorarium of $100 per meeting as well as reimbursement of out-of-pocket expenses associated with their attendance. The Chairman is paid as consultant to the office of the Prime Minister.
[Stage Direction]
Monday, January 27, 1975