1975-02-04

ROUTINE PROCEEDINGS


Mr. Speaker:: I am sure hon. members would want to know that early this morning the two electronic composing machines in the printing bureau burned out. That accident made it necessary for the bureau to revert to an alternate method of printing and preparing Hansard for distribution to members. In order to cope with this difficulty the bureau, at three o'clock this morning, called in extra staff to meet the situation. As a result, they have been able to deliver the English version of Hansard and expect within the next hour to complete distribution of the French version.
I wanted to assure hon. members, who I am sure have been looking for their copy of Hansard this morning, that the situation was caused by a mechanical breakdown totally beyond our control, and in face of that every effort is being expended to make sure that copies of Hansard reach members as soon as possible.


AGRICULTURE
[Stage Direction]
Third and fourth reports, in both official languages, of Standing Committee on Agriculture-Mr. Smith (Saint-Jean).
[Editor's Note: For text of above reports see today's Votes and Proceedings.]

Hon. Mitchell Sharp (President of the Privy Council):: Mr. Speaker, I wonder if there would be agreement that the House revert to motions at five o'clock this afternoon for the purpose of enabling my colleague the Minister of Energy, Mines and Resources (Mr. Macdonald) to present a statement on the Syncrude project.


Mr. Speaker:: In the interest of understanding and of conducting orderly business throughout the day, I am sure it would be preferable if the House agreed to make the order at this time; then hon. members would know what is taking place.


Mr. Walter Baker (Grenville-Carleton):: Mr. Speaker, I rise on the same point of order. It would certainly be agreeable and we would be prepared to facilitate the business in that respect. However, there is one problem with which I think we should deal at this time and in this context. I refer to the question of private members' hour which would be from 5 p.m. to 6 p.m. today. I wonder if the government House leader and other House leaders would be prepared to agree that private members' hour from 5 p.m. to 6 p.m. today be moved to 5 p.m. to 6 p.m. tomorrow. We could thereby preserve this hour and what we might lose on the swings, in terms of private members' hour, we would gain on the roundabouts.


Mitchell William Sharp: Mr. Speaker, I have no strong objection to that. The suggestion seems to assume, however, that we will take an hour discussing what I hope will be a rather brief statement by my colleague. But I am agreeable in principle to making up the time in respect of private members' bills or motions tomorrow afternoon.


Mr. Speaker:: Order, please. It would be understood, I take it, that whatever remains of the hour today will be devoted to continuation of government orders, so that the time would be used as government time. Then tomorrow the whole hour from 5 p.m. until 6 p.m. would be devoted to private members' business. Would that be the understanding of hon. members?


Walter David Baker: That would certainly be agreeable, Mr. Speaker.


Mr. Knowles (Winnipeg North Centre):: This is in accordance with discussions which have taken place. We are happy to agree.


Mr. Fortin:: Mr. Speaker, we have taken part in those discussions, and we maintain our agreement.


Mr. Speaker:: Its being agreed, is there any further discussion?


Mitchell William Sharp: Mr. Speaker, I am not quite sure what has been agreed. Is it agreed that we will go on with private members' hour at the conclusion of the statement on motions?


Mr. Hees:: Government business.
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February 4, 1975
Industry


Mitchell William Sharp: I regret that my colleague the Minister of Finance (Mr. Turner) will be otherwise engaged; he had made arrangements for the hour between 5 p.m. and 6 p.m. But I am quite happy that we should set aside tomorrow at five o'clock as private members' hour to make up for the time that we may lose today.


Mr. Speaker:: Order, please. The practical difficulty involved in beginning private members' hour today at 5.25 p.m. and then trying to make up the balance of the hour tomorrow would be much more awkward than simply continuing with government business today and then using the hour from 5 p.m. until 6 p.m. tomorrow. The absence of the Minister of Finance during that 25-minute or 35-minute period would not then create a critical situation. Is it agreed that, under those terms, the House will revert to motions today at five o'clock to permit a statement on motions by the Minister of Energy, Mines and Resources (Mr. Macdonald), with appropriate responses? At the conclusion of opposition responses to the statement, the House will revert to government orders; and tomorrow from 5 p.m. to 6 p.m. will be the private members' hour. Is that agreed?


Some hon. Members:: Agreed.


INDUSTRY
Mr. Claude Wagner (Saint-Hyacinthe):: Mr. Speaker, pursuant to Standing Order 43, I request the unanimous consent of the House on a matter of urgent and pressing necessity.
In view of the fact that the situation is more precarious from day to day in the textile industry in Canada, and particularly in Quebec where, in addition to the thousands of layoffs which occurred before Christmas, there were some 3,000 layoffs lately because several plants were closed for various periods, and considering that the few measures put forward on December 20 by the Department of Industry, Trade and Commerce, appear to be completely insufficient, as people from that very sector will show on Parliament Hill tomorrow, I move, seconded by the hon. member for Joliette (Mr. La Salle);
That this House call upon the Minister of Industry, Trade and Commerce and the government, until the final report of the Commission on Textile and Clothing is tabled and until a long-term solution is reached in the best of interest of all Canadians, to impose if necessary quotas on the import of textiles, in the absence of quick and efficient negotiations.


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


Some hon. Members:: Agreed.


Some hon. Members:: No.


Mr. Speaker:: There not being unanimous consent, the motion cannot be put.

May I just take one moment to say to the House that the hon. member's motion proposed pursuant to Standing Order 43 deals with the subject of the continuing problems of the textile industry in the province of Quebec. That motion or a similar motion was presented on more than one occasion by other hon. members pursuant to Standing Order 43 in earlier sittings. It was my view that because the rule under Standing Order 43 specifically requires that motions deal with a matter of urgent and pressing necessity the Chair had to intervene to examine critically all motions proposed under that Standing Order in order to be absolutely certain before presenting them to the House that they did contain some elements of urgent and pressing necessity.
After discussions with appropriate representatives of all parties, and after carefully considering the matter, I would not in any way relinquish or abandon that responsibility. I think that the Chair ought to examine motions presented under Standing Order 43 at all times to make sure there is some element of urgency. On the other hand, I am persuaded that perhaps the stand I took initially was a little more rigid and strict than it had to be because I was tending to apply the same rule to Standing Order 43 as I was to Standing Order 26. In fact the difference is, of course, that there is in the rule for Standing Order 43 motions the residual judgment in the House itself to decide by casting a negative vote, not only that the matter ought not to interrupt regular business but also that the matter is not of sufficient urgency.
I think, therefore, that I ought to take this opportunity, having presented the hon. member's motion to be decided by the House, to say that I will continue to reject those motions which in my mind clearly contain no element of urgency or pressing necessity. On the other hand, I will tend, I think, more to give to hon. members the benefit of the doubt in trying to come to the conclusion of whether there is an element of immediacy or pressing necessity on which the House ought to decide. I hope that makes my views on this matter quite clear.


AIRPORTS
Mr. Andrew Brewin (Greenwood):: Mr. Speaker, I rise to make a motion to the House on a matter of urgent and pressing necessity in pursuance of the provisions of Standing Order 43. I think it is urgent because it deals with a matter involving millions, indeed billions of dollars.
I move, seconded by the hon. member for Oshawa-Whit-by (Mr. Broadbent):
That in view of the fact that the Minister of Transport has indicated that he has not yet arrived at an over-all transportation policy, that this House directs the Minister of Transport to withhold any final approval of the Pickering airport construction until the minister has
February 4, 1975

produced an over-all national transportation policy and until he has consulted, in accordance with the Prime Minister's promises with the members of parliament from all of the region affected by the proposed construction of the airport.


Mr. Speaker:: The House has heard the motion being proposed. Pursuant to the provisions of Standing Order 43, it cannot be debated without the unanimous consent of the House. Is there unanimous consent?


Some hon. Members:: Yes.


Some hon. Members:: No.


BILINGUALISM
Mr. Leonel Beaudoin (Richmond):: Mr. Speaker, pursuant to Standing Order 43, I request the unanimous consent of the House to discuss a matter of urgent and pressing necessity.
In view of the fact that, over the last five years $170 millions have been spent on establishing bilingualism in the Public Service, but that a mere 6 per cent of the positions are held by bilingual employees, and since the great majority of employees classified as bilingual are located in Quebec, leading one to discern a serious anomaly in the implementation of the program, or a lack of motivation from English speaking civil servants, or, as stated recently by the Commissioner of Official Languages, Mr. Keith Spicer, a "show of action" from officials only, I move, seconded by the hon. member for Lotbiniere (Mr. Fortin):
That the House of Commons do review now the whole record on the Official Languages Act, in the light of the results up to date, in order to remedy the situation without delay and see that the necessary changes are brought about.


Mr. Speaker:: The House has heard the hon. member's motion. Under Standing Order 43, it cannot be debated without the unanimous consent of the House. Is there unanimous consent?


Some hon. Members:: Agreed.


Some hon. Members:: No.


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


VETERANS AFFAIRS
Stanley Howard Knowles: Mr. Speaker, I rise under the provisions of Standing Order 43. I should like to say to you, Sir, that if the government and parliament are to take legislative action to extend a right which would otherwise expire on March 31, it is obviously urgent that that action be started now. The fact that the matter is one of pressing necessity will be recognized by all members and I hope that instead of saying the usual "no", the House will agree to this motion. I therefore move, seconded by the hon. member for Humber-St. George's-St. Barbe (Mr. Marshall):
That this House urges the government to reconsider its decision to terminate the Veterans Land Act on March 31, 1975, and to bring in forthwith legislation that will extend its benefits beyond that date.


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


Some hon. Members:: Agreed.


Some hon. Members:: No.


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


INDUSTRY
Mr. Cyril Symes (Sault Ste. Marie):: Mr. Speaker, in view of the conclusion of the Estey Steel Profits Inquiry of October 1974 that the steelmaking industry has now obtained a price structure that is producing profit margins at or approaching the levels found acceptable by the industry in prior periods of prosperity in the steel business, so that any future price increases should be linked directly to cost increases, otherwise profit margins which customarily obtain in the industry will be exceeded, and in view of numerous recent price increases and profit increases announced today, I move, seconded by the hon. member for Cape Breton-East Richmond (Mr. Hogan):
That the government initiate an inquiry into whether these steel price increases are directly related to cost increases.


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


Some hon. Members:: Agreed.


Some hon. Members:: No.
28626-47)4

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Oral Questions


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


EXTERNAL AFFAIRS
Mr. Gilbert Rondeau (Shefford):: Mr. Speaker, under the provisions of Standing Order 43, I request the unanimous consent of the House to discuss a very urgent and pressing matter.
Following the information published that CIDA is spending $117 million "at full speed" to get a substantial increase in its budget next year, I move, seconded by the hon. member for Rimouski (Mr. Allard):
That the Standing Committee on External Affairs and National Defence be asked to summon the director of CIDA to answer the questions of the committee regarding the management of his budget before the $117 million are spent.


Mr. Speaker:: The House has heard the terms of the motion of the hon. member. 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. Therefore, the motion cannot be debated.



ORAL QUESTION PERIOD


Hon. Robert L. Stanfield (Leader of the Opposition):: Mr. Speaker, I should like to put a question to the Prime Minister.
The Prime Minister assured the House on November 27 and 29 last, that he had personally put forward to the governments of Quebec and France the position of the Canadian government on the planned construction of an uranium enrichment plant in connection with James Bay. Can the Prime Minister tell the House exactly what position he has put forward until now?


Right Hon. P. E. Trudeau (Prime Minister):: Mr. Speaker, I do not know whether I will satisfy the Leader of the Opposition by telling him exactly what the government position is: I believe that would require a rather long policy statement. As for a summary of the representations I made to the Quebec premier before his trip to France, considerations which I have also had the opportunity of

repeating since, I indicated the very real interest of the federal government in a project of this type, while reminding him over what fields our government has jurisdiction, namely that of finance, the export of uranium and its products, the control from the point of view of international safeguards, and that of foreign investment. In connection with all those fields as well as others, Mr. Speaker, I indicated that the federal government is highly interested in what studies are made with the view to building an uranium enrichment plant in Canada.


FEASIBILITY STUDY OF PROPOSED ENRICHED URANIUM PLANT IN QUEBEC-INDICATION OF GOVERNMENT POSITION TO QUEBEC
Robert Lorne Stanfield: In view of the statement by the Minister of Energy, Mines and Resources on December 20 that the government has made it clear this will require federal approval, and the Prime Minister reiterated this today, and that the government of Canada was undertaking a feasibility study to determine whether the project was in the national interest, has the government arrived at a decision on whether the project as presently contemplated is in the national interest? If so, has the position of the government of Canada been outlined to the government of the province of Quebec and the private group that is apparently interested in constructing the project for enriched uranium?


Pierre Elliott Trudeau: Mr. Speaker, I would defer for perhaps a more detailed answer to the Minister of Energy, Mines and Resources. However, I think it is fair to say there has been no precise submission made to us on any particular project, either by the government of Quebec or by the private sector. Even my discussions with the President of France were of a very exploratory nature on his part, to explore precisely the areas where we have jurisdiction and what our general outlook would be. Therefore, I doubt whether any feasibility study has been made by the government of Canada. I certainly do not know of any. In the case of the province of Quebec, the impression I gathered from Premier Bou-rassa was that they were not proceeding with such an examination with great urgency, but they have time to look at whatever proposals will be made to them. I suspect that the French government has not approached the province of Quebec with any detailed plan.


Robert Lorne Stanfield: It was the Minister of Energy, Mines and Resources who referred to the feasibility study. In view of the indication that members of the minister's staff are concerned about aspects of the project other than those mentioned earlier by the Prime Minister in response to my first question relating to the export of enriched uranium and foreign investment in that sort of thing, can the Prime Minister or the Minister of Energy, Mines and Resources indicate why a position has not been developed with regard to the desirability or otherwise of an enriched uranium project in view of the importance of preventing the expenditure of vast sums of money by private interests in developing such a project. Why has the government not indicated its position in order to prevent private interests and perhaps the government of Quebec from going a long
February 4, 1975

way down the trail which the government of Canada is going to bar eventually.


Hon. Donald S. Macdonald (Minister of Energy, Mines and Resources):: Mr. Speaker, I wish to correct the hon. Leader of the Opposition. He said we were engaged in a feasibility study. If he will look at page 2435 of Hansard for December 20, he will see reference was "they are engaged in a feasibility study," meaning the Commissariat a l'Energie Atomique de la France and the government of Quebec, or rather the James Bay Corporation. The position of the government of Canada is that a Quebec corporation is entitled, if it wishes, to engage in a study with regard to the possible use of the resources in Quebec. We would await the result of that study before determining the extent to which the project is considered feasible and the extent to which we shall engage in further discussions with the government of Quebec.


PROPOSED ENRICHED URANIUM PLANT IN QUEBEC-EFFECT OF PRICE OF ELECTRICITY ON FEASIBILITY OF PROJECT
Miss Flora MacDonald (Kingston and the Islands):: Mr. Speaker, my supplementary question is for the Minister of Energy, Mines and Resources. According to a memo dated November 15 from Mr. McNabb the project would not be in the national interest if the enrichment plant were to receive electric power at less than the average industrial power rate in the province. Has the government reached a formal decision with regard to at least that aspect of the question and, if so, what is it?


Donald Stovel Macdonald: I have already indicated to the Leader of the Opposition that it makes a little more sense to proceed with a feasibility study with regard to the project before formulating any decision with regard to it.


REQUEST FOR TABLING OF STUDY OF TECHNICAL AND ECONOMIC CONSEQUENCES OF PROPOSED ENRICHED URANIUM PLANT
Flora Isabel MacDonald: Last Wednesday the minister said he would be glad to provide the House with a study undertaken by his department two years ago concerning the technical and economic consequences to Canada of establishing a uranium enrichment plant. Is he now prepared to table that study? Will he also assure us that the position of the government as to the economic consequences will be conveyed to the governments of France and Quebec before any decision is taken to establish an enriched uranium plant?


Donald Stovel Macdonald: At the request of my hon. friend from Argenteuil-Deux-Montagnes I have arranged for that particular document to be translated into French. When the process of translation is complete, it is my intention to table it in the House in the two official languages.


Some hon. Members:: Hear, hear!
Oral Questions


GOVERNMENT POSITION ON THE EXPORT OF ENRICHED URANIUM
Mr. T. C. Douglas (Nanaimo-Cowichan-The Islands):: A question to the Prime Minister regarding this matter. On December 11, the Toronto Star quoted the Prime Minister as having told the prime minister of Iran that Canada would not be interested in exporting enriched uranium. I want to ask the Prime Minister whether that was an expression of general policy with application to all nations or whether it applied only to Iran, and more particularly whether the Prime Minister indicated in his conversations with the government of France or with the premier of Quebec that Canada does not intend to allow the export of enriched uranium as proposed by the consortium which is now seeking to get permission to do so.


Pierre Elliott Trudeau: I have not seen the report to which the hon. member refers. I can assure him that the position we took with the government of Iran is the same as the one I expressed to the government of France and to the government of Quebec. This position is based, as the House knows, upon the fact that Canada has developed the CANDU system which is not dependent on enriched uranium but on heavy water. We think the system is the best in the world and we are not interested a priori in enriching uranium to serve competitive systems. This is the position in principle. In practice we have taken the view which has just been stated by the Minister of Energy, Mines and Resources, namely, that if a government, whether a provincial government or a foreign government, has some precise plan to put to us we shall not answer a priori; we shall study it and see whether it contains any arguments of which we had not thought and which might be of a convincing nature.


PROPOSED ENRICHED URANIUM PLANT-NATIONAL INTEREST AS BASIS FOR DECISION
Thomas Clement (Tommy) Douglas: Answering a question a few moments ago, the Prime Minister laid stress mainly on the question of safeguards governing the utilization of exported uranium. May I ask now whether the government is considering the national interest of Canada, in view of the fact that the proposal from the Canadif consortium involves the consumption of some 25 per cent of the power generated by James Bay, the consumption of 18,000 tons of uranium oxide annually, which is three times our annual production, and great dislocation both in economic and environmental terms? Is the government looking at the matter on this basis and have the government of France and the premier of Quebec been advised that it is not merely a matter of safeguards but also a matter of the national interest of Canada?


Pierre Elliott Trudeau: Yes, Mr. Speaker. If the hon. member would refer to the first answer I gave today to the Leader of the Opposition, he would see that many other aspects in addition to safeguards are being considered by us. Indeed, I think some of those aspects were mentioned in the document which was leaked to the press a few days ago.


Thomas Clement (Tommy) Douglas: If the
Prime Minister has made this clear, it does not seem to

February 4, 1975
Oral Questions
have permeated to the Premier of Quebec, who stated in Paris that this matter would be determined by the government of Quebec, and that the role of the government of Canada was roughly that of a customs officer.


Donald Stovel Macdonald: A simple customs officer!


Thomas Clement (Tommy) Douglas: Mr. Jean-Gilles Masse, the Quebec resource minister has said that control by the federal government of uranium is no longer justified. I want to ask the Prime Minister whether it has been made perfectly clear to both the government of France and the government of Quebec that Canada intends to exercise the same control as it has exercised in the past with respect to granting licences for the export of enriched uranium.


Pierre Elliott Trudeau: Yes, Mr. Speaker.


OLYMPIC GAMES
Mr. Real Caouette (Temiscamingue):: Mr. Speaker, I wish to direct to the Prime Minister a question which deals with the 1976 Olympic Games.
One day the newspapers report that the federal government is going to help finance the Games and then, the next day, they report that it will not. Recently two first ministers met, that is the Prime Minister of Canada and the Premier of Quebec. Here is my question: Does the Prime Minister appreciate that the Olympic Games concern all our young people, not just those of Quebec but of all of Canada; does the federal government intend to help those young people and promote more vigorously the sale of stamps and coins to help finance the Olympic Games?


Pierre Elliott Trudeau: Mr. Speaker, I will go further than the hon. member. The Olympic Games are of interest not only to the young people of Canada but to the young people throughout the world. Going even further, I would say that they do not interest young people only but also people of my age who are still supple enough to be able to compete in the broad jump, for instance.


Some hon. Members:: Oh, oh!


Pierre Elliott Trudeau: As for the question, Mr. Speaker, the hon. member knows full well what the attitude of the government is. Yes, I can add, for the benefit of the hon. member, that I practice every day for the swimming competitions, Mr. Speaker.
I feel that the hon. member for Leeds especially will be proud when I win a gold medal for swimming.
I feel that this exchange of views should suffice to remind the House of the interest of the government and, I am sure, of all the members in this House who supported the Olympic Act to ensure the success of the Games; and more specifically our interest in the sale of stamps and coins, as well as in the lottery.


David Réal Caouette: Mr. Speaker, I have a supplementary question.
I thank the Prime Minister for informing me that it is a world-wide event and that young people of our age like him and me may very well participate in competitions, he in the swimming pool and I on my snowmobile.
Mr. Speaker, my supplementary question is the following: I had consultations with people interested in the Olympics in Montreal, and there were complaints that the sale of stamps is not adequately promoted nor, for that matter, the sale of coins, and that there are delays when there should not be. Is the government aware of this situation and does it intend to promote the sale of stamps and coins?


Pierre Elliott Trudeau: It is a matter, Mr. Speaker, which I discuss frequently with the Postmaster General. Quite recently, he told me about new plans to speed up sales receipts in that area. He might want to make an announcement in that respect in due course.


PROPOSED URANIUM ENRICHMENT PLANT AT JAMES BAY-IMPACT ON ECONOMY AND ENVIRONMENT
Mr. Donald W. Munro (Esquimalt-Saanich):: Mr. Speaker, I have a question for the right hon. Prime Minister which is supplementary to the earlier question concerning the problem of enriched uranium.
Since the Prime Minister has received a memorandum from the assistant deputy minister of Energy, Mines and Resources (Mr. McNabb) dated November 15, 1974, underlining the concern of that department that the proposed enriched uranium plant to be built in James Bay by France and Quebec might exert undue pressures on the economy and disrupt the ecology of the area, why has the government not yet taken a firm stand in that respect after three months?


Pierre Elliott Trudeau: Mr. Speaker, as the Minister of Energy, Mines and Resources said, a firm answer cannot be given to a strictly hypothetical question. Neither the French government nor the province of Quebec has submitted a definite project. On the contrary, we are the ones who approached the provincial government and warned them to be careful before making definite plans because federal jurisdiction and policies had very specific views on this matter, which I stated briefly in my first answer to the Leader of the Opposition.


Donald W. Munro: Mr. Speaker, I have a supplementary question.
The Prime Minister should have stressed the dangers feared by the various departments. In this respect, could he explain why, in a recent interview, the Minister of Energy, Mines and Resources did not rule out the possibility that Canadian taxpayers may have to pay part of the capital cost of such a plant that would be of benefit only to France and to the Quebec premier?
February 4, 1975

Oral Questions HEALTH


Pierre Elliott Trudeau: Mr. Speaker, I am not aware of such a statement being made by the Minister of Energy, Mines and Resources, but I shall ask the minister to check Hansard and see in what context he might have been quoted.


EXTERNAL AFFAIRS
Mr. Craig Stewart (Marquette):: Mr. Speaker, now that the Ford administration has asked that another $15 million be directed to the Garrison diversion project, indicating that Canadian negotiators have failed to modify or stop this project, is it the intention of the Secretary of State for External Affairs to have the dispute referred to the International Joint Commission?


Hon. Allan J. MacEachen (Secretary of State for External Affairs):: Mr. Speaker, in reply to the hon. gentleman's question I should say that at a recent meeting held between Canadian and United States officials on this point the United States reiterated its intention of carrying out its obligations; that no injury through this construction will take place to property in Canada. That is the continued position of the United States government.
I might say that I also noted the press report indicating that funds are being requested by the President, and apparently they have to do with construction of a particular reservoir that is part of the over-all project, but which could go ahead aside and apart from any effect in Canada. In respect of the second part of the question, at the recent meeting held with the United States it was considered, at least, that further steps ought to be taken to determine how the project could be remodelled to avoid any effect in Canada, and at the present time we have under consideration whether the IJC might be the appropriate body to carry out this task.


GARRISON DIVERSION-POSSIBLE REPRESENTATIONS BY PRIME MINISTER TO PRESIDENT FORD
Donald Craig Stewart: Mr. Speaker, since the official negotiators appear at this point to have failed, has the minister requested the Prime Minister to make personal representations to President Ford pointing out the harmful effects of this project on the Souris, Red and Assiniboine Rivers in Canada?


Allan Joseph MacEachen: Yes, the Prime Minister, at the meeting with the President in December, raised this question of the Garrison project, and reiterated Canadian concerns and attitudes. It was made clear at that time that the United States government intended to carry out its stated obligations under the treaty, and the present purpose of further inquiries, such as through the IJC, would be to determine how these particular obligations might be discharged.


STUDY OF ARSENIC POLLUTION IN YELLOWKNIFE-REQUEST FOR DATE OF COMMENCEMENT AND PRELIMINARY REPORTS
Mr. Paul Yewchuk (Athabasca):: Mr. Speaker, my question is for the Minister of National Health and Welfare and pertains to arsenic pollution in the Yellowknife. The minister indicated in a statement that he was going to augment the health staff in Yellowknife to enable them to carry out a health study. Could he inform the House whether this staff has been augmented, whether the study has begun and, in addition, whether there are any preliminary reports available from that study?


Hon. Marc Lalonde (Minister of National Health and Welfare):: Mr. Speaker, I have not received even the preliminary report yet, but my information was that the study was to have started last week, and I think it is now underway.


STUDY OF ARSENIC POLLUTION IN YELLOWKNIFE-REASON FOR DELAY IN INITIATING
Paul Yewchuk: Mr. Speaker, in view of the fact that the brief which prompted this inquiry had been around for a few years before the inquiry was initiated, could the minister indicate what brought about the sudden decision to have this health study done?


Marc Lalonde: Mr. Speaker, I already issued a statement on that matter, and the reasons were obvious.


Paul Yewchuk: Mr. Speaker, I should like to direct my final supplementary to the Minister of Labour. Having been the minister responsible for health at the time this report was initially produced and tabled, could he explain why the health study was not initiated at that time?


Hon. John C. Munro (Minister of Labour):: Mr. Speaker, I cannot recall at the moment, but I could check into it with my colleague.


CANADA-UNITED STATES AUTO PACT-GOVERNMENT ACTION IN VIEW OF DEFICIT
Mr. Bill Kempling (Halton-Wentworth):: Mr. Speaker, considering that the Canadian deficit in the automotive trade with the United States is expected to be in excess of $1 billion in 1974, and figures show a continuing and worsening deficit since 1972, does the Minister of Industry, Trade and Commerce plan any action to reverse this trend of increasing deficits, or is it the policy of his department that current deficits are acceptable?


Hon. Alastair Gillespie (Minister of Industry, Trade and Commerce):: Mr. Speaker, I do not think the current

February 4, 1975
Oral Questions
deficits are at all satisfactory. The reason for the deficit in the automotive account is the gap between the success of the Canadian market in the sale of automobiles and the failure of the United States market over this past year.


William James Kempling: Does the minister's concept of the Canadian industrial strategy operate on the assumption that the Auto Pact will be in perpetual deficit, or does the minister have any long range plans to improve Canada's automotive trading position?


Alastair William Gillespie: I have indicated on other occasions that I would expect that the deficit and surplus positions between the two countries would alternate from time to time. Indeed, this has been the practice in the past.


AIR TRANSPORT
Mr. Howard Johnston (Okanagan-Kootenay):: Mr. Speaker, my question is for the Minister of Transport. Could the minister give an indication to the House as to when the report on the Panarctic air crash off Melville Island will be completed, and is the department aware of any attempt to impede the progress of this investigation?


Hon. Jean Marchand (Minister of Transport):: Mr. Speaker, unfortunately I cannot say when the report will be made to the department. I hope it will be as soon as possible. On the other hand, insofar as the second part of the question is concerned, I know that Panarctic decided to intervene before the inquiry and there are one or two lawyers there trying to make a case. I do not know when the report will be made but I am expecting it.


NATIONAL DEFENCE
Mr. Robert Muir (Cape Breton-The Sydneys):: Mr. Speaker, my question is for the Minister of National Defence. Can he advise the House if a stop order has been issued to prevent a recurrence of any further field manoeuvres such as took place recently at Debert by units of the Canadian army at which trade unionists were designated as the so-called enemy?


Some hon. Members:: Shame.


Robert Muir: Can he also assure the House that this outrageous farce will not be repeated and that he will provide a public explanation as to what or who motivated this insult to organized labour?


Hon. James Richardson (Minister of National Defence):: I have not seen the allegations that have been

made but I will be very willing to look into them and to talk further with the hon. member.


INDUSTRY
Mr. Irenee Pelletier (Sherbrooke):: Mr. Speaker, I have a question for the Minister of Industry, Trade and Commerce.
Since the quotas introduced last December 20 with respect to certain textile products originating from South Korea and Japan did not bring about the expected results, could the minister tell the House, in view of massive layoffs in several textile manufactures throughout the country, and particularly in Quebec, if he intends to increase those quotas or even lay a temporary embargo on those imports?


Alastair William Gillespie: As members will recall, one of the features of the textile policy introduced a while ago by the parliament of this Canada-


Some hon. Members:: Oh, oh!


An hon. Member:: Which Canada?


Walter David Baker: You are on your way to the Senate, you know that.


George Harris Hees: Why don't you go back to square one?


An hon. Member:: Read it over.


Mr. Speaker:: Order, please.


Alastair William Gillespie: I consider the question asked by the hon. member to be a very serious one.


An hon. Member:: And it deserves a serious answer.


Alastair William Gillespie: And I consider the action of the Parliament of Canada in passing the bill which provides for the establishment of the Textile and Clothing Board to be a serious one. Under the provisions of that act, if there is a situation of injury or threatened injury to the manufacturers of Canadian textiles, a submission must be heard by that board. I asked the board to take urgent action last December. They have already provided an interim report, and I have advised the House on previous occasions that I would expect to have their final report very shortly. I can assure the House, and the hon. member who is particularly concerned with this question, that we will give very prompt attention to the recommendations of that board.
February 4, 1975


AIRPORTS
Mr. Edward Broadbent (OsKawa-Whitby):: Mr. Speaker, I have a question for the Minister of Transport. Would the minister, on behalf of the government, assure the House that he will not reach a decision on the Pickering airport until after his department or he himself has presented to the House the new national transportation policy which presumably, if it will be of any use at all, will cover the integration in Canada of air and rail transport facilities?


Jean Marchand: Mr. Speaker, I am not ready to make such a commitment.


Some hon. Members:: Oh, oh!


PICKERING-REQUEST FOR NEW ESTIMATE OF PROJECTED AIR TRAFFIC
John Edward Broadbent: At least the minister is consistent. My supplementary question is as follows: Considering that the estimates of projected air traffic arbitrarily used by the commission in reaching its findings were prepared by his own department and totally ignore the energy crisis which has existed in the past couple of years, and that they were objected to by other experts for other reasons, would the minister assure the House that before he reaches a decision on Pickering he will consider a new set of projections and inform the House and the people of Canada of the reasons for that new set of projections?


Jean Marchand: Mr. Speaker, I am ready to look at all the factors which are of some importance in relation not only to Pickering but to any other problem we have in transport. However, I think nobody in the House would want us to paralyze the whole department of transport-


Some hon. Members:: Oh, oh!


An hon. Member:: It is standing still now, Jean.


Jean Marchand: Nobody would want us, for example, to paralyze the building of the airport at Calgary, or to paralyze the new ferry to Newfoundland or about 100 other airports which are being built. I think no one would be ready to accept the postponement of all this.


PICKERING-SUGGESTED CONSIDERATION OF IMPACT ON REGION OF DECISION TO CONSTRUCT
John Edward Broadbent: I would like the minister to tell us how we can possibly paralyze a corpse. We are awaiting his answer on that.
Considering that the commission saw fit in its recommendations to ignore totally the impact that locating an international airport there would have on regional development plans by the provincial government, and considering specifically that the decision would fly in the face of the Toronto centre region plan of the provincial govern-
Oral Questions
ment and is opposed by the city of Toronto, would the minister assure the House that when he makes a final decision on this important matter he will consider the regional impact of such a decision?


Jean Marchand: This problem has been studied now for more than 5 years. The decision will be taken by the cabinet, and I am sure that the cabinet will take into account all the factors, the regional impact of airports and everything else. But I will not make any commitment at this stage and say that we are not going to proceed with the airport if such and such a thing does not happen.


Some hon. Members:: Hear, hear!


BILINGUALISM
Léonel Beaudoin: Mr. Speaker, I would like to put a question to the right hon. Prime Minister.
Because of the very high investments by the federal Treasury Board for the establishment of bilingualism in Canada's public service and because of the poor results from the existing program in operation these last five years, could the right hon. Prime Minister tell the House if the government intends to revise the whole program whose purpose is to establish bilingualism in the public service in order to make it more efficient?


Pierre Elliott Trudeau: Mr. Speaker, I cannot agree with the hon. member when he talks about poor results. Everybody in the House would have preferred still better results, I know, but there is no need to speak ill of that program. On the contrary, attempts must be made to apply it. I do not see the use of bringing back this matter before the House and of asking for new authorizations and new programs. I rather think that action must be taken according to the mandate delivered to the government by the House, and ask all members to second our actions.


Léonel Beaudoin: Mr. Speaker, a supplementary question. Could the right hon. Prime Minister tell us if it would not be advisable, at a provincial-federal conference, to have Canada agree to give the provinces the required funds in order to have the problem become a provincial and federal matter?


Pierre Elliott Trudeau: Mr. Speaker, as far as the federal government is concerned, we are prepared to exchange any necessary information with the provinces. There are many sectors for which control exists and for which federal capital is being spent within the provinces. In each one of these sectors, the federal government tries to get the best results.
I fail to see how useful a federal-provincial conference on the matter would be. Federal legislation and policy are part of our federal jurisdictions, and, as the hon. member
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February 4, 1975
Oral Questions
knows, the provinces have already made out their policies in this matter: Quebec has its Bill 22, New Brunswick made bilingualism official, Ontario has made serious progress, Manitoba tries somehow, but in spite of it all, we still know that many errors must be set right and many gaps filled in.


EFFECT ON MINISTER OF FINANCE OF PRIME MINISTERS' INTENTION TO REMAIN UNTIL PROGRAM COMPLETED
George Harris Hees: Mr. Speaker, I have a supplementary for the Prime Minister. In view of the Prime Minister's statement recently that he did not intend to leave Ottawa until the bilingual program is a complete success in Canada, and in view of the very traumatic shock which this had on the Minister of Finance-


Some hon. Members:: Oh, oh!


George Harris Hees: -would the Prime Minister outline a little more clearly to this House just how complete "complete" must be, so that the Minister of Finance can sleep a little more easily these days?


Pierre Elliott Trudeau: Mr. Speaker, all hon. members know how excellent the Minister of Finance's bilingualism is, and if it is true that he has been traumatically shocked,-which I do not know-by my statement, it is without any doubt because the hon. member for Prince Edward-Hastings is very slow in his own progress.


EXTERNAL AFFAIRS
Mr. J. M. Forrestall (Dartmouth-Halifax East):: Mr. Speaker, I have a question for the Secretary of State for External Affairs. It refers to a matter I raised about a week or ten days ago in the House regarding warnings to Canadians and the government, particularly by retired Admiral Porter, with respect to the proposed presence in the Northwest Passage of armed American icebreakers and the intention of the United States to proceed with the construction of some 62 quarter million ton tankers for the carriage of oil from Prudhoe Bay. I repeat my question. Have we raised the question of jurisdiction over that passage, the question of traffic control, maintenance of usual navigational aids, and indeed, the whole propriety of American icebreakers in our waters with armaments on board?


Allan Joseph MacEachen: Mr. Speaker, following the question put by my hon. friend some days ago I made inquiries, and we would not secure any confirmation of American plans as described by my hon. friend.


J. Michael Forrestall: I refer the Minister to the New York Times of December 5. I wonder if I could ask the Secretary of State for External Affairs if he would raise this in a formal way with Secretary Kissinger at the earliest opportunity to determine just what plans are being made by United States industry and commerce, which have the support of the United States government, with respect to the movement of oil out of Prudhoe Bay through the eastern Arctic, through what we allege to be Canadian waters, without our permission or sanction.


Allan Joseph MacEachen: Mr. Speaker, I will be happy to pursue these inquiries.


CRIMINAL CODE
Right Hon. J. G. Diefenbaker (Prince Albert):: Mr. Speaker, my question is directed to the Minister of Justice. I ask this question of him as the custodian of the Queen's conscience in this Canada. In this women's year, has the minister in mind any legislation to alter the section of the Criminal Code concerning abortions? That is the simple question, and I ask because so many people are asking what the attitude of the government is, and I go to the source of wisdom.


Some hon. Members:: Oh, oh!


Hon. Otto E. Lang (Minister of Justice):: No, Mr. Speaker.


EXTERNAL AFFAIRS
Mr. Erik Nielsen (Yukon):: I have a question for the Secretary of State for External Affairs concerning discussions which have been going on for a very long time now at the departmental level between the United States and Canada in connection with the cost sharing between the two countries of the improvement and paving of the Alaska highway. Have those discussions now proceeded to the formal level? Are the discussions under way between himself and representatives of the government of the United States? Is there an agreement that is about to be signed? At just what stage are these discussions and negotiations?


Allan Joseph MacEachen: Mr. Speaker, the United States authorities did propose that a section of the highway be reconstructed and repaved, I believe. The negotiations on this subject are at a very preliminary phase at the present time. I think the last meeting was held on January 21.


Mr.   Neilsen@: I take it from the Minister's reply that the discussions are still at the departmental level and have not
February 4, 1975

yet reached the diplomatic level. Would I be correct in that assumption?


Allan Joseph MacEachen: Mr. Speaker, I do not know where diplomacy begins and the departmental aspect ends, but the discussions are still at the departmental level.


INDUSTRY
Claude Wagner: Mr. Speaker, following the reply given a few moments ago by the Minister of Industry, Trade and Commerce with respect to textile products, I should like to direct a question to the Secretary of State for External Affairs.
Given the fact that Canada imports per capita more textile products from South East Asia than any other industrialized country, how far and in what ways do the Canadian delegates at the Tokyo Round and at any other stage of the study and renegotiation of the GATT agreements want to plead in favour of Canadian textile products? Finally, has the government adopted a definite position respecting both the Canadian interests in exports of grain or other products and a better protection of our own textile industry?


Alastair William Gillespie: Mr. Speaker, I think that the textile policy has helped to stabilize a declining industry.


Walter David Baker: Everything is closing down. Nothing is moving.


Alastair William Gillespie: The discussions at the coming round of talks will both seek access to markets and make concessions. You know and I know that the Canadian bargaining position has not yet been determined because we do not yet know what the bargaining rules will be. I can assure the hon. member that the concern he has expressed for the textile industry will be taken into account by the Canadian negotiators.


Mr. Speaker:: Orders of the day.



GOVERNMENT ORDERS


[Stage Direction]
The House resumed, from Monday, February 3, consideration of the motion of Mr. Turner (Ottawa-Carleton) that Bill C-49, to amend the statute law relating to income tax, be read the second time and referred to committee of the whole.
Income Tax
Mr. Adrien Lambert (Bellechasse):: Mr. Speaker, last night, just before the House adjourned, I was reviewing Bill C-49 and, particularly, the clauses relating to the working poor.
I think that it is my duty, as a member of parliament whose constituency has, per capita, the lowest incomes in Canada, to proceed with such an exercise. It is my duty to make representations to the Minister of Finance (Mr. Turner) and also to the cabinet and to my fellow members so that, after assessing the policy that we have known for a few years and that has led us where we are now, we might consider other means to solve the problem.
I was saying yesterday that we are experiencing inflation, deflation, unemployment and everything that goes with it. We are running in circles, like a dog barking at its tail. When we see a dog doing this, we wonder whether it is the tail that is running after the dog or the dog after the tail. Anyway, we are really running around in circles. Since coming to this House, new solutions have been proposed every year. These solutions are supposed to perform miracles, but as each year ends, we realize that the results expected were not achieved. One solution looks just like the other: only the label is different. As happens with different makes of pills, they all contain the same ingredients.
Mr. Speaker, I consider that inflation has lasted long enough and that small wage earners went through enough in terms of kickbacks of that social evil that has become a real cancer and affects all Canadians. Nevertheless it is true. If one considers what happened in 1949, and the situation in 1974, in the area of taxation, one realizes that the middle class of 1974 is taxed at the same rate as the wealthy of 1949. So, no progress was made, we simply reduced the possibilities of increasing the number of people who have something. In 1974 it can be said that those who pay for financing public expenditures are today's wealthy as compared with the wealthy of 1949. Indeed, Mr. Speaker, I think we should take a serious look at the situation in which those people live.
I have here a newspaper clipping dated October 1974 in which an analysis is made of a situation in the light of statistics. One reads that 60 per cent of salary increases were erased by inflation and devaluation of the Canadian dollar.
So I would like to say to union leaders across Canada that they are fighting useless battles when they ask that salaries be geared to prices. They get it. Fine. Salaries increase but prices jump even higher than salaries. So they come back asking that salaries be increased to catch up with prices. Mr. Speaker, where do you stop? I think we should consider that situation very seriously. I would like to simply quote from an article published in Economic nationale by Mr. Jean Poulin who is objective. He says this:
Sixty per cent of salary increases obtained in the manufacturing industry as a whole between 1961 and 1972 were lost through inflation, the rest alone representing a real gain in gross salary for workers.
So those data just released by Statistics Canada show that the increase in prices is not a new phenomenon, although it picked up in the past two years.
Furthermore, the improvement in performance per worker was well above the real gain he obtained.
28626-48'/2

February 4, 1975
Income Tax
Indeed, according to Ottawa figures, weekly salaries of $100 in 1961 had increased to $138.20 in 1972 ...
. . . the latest figures available at the time of writing this article,...
... while productivity increased by 57.9 per cent.
Even though workers are sometimes accused of incompetence, it is a fact that Statistics Canada has actually shown that during the same period, while they lost 60 per cent of their salary increases, they increased their productivity by 57.9 per cent. Therefore, nobody can say that the present situation is due to the fact that worker get higher wages. No one can blame them and say that the rising cost of living is due solely to salary increases because it is proven that while salaries increased, productivity also increased.
One has to be fair to everybody and I must admit that where production is concerned, generally speaking, the workers have done their share.
Mr. Speaker, there is a need for statistics. Sometime, one must look to them to know where one is heading for. Last June, Statistics Canada released some meaningful figures which showed that in the manufacturing industries, wages have increased from 100 in 1961 to 135.2. During the same period, retail prices were raised from 100 to 166.7. Then, it is true that the working poor have had their income increased, but still they have to pay about 66 per cent more for the commodities they buy.
During the same period of time, Mr. Speaker, there has also been a dollar devaluation. In 1961, the dollar value was actually $1. But the situation has seriously deteriorated. In June 1974, when Statistics Canada released its figures, the Canadian dollar had been devaluated by about 40 per cent, meaning a loss of .40 for every $1.
Canadian workers have reasons to complain that they cannot make both ends meet. Even though they have been given salary increases, prices have gone up faster than their wages. Statistics Canada proved this when it said that the Canadian dollar had depreciated by about 40 per cent. No wonder that every day we are being asked: What are you waiting for? What are you going to do to help us? Like so many others, I think that the answer does not lie in wage increases. We must seriously consider this solution: a reduction in personal income tax. This would strengthen the purchasing power of our people without increasing prices. Therefore, while bettering the condition of the working poor, we will contribute to the extension of the overall purchasing power without increasing prices. In doing this, we will be fighting against inflation. We will be dealing effectively with unemployment and I believe we will be fostering a climate more favorable to confidence and peace within our country:
Like all those in my age group, I have lived through the depression years of 1929-1939. I remember that in those days, just like today, people were saying: This is a hopeless situation. There is nothing at all we can do about it. Only a war could clear up this mess and settle this problem. I was listening to an open-line radio broadcast this morning, and I heard people mention war as a possible means to solve the unemployment problem. This would mean turning out bombs and dropping them on other
(Mr. Lambert (Bellechasse).]
people! But what other people? The choice is ours. And whoever they are, they will be other human beings who are as eager to live as we are.
If, because of such a crazy system as we have, we absolutely have to wage war, manufacture guns, drop bombs on the heads of other human beings, hurt, destroy and kill them, and if this is a sound economic system, I just do not want to have anything to do with it.
I am convinced that living standards can be improved without anyone having to go and drop bombs on the heads of other people of the planet.
If our system is not changed, there will surely be a war and war preparations are made by people who are interested in saving a system that is profitable to them. There is much talk nowadays there could be a war in a year against the Arab countries, because they own huge oil resources. It is said that if they don't want to be reasonable, we shall have to take over to let the rest of manking survive.
I say it would be advisable to solve our problems through other means. Instead of talking about war on the air in Canada, we should talk about peace and peaceful solutions. An appeal should be made to the intelligence of man, of the population and it should be shown that the difficulties and problems we might have with inflation and unemployment are due to a financial system that no longer meets today's requirements.
I have said very clearly what I think of that solution to our problems, as well as of strikes. Strikes have been necessary and will still be tomorrow, if there is injustice, if the capitalist system we follow comes to the point where we think of nothing but profits and forget that profitsharing also has rights.
Then, strikes, as a means to apply pressure on those responsible for this situation and make them think, become a healthy and inevitable course of action. Only when things get to such extremes and all other means have been exhausted are they justified. As long as there are people not working and plants not operating, there is no production. The demand still exists and that is what contributes to price increases because of the fear that seizes the population. People are afraid products will be scarce. They then rush to buy the products of those plants to be prepared for a possible shortage. I think that the doctrine of the Church on social matters, which is sixty years old and which has not changed, says that to establish the reign of peace in a society, the money capital and the work capital must work together to achieve goals, to transform natural resources into consumable products and to meet the needs of the people, while making a fair use of these two capitals. I think that if this idea of the respect of mutual rights were understood, we would live in a well balanced and peaceful society.
Mr. Speaker, another factor makes things even worse. As I did before, I ask again the government and the Minister of Finance (Mr. Turner) to take the appropriate measures to earmark the millions we are now paying as unemployment benefits to those who are unemployed so that the very same amount would serve to encourage work, to accept many more local initiative projects; then these people could work as most of them want to and become productive members in our society, we would
February 4, 1975


LE POUVOIR EXTRAORDINAIRE DES BANQUIERS DANS LA CRISE DE L'lNFLATION
[Stage Direction]
It starts off this way, and I quote:
A whole series of causes is to be blamed for world inflation, the increase in interest rate, the lowering of stocks, the decrease in real income in industrialized countries, the bankruptcy of first-level international banks, the instability of foreign exchange markets and the increase in unemployment throughout the world. Moreover, the common source of this situation escapes the influence of the monetary or fiscal policy of any single country.
This is not surprising since in all democratic countries, the financial world manages the governments and gives them orders. The population is led to believe that it is the parliamentarians who direct the destiny of their nation. This is absolutely false; financiers hold the levers, the financial world is in command and gives orders to the bureaucrats on how to prepare the legislation which has been passed by the parliamentarians. They want to give the impression to the population that Parliament is in command when, in fact, the House is in command of nothing. We can talk and make representations, but when the acts are passed, regulations are made. It is not the parliamentarians who make the regulations, it is the senior officials. That is what we see, Mr. Speaker, when we have to deal with the daily application of the Unemployment Insurance Act. We have surprises every day. The regulations are now more important than the act itself, and public servants stick to the regulations they have themselves prepared to apply a legislation which has been voted by members of Parliament. We know of cases of injustice of every kind resulting from the fact that those regulations have never been put before members of this House.
Finally, I would like to ask the Minister of Finance (Mr. Turner), who is listening very attentively to me, to consider the fact that it is very urgent for him, together with his colleagues in the Cabinet, to bring some amendments to this legislation which is rather voluminous and which will necessarily have to be put into effect, should it be passed as is. But at first it will be necessary to amend it to lighten the tax burden especially for low income Canadians.
Mr. Stan Darling (Parry Sound-Muskoka):: Mr. Speaker, I am pleased to make a few comments on Bill C-49, the omnibus bill which the geniuses in the government ivory tower whipped up to help the government bite a few more million dollars out of the taxpayer. Speaking of bites, a bill such as this should have been served to us in smaller bites so that we could have examined it in detail before attempting to speak on it. This government has a habit of
Income Tax
lumping as many things together as possible: this has resulted in a bill numbering hundreds of pages. We were given two or three days to do justice to the bill in debate. All members know it is not possible, in those circumstances, to debate a measure such as Bill C-49 as completely as we should.
Those in the government benches on their short leashes may not think it is important to debate every aspect of a bill in this House. I think it is important. At least with this type of a bill, those of us who are interested in taking some strips off government ministers can talk on all aspects of government spending. What we are talking about here is raising more money for this government to spend. The present government will go down in history as the spendthrift government. I do not intend to let that happen without getting in my licks.
It was pointed out by at least one hon. member that the government talks about the great tax break it is giving to those in the low and middle-income brackets. However, by some miracle of economic hocus-pocus the government will come out a couple of billion dollars to the good. That is like selling $10 bills for $5 each and ending up with a profit. I would like to know more about this magic formula. It might be just what we are looking for to cure all our economic ills. The plain fact is we are taxing the Canadian wage earner to the hilt. We are spending this country into the poorhouse. I say "we", but everyone knows I mean the reckless and irresponsible Diamond Jim Bradys on the other side of the House. They are the big spenders, the people with their hands in the federal till.
I looked through Bill C-49 for some evidence that the government has at least recognized the need for something in the way of a small business development agency or bank. However, as in the past I looked in vain. There is nothing in the bill specifically designed to help the small businessman to cope with the uncertain economic climate in Canada today. There certainly is nothing in the bill to assist resourceful people in launching a small business. The plain fact is that exactly the opposite is the case. I have not seen any recent figures on the failures of small businesses in Canada today. However, if they are anything like the last ones I saw, more businesses are failing than are being started. Perhaps that is just what this government would like to see.
It used to be that when a person decided to start a small business, he or she would first look for a suitable location and then for capable and trustworthy people to staff the business. Today, though, Mr. Speaker, if anyone even got the idea that he would like to go into business he would first have to hire a first-rate tax lawyer. A good tax lawyer would probably earn his fee right off the bat by advising the person not to go into business. A good case in point is the recent 10 per cent increase in the federal tax on boats and motors. People in my riding whose businesses were affected adversely by this tax could not believe their ears when they heard about it. They were faced with unfair competition from foreign boat builders and with annual increases in inflation that is running out of control. Then they got this slap in the face. I must say that the Minister of Finance (Mr. Turner) relented somewhat and took the extra tax off boat hulls, and I commend him for that, but it is still on motors.

February 4, 1975
Income Tax
I do not see very much in the way of real relief for the poor and the working poor in this bill. I commend my colleague, the hon. member for Fraser Valley East (Mr. Patterson), for pointing out to the socialists to my left that we in the Conservative Party have not called for any cuts in government expenditures that would work additional hardship on the people of our country. Of course, one does not hear their ranting any more since the voters cut them down to size at the last election. We used to hear a bit of shouting now and again, but now it is only a murmur. What we have called for and will continue to press for is a drastic reduction in government waste and a reduction in reckless spending on non-essential government programs.


Mr. Benjamin:: Name some.


Stan Darling: If we cut out at least some of the appalling waste in government spending we would have more money to spend on essential programs for the working people in this country.


Leslie Gordon Benjamin: Name some.


Stan Darling: I will let you do that. Millions of people in Canada today are working full time but still cannot avail themselves of decent housing or an adequate diet. Those people are contributing to our economic system and are in fact the backbone of the system, but for tens of thousands of them all they are getting out of the system is a bare existence.
This government has a hang-up on bilingualism. I certainly cannot be accused of being anti this particular program. Hundreds of millions of dollars go into this program each year. It is one of the government's biggest expenditures. However, it is not getting the returns that I feel it should. I am one member on this side of the House who takes French lessons every week. I hope to be able to converse in French in 10 or 15 years. I am at least optimistic enough to take the lessons. I say to members opposite that I hope to be in St. Jean for another one-week's immersion course beginning February 18. At least I understand French. In a speech to the faithful in Montreal, the Prime Minister (Mr. Trudeau) stated he would remain in office until this entire country is bilingual. I believe it has been worked out that he will break all records by reaching the age of 200. Whether there is any truth to that, I am not sure.


Mr. Turner (Ottawa-Carleton):: You have given him a real challenge.


Stan Darling: I would ask the minister to remember that a great many people who live in Parry Sound are by no means rich; a great many people living on low or fixed incomes are finding it increasingly hard to get by. That is why I am here trying to represent their interests.


John Napier Turner: It is one of the most beautiful constituencies in the country.


Stan Darling: Exactly. Then there is the matter of the oriental potentate, Paul-Gerin Lajoie. Mr. Speaker, that dandy flies around the world with a flock of loyal camp followers, trying to find ways to give away more hundreds

of millions of dollars each year. He makes all the decisions as to who is to get these free Canadian millions, yet he refuses to answer even the most basic questions put by members of parliament. I happen to be one of the potentate's bosses, and as long as parliament is the top level of our government I intend to reserve the right to question any and all officials appointed by the government.
It is time we got the full story of just what Paul-Gerin Lajoie is doing with our tax money. Who gave him the sole right to decide who receives gifts of Canadian money? Why is it that he cannot be brought before a parliamentary committee, and why is' he entitled to an expense account which allows him to live like an Arab oil sheik? I want to look at the books of the Canadian International Development Agency, and I don't care who accuses me of not being in favour of foreign aid.
Everyone who handles public money in our country is subject to the same laws concerning full disclosure of his official conduct. He or she is subject to scrutiny by the House. Every person entrusted with the disbursement of public funds is subject to periodic questioning. This is what I want, and what I demand, with regard to the Canadian International Development Agency. We have heard enough clear evidence to convince us that a large part of our aid money to the so-called developing nations is being distributed unwisely; and when I say "unwisely" I am being as charitable as I can. There is no reason why we should not get as much mileage from aid dollars as we get from dollars spent on domestic programs.
Further to my remarks about taxation, I suggest that many people, probably tens of thousands, should not be on the tax rolls at all. Why should anyone earning, say, $8,000 or $9,000 a year be obliged to pay income tax just as a person earning $15,000 is required to do? These people already have enough on their backs to cope with; they are finding it hard enough to put food on the table, to send their children to school and to put a few dollars aside for recreation. Loading taxes on these people does not make sense in present circumstances. The Minister of Finance and the government to which he belongs will be spending in excess of $25 billion this year. That is a lot of money. We realize that a great deal of this expenditure, in fact the great majority of it, is necessary. However, let us hope that some restraint will be exercised with regard to programs which are not absolutely necessary.
Again, if I might make a plea to the Minister of Finance, I would say this: I am quite sure that money will be flowing into the till; that the pockets of government will be bulging at the seams. If any extra money is to be expended, let it be channelled back to the provinces with the proviso that it go directly to the municipalities to help them keep down real estate taxes. A great many people today, though they are not subject to federal taxation are nevertheless obliged to pay municipal taxes if they wish to hold on to their homes. In many cases municipal councils have been obliged to increase their taxes because of the tremendous cost of doing business. I express the hope that the minister, in his wisdom, will see fit to follow up my suggestion by making extra assistance available to the municipalities. Ideally, I would like such assistance to be given directly, but I realize that in the circumstances this is not possible.
February 4, 1975


Mr. Jake Epp (Provencher):: Mr. Speaker, I welcome the opportunity to speak on Bill C-49 and to express some of my thoughts concerning government expenditure in general as well as to indicate, toward the conclusion of my speech, the direction I should like to see Canada take. It seems we are faced with massive increase in government expenditure, despite the fact that the Minister of Finance (Mr. Turner) has put forward proposals for a 3 per cent tax cut. The fact remains that the amount of money collected by the government is to be greater, which means, of course, that additional sums will have been paid in taxes by the Canadian wage earner and others.
I think it is time the minister recognized that regardless of the number of people he says he has taken off the tax rolls, and regardless of his statements about tax cuts, he will actually be getting more revenue this year from the same taxpayers. Mr. Speaker, if this is a year of restraint I would hate to see a year in which the government thought restraint was not necessary. In just two years we have had an increase in the budget of 44 per cent. If this represents restraint, I am sure many small businessmen and labour union leaders would like to see that type of restraint imposed upon them as well.
It is my contention that Canadian society has in the last number of years come to expect, as a matter of course, government involvement-by which I mean government financial input-in virtually every field. We have come to regard government as a big brother, the idea being that whenever an appeal is made to government, help will be forthcoming. Too often, unfortunately, governments have got themselves into areas in which they should never have been involved in the first place. Thus, we have created a grant mentality, evidence of which is the degree to which members of parliament on all sides are approached by constituents who have heard that grants are available. I had a phone call today along these lines, "Can you tell me what grants are available, because I want to apply for them?"


An hon. Member:: That was Syncrude.


Arthur Jacob (Jake) Epp: That type of mentality strikes me as being rather dangerous. It is part and parcel of our national thinking today and I believe it is very dangerous.
What has happened to personal initiative and incentive? I believe we have arrived at the point where leadership must be shown by this government, by this House and by every elected official in Canada in our approach to restraint on government involvement, and that means government expenditure. As members of parliament, we perhaps have not been as frank with our constituents as we should, particularly those who have asked for grants and government involvement. We are being asked to help as much as we can. We have become involved in this attempt to see whether there is more government money available. This kind of attitude must be changed. The objective of every member here must be restraint in respect of government expenditure. I believe it must be a national priority on the part of members of parliament to cut government waste and to cut government expenditures which are simply counterproductive.
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This mentality, created by the social welfare state, has affected every one of us. The idea that the government will help must be counteracted. The social welfare state has been described as a system under which the state determines what you and I need. Once the state in its wisdom has determined what we need, it taxes us in order that it can give us the things it has determined we need in the first place. I am a great believer in the idea that if the state governed less, government would be improved.
I am not opposed to many of the programs presently in effect. I will mention some of them later. There are many people in our society who need protection. It is my concept of government that government should protect those who are least able to protect themselves. If the government would rely on that type of objective, we would not have the huge government expenditure that we have today. It is time to stop this attitude, that as the gross national product increases, government expenditure must increase. I do not believe that premise holds water today.
The government and the elected officials in Canada must embark upon a public education program to teach the people that government expenditure cannot go on ad infinitum, that we must consider the cost to the Canadian economy. We must develop confidence, on the part of citizens, in the government regardless of the party in power, confidence that the government is protecting our interests rather than trying to get as much from us as possible. I submit that this government particularly stands condemned for its mental fixation that you govern better by spending more and more. I have seen very little evidence since coming to Ottawa that this message has got through to the government, that is, that spending increases must be curtailed. We have witnessed the trend of the 1960s and the 1970s, marked by many private groups and lobbyists, of more state involvement. We have seen state involvement in virtually everything, and it cannot continue indefinitely.
Happily, this mentality of the 1960s and 1970s has changed to some extent in the mind of the average Canadian. Unfortunately, that is not true of this government. Many of my constituents have told me they do not want to see more government programs but, rather, cutbacks in existing programs and their tax money used in the best way and to the best advantage and benefit of the Canadian people. Let us not simply carry on in this way, on the basis that more government spending will bring more happiness or a better way or quality of life, because this does not follow.
It is high time this government began to show the way. How successful has this minister been in controlling expenditures? He likes to posture in speeches and statements to various groups that it is time for restraint and that controls on government expenditure must be adopted. We are all aware of the procedure that is followed by government departments when they bring forward their budgetary estimates. These estimates are padded, with the knowledge that when they are submitted and reviewed they will be cut back, resulting in the department receiving the amount of money it required in the first place.
This minister keeps talking about tax cuts and the number of Canadians who have been taken off the tax rolls. I had someone check on the number of people the

February 4, 1975
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minister has removed from the tax rolls since assuming his portfolio three years ago and I was surprised that there were still some people left to pay the taxes. Perhaps the minister uses the same kind of mathematics as he applies to other budgetary items. The fact is that through direct taxation, in 1974 this government raised $11 billion. The projection for 1976 is $16 billion in taxes. That is an increase in revenue of some 40 per cent. Let no one be fooled that there has been a tax cut. It is time the minister stated things the way they are. The fact is that the government is going to collect more, not less. The minister said he has always been candid with the Canadian people. Perhaps some of his candid admissions should include the amount of money he is collecting today, relative to the time he assumed this portfolio.
If we are to control government expenditure, it is my opinion that we must first control revenue. Once we control revenue, hopefully the message will get through to the government that control of expenditure should and must also take place. We know that government expenditure is the largest single factor influencing inflation today. The minister has called for voluntary restraints. Bill C-49 is an attempt to regularize many of the minister's tax programs. In reference to voluntary restraints, the minister has rightly suggested that in the last election the people of Canada rejected a policy of price and wage controls. The alternative is voluntary restraint, with the hope that the people of Canada will respond.
If the minister is sincere about voluntary restraint, he should be a disciple of his own principles, and one principle should be to cut government expenditure. Having done that, the minister would be in a morally sound position to ask labour, industry and the average wage earner to reduce the demand on the Canadian economy. When will the minister apply to the government his voluntary restraint program?
There is a provision in the budget under which the first $1,000 in interest earned on savings is tax free. I commend the minister for it, and I have done so before. The Economic Council of Canada in its eleventh review stated that savings were being seriously eroded by inflation and that the government should take steps to protect the savings of Canadians and also to encourage Canadians to save.
However, in the so-called welfare syndrome in which we find ourselves, when you talk to old age pensioners who might have some savings and are getting a small income from those savings, you find that one of the difficulties that arises is that they might be better off if they had spent everything rather than saving, because presently they see their guaranteed income supplement being reduced as they receive other income. For instance, the Canada Pension Plan, which a number of retired persons are now receiving, is reducing their guaranteed income supplement. You might say, on one hand, that that is fine; but on the other hand, these people who contributed to the economy during their working years now feel they are being penalized by this government on the basis that they will receive less from the economy than people with no savings who are simply a burden on society. I say to the minister that there should be a review of the concept of the social welfare state. I think it is also time that we
considered the protection of those who have contributed a great deal and gave them greater benefits than those who were not willing to contribute nearly as much.
Reverting to the matter of voluntary restraints that the minister spoke about, I question whether the minister's message has reached the cabinet, or is he so emasculated in the cabinet that what he says in public has no effect on what happens in cabinet discussions? Publicly and in his speeches, if you read the 36,000 words or so that were contained in the last one, he expresses sentiments with which I mostly agree; but once they are in the confines and privacy of the cabinet room, does the message that the minister states so clearly in public reach his cabinet colleagues? I see no evidence that, first, the message is coming through and, second, that the message is being followed by restraints. When I look at the supplementary estimates and imagine what the estimates might be on March 1, I shudder to think of the budgetary expenditures projected for this government.
I ask the minister, as he meets the various sectors of the community, what has been the outcome of those discussions, and what has been the outcome of discussions he is having within the cabinet in respect of government restraint? I know that to a large extent many of us have been repeating this theme, yet it bears repeating. In my opinion, middle-income earners in Canada, the fellows who go out every day with their lunch buckets and do their daily work, are saying to the government; "spend less. Give me a significant tax cut so that I can spend my money on essential items that I need for myself and my family."
Since 1972 we have seen the Canadian dollar's buying power eroded by roughly 20 per cent. So I would like to repeat the sentiments expressed by my colleague, the hon. member for York-Simcoe (Mr. Stevens), that the government is in a position to initiate a more substantial tax cut than was introduced in the budget. My colleague suggested another 5 per cent, which would amount to roughly another $500 million.
Along with that, I submit to the government that it should cut waste. Let us take another look at the various grants that are being made. You might say, as an elected official, that that is one area in which we should not get involved. But I suggest that we should look at the Canada Council grants being paid out, and at some of the money that is being expended for language training. Let us look at the growth of the public service and, as the public service grows, the facilities that the public service expects.
It is my understanding that this year our budget for public works is increasing by 38 per cent, and the contracts that are coming down for public works are up to 20 per cent higher than those projected in the department. Let us look at some of the waste. I know that various provincial governments have frozen further expansion of government buildings and services for the time being, to release some of the materials for the private sector. I say that it can be done if we have the will to do it, but only if we make the fundamental decision that government growth, and with it government expenditure, has gone far enough.
I say to the minister and his officials that it is time they considered very seriously giving leadership to the federal
[Mr. Epp.l
February 4, 1975

government, to other governments and to the people of Canada in general by reducing government spending and clearly pointing out that we can reduce waste; that some of the programs we have, while good in themselves are not of national priority. Having done that, I think we can also cut revenues and regain to a large extent the confidence that I fear is being lost; that is, the confidence that should exist between the electorate and those whom they elected that they will use the tax money fairly, that they will tax only to the extent that is essential and that constant vigilance is exercised on the waste that can creep into government expenditures. I say to the Minister of Finance that if he embarks upon that road, not only will he have our support but he will have the gratitude of the Canadian people in general and of taxpayers in particular.


Mr. Jack Cullen (Parliamentary Secretary to Minister of Finance):: Mr. Speaker, I have been endeavouring to ascertain-the press have asked me this question-why this debate on second reading seems to be going on and on. Frankly, I have no answer for them. This budget, or a good portion of it, was debated prior to the defeat of the budget on May 8. We had the budget debate in November and now we have the second reading debate, and I expect on clause 1 we will have another debate. So it seems difficult to figure out. Perhaps we will get the answer from one of the hon. members opposite.
While I am on my feet and participating in this debate I should like to congratulate the hon. member for York-Simcoe (Mr. Stevens) on his elevation to the position of Conservative co-critic of financial matters. I notice with interest that the troika has now been reduced to a duet. However, when I look across the chamber I see the Leader of the Opposition (Mr. Stanfield) in the role of playing coach. When the leadership convention is over, I suggest to the hon. member for York-Simcoe that he should hang loose, because that may be a good role for the leader of the opposition and the hon. member for York-Simcoe may then be either part of the troika or shifted to some other area of responsibility.


Robert Lorne Stanfield: The hon. member must be trying to prolong this debate.


Jack Sydney George (Bud) Cullen: At the outset of the debate on second reading of this bill, the hon. member for York-Simcoe called for further tax cuts in addition to the very substantial reductions proposed in the budget, to inject further stimulus into the economy, and he deplored increased government expenditures. After two years, I suggest with respect to the opposition, the wheel has turned full circle. At the time when the Minister of Finance (Mr. Turner) introduced the budget of February, 1973, Conservative spokesmen contended that it was not nearly expansionary enough. The hon. member for Don Valley (Mr. Gillies) said that the deficit should have been more than 2 Vi times that projected in the budget. He contended that the monetary policy should be far more expansive.
The hon. member for Edmonton West (Mr. Lambert) contended that government spending was not being increased nearly enough to promote adequate economic growth. That, it may be remembered, was at a time when the economy was already headed for one of its strongest performances in many years. By the fall of 1973 it became
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apparent to the hon. member for Don Valley that the economy was indeed growing very rapidly, a development which obviously greatly confused him and other members of his party. As the Minister of Finance pointed out at that time-if I may quote my minister-it seemed that the Conservatives were so confused that on Mondays, Wednesdays and Fridays they were calling for more expansionary policies to further accelerate growth of the economy, but on Tuesdays, Thursdays and Saturdays they were calling for more restrictive policies to slow down the growth of the economy.


Walter David Baker: And on Sundays we prayed for the country.


Jack Sydney George (Bud) Cullen: The official opposition never really did determine whether they should be coming or going until the time of the May budget and the subsequent election campaign which they foisted on the Canadian people by their defeat of that budget. Then, instead of proposing to jam down the accelerator they proposed to jam down the brakes. The hon. member for Don Valley called for a budget surplus although his leader indicated that he would settle for a balanced budget. They advocated a drastic slowing of the growth of the money supply, imposition of consumer credit controls and, of course, imposition of wage and price controls, all of which together would very effectively have brought the growth of our economy to a jarring halt.
Looking back, it is perfectly obvious that the Conservatives were once again advocating the wrong policy at the wrong time. But it was not necessary to have the benefit of hindsight to know at the time that the highly restrictive economic policies being advocated by the members of the official opposition were dead wrong. In a paper published only three days before the budget of May, 1974, the Conservative Party's own economic advisers warned strongly against adoption of restrictive economic policies. I quote as follows from that report:
Any government policies aimed at reducing domestic demand may only accentuate an existing trend of demand reduction and do irreparable harm to the confidence required by business in order to undertake investment.
Of course, a drastic reduction in domestic demand was precisely what the leader of the Conservative Party and his followers were proposing to the Canadian people. It is perhaps not surprising that for many months following the federal election last July, the Conservative Party took refuge in total silence on virtually all aspects of general economic policy, a silence which was broken only last Thursday, January 30, by the hon. member for York-Simcoe when he told us that the government was not doing nearly enough to stimulate the economy. As I noted earlier, the wheel has turned full circle.
Notwithstanding the fact that the budget introduced by the Minister of Finance in November was highly expansionary, the hon. member for York-Simcoe called for the injection of further massive stimulus in addition. Recall that the budget projected a budget deficit of $1 billion for 1975-76. The hon. member for York-Simcoe proposed to almost double that deficit. He advocated not only an additional $500 million cut in income taxes but also the com-

February 4, 1975
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plete removal of the sales tax on building materials, which would cost the treasury an additional $380 million, for a total of some $880 million.
How appropriate would it be to virtually double the budget deficit to almost $2 billion? For an answer to that question we might refer to the judgment of the hon. member for Don Valley. On November 25, 1974, the House may recall that during the course of the budget debate the hon. member deplored the size of the deficit already proposed by the Minister of Finance. I quote from his speech at page 1649 of Hansard:
The Minister of Finance and his government are talking now about a budgetary deficit for next year. I suggest that this will produce more inflation. The Minister of Finance obviously does not understand the problems under which the economy is operating at the present time.
If the Minister of Finance does not understand the problems under which the economy is operating at the present time, think how much less is the understanding of the hon. member for York-Simcoe. What is the basis of the contention by the hon. member for York-Simcoe that we should double the budgetary deficit to inject additional stimulus into the economy? Apparently it is based on his understanding that economic forecasts for this year, being put out by responsible organizations, are alarming. As evidence, he quotes two sentences from a post-budget analysis of the economy attributed to Professor Jump and Professor Wilson of the University of Toronto's institute for quantitative analysis, anticipating that growth of the economy this year will fall far below potential.
The two sentences quoted by the hon. member are rather interesting. As it turns out, the evidence he has produced to prove that the economic outlook is alarming is taken out of context from a paper prepared for the Janu-ary-February issue of the Canadian Tax Journal, which is not published and hence is not in the public domain for all to peruse. The authors of this study were kind enough to make a copy of it available after a partial reference was made to it by the hon. member for York-Simcoe. I leave it to the House to judge how fairly he represented their views. I quote in full from the summary of their views at the conclusion of the article:
When judged solely from the standpoint of stabilization policy, the federal budget of November, 1974, must be given high marks. The major fiscal stimulus provided will mitigate the economic slowdown that would otherwise be severe, and will limit the rise in unemployment rates to more tolerable levels. Moreover, these gains are achieved at no cost in terms of increased inflation, because of the deflationary impact of the reduction in the sales tax on building materials.
Combined with the effects of indexing-


Mr. Lambert (Edmonton West):: Oh, boy!


Jack Sydney George (Bud) Cullen: The hon. member for Edmonton West (Mr. Lambert) says, "Oh, boy!" However, it was his colleague who quoted from this report but, unhappily for him, only part of it. I continue quoting:
-transfer payments and income taxes, the November budget helps to ensure that the Canadian economy will continue to grow, despite the recession in the U.S. and the poor economic performance of our overseas trading partners.
While the budget provides some relief to those hurt most by inflation, and clearly does not worsen the inflation rate, inflation nevertheless remains severe over the forecast horizon. With the price deflator of gross national expenditure rising 10.6 per cent in 1975 and consumer

prices rising a bit faster, there certainly remains considerable room for improvement.
That is an honest reporting of the Statement made by the professors, not something taken on a selective basis by the hon. member for York-Simcoe.


John Napier Turner: Hear, hear!


Robert Lorne Stanfield: Filibuster.


Jack Sydney George (Bud) Cullen: It is nice to know that the Leader of the Opposition has woken up and decided that there is a filibuster going on by his colleagues.


John Napier Turner: Hear, hear!


Jack Sydney George (Bud) Cullen: If we just exercised control on those gentlemen, maybe we could get to the clause by clause discussion. I would like to deal briefly with the attempt of the hon. member for York-Simcoe to portray the government as being wildly spendthrift in its expenditure of public funds. There has unquestionably been a large increase in government spending in the past few years. In part, that is due to the impact of inflation on the government's own wage and salary costs and the costs of the goods and services which it buys every year. In even greater measure it is due to the substantially increased expenditures the government has made to help offset the adverse impact of inflation on the Canadian people, such as increased old age pensions and family allowances and subsidization of a number of basic commodities such as oil and milk and beef.
While the subsidization of oil admittedly does not sit well with the western rump of the Conservative Party, I have not heard Conservatives generally voice opposition to any of these programs to help the Canadian people. In fact, hardly a day passes that one Conservative member or , another is not on his feet proposing additional expenditures. On the day that the hon. member for York-Simcoe concluded his remarks in this debate and denounced the big-spending cabinet, his colleagues were particularly active.
The hon. member for Lisgar (Mr. Murta), for example, was urging the government to cough up funds to cover demurrage charges for grain at Vancouver. Immediately afterwards, his friend the hon. member for Brome-Missis-quoi (Mr. Grafftey) alleged that excessive government spending is the chief factor in rising inflation, and the hon. member for Humber-St. George's-St. Barbe (Mr. Marshall) was questioning what the government was going to do about financing construction of a power transmission line from Gull Island, in Labrador, to Newfoundland. He was followed by the hon. member for York-Sunbury (Mr. Howie) who urged the government to subsidize the expansion of regional air services in the Atlantic region. Then the hon. member for St. John's East (Mr. McGrath) wanted to extend the freight rate freeze, which of course would only serve to increase the subsidies the government must pay the railways. Then the hon. member for Esquimalt-Saanich (Mr. Munro) was suggesting there should be no taxes for those over 65. To be fair to the hon. member, one of his points did not get into his speech. He did not indicate that this should apply to all people over 65. I think he would have put a ceiling at somewhere
February 4, 1975

around $10,000 or $12,000. When I questioned him oh this point, he indicated it was his intention to put a ceiling on it.
While the Conservatives preach spending restraint, in practice they almost daily come up with new proposals for increasing government expenditures. In their analysis of the budget, based on the results produced by their economic model, Professor Wilson and Professor Jump of the University of Toronto said that it was clear that the November budget "is providing a major, real expansionary impetus to the economy in 1975". They forecast that "beginning with the second quarter of this year, and carrying through to the end of 1976, the economy will likely achieve real growth at a rate above its potential growth rate."
So, Mr. Speaker, I think the opposition must try to get together and come up with one policy. They should either say there is to be restraint and not call for a lot of expenditures, or they should indicate that we should be spending more and so have a much larger deficit. I think that would be to the detriment of the Canadian economy. If we should find some expansion, in all likelihood we will find the hon. member for York-Simcoe, if he is still in his post, displaying once again the Conservative Party's unerring ability to come up with the wrong policy at the wrong time.


Marcel Joseph Aimé Lambert: Mr. Speaker, could I ask the parliamentary secretary a question? Having given us an exercise in reading-which is unfit for a parliamentary secretary-could he also advise us the name of the author of the speech?


Jack Sydney George (Bud) Cullen: To be fair-


Some hon. Members:: Hear, hear!


Robert Lorne Stanfield: I think it must have been his own work.


Some hon. Members:: Hear, hear!


Jack Sydney George (Bud) Cullen: Mr. Speaker, they asked a question but they will not remain quiet for the answer. I listened to the question, and I think as a courtesy they might listen to my response.


Mr. McKinley:: If you said anything, we would.


Jack Sydney George (Bud) Cullen: Mr. Speaker, I did a bit of research. I am one of the few members of the House who has sat through practically the whole of the debate. I have taken notes of every speech made by members of the opposition parties, and I have asked for clarification and information from officials of the Department of Finance as to what they think of the recommendations some of which I think are ludicrous. I am prepared to concede that I read a great deal from my notes because I did not want to tell the opposition anything that might be wrong. I thought I should do a little research for my speech, rather than mouth off from my seat.


Mr. Bert Hargrave (Medicine Hat):: Mr. Speaker, if I may respond very briefly to the parliamentary secretary, I
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should like to suggest that he bear with us and take a few more notes. In my remarks today in the second reading debate on the amendments to the Income Tax Act, I want to refer specifically to those items covered in clause 38(7) on pages 89 and 90. This clause deals with the intergenerational transfer of farm lands and farm property. My special concern relates to the current status of this provision in that it only applies to individual family farm transfers, such transfers that take place during the lifetime of a farmer or on the death of a farmer.
When this exceedingly detailed bill was introduced, my first interest was to see if these same roll-over provisions that now apply to individual farm transfers would apply as well to incorporated family farms and farm partnerships. It is clear that this provision is not covered. In my opinion, this is a very serious omission. Representations were made to the Minister of Finance (Mr. Turner) on this subject on March 13 last year when the tax committee of the Canadian Cattleman's Association met with the minister. At that time the minister very graciously invited me to attend and participate in this meeting, along with the hon. member for Kamloops-Caribou (Mr. Marchand). I am sure it was because of our very obvious involvement in and concern for the cattle industry and this particular aspect of it that we were included.
I hasten to point out, however, that my interest and concern in this subject is not limited to cattle operations but extends to all farm operations. This concern must surely relate to any farming operation that has decided to either incorporate as a family farm or as a family partnership. Perhaps we should remind ourselves that farmers have been encouraged to go this route by both federal and provincial governments over the years. One of the most obvious and practical advantages of such a route was that wives could become legally involved in a farming operation and be paid for their services; children could be encouraged to become more involved before there was a need for transfer of ownership due to retirement or death.
It is important to remember that while only some 7 per cent of our Canadian farms are incorporated, they account for 28 per cent of our total farm production. These figures do not include farm partnerships. We should also take note of the fact that while we have some 336,000 farmers in Canada, about one-third of this number, 113,000, produce 80 per cent of our total farm production. It is a personal view, of course, but I make a clear distinction between a so-called family farm corporation and a business corporation in a non-farm sector of our society. Surely the fundamental reason for farm incorporation is to enhance and preserve the family farm as a meaningful farm unit.
While the roll-over provision is the most important aspect of my representations, there are two other items which are also important since they also relate to incorporated family farms. I refer to the provisions for five-year averaging for income tax purposes and the principal resident exemption under the capital gains tax provision. These options are not available to incorporated family farms. Surely there can be no argument that a farm corporation involving a farm family is entitled to and needs a residence as distinct from a business corporation that requires an office or headquarters but not a residence.

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It is a well known fact of farm life that the capital requirements of a farm operation are very high, primarily because of land values but also due to the very high capital cost of breeding herds. These farm capital costs are so high as to make returns on investment in farming much lower than comparable business operations. I suggest that a 2 per cent or 3 per cent return on invested farm capital is quite common, in comparison to rates of two or three times this return in business operations. Taxes payable by any family farm operation, whether incorporated or not, require a higher percentage of the profit structure. This is especially true when the roll-over provision is not applied to incorporated farms.
At the meeting I referred to earlier with the Minister of Finance in March, 1974, there appeared to be genuine interest and sympathy from the minister with respect to this matter. He suggested to our tax committee that because of the implications of our request, the so-called small business side of our society had to be seriously considered and he could make no decision at that time. He also suggested that his department must determine, in fairness to small businesses, if the roll-over provisions for small family businesses should also apply to them. To use the current phrase, I ask sincerely, why not? Surely a suitable definition of the term "small business" or "small family business" could be arrived at. This possibility could be given serious consideration. I think the minister has got into difficulty because he cannot adequately define a small business. In summary, I suggest that clause 38(7) of Bill C-49 has indeed done justice to the individual family farm, but at the same time it has drawn attention to a remaining injustice to other family farm businesses which do not enjoy this privilege.
Last night the hon. member for Victoria (Mr. McKinnon) made some practical comments about the peculiar situation relating to perpetual bonds. The matter I am referring to concerns at least 300,000 Canadians who have an interest in Canadian Government annuities. It seems to me that Bill C-49, which relates to income tax amendments, would have been an ideal vehicle for the government to bring about compensation in an up to date and meaningful way for the use of private funds from annuities, since these funds now earn interest rates which are less than half the rates which could be earned in other types of investment.
This is a subject I hear about quite regularly, mostly from constituents who have paid into government annuities for many years and now are approaching retirement. The official response of the Minister of Finance or his parliamentary secretary seems to be something like this, "A contract is a contract", with absolutely no action except to say they are trying to resolve the matter. Surely the government should recognize its immense moral responsibility to find a fair and just solution for its annuity holders.
If the government cannot bring annuity interest and pay-out rates into line with today's prices, or allow annuity holders to regain their capital investment to reinvest at a much fairer return, would the minister not give serious consideration to implementing flexible interest rates for annuities which reflect current levels of interest in the

economy? This has been done in other countries, namely, the United States and the United Kingdom. Or, why cannot the minister permit the government to make fully deductible pay-outs to annuity holders for the full term of the contract? Why could this not be done, instead of allowing premiums to be tax deductible only for that period prior to allowing premiums as tax deductible items? Finally, I suggest that annuity holders are entitled to a guarantee that the principal will be returned, instead of a guarantee made in some cases that payments will be made only as long as the annuity-holder lives.


Mr. Jack Murta (Lisgar):: Madam Speaker, in participating in the debate on Bill C-49 I wish to speak about certain aspects which may not have been covered so far. I am particularly interested in one aspect, that of additional income tax cuts which would bring the total tax reduction to 8 per cent. I hope to show, before I finish speaking, that this can be done. If we limited government revenues we could control or reduce some government expenditures.
I think all Canadians, and people in other countries as well, are concerned about the escalating cost of government and escalating government expenditures. Bearing this in mind, it is interesting to note that in the 1974 fiscal year the government spent some $20 billion. In the 1976 fiscal year, according to estimates, government expenditures will rise to $28.2 billion, or by 44 per cent over two years. Contrary to what Liberal supporters have said, I and my colleagues believe that if we were to try we could bring what appear to be uncontrollable government expenditures under control. The Canadian people want this; it is what they expect their leaders to do. The calls for restraint made by the Minister of Finance (Mr. Turner) to various segments of our society will be helpful, but that is not enough. The government and parliament must show that we mean business, and one way of showing this is by further cutting taxes.
Consider personal income taxes. In the 1974 fiscal year the government took in some $7,926 million in personal income tax. In 1976 it will take in, according to estimates, $11,350 million in personal income taxes. The government intends to take from the Canadian people by way of tax an extra $3.4 billion in two years, or 40 per cent more in personal income taxes. This situation, given the present rate of inflation, alarms the vast majority of Canadians.
In 1974 the government took in, through direct taxes- and I have mentioned income tax-$11 billion. By 1976 this amount will have risen to something like $15.9 billion. We shall see a 40 per cent increase, or almost $5 billion more paid in taxes, in two years. If the money is available to the government-and I think this applies to every government in the western world-it will find ways of spending it on different programs. Make no mistake about it, the Government of Canada has the money. It has deposits of almost $5 billion with the Bank of Canada. It could easily give $500 million back to Canadians in the form of tax cuts at this time. Apart from putting more money into people's pockets, this move would instil confidence in our economy and would enable us better to tackle the problems which face us in 1975. The Canadian taxpayer, I think all in this chamber would agree, deserves a break: he has been under continuous pressure for too many years.
February 4, 1975

I think it is commonly said that our taxation system is destroying our work ethic. I think this is true of a good many people who are trying to earn a decent living. When you travel throughout the large cities and small towns of this country you sometimes wonder why people do work, with the taxation system we have at the present time.
If we have the money, and I believe we do, we should give some of it back to the Canadian people as a stimulus. If this were to occur we could look to stimulating the economy; we could look to restrained government spending, because government would be far more aware of the amount of money available. Such a step would be antiinflationary. The reduction would be reflected, in terms of most individual taxpayers, in a saving of somewhere between $50 and $300 for every person in Canada, with this kind of tax break. It is certainly logical at this time, for the reasons I have given.
I hope the Minister of Finance will seriously consider this suggestion, which I think would receive speedy passage by all parties in this House. If such a tax measure were introduced, it would certainly help the Canadian people, and they deserve to be helped.


David Réal Caouette: Madam Speaker, Bill C-49 is tantamount to some kind of a tax reform: it reduces or increases someone's tax burden, and tries to help someone else. It amounts to changing money from one pocket to another.
In 1865, Madam Speaker, President Abraham Lincoln, probably the greatest president in the entire history of the United States, delivered a speech on the occasion of the Civil War which pitted the North against the South. If I quote from Abraham Lincoln's speech, it is because everybody here is talking about government spending and the need to reduce it to the bare minimum, in spite of the fact that this might entail an increase in unemployment, a slow down in the building industry or in the development of our economic and natural resources. Many hon. members, especially within the Progressive Conservative Party, are eager to see the government reduce their spending, even if this would mean delaying progress in Canada. That is why I wish to quote the following from Abraham Lincoln's speech:

I have two great enemies-the southern army in front of me, and the financial institutions in the rear. Of the two, the one behind is my greatest foe.	*

This is a President of the United States speaking. How I wish I had heard the Leader of the Opposition say something like that!

The government should create, issue and circulate all the currency required to satisfy the spending power of the government and the buying power of consumers.

President Lincoln was not a fool, Madam Speaker, and he was concerned not with the army and the guns that he had facing him, but with the financiers behind him who
Income Tax
would not put up with the decisions of his government. I continue on:

The privilege of creating and issuing money is not only the supreme prerogative of government, it is the government's greatest creative opportunity. The people can and will be furnished with a currency as safe as their own country. Money will cease to be master and become the servant of the people. Democracy will rise superior to the money power.

Madam Speaker, Lincoln was right at that time, and he was criticized for having had green backs printed to finance food and clothing supplies for the Northern armies. Is it not a fact that it was with those green backs that he won the war? In a moment, we shall be listening to the hon. minister, who has just come in, speaking about fiscal, financial and other matters, all related to the development of oil resources in Alberta. The problem is a monetary one, not a problem of oil sands, of manpower, of physical or intellectual capacity, it is a monetary problem. There is no money.
Madam Speaker, one object of the new fiscal system is even to reduce taxes in one sector to increase them in another. At the same time, we hear speeches about inflation, about the prices that are too high because there are shortages.
The Minister of Agriculture is not here this afternoon. He is the one who told the farmers yesterday, as it was reported in the newspapers: You are overproducing. There is an oversupply of foodstuff. This is why there are people starving in Montreal, in smaller communities, and this is why others have almost reached the point of starvation in the Gaspe peninsula and the riding of Bonaventure-iles-de-la-Madeleine-


Mr. Bechard:: That is not so!


David Réal Caouette: *-with pittance
cheques of $145 a month, in Bonaventure proper-


Albert Béchard: No, not in Bonaventure.


David Réal Caouette: -in Gaspe, it is all the
same.


Albert Béchard: You are insulting the people of Gaspe.


David Réal Caouette: No, I am not. It is the system that you keep on supporting in this House that I blame, not the people of your area. But I blame the representative of that area, however, because he is not doing his duty.


Albert Béchard: I thank the hon. member. The representative of Bonaventure-Iles-de-la-Madeleine does not disappear for months at a time, though.


David Réal Caouette: This is probably none of the business of the member for Bonaventure-Iles-de-la-Madeleine. If he wants to know why I am not here, I can inform him.


Albert Béchard: That is none of your business either.

February 4, 1975
Income Tax


David Réal Caouette: But your constituents' business is my business.


Albert Béchard: Mind your own business.


David Réal Caouette: That's it, I mind it precisely. If you should mind yours too, instead of just fooling around with politics, things would be a lot better. Why don't you serve your constituents and put claims on their behalf?


Albert Béchard: That is precisely what you have been doing, fooling around with politics.


David Réal Caouette: Madam Speaker,
freaks like the hon. member for Bonaventure-Iles-de-la-Madeleine go over there and pity miserable people, but they are the ones who uphold this system which holds them in misery over there.
Madam Speaker, the Minister of Agriculture says there is an agricultural surplus and farmers should stop producing and in the meanwhile some people badly want essentials, food, clothing. There are children in Montreal who have no clothes to wear to go to school. That is what we are witnessing in 1975. The Minister of Agriculture says: Stop producing, there is overproduction. We do not want the government to buy agricultural surpluses to enable farmers to earn a living until those products get sold. But if people do not have the necessary purchasing power to buy those products, there will obviously be overproduction. Everybody knows that.
Madam Speaker, what are we saying? We are now witnessing, as my colleague the hon. member for Bellechasse (Mr. Lambert) said earlier, a crazy race to gear wages to the cost of living and to gear the cost of living to wages. As soon as they start indexing, prices go up. What is the outcome of all that? The worker who strikes to have his wage geared to the cost of living is a loser: prices go up higher and faster than wages do. And anyway, even if the worker comes back from the factory with a bigger amount of money, if his groceries bag keeps shrinking, what good is it to him? That is what inflation is all about!
Will our taxation system change anything in that field? Absolutely not. Had a monetary reform been considered instead of a fiscal reform, as Lincoln said when he stated that the supreme responsibility of a government is to create its own credit to finance its expenses, and those of the consumers of that country, that credit would have been as sound as the country we live in. We request, here, a guaranteed annual income instead of tax reforms, and interest-free loans to the provinces; today, the Bank of Canada may, and is authorized to make loans, but only for periods of up to six months and for up to 25 per cent of the provincial budgets; Quebec could borrow two billions from the Bank of Canada this very afternoon, but only for a period not exceeding six months.
I introduced a bill to this effect in this House to extend the period from six months to 60 years. Our provinces deserve the same treatment that we give India, South America, Africa, that is, 60-year loans. When my bill was put before the House, it was killed. The provinces are not to be helped. We cannot afford to change from six months

to sixty years the period stipulated in the Bank of Canada Act.
Madam Speaker, the hon. member for Bonaventure-Iles-de-la-Madeleine (Mr. Bechard) voted against the motion allowing interest-free loans to the provinces. After that, he says he represents his constituents.


Albert Béchard: I voted against the philosophy of the Social Credit Party. I am not a Social Crediter, I am a Liberal member.


David Réal Caouette: This is the kind of advertisement the people from Magdalen Islands are receiving. The member just said so. All he does is vote against the Social Credit Party, that is all. What intelligence for a notary! Madam Speaker-


Albert Béchard: What demagogy!


David Réal Caouette: Yes, I understand, what demagogy!
When I think that this member once sat at your place, Madam Speaker, when he was playing politics-


Albert Béchard: This is not true!


David Réal Caouette: -in the Chair instead of respecting the political views of the members.


Albert Béchard: This is not true!


David Réal Caouette: Madam Speaker, if the hat fits him, I'll put it on him right down to his ears: I say it is horrible-


Albert Béchard: Madam Speaker, may I put a question to the hon. member for Temiscamingue?


David Réal Caouette: No, Madam Speaker, not until I am through with my speech. No question! Madam Speaker, when we introduce-


The Acting Speaker (Mrs. Morin):: Order, please. Does the hon. member wish to ask a question?


Albert Béchard: Madam Speaker, I wish to ask one, but-


David Réal Caouette: Later, after I am finished with my remarks.


Albert Béchard: The hon. member is unable to answer!


David Réal Caouette: The hon. member never rises to speak, he has no right to speak. Moreover, he does not have the heart to do so, either. Madam Speaker-


Albert Béchard: You attend once a month!


David Réal Caouette: Yes, when I am in hospital, I would not want to see that man in front of me or beside me in my room.
Madam Speaker-


Albert Béchard: That is not funny!


An hon. Member:: He is a mere cipher!
February 4, 1975


David Réal Caouette: Exactly! As the hon. member just said, Madam Speaker, he is a mere cipher, and he will always be!


Albert Béchard: Do not judge if you do not want to be judged!


David Réal Caouette: I come back to what we are advocating in the House. Instead of taxation, there will still be taxation. But to have sound taxation, I think we must have first of all a sound financial system. And that is the system we do not have. That was the system which was condemned in the United States by President Lincoln, Madam Speaker. I believe Lincoln was right, I believe we are right. I am not saying Lincoln was a Social Crediter, no, but he was talking and thinking like a Social Crediter, and he was right as the Social Crediters are right presently. That is why Bill C-49 will change nothing, nor will it help anybody either. It is only a transfer of tax from one pocket to another, and everything will be the same as before.
As long as we fail to take the bull by the horns, as long as we fail to put the Bank of Canada at the service of Canada, Madam Speaker, we will not be able to make head nor tail of it. The government is now leading Canada into the worst economic crisis the country has ever seen. And we will fight any piece of legislation which prevents the Canadian people from deriving full benefit from their natural wealth and their country.


Mr. Harvie Andre (Calgary Centre):: Madam Speaker, I have no interest in prolonging this debate, unlike the hon. member from Sarnia, but there are a few points I wish to make. As the Minister of Finance (Mr. Turner) might expect, I wish primarily to discuss the tax on resources, partly because it involves what is probably the most important part of the bill before us and partly because it is of direct concern to my own constituency and to the province from which I come. However, I note it is nearly five o'clock.


The Acting Speaker (Mrs. Morin):: Order. As the hon. member recognizes, it is almost five o'clock. Perhaps before we revert to motions the Chair might be permitted to announce the questions which will be debated on the adjournment motion tonight.



PROCEEDINGS ON ADJOURNMENT MOTION


The Acting Speaker (Mrs. Morin):: It is my duty, pursuant to Standing Order 40, to inform the House that the questions to be raised tonight at the time of adjournment are as follows: the hon. member for Victoria (Mr. McKinnon)-National defence-Canadian position on use of nuclear weapons; the hon. member for Richmond (Mr. Tar Sands
Beaudoin)-Administration of justice-Suggested restoration of capital punishment; the hon. member for Provench-er (Mr. Epp)-External affairs-Alleged persecution of Christians in Chad.
Pursuant to the order made today, the House will now revert to motions.



ROUTINE PROCEEDINGS


Donald Stovel Macdonald: I am most happy, Madam Speaker, to be able to inform parliament and the Canadian public this evening that the Syncrude project will go ahead.


Some hon. Members:: Hear, hear!


Donald Stovel Macdonald: Agreement in principle has been reached on the financing of the estimated $2 billion cost of this second synthetic petroleum plant in the Athabasca oil sands. As I speak to the House, this announcement is being made simultaneously in two provincial capitals by the Government of Alberta and the Government of Ontario. We are all new partners in Syncrude. We have joined together with three of the original Syncrude participants, Imperial Oil Ltd., Canada-Cities Service Ltd. and Gulf Canada Ltd., to ensure that this project will be accomplished. Immediately, activity will be stepped up at Mildred Lake to complete the Syncrude plant on schedule, to bring on stream by 1978 this plant which will provide at ultimate capacity more than 125,000 barrels per day of crude oil for Canadians.
When Atlantic Richfield Canada Limited announced its withdrawal from the project late last year because of drastic increases in estimated capital and operating costs, the federal government took the position that it would do all it reasonably could to assure the survival of the project. Our efforts, and those of the provinces of Alberta and Ontario and of the three companies, have been intense, culminating in a ten-hour negotiating session in Winnipeg yesterday attended by my colleague, the President of the Treasury Board (Mr. Chretien), myself, the Premier of Ontario, the Premier of Alberta and the chief executives of the three oil companies.
As a result of these negotiations the federal government, on behalf of the citizens of Canada, will acquire a 15 per cent ownership in Syncrude Canada Ltd. It will, over the course of construction of the plant, invest $300 million in equity funds. I believe this investment will provide an auspicious beginning for the portfolio of PetroCanada.
The province of Alberta will take a 10 per cent ownership in Syncrude, with an equity investment of $200 million. As well, Alberta will make a loan to the project of

February 4, 1975
Tar Sands
$200 million. In addition, Alberta will invest between $500 million and $600 million in a power plant to serve the project, in a pipeline and in housing and other infrastructure related to this major resource development project in northern Alberta. The province of Ontario, whose participation is most welcomed by the federal government, will acquire a 5 per cent equity interest in Syncrude, with an investment of $100 million.
Together, the three new partners in Syncrude will acquire a 30 per cent equity interest in Syncrude, on behalf of the public, with, of course, further potential equity interest if Alberta chooses to exercise the convertible debentures and the 20 per cent option it now has outstanding.
For the moment, the private companies will retain a 70 per cent equity interest in the project. To do this they will have to increase their investment of $1,000 million, which they had previously committed, by a further investment of $400 million. Half of this increase will be financed, as I have already noted, by loans from the Alberta government, secured by convertible debentures.
The significance of this project goes far beyond the construction of this one plant, as immense an endeavour as it is. There are, in the Athabasca oil sands, an estimated 300 billion barrels of oil. Under current and immediate prospective conditions, however, it remains a very high-cost oil and special arrangements are necessary to assure its commercial production.
Over the long run, the technological knowledge and experience the partners of Syncrude will gain will, I am sure, lead to the further successful development of this vast resource. We will at the same time continue our interest in the development of technologies which will exploit the full potential of the oil sands.
The potential of the oil sands, along with the Mackenzie Delta, to give Canada self-reliance in petroleum is indeed heartening. I believe, too, that I need only briefly draw the attention of hon. members to the substantial job-creating aspects of this project. I would conclude by underlining that there is more significance in this agreement than that the Syncrude project will be proceeded with, for what it in effect signifies is the positive, co-operative attitude of governments and industry in this country to meet the challenge of providing Canadians with sufficient and secure energy.


Some hon. Members:: Hear, hear!


Thomas Clement (Tommy) Douglas: Before the minister completes his statement, Madam Speaker, would he clarify one point? Do I take it that the concessions to which he referred last Thursday are also part of the agreement, or have those been dropped?


Donald Stovel Macdonald: In addition to the investments, Madam Speaker, the points really reached in the discussion are four. The agreement against prorating by both Alberta and Canada was agreed to. The second was the confirmation of taxation opinions previously given. As I said last Friday, and I repeat again, that was confirmed in writing. The third was in respect of the product of the Syncrude plant alone, not of any other production, being sold at internationally-oriented prices, and that was con-

firmed. Of course, the fourth was to have additional participants, and that is what I have announced today.


Hon. Alvin Hamilton (Qu'Appelle-Moose Mountain):: Madam Speaker, the oil sands of Athabasca represent Canada's ace in the hole in respect of national security of supply. The announcement we heard this afternoon is in one respect-that is, security of supply in the country- one small step forward. It is one small step toward rational behaviour between governments and industry in dealing with a vital national interest.
I want to point out very clearly that this deal as set up is extremely marginal and dangerous economically as a business venture. What the government does not seem to understand, and I suggest what the provinces and industry do not seem to understand, is that we are now in an age of capital-intensive investment. Even the buying of a home is a capital-intensive investment, for the great bulk of the money spent by the home buyer is in interest on the capital. The same thing applies to a production firm, a manufacturing industry or a resource industry about which we are talking today.
According to even the most immature and elementary type of economist, as well as the better ones, there are only two ways to get at this problem of capital-intensive investment which faces the whole world, not just Canada. The first is to find a way of increasing the capital stock of nations and industries, and that boils down to one phrase-savings programs enforced by governments, and by a determination on the part of individuals to save more. We have to increase capital stock to meet this tremendous capital demand, not only in this one enterprise but in the many that face us. The second answer to this problem is the one I suggested last Thursday night in this House; that is, we must find a way of increasing the velocity of use of capital and speed up that use two or three times. In this way we would in effect achieve the same result as saving two or three times as much capital stock. I make that point at the beginning of my remarks to put into perspective what I now have to say in detail.
The proposal before us does not face up to worldwide as well as Canadian needs. It is just a formula for sharing economic rent; 70 per cent to private capital and 30 per cent to governments. There is really nothing here for individuals. I would simply ask the Minister of Finance (Mr. Turner)-because in the long run he will carry the can, and not the "Petro-Can" either-what will happen if the world price drops? I worked out roughly what this would mean in economic details. Before mentioning those rough analyses let me state that in the proposal I made to the government the other night I suggested to the Minister of Finance that to get out of this mess, not only in respect of this venture but in respect of others as well, he should consult the provinces and the companies in respect of new projects which would accelerate the flow of capital.
In that proposal I used the figure given by the Minister of Energy, Mines and Resources (Mr. Macdonald) to the committee when he was talking about breaking this down into economic rent, and the minister said 50 per cent to the provinces, 20 per cent to the federal government and 30 per cent in equity. The technique of doing what I suggested is putting in a leverage factor in order to use the debt capital, and fast payback so there would be more money
February 4, 1975

for everybody. I just repeat this proposal now and will say nothing more about it.
Let me give the House the figures. Using round figures, if the world price is $6.50 a barrel, this proposal would pay the costs of operation and interest at 10 per cent, and nothing more. There is no possibility of even the repayment of capital and no economic rent for the people or anybody else. At $11 a barrel this proposal will pay the costs of operating, the interest cost and just barely pay back the principal; and still there is no economic rent at that price. At $12 a barrel there will be approximately $60 million a year in economic rent, 70 per cent to the companies and 30 per cent to the people in the form of the three governments participating.
I put these rough figures before the House to show that we have no choice but to support any move that keeps the venture going, in the interests of this nation. However, that does not prevent us, as responsible members representing the people of Canada, pointing out that we have gone into a joint venture that is completely marginal and dangerous unless there is world agreement on price-even the Americans know that-and unless there is a way of getting out of that debt fast so that we can be in a position to provide an economic rent for the people who own this resource.
I understand from the minister's statement that in this particular instance the tar sands project will be removed from any fear of prorationing, that we will go back to the federal tax of 1973, provincially and federally, and that we will have the world price in this single case. Does he think for a moment that every mining company in this country, every resource economy will not be down here very fast asking for an end to discrimination in the same type of deal? I am simply saying that you cannot run this country, or any other country or business on the basis of discrimination of this magnitude.


Some hon. Members:: Hear, hear!


Francis Alvin George Hamilton: I have suggested to the Minister of Finance that he should get out of this bind, because he is caught in a trap, by dividing Bill C-49 and not proclaiming the section on non-deductibility until he can get a more rational type of proposal that is not only economic for the people of Canada but economic for the companies as well. Then he should sit down with them and look at various proposals-there are several-and arrive at a deal that is both economically sound and fair and equitable to the people of the province who own this resource, and fair and equitable to the federal taxpayer who has to pay the cost of all the things we have to do to run this country, as well as fair to the people who have invested in the project.
I conclude by asking whether it is not about time in Canada's economic history, when the whole world is looking at us and our resources, to give an opportunity to Canadians as individuals to own this country. That is lacking in this proposal. Is it not time that we took advantage of the fact that there is an imbalance of capital accumulation in the world, where we have one group of nations with a tremendous volume of capital trying to find
Tar Sands
a place to put it? We would be glad to welcome that capital if Canadians had 100 per cent ownership and perhaps a few percentage points were given to the companies for their contribution, their efficiency and their management.
This is the type of deal that I think you could expect from government in this day and age. This announcement is only a very small step, but it is not too late, if the government seeks new light and new ideas, to discuss it with other people. I have to support the proposal because my country demands it, but that does not stop me suggesting that there are better ways of doing it and that this is the least acceptable of all choices.


Thomas Clement (Tommy) Douglas: Madam Speaker, yesterday the real government which controls and directs the oil policy of Canada met in Winnipeg and summoned the premiers of Alberta and Ontario and the two gold-dust twins from the federal government, the Minister of Energy, Mines and Resources (Mr. Macdonald) and the President of the Treasury Board (Mr. Chretien). For some weeks now the press has been referring to these discussions with Syncrude as a poker game. Certainly yesterday the card-sharps took the innocents to the cleaners. The president of Imperial Oil, the subsidiary of Exxon, is not called Armstrong for nothing.


Some hon. Members:: Oh, oh!


Thomas Clement (Tommy) Douglas: I certainly think that he has strong-armed the government representatives and brought about a deal that will benefit nobody but the oil industry. The deal as it now stands and as the minister has outlined, if we understand it-there may be further clarifications coming during this session- represents the greatest sell-out of our natural resources in the history of Canada.
The minister was quite right when he said that this particular project goes far beyond the construction of one plant. The government is now laying down a policy which will apply to the development of the oil sands in Canada. The minister need not think for a moment that he can make this agreement with the partners of Syncrude and not do the same for Shell Oil, Home Oil, Petrofina or any of the other companies which have commitments to build plants in the Athabasca tar sands. He will have to give them the same concessions. So we are now laying down the policy for the development of what the minister has said is in excess of 300 billion barrels of oil, 50 billion barrels of which is on the surface and readily accessible. As a matter of fact, the minister's own department officials have given estimates as high as 630 billion barrels. This is a larger concentration of oil than is to be found in the Middle East.
There are problems with extraction, particularly in the in situ deposits, and there are environmental problems to be resolved. But assuming that modern technology can resolve these problems, Canada has within its borders one of the greatest reservoirs of oil in the world. And what are we proposing to do with it? We are proposing to turn it over to a collection of U.S. oil companies on terms that, I suggest to the minister, will be condemned by future generations.

February 4, 1975
Tar Sands
What are the terms as we understand them? In the minister's statement last Thursday, as recorded at page 2741 of Hansard and reiterated today, first, they will be freed from prorationing. That can open up the whole question of whether they can export a large quantity of this oil. Second, they will be allowed to deduct certain payments to the Alberta government for income tax purposes and, most serious of all, they will be allowed, says the minister, to charge the international-orientated price. That is a new term, but the minister is quoted by the press as having said outside the House that by that term he means the Montreal price with adjustments for transportation. Whether transportation will be added or subtracted, he does not say; but it means that the people of Canada will pay virtually the world price set by the OPEC countries for the privilege of using their own oil.


Some hon. Members:: Shame.


Thomas Clement (Tommy) Douglas: Today the minister tells us of the financial commitments which are now being made. The Government of Canada will take a $300 million equity, Alberta a $200 million equity, Ontario a $100 million equity. This is a 30 per cent equity. What will the people of Canada get for their 30 per cent equity? Someone says that they will get 30 per cent of the dividends. What dividends?


An hon. Member:: Oil.


Thomas Clement (Tommy) Douglas: I will come to oil in a moment. Originally, Syncrude was set up with the specific understanding that it would not make profits. It was set up as a service plant to which each of the four partners were to contribute a certain amount of equity. They were to pay the operating costs of the plant in the same proportion, and they were to receive oil at the cost of processing it in the same proportion as their equity.
Syncrude was never intended to provide a profit. Unless the minister has some agreement with Syncrude as to the price, what dividends will the Canadian people get for their 30 per cent investment? If it is to be decided by the board of directors of Syncrude, the three governments concerned will be in a minority position and the decision whether this oil will be sold to the respective partners at cost will be determined by the multinational corporations in the boardrooms of the United States.
If the minister can tell us in the next day or two, when we are asking questions, that he has an agreement regarding the price at which Syncrude will sell its oil to the partners in the consortium, then we will know whether there will be any dividends. But if Syncrude is operated on the basis on which it was originally established, there will be virtually no dividends. The Canadian people are going to put up 30 per cent of the capital, and what are they going to get?


Mr. Guay (St. Boniface):: Oil.


Thomas Clement (Tommy) Douglas: The
hon. member for St. Boniface (Mr. Guay) says Canadians are going to get oil. Canadians are going to get oil at the world price. We are going to get oil at $5 or $6 per bar rel

more than we are paying today. That is what we are going to get. The people who are going to make money out of that oil are the multinational corporations, and the contribution we will have made is to put up 30 per cent of the capital.


Some hon. Members:: Oh, oh!


An hon. Member:: Do you want low prices, or dividends?


Thomas Clement (Tommy) Douglas: In
addition, the parent companies of Imperial, Exxon and Bechtel, the main contractors, who have all the licences on the technology for work which was mainly done in Canada, out of public funds, by the Alberta Research Council and the National Research Council of Canada, will be paid millions of dollars in royalties and licence fees for technology which was developed in this country. The people who are going to benefit from this deal are Imperial Oil, Exxon, Gulf and City Services. Those companies are going to benefit, and not the Canadian people.
We in this party have urged the government to develop the Athabasca oil sands under public ownership, either the federal government alone or in conjunction with the province of Alberta and any other provinces which are willing to join.


Some hon. Members:: Hear, hear!


Thomas Clement (Tommy) Douglas: When I asked the Minister of Energy, Mines and Resources on Friday why we did not do this, he said that there are limits to the amount of money we can invest. Surely the minister does not believe that. If the Canadian people can spend hundreds of millions of dollars on the Olympic Games, if the Canadian people can spend hundreds of millions of dollars producing CANDU reactors, if the Canadian people in all the provinces with the exception of one can invest hundreds of millions of dollars to generate and distribute electric power, the Canadian people can find the money to produce oil for the consumers of this country at reasonable and just prices.
The proposal which the minister has made today makes a farce out of the minister's statement that we are going to set up a national petroleum corporation. The national petroleum corporation's opportunity lay in the oil sands. If we set up a national petroleum corporation and it does not have a major equity in developing the oil sands, it will be relegated to the task of doing some drilling up in the Beaufort Sea.
I conclude by saying that the whole trend in the world today is toward public ownership and the development of oil resources. People in every country of the world, through their governments, have taken over the development of oil because it has become so essential to our way of life. Our government lags far behind public opinion, as the Gallup poll shows in a survey which was taken last summer. The time is long past for the resources of this country, which belong to the people, to be developed by the people and for the people.
February 4, 1975


Mr. Rene Matte (Champlain):: Madam Speaker, this statement by the minister really has tremendous importance because of the incredible value oil has acquired in the whole world. However, I think that, at first sight we must recognize we have not sufficient data on the terms of this agreement to be able to make a good judgment.
Madam Speaker, it is strange that the government is acting at a moment when multibillionaire multinational companies are involved in a kind of blackmailing to force the government to contribute financially.
If I may reflect popular opinion, how come billion dollar multinational companies themselves are incapable of investing the full amount needed for the Athabaska tar sands operation, unless the operation is not profitable? If it is unprofitable for a capitalistic corporation, in the worst sense of the phrase, why not then think it over, if we wanted to achieve the objective?
In my opinion, the true objective should be that the oil sands potential should allow Canada to cover its oil needs from its own resources, which is indeed a comforting prospect.
I obviously support that objective, if it is to be met, and if corporations find it impossible to invest all the money needed, because they expect the operation will not be profitable. What if, within a year or two, huge oil deposits are discovered, making oil readily available? What will happen to the investment in that company, where it is recognized the oil will be costly, and special measures are needed to ensure competitive production? What are those special measures? What is the nature of the possible relief given the corporations? What is the exact role of the province of Alberta? Will it be taking royalties? We hear it has a 10 percent participation. But on top of that, Alberta will loan money to companies holding 70 per cent participation. I feel there is absolute confusion there, and I wonder if we are not showing too much haste in committing ourselves that way-I feel compelled to say, as did Shell Canada Ltd.-in some sort of adventure.
The aim is to cover the oil needs of all Canadians, of those who have a special need for it, those in eastern Canada. How come Quebec, New Brunswick, Nova Scotia or Newfoundland do not participate? I suggest it was the federal government's role to create in every Canadian province a sort of climate conducive to some form of co-operative in which all the provinces would have contributed, where they would have provided the funds or established very specific conditions even though this may have required calls for tenders for companies to administer and carry out the development of the sands.
Since this production cannot be left in the hands of just anyone who could do what he wanted, I am sure that all members will agree that Gulf Oil Canada Limited or Imperial Oil Limited could not take all the oil from the tar sands and sell to the United States, England or France. If we say that this oil is for Canadians, it would have to be exclusively to guarantee Canadian consumption. Yet those who need it, like Quebec and all eastern Canada, are not represented.
Income Tax
In my opinion, there is something which is not clear. Maybe this will prove a success. If this is the case, it will bring only 15 per cent to the government and 70 percent to the others. We should have been told what were the conditions set by Alberta since, as a source of energy, this oil is controlled by the provinces. This is why all the provinces should have benefited from it. In my opinion, the minister should have communicated with all his provincial colleagues and urged them to come to an understanding and truly ensure supply throughout Canada. As far as I can see, the Ottawa River will be the territorial boundary, since eastern Canada will continue to get its oil from foreign sources.
I believe that something is not clear. It is therefore impossible to make a judgment and say whether this is good or not. I greatly fear it is no good and I think that there should have been some kind of co-operative set up by the federal government, the provinces and private enterprise. Some might say it is a fad but why didn't anyone think of financing these two billion through new, interest free credits from the Bank of Canada? It doesn't matter that oil extracted from the tar sands is costing more than the product coming from Saudi Arabian wells; there would have been no problem since it would simply have been financed through the physical capacity of Canada to develop these sands.

*the Acting Speaker (Mrs. Morin): Pursuant to the special order made earlier today we will now revert to the business which was before the House at five o'clock.



GOVERNMENT ORDERS


[Stage Direction]
The House resumed consideration of the motion of Mr. Turner (Ottawa-Carleton) that Bill C-49, to amend the statute law relating to income tax, be read the second time and referred to committee of the whole.
Harvie Andre: Madam Speaker, as I indicated in my opening remarks I want to spend a few moments talking about the taxation of resource industries, a subject to which the Minister of Finance (Mr. Turner) devoted most of his speech when introducing Bill C-49 for second reading.
The minister indicated that he felt much of the debate on this subject was getting away from the central core of the issue, which was the question of the fair sharing of oil revenues. He implied that all of the other discussions about consultation with the provinces, about maintaining a viable oil and gas industry, about security of oil supplies for Canadians, about jobs for Canadians and so on, are immaterial to the question of what constitutes a fair share of the oil revenue which must go to the federal government. If that represents the minister's views, he has clearly lost track of what should be the priorities of his department and of the government.

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He is stating that what is important is for the federal government to have 18 per cent, 23 per cent or 30 per cent of the total cash flow from the sale of crude oil in Canada, and that everything else is immaterial-the total cash flow is immaterial as long as it gets its 25 per cent. The fact that the policies it pursues may affect the jobs of many Canadians is not important; what is important is that the government receives its 25 per cent. The question of security of supply for Canadians is not important; what is important is that the government gets its 25 per cent. The question of lost opportunity to Canada-and we had a marvellous opportunity being the only western industrialized nation self-sufficient in energy-is not important; what is important is that the government gets its 25 per cent.
What about the question of federal-provincial relations in Canada? What about the disunity in this country as a result of the actions of the Minister of Finance and of the Minister of Energy, Mines and Resources (Mr. Macdonald)? Apparently that is not important; what is important is that they get their 25 per cent of the cash flow. Madam Speaker, that is totally unacceptable. That is not the type of policy that Canada deserves. It is not the type of responsible government that we should be receiving from he Liberal party.
What did the minister say about this question of sharing the cash flow from the sale of oil and gas in Canada? He alluded to the fact that during the budget debate the Prime Minister (Mr. Trudeau) indicated that this whole question of resource revenue sharing was brought up during the first ministers' conference a year ago January.
Let us consider what happened at that conference. The Prime Minister indicated that he had suggested sharing but the provinces did not listen, they would not consider it, and therefore the federal government had no alternative but to act unilaterally in the manner it first proposed in the budget on May 6, and repeated in the budget of November of last year. A document was presented at that first ministers' meeting-I have a copy here-proposing a sharing. It was presented by the Minister of Energy, Mines and Resources and was entitled "Suggested Distribution of Revenue Flows of Oil for Alternate Price Increases". It suggested a percentage distribution of revenues that with the wellhead price at $6 per barrel it would be reasonable for the oil producing provinces to receive 28 per cent of the total revenues and for the federal government to receive 6.6 per cent. At a price of $7 per barrel the suggested breakdown was that oil producing provinces should receive 33.5 per cent of revenues and the federal government 8.9 per cent. These revenues include export tax.
Let us compare what was suggested with what actually happened. As a result of the first ministers' agreement at 24 Sussex Drive last March, a price of $6.50 per barrel at the wellhead was agreed to. Using the document of the Minister of Energy, Mines and Resources, the fair share of the oil producing provinces would have been 30.75 per cent. Again I say I am using the figures of the federal government.
The Alberta government introduced a royalty scheme which produced for that government royalties and reve-

nues amounting to 23 per cent of total revenues, in other words, 7.75 per cent less than the federal government's own figures suggested. When the Prime Minister and the Minister of Finance turned round in May and said that they were bringing in the May budget which called for the non-deductibility of royalties because the provinces had been acting in bad faith, were being greedy and taking too much of total revenue, they were nothing if not dishonest and deceitful


Mr. Gilbert:: But honest.


Harvie Andre: No, Madam Speaker. Let us look at the figures relating to the federal government's share of revenues, as suggested at the meeting to which I have referred. The federal government could have expected to receive 7 per cent of total revenues; but the May budget would have given the federal government 23 per cent of total revenues, 16 per cent more than it had indicated in its own document would be a fair share.
Then the Prime Minister had the effrontery to come before the House and say that that document provided the provinces with a fair warning about the type of revenue sharing they could anticipate, and therefore it was wrong of them to accuse the government of double dealing, dishonesty and breaking faith by introducing the budget of May 6. The budget certainly broke faith.
The government says one thing one month, and another another month. That is characteristic of how the government has behaved throughout the energy crisis, or since September 4, 1973, when it unilaterally, without consultation, and as a result of pressure, imposed a price freeze on Canadian crude oil. We know what happened after that. The export tax was imposed, again without consultation or discussion. Then there was the commitment that the freeze would be off by January 31; then that the freeze would be off at the end of the heating season; then that prices would be allowed to rise, and then that they would not be allowed to rise.
This is a sad history of double dealing, deceit and plain, hypocritical activity. It is small wonder that it now looks as if Canada's future security of oil supply is very much in jeopardy that the National Energy Board predicts we shall be net importers of oil in the near future and that the level of exploration and development in the oil and gas industry has fallen off at an alarming rate. Yet the Minister of Finance says that the important thing is that the government should get the right share of total revenues. It does not matter if total revenues are less than ths potential- the important thing is that the government should get what it considers its proper proportion. It is not important that jobs are being lost in my constituency and in my province. The only important thing is the government's percentage of total revenues. No, Madam Speaker, there we see the sad history of the mishandling of an issue that is vitally important for Canada's future.
There has been mishandling on the part of the government which has no rationale in its approach, and which has its priorities totally distorted and warped. One wonders what goes on at cabinet meetings. Is there not one minister who says, "Hey, we have to worry about our future security of supply, about jobs, about oil drilling rigs
February 4, 1975

leaving Canada, and about the state of our oil and gas industries."
We cannot rely on the tar sands, as emphasized in today's announcement, to be an automatic ace, a trump card which will prevent us from becoming as vulnerable to Middle East pressures as European countries. We cannot count on tar sands oil preventing balance of payments problems which could rival those of other countries, such as Great Britain and Italy. It is time somebody started paying attention to these questions.
Ours is the only petrolific country in the world, the only country in which there is a potential for oil and gas production but which has seen a net decrease in the last year in the level of exploration and development. What a testimonial for this government! We had such a tremendous opportunity to further regional economic development in this country and become self-sufficient in energy. And what happened? We frittered the opportunity away by bickering about who was going to get the biggest chunk of the pie. After all, says the government, it doesn't matter if there is no pie in the end, as long as the Minister of Finance and the Minister of Energy, Mines and Resources get the biggest chunk of any existing pie. They want to be king of the castle, but the castle is crumbling at their feet.
A number of good suggestions have been made in this debate. One of the most sensible is similar to one made with regard to the government's petroleum administration bill, and it is this, that aspects of Bill C-49 dealing with taxation of resources should be set aside. Let us pass other provisions of the budget many of which are excellent. There are many excellent features in the budget, on which my colleagues have elaborated. Hopefully in committee of the whole we will have the opportunity to convince the government that Bill C-49 can be further improved. But let us put aside the question of taxation and of royalties from natural resources until after the first ministers' meeting in April.
In an atmosphere in which everybody realizes, hopefully, that the question of our long-term security of supply is at stake, in which everybody realizes that we have a duty to keep our conventional oil industry viable, and in which everybody realizes that Canada needs a conventional oil industry because we cannot rely on the tar sands to supply all our future needs, maybe, just maybe, an agreement can be reached between producing provinces and the federal government which will result in a fair and just share going to the various levels of government and to the industry.
An agreement like that would put an end to confrontation and, hopefully, help to restore confidence on the part of the industry and of the people of western Canada, from whom one increasingly hears sentiments of western alienation.
The minister has not demonstrably appreciated another factor relating to the oil and gas industry. I am talking about the considerable drop-off in investment. Other countries, such as the United States, right now are in a much more serious position than we are. Consequently they are making it very attractive for investors to invest their dollars south of the border. In normal circumstances we would find it difficult to compete for this money.
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One of the consequences is that the traditional areas to which the oil and gas industry has looked for capital to finance exploration development are simply drying up. They are not available as they were before. The use of normal cash flow through return on business is being discouraged by punitive royalties and taxation schemes. Therefore where is the money going to come from to find the oil and gas we will need? One way would be the very simple removal from the Income Tax Act of the provision which is now there respecting oil and gas, namely, the principal business test.
It is an established principle in Canadian income tax law that you lump together your income if it comes from a variety of sources, such as from your profession and investment. It must be lumped together in terms of paying income tax. This means you are able to lump together your negative income, such as business losses, as well as your business income. This is provided universally, with two exceptions. There were three, but one is being removed in this budget.
The one exception is gentlemen farmers. If farming is not your principal source of income, you cannot deduct your losses from your professional income. The other aspect is the oil and gas business. If you drill a well and it turns out to be a dry hole, you cannot deduct the losses from your income. That provision has been in our tax law for as long as anyone can remember; as long as it has been important to Canada.
That provision, more than any other aspect of Canadian tax law or legislation, is the prime cause for Canada's oil industry being something like 99 per cent foreign owned at this time. An American citizen can deduct business losses from oil and gas exploration in Canada from his professional income. That means an American citizen can drill an oil well in Alberta with tax free dollars, and a Canadian citizen cannot.
There are scores of examples of what is termed in the industry as an attractive looking play. When looking for Canadian investors, who must invest after-tax dollars in competition with American investors who can invest pretax dollars, there was no contest. Therefore, scores of professionals from the United States, who had some discretionary income, drilled oil and gas wells in Canada. Many of them made a pile of money. They ended up owning our oil and gas industry because of the tax laws we have in this country.
Our tax laws discriminate against Canadians and that is absurd. At least half a dozen delegations from various groups in Alberta, such as the Independent Petroleum Association, government groups and private groups, have come to Ottawa in the last dozen years. They had well prepared documentation showing what that discriminatory aspect of our Income Tax Act is doing to Canada's oil and gas industry. They showed how this is forcing Canadians into maintaining a subservient position, and how it gives advantage to foreigners who invest in our country. It is an incredible situation.
Every time I think about this, I get angry. How could we put up with this stupidity for so long? I have a quotation here from a former deputy minister of finance. He said,

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"We do not care who owns the oil and gas industry as long as we can tax it." Isn't that an admirable attitude for members opposite who are guiding our country? So be it. History is history. That is not the only mistake that has been made in this country.
Now is the time to remove that provision. As a country, we will need more exploration and development. Canadians should be given an opportunity to participate in that. They must be encouraged to do so.
Let us remove this principal business test which discriminates against the oil and gas industry. No other industry is affected. That is a fact. Members opposite ask what is behind western alienation-why do people out there feel like that toward Ottawa-don't they know this is a strong government acting in the interests of all Canadians? I have given one reason for this alienation. I could also deal with transportation.
That tax provision should be removed so that all Canadians can participate in this industry. Canadians should be encouraged to invest in the exploration and development that are necessary for all of Canada. Alberta is not going to freeze in the dark, because the oil is there. However, those living in other places just might, unless we come up with the oil and gas we are going to need. We must have that activity. By a minor change in the Income Tax Act, we may be able to accomplish that.
When the bill was introduced the other evening, I shouted to the Minister of Finance, "How about the principal business test?" He proceeded to give me a lecture. He stated the government was working out with the provinces the matter of where the corporations are located so the total cash flow can be divided equitably. The minister does not even know what I am talking about when I refer to the principal business tax. His total preoccupation is what share of the pie will go to the government. A government which is preoccupied with that simplistic, idiotic notion really has no right to be here.
I see it is getting near the hour of adjournment. I only hope that someone, somewhere, will look at this question of the principal business test. I hope that members opposite who feel it is important for Canadians to have an opportunity to participate in the growth of this country will so inform the minister. Maybe, just maybe, if the government is confronted with the facts often enough, it will learn, and we will have these positive changes.


The Acting Speaker (Mrs. Morin):: It being six o'clock, I do now leave the chair until eight o'clock this evening.
At 6 p.m. the House took recess.


[Stage Direction]
AFTER RECESS

The House resumed at 8 p.m.
Mr. William Knowles (Norfolk-Haldimand):: I am
pleased to enter the debate on Bill C-49, Mr. Speaker. My remarks will, as usual, be short and to the point. Although the Minister of Finance (Mr. Turner) is not in his place I see that his parliamentary secretary, the hon. member for Sarnia-Lambton (Mr. Cullen) is here; I know him to be a

reasonable man and I am sure he will pass on to the minister the representations I shall be making.
I want to discuss that part of the bill which has to do with capital gains tax on farm property. Hon. members who were here at that time will recall that in 1971 a voluminous bill was passed making many changes in the tax laws. That bill was forced through the House by the government; closure was applied in order to get it through before the end of the year, as a result of which its contents were only partially scrutinized.
There are some who say we are talking too much about the bill now before us to amend the Income Tax Act, but I suggest if we had spent more time in 1971 examining the details of that year's tax measure we might not have to spend so much time on Bill C-49.
Back in 1971 members on this side of the House opposed the government's decision to extend the capital gains tax provision to apply to the family farm. For the most part those representations went unheeded, but the former minister of finance and his colleagues did yield on one point- they made it possible for a father to pass his farm over to his son without capital gains tax being exacted. I think it is time for the government to go all the way by allowing a once-in-a-lifetime exemption for a family farm, regardless of whether it is sold to a relative or not. This is what we contended in 1971, and we are still of the same view. My hon. friend from Medicine Hat (Mr. Hargrave) was arguing logically this afternoon that this provision which applies to family farms should also apply to family farms which are incorporated or held in partnership, and I heartily agree with him.
The capital gains tax as it affects family farms comes into sharp focus in Norfolk-Haldimand, the constituency I have the honour to represent. It is largely a rural area, but the rural countryside has been subjected to instant industrialization. First, Ontario Hydro located at Nanticoke, a small fishing village on the north shore of Lake Erie, the largest thermo-generation plant in North America. Next, Stelco announced it was moving a portion of its steel rolling mill from Hamilton to the Nanticoke area. The plant is now under construction, and in this connection 4,000 acres of land have been purchased to become an industrial park for ancillary industry. Texaco is building the largest refinery in North America in this rural area. It is now under construction.
The provincial and regional governments foresee a large influx of people to man these various projects, so they are planning two satellite cities to house approximately 200,000 inhabitants each. Two giant land assembly programs have been undertaken, and approximately 26,000 acres have been accumulated in connection with these satellite cities. This land was, of course, purchased from farmers. They had no choice but to sell. Some of them gladly did so; others were loath to give up the farms where they had lived all their lives. All were forced to move out under the threat of expropriation. Now they are face to face with the grim reality of the capital gains tax and what it means. For some of the farmers in the area it spells hardship and ruin. A farmer has a choice: he can sell out and retire, or he can use the proceeds of the sale to purchase another farm-I suppose the nature of his decision would depend largely on his age.
February 4, 1975

Let us examine the plight in which these farmers are placed. This is the way in which the capital gains tax really hurts: December 31, 1971, was V day-valuation day. The increase in the value of the land since that day is the amount upon which capital gains tax is based. It is half that amount. Let us remember that since 1971 inflation has been running rampant. This has been said so many times in the House it scarcely needs repeating now. Coupled with the inflation we have, in this industrial area I speak of there is great competition for land for the purpose of building houses, and speculators have driven up the price. This is not the fault of the farmer as it is beyond his control, but as a result he is faced with an exorbitant capital gains tax.
Mrs. Mary Field, whose husband farms in the rural route four area of Simcoe, Ontario, makes a comparison of values of land with which she is familiar. In 1971 the farm was worth $500 an acre, but today it is worth $1,250 per acre. On a 100-acre farm this means a capital gain of $75,000, and the tax on that gain, added to the personal income tax already being paid, represents an exorbitant tax on these people. What is left for the person who wants to retire and buy himself a small home, or to create an estate on which he can live comfortably for the rest of his life?
The farm itself more often than not represents the farmer's lump sum pension. The only other pension available to him is the Canada Pension Plan, and that is not much for someone who has to live on it for the rest of his life. As I say, the sale of a family farm represents the lump sum pension for most farmers. Everything these farmers earn is ploughed back into the land in an attempt to improve it, to make the farm easier to operate, hopefully to provide a larger income.
All this reminds me of the story of three farmers who were going to fall heir to $500,000. One said he was going to buy a yacht and cruise the world. The second said he would like an airplane and he was going to buy one, while the third man said he would just keep on farming until it was all gone. This is an example of what happens to many people who spend their working lives farming. The farm represents their entire retirement pension scheme. Surely the government is not going to tax this money, taking it away from these men who have worked hard for years in order to have something put aside for their retirement years. It is patently unfair to see the fruits of one's labour siphoned off by this iniquitous tax.
Let us look at the second alternative. Supposing a man wanted to purchase another farm, I suggest the capital gains tax would be such that there would not be enough left for him to pay the down payment. His total net value would be very little, most of his money having been used up in the way I have described. There would just not be sufficient funds left to buy a new farm. The man may have sold his farm at an inflated price, but he must also purchase at the same or an even higher inflated price. If we tax away part of the proceeds then we can see the position in which the farmer finds himself.
In addition to the letter to which I referred from Mrs. Mary Field I also received a letter from a very successful
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farmer in the area, a Mr. Joe Bernard, and I should like to quote a few paragraphs to illustrate the point I am making here. Mr. Bernard states in his letter:
I have no quarrel with capital gains tax on any profits on property sold, but it does not make sense to sell our farms and have to pay capital gains tax on the difference between the '71 valuation day freeze value of the property and the present inflated selling price.
Farm land prices have almost doubled since 1971 and it is impossible to replace the same type of farm in most districts after having paid the capital gains tax.
He cites an example of exactly how this works out, but I do not think I need quote it. In other words, he is faced with the same situation as the person who wishes to retire. The capital gains tax makes it impossible for him to retire on either one of these schemes.
I have literally hundreds of petitions in a file in my office that have been sent to me by persons who feel the way I have described about the capital gains tax and its effect on the family farm. Perhaps one of the best ways of drawing attention to these would be to send them across to the Minister of Finance so he could have a look at them. I have been looking at these petitions for the last month or two since I have been receiving them. Let me quote briefly from one which states:
By present values, a farmer cannot relocate his business on a V-day basis, and with rapid inflation the dollar is not even comparable to V-day dollar value. This is without taking into consideration the expense and losses incurred in relocating.
The petition states toward the end:
Traditionally a farmer has his only hope for retirement invested in his property.
We, the undersigned, strongly feel capital gains tax on home farms should be exempt for bona fide farmers, retroactive to December 31, 1971.
The Ontario Federation of Agriculture is in complete agreement with the views I have just expressed, and so also are the local county federations of agriculture, that is, the Haldimand and Norfolk county federations. They are sympathetic to the plight in which these people find themselves.
I would ask the Minister of Finance to seize this opportunity to amend the act to remove these inequities. He should remove the capital gains tax for once-in-a-lifetime sales of family farms, and perhaps should also include in that exemption the incorporated family farm. Surely that is a reasonable suggestion.
If that is not considered reasonable, let us at least use an indexing system to take care of the inflationary factor which has pushed farm values entirely out of sight, to the point that they bear no relationship whatsoever to their income potentials.
These farmers for whom I speak are deadly serious, and look to the minister to be reasonable, and to give them some hope for financial survival. Let us make it possible for free enterprise to yield a just reward for those who have worked hard all their lives. Let us not see them penalized at the end.


Mr. Leonard C. Jones (Moncton):: Mr. Speaker, my remarks will be very brief. The amendments to the Income Tax Act proposed in Bill C-49 are alleged to be of some benefit to some. On the other hand, because of inflation, the fact of the matter is that the government will, in the

February 4, 1975
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long run, be extracting even more tax dollars from the citizens of this country. This, in turn, will bring about greater increases in the prices of goods and services. The people of our country are now being over-taxed because of continued government waste and worthless, unproductive programs.
On several occasions the Canadian Federation of Mayors and Municipalities has made submissions to cabinet requesting, inter alia, that real estate taxes and annual mortgage interest payments on owner-occupied properties be deductible from taxable income, and that interest on municipal bonds not be classed as revenue, or be deductible from taxable income.
There are certain well-known anomalies in the Income Tax Act that should be corrected at this time. A review should be conducted to eliminate the fiction or the veil, so-called, that certain clergymen are not taxed.
Consideration should be given to permit the total amount of charitable donations to be deducted from taxable income. Possibly charitable donations should fall into the same category, and be given the same courtesy accorded donations or contributions to political parties, whereby the donation is deducted from the tax payable rather than the taxable income.
Incidentally, I have been careful not to make any mention at this time of the fact that as an independent member, not affiliated with any political party, my agent, or committee, or association, if I had one, would not be permitted to accept donations under the provisions of the Election Expenses Act, or the Income Tax Act, which would be deductible for income tax purposes. I suggest that this is a discrimination, and that the minister should be prepared to present an amendment to solve this problem, and accept the other suggestions I have made.
Above all, there is a responsibility on the government to put a halt forthwith to waste, and to reduce all unnecessary government spending on luxurious and worthless programs which really do nothing to engender enthusiasm and production in the country, but rather decrease initiative, industry and concern on the part of Canadians generally.
We can pass all the statutes, acts and amendments we wish in this House, but unless the cabinet and administrative bodies come to some sense of realization of stability and financial responsibility, coupled with a restoration of confidence, it will all be for naught.
I suggest that we get down to the basics of Bill C-49 immediately, and that the Minister of Finance should indicate just what changes he might be prepared to make in order to avoid any further debate and delays so that the legislation can be enacted, income tax returns processed expeditiously, and refunds made.


Some hon. Members:: Hear, hear!


Leslie Gordon Benjamin: Mr. Speaker, Itake part in this debate after having been angered somewhat listening to the Minister of Finance (Mr. Turner) last Tuesday, night, in addition to my anger and disgust

when listening to the Prime Minister (Mr. Trudeau) last November when he took part in the budget debate.
This evening I will try to put some things on the record that they forgot to mention because it did not suit the kind of argument they were trying to make in the area of energy, concerning fair sharing of the revenues from resources between the federal government, the provinces and the industries, in the area of equalization in terms of the fiscal relationship between the federal government and the provinces in deciding in what kind of direction we should and could be taking, and whether or not there was a breach or a failure to live up to the letter and the spirit of the March, 1974, agreement.
First I want to say that in his statement on the income tax bill the Minister of Finance ventured the opinion that most of the debate has been on issues that are, in his opinion, peripheral or irrelevant. He said that the central issue is what constitutes a fair share of revenues among industries, the provinces and the federal government. Then he went on to say that no provincial government and no opposition party has, to his knowledge, revealed as yet what it considers to be a fair share of production income among industry, provinces and the federal government.
It seems to me that the minister has not been, and is not now, prepared to listen. The question of what constitutes a fair share is laid out very clearly in the British North America Act in the section which gives the provinces jurisdiction over natural resources within their territory. This is a fundamental part of our constitution. If the minister intends to abrogate the constitution in this respect there are methods of doing so, as has been done in the past with respect to grain elevators and uranium. However, if that is what the government intends to do, it should have the courage to say so.
Clearly the federal government is interested in changing the relationship between the provinces and the federal government, and this is a serious matter. If one examines with some care even the figures which the minister provided in his speech, it becomes obvious that the fair share argument is just a smokescreen for an attempt to increase the power of the federal government at the expense of provincial governments.
May I say at this point that I will not take a back seat to anyone in the House regarding the importance of having a strong federal government.


Walter David Baker: We won't give you a front seat either.


Leslie Gordon Benjamin: The federal government must govern in the interest of all Canadians, but when a federal government of any political stripe intends to sneak in by the back door and get around the provisions of our constitution, that is not what one would call striving for a strong confederation, or preserving, extending and expanding Canadian unity.
As the minister himself admits, up to the end of 1973 only a handful of petroleum companies were paying any corporate tax-not fair taxes, not taxes on their petroleum revenues, but any taxes at all. If the federal government has been interested in ensuring that it gets a fair share of petroleum revenue, its interest obviously has been very
February 4, 1975

recent. For example, one has only to look at deferred taxes. Those are the ones that have been a federal responsibility.
Until the end of 1973 Esso owed $226 million in deferred taxes, Gulf owed $116 million, Texaco $50 million, and the Shell oil Company says that if they were recording deferred taxes, they would have $122 million in deferred taxes to the end of 1973. Shell accountants have come to the conclusion that it is not likely that they will have to pay these taxes "in the forseeable future," to use their words. Therefore they do not regard these as a liability in their accounts. In fact Shell accountants have put into practice what in the whole industry is the unwritten rule. I will say for these accountants that at least they are being honest and open.
The amount in deferred taxes that the Minister of Finance and his predessors have allowed up to the end of 1973 totals over half a billion dollars among the big four. If you were to include 1974, you could safely add $100 million in deferred taxes. If, by some remote chance, those taxes were ever paid, those big four would in fact have had an interest free loan. Let us assume that they paid 8 per cent or 10 per cent interest on that loan. If, by some remote possibility, they ever paid those deferred taxes they would have saved $40 million to $50 million a year in interest charges-not a bad deal. What is the minister complaining about? Here was his opportunity to gather, in a legitimate area of the taxation field, a fair share of the tax revenue, and he blew it. He blew $600 million.
The argument that these deferred taxes will eventually have to be paid is nothing more than a polite fiction. Everyone knows that they will not be, so they amount to a gift of over half a billion dollars to the end of 1973.
The minister's own figures show that the federal government was getting about 5 per cent of the production revenue when oil was priced at $3.80 a barrel. This is about 19 cents a barrel. With the new royalty system in effect, the federal government would have obtained about 8 per cent on a $6.50 barrel, with no disallowance for provincial royalties. This comes to about 57 cents a barrel. With the disallowance, the federal government's share goes up to $1.17 a barrel on a $6.50 barrel of oil.
What is the reason for the sudden interest in fair shares when it is clear that the federal government has not been even vaguely interested until just now? I would suggest that there are two reasons. The first one is that the federal government is trying to muscle the provincial governments out of an area of jurisdiction that is their legitimate right under the BN A Act. This is a most serious matter and I hope the Minister of Finance and the Prime Minister will have the courage to say in public that this is just what is being done.
I contend that there has been some measure of bad faith, in spite of the protestations of the Minister of Finance. Let me give you some examples of the kind of negotiating in bad faith that has gone on in recent months to indicate that the federal government is not interested in making confederation work. You will recall, Mr. Speaker, that from early 1968 until this day the Prime Minister, his cabinet ministers and his backbenchers, have repeatedly talked about national unity and making confederation work, and yet they continue to perpetuate old practices
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and to bring in new policies that divide this country and prevent national confederation from working.
The Minister of Finance says that the government lived up to the spirit and the letter of the March, 1974, agreement. He is probably safe in saying that it lived up to the letter because there was nothing in writing. That is an easy statement for him to make. The Saskatchewan premier, and others at that conference, came away with the understanding that money from increased oil revenues put into a capital fund would not be subject to equalization. Saskatchewan lived up to that agreement. Saskatchewan put 100 per cent of its increased oil revenues into a capital fund, everything between $3.80 per barrel and $6.50 per barrel. Saskatchewan lived up to its part of the deal.


Mr. Nystrom:: Not Ottawa.


Leslie Gordon Benjamin: Saskatchewan put 100 per cent of its increased oil revenues into the capital fund, but the Minister of Finance, however, did not live up to the spirit, as he puts it. He now says that all increased revenue will be subject to equalization. The next time our innocent, trusting prairie boys sit down with this government, with the Prime Minister and the Minister of Finance, I hope that they will sit with their backs to the wall, keep their guns loose in their holsters, and get everything down on paper.


An hon. Member:: They should sit facing the wall.


Leslie Gordon Benjamin: The minister's budget arbitrarily betrays that agreement and that understanding. The great protector of prairie Canada, the Minister of Justice (Mr. Lang), has not said a word other than to back up the Minister of Finance, which I expected him to do. Both sides agreed that the agreement was that any of the increased oil revenue put into a capital fund would not be subject to equalization, and that funds which went into general revenue would be subject to equalization. At that point that was the only agreement which was reached.
After that agreement the Minister of Finance, the Minister of Energy Mines and Resources (Mr. Macdonald), and the premiers and their representatives talking amongst themselves arrived at a consensus that possibly about one-third of the revenue of those provinces would go into the general revenue of each province and that that would be subject to equalization, but that talk among themselves was never formalized into an agreement, and never was agreed to then. In fact Saskatchewan had the understanding, when its representatives left that meeting, that it had the right to put up to 100 per cent of its increased oil revenues into a capital fund which would not be subject to equalization. The minister's budget betrays that understanding, which Saskatchewan has totally lived up to, Madam Speaker. After the fact, the minister says that even though Saskatchewan has put 100 per cent of its revenue into a capital fund one-third of it will be calibrated under equalization, which in turn will cost Saskatch-wan between $35 million and $40 million in equalization payments from the federal government. The Minister of Finance, the Prime Minister and the Minister of Justice talk about national unity and making confederation work. That is a lot of crap, coming from them.


Lorne Edmund Nystrom: I would use stronger language.
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February 4, 1975
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Leslie Gordon Benjamin: Let us go into a little more of this. The arrangements were understood by the men who sat around the table and took one another's word for things. Out west a man is as good as his word, though I am ashamed to say that there are a few from the west who are not as good as their word. The Minister of Finance quoted the Prime Minister's letter to the premier of Saskatchewan on this whole subject, and I too quote:
I must make clear that any action that you may decide to take in respect of royalties has to be regarded as being without prejudice to our freedom of action as regards to federal taxation.
I presume the Minister of Justice was party to that. The Minister of Finance says that the Prime Minister said that that was serving warning; that those provinces were forewarned. The Prime Minister went on to say that he felt that this was a clear warning that the federal government was considering changes in the long standing treatment of provincial royalties and whether they would be deductible.
In his words, when the Prime Minister spoke, the warning was about as clear as he could make it. Well, the premier of Saskatchewan did not think it was all that clear. He thought it was far from clear. He addressed a letter to the Prime Minister on March 22, 1974, a copy of which he insisted the Prime Minister table in this House, a request the Prime Minister conveniently neglected to refer to in his diatribe of last November. The Premier of Sas-katchwan in that letter put it to the Prime Minister point blank:
Do you have in mind not allowing provincial royalties as deductions from taxable income?
The Prime Minister did not reply in writing, nor did he give any indication verbally that he intended to take the unprecedented action of disallowing the royalties as an expense. If he wished a warning to be as clear as he could make it, it would have been simple for him to answer the premier of Saskatchewan's question with a direct yes or perhaps, "We reserve the right to do so." But this was not done. Mr. Blakeney did not know that. Mr. Blakeney did not understand that.


Otto Emil Lang: He did, and his letter proves it.


Leslie Gordon Benjamin: Mr. Blakeney asked the Prime Minister. The Prime Minister has yet to answer that.
I am reading and presenting material which both the Prime Minister and the Minister of Finance conveniently forgot to include in their speeches.
When Saskatchewan went to the meeting of March 27 and bargained long and loud, there were many issues, and the premier left the meeting of March 27 with the clear understanding that the price of oil was to be $6.50, that all proceeds over $6.50 would go to the federal government through the export tax, and that the amount up to $6.50 was to be divided between producers and the provinces, subject to the normal federal income tax provisions. To use the premier of Saskatchewan's own words in the Saskatchewan legislature, "I did not understand that the federal government proposed to attempt to get a part of the $6.50 by taxing royalties." The premier of Saskatchewan also said, "If I understand Premier Lougheed's letter of November 22nd to the Prime Minister, he did not understand it either".

The Minister of Justice, the Minister of Fiannce and the Prime Minister may feel that one premier's not understanding is understandable, but are they trying to suggest that there are two premiers under a misapprehension? This is why I suggest to those premiers that the next time they meet with these birds they keep their backs to the walls, their guns loose in their holsters, and get it down in writing.
The Minister of Finance talks about an equitable sharing between the federal and the provincial governments and the oil industry. What is the Minister of Finance trying to give us? What is he talking about? He does not even know what he is talking about. I will give you a "before and after" the federal budget.
The $11.28 per barrel of oil is the international price, and out of that the federal government takes $6.75 in income tax and export tax. This is slightly over 59 per cent. Then the province of Saskatchewan will take 36.4 per cent or $4.10 out of that international price, and the industry, before the budget, would have got 5 per cent. After the budget, however, it gets 4.9 per cent. Who took what from whom? Who is doing what to whom?
The Minister of Finance talks about fair sharing between the federal government, the provincial governments and the industry. It is sophistry. It is chicanery. It is all part and parcel of that gathering up in the hands of the federal authority of the ability to tax far beyond any right in law, or any constitutional or moral right.
I am sure no hon. member would expect me to make a speech sympathetic to the oil industry. Had it not been for the province of Saskatchewan moving into a vacuum which the federal government refused to move into, had it not been for the government of Saskatchewan saying that the industry was not going to get all those windfall dollars, then the oil industry would have been raking off those windfall dollars.
The budget said that if a company develops its mineral resource-in Saskatchewa, for example, oil or potash-and it pays a royalty to the provincial government, then when it pays its corporation income tax it cannot deduct the royalty as a business expense. Any accountant, Mr. Speaker, would call a royalty a proper business expense. Any economist would call a royalty a proper business expense. Royalties have been allowed as a proper business expense since companies began paying corporation taxes.
Under this budget if a royalty is paid to a private mineral owner like the CPR or the Hudson Bay Company, it will be allowed as a business expense. If a royalty is paid to someone in Montana or Texas, it will be allowed as a proper business expense. But if a royalty is paid to the people of Saskatchewan, it will not be allowed as a proper business expense.
That is the same thing as telling a farmer who rents land that he cannot deduct his rental payment from his income tax. It is the same as telling a farmer when he is totalling up his taxable income that he cannot deduct municipal taxes as an expense. And the Minister of Justice tells us he is going to protect us all from the likes of the Minister of Finance and the Prime Minister!
February 4, 1975

The budget shows that the federal government taxes provincial royalties because it wishes to force provincial governments to lower their royalties-wishes them to be easier on the potash companies, on their corporate friends on the oil companies and the paymasters of the Liberal and Tory parties. The Minister of Energy, Mines and Resources made that clear. In the Regina Leader Post of November 30, 1974, he was quoted as saying:
Some oil companies broke a promise to the federal government by not pressing the provinces for a reduction in royalties.
That is a cozy little arrangement. The federal government and the oil companies get together to put the squeeze on the provinces to lower royalties. The cut in royalties will be divided between them, with over half going to the oil companies and less than half going to the federal government. The federal government did its part. The budget is tailored to put the squeeze on the provinces. It is designed to force the provinces to give the oil companies even fatter profits.
The profits of major oil companies have always been high, and in the last three or four years have increased 100 per cent, 200 per cent or more. And the Canadian citizens who own these resources pay. Whom do they pay? They pay birds in the United States and people sitting in board rooms, where no doubt the hon. member for Calgary North (Mr. Woolliams) would rather be sitting right now.


Jack Sydney George (Bud) Cullen: Anybody would, right now.


Leslie Gordon Benjamin: This budget is a clear attempt by the federal government to take the benefit of ownership and the control of resources away from Saskatchewan. It is a violation of the spirit of confederation, and an attempt to ensure that the major benefit from Saskatchewan resources goes not to the people of that province but to the resource companies and people in other parts of Canada.
This poses a major problem for Canada. As the Prime Minister said in the House, the issue is one of an equitable pattern of revenue sharing. Clearly, if resources are developed by private companies these companies should make enough to cover their reasonable and proper costs, with a fair return. Just as clearly there should be corporate profits that the federal government can tax.
And what should a provincial government get as the resource owner? The answer, I think, is clear-the best price possible. Certainly, if an oil company is leasing oil rights from the CPR, the CPR will charge royalties and bonus payments, get all that it can, and still leave the company and attractive and reasonable return. Surely a provincial government should not accept less for the people of Saskatchewan than the CPR gets for itself.
In the whole area of equalization, Mr. Speaker, the government has betrayed that agreement. I spoke about the prohibition of royalties as a deduction for income tax purposes. The people of Saskatchewan and Alberta, and their governments, have never objected to paying their share of the cost of the world energy crisis to Canadians, and I would point out that the province of Saskatchewan has voluntarily forgone $400 million. But they are not complaining. The people of Saskatchewan played their full part in confederation and national unity.
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Under the previous arrangement Saskatchewan could have received a maximum of $6.50 per barrel, no matter who used the oil. The $5.20 taken by the federal government in effect cost Saskatchewan about $200 million in annual exports. The designated price domestically of $6.50 per barrel meant that Saskatchewan gave up, for the benefit of all Canadians, another $200 million. So when the Minister of Finance talked about a way to share equitably revenues from our natural resources, he was indulging in sophistry or chicanery. In the light of recent history the producing provinces, by making concessions, displayed great statesmanship. They entered into an agreement. The Minister of Finance has said how pure he has been, that everything the federal government has done has been right, and that everything done by the provinces has been wrong. Nobody understood the agreement except the Minister of Finance, the Prime Minister and the crows who sit behind him.


An hon. Member:: Like Otto.


Leslie Gordon Benjamin: Madam Speaker, let me refer the House to what the minister said on this subject, as recorded at page 2693 of Hansard :
In April of last year the price of Canadian oil was increased from around $3.80 a barrel to $6.50 a barrel as a result of the agreement reached at the first ministers' conference on March 27. If the existing provincial royalty systems had remained unchanged, the share of production revenue going to provincial governments would have increased to around 31 per cent-the share to the federal government would have increased to about 13 per cent. As a result, the government of Canada on behalf of the Canadian people as a whole would have begun to approach a fairer return from the growing profits yielded by higher prices and the advanced development of the petroleum industry. This prospect was radically altered, however, by the move of several of the provinces to increase substantially their taxes, royalties and other levies on the petroleum companies.
The Minister of Finance conveniently forgot that the new Saskatchewan royalties were already in place, contrary to the impression he tried to leave, and were recognized in the temporary agreement reached at the national energy conference.
The minister was all wet when, later in the same speech, he said this, as recorded also at page 2693 of Hansard:
For the last nine months of 1974 the federal share of petroleum production revenue would have been slashed from 13 to 6 per cent, while the provincial share would have jumped from 31 to 42 per cent.
I should like to know how he arrived at those figures. He went on to say:
Over the period to the end of the decade the federal share would have averaged only 8 per cent.
The percentages the minister mentioned may be accurate, yet the actual number of dollars which the federal government would have received would have remained the same, or increased. The minister forgot to make that point.
Let me now turn to the Syncrude matter which has been on our minds for many weeks, and which was mentioned again this afternoon. I paid particular attention when Liberals and Tories yelled at, and ridiculed the hon. member for Nanaimo-Cowichan-The Islands (Mr. Douglas) when he said in reply to the statement on motions today that we should "go it alone with the Syncrude
28626-49)4

February 4, 1975
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development." They yelled things like, "The hon. member for Nanaimo-Cowichan-The Islands sounds like a Socred in the dirty thirties; print your own money, and go ahead and do it."
The economic Neanderthals from the old line parties are incapable of considering the realities of the 1970s. They do not know how to live in the twentieth century. The Tories do not even listen to their own spokesman, the hon. member for Qu'Appelle-Moose Mountain (Mr. Hamilton), who complained that Canadians will not have an opportunity to invest in the Syncrude operation with which the minister dealt today. We could develop that project. We have the money and the technology, and we could do it. But my private enterprise friends to my right and across the way, both of whom are to my political right, keep asking, "But where will you get this massive amount of capital?" They say, "Think what all that spending will do for inflation."
I remind the House that a small province, Saskatchewan, with a population under one million, has established a power corporation. Would you believe it, the people of the province own the power corporation, for which they have borrowed about $1 billion. That loan is being paid off, and the people of the province have available low cost power from this power corporation for which they themselves paid. The corporation provides electricity to 60,000 farmers. It has laid miles and miles of hydro lines, and all this has been done in the little province of Saskatchewan.
But the Liberals and Tories say, "You have to borrow money, and you have to put some equity into an international oil company and let it do the job." We do not need these companies. As a Canadian I was insulted at five o'clock this afternoon by the way the government denigrated the ability of Canadians, suggesting that Canadians could not undertake this development themselves. The Grits and Tories remind me of a hound dog sitting on a cactus with all those needles in his backside, howling for help, but refusing to get up and help himself.
The Syncrude operation can, and should be Canadian owned. I will not argue now whether it should be totally publicly owned or whether ownership should involve a combination of public Canadian ownership and Canadian private ownership. Surely some of my friends from Alberta can tell this House about the millions of dollars available for investment by Canadians and independent Canadian companies.


An hon. Member:: Not in Saskatchewan.


Leslie Gordon Benjamin: Oh, yes, there are such people.


Mr. Eawden:: Tell us how many rigs are working in the province.


Leslie Gordon Benjamin: The hon. gentleman to my right asks how many rigs are working in Saskatchewan. If any rigs have left, it is because they have been blackmailed by international oil companies.


Some hon. Members:: Oh, oh!


Leslie Gordon Benjamin: I am not pretending to be an expert.


An hon. Member:: But you are!


Leslie Gordon Benjamin: But I think I am as expert as some of the mouthpieces in this House for multinational oil corporations pretend to be.
Dozens of Canadian-owned independent drilling and service rigs, oil companies and exploration companies have either gone belly up, or have been bought out by foreign companies. Why? The reason is multinational corporation blackmail.
I would like hon. members from Alberta to tell me how many private independent Canadian-owned drilling and service rigs have left Alberta and are now in Oklahoma and Texas? I ask them, if they are so smart, how come their independent companies in Alberta are in their present situation?


Some hon. Members:: Oh, oh!


Peter Colwell Bawden: You are going to blow your top.


Leslie Gordon Benjamin: The budget is designed to prevent the democratically elected government of Saskatchewan from developing, exploring for and producing the province's own oil and mineral resources. It is designed to do nothing but hinder the development of Saskatchewan oil under public auspices. I tell my friends from Calgary, who wonder about how many rigs remain in the province, that Sask Oil has brought in three producing wells.


An hon. Member:: But how many rigs are in the
province?


Leslie Gordon Benjamin: I don't know. There must be some, because you cannot get producing wells without first drilling some dry holes. So, some rigs must be operating in the province.
Saskatchewan has the capital fund which it set aside and which was not supposed to be subject to equalization; it is set aside for the purpose of exploring for and developing our natural resources, for the benefit of Saskatchewan and not for the benefit of those idiots in Montreal-


Some hon. Members:: Oh, oh!


The Acting Speaker (Mrs. Morin):: Order, please. I regret to interrupt the hon. member, but the time allotted to him has expired.


Some hon. Members:: Continue.


The Acting Speaker (Mrs. Morin):: Is there agreement that the hon. member shall continue?


Some hon. Members:: Agreed.


Leslie Gordon Benjamin: Madam Speaker, I thank you and my hon. friends for the privilege of continuing for a few minutes. I know the reason is that members want to see how I will get out of this one. I was thinking about the CPR and that is why I thought of Montreal.


Some hon. Members:: Oh, oh!
February 4, 1975


Leslie Gordon Benjamin: I mean that. There are some idiots in Montreal. There are even some in Regina, but they all sit on the opposition side of the legislature.
In spite of all the fun, we can do things by ourselves. We have proven that many times over. Ontario Hydro has between $1 billion and $2 billion in investment and projected investment. Don't anybody try to perpetuate this mythology that because it is a vast amount and, because these big oil corporations are sitting outside our border, we have to lay back and let them rape us.


Some hon. Members:: Oh, oh!


Some hon. Members:: Explain.


Leslie Gordon Benjamin: Madam Speaker, I have enjoyed this. I have enjoyed the fun my colleagues are having this evening. I am sorry my remarks were misconstrued because they were missaid.


Some hon. Members:: Hear, hear!


Leslie Gordon Benjamin: If I were an orator or read my speeches word for word, I would probably not get into this kind of difficulty. I would probably not have nearly as much fun. I want to close-


An hon. Member:: I don't blame you.


Leslie Gordon Benjamin: I had better not hear any more remarks like that because hon. members have granted me extra time. That means I can stand here until ten or eleven o'clock.


Some hon. Members:: Hear, hear!


Leslie Gordon Benjamin: I promised not to abuse that privilege, but I could be provoked into doing so. In fact I have several more pages I have not dealt with yet.
There is another area I want to mention because the Minister of Finance made specific reference to it in his speech, as a result of some things that were said, both in and out of Saskatchewan concerning what is in the budget. That is the case of the Saskatchewan Power Corporation, natural gas development, production and retailing to customers of a corporation like that.
The provisions in the budget are almost unbelievable. Our corporation buys natural gas produced in Saskatchewan from a number of oil and gas companies, as well as fields which it owns, at an average of about 16 cents per thousand cubic feet. The SPC then distributes this gas, and other gas we get from Alberta, to our customers at low rates.
The federal budget allows the federal government to tax these companies as if they sold the gas to Saskatchewan Power Corporation at going market prices as set by the federal government, very possibly more than 60 cents per thousand cubic feet. This means that in some cases these companies will have to pay in taxes very nearly the total price they get from Saskatchewan Power Corporation.
These provisions affect primarily those provinces that have taken steps to keep natural gas rates down. The federal budget is designed to force customers in those provinces, especially Saskatchewan, to pay rates similar to those paid by customers in other parts of Canada.
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The excuse offered for this is that the federal move is necessary to prevent provinces from getting around the new federal ruling respecting the taxing of provincial royalties. They do not want a provincial corporation to buy oil from a company cheaply, then sell it at a high price and, in effect, convert what would have been a royalty into a profit.
However, that has got nothing to do with the Saskatchewan Power Corporation. Saskatchewan Power Corporation does not buy gas cheaply to sell it at high prices. It buys gas cheaply to sell it to Saskatchewan people at low prices. Saskatchewan Power Company applies to natural gas the same principle that it and power corporations in other provinces apply to electric power, the utility principle.
This budget is an attack on the whole concept of using Saskatchewan resources for the benefit of the people of Saskatchewan. It hurts one province above all the others, Saskatchewan. Canada's history contains no similar example of the federal government attempting to stop a provincial government from developing energy resources and providing them to the citizens of that province at the lowest possible cost-in fact, at cost.
For more than 50 years Ontario Hydro has been following that very policy without federal interference, providing electric power to the people of Ontario at low cost. For many, many of those years it was providing power at a fraction of the cost we paid in Saskatchewan.
Federal interference in Saskatchewan Power Corporation's attempts to provide low-cost gas to the people of Saskatchewan is particularly reprehensible, and cannot be explained on any other basis than federal opposition to western Canada enjoying the benefit of its resources. I have not heard any criticism of that particular provision from members of the federal Liberal party. I am not sure I have heard it from members of the provincial Liberal party. I am not sure I have heard it from any members of the Conservative party.
We will not willingly stand by and let the Saskatchewan Power Corporation gas division, which has operated to serve Saskatchewan customers for almost 20 years, be plundered, and plundered with no possible justification. Last Tuesday evening, as recorded at page 2695 of Hansard, the Minister of Finance made some remarks about this, and I quote:
As I indicated to the House previously, I have been giving consideration to the question raised about the possible impact of the new resource taxation system proposed in the budget on the Saskatchewan Power Corporation. It is my understanding that gas acquired by the corporation both from Alberta and from within the province is supplied to Saskatchewan consumers essentially at cost after provision for its own administrative, operational and debt expenses. Assuming that to be the case, no element of royalty or similar levy by the province is involved, with the result that the Saskatchewan Power Corporation should not be affected by the fair market value rule contained in the bill now before the House. Since there has been some doubt regarding the meaning of "fair market value" in specific circumstances, I should like to advise the House that I intend to introduce a clarifying amendment.
That looks promising. But the amendment had better do more than clarify. It had better exempt the Saskatchewan Power Corporation from the provisions of this budget. In fact, if the Minister of Finance and the Prime Minister are

February 4, 1975
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genuine about reaching understanding and agreement on resource revenues with the provinces, they had better shut up some of their colleagues who have been talking about taxing Crown corporations.


Some hon. Members:: Oh!


Leslie Gordon Benjamin: That notion has frightened the daylights out of people in all political parties. I should like to ask the Minister of Justice what he would do if the government of Saskatchewan were to decide to repeal the legislation which established the Saskatchewan Power Corporation, the Saskatchewan Transportation Company, the Saskatchewan Insurance Company and so on, and put them all under one provincial department? I should like to know from the Minister of Finance and from the Minister of Justice, who is supposed to be a legal expert, whether they would be prepared to tax a provincial government department? There was half a nod from the Minister of Justice. Those are the ramifications involved in a budget of this kind. They will do more to create disunity and cause harm-


An hon. Member:: To socialism.


Leslie Gordon Benjamin: -than anything which has happened in the past.
Of course the federal government has to tax for the benefit of all Canada. There is no argument about that.


An hon. Member:: Yes there is.


Leslie Gordon Benjamin: The federal government is entitled to fair sharing not only of resource revenue but of all revenue. I am getting tired of the straw man the Minister of Finance is putting up. All political parties are agreed on this. We disagree on how to do it.
The methods used by the Prime Minister and the Minister of Finance included the betrayal of an agreement; they betrayed an agreement, they double-dealt, they chose to take only their version of what the agreement meant. I said at the beginning that a man was only as good as his word, and that governments were only as good as their word. If the Minister of Finance and the Prime Minister felt they were in a corner and were obliged to disallow royalties as a deduction for income tax purposes, they should have gone to the premiers and said, "This is the way we see the agreement; do you?" But they did not do this.
I always understood you don't back out of an agreement without the consent of the person with whom you made the deal, and that if you want to change a deal you go back to the people with whom you made it. The Prime Minister and the Minister of Finance failed to do this. They chose to quote the correspondence which suited their argument, while ignoring other parts of it. This does not contribute to national unity. If they really believe in national unity they will change their way of dealing with the provinces and make a better effort to reach understanding.
I was only being half serious when I spoke about the provinces getting it down in writing but, as a result of the experiences of the past months, it might be well for both sides if it were in writing. It would certainly be good for the country if the Minister of Finance and the Prime

Minister were much more open in their dealings with their provincial counterparts. It is not just Saskatchewan or the other oil producing provinces which are concerned. What about Ontario's nickel and hydro-electric power? What about the lumber in the Province of British Columbia? If there is to be sharing it cannot be just the resource of one area of Canada. It has to be a sharing of all the areas, of all the resources. I hope the Minister of Finance and the Prime Minister will, in future, do a much better job than they have done in the past year.
If the Minister of Finance would withhold the provision concerning royalties until after the meeting of first ministers in April he would be making a significant contribution to mutual understanding between the federal government and the provinces.


Marcel Joseph Aimé Lambert: Madam Speaker, I found a familiar note in the speech made by the hon. member for Regina-Lake Centre (Mr. Benjamin). He echoed what one has been hearing in western Canada for months.
I am glad he made that speech tonight, although we cannot accept his nationalism, along with some of the other doctrinaire theories of the NDP. I invite members of this House from central and eastern Canada to go out and walk up and down the streets of our western cities. They will see. It will come up and hit them right in the jaw. I am very serious when I make this assertion. This is not in my notes for this speech and I am deadly serious when I tell hon. members that the vote in July in western Canada was a clear reflection of the ill-considered proposals put forward in the budget of May 6.


Otto Emil Lang: Everything else was all right?


Marcel Joseph Aimé Lambert: I invite the Minister of Justice (Mr. Lang) to go to the Province of Alberta and stand up and explain his policies. The only time he would be well received is when he is dispensing judgeships among his Liberal friends.
The government took the same position on the night of November 18. It is amazing, but I will repeat what I have said before with regard to the budget;

I shall say it again and again: had the province of Quebec owned those natural resources, this budget would never have been introduced.
The Quebec Minister of Natural Resources is protesting against it, but the revenue of his province is not at stake this time; however, we will know what his reaction is when this bill is passed.
Under our Canadian statutes, we will have problems with the other provinces because Quebec is rich in natural resources. All of them have not yet been discovered. Some day, let us hope in the near future, the province of Quebec will have a far more vigorous and viable market for its natural resources than it has at the present time.
In view of the attitude of the provincial governments, the revenue of the province will be higher than it is for the iron and ores now extracted.
We will see, for instance, that when the shoe is on the wrong foot, toes are pinched. I say, even now, that there is
February 4, 1975

no room in our present-day confederation for the proposal of the government whereby no adjustments can be made with regard to revenue resulting from the development of our natural resources.
That is the message in so far as the thrust of this budget in respect of natural resource taxation is concerned.
I can remember the Minister of Industry, Trade and Commerce (Mr. Gillespie), then a member of the finance committee, and the hon. member for Labelle (Mr. Dupras), as well as a number of other members in this House who were members of that committee, accepting and backing the resolutions of the committee and the white paper on taxation, which said that exploration and development expenses should be fully depreciated.
What did the minister do in May? He proposed to cut the tax to 30 per cent annually on a declining basis. Then, of course, he had his parallel proposition of disallowing royalties, licences and fees payable to the provinces in respect of the development of provincial natural resources.
As indicated by the hon. member for Regina-Lake Centre, this was not money paid to individuals who had royalty rights, and not payable to foreigners who had royalty rights. This was money payable only to the provincial governments. Like little Jack Horner, and not my good friend, the hon. member for Crowfoot (Mr. Horner), the minister sat in a corner, put in his finger and pulled out a plum. He then said, "I am prepared now to turn to the 100 per cent formula in respect of exploration expenses, and 30 per cent on development expenses, if the provinces will yield their position in respect of royalties." That was two-faced robbery.
His proposition was wrong on two counts. I am not going to go back into the history of negotiations in respect of oil taxes, as that was covered by the hon. member for Calgary Centre (Mr. Andre). I do suggest to the minister, however, that there was a clear breach of the undertaking reached in January with regard to the surplus, above 50 per cent, of the whole export tax.
In that way the federal government was taking the biggest individual slice of this oil pie. It said it would use 50 per cent for the laudable objective of evening out the price of foreign oil eastern Canadians were being subjected to, a price which had been skyrocketing as a result of the action of OPEC countries. It suggested that the remainder would be divided with the oil producing provinces.
Then on March 27 the provinces were faced with the unilateral declaration that all that was off, and that the federal government intended to take the entire export tax. That meant, quite frankly, that the producers of oil and gas in Alberta, Saskatchewan and British Columbia, who were dependent on the oil industry, were paying the entire export tax. As far as the United States was concerned there was nothing special about this. The United States was paying the world price for oil, not a special tax to Canada. This was an export tax taken from western Canadian oil producers, and they have continued to pay it all along.
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In addition to that the Minister of Finance had the gall, in his budget of May 6, to tell the people in those producing provinces that all their royalties, licences and fees would not be allowed in the computation of income for income tax purposes. We could look at some of the detail in this regard, but I have not got time to do so now. I will cover this when we get into the committee of the whole.
In any event there are inconsistencies, uncertainties and retroactivities in respect of the capital payments for Crown leases, and those things allowed and not allowed. This is an unwarranted raid by the federal treasury- piracy of the worst kind. This is public piracy, and over there we have a bunch of sycophants prepared to back up the government simply because there is a quarrel, led by a government that knows nothing about western Canadians. This minister knows nothing about them, has never known anything about them and, quite frankly, does not care about them. That is the attitude of those across the way.


An hon. Member:: Some of my best friends are out there.


Marcel Joseph Aimé Lambert: I would invite the hon. member for St. Catharines-


An hon. Member:: Hamilton Mountain.


Marcel Joseph Aimé Lambert: That is not far off, and I am sure the hon. member will not deny the people of St. Catharines. I would invite the hon. member to come out to western Canada and spread around that good cheer of which he has so much. He is a great fellow and easy to get along with, but I would bet my bottom dollar that he would be absolutely astonished, when walking the streets of Edmonton or Calgary, by the reaction of the average John Q. Public to what the federal government is trying to do in respect of oil and gas.
Let me suggest to the transplanted member from British Columbia that he has heard of this reaction in his own province. I invite him to come to what some people in his province call eastern Canada, that is Alberta, to find out the reaction of the people there. He should talk to some of his ex-service friends in Edmonton. They will tell him what they think about the attitude of the government of Canada in this regard. There is a great deal that might be said about what these people think, but I will leave the matter at that.
The minister would have done us a service if he had given some incentives to Canadian taxpayers with regard to ownership and development of Canadian resources. I would like to have seen an incentive beyond that which he has given. After all, the limited incentive with regard to dividends to Canadian companies in 1975, including some bank interest and so on, totaling up to $1,000 frankly is for senior citizens who are depending upon earnings on their savings, and that is fine. I fully appreciate and support the minister on that proposal. But with regard to the serious investor in this country the minister has done nothing. He has offered crumbs.

February 4, 1975
Income Tax
What I would like to see with regard to resource development-I have exposed this plan before, and there are others-is that on the determination of what is a natural resource and the stages of development of natural resources, a Canadian taxpayer, be he an individual or a bona fide Canadian company, would be entitled to invest any amount therein, provided the investment were kept for five years within that ball park, and then there would be a total forgiveness of capital gains tax. If it were kept for four years, it would be 80 per cent forgiveness, and so down the line. Turnovers would be allowed within that field. What we are asking that Canadians be given as an incentive is a forgiveness of the total gains tax on those particular investments if they leave them in natural resources, and they have to be Canadian citizens and truly Canadian companies. Then we will be able to get the serious investor.
Today you have to get investments of from $50,000 to $100,000. Gone are the days when, as I well remember in the early 1950s, you could drill a well for $75,000. We have lost out on that when that silly, exclusive principal business rule was brought in, a rule that the minister will not discard. Canadians got skunked right out of their place in the oil lease market. At that time $75,000 could drill a well, but it was so easy for the Americans to come in. They did not have to contend with the principal business rule, so that all they lost was $5,000, $10,000 or $20,000, with a small syndicate of fellows going it independently.
How do you think the oil industry was developed there-by the big companies? Nothing doing! It was being developed in the same way that drilling was being done this past year, ans now is abandoned. It was being done by small Canadian independents who were doing the drilling for the big companies, holding their leases. People who say that it is the big companies that are being affected by this closedown are wrong. That is nonsense; they do not know the first thing about business.
It is Canadian oil companies, Canadian independents, Canadian drillers, Canadian service companies and catering companies, and prefabricated camps, that are being driven to the wall this winter because of the close-down of the oil business. The big companies have never brought in their capital. Remember that for every dollar they have, there is a $5 demand. Conditions are tough in Canada. They have the North Sea where they can put their money. They can go somewhere else. The Minister of Finance will remember what happened to the oil industry at the time when the white paper came out. It took us two years to recover in the oil industry, to get the drilling and exploration programs back on the rails, simply because of the white paper and its idiotic provisions and recommendations.
The point is that this government and its predecessor were criminally negligent with regard to the oil industry. This is a fact of life. It makes me cry to listen to the crocodile representations being put forward by the Prime Minister, the Minister of Finance and others on behalf of the sacrifices made by eastern and central Canada for the development of the oil industry. They said that under the national oil policy they paid higher prices for oil. They could have had cut rate oil from Soviet ships. I remember

the efforts of the former minister of national revenue to prevent the dumping of that oil.
There was much hot and bootlegged oil that could be sold in eastern Canada at perhaps $1.10 or $1.25, laid down on the docks in Montreal and Toronto. But it would cost a $1.50 or a $1.80 to get western oil down here, and the government of the day said that we were going to develop the western oil industry.


Some hon. Members:: Hear, hear!


Marcel Joseph Aimé Lambert: They said that that would be done at the expense of the people of central Canada. Nonsense, Madam Speaker. I would ask the people of Hamilton how many miles of drilling string went out, and ask the machinery companies in central Canada how much machinery was made for the development of oil, how many pumps for the pipelines that brought the stuff to eastern Canada? It did not all come out of eastern Canada.


Some hon. Members:: Oh, oh!


Marcel Joseph Aimé Lambert: I agree that not all came out of central Canada. At times the prices in central Canada were a little hoggish. There was a tariff. Also, may
1	say, there is that famous transportation policy under which manufactured goods coming from eastern Canada really paid the freight. Now we ask; who benefited? Sure, western Canada benefited from it, but not at the expense of central Canada. I have left out eastern Canada and the Atlantic seaports because they did not make provision of materials into western Canada.


An hon. Member:: What about tax incentives?


Marcel Joseph Aimé Lambert: You would not know a tax incentive if it bumped you on the nose. You can write off drilling expenses. The hon. gentleman has so much money that he could drill into three dry holes before he could get a producer. What happens to expenses on three dry holes? Should you not be able to recover them? Is that a tax incentive? Come on, the hon. member does not have the brains or the money to drill into one hole on that basis.
The oil industry, as well as gold mining and some of the other mining industries in Ontario and Quebec-my goodness, the Quebec members should know how chancy that is-are the high risk industries, and if people are going to go in there they will have to have a return, and not a mere
2	per cent on their capital.
You have to get your capital, and then some, because all too often within the next six months not only your shirt but your pants will be gone. To the hon. member from British Columbia I say, ask your mining people how they are being taken to the cleaners now.


An hon. Member:: Speak on the point and say something.


Marcel Joseph Aimé Lambert: The hon. member for Sherbrooke (Mr. Pelletier) is not even aware of the point about this excessive taxation. I am speaking about excessive taxation for a particular industry, and if the hon.
February 4, 1975

member will bother to read the provisions in this speech, or in the tax bill, and find out all the detail of how that industry is going to be driven to the wall by these particular provisions-


An hon. Member:: What about Lougheed's royalties?


Marcel Joseph Aimé Lambert: The hon. member shows precisely the type of ignorance that is so prevalent in central Canada-


An hon. Member:: New Brunswick.


Marcel Joseph Aimé Lambert: The hon. member knows nothing about the oil industry. He asks what about the answers of Premier Lougheed with respect to royalties. He will understand that the federal government was taking everything over $6.50 out of every barrel of oil. And when we are looking at oil we are not looking at old oil, we are looking at the cost of producing new oil, but the federal government is skimming off $6.50 for its own purposes. It is doing this simply to make equalization payments, admittedly to eastern Canada, but not to the producing provinces. Those provinces get nothing from it. There was a welsh on the January deal. There was a welsh on March 27, and the Minister of Justice knows it. Certainly I agree with the priority pricing. The suggestion for it came from this side in the first place.


An hon. Member:: All the provinces agreed to it.


Otto Emil Lang: What about the Arab price?


Marcel Joseph Aimé Lambert: But that price is there. The minister is trying to counter that in order to protect people who would have been in better shape if this administration, five years ago, had built that pipeline. That pipeline would now have been in place. But no, it was not going to be built. That pipeline is not going to be built, despite all the protestations and those great statements by the Prime Minister and the Minister of Energy, Mines and Resources with regard to that pipeline.
I have spent enough time on oil, I think, for tonight.


An hon. Member:: Right on.


Marcel Joseph Aimé Lambert: I will suggest to hon. members from Quebec that they look at this very carefully. I will repeat that today it is our turn in western Canada. Tomorrow it may be their turn.


Irénée Pelletier: Why not go and say that in Quebec?


Marcel Joseph Aimé Lambert: Mr. Speaker, I will say it, and I have said it several times.


Irénée Pelletier: Where?


Marcel Joseph Aimé Lambert: At different places, on television, on radio.


Irénée Pelletier: Where in Quebec?


Marcel Joseph Aimé Lambert: I need not say it. Invite me and I will say it.
Income Tax


Irénée Pelletier: You will say it?


Marcel Joseph Aimé Lambert: Yes.


Irénée Pelletier: Come to my place. Come in my riding.


Marcel Joseph Aimé Lambert: I do know the facts, while you, you don't know them.

In so far as the personal income tax proposals are concerned I think that the minister has moved in the right direction. However, because the tax scheme set up in 1971 was on a scale which was just completely and utterly divorced from any degree of reality in these times of inflation, the returns to the government on personal income tax are escalating beyond the wildest dreams of any minister of finance. My colleague from York-Simcoe (Mr. Stevens) put them on the record last week. We can see the increases from the pages of the budget speech, which are higher than the increase in the cost of living.
No one can tell me that high rates of income tax are not inflationary. Ask any negotiating officer on behalf of any union today. Let the minister ask his colleague, the President of the Treasury Board (Mr. Chretien); let him ask the Postmaster General (Mr. Mackasey) who is now negotiating with the postal workers. Tax as represented by inflation is immediately passed on to management, and on into costs. We see it reflected, as hon. members who own their own businesses may know, in an economic crunch.
The Minister of Justice, although he is not a practising lawyer, knows that as soon as lawyers have to pay more income tax they insist on increased take home pay. What have we seen amongst doctors in this country, and with all the teachers? Due to inflation they go into higher income brackets and pay much more tax.


Lorne Edmund Nystrom: And members of parliament.


Marcel Joseph Aimé Lambert: And somehow the same will happen in this house. They will look to the net position. It is not unnatural. The minister would do a great deal to remove some of the impetus in the inflation psychology if he did something more on the side of personal income tax.
We have the tables on the basis of what the minister projects. Even though for 1975 he increases the personal cut to 8 per cent with a minimum of $200 and a maximum of $750, has the minister calculated what the increase is going to be in the total collections under personal income tax on the basis of his projections? He still has a cushion of something like 16 per cent or 18 per cent. That includes, for the first time this year, indexing and that indexing is at 10 per cent. If we took that 10 per cent and added it to the income, if we took those tax cuts the minister proposes and added them on, what would be the yield to the minister in personal income tax? My God! There are not enough strongboxes in this country to hold all that cash. Talk about 50 per cent increases. That would be one right there, right on yield in one year.


Lorne Edmund Nystrom: Social Credit in practice.
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Marcel Joseph Aimé Lambert: But this is wrong. I agree that for our senior citizens who have small investments the $1,000 tax free interest as proposed in the May budget is good. I do not think so much of the dividends, because the net amount is actually going to be too small, and there are too many difficulties.
I am sure the minister reads comments of tax experts like Mr. Asper, and I am glad to see that the hon. member for Waterloo-Cambridge (Mr. Saltsman) had also read them and put them on the record. There are some great ways to get around this. It is going to be difficult and I would have thought, however, that a far better way to relieve the pressure of inflation today would be to adopt the proposal put forward by the Leader of the Opposition (Mr. Stanfield) in the last election campaign, and adopted in part by the minister's own party.
Where an income earner reaches pensionable age and his spouse is aged under 65 and you can reverse it if need be- when the husband becomes pensionable under the Canada Pension Plan and receives old age security, and his spouse is aged over 55, she should also qualify for a pension. I do not expect a woman over 55 to go out and get a job in order to take up the slack which has suddenly arisen in their income position by reason of the husband's going from an income earning position to a pensionable position. This would not cost that much money and it would relieve a lot of suffering. I sincerely hope that the minister will do that in his next budget. It would be a step in the right direction.
I asked the minister privately yesterday if he had cleared with the Minister of State for Urban Affairs (Mr. Danson) whether the $500 bonus for a first time home purchase is considered a benefit under the Income Tax Act.


John Napier Turner: It is not taxable.


Marcel Joseph Aimé Lambert: The minister says it is not taxable and I am glad to hear that because it would have been a cruel hoax had it been. We will have to see whether there are some other benefits that do not get taxed.


John Napier Turner: We will go through them together.


Marcel Joseph Aimé Lambert: Fine. I am glad to have the minister's assurance on that point. Does the $1,000 for private pension plans apply to public service superannuation, RCMP superannuation and armed services superannuation? All of these plans are not of general contribution, they are contributions of the individual members, and there is a pension plan earmarked for them. It would be a cruel irony if a member of one of those groups, or a former member of this House, were to be told that the first $1,000 of their pension did not qualify. Under a registered retirement savings plan which has been converted into an annuity, the first $1,000 is exempt, so certainly it should be for a member of the public service-a postal worker, for instance. I see the Postmaster General (Mr. Mackasey) nodding with some approval at what I am saying.


Mr. Mackasey:: I was following.
[Mr. Nystrom.j


Marcel Joseph Aimé Lambert: The hon. minister was nodding-I am sure he would not dare fall asleep with such a benign look on his face.
There is one final point, Madam Speaker. Some two years ago, when he was trying to get through the special tax deductions on manufacturing and processing machinery, the minister said he was conducting a survey, but we have not heard a word about it since away before last May. He was supposed to be making a study of the efficacy of any depreciation plans, but the results have not come forward. The minister has suddenly made some changes, however. He has agreed that the accelerated depreciation over two years for manufacturing and processing machinery will continue without terminal date. On what basis has he done this, however, in view of the undertakings he gave to this House? The reasons may be perfectly all right.


John Napier Turner: I described them in the budget speech.


Marcel Joseph Aimé Lambert: There was no detail, just an assertion that the minister was happy to do it.
On the basis of what I have said, Madam Speaker, on the provisions in the budget and in this bill with regard to the deductibility of royalties, etc., I now move, seconded by the hon. member for Athabasca (Mr. Yewchuk):
That all the words after "that" be stricken out and that there be substituted the following:
This House, while approving the several provisions in Bill C-49 which relieve against the incidence of income tax on, inter alia low income earners, pensioners, and persons in receipt of specified sources of interest and investment income, declines to give second reading to a bill which includes provisions which eliminate the deductibility of royalties, licences or other fees payable to provincial governments from operational income in the computation of income tax by taxpayers engaged in the development and production of natural resources owned by such provinces.
I am satisfied that this motion should meet the approval of our colleagues in the New Democratic Party because it is in line with the speech made by the hon. member for Regina-Lake Centre (Mr. Benjamin).
This is a reasoned amendment, and I am satisfied in my own mind it is of a nature that can be supported by argument. It is one of a kind that is somewhat rare, but there have been occasions when I have been successful in convincing the Chair that the reasoned amendment technique is the best way to deal with an omnibus bill.
This is the type of bill that contains many provisions affecting all the sectors of the economic life of this country. There are many of these provisions with which we agree, and there are many with which we disagree. The House should be able to join issue on a full debate and be able to express its opinion with regard to these various provisions. I would hope, Madam Speaker, that it being one minute to ten o'clock you would consider my motion overnight, and that we could have a decision from whoever is in the chair tomorrow afternoon on the continuation of this debate. May I call it ten o'clock?


John Napier Turner: On a point of order, Madam Speaker, before the Chair eventually rules on the admissibility of this particular amendment I would hope
February 4, 1975

that the Chair would allow argument as to its admissibility.


The Acting Speaker (Mrs. Morin):: As the hon. member for Edmonton West (Mr. Lambert) has suggested, the Chair will reserve its opinion on this amendment, and make a ruling tomorrow.


Marcel Joseph Aimé Lambert: Madam Speaker, I would like to support the representations of the hon. Minister of Finance (Mr. Turner) by saying that, if need be, we will have an opportunity to voice our opinions on the acceptability of the motion.


An hon. Member:: Agreed.



PROCEEDINGS ON ADJOURNMENT MOTION

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

Mr. Allan B. McKinnon (Victoria):: Madam Speaker, I asked a question of the Minister of National Defence (Mr. Richardson) some time ago and considered the answer unsatisfactory, so I have asked for this adjournment debate on the subject. As reported at page 2329 of Hansard for Tuesday, December 17, 1974, my question concerned the use of nuclear weapons by Americans in northwest Europe, and I quote:
During the recent meeting the Netherlands' minister suggested a reduction in tactical nuclear weapons, opposed by Canada. Let me quote from the Gazette under the headline "Canada supports NATO A-weapons" as follows:
Canada lined up with a majority against the suggestion ... Apparently Canada was against the suggestion that we reduce nuclear weapons in Europe. This is clearly a change in policy.
Mr. Cadieux, the former minister of national defence, said on December 8, 1969:
Speaking for Canada, I supported the adoption of those papers which further define and restrict the circumstances under which nuclear weapons might be used.
I asked, as recorded on page 2329 of Hansard for December 17, 1974:
Would the minister confirm and explain this change in policy?
The minister replied:
Mr. Speaker, Canada is not involved in the discussions with European allies about the use of nuclear weapons. We do not use nuclear weapons ourselves in Europe. The hon. member has quoted another country's policy, not Canada's policy.
Adjournment Debate
That answer completely evaded the question. I then said:
Mr. Speaker, the U.S. Secretary of Defence, Mr. Schlesinger stated at the same conference that NATO can no longer count on the United States umbrella to protect it. Did the minister consider this to be a reference to a growing United States reluctance to use nuclear weapons in a ground defence role in western Europe?
To which the minister replied:
No, Mr. Speaker, I think it was made very clear that if necessary or required the United States was prepared to use tactical nuclear weapons in Europe.
Canada has a longstanding commitment to Europe and, at one time, our aircraft were used in the strike role and were carrying nuclear weapons on exercises. Recently a change has been made, and we are using aircraft designed for the strike role in a support role, which merely shows the futility of some of the policies embarked on by the present regime. Here we are, using a 1,500-mile-an-hour fighter in a 500-mile-an-hour role. It is hard to imagine a less efficient use of money, and a less efficient use of an aircraft designed for a much more demanding role.
It is crucial for us to know what is to be Canada's position concerning NATO. While the minister has made some statements, they have generally been equivocal. I should like the minister to explain what the situation is concerning our role in Europe, because our European allies are becoming uneasy about our position.
A senior diplomat in the German NATO delegation observed
Canada's cut in its NATO forces of ten thousand to five thousand was rather traumatic at the time and current talk of a defence review in Canada leads some of us to feel a cut of a thousand to zero is as possible as anything else.
I should like the minister to provide an answer, as cutting our forces further would involve questions about our reliability, particularly as Secretary Schlesinger said that NATO nuclear weapons may eventually become a Vienna bargaining counter.
This places us in this position: if we are no longer to have a nuclear deterrent in western Europe, it goes without saying that our European allies will look for stronger conventional forces to replace the nuclear umbrella, and apparently Canada is not willing to share that burden. Consider that at present Warsaw pact forces outnumber NATO forces. At least 70 Warsaw pact divisions face only 25 NATO divisions; 20,000 Warsaw pact tanks face 7,000 NATO tanks and 4,350 Warsaw pact aircraft face 2,040 NATO aircraft. Madam Speaker, we, on my side of the House, want to know what the level of Canadian forces is to be.
The minister said, as recorded at page 122 of Hansard for October 4, 1974:
We have found it necessary to reduce expenditures...
He was referring to personnel.
Thirteen days later in the defence committee he said the Canadian forces would be 79,000 at the end of the fiscal year 1974-75, which would mean an increase. The first statement suggests that the forces' strength is going down; the other suggests it is going up. Perhaps he does not know what will happen to the strength of the forces. He has once again changed the figure, because a few days ago,
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Adjournment Debate
before the Conference of defence associations, the figure of 78,000 was given as the latest, revised version of armed forces strength. These constant revisions to what is supposed to be our long-term policy are alarming the troops and alarming the defence critic of my party.
Finally, may I say a few words about a point put forward by Professor Laurence Martin who is Professor of War Studies at King's College, London. He wrote in an article headed "Theatre Nuclear Weapons and Europe," printed in the December, 1974 issue of "Survival", the publication of "The International Institute for Strategic Studies," that:
The rise in Soviet long-range nuclear striking power has accelerated appreciation of the futility and immorality of a nuclear strategy effectively confined to massive retaliation against cities. ... United States Secretary of Defense, James Schlesinger, has set about his search for limited strategic options. It is only natural that tactical nuclear weapons, which also offer a limited option, should come under renewed scrutiny.
I see my time is up, Madam Speaker. I simply recommend this reading to the Minister of National Defence (Mr. Richardson) at the earliest opportunity.


James Armstrong Richardson: Madam Speaker, I welcome the opportunity provided by this adjournment debate to reply to the hon. member for Victoria (Mr. McKinnon), particularly to reply concerning the place of nuclear weapons in NATO strategy. I think that was the substance of his question to me in December and, in fact, on other occasions. The hon. member has raised other matters tonight. If I had time I would go into them. However, in the very few moments available to me I will answer what I believe is his main concern.
I would like to confirm that there has been no change in that policy, and that the position taken by the Canadian delegation to the ministerial meeting of the NATO defence planning committee last December was a reaffirmation of the policy we have followed consistently since 1969. NATO's deterrent strategy of flexible response rests upon three principal components of NATO's defensive forces. These are, first, the conventional forces; second, the tactical or theatre nuclear forces, and third, the strategic nuclear forces.
At the recent meeting to which I have referred all of the NATO defence ministers agreed that these three components continue to be essential to the collective security of the NATO allies. They reaffirmed their previous position that unilateral reductions in any of these components would be detrimental to the delicate negotiations now going on between the United States and the Soviet Union on strategic arms limitations, and between NATO and the Warsaw Pact on mutual balanced force reductions in Central Europe.
At the December meeting there was a very complete discussion concerning the relative weight which should be given to each of the three components of NATO's deterrent forces. It was agreed that while all three components all remained essential, NATO should not become fully dependent on nuclear weapons and that all possible efforts should be made to improve the deterrent capability of NATO's conventional forces.

The hon. member for Victoria in his earlier question, and again tonight, appears to be asking if the Canadian nuclear policy or the NATO policy concerning nuclear weapons has changed. I want to confirm to him, as I did earlier in this answer, that Canada's policy and the NATO policy have not changed.


The Acting Speaker (Mrs. Morin):: Order, please. I am sorry to interrupt the hon. minister, but the time allotted to him has expired.


ADMINISTRATION OF JUSTICE-SUGGESTED RESTORATION OF CAPITAL PUNISHMENT
Léonel Beaudoin: Madam Speaker, on January 22, 1975, I once again raised in the House a matter that grows ever more important each day, that is the restoration of capital punishment.
There has been an intolerable number of murders since the beginning of the year 1975, 33 in only 21 days. In view of those unacceptable facts, I moved under the provisions of Standing Order 43 a motion asking that the House of Commons be given an opportunity to discuss the possibility of restoring capital punishment in cases of capital murder to put a stop to this inadmissible situation. The House did not accept the motion. However, the great majority of members present told me they regard my proposal as important and interesting.
Today I asked once more that hon. members take their responsibilities and fulfil their duties as protectors of honest citizens in restoring capital punishment.
Let us put the question in historical perspective. It may be said that the act was amended three times since 1961. Before that, all murders were capital ones, and carried a death penalty.
In September 1961, two different categories of murder were introduced in the law. First there was capital murder, possibly carrying death penalty. Those were murders planned and deliberate, or causing the death of a police officer, prison warden or judicial authority, and finally murders committed in the accomplishment of another criminal act. The second group, non-capital murder, included all other kinds of murders, with a possible life imprisonment penalty.
In September 1967, the law was amended for a five-year period, and the capital murder concept was restricted to those causing the death of representatives of the law.
It will however be noted that after the law was watered down, Quebec was the scene of 52 murders in 1967, 91 in 1968, and a total of 129 in 1969.
In 1972, despite a significant increase in the number of crimes and numerous appeals for reinstatement of capital murder, the House of Commons freely decided that the only kind of capital murder, carrying death penalty, was that of a police officer.
Further, the act as it now stands provides that an individual sentenced to death for the murder of a police officer can apply for clemency to the governor-in-council, that is the Prime Minister, and may have the sentence commuted to life imprisonment. All such sentences have
February 4, 1975

been commuted in the last few years. To all practical purposes, the death penalty is now completely abolished in Canada. What is then the current situation? Since the beginning of 1975, that is during last month only, more than 30 murders were committed. If that pace was to be maintained over the whole year, murders would total 300.
The honest citizen who represents the greater majority of the Canadian public is worried and wants to be protected according to his rights. He is now sick and tired of having legislation, institutions and leaders oriented towards the protection of criminals, while past or future victims count next to nothing.
In fact, a poll I conducted in 1972 among nearly 18,000 heads of families in my riding revealed that the greater majority were in favour of reinstating capital punishment. As a matter of fact, I am not the only one concerned with this problem. The Quebec Minister of Justice stated a few days ago that he would be very glad to see capital punishment reinstated. The Canadian Federation of Mayors has also made representations in this direction. I should mention many other responsible organizations which have taken similar stands, but I cannot for lack of time.
Madam Speaker, the government has been as generous as it possibly could. Events have indicated that it is practically impossible to assure the security of honest citizens against the actions of the criminally inclined, without the most powerful deterrent of them all: capital punishment.
In the case of hardened criminals who will not regret their crime, no other penalty will solve the problem. If they are freed, they will commit other crimes, maybe raped and murders. In my opinion, criminals of this type who are fully conscious of their acts deserve death.
But it is not only a matter of punishing certain criminals or stopping them from killing again, it is a matter of stopping potential murderers. Everyone knows that fear is useful since it is the beginning of wisdom. We also know that this fear allows organized criminals to protect themselves against informing and errors which could compromise their organization. What works for crime professionals should work even better for potential criminals.
If the death penalty is reinstated, two principles must obviously be followed to reduce crime. First, for the sentence to be effective, it has to be executed. It is not enough that it should be included in the Criminal Code. In addition, I believe that it must be executed soon after the judgement instead of being postponed by unending delays until such time as the crime is forgotten or seems nearly ordinary. Therefore, the sanction must be made an example to have an educational impact.
There is another thing which can be ascertained, and that is that under present conditions, sparing hardened criminals means condemning others, innocent people, to pay the price with their lives. The only thing that remains to be known is who will be the next victims and how many there will be.
For all these reasons, Madam Speaker, I honestly consider that the House must without further delay reinstate capital punishment in Canada and that the sentence must be executed in cases of capital or premeditated murder or murder committed during the execution of another criminal act.
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Madam Speaker, I humbly ask the House of Commons to consider this matter as soon as possible to put an end to murders.


Mr. Herb Breau (Parliamentary Secretary to Secretary of State for External Affairs):: Madam Speaker, I am glad to have the opportunity tonight to answer on behalf of the Solicitor General (Mr. Allmand) to the hon. member and to the comments he made recently in the House about the re-establishment of capital punishment.
As the hon. member is aware, that issue has been discussed in December 1973. Then there has been a free vote in the House, the result of which has been to extend the abolition of capital punishment for five more years.
In December 1977, members of parliament will have another opportunity to express their views on this matter, which is very important and very serious. In fact, they will have to decide to abolish capital punishment or to restore it.
On that point, I would like to say that there is no sufficient evidence that capital punishment may deter or dissuade a criminal from doing wrong. Then, what other reasons should we have to justify such action from the state? Fears of increasing murders of crimes are certainly unfounded. If this were a major trend there would be an even or global increase in crimes throughout the country and not only in some big cities.
I firmly believe that we have other ways at hand, that we have other means to reduce the number of crimes in society. I think that capital punishment is not the solution. I believe that the state might rather show some respect for life; its example might in the long run bring some changes in the attitude and behaviour of Canadians. Although there is no evidence that capital punishment has any effect in the short term on the number of murders, the only assurance of an improvement in the long run might be total abolition.
To revert to the question recently raised by the member in the House on the restoration of capital punishment, I will reply on behalf of the Solicitor General (Mr. Allmand) that the government has no intention to bring this matter again before the House in the near future. I hope that the hon. member will be satisfied with this reply.


EXTERNAL AFFAIRS-ALLEGED PROSECUTION OF CHRISTIANS IN CHAD-GOVERNMENT ACTION
Arthur Jacob (Jake) Epp: Madam Speaker, on December 17 last I asked a question of the Secretary of State for External Affairs (Mr. MacEachen) regarding the alleged persecution of Christians in Chad. The reply I received from the minister at that time was restrictive, in the sense that he replied that to his knowledge, or the knowledge of the department, no Canadians were suffering persecution or any undue hardships because of the domestic policies of Chad. I would like to expand on that in the few minutes I have available tonight.
The argument that we cannot, as Canadians, get involved in the domestic affairs of a sovereign state-a principle that Canada has held for some time-I do not

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Adjournment Debate
think is really operative in respect of the question I asked the minister last December 17.
In the past we have raised our voices against persecution or discrimination. This voice has been raised whether there was religious discrimination or persecution based on religious differences within a country.
Reports coming out of Chad in the last few months of a program initiated by President Tombalbaye indicate that the president has begun a so-called cultural revolution or nationalization program the main terms of which include: first, an attempt by the government to eradicate all European influence, that is, the removal of non Chadian names including the biblical names that were given by parents as a result of missionary influence.
The second phase began in November of 1974, a so-called authenticity program, one in which all tribesmen must submit to initiation rites. In Christianity Today of June 21, 1974, the program as it was then visualized by the writers of the magazine was said to be as follows:
... secret ceremonies often involving sacrifice to ancestral spirits and an animistic "rebirth" ... The children of some were taken forcibly to the initiation camps. Sources say that one pastor who refused to let his sons go was shot, and that an evangelist's son who helped translate the New Testament into the Sara language was killed.
The article goes on to say also that missionaries have been expelled from Chad.
In article written for the New York Times by one of their correspondents, Henry Kamm, we find the following description:
... the ordeals in the camps exact a brutal physical toll. They are known to include floggings, burning with coals, scarring, sexual indignities, mock burials, drugging, and acts of humiliation. In the dispute surrounding the rites, some missionaries have been expelled and dozens of churches have been closed. Some believers have been killed, others maimed.
As I have said in my opening remarks, Canada has voiced its concern whenever discrimination took place. Both Canada and Chad are members of the United Nations, and as members of that international body both countries have signed the Universal Declaration of Human Rights. Article 5 of that declaration reads:
No one shall be subjected to torture or to cruel, inhuman or degrading treatment or punishment.
Article 30, the concluding article of the declaration, Nothing in this declaration may be interpreted as implying for any State, group or person any right to engage in any activity or to perform any act aimed at the destruction of any of the rights and freedoms set forth herein.
My intent today is simply to mention to the government of Canada once again that, in my opinion, we should use our diplomatic relations and our good offices to bring to the attention of the world community and of the government of Chad that persecutions or discrimination of any type are activities that are not condoned by Canada. I do not think that we have to do this in an aggressive way. I think it can be done in a positive way.
On December 15, a day of prayer for Chad was announced by the Evangelical Fellowship of Canada. Many Canadians, in fact approximately 1 million members belonging to the Evangelical Fellowship of Canada,

became involved in this day of prayer for Chad. Today I would simply like to add my voice, and request the minister and the government of Canada to use the existing diplomatic channels that are available to them to make a representation, first of all, to the world body, and specifically to Chad, that persecution and discrimination of the type that we are reading about in Chad go beyond domestic policy and are activities which we as members of the international community cannot accept.


Herb Breau: Madam Speaker, I welcome the opportunity given to me by the hon. member for Provencher (Mr. Epp) to enlighten the House on this point.
In 1973 the Chadian government launched a movement for social and cultural revolution. The purpose of this movement is to produce an authentic "Chadian personality". Accordingly, the authorities re-established the ancestral practice of initiation termed the "Yondo". Yondo was seen by the Chadian government as an authentic indigenous rite which could serve to link all Chadians and could encourage the influential bourgeoisie, said to be copying blindly occidental taste, to return to fundamental Chadian identity.
It is now compulsory for all Chadians citizens to undergo initiation. No one, except the initiates themselves, really knows what is involved in this practice. It is thought to be a kind of survival in the bush course, accompanied by instructions in animist mysteries.
In a recent interview given to the French newspaper Le Monde, President Tombalbaye of Chad, who is himself a Christian, said that Yondo was not incompatible with the Christian faith and expressed the hope that the cultural movement launched in Chad would result in a new symbiosis of African and Christian values. Many missionaries have not opposed the government's campaign in favour of Yondo, and there is no evidence that Chadian authorities, in pushing Yondo, are being anti-Christian or are countenancing the alleged tortures and killings. However, some missionaries have adamantly opposed the institutionalization of these practices which, from their point of view, are immoral, and have forbidden their followers to accept initiation.
During the last month the Canadian government has been requested by a certain number of Canadian citizens to intervene on behalf of those Christians in Chad who felt the Yondo incompatible with their faith, and who are allegedly persecuted. There has also been some suggestion that the government should stop all economic aid to Chad.
The main concern of the government has been to ensure there is no threat to Canadians living in Chad. Periodic reports received from our embassy in Yaounde, Cameroon-also accredited to Chad-indicate that Canadians are not threatened and can perform their usual duties freely. Furthermore, the information gathered by the officials of this department from a great variety of both Canadian and foreign sources is not in accordance with information dispatched to the press by the religious organizations opposing Yondo. According to the reports I have received from many quarters, there has been a gross exag-
February 4, 1975

geration in the allegations that Chadian Christians are being persecuted.
Concerning Canadian economic aid to Chad, I would like to add that it consists mainly of food and is an integral part of our program designed to help countries
Adjournment Debate
stricken by the drought in the Sahel area.


The Acting Speaker (Mrs. Morin):: The motion to adjourn the House is now deemed to have been adopted. Accordingly, this House stands adjourned until tomorrow at 2 p.m.
Motion agreed to and the House adjourned at 10:30 p.m.

Wednesday. February S. 1975