1975-06-26

ROUTINE PROCEEDINGS


[Stage Direction]
Justice and Legal Affairs for recommendation and report to parliament.
Mr. Speaker:: The motion, pursuant to Standing Order 43, requires the unanimous consent of the House. Is there unanimous consent?


Some hon. Members:: Agreed.


Some hon. Members:: No.


Mr. Elmer M. MacKay (Central Nova):: Mr. Speaker, I rise under the provisions of Standing Order 43 on a matter of urgent and pressing necessity. In view of continuing revelations concerning the activities of air carriers and travel agencies which are so well known they do not need repeating in detail at this time, I move, seconded by the hon. member for Don Valley (Mr. Gillies):
That the Minister of Transport check immediately on possible violations of the Aeronautics Act prohibition against discriminatory rates and, further, since it is standard practice for shareholders in a company to seek to recover funds spent by management in an illegal or unauthorized manner, that the minister consider asking the CNR, as a principal shareholder of Air Canada, to initiate such action in regard to any under-the-table payments made by the current management of Air Canada, and that the Minister of National Revenue in regard to the same matter, order his department to inquire into whether Canadian travel agencies have reported any payments as taxable income and whether Air Canada or any other Canadian airline has attempted to claim payouts for this activity as a tax deductible expense.


Mr. Speaker:: The motion is presented 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.


PENITENTIARIES
Mr. Stuart Leggatt (New Westminster):: Mr. Speaker, my motion is under the provisions of Standing Order 43. It is a matter of urgent and pressing necessity. In view of the recent sad and unfortunate death of Mary Steinhauser in the B.C. Penitentiary in the course of her employment with the Penitentiary Services, I move, seconded by the hon. member for Winnipeg North (Mr. Orlikow):
That the subject of compensation for the families of those who may be killed in the course of their duty to the Penitentiary Service and therefore to their country be referred to the Standing Committee on


CRIMINAL CODE
Mr. Leonel Beaudoin (Richmond):: Mr. Speaker, under Standing Order 43, I ask the unanimous consent of the House to discuss a matter of urgent and pressing necessity.
In view of the recent requests of the Quebec police and the Canadian Municipalities Association for the restoration of the death penalty; in view of the frightening rate of violent crimes and murders since the beginning of the year, as evidenced in Montreal, for example, where the number of murders is equivalent to the number of days gone by in a year; considering that it must be admitted that this government by its slackness and its alleged sense of humanitarian compassion led us in a world where policemen and victims are wrong, where criminals are more protected than honest people and where bandits are heroes enjoying a great deal of publicity, I move, seconded by the hon. member for Bellechasse (Mr. Lambert);
That this House of Commons may discuss now the urgent need to reinstate the death penalty for those convicted of murders committed during armed robberies, robberies with violence, kidnappings, political crimes, etc, and also make a comprehensive study of the whole problem of crime in Canada.


Mr. Speaker:: Once again, I regret to have to say to the hon. member that I must continue to disallow discussion on the general subject of capital punishment presented in the form of a motion pursuant to Standing Order 43.


PRIME MINISTER'S OFFICE
Mr. Tom Cossitt (Leeds):: Mr. Speaker, I rise under the provisions of Standing Order 43 to propose a motion arising from the urgent and pressing necessity of ensuring at all times proper expenditure of public funds. I move,

June 26, 1975
Speaker's Ruling
seconded by the hon. member for Marquette (Mr. Stewart):
That the Prime Minister advise the House whether or not the Royal Canadian Mounted Police at public expense, patrol and inspect an area of approximately 628 acres of mostly vacant land in the Laurentians belonging to the Prime Minister and, if so, that the House be advised of all reasons for such expenditure of taxpayers' money for personal purposes, which would constitute a further example of living like a leech off the taxpayers.


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


Some hon. Members:: Agreed.


Some hon. Members:: No.


PRESENCE IN GALLERY OF REPRESENTATIVES OF JAPANESE
Mr. Speaker:: Order. Before moving to the beginning of the oral question period, may I, on behalf of all members of the House of Commons call attention to the presence in our gallery of a very distinguished delegation visiting us as representatives of the Diet of Japan led by a very distinguished member of the House of Representatives, Mr. Hideyo Sasaki.


Hon. Members:: Hear, hear!


BUSINESS OF THE HOUSE
Mr. Speaker:: I indicated to hon. members yesterday that I would review the points of order which were put forward in connection with questions asked during the question period on the subject of the budget.
I have looked over the records of past parliaments and I find that they are of no more assistance than the arguments which were put forward yesterday. The fact is that in the past there has been a restriction against anticipating orders of the day in the question period. However, during the budget debate and during the debate of the Address there has been a relaxation of the rule, which perhaps gives me guidance along the lines that I ought to permit questions but govern them with some sort of restriction so as not to allow them to monopolise the question period. That point of view has been pronounced before, and I shall try to permit a reasonable number of questions on budget topics.



ORAL QUESTION PERIOD


Mr. James Gillies (Don Valley):: Mr. Speaker, my question is addressed to the Prime Minister. Has the government been in discussion with France with respect to the proposed sale by France of a nuclear reprocessing plant to South Korea and Argentina, given the fact that such plants could be used in conjunction with the Canadian CANDU reactor to manufacture nuclear weapons? Has the Government of Canada been protesting to France about the proposed sale of this equipment to the two countries I have mentioned?


Right Hon. P. E. Trudeau (Prime Minister):: I, personally, have not been discussing this matter with the Government of France but as I indicated in the House the other day this is the kind of subject we are discussing generally with other countries. I do not know whether any specific discussions such as the hon. member suggests have taken place, but I would suspect that at the London Conference this kind of thinking on the question was made apparent. I am not sure to what extent those confidential discussions can be made public. I apologise for not being able to help the hon. member to any greater extent today.


James McPhail Gillies: Given the existence of reports that France is selling this equipment to Argentina and South Korea, would the Government of Canada consider holding up negotiations with South Korea and Argentina with respect to the sale of the CANDU reactors until this matter has been completely clarified?


Pierre Elliott Trudeau: With respect to both Argentina and South Korea the federal government has expressed concern about some of the developments. It is fair to say we shall want to know more about the future intentions of the Argentine and South Korean governments because, as the House knows, we do not wish to sell any technology or material in the absence of an assurance that it will not lead to any form of explosive device. In order to ascertain this result, consultations are going on.


James McPhail Gillies: I do not wish to be redundant but perhaps I may ask a further question so as to understand the Prime Minister's answer clearly. Is it now the position of the government that it will not go ahead with sales to Korea and Argentina until there is absolute clarification that the sale of equipment from other countries which can be converted through CANDU to nuclear weapons will not take place, and that this will be an absolute condition before Canada will, in fact, make CANDU available to very unstable countries?


Pierre Elliott Trudeau: No, Mr. Speaker, the government has not reversed itself on this. I think it was made clear from the outset that the government, under its new increased safeguards, was not going to make any agreement with a country that might lead to a nuclear explosion, peaceful or
June 26, 1975

otherwise, being conducted by that country. If we have knowledge that a country intends to explode a nuclear device or that it is indeed being supplied with devices that can only be used for an explosion, then of course our decision will rest upon an appreciation of that fact.
It is not the so-called instability per se of a government but the lack of credibility that might be forthcoming on the part of a country that says it does not want to explode a nuclear device that is the test as far as we are concerned. If a country is taking steps toward acquiring explosive devices then, of course, our safeguards would prevent us from selling to them.


POSSIBILITY OF RENEGOTIATING 1973 AGREEMENT FOR SALE OF NUCLEAR REACTOR TO ARGENTINA
Mr. Allan B. McKinnon (Victoria):: Mr. Speaker, my question is for the Acting Secretary of State for External Affairs. Last Wednesday the Acting Secretary of State for External Affairs told the House that safeguard negotiations with Argentina for the sale of another reactor are still underway. Since the understanding with Argentina on the first sale, the one of 1973, involved nothing more than an exchange of letters that expressed peaceful intent but included no safeguards, enforcement or inspection measures, are those 1973 arrangements being renegotiated as well?


Hon. Mitchell Sharp (Acting Secretary of State for External Affairs):: Mr. Speaker, we have not yet supplied any nuclear reactor to the Argentine. We have made it very clear that our safeguards are to be satisfactory to us; that is, that the country undertakes not to use nuclear technology for explosive purposes, peaceful or otherwise, and generally abides by the international safeguards we are insisting upon. As the Prime Minister has said, we are concerned about the sort of reports that have been coming forward regarding the intention of Argentina in this respect, and we are having further consultations with the Argentine to determine what their real intentions are.


TOUGHNESS OF NUCLEAR SAFEGUARDS-GOVERNMENT POSITION
Allan Bruce McKinnon: A supplementary question for the Acting Secretary of State for External Affairs. He often refers to Canada's nuclear safeguards as the toughest in the world. The ones available to us in regard to Pakistan and Argentina obviously do not require the customer to sign the non-proliferation treaty and do not require any inspection by us. The agreement with Pakistan permits any party to withdraw on six months' notice. So in what way are they tough at all?


Mitchell William Sharp: As tough as any in the world, Mr. Speaker, and' I say tougher than anybody else's. It is always possible, as hon. members know, for any country, regardless of what undertakings it has made, to denounce those undertakings and to withdraw from the treaty. These are the facts of international life. There is no way we can protect ourselves against that eventuality, unless we decide, which we do not want to do, to withhold our
Oral Questions
technology and not make it available to the needy people of the world. That is a possible alternative but one that we have rejected.


POSSIBILITY OF REDUCTION IN MEDICAL SERVICES- GOVERNMENT POSITION
Mr. Edward Broadbent (Oshawa-Whitby):: Mr. Speaker, I have a question for the Minister of National Health and Welfare. Since the cost of medical services has increased in Canada by some 16.6 per cent this year, given the current rate of inflation and the increasing cost of medical programs unrelated to inflation, and the announcement in the budget that there is to be a 13 per cent federal ceiling next year on medical cost sharing programs with the provinces, which really amounts to a freeze, would the minister inform the House whether or not his department has given consideration to which medical service programs may have to be cut back in the provinces, particularly the poorer provinces which may have no access to greater sources of revenue to pay for medical services?


Hon. Marc Lalonde (Minister of National Health and Welfare):: Mr. Speaker, the figure of 16.6 per cent to which the hon. member refers can only be at best a forecast and not a firm figure since the year is not over yet. We will know the exact figure only when the year is over. When the hon. member compares the figure of 16.6 per cent with 13 per cent, he is mistaken because the latter should further include an adjustment of 1.5 per cent for the increase in population. So the comparison must consequently be between 16.6 per cent and 14.5 per cent growth for next year. As the hon. member knows, the rate of inflation seems to be slowing down over last year. There is every reason to believe that the rate of inflation next year will again be lower than this year's. And it seems the figure of 14.5 per cent may very well be reached within the forecasts made without any reduction whatsoever in the quality of medical services made available to the people of this country. There is no reason for such a thing to cause a reduction in the quality of medical services in any province of Canada.


EFFECT OF FREEZE ON MEDICAL SERVICE ON NEGOTIATIONS WITH PROVINCES FOR EXTENSION OF SERVICES
John Edward Broadbent: Mr. Speaker, the minister will have an impossible task convincing his provincial counterparts about his calculations in that answer with regard to existing programs. I should like now to ask a question concerning negotiations he and his officials are having with the provinces with a view to extending medical service programs in the country. Does he think that the unilateral announcement by the federal government of the freeze it is putting on costs is going to jeopardize those negotiations going on, and is it going to

June 26, 1975
Oral Questions
bring to a halt the plans of a number of provinces to extend their medical services?


Marc Lalonde: Mr. Speaker, the purpose of the current negotiations was not to extend medical services as such, but health services generally, more specifically to extend the services provided now under hospital insurance plans and try to cover some other services which are not yet provided, in exchange for the introduction of systems which are more effective than those applied by certain provinces. These negotiations were opened a few months ago, and I see no reason to stop or slow them down. Quite the contrary, I think that the Minister of Finance's decision should facilitate and accelerate decisions in this area. However, there must be two parties to negotiations. Of course, if either of the provinces the hon. member referred to does not take part in the discussions, negotiations are impossible. My department could not negotiate all by itself.


METHOD OF MAKING FUNDS AVAILABLE TO PROVINCES TO TAKE CARE OF EXTRA COST OF MEDICAL SERVICES
John Edward Broadbent: Mr. Speaker, I have one supplementary for the Prime Minister. Considering that the appropriate minister in Manitoba has already cancelled negotiations as a result of the budget and that the appropriate minister of the province of Ontario has indicated he wants to cancel negotiations as a result of the unilateral action taken by the federal government, and in view of the fact that this is going to cost the province of Ontario alone an additional $75 million for medical services, directly because of the decision taken by the federal government, does the Prime Minister intend by way of tax transfer points or by some other means making funds available to the provinces in order that they can pick up the extra cost of immediate medical services in Canada?


Marc Lalonde: Mr. Speaker-


An hon. Member:: He doesn't trust you, Pierre.


Some hon. Members:: Oh, oh!


Marc Lalonde: I have before me the telegram from the minister of health of the province of Manitoba. It does not say exactly what the hon. member has just said.


Pierre Elliott Trudeau: Could I answer the supplementary, Mr. Speaker?


Some hon. Members:: No.


An hon. Member:: Wait for it.


Pierre Elliott Trudeau: Perhaps I had better wait for the supplementary.


Mr. Speaker:: The hon. member for Rimouski.


John Edward Broadbent: On a point of order, Mr. Speaker.


Some hon. Members:: Sit down.


An hon. Member:: Three o'clock.


Some hon. Members:: Order.


CRIMINAL CODE
Mr. Eudore Allard (Rimouski):: Mr. Speaker, I wish to put a question to the Solicitor General.
Considering the increase in homicides and offences of all kinds and the wishes of various police forces throughout Canada, the Quebec Provincial Police in particular, does the minister intend to introduce a measure authorizing a national referendum on the restoration of the death penalty?


Hon. Warren Allmand (Solicitor General):: No, Mr. Speaker.


FINANCE
Mr. Sinclair Stevens (York-Simcoe):: Mr. Speaker, in the absence of the Minister of Finance and the Acting Minister of Finance, perhaps I could put my question to the Prime Minister. In order for the Minister of Finance and the government to project levels of anticipated revenues from various sources they must have some idea concerning the level of economic activity during the rest of this fiscal year. Would the Prime Minister reveal to the House the economic assumptions upon which his budget is based, particularly his projection for real growth in the economy in the 1975-76 fiscal year.


Pierre Elliott Trudeau: Well, Mr. Speaker, I think it is fair to say that the budget which was delivered by the Minister of Finance corresponded to the projections he has for the future. I do not believe it is customary to indicate in any precise terms what those figures are. He referred to the conflicting views on the economy by various people but indicated his own choice.


NUMBER OF NEW JOBS EXPECTED TO BE CREATED BY BUDGETARY MEASURES-GOVERNMENT ESTIMATE OF UNEMPLOYED
Sinclair McKnight Stevens: Mr. Speaker, my supplementary again is for the Prime Minister. Considering that many thousand Canadians are concerned about the effect of the Canadian economic recession on their jobs would the Prime Minister tell the House, as the
June 26, 1975

Minister of Finance has done in an earlier budget but not in Monday's budget, how many new jobs the government expects to be created in the economy in 1975. Will the Prime Minister indicate the net increase in employment and how many new jobs will be created in the manufacturing field?


Pierre Elliott Trudeau: Mr. Speaker, that is a question of a statistical nature which obviously I cannot answer now but I will look into the matter.
Oral Questions


Mr. La Salle:: Mr. Speaker, I wish to ask a supplementary question.
The Quebec counterpart of the minister said yesterday and I quote:
I mainly regret the ceiling imposed unilaterally and without notice and the fact that the evolution of the system is not possible on such short term.
In view of this statement is the minister prepared to revise this term?


Mr. Speaker:: The hon. member for York-Simcoe on a final supplementary.


Sinclair McKnight Stevens: Mr. Speaker, this question is also
addressed to the Prime Minister. Based on the estimate of the Minister of Finance in his budget that UIC benefit payments will exceed $33/S billion and in view of committee evidence by Mr. Cousineau, the Chairman of the UIC, that 8 per cent unemployment would result in $3.7 billion in benefit payments, would the Prime Minister indicate if it is correct to assume the government believes there will be unemployment in excess of 8 per cent for this fiscal year which would mean 8'A per cent to 9 per cent unemployment this coming winter.


Marc Lalonde: Mr. Speaker, in so far as hospital insurance is concerned, we have a five-year period. Then, we have all the time needed to hammer out a new agreement on hospital insurance cost sharing. As to health insurance, there is no change for the present fiscal year. We are only talking about the financial year beginning the first of April next year. As I said earlier to the hon. member who asked a question on the same subject, the reduction proposed is only 2 per cent compared to this year's growth rate. So I do not see any reason that would prevent an adjustment to meet that objective without too many difficulties next year.


Pierre Elliott Trudeau: Well, Mr. Speaker, the hon. member is drawing some conclusions from figures. I suggest he has to take the responsibility for those conclusions.


REDUCTION OF FEDERAL PARTICIPATION IN COST OF SERVICE-REQUEST FOR CONSULTATION WITH PROVINCES
Roch La Salle: Mr. Speaker, I should like to put a question to the Minister of National Health and Welfare.
Since some provinces have already expressed their concern about the announcement by the government of a reduction in the cost-sharing of medical care insurance and that yesterday his counterpart in Quebec regretted the lack of prior consultations on that matter, I should like to ask the minister whether, in view of that concern and the absence of previous consultations, he intends to meet with his Quebec counterpart to reassure the province in that regard?


Marc Lalonde: Mr. Speaker, as the hon. member said, the decisions announced by the Minister of Finance were part of the budget and it is almost impossible to have consultations on the budgetary measures.
Immediately after the budget speech I sent a telegram to my colleagues explaining the decision made and our intention to follow on the present negotiations and telling them that my deputy minister would meet the provincial deputy ministers as soon as possible to clarify this decision.
In so far as a ministers' meeting is concerned, one has been planned for the fall and I do not see any reason to delay it or make it earlier.


HOUSING
Miss Flora MacDonald (Kingston and the Islands):: Mr. Speaker, my question is for the Minister of State for Urban Affairs. In view of the limited measures in the budget for a new housing program, and in view of the dismal record of housing starts in the first five months of this year, is the minister now prepared to give us a revised projection of housing starts for 1975?


Hon. Barney Danson (Minister of State for Urban Affairs):: Mr. Speaker, I have not been very good in making predictions so far, but so far as the performance of government assistance is concerned, it appears that it will be responsible for some 45,000 starts this year, which is a higher number than in any other year in history except for 1970.


Some hon. Members:: Hear, hear!


Barnett Jerome Danson: The over-all picture reflects very much the general economic situation-


An hon. Member:: Dismal.


Barnett Jerome Danson: -which is a tough situation in which we find ourselves, particularly in relation to private mortgage markets. However, in our consultations with lending institutions on the new enriched subsidy programs for assisted home ownership and limited dividend programs, I hope we can come much closer to the targets than I thought we would before the budget.


Miss MacDonald:: Mr. Speaker, in an effort to help the minister to be more precise, I would like to put to him the following question. Given the miserly approach of the

June 26, 1975
Oral Questions
Minister of Finance to our housing needs, is the minister prepared to stand by his early prediction of a minimum of 210,000 housing starts in 1975?


Barnett Jerome Danson: Mr. Speaker, I think I should point out that in the entire budget the housing allocation was the largest single item for this year-


Some hon. Members:: Hear, hear!


Barnett Jerome Danson: -plus the very significant non-budgetary items and the increase in the subsidy portion. I still hope for the minimum figure of 210,000 housing starts, but I think it will be very difficult to reach. I am hopeful that the subsidy program will work better, but I do not want to lose sight of that target in the present circumstances. We will have a difficult time making it, but I like to keep my sights high, as does the government, and I hope we will make it.


Some hon. Members:: Hear, hear!


ROYAL CANADIAN MOUNTED POLICE
Mr. Irenee Pelletier (Sherbrooke):: Mr. Speaker, I would like to put a question to the Solicitor General.
Following Mrs. Blanchet's kidnapping yesterday in Sherbrooke where the kidnappers demand $1 million in ransom, could the Solicitor General reassure the House and the Eastern Townships population that the Royal Canadian Mounted Police will help other police forces in the area so that Mrs. Blanchet may be found?


William Warren Allmand: Mr. Speaker, under ordinary circumstances this matter would be the responsibility of the Quebec police, but if they approach the RCMP, the RCMP will be pleased to co-operate.


INCOME TAX
Mr. David Orlikow (Winnipeg North):: Mr. Speaker, I should like to direct a question to the Minister of National Revenue and ask him whether he could confirm the truth of the statement made by a spokesman for his department that all persons purchasing gasoline who can claim an expense deduction in calculating income tax will also be eligible for a refund on the ten cents a gallon excise tax.


Hon. Ron Basford (Minister of National Revenue):: Mr. Speaker, those entitled to the refund will be governed by the legislation to be introduced very shortly.


David Orlikow: Does that mean in fact that a doctor, a lawyer or a self-employed businessman will be able to get

a refund on the ten cent a gallon excise tax, while a worker who has to drive 20 or 30 miles to work and the same number of miles back and who cannot deduct anything for travelling expenses, will not be able to get the refund on the excise tax?


Mr. Speaker:: I appreciate, as I am sure all hon. members do, the importance and the impact of the question. However, this does not alter the fact that the hon. member is seeking an opinion from the minister on what will be in the legislation.


Some hon. Members:: Oh, oh!


EXTERNAL AFFAIRS
Hon. Robert L. Stanfield (Leader of the Opposition):: Mr. Speaker, two minutes ago the Secretary of State for External Affairs said that Canada had not sold a nuclear reactor to Argentina. What explanation does he have for the advertisement in the Globe and Mail issue of Saturday, June 21, by Atomic Energy Commission of Canada reading in part as follows:
Atomic Energy of Canada Limited (AECL) in a joint venture, is building a nuclear power station in the province of Cordoba in Argentina and is currently recruiting for professional engineers and engineering support personnel as outlined below:


Mitchell William Sharp: Mr. Speaker, I apologize for the words that I may have used. Perhaps I should explain that the contract is subject to the conclusion of the necessary safeguards.


Some hon. Members:: Oh, oh!


POST OFFICE
Mr.  R. Gordon L. Fairweather@Fundy-Royal: Mr. Speaker, I have a question for the Postmaster General somewhat related to a question posed by the hon. member for Winnipeg North. Will an adjustment be made to the contracts of the rural mail carriers who have had their contracts substantially discounted as a result of last Monday's budget?


Hon. Bryce Mackasey (Postmaster General):: Mr. Speaker, these contracts are under review in light of unexpected expenses-


Mr. Fairweather:: As part of the cabinet you could have expected those expenses.


Bryce Stuart Mackasey: -expenses that sometimes occur, and we would want to review them in that light.
June 26, 1975

Oral Questions


REGIONAL ECONOMIC EXPANSION
Mr. J. M. Forrestall (Dartmouth-Halifax East):: Mr. Speaker, I should like to direct my question to the Minister of Regional Economic Expansion, in the determined belief that today or very shortly he will be prepared to answer it. Since it is now 1,103 days since he and his colleagues or confreres in Nova Scotia announced the establishment of the Metropolitan Area Growth Corporation providing millions of dollars for the start of new industry and new businesses in the Halifax Dartmouth area, I wonder if the minister can now indicate whether or not bickering or the difference of opinion between Ottawa and Halifax can be resolved in order that this corporation go into business before September 1?


Hon. Donald C. Jamieson (Minister of Regional Economic Expansion):: Mr. Speaker, as to the last part of the question, I certainly hope they will go into business before September 1. In so far as bickering is concerned, if that is the appropriate term, I do not think there is disagreement at present. The executive search is underway, and I can only say to the hon. member that I hope he will not have to add many additional days to those he already mentioned before I am able to make an announcement jointly with the province. I should add that approximately two-thirds, or perhaps a little more, of actual investment in this corporation is provincial. Therefore, we have to take their interests and concerns into account.


CORPORATE AFFAIRS
Mr. Ron Huntington (Capilano):: Mr. Speaker, I have a question for the Minister of Consumer and Corporate Affairs, and I have given notice. Is the minister and his department taking action against the officers and the company of Gelco Enterprises Ltd., a federally incorporated company which has failed to submit a financial summary to the department for the fiscal years 1973 and 1974 in accordance with the Canada Corporations Act?


Hon. Andre Ouellet (Minister of Consumer and Corporate Affairs):: I did receive notice of the hon. member's question some time ago. Unfortunately I had the reply ready for him when he gave it to me. I do not have it with me today. I shall check and report to the House as soon as possible.


OLYMPIC GAMES
Mr. Steven E. Paproski (Edmonton Centre):: Mr. Speaker, my question is also for the Minister of Consumer and Corporate Affairs. Would the former Postmaster General tell the House what happened to the statue Olympic he commissioned for $50,000 by the Quebec artist Coville? Where is the minister hiding it?


An hon. Member:: In the mail.


Bryce Stuart Mackasey: Mr. Speaker, there is nothing more difficult to hide in Ottawa than a statue. When the time comes for the unveiling, I know who will be the guest of honour.


Steve Eugene Paproski: Is this statue going to be located on the Consumer and Corporate Affairs lawn which is in Hull, or is the former minister of consumer and corporate affairs afraid to show this statue to the people of Canada?


Bryce Stuart Mackasey: I think it is a marvellous work of art, and I am sure the hon. member will agree with me. He has a very discerning eye, which is well known on the Hill.


Some hon. Members:: Hear, hear!


Bryce Stuart Mackasey: I am sure he would not look on any work of beauty with suspicion.


LABOUR CONDITIONS
Mr. Otto Jelinek (High Park-Humber Valley):: Mr. Speaker, I wish my question could be related to the last one, but it is not. It is for the Minister of Labour. In view of the fact that warrants have been issued today by the Ontario provincial police for the arrest of SIU president Roman Gralewicz as well as two union vice-presidents for possessing weapons dangerous to the public peace and other dangerous acts, could the minister advise this House whether this is a result of any action which may have been taken by this government or as a result of the minister's own persistence in this matter? And perhaps the minister could let us know if any of these men have as yet been apprehended.


Hon. John C. Munro (Minister of Labour):: Mr. Speaker, as the House well knows, I announced some time ago that there would be an RCMP investigation into the SIU. Also, after some considerable time and some urging, the Ontario provincial government turned over certain information to us, and that has been taken into account during the RCMP investigation. As far as these particular charges are concerned, to which the hon. member is referring, and about which we have all heard, I am afraid the hon. member would have to seek out from the Ontario provincial police the basis upon which they laid those charges. It

June 26, 1975
Oral Questions
could be information they have already supplied to us. It could be other information upon which these charges are based, but that is the proper police force for criminal investigations of this kind. That is the position taken by the Minister of Justice and by the RCMP, and I think that the Ontario provincial police would be the proper force to which to make this inquiry.


Otto John Jelinek: Obviously, the minister did not know the answer to the first question, so perhaps he could answer a supplementary. Would the minister be in a position to announce to this House how the federal part of the investigation is progressing, and when can we expect the investigation to be concluded and a report made available to this House?


John Carr Munro: As far as the investigation at the federal level is concerned, as I have already indicated that is in the hands of the RCMP, and it is proceeding expeditiously. I cannot give any more information than that. It is in the hands of the RCMP, and the proper minister to question with respect to that would be the Solicitor General, who is responsible to the House for the RCMP.


AIR CANADA
Mr. Jim Fleming (York West):: Mr. Speaker, my question is to the Minister of Transport. Considering the fact that for the past month or so Air Canada as a policy has overbooked flights and as a result turned away confirmed ticket holders on a regular basis, would the minister take up this matter with senior officers of Air Canada before the reputation of that publicly owned enterprise is wiped out?


Some hon. Members:: Hear, hear!


Hon. Jean Marchand (Minister of Transport):: Mr. Speaker, I think I will follow my hon. colleague's advice and ask for a complete report by Air Canada. I know that the practice of selling more tickets than seats available is not peculiar to Air Canada: it is common to every airline of the world. They compute on averages for economic reasons. Anyway, I think the House should know what procedure is used. There is no doubt that when someone has a boarding pass, it is fairly frustrating to be denied access to the aircraft. I will therefore ask for the report and will be glad to give it to him.


COMMUNICATIONS
Mr. Rene Matte (Champlain):: Mr. Speaker, I have a question for the right hon. Prime Minister.

In view of the ambiguous and tense situation that now exists between the Quebec government and the federal government with regard to cablevision, and in view of the cases now pending before the court, can he tell us whether he will await the results of those trials before considering any other request from potential cablevision operators in Quebec?


Pierre Elliott Trudeau: Mr. Speaker, the question is slightly hypothetical in the sense that I do not know whether or not there will be other applications, nor what their nature might be; but I certainly agree with the hon. member who points out that some cases are pending. I believe they fall within the two levels of jurisdiction and if the hon. member is of that opinion, I agree with him, that we should not try to solve the problem at the political level while the cases are before the courts. We should certainly not make statements that might hamper the courts in reaching a just decision based on law. As for the future, I cannot answer the question because I do not know whether there will be any other applications, nor what their nature might be.


LABOUR CONDITIONS
Mr. T. C. Douglas (Nanaimo-Cowichan-The Islands):: Mr. Speaker, in the absence of the President of the Treasury Board I would like to direct my question to the Minister of Justice, who, I believe, is acting in that capacity. My question has to do with the legal strike which has been conducted by the dockyard trades and labour council at the torpedo testing station at Nanoose Bay, a project which is jointly operated by the governments of Canada and the United States. My information is that American personnel at the base refused to cross the picket line, but have been ordered from the United States that they must do so, and that an electronic technician has been flown to assist in breaking the strike. I want to ask the minister if these strike breaking tactics are being conducted with the consent and approval of the Canadian government. If not, will the minister undertake to see that they are stopped?


Hon. Otto E. Lang (Acting President of the Treasury Board):: Mr. Speaker, as far as I know there was no involvement by the Canadian government. I have been informed that the rumour that there were United States personnel brought in was, in fact, unfounded. I had not specifically asked about an electronics engineer, and I would like to do that to confirm that there was no single person brought in. There are, of course, United States military and civilian persons working there on an ordinary basis.
June 26, 1975


IMMIGRATION
Thomas Clement (Tommy) Douglas: Mr. Speaker, I would like to direct a supplementary question to the Minister of Manpower and Immigration. I would like to ask him if the electronic technician, who was flown in by the United States authorities to Nanoose Bay, was granted admission by his department and whether he was granted a work permit. Will the minister investigate and ascertain whether this man is legally in Canada and legally permitted to indulge in strike-breaking activities?


Hon. Robert K. Andras (Minister of Manpower and Immigration):: Mr. Speaker, I am not aware of the particular incident to which the hon. member is referring, but I will certainly look into it, although it is not the practice of the department to take a stand in these circumstances.


EXTERNAL AFFAIRS
Mr. Dan McKenzie (Winnipeg South Centre):: Mr. Speaker, may I direct a question to the Acting Secretary of State for External Affairs? In view of the false statements made by Congressman Wayne Hays this Tuesday in Washington, to the effect that Canada's objections to the Garrison diversion are not strenuous and that an agreement has been worked out between the two countries, will the Acting Secretary of State for External Affairs now get in touch with President Ford and request a moratorium?


Mitchell William Sharp: Mr. Speaker, it was precisely because of the false impression which had been created by certain people in the United States about the Canadian attitude that I arranged for the Canadian position to be conveyed to the State Department, which conveyed it, in turn, to the Congressional committee. That is the document I tabled in the House the other day.


A. Daniel McKenzie: A supplementary question, Mr. Speaker. That document arrived too late. I understand that the $13 million passed by the House of Representatives on Tuesday, in Washington, for further work on the diversion unit must now be approved by the United States Senate. Will the minister request the Senate not to approve the funds until all the environmental studies are completed?


Mitchell William Sharp: Mr. Speaker, I do not think that the representations which we made arrived too late. They were well known in the State Department. The reason we had them sent specifically to the Congressional committee was that a false impression had been created by certain members of the United States Congress. I do not think there is much more we can do to indicate our very strong opposition; nor can there be any stronger assurance than we have received from the United States administration
Oral Questions
that it will not, in this undertaking, do anything which will damage the Canadian environment. It is an unqualified undertaking by the United States administration and I can think of nothing stronger on which to rely.


AIR TRANSPORT
Mr. Gordon Ritchie (Dauphin):: Mr. Speaker, may I direct a question to the Minister of Transport? Has the minister indicated to the Manitoba government that the federal government does not support the Manitoba government's intention to operate its own airline with which it will link Winnipeg, Brandon, Dauphin, Yorkton and Regina?


Jean Marchand: No, Mr. Speaker.


William Gordon Ritchie: A supplementary question, Mr. Speaker. Has the minister ascertained Saskatchewan's views on the proposed carrier and, if so, can he tell the House what they are?


Jean Marchand: Mr. Speaker, I am afraid somebody close to me was talking. Would the hon. member please repeat his question?


William Gordon Ritchie: Mr. Speaker, my question concerns the Manitoba government's proposed prairie airline. Has the minister ascertained Saskatchewan's views on this proposed carrier and has the Private Carriers' Association lodged a protest with the CTC or the government about the proposed takeover of that route by the Manitoba government's airline?


Jean Marchand: No, Mr. Speaker, there have been no negotiations with the government of Saskatchewan. I met with Premier Schreyer yesterday morning and I agreed to his proposal. I hope that we can have the service as soon as it is feasible.


AIR CANADA
Elmer MacIntosh MacKay: Mr. Speaker, may I direct a question either to the Minister of Transport or to the Minister of Labour. Can either of those hon. gentlemen inform the House about the current status of negotiations going on between Air Canada, the Canadian Airline Employees Association and the Canadian Airline Flight Attendants, in view of reports saying that these negotiations have run into difficulty?


John Carr Munro: Mr. Speaker, my latest information is that matters are proceeding satisfactorily. I wish the hon. member would be more explicit when he refers to "difficulties".

June 26, 1975
Oral Questions


Elmer MacIntosh MacKay: A supplementary question, Mr. Speaker. May I indicate to the minister that I have heard a number of reports saying that negotiations have broken off. That prompted my question. I ask him to assure the House that he will do everything he can to expedite orderly negotiations, in order to avoid the possible consequences this summer of disruption of our air services?


John Carr Munro: Mr. Speaker, I will look into the situation which the hon. member raised. He suggested negotiations broke off this morning. Of course, we will do everything possible to avoid a breakdown and we shall make available to both parties the full services of our department.


TRANSPORT
Mr. Donald W. Munro (Esquimalt-Saanich):: Mr. Speaker, may I direct my question to the Minister of Transport and express the hope that the inquiry which he promised the hon. member for York West will be quicker coming forward than the inquiry for which I asked three months ago. I asked the minister on several occasions since then if he would make available to the House, to me or to the fishermen the report of the inquiry, promised more than three months ago, to do with the disastrous occurrences on the west coast involving loss of life and loss of fishing boats.


Jean Marchand: Mr. Speaker, I was supposed to do that today but was prevented from doing it at the last moment. I hope that when I return to the House I can file a report.


ENVIRONMENTAL AFFAIRS
Mr. Joe Clark (Rocky Mountain):: Mr. Speaker, may I direct my question to the Minister of the Environment? Since dike construction by the minister's department and the government of British Columbia under the Fraser River Flood Control Program is going to endanger critical nursing grounds for spring and cohoe salmon at Robert's Bank, will the minister advise us whether an environmental impact assessment report was prepared before that construction began and, if not, will there be such a report. Will the diking be stopped until that impact assessment has been completed?


Hon. Jeanne Sauve (Minister of the Environment):: Mr. Speaker, the diking of the Fraser River was the object of a number of studies. I understand that these are not finished. As for delaying or even stopping construction of these dikes, some problems have come to the surface and I am looking into them.


Charles Joseph Clark: A supplementary question, Mr. Speaker. May we have a commitment that the minister will look into this matter directly and report to the House immediately, by which I mean tomorrow or next week, as to precisely what activity is to be undertaken, so that there will not be further destruction of the salmon fishery on the west coast of British Columbia.


Jeanne Sauvé: Mr. Speaker, I have been looking at this question for a number of days. As soon as I have the complete information on this matter, I will be glad to report.


INDUSTRY
Mr. Dean Whiteway (Selkirk):: Mr. Speaker, my question is directed to the Prime Minister. Yesterday the Prime Minister met with the premier of Manitoba and discussed the Saunders Aircraft Corporation. Can the Prime Minister indicate how the federal government intends to participate in the activities of the Saunders Aircraft Corporation and will he assure the House that the same formula will be applied to the Saunders Aircraft Corporation as was applied to another eastern aircraft manufacturer, de Havilland?


Pierre Elliott Trudeau: Mr. Speaker, the discussions between the premier of Manitoba and myself had to do with the industrial development of the province. It is not customary for me to indicate the details of that correspondence or exchange. The premier and I have been exchanging correspondence and, no doubt, will exchange further correspondence. If he wishes to make it public that, of course, is his privilege, provided both sides agree.


TRANSPORT
Mr. Hugh A. Anderson (Comox-Alberni):: Mr. Speaker, my question is for the Minister of Transport. As the government has generally provided service when the private sector has failed to provide it, and as CPR announced recently that they would close their rail line between Franksville and Courtney on Vancouver Island, would the minister consider the acquisition of the Esquimalt-Nanaimo railroad in order to provide passenger and freight service for upper Vancouver Island?


Jean Marchand: Mr. Speaker, that is a tough question to answer. I know that the CPR applied to the CTC for permission to abandon this line. Although I do not have the answer and do not know the decision of the CTC, I do know that the CPR guaranteed a bus service, and even a truck service to provide the service that they are not giving themselves.
June 26, 1975


Mr. Speaker:: Order, please. I have received notice of three questions of privilege, one to be raised by the hon. member for Mackenzie (Mr. Korchinski), another by the hon. member for Burnaby-Richmond-Delta (Mr. Reynolds) and the third by the hon. member for Bellechasse (Mr. Lambert).



ROUTINE PROCEEDINGS


Mr. Baldwin:: On a point of order, Mr. Speaker, before Your Honour hears the interesting questions of privilege may I ask the government House leader what the business of the House will be for the rest of this week and for next week, if he is able to give it to us?


Mitchell William Sharp: Mr. Speaker, as the House will have noticed, I have put down a notice of motion regarding hours of sitting, in which I have suggested, in response to suggestions made by members on all sides of the House, that we not sit on June 30 or on July 7. I hope that these suggestions will be accepted. I also put down, in order to compensate for that lost time, extra hours of sitting for the subsequent days of the same week.
I do not want there to be any misunderstanding that we are asking the House to sit extra hours. We are simply making up the time that I believe it is desirable we should make up for the days on which there seems to be a general disposition we should not sit. As for the business for those particular hours, they would be like the days we have given up which were available for government bills. I am not quite certain how we will use that time.
It might help the House in connection with the general plans for a recess, which I think is desirable at some point, to say that we have a limited number of bills that are now passing through the House at various stages which we want to complete before recessing. I will have an opportunity to talk about them in greater detail with the House leaders. There will also be five bills arising out of the budget: three tax bills, one to amend the Unemployment Insurance Act and one to amend the medicare act. Our general intentions in this regard are as follows, and this may help in trying to reach a judgment as to how long we should sit. We intend to proceed with the bill to amend the Excise Tax Act through to royal assent because that bill will provide for the refunds as well as the imposition of the tax on gasoline. It is intended to proceed on the amendments to the Unemployment Insurance Act to the completion of second reading. Those are the main priorities we have with respect to the bills which will emerge from the budget. It may be possible to make progress on the other budget bills, but they are not quite as urgent.
Business of the House


Gerald William Baldwin: Mr. Speaker, so that the hon. gentleman may be aware of our views, as far as the two Mondays are concerned, June 30 and July 7, we have no objection to giving consent to the additional hours to compensate for the time lost being used in the way mentioned by the hon. member. With regard to the business announced by the government House leader, is he now talking in terms of one bill going through all stages of the House, one bill going through to second reading, and there is still no positive attitude on the part of the government with regard to the other legislation, that it is a matter for discussion between House leaders?


Mitchell William Sharp: Mr. Speaker, there are more than one or two bills to which we attach equal priority. For example, we intend to complete the Petro-Canada bill since there is an order of the House which binds all parties to a couple of days' debate. There are some other bills that it is very urgent to dispose of and on which I do not think there is very much controversy. We have one other bill which will be introduced in the next few days which has been recommended to us by the joint committee on the Finkelman report, dealing with the revision and the composition of the Public Service Staff Relations Board. I believe that should be completed.


Mr. Knowles (Winnipeg North Centre):: Mr. Speaker, I rise simply to say that we have been a party to the discussions regarding the next two Mondays and the extra hours in the next two weeks to make up for them. We are prepared to agree to the proposal that the minister has made. I understand that some further negotiations may be necessary. We shall, of course, take part in those negotiations. As for the menu for the next two or three weeks, perhaps we can have more discussions among House leaders about that.


John Edward Broadbent: Mr. Speaker, I rise on a point of order referring back to an earlier stage in the question period. I asked the Prime Minister about the possibility of a transfer of tax points from the federal government to the provinces to compensate for the freeze put on sharing the cost of medical services. I thought I was addressing the question to the Minister of National Health and Welfare. He in fact answered another question. The Prime Minister was about to answer when Your Honour went on to another questioner. The question was very straightforward. It is of serious concern to the provinces. I wonder if the Prime Minister would take the opportunity at this time to answer the question.


Mr. Speaker:: The hon. member for Oshawa-Whitby raises, as he knows, essentially a non-point of order. I felt, in fairness, I gave him the time that should be allotted to him during the day. There is a great deal of pressure regarding questions on the budget. It was the hon. member's second or third supplementary when we arrived at that point. His question was put to the Prime Minister and he received a combined answer from the Minister of National Health and Welfare and the Prime Minister. At that point it was necessary to go on to another member.
The hon. member now raises the same question by way of a point of order. If I were to permit him to proceed now
7086

June 26, 1975
Business of the House
in that way, I am sure there would be several such points of order every afternoon. I really have no choice.


Allan Bruce McKinnon: Mr. Speaker, I rise on a point of order. It is in response to the answer given by the Acting Secretary of State for External Affairs to a question asked by myself and followed up by the Leader of the Opposition. The acting minister gave the impression that no agreement has been signed and that the reactor sale is subject to the conclusion of safeguard agreements. I wish to point out that in an exchange of notes on September 10, 1974, between ambassadors, the Canadian ambassador referred to the two contracts signed at Buenos Aires on December 10, 1973, between Atomic Energy and the Argentina counterpart. I quote from the exchange; the Canadian note said:
-this note .. . and Your Excellency's reply shall constitute an agreement between our two governments.
That was replied to on September 12 by the Argentina ambassador. He again referred to the two contracts signed in Buenos Aires on December 10, 1973, regarding a nuclear steam generating plant in Cordoba. I quote from the reply:
This note, together with that of Your Excellency, to which I refer above, constitute an agreement between our two governments effective from today's date.
We now have contracts and an agreement. We are going to be in extreme difficulty if we try to back out of either the contracts or the agreement, and we will be in double jeopardy if we back out of both.


Mitchell William Sharp: Mr. Speaker, I am advised that the negotiations for the completion of the bilateral agreement which flows from the agreement mentioned by the hon. member are still under way. Indeed, I have the intention of calling in the Argentina ambassador within the next couple of days to discuss with him the points that have been raised in this House, to ensure that the agreements we reach with them on bilateral agreements and safeguards fully comply with all our requirements.


Mr. Herbert:: Mr. Speaker, I rise on a point of order concerning House business to inquire whether it was the intention of the government House leader, by excluding it from his remarks, to state that Bill C-2, the competition bill, is no longer one of the priority bills the government wants passed before the summer recess.


Mitchell William Sharp: Mr. Speaker, I did not exclude Bill C-2. I said there were a number of priority bills. I mentioned Petro-Canada particularly.


Mr. Speaker:: Is the hon. member for Bellechasse (Mr. Lambert) rising on a point of order or a question of privilege?


Mr. Adrien Lambert (Bellechasse):: I simply wish to put a question to the President of the Privy Council (Mr. Sharp) concerning the business of this House.
I rise on a point of order, Mr. Speaker. To my understanding, the President of the Privy Council told us a few minutes ago that agreement had been reached between all parties of this House concerning the notice of motion on today's order paper. I do not doubt his word. However, I

should like to make the following point. Considering that on Monday, June 23, 1975, this House sat on the eve of a statutory holiday provided for under Standing Order 3(3) and considering that the coming Tuesday, July 1, bears an odd resemblance with the past statutory holiday, I have come to the conclusion that if we deemed it convenient to sit on June 23, it was because we had a lot of work to do in this House. In view of this, I think that French-speaking members of this House would also have liked to benefit from a holiday on the 23rd to celebrate Saint-Jean-Bap-tiste day appropriately.
I do not wish to show any obstinacy or ill-will towards anyone, but I should like to ask the President of the Privy Council for his attention so that he may submit a motion. I submit that we should avoid such conflicts in the future. This situation arose in 1969 and is arising anew in 1975. That does not mean that it happens frequently, but it happens too often for us. So I ask him if he would be kind enough to put forward a motion to amend the House procedures, providing that on such occurrences, when the commemoration day of June 24 falls on a Tuesday and when Confederation Day is also a Tuesday, those two Mondays preceding those two commemoration days shall be holidays for the House. This way, all hon. members will benefit from a long weekend and will be able to celebrate those two commemoration days which are holidays for all Canadians.
If the President of the Privy Council would be kind enough to give an answer to that request, I think it would be easier for me to agree with respect to Monday, June 30.


Mitchell William Sharp: I want to assure the hon. member that we did consider very carefully whether we should sit on Monday. This was in response to representations received from the Liberal caucus as well as from hon. members in all quarters of the House. However, because of the peculiar circumstances, the presentation of the budget, we found it necessary not to postpone the budget still further. There had been a good deal of protest from all sides that the budget had been delayed-some members said unnecessarily delayed-and if we had taken a holiday on Monday it would have meant postponing the presentation of the budget until later this week. I may say I have the greatest sympathy with the hon. member and I would have liked Monday off, too.


Gerald William Baldwin: On a point of order, may I say that from our point of view the budget could have been postponed for another year.


Some hon. Members:: Oh, oh!


Joseph Adrien Henri Lambert: I rise on a question of privilege, Mr. Speaker, but not on the same subject.


Mr. Speaker:: I understand very well that there is a question of privilege for the hon. member for Bellechasse (Mr. Lambert), but some notices have already been received from the hon. members for Mackenzie (Mr. Kor-chinski) and for Burnaby-Richmond-Delta (Mr. Reynolds).
June 26, 1975


PRIVILEGE
Mr. S. J. Korchinski (Mackenzie):: Mr. Speaker, I rise on a question of privilege which I believe affects all members of the House. On Monday last I rose to ask the minister responsible for the Wheat Board to inform us whether the Wheat Board was providing an opportunity for farmers to deliver grain to more than one delivery point. He replied that the Board did this a year and a half ago. I pursued the question, thinking that possibly the minister did not understand what I was getting at. I asked him whether there was an opportunity to deliver to five or six alternate points-Hansard reported it as six. The minister said he had indicated in his previous reply that delivery could be made to any point and that this had been the situation ever since the Wheat Board allowed this to happen last year.
However, there was a point of confusion here because I am also a producer and as such I am entitled to a permit book. In applying for a permit book I have to indicate a primary delivery point plus one alternate point. I rose later on a point of order, hoping that perhaps the minister would be able to correct his reply and thereby avoid any confusion in the mind of anyone reading his reply. I asked whether he would take advantage of the opportunity to correct the impression he had given. He proceeded to state that for the third time that afternoon he could tell the House that grain could be delivered to any elevator in Saskatchewan.
I telephoned the Wheat Board and checked the accuracy of my information. I found that though the Board had made provision for the previous year, in subsequent years the situation will be such that there will only be one primary point and one alternate point. A representation has been made to me that prior to making any application a farmer should have the option of several delivery points, for various reasons, one being-


Mr. Speaker:: Order. The hon. member is surely not seeking the floor on a question of privilege in order to make a case for making alternate delivery points available, but to discuss whether the minister misled the House by giving the information he did. If there is nothing further the hon. member has to add, perhaps the minister could be allowed to reply.


Stanley James Korchinski: Then I will forgo my further remarks, Mr. Speaker, and on the basis of the fact that these delivery points are not available, I move:
That the entire question of the minister's reply be referred to the Committee on Privileges and Elections to ascertain whether the minister has deliberately misled the House and, if such be the case, to recommend appropriate action thereon.
I will conclude by reminding the House that Mr. Profu-mo was asked to resign at one time because of a lie told to the House, and I certainly do not want such a situation to develop here.


Some hon. Members:: Hear, hear!
Privilege-Mr. Korchinski


Otto Emil Lang: Even the hon. member for Rocky Mountain (Mr. Clark) might have withheld his applause until he knew the facts of the situation. I should have thought that the hon. member for Mackenzie (Mr. Korchinski) would have hidden his embarrassment at not knowing the facts in the first place and refrained from pursuing this matter any further. On the day in question-I refer to Hansard at page 6997-the hon. member for Mackenzie asked:
Has the Wheat Board given any consideration to providing the opportunity for farmers to deliver to several alternate points, not just the two points, one being the main point and the other an alternate point?
I answered that the Wheat Board had done that about a year and a half ago. Without checking the dates precisely, let me say this is precisely the fact, and obviously the hon. member for Mackenzie was not aware of it. Even though he is a producer, he does not know what almost every producer in the province of Saskatchewan knows, that the Wheat Board had, in fact, opened the thing wide. The hon. member now reports that he got a clue, from the way in which he was filling out his permit book, that the situation might be different next year. But he was asking me specifically with regard to the situation then, and his question went on to say exactly that, in effect, "Can I, for instance, deliver to six alternate points?" The answer is that he can deliver to six; he can deliver to 3,200 if he likes. That is a possibility right now, and that is how the hon. member was framing his question. It is clear that the hon. member persists in this matter in order to hide his embarrassment.
As for the further part of the question, let me give him this bit of information. While the alternate delivery point on a wide open basis is very much the general intention for the future, the Canadian Wheat Board wants, for a couple of reasons, to have the specific and alternate point indicated in the application form, first of all in order to have an indication of where the grain is likely to be delivered, and secondly because circumstances may arise at some time in the future where such a restriction has to be reimposed in the interest of the orderly delivery of grain. It is not the intention during the course of the bulk of the next year, except in exceptional circumstances, to have this restriction in fact in place; therefore, the hon. member has no need to worry about it.
I suggest, Mr. Speaker, it is really something of an abuse of the privileges of this House for the hon. member to hide his embarrassment about not knowing the facts by bringing in a question of privilege on this point.


Mr. Speaker:: Order, please. A disagreement between the hon. member for Mackenzie (Mr. Korchinski) and the minister has now been the subject of a number of questions in the question period, a point of order and a question of privilege. It is a disagreement and obviously remains a disagreement. Therefore, it does not constitute a question of privilege. Citation 113 is quite definitive and provides that a disagreement as to facts does not constitute a question of privilege.
29S76-35V2

June 26, 1975
Privilege-Mr. Reynolds


MR. REYNOLDS-EXCHANGE OF DOCUMENTS BETWEEN CANADIAN AND FRENCH GOVERNMENTS RESPECTING &quot;GREENPEACE III&quot;
Mr. John Reynolds (Burnaby-Richmond-Delta):: Mr. Speaker, I rise on a question of privilege regarding questions that I put on April 9, 1975, as reported at page 4643 of Hansard, to the Secretary of State for External Affairs (Mr. MacEachen) as well as the Acting Prime Minister (Mr. Sharp) at that time regarding the Greenpeace III. The question I put to the Acting Prime Minister at that time was:
Would he be prepared, on behalf of the government, to table all documents exchanged between the government and any department of the French government that had anything at all to do with the Greenpeace III?
The Acting Prime Minister answered as follows:
I will take that under consideration, Mr. Speaker, but I should like to reaffirm what my colleague, the Secretary of State for External Affairs has said, that I did not nor did any of the officials at that time have any correspondence or conversations with the French government along the lines suggested.
I respect that answer and I am sure the minister thought he was giving us a correct answer. But yesterday into my hands came a document which is confidential and headed "Department of Defence, Nuclear Testing Centres Branch" of the French government. I have had it translated by the translation department of the House of Commons and the document leaves no doubt as to the fact that there must have been some correspondence between someone in the government or one of its officials and the French government, because the document states:
After having ascertained from you that no retaliatory measures would have to be feared from the Canadian government on our Air France and Cotam airlines stopping in Montreal, I decided to carry out this boarding in the early afternoon of August 15.
This document is from Vice-Admiral Claverie, the commanding officer of the nuclear testing operations group, and was sent to the general of the air corps, nuclear testing centre director of the French government. I know that in your past ruling, Mr. Speaker, you said that disputes between members are not questions of privilege, but in my argument in this case I am saying that I did not have a dispute with the Acting Prime Minister at that time. I think that members of the House would like to know the facts of the matter. I think the government misled the House in stating there were no discussions. We now have a document that has been put forward in a French court.
If Your Honour finds that this is an acceptable question of privilege, I hope we can refer this matter to a committee so as to find out the true facts of what happened between the Canadian government and the French government in the boarding of the Greenpeace III. Until we know those facts, I do not think the Canadian government can stand before the Canadian people and say, "We have done everything for Captain McTaggart and his crew that we have promised the Canadian people we would do".


Mitchell William Sharp: Mr. Speaker, I listened with great attention to the hon. gentleman. I thought he was going to produce some documents that showed that there had been correspondence or some communications between the two, but all he did was

draw attention to a document of which I was already aware. I deny that we did have any such conversations.


Mr. Speaker:: Order. For the reasons just set out in respect to the previous question of privilege, this is a matter of dispute between hon. members as to the accuracy of answers and facts in a particular case and does not constitute a question of privilege.


AGRICULTURE
[Stage Direction]
Eighth report of Standing Committee on Agriculture- Mr. Smith (Saint-Jean).
[Editor's Note: For text of above report, see today's Votes and Proceedings.]

Jean Marchand: Mr. Speaker, pursuant to Standing Order 41(2), I would like to table in both official languages the summary of the Scott committee's report on the organization of Canadian ports.


QUESTIONS ON THE ORDER PAPER
[Stage Direction]
(Questions answered orally are indicated by an asterisk.)
Mr. John M. Reid (Parliamentary Secretary to President of the Privy Council):: Mr. Speaker, the following questions will be answered today: 2,096, 2,384, 2,459, 2,460, 2,562, 2,576 and 2,702.
If questions Nos. 2,258, 2,368, 2,482 and 2,633 could be made orders for return, these returns would be tabled immediately.
Would you be so kind, Mr. Speaker, as to call starred question No. 2,555?
I ask, Mr. Speaker, that the remaining questions be allowed to stand.


Mr. Laprise: 1.	What is the nomination process for (a) the president of a conciliation board (b) the employee representative (c) the employer's representative?
2.	What is the remuneration process for the president, the employees representative and the employers representative (a) for each sitting day (b) for each half sitting day (less than four hours)?
June 26, 1975

3.	What is the total cost of operation and salaries of conciliation boards (a) for each province (b) for each regional office?


Robert Knight Andras: 1. The Governor in Council appoints chairmen of boards of referees on the recommendation of the Minister of Manpower and Immigration, (a) Nominations are requested by the commission from labour organizations in the community served by the board. These nominations are evaluated and successful candidates appointed by the commission, (b) Nominations are requested by the commission from employer organizations in the community served by the board. These nominations are evaluated and successful candidates appointed by the commission.
2.	The chairman and members are paid by cheque for each sitting, (a) Chairman, $100; Members, $80; (b) Chairman, $60; Members, $40.
3.	(a) Not available.
	(000's)
	1974
Atlantic	*156.1
Prairie	*246.9
Pacific	$289.9
Quebec	$380.7
Ontario	1704.2
Total	$1,777.5


Mr. Schellenberger: 1.	Is the Minister of National Health and Welfare considering an investigation into the possibility of reopening the Hobbema Hospital?
2.	What were the reasons for its closure?
3.	Has the Department entered into an agreement with the Wetaski-win Hospital to provide services for Indian people of that area?
4.	Does the Department feel that adequate beds and facilities now exist to treat people from both areas, especially children?


Marc Lalonde: 1. No.
2.	(1) It was felt that the interests of the Indian people would be better served by having them utilize the existing and expanded hospitalization facilities in Ponoka, Wetas-kiwin and Edmonton. In this respect, special provisions were made to ensure that the recently expanded hospital in Wetaskiwin would have sufficient capacity to accommodate the Hobbema Indian patients. The distance from the reserve to the hospitals in Ponoka and Wetaskiwin is within 10 miles on good all-weather roads. The economy of the reserves had also improved so that transportation was more readily available. (2) The province of Alberta wished to assume its responsibility in providing hospitalization for all its residents in accordance with the Hospitalization Act.
3.	The Department of National Health and Welfare has entered into no formal agreement with the Wetaskiwin General Hospital since the hospital was willing to provide services for Indian people of the area. Provision has been made to appoint an Indian representative on the Wetaskiwin General Hospital Board.
Order Paper Questions
4.	The responsibility for ensuring that an adequate number of hospital beds exists to treat all people in a given area is that of the Alberta Hospital Services Commission. Should temporary shortages of beds exist from time to time, the patient overflow may be directed to the Charles Camsell Hospital in Edmonton or to other district hospitals. The department is not aware of any hospital bed shortage in this part of the province.


Mr. Mitges: What is the method now used to detect antibiotic residue in milk or meat?


Marc Lalonde: The present methods now used to detect antibiotic residues in milk or meats are microbiological in nature. Initial tests are usually carried out for inhibitory substances for penicillin. Research is being carried out to obtain more specific and rapid chemical tests.


Mr. Mitges: Has there been any new tests or other tests devised to detect antibiotic residue in milk and meat that could be used more or less routinely by lay men?


Marc Lalonde: No. However, tests are now being carried out by the Health Protection Branch of the Department of National Health and Welfare to investigate the practicability of the addition of marker dyes to mastitis creams to provide visible absence of antibiotics from milk from treated cows.


Mr. Marshall: 1.	Did the Minister of Transport request the country's two major airlines to show restraint following their applications filed with CTC to increase domestic fares (a) by nine to fourteen percent (b) by higher percentages for short haul routes and, if so, what answer did the Minister receive?
2.	What would be the rate increase to and from Stephenville, Newfoundland and (a) Halifax (b) Montreal (c) Ottawa (d) Toronto (e) Boston (f) New York (g) Florida?


Mr. Cliff Mclsaac (Parliamentary Secretary to Minister of Transport):: I requested the airline to reassess the proposed increases in domestic air fares, particularly where the proposed new fares represented a substantial increase over the existing fares. Subsequently, both Air Canada and CP Air limited the increases on short-haul routes to $5 per one way fare. With the approval of the House and Your Honour I would ask that the next part be tabled, or taken as read and appended to Hansard.


Mr. Speaker:: Is that agreed?


Some hon. Members:: Agreed.
[Editor's Note: The part of the answer referred to above is as follows:]
Order Paper Questions
Air Canada

June 26, 1975
Normal One Way Economy Fare
Between Stephenville, Nfld. and:
Halifax
Montreal
Ottawa
Toronto
Boston
New York
Miami
Tampa
Effective date
of increase	From	To
	1	$
May 27, 1975	41	46May 27, 1975	71	77May 27, 1975	77	84May 27, 1975	90	99June 1, 1975	85	94June 1, 1975	100	110Nil	183	Nil	167


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


Mr. Herb Breau (Parliamentary Secretary to Secretary of State for External Affairs):: 1.	$746,200.
2. (a) Replacement man-years and salary moneys for those on language training are provided separately by Treasury Board, and therefore are not included in direct training costs, (b) Instructional staff salaries will amount to $212,000 primarily in connection with our overseas language programme, (c) $351,600 is targeted for supplementary services from the Public Service Commission in the form of monitors, pedagogical advisors and special programmes. (d) $182,600 has been budgeted to cover items such as software, equipment, travel and administrative salaries in the Official Languages Unit.


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


Mr. Joseph-Philippe Guay (Parliamentary Secretary to Minister of Regional Economic Expansion):: The reply for the Department of Regional Economic Expansion is as follows: 1.	$277,000.
2. (a) Nil, (b) Nil, (c) $227,200, (d) $49,800.


Mr. Herbert: What is the reason for the delay in the production of the Annual Report for the year ended March 31, 1974, of the Bureau of Intellectual Property; patents of invention, trade marks, copyright and industrial design?


André Ouellet: The Annual Report of the Bureau of Intellectual Property for the year ended March 31, 1974 was included in the Annual Report of the Department of Consumer and Corporate Affairs for the same year, which report was tabled in the House of Commons on March 17, 1975.



QUESTIONS PASSED AS ORDERS FOR RETURNS


Mr. Schumacher: 1.	Has CBC conducted, or had conducted on its behalf any public surveys regarding the success or failure of its "Performance" series, since its inception to date and, if so (a) what was the nature of each survey (b) by whom were they conducted (c) what were the (i) age groups (ii) numbers (iii) locations of people contacted in respect of each programme in the series?
2.	What were the results obtained as a result of such surveys (a) of each programme (b) in each age group (c) in each location?
3.	By each programme in the series, what costs were involved for (a) production (b) actor/actress salary (c) distribution (d) other?
4.	By each programme, what were the standard television ratings in Canada?
5.	By programme, how many advertisements were carried (a) from national sponsors (b) from local sponsors (c) as public service announcements and what revenue was obtained from such advertising?
Return tabled.



CANADIAN NATIONAL WILDLIFE AREAS

Mr. Clark (Rocky Mountain): What are the locations of national wildlife areas in Canada and, in each case (a) what was the date of establishment of the area (b) what is the annual financial participation of the (i) government (ii) provincial government (c) what is the specific purpose of each such area?
Return tabled.



POSTAL OPERATIONS, SERVICES AND FACILITIES ACROSS CANADA

Mr. Jones: 1.	What are the details of all postal operations, services, facilities and buildings including the population in each city, town, village and community across Canada?
2.	What are the criteria followed for each establishment of postal operations, services, facilities and buildings in cities, towns, villages and/or communities across the country?
3.	Is the same criteria followed in each province, territory or region?
4.	How many post office buildings are located in each city, town or community?
5.	Has a post office building with complete facilities been built at Riverview, New Brunswick (with a population of at least 12,000 persons) and, if not, for what reason?
6.	How many communities smaller in population than Riverview, New Brunswick have a post office building?
7.	What definition or interpretation does the government have of the word "soon"?
June 26, 1975

Return tabled.



AIR CANADA UTILIZATION OF AIRCRAFT COMPARED TO OTHER AIRLINES

Mr. Mazankowski: 1.	What is the average daily utilization in hours of the (a) Boeing 747 (b) Boeing 727 (c) Douglas DC8 (d) Douglas DC9 (e) Lockheed-LlOll operated by Air Canada as at December 31, 1974?
2.	For the same period, what are the comparative figures for the same or similar type aircraft operated by (a) CP Air (b) Delta Airlines (c) Northwest Airlines (d) Braniff Airlines (e) Pan American Airlines (f) Western Airlines (g) Eastern Airlines (h) American Airlines?
Return tabled.



GOVERNMENT ORDERS


[Stage Direction]
The House resumed, from Wednesday, June 25, consideration of the motion of Mr. Turner (Ottawa-Carleton) that this House approves in general the budgetary policy of the government; the amendment thereto of Mr. Stevens (p. 7063) and the amendment to the amendment of Mr. Broad-bent (p. 7067).
Robert Lorne Stanfield: Mr. Speaker, I am sorry that the Minister of Finance (Mr. Turner) is not able to be in the House this afternoon. I say this not to make any protest about it, because I accept the fact that he cannot be here, but simply to express regret that he cannot have the benefit of my advice to him delivered personally, thereby missing some of the nuances and emphasis that will never come across properly in Hansard.
This is my fifth opportunity to comment on a budget presented by the current Minister of Finance. I am quite sure the minister would have been just as happy to have escaped to some other jurisdiction after his fourth effort. I got that impression when the budget he delivered last November covered a time-frame not just of a year but of a year and a half. However, his departure to other fields was not to be the case, and here we are again. To say that the minister has made a downhill progression in the worth of his budgets from the first to the fifth would be about the same as saying that the Titanic was ill-designed to be a submarine.
I remember some of those earlier budgets that contained dramatic innovations like indexing of the personal income tax system which the minister had earlier said would create chaos and imperil federal-provincial fiscal relations. The minister was certainly right about what we were going to have-chaos and strain. I do not know why he did that crazy indexing when he had so accurately forecast what was going to happen. It is a shame that happened to be his last correct forecast.
The Budget-Mr. Stanfield


Some hon. Members:: Hear, hear!


Robert Lorne Stanfield: Then there were the tax cuts and pension increases as well, early in 1973, following the near defeat of the government in 1972. In respect of those tax cuts and pension increases the minister had earlier forecast they would lead us to ruin and ultimately to bankruptcy. The minister was quite right in his forecasts in those good old days. Then the minister began to slip. There were little errors at first-errors of the order of 50 per cent and 60 per cent, and then bigger ones like predicting 4 per cent growth for a year in which there was no growth at all.


Some hon. Members:: Oh, oh!


Robert Lorne Stanfield: Finally, it just had to happen; we got a budget with no forecast whatsoever. Some might say that the minister lost his nerve, but I find that very hard to believe. I am more inclined to believe that the minister was faced with a desperate dilemma and there was only one thing he could do. Just look at it this way: if you had forecast chaos, strain and ruin if certain things were done, and then you did those things and, sure enough, along came chaos, strain and ruin right on schedule, what do you do for an encore?


Some hon. Members:: Hear, hear!


Robert Lorne Stanfield: Obviously and logically-at least logically in the government's method of thinking-if the country is to be spared total collapse, when you are in the position of the Minister of Finance in these circumstances you must stop forecasting anything and stop doing anything. And the minister has met these requirements in this new budget.


Some hon. Members:: Hear, hear!


Robert Lorne Stanfield: You will recall, sir, that at the time of his November budget last year the minister said he was on a tight-rope, figuratively speaking. When he committed himself to a new budget in the wake of a spate of sabre-rattling and doom-saying in terms of both himself and the Prime Minister (Mr. Trudeau), he raised a host of expectations that the government might finally take some definitive action to deal with the economic problems of this country. The kites and the trial balloons were flown, but all these came crashing down last Monday night, along with the hopes of millions of ordinary Canadians who look to this government to protect their interests. Everything fell in a heap-everything but the poor minister who was left hanging by one hand, dangling from his November tight-rope. I hope the Prime Minister has sent him a copy of his office poster which says "Hang in There, Baby!"


Some hon. Members:: Hear, hear!


Robert Lorne Stanfield: It is almost impossible for even the most dedicated apologist for this government to impute any thrust or direction to this latest budget. The posture of many of the ad hoc items presented was not a chosen posture but, rather, a posture that was forced upon the government. That, sir, is not leadership, that is drifting: it is like the command going down from the bridge to the engine-room, "Hold her unsteady as she goes".


Some hon. Members:: Oh, oh!

June 26, 1975
The Budget-Mr. Stanfield


Robert Lorne Stanfield: The fact that we have a big deficit is largely happenstance. The fall-off in revenue occasioned by a sharp slowdown in the economy is an example of the tail wagging the dog, in this case the deficit. The proposed expenditure cuts are only cuts in ministerial estimates and they are counterbalanced by increased LIP grants, tax credits to industry and proposed additional amounts for housing and other items. The expenditures proposed during the current fiscal year in the budget presented on Monday night are every bit as high as the expenditures proposed last November by the minister for the current fiscal year.

It is striking to note that the government, faced with a $2 billion deficit in spite of the increased tax on gasoline and the increased tax on high personal incomes, chose to boost that deficit to $3 billion and realize some of the so-called popular projects.
It appears that this tremendous deficit is not due to a tax cut, as is the case with the United States deficit, but that it is caused by an increase in expenditures which the government cannot control, and this fact is associated with decreasing revenues.

I suggest that some of these things just cannot last. I say that a course of restraint was not chosen by the government, a large deficit was not chosen by the government, and the fiscal stance was not chosen by the government: all these things were forced upon a government which for too long ignored its responsibility and shirked the duties of leadership. Events have finally caught up with a complacent government and a fair-weather finance minister. The actual stance of the Minister of Finance is not a deliberate choice and it is not the result of any leadership; it is simply the result of policies catching up with the minister and slow-growth aggravated difficulties.
What has happened to the consensus program? It died, as did Julius Caesar, following months of subterfuge and secret meetings. One has to assume that it was designed to disappear at some point because it was phony from the start; that is obvious now. It was designed simply as a time-burner, and having served its purpose it is now consigned to oblivion. There was never any education blitz for the so-called consensus program; there was never any effort by the government to rally public opinion behind its consensus program. It was all shroud and secrecy; no details were ever put before the public. That was just prior to the CLC executive meeting. Then what was produced was not even a proposal. The government would not put its name to anything as drastic as a proposal. What a sham!
I understand we will hear from the Prime Minister in the course of this debate. I understood he was going to speak today, but I do not criticize him for taking another week to try to defend this budget. When he speaks, I hope he will take the opportunity to tell us about his own role of vital leadership in this consensus process. Members will recall that the Prime Minister boldly told the House at the outset that he was in charge of the consensus program, but as the weeks and months went by the Prime Minister's

visibility on the firing line approached and reached zero. The Minister of Finance was left all by himself to make the unconditional surrender. The Prime Minister had long since evacuated himself by helicopter to the picnic grounds.


Some hon. Members:: Hear, hear!


Robert Lorne Stanfield: The so-called consensus program was designed simply to consume time, to get the government from budget to budget with the appearance that it was doing something, in the hope that the economy would react quickly, that our own domestic inflation might ease and that time would heal all the wounds. That hope was not fulfilled. Having failed to achieve voluntary controls or consensus, the budget purports to create an atmosphere in the country conducive to the exercise of restraint by Canadians as they carry on negotiating their wage and salary agreements.
The budget purports to set an example of restraint. Actually, the budget contains very little besides rhetoric and confusion. We have, for example, an increase in the price of petroleum put forward by the minister as being in the public interest. This increases prices to the consumer. It tends to increase the cost of living. I think anyone would have to admit it creates a tendency for consumers to ask for higher wages and salaries. I would expect the minister, having considered this tax necessary in the national interest, to offset it to some extent by some kind of tax cut for consumers, if he is really serious in trying to create an atmosphere in the country conducive to restraint.
But what did he do? Far from offering any offset to the consumers, he proposes a ten-cent a gallon tax on gasoline. Some apologists for the government point to that as an example of restraint. Surely that is playing with words, because we had previously been talking about exercising restraint in our demands on the economy, in the government's demands on the economy and in the demands of the workers and the public on the economy. If it is encouraging restraint for the minister to put up the price of gas by ten cents a gallon, and if it is encouraging restraint in Canada by putting up the price of oil, then the OPEC countries are encouraging restraint in Canada by putting up the price of oil. If one follows that logic, any company is encouraging restraint when it puts up the price of its products in Canada, because Canadians with low incomes will not be able to buy those products.


Some hon. Members:: Hear, hear!


Robert Lorne Stanfield: The minister placed a tax of ten cents a gallon on gasoline to raise more money. He admits that. He placed a ten cents a gallon tax on gasoline to yield more than the government's proper share of the gross national product; but he will not admit that. On a national accounts basis, the minister is increasing his expenditures by 16 per cent over the last fiscal year, in a year in which zero growth for our economy is predicted. When he is taking so much more than this government's proper share of the gross national product, his budget clearly is inflationary.
The minister says the tax of ten cents a gallon is necessary to pay for the one oil price across the country; that it is necessary to pay for the subsidy to eastern Ontario,
June 26, 1975

Quebec and the Atlantic provinces. Mr. Speaker, as a maritimer I resent and object to being placed in the position where any time people buy gasoline in Ontario or in the west they will feel resentment toward the people of Quebec and the Atlantic provinces. A one-price system and any subsidy in connection with it should be supported from the general revenues of this country. I say that a ten-cent a gallon tax on gasoline is just about the poorest type of tax one could have selected.
Some people talk about the conservation effect of the gas price increase of ten cents a gallon, but the minister does not try to justify it on that basis. When one asks him what the consequences of the effect will be, he says he does not know. How much would it decrease consumption? Based on the answer of the minister in the House yesterday, it would seem that he does not have even the foggiest idea. In any event, if the aim of the minister was to create an atmosphere conducive to restraint, this ten-cent a gallon tax on gasoline should have been offset by a reduction in other taxes. If the aim is to encourage an attitude of restraint on the part of the working people of this country, or Canadians generally, through a tax like this for something that is thought necessary in the public interest, obviously it should be offset with a reduction in some other tax so that the people do not feel they have been had, as they do now. But the minister has not done this.
So far as constraint or any atmosphere conducive to restraint is concerned, the budget is simply a bust. Actually, the minister is doing exactly what he has asked other people not to do: he is increasing the government's share of the gross national product and is encouraging others to try to protect themselves by asking for more. So, sir, the consensus is dead-if it ever was alive-and restraints are simply a sham.


Some hon. Members:: Hear, hear!


Robert Lorne Stanfield: The Minister of Finance spoke about cutting back expenditures by $800 million. The hon. member for York-Simcoe (Mr. Stevens) dealt with this in a masterly fashion yesterday when he pointed out that what the Minister of Finance was cutting back were the estimates that were presented in November. He was simply cutting back on the demands and requests of the ministers. You have to go through that every time you make a budget. The short answer to him is that the total expenditures that he is now projecting for the current fiscal year are no lower than the estimates for the current fiscal year which he projected last November. That is the complete answer to any claim by the minister that he has cut back expenditures. It would not be an exaggeration to say he has not cut expenditures by a nickel.


Some hon. Members:: Hear, hear!


Robert Lorne Stanfield: It is the old Benson ploy. We went through this with one of Mr. Benson's efforts when he talked about how much he cut back estimates. All he did was to cut down some of the requests by some of the ministers. I would have expected the current Minister of Finance to be a little more subtle and a little more original.
The Budget-Mr. Stanfield
The minister tries to create the impression of restraint by looking beyond the current year to show what plans he has to bring under control two programs obviously costing many times more than the government forecast they would cost when they were first put in place. Both are shared-cost programs. One is unemployment insurance, the cost of which is shared between the federal government on one hand and employers and employees on the other. For unemployment up to 4 per cent the cost is borne by employers and employees; above 4 per cent, by the Government of Canada. The Minister of Finance has found an easy way to reduce federal expenditures for this program simply by reducing the percentage of the total cost that is to be borne by the federal government. It is an ingenious idea. The federal government will no longer pay the cost of unemployment above 4 per cent; it will only pay the cost of unemployment above the average rate in the previous eight years. So employers and employees will pay on the basis of the government's mistakes over the previous eight years. That is restraint!
I do not know how much the changes in four provisions in the Unemployment Insurance Act to which the minister referred will affect the total cost of the program to Canadians. The Minister of Manpower and Immigration (Mr. Andras) refused yesterday to give any information on this until somewhat later. Presumably he wants to give a very elaborate explanation and elaborate qualifications in connection with his estimates. But the change in the total cost of this program to Canadians as a result of the proposed changes cannot be very great or this government would not be trying so hard to reduce its proportion of the total cost of the program. Certain of the proposed changes will do very little to reduce disincentives which employers-especially small employers-can bear, to which the Minister of Finance made a general reference on Monday night.
In the case of the hospital plan and medicare, these of course are programs shared by the provinces. The government proposes to restrain its expenditures by reducing the federal proportion of the cost, thereby increasing the provincial proportion of the cost of these plans. The Minister of Finance did not put it that way but that is the effect of his proposal. In the case of the hospital plan, he cannot impose any changes on the province for five years because it has been signed on the dotted line. That is what you would call exercising restraint, revoking the agreement some five years hence. But in the case of medicare, the government is not bound by any written commitment to pay a stated percentage of the cost of a program which the federal government imposed on the provinces in its present form.
The imposition of unilateral savings by the Government of Canada-that is, unilateral savings in so far as the Government of Canada's share is concerned-is a breach of the understanding reached by the federal government with the provinces, but not a breach of any formal document. The federal government is guilty of treachery, but it is not guilty of any breach of the law if it proceeds to reduce its share of national medicare. I say it will evoke enormous bitterness on the part of provincial governments and the people they represent for this government to act as it proposes to do in connection with medicare, particu-
7094

June 26, 1975
The Budget-Mr. Stanfield
larly when it forced the program in its present form on many of the provincial governments in this country.
I do not say that the four main principles that Mr. Pearson put forward were unacceptable, nor do I say that all provinces objected to those four principles, but most provinces did and most provinces foresaw what was going to happen because of medicare escalating costs. They know how difficult it is to control a program of this type once it is in place. I myself know about it because I attended several provincial-federal conferences trying to persuade the government of the day in Ottawa to be more flexible and to permit the provinces to enter into agreements on medicare which would lend themselves somewhat more to control.
I was certainly not alone in that. I can remember the then premier of Ontario, Mr. Robarts, making a very determined effort to get the federal government to see a little something in the way of reason. Certainly control is important, but it should be based on discussion, particularly in view of the history of medicare and in view of the history of the stubborn and determined attitude of the Government of Canada in connection with medicare.


Some hon. Members:: Hear, hear!


Robert Lorne Stanfield: All in all, these attempts by the government to attain restraint by putting a bigger burden on the employee and employer in the case of unemployment insurance, and to put a bigger burden on the provinces in the case of the hospital plan and medicare is, I say, a very sorry thing. It is not a very edifying example for the Canadian people, and is just about as phony as the consensus program. It is pitiful to see, once again, housing as a casualty of the lack of any general economic policy in this country. It is socially bad, it is bad for employment and it is bad for inflation, because faced with an acute shortage as we are-certainly there is no pick-up in the economy- this means higher prices, higher rents, a further thrust to the forces of inflation and the very opposite of any atmosphere conducive to restraint in our country. There is nothing in the budget to head this off.
Yesterday, the hon. member for York-Simcoe made a number of proposals on behalf of my party. They are realistic, they are sensible and I believe they are helpful. I expect them to be developed further by the hon. member for Kingston and the Islands (Miss MacDonald) when she participates in this debate.


Mr. Cullen:: You will certainly need help.


Robert Lorne Stanfield: It is you who needs all the help you can get. I will simply say this in connection with housing, before moving on to something else. It is surely an area where the government could have done something, and it could have done something to fight unemployment and inflation at the same time. The budget represents a pitiful cop-out in that direction. The minister puffs himself up in his budget speech and says:
One million more Canadians are at work today than when I took this office.
I am obliged to advise the minister that there are now 11/2 million more Canadians in the labour force than there were when he took the finance portfolio. That is the sober

fact behind all his self-congratulation. The fact is that the minister should not be patting himself on the back with regard to employment, although he does that kind of thing pretty well because he does it so frequently. For his performance in job creation he deserves a kick, more than a part-a gentle admonition delivered about two feet lower than the normal reception area for a pat.
When the minister and his cabinet colleagues are not congratulating themselves on their successful maintenance of the force of gravity while the Liberals have been running things, they are manufacturing outlandish profundities. They say there is no easy solution for unemployment, just as they say there is no easy solution for inflation, another example of devastating insight on their part. I get the impression that if they cannot find an easy solution, they drop the pursuit of any solution at all.


Some hon. Members:: Hear, hear!


Robert Lorne Stanfield: The minister paraded a whole regiment of options before the House on Monday night. He cannot find solutions because he has all these options. He had more options than a mosquito in a nudist colony.


Some hon. Members:: Hear, hear!


Robert Lorne Stanfield: When it comes to attacking unemployment and inflation, the minister is certainly not out for blood, with the result of the bite being sustained by the ordinary Canadian. We are going through another period of speculation these days regarding the minister's own options. He has not consulted me about this. I should not give him any gratuitous advice, and I will not do that, but I ask him whether he is keeping his options open or whether he is playing out his option. I hope he makes up his mind soon, because-and I say this in a spirit of good will-I am afraid the minister is starting to lose interest in his work now that he is involved in so much backing and filling and marking time.
There is no anti-inflationary policy or program in this budget. It buries the consensus program, if the consensus program was alive before the budget was delivered. The budget shows no restraint except rhetorically. Of course, there is no restraint as far as rhetoric is concerned, but there is much rhetorical restraint in the budget. It does not set any example itself and it does not encourage restraint by others. There is a ten-cent tax on gas and there is a bigger demand by the government on the gross national product in a year of no growth in the economy. I think that is a pretty fair summary on the effect of the budget.
I want to say, in all honesty and as fairly as I can because it is a serious charge to make, that the government is clearly counting on unemployment and economic slowdown to cool off inflationary pressures in this country. I do not say that the government deliberately created the unemployment or the slowdown, but I do say that the slowdown and the associated unemployment are the only factors tending to cool off inflation today in Canada. Clearly this is what the Prime Minister and the Minister of Finance are counting on. The consequences will be even more unfortunate than the policy of the Prime Minister
June 26, 1975

some five years ago, and it will not be any more effective in solving the problem of inflation than was that policy of five years ago of deliberately creating unemployment. The government rejects this policy now, rhetorically. It rhetorically rejects a policy of using unemployment and slowdown to fight inflation. It rejects this as being inhumane and ineffective. But I say again that slowdown and unemployment are in fact the only anti-inflationary programs in effect in Canada today and it is clear, when one reads the budget and reflects on it, that this is what the government is counting on to slow down inflation in this country.
I realize that many employers in Canada believe there is little or no real unemployment in Canada. They feel the incentive to work has been destroyed for many Canadians, and I do not make light of those concerns which are based on their experience as employers. We ought to examine seriously what is happening to incentives in this country. I question whether the sort of tinkering the minister proposes with the UIC would help very much. I do not see anything there to increase incentives. But granting that some Canadians do not want to work, I suggest it is far too simplistic and widely wrong-indeed, wildly wrong-to suggest that unemployment rates at the current level, or anything like them, are acceptable in this country.
These levels of unemployment will lead to social unrest and they are not effective or acceptable as a cure for inflation. Consider how much they add to social injustice. This kind of unemployment and the conditions and the atmosphere associated with it have a great effect in depressing the rates of pay of many Canadians who do not belong to big unions. They probably have little effect on the pay rates of those who belong to big unions and are able to get jobs, but they certainly build up pressure for the future even there when they get the chance to make up for losses during slowdown and unemployment.
We should recognize the legitimate complaints of employers, but we certainly cannot regard slowdown or unemployment as a cure for inflation. Yet these are the only anti-inflationary programs in effect in Canada today. It is this that the government is counting on, and nothing else, to slow down the rate of inflation in this country. It is the only way one can explain this budget. The government and some pundits say there is no simple or easy cure for inflation, and of course they are right. But who says there is a simple cure for inflation? I do not say that and I never have, but I wish the Government of Canada and those pundits who stand up all the time and say that there is no simple cure for inflation would recognize that by saying they have not solved the problem.
There is a problem. We must find a way to reduce inflation to a low figure. We must find a way to achieve stability and to have satisfactory employment conditions. What better time could there be for the government and for this country to face this problem honestly than now? There is, presumably, no general election facing the government for some three years.


An hon. Member:: What a tragedy.


Robert Lorne Stanfield: In light of all the talk a year ago about the importance of leadership, in these circumstances why have we had this charade of consensus and this charade of
The Budget-Mr. Stanfield
restraint? If we are to have reasonable price conditions associated with reasonable employment, we must have some kind of compulsory restraint, and I say that deliberately. Why did the government and its apologists pretend anything else?
Through the years compulsory restraint was monetary policy, tied to gold. Unemployment became so savage after the First World War that the priority for economic policy became full employment. There are economists today who believe passionately that monetary policy is the only effective restraint on inflation and they accept the unemployment that goes with it. Sometimes they argue that it would not be very high. Other economists and other commentators say that monetary policy by itself is too crude and too cruel a method by itself for controlling inflation, although, of course, a sensible and restrained monetary policy is obviously part of any sensible economic program.
But if we are not prepared to use the restraint of monetary policy to compel restraint by the different sectors of our economy, we must devise other methods. As I say, sensible monetary and fiscal policies are necessary if we are to avoid the overheating and cooling of the economy we have witnessed. We need something more. Indeed, the Minister of Finance himself seems to recognize that we need something more. He sought a voluntary consensus, he says. I say, with respect, that it was a silly proposal, but it showed a recognition of the inadequacy of existing traditional tools.
Sir, I am not arguing in favour of the kind of general control of prices and incomes which I indicated one year ago would be appropriate for about IV2 or two years. I still believe that these controls were appropriate in the conditions which existed; I believe now that if they had been put into effect, the government would face much less of a crisis today. I do not believe that such controls can be put forward as a permanent solution to inflation, and I said so at the time.
Today, sir, the government would have a virtually impossible task if it tried to persuade Canadians to accept such a program even for a relatively short time, because the government for more than a year has concentrated its efforts on persuading Canadians that such a program would never work. When I heard the Minister of Finance say on Monday night that conditions in Canada now would lend themselves more readily to the imposition of mandatory controls but that the government would not bring them in because the public would not accept them, he displayed a bigger sense of humour than I thought he possessed.
General mandatory controls of prices and incomes are not acceptable in a permanent sense because they are too rigid; they create too many rigidities in the economy. We must find some system of compulsory restraint which permits the economy to adjust as conditions change, which allows individuals to achieve promotion and advancement, and allows companies to make profits from enterprise as distinct from profits from the exploitation of a particular situation. The system must allow companies to reap the benefits of enterprise. The traditional monetary controls imposed a compulsory restraint which met those require-
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June 26, 1975
The Budget-Mr. Stanfield
ments. Those traditional controls, particularly traditional monetary controls did, when tied to gold, keep inflation under control; at the same time they permitted the economy to adjust as conditions changed. Such controls allowed individuals to move up and down, and companies which were progressive and able, to make profits; but they did not assure profits for the inefficient. Although the traditional monetary controls were effective, they are generally considered to be inadequate and not acceptable socially; therefore, we need a supplementary program.
Any program, to be effective, must involve governmental restraint-which we do not have. It must also involve some discipline on the prices and incomes which are inflation leaders. One hears many suggestions made these days. Professor Crispo, of Toronto, has made proposals, as has the chairman of the Economic Council of Canada. Other people are bringing forward proposals as well. This problem, sir, is one of the great economic problems of our time, one of the great economic challenges. We in Canada cannot eliminate all inflation. We do business with the rest of the world and if our trading partners are suffering from inflation we import some of it. Yet we can do much to control inflation in our country. We must do much to control inflation in this country. We must introduce a program for fighting inflation, if we value the continuation of our way of life, if we value what I call the small "1" liberal approach to our economy.
I suggest that in all probability we are three years away from the next general election. Therefore, let us face this problem honestly and frankly. Let us recognize that our economy needs discipline. If we reject the discipline of monetary controls as unacceptable, we must develop some other discipline. We need more than the mush of voluntary consensus. We need more than a budget which is self-contradictory and is merely another act in a tragic farce.


Some hon. Members:: Hear, hear!


Robert Lorne Stanfield: Sir, the Minister of Regional Economic Expansion (Mr. Jamieson) cautioned us yesterday against playing politics with today's inflation problem. I have to believe there was some sincerity in that warning. I hope he is pressing that point as sincerely and firmly within the cabinet as he did in the House. As I say, there will be no pressure of a federal election for a few years. There can be no more appropriate time for a government to back off political game-playing than the present. There can be no better time for the government to deal honestly and openly with Canadians on the resolution of these great problems of unemployment and inflation.
I said I would support the Minister of Finance when he was asking for a consensus, although I said I did not think it would work. I expressed my views on the program on previous occasions and I have expressed them in somewhat stronger terms today, although I do not think what I said about the program today will impair his chances of achieving such a consensus. I assured the House, Mr. Speaker, that I would support any reasonable, open and determined effort to deal with inflation, provided it is not a plan built on the backs of the ordinary people of this country. Let us recognize that if we are to achieve stability, we need discipline in our economy. I say, let us back off the game-playing and deal honestly and openly with 
Canadians. I will be pleased to see the Prime Minister move in that direction when he takes part in this debate.


Donald Stovel Macdonald: Mr. Speaker, in participating in this debate I wish to deal with five matters which concern my particular responsibilities. I shall deal, first, with the increases in gas and oil prices announced on my behalf by the Minister of Finance (Mr. Turner); second, with the funding of the compensation program which keeps a single oil price available to Canadians; third, with some adjustments in that compensation program; fourth, with changes in the resource taxation system; and fifth, with Petro-Canada and particularly with budget statements to do with Petro-Canada.
First may I deal with the question of oil and gas pricing in Canada. I think it is fair at this point to emphasize the value of the agreement which this budget and budgetary statement has declared between the Government of Canada and the province of Alberta in particular with regard not only to the pricing of oil and gas in Canada for the next year, but also certain decisions to be taken by that government which will withdraw the embargo it had imposed on the removal of natural gas for the use of markets in Manitoba and Ontario. I might emphasize the fact that after a period which has been difficult and sometimes rancorous in the adjustment of the resource-producing area's interests to those of the rest of Canada, I think it can be said that the agreement indicates we are moving into a period of calm, a period which we think should provide some stability in this area.
Our objective, of course, in going into the first ministers' conference in April was to achieve, if possible, the same kind of consensus on prices that was achieved at the meeting in March, 1974. However, in the course of discussions that followed the first ministers' conference, deliberations between federal and provincial officials, discussions between ministers and ultimately between the Prime Minister (Mr. Trudeau) and the other first ministers who were involved, it was obvious that no broad consensus on the question of oil and natural gas pricing could be reached. In the context of the positions taken by some first ministers at the April conference, the failure to obtain consensus is perhaps not surprising. While it is regrettable, it does not relieve the federal government of its responsibility to take those positions which it feels are in the broad national interest, and those decisions have been made.
There will be an increase of $1.50 per barrel in existing Canadian prices for crude oil and equivalent hydrocarbons effective July 1, 1975. We are again asking the industry to refrain from reflecting this increase in product prices for a period of 45 days. In addition, to provide an appropriate measure of flexibility and to permit adjustment for seasonal and other factors in the market for Canadian oil, federal and provincial officials will be meeting to review price relationships between different grades of oil and will recommend changes to existing differentials if such changes appear necessary.
Effective November 1, 1975, the price of natural gas at the Toronto city gate will rise from its current value of 82
June 26, 1975

cents per thousand cubic feet to $1.25. Natural gas is a premium, clean-burning fuel that has become increasingly undervalued relative to oil. In Canada, this undervaluation has resulted in extremely high rates of growth in natural gas that are inefficient from a resource allocation point of view and has raised the possibility of deliverabili-ty problems within the next few years. Given our current estimates of demands and supplies for gas, we believe that it is in the interests of all Canadians to see this undervaluation of gas eliminated.
The decisions announced in the budget will result in the natural gas price rising from about 65 per cent of a crude oil equivalent price at Toronto to 85 per cent of that price, and this will be reflected in average field prices in the range of 70 to 80 cents per thousand cubic feet for natural gas moving from Alberta to eastern Canada. Producers will also benefit from the recently announced increase in the export price of natural gas.
We remain committed to the elimination of the 15 per cent gap still existing between the price of natural gas and the commodity-equivalent price based on crude oil. However, we want to phase this further adjustment over a period that allows consumers of Canadian gas time to make the necessary adjustments to higher prices. We are committed to a phasing process which will be completed within three to five years. Potential and existing gas customers should reflect this in their planning.
Existing Canadian energy resources provide an ability to adjust gradually to the economic shocks imposed immediately on other countries by the action of OPEC. This ability to adjust is a valuable asset. The intention to phase-in necessary price increases for both oil and gas, together with the one-price oil system and the determination to remove the undervaluation of natural gas, constitute the three fundamental principles on which our oil and gas pricing policy is based.
I want to make it clear that the pricing decisions announced in the budget represent the second stage in this phasing process and that further price increases will be required in the future. I would also point out that the agreement reached on natural gas will override a recent arbitration award that would have seen natural gas prices at the Toronto city gate rise to between $1.55 and $1.65 per thousand cubic feet on November 1 next.
It has been suggested, both with regard to oil and natural gas, that these price increases should be withdrawn. I would again emphasize the fact that the agreements on oil and gas pricing, just as the agreement by Alberta to withdraw the embargo on gas which will be needed in Ontario and Manitoba this winter, are a part of the package. This was part of an arrangement made between the federal government and the producing provinces.
Natural gas consumers should therefore understand that it was the agreement on natural gas pricing announced in the budget which has been instrumental in obtaining the Alberta government's approval for additional supplies to TransCanada Pipelines of some 1.4 trillion cubic feet. The release of these contracts will help to ease a pending short supply situation that has been of critical concern to Manitoba and Ontario in particular.
The Budget-Hon. D. S. Macdonald
I again emphasize that the price agreement is a package. It is true that under the Petroleum Administration Act we could indeed have limited the price, but there was no way the federal government could have ensured the continued supply of natural gas. These were the considerations. These were the exchanges involved in the agreement announced in the budget.
Let me now review some of the events of the past year and a half and indicate the nature of the reasoning which led us to conclude that price increases are necessary at this time. The starting point is the nature of the one-price oil system in Canada agreed to by first ministers in March of 1974. The use of export charge revenues to finance the oil import compensation program constitutes an effective system that allowed us to set oil prices domestically considerably below world prices without incurring balance of payments deficits to oil exporting countries as long as our oil exports balanced our oil imports. The rise in price to $6.50 per barrel led to income transfers, but these were transfers between Canadians and not transfers from Canadians to foreigners. Consumers of imported oil were substantially cushioned from higher international prices, total purchasing power in the country was not diminished and Canadians, over the past 15 months, enjoyed the lowest oil prices of any major industrialized country.
Canada's external trade in oil is no longer in balance. In response to a National Energy Board assessment of future oil supplies and demands presented last October, the government imposed a ceiling of 800,000 barrels per day on oil exports to the United States. Actual exports have averaged less than the maximum allowed since January. At the same time, Canadian imports have continued to grow. Canada is now a net oil importer and will remain in a net import position for some time. It is no longer possible to postpone the time when Canadians will have significant balance of payments deficits with oil exporting countries.
Similarly, as our oil export tax revenues continue to decline and our imports rise, it will become increasingly difficult to defend the subsidization of oil consumption in Canada out of general revenues. I shall return to the subject of the oil import compensation program later in my remarks.
The basic point that must be stressed here is the following: if we do not make the price adjustments necessary to bring new oil supplies to market and to reduce the rate of growth of our demands, then the difference between our imports and our exports will continue to grow and the price we will have to pay-not just to one another, but as a nation-will increase dramatically.
I have said on numerous occasions that the era of cheap energy is over. It is critical that Canadians come to realize this. The view that we have a continuing capacity to price energy cheaply in this country is fallacious, and while it may have immediate attractions for some, in the long run it will lead to serious distortions which can only threaten the economic and social goals we all seek.


James McPhail Gillies: Written by Imperial Oil.

June 26, 1975
The Budget-Hon. D. S. Macdonald


Donald Stovel Macdonald: The basic issues were well articulated by the Economic Council of Canada in its Eleventh Annual Review. The council concluded:
The policy of keeping oil prices to Canadian domestic consumers below the price of alternative supplies cannot be maintained for very long and if it were pursued as a medium-term objective it could serve to delay needed energy-conserving technological change, hasten the depletion of existing reserves, delay the provision of supplements and alternatives, lower the potential vulume of savings and perhaps foster abortive development of energy-intensive industries dependent upon a hidden subsidy for oil and gas.
It has been, and remains, the stated policy of the government to see the price of Canadian oil rise toward world prices-not necessarily to world prices, but toward world prices. The level at which it stops will be determined ultimately by the demand and supply position within Canada. The rage at which it rises will depend upon conditions in world oil markets, the ability of the Canadian economy to absorb further increases and the success of policies and programs directed at increasing supply and reducing demand.
Before speaking in more detail about these policies and programs, I would like to answer directly the question why price increases for oil and gas were deemed necessary at this time. The logic of the argument in favour of higher prices is clear. Indeed, even the strongest opponents of increases at the first ministers' conference in April admitted that higher prices were in the national interest. Opposition to such increases was in large part on the ground of the timing. I am aware of the apparent contradiction between the energy price increases announced and the necessity to revive economic activity and bring inflation under control. Nevertheless, it is our responsibility to ensure that the actions we take to manage the economy in the short term do not sacrifice the attainment of longer-run objectives.
In the 15 months during which the Canadian oil price has been held at $6.50 per barrel, the average price of oil in the United States has increased by almost $2 per barrel to a level of about $10.40. The price of oil imported into Canada has increased by about $1.60 over the same period and the prospects of further substantial increases in September of this year cannot be dismissed. The energy-producing provinces of Canada argue, with some justification, that the "opportunity cost" of their depleting resource has increased and that they should be entitled at a minimum to regain the relative position they had when they entered into the price agreement of March, 1974.
With regard to natural gas, I would point out again that if agreement had not been reached with the producing provinces, and if the federal government had not acted at this time, the field price would have risen on November 1 to $1.15 per thousand cubic feet. This would have resulted in a price at the Toronto city gate about 30 per cent higher than the price announced in the budget. Moreover, there would have been a risk of shortage in Manitoba and Ontario.
A third reason for raising prices at this time is that failure to have done so would have greatly increased the anticipated deficit in the oil import compensation fund. We have known for some time that Canada's new import position would entail a deficit in the compensation program. At the first ministers' conference on April 1, I

announced that the federal government reaffirmed its commitment to a one-price policy and would draw upon its general revenues to finance this deficit.
There is a point, however, at which the continued subsidization of oil consumption by the general taxpayer becomes inequitable. A significant portion of the burden should therefore be paid by the end user of the commodity. The combination of the oil price increase and modifications to the functioning of the compensation fund which I will announce in a few moments will reduce the anticipated deficit in this fiscal year by some $200 million. Nevertheless, at current international prices we expect the deficit in fiscal 1975-76 to approach $375 million, and should international prices increase further in the autumn this estimate will climb even higher.
I think it is fair to observe at this point that most people support our one-price policy for petroleum in Canada, with its subvention or transfer payment to the east and the far west for those dependent upon foreign oil. I think it is equally true to say that while we are all in favour of this subvention, nobody wants to pay for it.


James McPhail Gillies: Through an excise tax.


Donald Stovel Macdonald: The question for debate is this: Which system of taxation is most equitable to pay for the deficit in the compensation account? We could, of course, have provided for these payments by way of a general increase in income tax. But, in terms of equity, is it really fair to impose this payment for the increased cost of imported oil on all, irrespective of their use of that commodity? The member for Don Valley (Mr. Gillies) says that of course there should be an increase in the income tax for this purpose; that is what he favours. I would point out that his hon. friend from York-Simcoe (Mr. Stevens), his party's official spokesman, said on CBC television last night that he would oppose an increase in personal taxation in order to pay for this program.


James McPhail Gillies: You don't have to do it.


Donald Stovel Macdonald: Mr. Speaker, you can't have it both ways.


Some hon. Members:: Hear, hear!


Donald Stovel Macdonald: If you want a subsidy in Canada, part of which is directed to eastern Canada-and this government does-then let us be honest about it and recognize that it has to be paid for.


Some hon. Members:: Hear, hear!


Donald Stovel Macdonald: What we have done in this respect is emulate most provincial governments by placing a sales tax on this commodity in an area where most consumers do have considerable latitude of choice. If a particular consumer chooses to continue a high rate of consumption, in most cases it is a choice which he is free to make and in fulfilment of which he will have to allocate a larger percentage of his income. We have sought to minimize the impact of the tax on those who, for occupational reasons, must use gasoline. But we recognize there will be some not included in the exemptions who will be adversely affected.
June 26, 1975


James McPhail Gillies: Typical Macdonald dishonesty.


Donald Stovel Macdonald: I have noted that some of the provincial spokesmen, like the Ontario friends of the hon. member for Don Valley, who have been most vehement in condemning this sales tax as a regressive tax represent provincial governments which for many years have charged retail sales tax on gasoline of up to 21 cents a gallon.


Some hon. Members:: Shame!


Donald Stovel Macdonald: Indeed, the Leader of the Opposition (Mr. Stanfield), who was so vehement a few moments ago against a sales tax on gasoline being used as a means of raising revenue, was himself, as provincial premier, responsible for a sales tax in Nova Scotia of 19 cents a gallon at a time when the general price was much lower.


Some hon. Members:: Shame!


Donald Stovel Macdonald: In a very real sense, gasoline consumption is related to income. The second-car family-like that of the hon. member for Don Valley-the snowmobile or the 75-horsepower outboard motor, reflect in a general way a taxpayer's income. Should taxpayers generally be subsidizing this kind of use? We do not think so, Mr. Speaker. When coupled with our concern that Canadians are using up at too great a rate our non-renewable resource, petroleum, and while the price of gasoline is restrained at a level lower than most other industrial countries, there is real motivation for us all to make less prodigal use of this valuable resource.


James McPhail Gillies: You don't have any idea what the elasticity of it is; none whatsoever. You should have done some homework before you made your statements.


Donald Stovel Macdonald: I think I would have to say that the Leader of the Opposition was rather disingenuous-because of the restraints imposed on parliamentary language that is perhaps the strongest term in which I can describe him-in saying several minutes ago that he was of course in favour of the subsidy program but he was objecting to the manner in which it was proposed that it be paid. He said that, as a Nova Scotian, he objected to the notion that when people in other parts of the country went to pay for gasoline, they would feel they were having to subsidize the use of gasoline by himself and others in the Atlantic provinces. He does not mind, of course, just sneaking it in by way of an increase in general income tax. Oh, no, that is all right. What he objects to is the honesty of putting it to people that there is indeed a subvention involved. He, in particular, would have this small-minded attitude of resentment, presumably, if he was living in other parts of the country. But I think Canadians are bigger than the Leader of the Opposition in this regard. I think Canadians in other parts of the country are prepared to pay this kind of tax so that Canadians generally can enjoy the one-price policy. I do not think the kind of small-minded attitude that the Leader of the Opposition demonstrates is one which will be demonstrated by most Canadians.
The Budget-Hon. D. S. Macdonald
All of these considerations are important in coming to a decision on the timing of price increases. But there is one further consideration which is even more fundamental. I stated earlier that the policy of the government is to phase the necessary price adjustments so that the distortions suffered by less fortunate countries that have had to adjust immediately could be minimized for Canadians. We have the ability to manage the transition in a measured way because we have substantial domestic energy resources to cushion the shock.
But this ability is depleting as our resources are depleting. Failure to take appropriate steps at this time would lead to greater uncertainty with respect to where we must go, and would delay necessary adjustments by both producers and consumers-greater exploration activity by producers and more prudent use of existing resources by consumers. Failure to act now would, as well, bring with it the possibility that a sharp and massive price increase might be required at a later date. It is just this prospect, with the painful adjustments that would be required long after other countries had adjusted, that it is our purpose and to our advantage to avoid.

Mr. Speaker, I earlier mentioned the compensation program for oil importers; before proceeding with the discussions on the budget, I would like to take the opportunity to announce changes in the administration of that program. Within the past year, we came to realize, mainly because of the falling off of the oil markets in recent months, that the creation and application of the compensation program have institutionalized some disparities and a kind of rigidity, and that the situation should be corrected. The program, as it is applied now, allows the importer to receive an allowance based on the increase in some costs, from a reference date which has been fixed as November 1973, and weighed according to the changes in prices of Canadian oil at the wellhead. Two kinds of difficulties arise from it.
The reference period which has been chosen, that is November 1973, was one of the most troubled time, as far as world markets are concerned, because of the pertuba-tions following the Middle East war and the embargo that resulted. The prices of crude oil had doubled and those of the oil from Venezuela had increased much more rapidly than the other supply sources.
Freezing the situation at that time made final the temporary distortions of the world markets and resulted in a higher allowance for crude oil from the Middle East, as its costs increased, and contributed to the reestablishment of a more traditional relation with the crude oil from Venezuela. These changes resulted in an artificial advantage for Middle East crude on the Canadian market. Consequently, the proportion of Middle East oil increased faster than anticipated and the average cost of the allowance per barrel increased a little. That was the first difficulty.
The second one arises from the fact that the softening oil world market resulted in a reduction of the transport rate, which favoured the long distance supply sources. After compensation payments this reduction resulted in

June 26, 1975
The Budget-Hon. D. S. Macdonald
lower costs of oil shipped to eastern Canada; therefore the oil prices in that area are generally below the single Canadian rate for crude oil, after the adjustments relating to differences in quality and transportation have been made.
The government studied the operation of the program and decided that, on July 1, 1975, the compensation procedure would be altered in such a way that importers would be refunded according to a uniform rate for each barrel. This uniform rate would be determined by working out the average delivery price of crude oil from the main suppliers; the rate would amount to the difference between the average price and the price of Canadian crude oil delivered in Toronto and adjusted according to its quality. The compensation scale would be revised periodically.
This new policy will result in lowering the compensation rate for each barrel and, as I have pointed out, combined with an increase in the price of domestic crude oil, it will make it possible to reduce the expected approximate deficit by $200 million for this fiscal year. The tariff for petroleum products in the areas which depend on exports should not rise as a result of this new policy, but the present rebates on bulk sales and the discounts on posted rates may become less important as the prices which are subject to compensation will get closer and closer to the prices which prevail in the rest of Canada. It is hoped that the changes I have announced will eliminate the disparities the program had brought about with regard to the sources of imported crude oil and will stimulate competition in the purchase of oil imported into Canada. This is the most important point.
The government is fully aware of the problems oild refiners in eastern Canada have to face concerning imports on account of the present situation of the oil market. The recognition of these problems is reflected in a differential compensation scale for crude oil imports and petroleum products. The new plan will maintain this difference adequately.

I have indicated the nature of the concerns that led us to conclude that higher prices for oil and gas are necessary in Canada, and at this time. I have argued that higher prices are necessary, firstly to bring on stream the oil and gas resources that Canadians will require in the next five to ten years; secondly, to help generate the high volume of savings necessary to find and develop these resources; and thirdly, to reduce the rate of growth of energy demands to manageable levels.
Many Canadian consumers have raised questions with regard to whether or not the revenues arising through higher prices are being deployed in a manner that will lead to the increased energy supplies we require. These are legitimate concerns and I want to answer them directly. Over the past 13 months there have been a number of announced changes to the taxation and royalty systems affecting the operation of the petroleum industry in Canada. The federal government has announced changes in each of the last three budgets, and producing provinces have made modifications to their taxation systems as well.
The purpose of the changes we have introduced has never varied. They were intended to achieve an equitable 
distribution of the unexpected revenues accruing to producers in Canada from higher prices. This distribution was to accomplish three objectives: first, to allow an adequate return to the producing provinces in recognition of both their constitutional rights of ownership and the depleting nature of their resources; second, to protect, at the same time, a minimum share of resource revenues accruing to the federal government on behalf of all Canadians; and finally, to leave the industry with cash flows and expected rates of return sufficient to undertake the exploration and development Canadians require and expect.
There is no question that attempts to redesign federal and provincial fiscal systems in response to higher prices and in a way which could meet these three objectives have been very difficult. In particular instances, the combined effect of federal and provincial changes has led to insufficient cash flow to industry and has created a climate of uncertainty that has not been productive. The modifications to the taxation system announced in the budget will contribute greatly to reducing this uncertainty and to fostering a healthy climate for further exploration.
Much of the debate over the past year has centred around the disallowance of provincial levies on resource revenues as deductible items in calculating federal tax liabilities. The introduction of the 25 per cent resource allowance, calculated on the basis of production income, represents a practical way of recognizing that provincial governments have the right to apply levies to income from their resources that, within certain limits, can be considered deductible.
The concept and design of the resource allowance recognizes the structure of the taxation system as it existed prior to the price increases and provincial royalty changes that occurred early in 1974. When the resource allowance is introduced on January 1, 1976, it will be accompanied by an increase in the rate of federal corporation income tax from 25 per cent to 36 per cent. This higher tax rate will have two effects. It will ensure that the federal share of revenues from Canadian oil and gas remains at about 18 per cent. This is the minimum share that we think the federal government, on behalf of all Canadians, is entitled to receive from a mature petroleum industry. In addition, the increase in the federal tax rate will increase the after-tax value of exploration and development carried on in Canada. The after-tax cost of exploration will be reduced by more than 25 per cent and this will reward directly those companies that seek additional resources in this country and will penalize those that do not.
It is difficult to estimate what the effects of the revised taxation system will be. Provinces may desire to make further adjustments in light of the budget announcement. In addition, the incentives to explore in the current system make estimation of the resulting shares dependent on rates of exploration. The industry share of the price increment will depend in large measure on industry's actions in this regard and the actions taken by provincial governments concerning royalty and provincial tax systems. In this context, it is encouraging to note the comment by the Alberta minister of energy and natural resources earlier this week to the effect that he would be
June 26, 1975

recommending to the provincial executive council that the royalty rate on the additional $1.50 a barrel be reduced from 65 per cent to 50 per cent.
We believe we have established a clear and lasting set of rules that are equitable and provide appropriate incentives. A positive and constructive response from provincial governments and industry will ensure that the difficult task of bringing new oil and gas reserves to markets will proceed unhindered.
I know my time is running short, Mr. Speaker, but I would like to make one final point before resuming my seat.


Mr. Bawden:: On Petro-Can.


Donald Stovel Macdonald: That is exactly right. For once, the hon. member for Calgary South (Mr. Bawden) is right. I should like to respond to concern about the announcement of a cut in this year's budget for Petro-Canada. This cut does not affect our commitments to Syncrude but is restricted solely to the administrative funding for the corporation. The cut reflects the unconscionable delay, as it has been expressed, in getting the legislation through parliament and amounts to $5 million of a previously estimated $15 million; that is to say, there will be $10 million available to the corporation in the balance of this year in order to commence operations.
I would like to close by observing, again, that the arrangements made for the pricing of oil and gas represent the result of extensive discussions and a compromise particularly between the major producing province and the Government of Canada. Taxation measures being taken with regard to the compensation fund provide some means of maintaining our single oil price across Canada; and in particular-just as provincial governments have done-we have selected the end user of this particular commodity, gasoline, as the person who is in the best position to bear this particular cost.


An hon. Member:: Totally regressive.


Donald Stovel Macdonald: The hon. member suggests it is totally regressive. I am glad the Leader of the Opposition has rejoined us, as the provincial author of a gasoline sales tax, but I suppose he could be called totally regressive as a leader as well.


Peter Colwell Bawden: Mr. Speaker, would the minister entertain a question?


Mr. Deputy Speaker:: Order, please. This could only be done with the unanimous consent of the House, as we have actually gone beyond the time allotted to the minister in that I allowed for some interventions made during his speech. Is it agreed that the hon. member be allowed to ask a question?


Some hon. Members:: Agreed.


Peter Colwell Bawden: Mr. Speaker, the minister made reference to the 50 per cent royalty rate mentioned by the minister of the government of Alberta. I would ask if it is true, as it was reported in yesterday's press, that prior arrangements were made between the federal government and the government of Alberta to limit any increase in Alberta pro-
The Budget-Hon. D. S. Macdonald vincial royalties on the increased crude oil price to 50 per cent? If that is the case, would the minister indicate whether similar agreements were reached with the governments of Saskatchewan and British Columbia?


Donald Stovel Macdonald: Mr. Speaker, it would not be correct to say that an agreement was reached in this regard. The Premier of Alberta and the ministers, prior to the first ministers' conference in April, indicated what they considered an appropriate change in federal taxation policies would be and that they would be prepared to change the royalty provisions. There was no agreement in this regard, but the actions of the Alberta minister of energy and natural resources and his announced intentions in this regard would indicate that he really is carrying out what was the premier's expressed intent. So far as I know, there has been no similar expression of intent either on the part of the Premier of Saskatchewan or the Saskatchewan minister, or on the part of the government of British Columbia. There was not, as there was not with the Alberta government, anything that could be described as an agreement.


Peter Colwell Bawden: Mr. Speaker, I should like to ask the minister whether a similar agreement was sought by the federal government with the provinces of British Columbia and Saskatchewan, particularly in view of the stated objective of this government to direct price increases toward stimulating new exploration. Bearing in mind that in the case of the most recent crude oil increase as it relates to the province of Saskatchewan, 100 per cent of the increase is going into the provincial coffers rather than into the search for new supplies, I would ask the minister what efforts were made and why it was not possible to achieve such an understanding as it relates to incremental royalties in the provinces of Saskatchewan and British Columbia?


Donald Stovel Macdonald: Just to correct the hon. member's language, neither on the part of the federal government nor on the part of Alberta, nor on the part of any other government, was there anything in the nature of an agreement on so-called tax bargaining. There was not an agreement in this sense and I do not think one could expect that such an arrangement would in fact be made.


Peter Colwell Bawden: Why not?


Donald Stovel Macdonald: The government of Alberta, just as the Minister of Finance, takes the view that it forms the taxation policy and neither the minister nor the treasurer of Alberta should engage in a form of bargaining on this particular matter. We did, however, have extensive discussions and the Alberta government expressed some intention that it will follow through in this regard. We have represented to the governments of British Columbia and Saskatchewan that the royalty policies they follow are antipathetic and, therefore, disadvantageous in the case of British Columbia in respect of the natural gas industry, and in the case of Saskatchewan, the oil industry. I can only say that while this view has been put strenuously, not only by the federal government but also by many other observers in this country, it has not changed the thinking on the part of these particular governments.

June 26, 1975
The Budget-Mr. Wagner


Mr. Claude Wagner (Saint-Hyacinthe):: Mr. Speaker, before the Minister of Energy, Mines and Resources (Mr. Macdonald) rose to speak, we all knew this budget was pretty bad. Having now heard the rambling explanation of the minister, coupled with some very unfair remarks directed to the Leader of the Official Opposition (Mr. Stanfield), we are convinced that the minister participated legally in what must be considered the most atrocious sham of recent political history.

Mr. Speaker, when I hear the remarks of the government members, I could perhaps explain to them more precisely what I mean when I say that this budget is the most atrocious sham of the recent political history of this country.
The budget brought down on the eve of Saint-Jean-Bap-tiste Day is the most indecent we have ever known. It is indecent because it is meaningless, regressive, inflationary and antisocial. Indecent as well because it is excessively centralizing, clearly insufficient, unprecise and on the whole amoral. Indeed the June 23, 1975 budget will signal the beginning of the end of the Trudeau-Turner tandem.


Irénée Pelletier: You said the same thing last year.


Claude Wagner: I know that these comments hurt the government members, but they should know that their budget hurts even more the average Canadian taxpayers. They should know that this budget is a reflection of the government and that every budget brought down in recent years has revealed something more about this government. Monday's budget shows, unconsciously I would say, the government as it really is. This government whose main qualities, we must admit, whose diplomatic and strategic talents go against the real interests of the average Canadian.
Even though it had been elected originally to bring down separatism in Quebec, the government of this Prime Minister-the statistics speak for themselves in this regard-has only kept it alive. Even though it was reelected last July 8-only one member is applauding on the other side, and I understand him-even though it was reelected on last July 8 to curb inflation, according to its promises, the government of this Prime Minister-the statistics also speak for themselves in this matter-has only increased it. Today, the whole population can see the failure of its inaction policy. Today, we are suffering the consequences of action that was not taken.
Canadians will challenge this leadership which, once again, favours inaction and drift in economic matters, to which my hon. friends opposite have committed themselves. Only its majority in this House, which it does not have the maturity to handle, will keep this government in power for a while longer.


An hon. Member:: For four years.


Claude Wagner: That is too long. Someone on the other side says that it will be for four years! The Canadian people cannot wait that long.

The Prime Minister (Mr. Trudeau), the Minister of Finance (Mr. Turner) and all their cabinet colleagues, which include the former president of a Quebec union organization, who is now Minister of Transport (Mr. Mar-chand), all these good people have deliberately used strong arm tactics in this budget, in a style which is more reminiscent of provocation than of a true salary policy, as concerns the unions and their members who will undertake negotiations this year.
A government which no longer knows how to handle its leadership, which is unable to obtain a consensus on anything in the country, loses the confidence of its citizens. This government has done it!

Mr. Speaker, the budget brought down by the Minister of Finance (Mr. Turner) has already been referred to by some as cynical, and rightly so. One provincial premier has already called it a wholesale tax grab. This was an understatement.


Gerald William Baldwin: The minister did not bring down the budget; the budget brought down the minister.


Claude Wagner: Most Canadians are deeply shocked and upset. I hear one member, the former parliamentary secretary to the minister of finance (Mr. Comtois), say to me, "En frangais", suggesting that I speak in French. Until further notice, there are two official languages in this country. I feel, Mr. Speaker, I have as much right to speak in French or English in this House as the Prime Minister (Mr. Trudeau) has the right to speak in French or English, and I have as much right to answer in English as some ministers have to answer me in French.


Some hon. Members:: Hear, hear!


Claude Wagner: I hope this will be the last time I hear in this House a remark from a Liberal member asking me to speak in French when I judge that I should speak in English.
I say that most Canadians are shocked and upset. All members of this House are feeling the pressure of their constituents' concern and apprehension. This budget is more than cynical. It is more than just a tax grab. It is, above all, insensitive to the reality of the consumer in this country. The methods suggested for energy conservation are insensitive and are motivated by cheap political partisanship on the part of the Liberal government, rather than by any real concern for the interests of the consumers in this country.
The Minister of Finance knows, as does the Minister of Energy, Mines and Resources, that gasoline has been found to be an inelastic commodity with regard to price and demand. He knows that gasoline is very much like penicillin and other medication, in the average North American mind. The increased cost will not necessarily decrease the amount used. All the increased cost will do is effect a transfer of financial resources from other areas of the economy which desperately need these resources to sustain demand and employment. The United States had success in energy conservation when it reduced the speed limit to 55 miles an hour. That would have been a conser-
June 26, 1975

vation measure. However, this government is not interested in conserving anything aside from itself.


Some hon. Members:: Hear, hear!


Claude Wagner: When the ordinary men and women in this country have to pay the price, this does not bother the present government. It never has, and it never will. The oil companies have made their own case now. They indicated that they are not only expected to fuel the country but to fuel the government with extra revenue. While no one in this House need stay up at night, losing sleep over the ability of the oil companies to take care of themselves, we do have a responsibility to concern ourselves with the average consumer and the average taxpayer.
Mr. Speaker, we have long heard rumours of how the pressure of the finance portfolio has been very heavy for the present minister to carry. I would like to spring to the defence of the minister. He has been carrying the pressure remarkably well. He has been carrying it well because he has been passing it on tenfold to the people of Canada. Instead, I am afraid that if there is any epithet that best describes this minister, this budget and this government, it is "cold and insensitive." One can see the cynical advisers in the back rooms telling the minister to be tough this time around because the federal election is several years away. As the hon. member said a few moments ago, it is four years away, so why be tough? God knows how much of the money already taken from the people this government can contrive to give back before the next election.
This government lacks in sensitivity no more than it lacks in judgment and foresight. At a time of unemployment higher than we have had in the past 40 years, we have a government that attacks the industrial heartland of Canada by taking on the premier of the province of Ontario. How proud the Liberal strategists must be of having devised a way of robbing the people of Ontario of 25,000 jobs. How proud they must be of having put an extra burden on the industries and the economies of Quebec and Ontario.
Perhaps they believe they are helping those in opposition in Ontario by trying to make their gloom and doom come true through federal contrivance and subterfuge. This budget will allow the voters in many jurisdictions in this country, specifically the voters in Ontario and Quebec, to understand that there is one Liberal Party, one group of cynics, one group of insensitive and calculating technocrats who are prepared to avoid sacrifice in their own cheap, political interests. Of course, the sacrifice they are always prepared to offer comes out of the pockets of the people. Yesterday, on the heels of the Alberta experience and the Saskatchewan experience, voters in two by-elections in Manitoba elected, with massive majorities, Progressive Conservative candidates.


Some hon. Members:: Hear, hear!


Claude Wagner: In one case, the leader of the Manitoba Liberal Party saw his own defeat. That is an initial response to the cynicism of the Liberal budget, a response by the voting public. The next response will be in the ballot boxes of Ontario. As the leader of the Liberal
The Budget-Mr. Wagner
opposition in Ontario indicated, this budget has not been helpful to his colleagues. I challenge this government to call the by-election in Restigouche and seek a mandate from a previously Liberal constituency for this economic policy. Let them try to seek a mandate there.


Some hon. Members:: Hear, hear!


Claude Wagner: They do not have the guts to seek a mandate one year later in a Liberal riding, on account of their mismanagement and manipulation. Less than a year ago the people of this country believed the Liberal message.


An hon. Member:: They still do.


Claude Wagner: It is apparent the hon. member has not been out of this House. They believed that there were no drastic measures needed and that inflation could be wrestled to the floor. It is the consumer that has been wrestled to the floor, and the taxpayer. It is only a matter of time till the pigeons come home to roost. As my colleague, the right hon. member for Prince Albert (Mr. Diefenbaker), has said from time to time, "It is a long road that has no trash cans".
The insensitivity and arrogance of this administration will now be felt by every Canadian, every day of every week of every month of every year until the next federal election, and that cannot be a source of hope for the future.
Mr. Speaker, I say this budget is meaningless. It has no punch except for the unfortunate fact that it penalizes the average Canadian in an unjust and irrational way.
I will say to the Prime Minister (Mr. Trudeau) who complained recently that nowadays people disobey the law more readily, that it is so mostly because his government does not assume the economic and social role that should be its own. The Prime Minister and his government are responsible for the increased danger of dislocation in this country.
As the Chairman of the Economic Council of Canada advocated it, Canada must reinvent its economic and social role, and it is in that context that we deplore in this budget the absence of an underlying policy, philosophy and strategy of economic development. In my opinion, the budget is regressive because instead of stimulating two key sectors of our economy, the automotive industry on the one part and tourism on the other, it hits them head on in a period of the year when they are at peak activity.
The budget is inflationary in that the famous 10 cent a gallon tax on gas in itself and in its repercussions in many areas will fuel inflation which according to the OECD itself is likely to remain up to its current level of 11 to 12 per cent.
This budget is anti-social since the whole of its revenues, its measures to sanction the primacy of private enterprise in this country makes individuals the only scapegoats of the current inflationary spiral. The average Canadian has been given the major responsibility for the overconsumption of oil and for inflation while private

June 26, 1975
The Budget-Mr. Wagner
enterprise is being squarely asked to take upon itself the leadership to ensure the well-being of Canadians. Yes, this budget is anti-social because it does not take into account at all the fact that in the pattern of consuming society the average Canadians had to increase their indebtedness by 15 per cent over the first three months of 1975.
That does not take into account the fact that 55 per cent of Quebec households are in debt, and that about 25 per cent of them are literally strangled by their debts.
This budget is over-centralizing, bearing in mind two of its propositions, that is: The municipal works program and the announcement that the Federal government might withdraw from hospital insurance and medicare programs. Mr. Speaker, should we once again remind the government that municipalities are provincial creatures and that any community development project must be, if not of exclusively provincial inspiration, at least jointly developed and implemented.
On another level, we cannot and do not accept that the Minister of Finance and the Minister of National Health and Welfare (Messrs. Turner and Lalonde) should decide unilaterally to impose provinces with a ceiling on hospital and medicare costs, especially after they have promoted the establishment of programs, not so long ago, against the explicit will of the most populated provinces in the country. By the way, the fact that they have already put a ceiling on the per capita rate of increase of the federal participation in medical insurance, until 1978-1979, is completely foolish.
How can a government who is unable to plan the economy for the six months to come, establish the maximum increase rate of health costs, until 1978-1979, when he does not know either the impact of the future pay settlements on costs increases, or the costs increases due to a growth of health services? It is sheer thoughtlessness. The only explanation I can see is that the central government forces the provincial governments to limit their participation in hospital and health insurance programs at least as far as the working class is concerned.
This is, Mr. Speaker, a direct interference in the free negotiations that will take place soon in the hospital sector, particularly in Quebec. And it is a principle that we cannot accept. I cannot understand that Quebec Liberals among whom there are ex-unionists as the hon. member for Longueuil (Mr. Olivier) and the hon. member for Sainte-Marie (Mr. Dupont) can applaud at such a procedure on the part of the federal government. The Minister of Finance (Mr. Turner) and the Minister of National Health and Welfare (Mr. Lalonde)-who is also called the meat minister-interfere directly and impudently in the reversal of the next collective bargainings in the public sector in Quebec. In fact, there is another area in which Ottawa makes fun of provinces and it is unemployment insurance for which the budget provides some adjustments and particularly the suppression of the additional allowance for persons with dependents and the eligibility for the plan of people 65 years old or more. In doing so, the Minister of Finance and the Minister of National Health and Welfare are insulting the heads of families who are already humiliated because of their unemployment and also our senior citizens who wish to continue to serve
actively the community in a field where they are competent. I consider that it is inhuman and aberrant.
It is also a breach of provincial prerogatives when federal-provincial consultations are under way to define an integrated social policy and when we are delaying the implementation of a minimum guaranteed income policy for everyone.
Let us see whether the Premier of Quebec, a friend of my hon. friends opposite, does not himself believe, and I quote:
That the Turner budget will affect Quebec
This should read "the Quebec government". I, for one, am convinced this budget will affect both Quebecers as a whole and other provincial governments.
I suggest the budget is totally inadequate considering what has been announced in the area of housing, considering the total silence regarding interest rates. I suggest this is absolutely evasive as far as farm credit is concerned for instance. Is that another indication of this liberal government's lack of concern for farmers and their needs, an area where everything should be done if an increased farm production is seriously envisaged and especially when reference is made in other forums of our increasing responsibility to hungry peoples of the world.
Mr. Speaker, the budget is evasive and it is also absolutely devoid of morals. I feel it is devoid of morals for the reasons I have been putting forward, and also because if one excepts the propositions to increase oil and gas prices and to impose resource taxation, which is over centralizing, this budget is a sham, an example of a wait-and-see policy. It is devoid of morals because it allows people to believe action is being taken, and above all because the goods promised at this time last year are not being delivered. Because there is no sign of that air of leadership that was put on when the train entered the station during the last federal campaign. Because so much noise was made with promises of a consensus from all parties to the economy, knowing full well were it only by experience, that we cannot at the same time seek a consensus with given partners and then threaten them to infringe upon their jurisdiction or their purpose, devoid of any morals because they do not put their money where their mouth is, because they do not have the guts to take the only measure which I believe was needed, that is a budget that would have set up certain selective controls and favoured more precisely some industrial areas so that we could have found in it an employment policy worthy of its designation.
It is therefore with a very clear mind that I will vote against this budget, and I hope this government, through the Minister of Finance, will continue to look for new measures to fight inflation. By the way, maybe I could give a little friendly advice to the government and tell them that if they want to cut into government expenses or travel expenses of the ministers, when the time will come to distribute cheques issued by the Department of Regional Economic Expansion or any other department, it might rely on the Post Office and mail those cheques to different ridings instead of doing as they did in Saint-Hyacinthe, asking the Minister of the Environment (Mrs. Sauve) to go in the riding and hand herself the cheques, when the people will have to kneel to her as that happened many times. If the government do not trust the regularly elected

June 26, 1975

member for Saint-Hyacinthe, at least they could trust postal workers who are held in so high consideration by the Postmaster General (Mr. Mackasey).
Mr. Speaker, it will be our pleasure to go on listening to the speeches during this debate. I am pleased to support the amendment motion so well drafted and introduced by my colleague for York-Simcoe (Mr. Stevens), an amendment which I had the privilege and the honour to support on behalf of my colleagues.
1 hope that as a result of the debate, the government which has the full assurance of its majority but which is not perhaps so strongly backed by public opinion, knows on one hand that it has a comforting number of members in the House, but on the other hand that its popularity is decreasing from day to day. The Prime Minister will perhaps have to continue travelling by helicopter, because if he remains at one place, he runs the risk of finding out just how the people feel. He should then do like certain birds and hop from one place to another. He should be isolated as much as possible from the people and mix with them as seldom as possible. Thus by ignoring the views of the people, he would finally remain in his ivory tower during four years. And we will see what happens then, Mr. Speaker.


Mr. Deputy Speaker:: Is the hon. member for Sainte-Marie rising to ask a question?


Mr. Raymond Dupont (Sainte-Marie):: Mr. Speaker, on a question of privilege, I should like to indicate following the speech delivered by the hon. member for Saint-Hyacinthe (Mr. Wagner), that the memory is a faculty that forgets, but I should like to remind him of the good old times when he was a member of the provincial government. Well, the government he was associated with at that time, in 1964, stated that one does not negotiate with one's subjects, the subjects concerned being merely provincial employees and officials. I should like to remind him-


Mr. Deputy Speaker:: Order. The hon. member will admit that the question he is raising is certainly not a question of privilege. Before I recognize the hon. member for Sherbrooke (Mr. Pelletier), I have the honour to inform the House that I received a message whose text is following.



THE ROYAL ASSENT

[Stage Direction]
Government House
Ottawa, June 26, 1975
Sir,
I have the honour to inform you that the Honourable Wishart F. Spence, O.B.E., Puisne Judge of the Supreme Court of Canada, in his capacity as Deputy Governor General, will proceed to the Senate Chamber today, the 26th day of June, at 5.45 p.m. for the purpose of giving royal assent to certain bills.
The Budget-Mr. I. Pelletier
I have the honour to be,
Sir,
Your obedient servant.
Andre Garneau Brigadier General Administrative Secretary to the Governor General.

Mr. Deputy Speaker:: I also have the honour to inform the House that a message has been received from the Senate informing this House that the Senate have passed Bill C-16, an act to amend certain statutes to provide equality of status thereunder for male and female persons, with an amendment to which the concurrence of this House is desired.


Mr. Faulkner:: Mr. Speaker, although I missed the earlier proceedings, I may say that I believe there is unanimous consent for the amendment made by the Senate to Bill C-16 to be read the second time and concurred in.


Mr. Deputy Speaker:: Hon. members have heard the Secretary of State's (Mr. Faulkner) suggestion. Is there unanimous consent for his proposal? Is it agreed that I shall put the motion for second reading and concurrence?


Some hon. Members:: Agreed.


STATUTE LAW (STATUS OF WOMEN) AMENDMENT ACT, 1974 MEASURE TO ESTABLISH EQUALITY OF STATUS FOR MALE AND FEMALE PERSONS UNDER CERTAIN STATUTES
James Hugh Faulkner: the second reading of and concurrence in the amendment made by the Senate to Bill C-16, to amend certain statutes to provide equality of status thereunder for male and female persons.


[Stage Direction]
Motion agreed to, amendment read the second time and concurred in.

[Stage Direction]
The House resumed consideration of the motion of Mr. Turner (Ottawa-Carleton) that this House approves in general the budgetary policy of the government, and the amendment thereto of Mr. Stevens (p. 7063), and the amendment to the amendment of Mr. Broadbent (p. 7067).
Irénée Pelletier: Mr. Speaker, I would have liked to comment on what the hon. member for Saint-Hyacinthe (Mr. Wagner) just said in his speech, but I will try to make more decent remarks and just remind

June 26, 1975
The Budget-Mr. I. Pelletier
him that a great poet once said that there are politicians who say what they think, and others who think about what they say. He belongs to the first category.
Mr. Speaker, during a parliamentary session, there are two major government papers which are presented to the House for debate, the Speech from the Throne and the budget. These two occasions give members the opportunity to comment on the content of those texts and sometimes give them a touch of their personal creed. My first intent was to comment on the budget brought down last Monday night by the Minister of Finance (Mr. Turner) with regard to his references to the international economic situation at the present time, and, second, to look into the Canadian economy and make a brief analysis of the economic difficulties we are now facing.
I will therefore say a word or two on the budget, followed with a brief comment on the textile situation in Canada and on the way it seems to me the Canadian government could remedy the situation with some strong measures taken by the Minister of Industry, Trade and Commerce (Mr. Gillespie).
The budget that was brought donwn on Monday invites all Canadians to co-operate in facing more efficiently the three main problems of the day in the world and in Canada, namely those of inflation, recession and energy. And so it was that the government took the lead in what it believes to be the best means of confronting the present economic situation in our country.
Though some of the measures announced in the budget may be austere, though they will force many Canadians to tighten their belts, one thing is sure: they will do much towards restoring the Canadian economy. May I mention a few: considerably lower departmental expenditures and closer scrutiny of public expenditures; slow down in the growth of the civil service, significant change in the Unemployment Insurance Act, aid to corporations-which my colleague did not mention a while ago-assistance to housing, new assistance program for municipalities and students, abolition of the 5 per cent tax on some building material, maximum annual subsidy increasing from $600 to $900 on eligible new housing under the low-rental housing program and others. Those are a few of the means, at once stimulating and strict, resorted to by the Minister of Finance to ensure our economic recovery.
Of course, the increase in the price of gas will by far be the least popular of all, but I am quite confident that it will soon be understood that it is justified if we want both a single price across Canada and the rational development of our energy resources.
One excerpt from the budget speech of the Minister Monday evening last held my attention. I am especially proud of the eminently positive attitude he adopts on this subject. I quote:
Countries of the Third World are themselves seeking new ways to improve their longer-term growth and development. Canada is prepared to join them in seeking out the areas where progress can be made. We believe that this search should encompass new measures to assist these countries in expanding their economies and raising the standard of living of billions of people. We are looking at the ways of financing international trade and of helping them expand their exports

and increase their export earnings. But these new initiatives must be firmly based on economic realities, not empty rhetoric.
These are direct words, Mr. Speaker, and I hope I shall have the opportunity to comment on them one of these days.
Mr. Speaker, in view of the very difficult situation of the textile industry, which is the key industry in my area, I intend to make some observations on the problems confronting this industry at this time in Canada and to make some suggestions which I feel it is important to consider in order to improve the textile situation in this country.
We all know that more than 100,000 workers depend on the textile industry in Canada, and there are 50,000 of them in Quebec alone. For several years, the textile workers have been concerned by the regular reappearance of a "marshy" and demoralizing situation in which we have cycles of timid prosperity and frightening stagnation. A glimmer of hope appeared however some years ago. In 1970, following a very close assessment of the situation of the textile industry in Canada, Hon. Jean-Luc Pepin, who was then Minister of Industry, Trade and Commerce, introduced in the House Bill C-215 to correct the situation of the textile industry which had been constantly jeopardized by the considerable fluctuations which we had known over the past few decades.
Through this bill, the then Minister of Industry, Trade and Commerce wanted to correct a situation. His purpose was to make of the textile industry a modern, well equipped and competitive industry. He was setting up the Canadian Textile and Clothing Board, a body with the necessary terms of reference to prevent future ups and downs similar to those which had jeopardized the textile industry for so long. Now that five years have elapsed since the introduction of this bill, when making a review of this short period, it is fair to say that, from 1970 to 1973 inclusive, the situation of the Canadian textile industry was fairly stable and encouraging. However, from 1974, for a great many reasons which would take too much time to explain here, the situation has considerably deteriorated.
Of course the federal government has adopted several measures aiming at correcting the situation, for instance in December of 1974 and March of 1975. But considering the effects of all these measures, one is now forced to admit that the time has more than ever arrived for the department to study seriously, and as early as possible, the overall situation of the Canadian textile industry.
The fact that a 15 per cent manpower reduction took place within this industry during last year alone is a serious indication that all is not well in this sector of our economy. The measures adopted during the last ten months by the federal government were in most cases well received by union representatives of the textile industry. However, I must admit that in several cases, the measures adopted by the government at the suggestion of the Canadian Textile and Clothing Board did not give the expected results. One particular instance that suddenly arises in my mind concerns polyester fabrics. The suggestion of the Canadian Textile and Clothing Board, which was to impose a surcharge, was not deemed appropriate by the Department of Industry, Trade and Commerce and, as a result, the situation kept getting worse.
June 26, 1975

Half measures or shy measures will never solve the problem. We must resort to extreme measures and protect the 90 per cent Canadian owned textile industry, to live decently and fully participate in the economic progress of the country.
During the last two years, Mr. Speaker, we know that imports, mostly from developing countries and some Asian countries such as Japan and South Korea, have caused considerable prejudice to our textile industry. Those massive imports have greatly damaged the textile industry in Canada. Everybody knows that GATT international agreements concerning textiles have been broken several times. Furthermore, we know that dumping was practiced at an alarming rate and that the Canadian textile industry felt its effects. We also know that the Canadian Textile and Clothing Board looked several times into the damages likely to be caused to the textile industry, and in most cases, it concluded affirmatively that there were indeed damages caused to the Canadian textile industry by massive imports.
How can the government redress the situation? In my humble opinion, there are several ways to do it. First, we should accept as such the recommendations the Canadian Textile and Clothing Board made when it was led to inquire into the textile field, where it is proven beyond any doubt that there was prejudice for the industry.



[Stage Direction]
A message was delivered by the Gentleman Usher of the Black Rod, as follows:
Mr. Speaker, the Honourable the Deputy Governor General desires the immediate attendance of this honourable House in the chamber of the honourable the Senate.
Accordingly, Mr. Speaker with the House went up to the Senate chamber.
And being returned:
Mr. Speaker informed the House that the Deputy Governor General had been pleased to give, in Her Majesty's name, the royal assent to the following bills:
Bill C-64, Appropriation Act No. 3, 1975.-Chapter No. 57.
Bill C-62, An Act to amend the Old Age Security Act, to repeal the Old Age Assistance Act and to amend other Acts in consequence thereof.-Chapter No. 58.
Bill S-15, An Act to amend the Department of Industry, Trade and Commerce Act.-Chapter No. 59.
Bill S-17, An Act to amend the Explosives Act.-Chapter No. 60.
At six o'clock the House took recess.

AFTER RECESS

The House resumed at 8 p.m.
The Budget-Mr. I. Pelletier


[Stage Direction]
The House resumed consideration of the motion of Mr. Turner (Ottawa-Carleton) that this House approves in general the budgetary policy of the government, and the amendment thereto of Mr. Stevens (p. 7063), and the amendment to the amendment of Mr. Broadbent (p. 7067).
Irénée Pelletier: Mr. Speaker, before the House took recess, I was saying that more than 100,000 workers depend on the textile industry in Canada, and there are 50,000 of them in Quebec alone. For several years, the textile workers have been concerned by the regular reappearance of a "marshy" and demoralizing situation in which we have cycles of timid prosperity and frightening stagnation.
A glimmer of hope appeared however some years ago. In 1970, following a very close assessment of the situation of the textile industry in Canada, hon. Jean-Luc Pepin, who was then Minister of Industry, Trade and Commerce, introduced in the House Bill C-215 to correct the situation of the textile industry which had been constantly jeopardized by the considerable fluctuations which we had known over the past few decades.
Through this bill, the then Minister of Industry, Trade and Commerce wanted to correct a situation. His purpose was to make of the textile industry a modern, well equipped and competitive industry. He was setting up the Canadian Textile and Clothing Board, a body with the necessary terms of reference to prevent future ups and downs similar to those which had jeopardized the textile industry for so long.
Now that five years have elapsed since the introduction of this bill, when making a review of this short period, it is fair to say that, from 1970 to 1973 inclusive, the situation of the Canadian textile industry was fairly stable and encouraging. However, from 1974, for a great many reasons which would take too much time to explain here, the situation has considerably deteriorated. Of course, the federal government has adopted several measures aiming at correcting the situation, for instance in December of 1974 and March of 1975. But considering the effects of all these measures, one is now forced to admit that the time has more than ever arrived for the department to study seriously, and as early as possible, the overall situation of the Canadian textile industry.
The fact that a 15 per cent manpower reduction took place within this industry during last year alone is a serious indication that all is not well in this sector of the industry.
The measures adopted during the last ten months of the federal government were in most cases well received by union representatives of the textile industry. However, I must admit that in several cases, the measures adopted by the government at the suggestion of the Canadian Textile and Clothing Board did not give the expected results. One particular instance that suddenly arises in my mind concerns polyester fabrics. The suggestion of the Canadian

June 26, 1975
The Budget-Mr. I. Pelletier
Textile and Clothing Board, which was to impose a surcharge, was not deemed appropriate by the Department of Industry, Trade and Commerce and, as a result, the situation kept getting worse.
Half measures or shy measures will never solve the problem. We must resort to extreme measures and protect the 90 per cent Canadian owned textile industry, to live decently and fully participate in the economic progress of the country. During the last two years, we know that imports, mostly from developing countries and some Asian countries such as Japan and South Korea, have caused considerable prejudice to our textile industry. Those massive imports have greatly damaged the textile industry in Canada. Everybody knows that GATT international agreements concerning textiles have been broken several times. Furthermore, we know that dumping was practiced at an alarming rate and that the Canadian textile industry felt its effects. We also know that the Canadian Textile and Clothing Board looked several times into the damages likely to be caused to the textile industry, and in most cases, it concluded affirmatively that there were indeed damages caused to the Canadian textile industry by massive imports.
How can the government redress the situation? In my humble opinion, there are several ways to do it. First, we should accept as such the recommendations the Canadian Textile and Clothing Board made when it was led to inquire into the textile field, where it is proven beyond any doubt that there was prejudice for the industry.
Like the government, the union members and the textile manufacturers themselves admit that the Canadian Textile and Clothing Board has done great things since its creation, that it has always presented complete studies of the situation and that its suggestions were always reasonable and fair.
Everyone admits the ability of its members and the value of its reports. The Canadian Textile and Clothing Board nearly always recommends a strict minimum of corrective action. Consequently, the government should at least accept these recommendations.
At the present time, and this is what is especially unfortunate, the Canadian Textile and Clothing Board must investigate because one of the two parties involved, either the workers or the employer, finds that there has been some injury to the Canadian textile industry. Consequently, the present role of the Canadian Textile and Clothing Board is simply that of a coroner. It steps in when the damage has already been done and, in my humble opinion, we must urgently review completely the role of the Canadian Textile and Clothing Board.
Why should the Board not become permanent and sit throughout the year? It could foresee the direction of the market, and could warn the government about action that should be taken before the damage is done. In this way, the Textile and Clothing Board would prevent in many cases considerable damages that it cannot prevent at the present time for the simple reason that it steps in much too late.
I strongly recommend, Mr. Speaker, that the Minister of Industry, Trade and Commerce (Mr. Gillespie) consider

this suggestion of making the Textile and Clothing Board permanent as soon as possible.
There is another way: In view of the great number of exporters who by-pass extremely easily the Canadian Anti-dumping Act, we should urgently reconsider the definition of dumping and establish that there is dumping when the sales price is lower than the cost price.
The great majority of textile producing countries greatly help their textile industry by granting all kinds of subsidies and stopping if required the import of foreign textiles which could compete disavantageously with their own industry. One must not be fearful when it is a matter of protecting national interests in a sector like that one.
Third, Mr. Speaker, it is vital in my humble opinion that we decide once and for all what the share of the Canadian market and of Canadian producers will be, and that that share be determined according to their productive capacities. It is impossible in Canada to turn out products at the same price as in the developing countries. Shirts at $1.99 are no longer available here.
The argument that we should have competition without considering the situation seems to me positively absurb. If we were to adopt those theories, many Canadian industries would be better off closing their doors as they certainly would not be able to compete with similar industries in countries which enjoy better marketing, economic and climatic conditions, and what have you.
In my view, Mr. Speaker, the best way to settle the problem of the textile and clothing industry is to consider Canadian productivity and Canadian textile potential to determine what part of the Canadian market domestic industries can supply, the balance will have, of course, to be imported by other countries.
If it can be proven that the home market can easily be supplied with domestic products, such should be the share of the Canadian market for Canadian manufacturers. This would result in textile workers, employers and investors regaining confidence, since everyone would know where he is going.
In conclusion, Mr. Speaker, if we are to implement the three suggestions I just mentioned, I consider it important that a tripartite conference-with the participation of the federal government, management and the unions-thoroughly review the situation of the textile and clothing workers in Canada so as to set up, after those discussions and within the shortest delay, a real national textile policy.


Donald W. Munro: Mr. Speaker, my purpose in intervening in this debate at this time is not so much to comment directly on particular budgetary items such as increased taxes, the crushing burdens that are being loaded on to the Canadian people by this budget, or insufficient deductions before taxes, but rather to take advantage of one of the traditions of the budget debate, according to which one is enabled to float a few ideas relating to an important public matter. The one I have chosen is one to which the minister referred in his opening comments on Monday night.
June 26, 1975

Let me emphasize at the outset that these ideas, notions or proposals have been generated as a result of my past experience and do not carry the cachet of approval of the party to which I belong. Even if they are still personal kites I am flying, they are kites that to my mind are very important ones, ones that deserve consideration in the days ahead and ought to be brought out now before a full consideration of this matter comes before this House.
In the first half of his budget address the Minister of Finance (Mr. Turner) provided me with the text for my comments today when he said, as reported at page 7026 of Hansard for June 23, and this was not from the "Book of Revelation", as I have just been reminded, but rather the minister was talking about the collective bargaining process:
An essential element is the legal right to strike in all but the most essential occupations. But the government is not prepared to grant increases that are unwarranted by any reasonable standard. This may lead to legal work stoppages. The resulting inconvenience to the public will have to be accepted.
I happen to think that comment, stated in that way, is something less than complimentary to the public service, suggesting for example that it is irresponsible and might engage in strike action at any moment, and something less than appropriate to say to the public at large. The minister is threatening the public by saying it will just have to put up with the way the government deals with its employees. This is not an appropriate form of speech for a Minister of Finance, either to the employees of the Canadian government or to the Canadian general public at large.
I say that to assume a degree of irresponsibility on the part of the public service does that service a great deal less than justice, and I say this basing my views on fairly lengthy experience in that service. The public service is a responsible service, and if parts of it feel called on to go on strike from time to time I think we should look for the causes of such action rather than deprecating the action itself.
What can those causes be and where are they to be found? As a member of the Joint Parliamentary Committee on Employer-Employee Relations in the Public Service I have heard on many occasions from witnesses coming before us criticism of the government for its failure to bargain in good faith. This comment has been made so often, and it is on the record of our proceedings to it, I feel there has to be something in it. I feel there must be some way to remove the need to make such a comment because, in all frankness, it does no good to the bargaining process. It is to this that I intend to turn my attention this evening.
I am also led to look into this matter because I get the impression from my mail, comments I read in the press, and from remarks made to me by voters in my riding that the general public, which, and I would like to underline this right now, is in the final analysis the real employer of the public service, is thoroughly fed up with work stoppages and the denial of services for which it has paid, and which current negotiating procedures seem unable to eliminate entirely.
An employer does not like to be deprived of the services for which he pays, and I understand that perfectly, whether because the paymaster, in the form of the Treasury Board acting as the public's agent in this particular
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instance, is not offering enough, or whether it is because the unions are demanding too much. One way or the other, the public does not want to go on with this process in that manner.
In any event, does the public really know what causes the breakdown, the resultant strike and the withdrawal of services? I think the general public should be made aware of these causes, and as my address develops I propose to come to this matter.
It is against this general background that these ideas developed and are being put forward tonight for consideration, pending the legislation which I presume will have to emerge from the deliberations of the joint parliamentary committee. Before that we should have the ideas in the open and before us, to think about, to be weighed and evaluated between now and when the legislation is brought down, because perhaps out of these considerations will develop a more effective structure in which collective bargaining in the public service can take place to the advantage of all concerned, and that is my primary interest.
The government seems rather proud of having extended the right to strike to public servants. It is so proud of doing so that it is prepared to classify it, as we heard in the budget address, as part of the democratic process. To the extent that a channel of protest can be regarded as democratic I suppose I would have to agree, but I would hardly characterize all strikes and all strike action in that way. Be that as it may, I should like to see that right in the public sector replaced by more effective means, or by eliminating the need to strike.
What I should like to see enshrined in the bargaining procedures is an even more deeply entrenched element of the democratic process, namely, that fair, reasonable and just treatment be guaranteed to all concerned by all concerned, and here I mean the employees who provide the service, the government which distributes to the employees, in the form of wages and salaries, moneys obtained from the general public, and the third element, the general public, who in the final analysis is the consumer of those services and who pays for them, the ultimate employer in the final analysis who above all else must be satisfied.
Nobody likes strikes. All we have to do is find an effective means of rendering them unnecessary. Before turning to the proposals I have to put forward to that end, let me say that in my view the predecessor of this government made two conspicuous bungling errors in the initial stages of drawing up the legislation extending collective bargaining to the public service. I saw that at the time from the point of view of one who was inside the public service. I did not agree with it at that time. The first was the notion that the whole process of collective bargaining as it had grown up willy-nilly, with all its good points and its bad points in the private industrial sector, could be transferred in toto holus-bolus and substantially unmodified for application in the public sector.
Even the right to strike was transferred in this way. This right incidentally was one which Arnold Heeney, the Commissioner of the Public Service at that time, did not

June 26, 1975
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really favour extending to the public service. It might be interesting to read an extract from the report prepared under Mr. Heeney at that time. The report had this to say:
Consideration was given to the possibility of proposing that strike action be prohibited in the statute establishing the proposed system. Although convinced that, in many parts of the public service, a strike would be quite indefensible and a lockout unthinkable, the committee decided not to recommend a statutory prohibition. Looking at the recent history of the public service, we concluded that it would be difficult to justify a prohibition on grounds of demonstrated need. We concluded also that, if a strike should ever occur, the government would not be without means to cope with it. At the present time, most of the employees to which the proposed system would apply do not have a 'right to strike' and would be subject to disciplinary action by the employer if they were to participate in a strike. Nothing in the recommendations of the committee is intended to change the position.
The government of Mr. Pearson flew in the face of this recommendation and incorporated the right to strike into the legislation. That was one of its mistakes. We are now saddled with it in law. It will not be easy to remove it through amendment or other legislative means.
What we must do, in my view, is remove the need to resort to it. If the structure for collective bargaining is appropriate and responsive, that we should certainly be able to do.
The second great blunder made by the Pearson government in drawing up the legislation was that it made inadequate provision for constituting unions to go to the bargaining table. Here again, as in the previous instance, the government of the day, of which this present one is the legal successor, gave too little thought to the problem and failed in consequence to ensure that the accredited bargaining agents at the bargaining table were directly responsible to those whom they represented. The upshot of this thoughtlessness is that we have some employees today represented at the bargaining table by spokesmen over whom they have no real control, and who have no real stake in the outcome of the negotiations.
Without in any way intending a dig at anyone or at any institution, I feel each bargaining unit ought to be recruited from persons who will have to live with the agreement worked out. Surrogates are not really satisfactory. It may be necessary for the bargaining team to call on technical advisers in the field of bargaining perhaps, but the final decisions on whether to accept or reject a bargaining package should be made at the bargaining table by responsible and responsive bargainers drawn from those to whom the bargaining package will have to apply.
I would cite one further mistake made in drafting the original legislation. Why should Treasury Board be both a convenor and a spokesman in the collective bargaining process? As the agency of government with the firmest hold on the purse strings, perhaps it should. I can understand it in that light. But there is a conflict of interest here. Is it really a valid spokesman for management in all departments? Is it a valid spokesman for the general public? As an adviser I will accept Treasury Board, but not as a principal in the confrontation between the employee on the one hand and the employer on the other.
These three blunders now must be faced and a way out found so that they will not completely destroy the good name and morale of a public service of which Canada ought to be proud. To overcome the damaging effects of these monumental blunders I envisage a complete restruc-

turing of the bargaining process. It involves four main steps, large steps it is true, but only four. It involves a complete re-thinking of the whole collective bargaining process in the public service designed to meet the special needs of that service.
What is required, as I see it, first of all is to ensure that all public servants concert their efforts for bargaining purposes along functional lines as is already the case in some instances, for example among the professions, and that the general assemblies of these employees so formed-call them unions or what you will-should by secret ballot entrust their fate in the bargaining arena to an executive and negotiating team or bargaining unit from their own number. If all unions constituted in this fashion wished to federate into an alliance or federation in order to adopt common front positions on some issues, there is no reason they should not do so, but the decision to do so should be theirs, and the implementation of that decision should be made by them by secret ballot. This is one departure at least from union practice as developed in the industrial sector. It takes into account the features of the public service that distinguish it from the private sector and the industrial sector. The same can be said of the other party in the bargaining process, namely, management, and this is the second element in the proposed restructuring of the bargaining process, as I see it.
As matters now stand, Treasury Board acts for management, yet Treasury Board does not, except for its own employees, have to live with the deal worked out. Treasury Board has a role, obviously, because it controls the purse strings. But is it logical that on those grounds, and on those grounds alone, it is entitled to determine all aspects of the working conditions of all employees throughout the public service? Surely management should enter the picture more directly, using Treasury Board when needed as an adviser on the dollars and cents implications of the proposals that are put forward.
Management is the other part of this bargaining process. But, it can be asked, how can management bargain when employees are drawn from so many departments and are working under so many managers? In cases where the employee bargaining unit is drawn from a variety of departments and, in accordance with the proposals made above, has entrusted its side of the negotiations to a team drawn from its own number, I suggest that the management bargaining unit drawn from those same departments should do very much the same thing, that is, consult together about the stenographic, clerical or transport driver help on which they depend so much, and select a negotiating team to represent them at the bargaining table. In this way, both sides to the bargain eventually arrived at are directly involved in the make-up of the package. Each knows his own requirements and each knows what is expected of the other.
Any attempt to negotiate through the intermediary procedure is not only nonsense but leads inevitably to misunderstandings and discontent.
The third element in my formula is to provide an umbrella under which these negotiators can come together and negotiate. I would call it a public interest negotiating
June 26, 1975

tribunal, of permanent standing and reporting directly to parliament its failures and successes. It should have at its disposal machinery such as is now available under the Public Service Staff Relations Board for appeals, accreditations, and so on. But, generally speaking, it merely offers the arena in which negotiations can take place between a management team and an employee team across the table.
The fourth element in my prescription is to require under law, should negotiation be broken off through failure to agree, that the state of play of the negotiations at the moment of disagreement be divulged in all its detail to the public via the press in an official communique to which the public service negotiating tribunal, the negotiating employee team, and the negotiating management team all subscribe. In this way the offers and the demands, together with comparable figures in the industrial sector for comparable work, will be made known to the real employer, the general public. The real employer, therefore, at that point will be able to bring pressure to bear on the more recalcitrant party in the negotiating process, whether it be one side for being too niggardly or the other for being too demanding.
In this way the public servant will know what is expected of him by his real employer, namely, the general public, and he will be reminded that he is himself part of that real employer because he is part of the general public, and he too wants the service and he too pays for that service. The whole mass has to be brought together, and I submit that here is a way of doing it. By creating a public interest negotiating tribunal as the forum in which negotiations have to take place we remove government, in the form of Treasury Board, from the negotiating process, and replace it by representatives of the general public, the real employer. The tribunal should be answerable directly to parliament, not to government. It should be constituted by parliament, not by government.
Finally, by providing for a democratically constituted bargaining unit for the employees and a representative bargaining unit for management, we have in the confrontation all the elements which will have to abide by the outcome of the negotiations. This is an important and a fundamental change in the whole negotiating procedure.
I commend these proposals to hon. members. We all want the best public service Canada can provide in talent, skills, competence, and performance, and we are ready to pay for that service. The only way, I suggest, that we can be assured of getting it is to amend the present legislation, removing anomalies, eliminating practices and procedures that have proven themselves wrong or inadequate, and replacing them with valid, workable, meaningful and sound alternatives. I suggest I have put forward a draft of just such alternatives.


Mr. F. A. Philbrook (Halton):: Mr. Speaker, thank you for the opportunity of presenting my first major address in the Canadian House of Commons-


Some hon. Members:: Hear, hear!


Frank A. Philbrook: -the first, I believe, by a Philbrook- and of representing here the people of Halton, a riding of great beauty and prosperity, but, even more appropriate to this key budget debate, one blessed with many Canadian
The Budget-Mr. Philbrook
businesses of all sizes and types, of which we are very proud and with which we are concerned.
In general the citizens of my riding tell me that they want us to produce not just a new budget but an orderly, peaceful, and prosperous society. They expect their elected representatives to encourage three things: first, traditional respect for law and order; second, reasonable, responsible government with reliable public services; and third, a healthy economy based on equal rights for business, labour, and consumers alike.
I find that Canadian people, patient and moderate as they are, are becoming more concerned and more vocal about these essentials. They want the best of Canadian society preserved and are beginning to feel strongly about what that will require.
Federal budget time is more than just a time to re-allo-cate moneys. It is again a time to take a good look at where we are going and to try to do something about it.
To be sure, we are all proud and glad to be Canadians, whatever the situation. After seven years of working and travelling in India, Pakistan, and other countries, my family and I realize this more than ever. But from time to time the situation changes, and we must change with it. The pendulum swings, especially in a free country.
The situation has changed recently after many better than normal years, both for us and for the rest of the world. Accepting this fact may not be easy, especially for Canadians too young to remember anything but expansion and prosperity. But accept it we must. Therefore now is also the time to return to basics and to make sure where we are going. Now is the time for our best, clearest, and most decisive leadership, and that is Liberal leadership.


Some hon. Members:: Hear, hear!


Some hon. Members:: Oh, oh!


Frank A. Philbrook: I noticed that the opposition showed a little voluntary restraint.
Canadians have long been committed to a balance between social justice and economic strength. During the good times we have managed to create one of the best systems of social justice anywhere in the world, and now we must concentrate on looking after the economy and making sure that it remains as strong and as healthy as possible at home and abroad. In a liberal, democratic, free enterprise society like ours this means looking after business and industry, looking after the people who generate the wealth which supports all our programs, jobs, and income. A healthy incentive climate must be maintained, especially for Canadian-owned businesses, both the small independents and budding Canadian multinationals. The Minister of Finance (Mr. Turner) has known great success in recent years in stimulating the economy with corporate tax cuts.
There are many things we could discuss about the budget or the economy, and I would like to speak first about the present working relationships between the government, business, and labour, the three most powerful groups in our system. Business realizes that government bears the burden of certain special responsibilities in our

June 26, 1975
The Budget-Mr. Philbrook
system, but it rightfully expects government to perform well. In business and industry under good management the most optional programs are cut back in tight years, and they are expanded in good years. At least this was so during the five years I spent in the pharmaceutical industry. Therefore business expects government also to show restraint and to work productively, as business itself must.
With all its concerns and with all its need to put its own house in order, Canadian business is essentially strong. However, businesses, especially our smaller businesses, complain that they are having difficulty planning for the future because of new laws and government actions of all kinds. Therefore government and business must strive more and more to understand each other, to work together for the Canadian people, and to reduce their conflicts.
Business must be allowed fair access to our labour and money markets, it must be free of excessive paper work, and it must be allowed fair profits and tax rates reasonable enough to permit it to invest in the future. I refer especially to the resource industries. At present its confidence is down, its profits are down, its financial health is down and production is down, but business failures are up. However, at the same time business must realize that it must be more organized and in tune with political goals and social thinking, it must remain competitive, it must improve its public image, and it must work hard to increase its international trade.
With regard to business and government relations, naturally everyone tends to protect his own position, business being no exception. It comes as no surprise when they suggest more for business and less for government, especially when we have a slump in the economy.
Several good suggestions have been made on how to help business by our own Canadian Federation of Independent Businesses, through its energetic president, Mr. John Bullock. For example, he suggests a long term program to build a strong Canadian-owned secondary manufacturing industry which is internationally competitive, along with a gradual program of tariff reductions; fair taxation and profit policies by the government; better tax incentives for small business; freedom to transfer business without serious penalty; more effective control of foreign ownership; and increasing markets for Canadian businesses through selective purchasing by Canadian governments. We should listen to these suggestions from the world of business through our own Canadian businessmen.
On the other hand government is expected to help out by showing restraint in certain major areas, for example, the introduction of new and expensive government programs, the size and salary budgets of the civil service, and in general allowing adequate funds to remain in the private sector for the capital investment necessary to create jobs and general economic recovery.
On the financial side, both our businessmen and our economists want to see careful control of the money supply from now on, enough to allow growth, but through responsible political decisions, not so excessive as to aggravate inflation. This may be more easily said than done. Those two measures-getting behind private business and handling our money carefully-are the bases of a healthy economy in a free enterprise system. That is our

system, and we must work with it. It benefits not only the businessman, but all of us-the worker, the taxpayer, the consumer, and even the government. Hopefully a healthy economy free of inflation and recession will also lead to a new area of labour management relations and industrial peace.
With regard to labour, the role of labour in our society is a very sensitive subject, especially for many of us who grew up in the great depression of the 1930's and felt the personal tragedy of prolonged unemployment, poverty, and the accompanying loss of human dignity. That tragedy left deep social scars and changed all our lives.
But labour has come a long way since then, and although it still has its legitimate concerns, the public mood, as I sense it, now begins to suggest that perhaps labour has come too far, that even now it controls society, and that it often has society at a disadvantage. Increasingly, people seem to be complaining about strikes, especially strikes in the public service, and they want strikes replaced by other methods of collective bargaining. They complain about the resulting disruption of services and lost time from work, both for reasons of inconvenience and economic loss. They want mail and transportation to stick to schedule.
Many people now want essential services to include more than personal safety, but to include all public service and anything affecting the economy, especially during the present climate of economic uncertainty both here and abroad. And now public reaction to organized labour has apparently hardened to the point where many Canadians-including that august body, the Canadian Chamber of Commerce-are suggesting that the economy, inflation, and production costs must be brought under control, even if it means higher unemployment.
God forbid that we should be guilty of deliberately creating unemployment for some of our citizens-ironically to correct the economy for other citizens-especially in view of the concern about the work ethic, alleged abuses of unemployment insurance, and strike action. Personally, I believe that everyone capable should be working in the most meaningful and satisfying jobs possible. Work is more than income. It is a way of life, and that is one reason some of us favour a budget to stimulate the economy while still fighting inflation. We must remain on the job and be productive. We must be reasonable in our demands and free from both strikes and lay-offs where at all possible.
Because of the restriction of time I shall refrain from commenting on housing. I would simply like to say that as urgent and important as it is at the present time, I would like to see us keep our minds on the long term goals and long term effects of our housing activities.
Actually there are many positive social economic signs at present. Don McGillivray of the Ottawa Citizen, who is Canada's incurable optimist, recently listed 16 such good omens, and there are many more. I will not go into those now.
In general terms, and in a general summary of the economy, this is what I hear people saying about our economy, especially our businessmen: we must continue fighting both inflation and recession, but with the empha-
June 26, 1975

sis on continued growth. Our economy will benefit by the strengthening of related economies, but we must not wait too long or rely too heavily on other countries. We must continue to try to make voluntary restraints work with the co-operation of all sectors, with government setting a solid example, but certainly not mandatory controls. Those we leave to the Tories. We must keep our productivity and labour costs competitive, and therefore we must find better ways of collective bargaining so that we will have fewer strikes, less lost time, and less disruption of services, especially in the mail and in transportation like Air Canada. We must maintain good working relationships between all levels of government, particularly with regard to the effects on business, and especially the effects on the resource industries. We must stimulate and support the housing industry. And above all, governments must create a favourable climate in which Canadian business can thrive, both at home and in foreign trade.
These are of course all technical, economic positions, and to work they must take place within the framework of a stable society, stable at the work place and stable in the general community.
I believe that by introducing this budget in the summer of 1975 the Minister of Finance and the Liberal government have shown they are on the right track. We have witnessed more frequent federal budgets in recent times, and there is nothing wrong with that. As circumstances change more quickly, so should our responses.
The Minister stated that the government has chosen to create the climate and set the example to meet the problems before the country. It has set a $1 billion target of budget economies to provide a lead in the exercise of restraint. It is taking measures to establish strict control over its current activities and programs, to reduce their growth over the long run. We all hail this initiative, this courageous statesmanship. However, the government could do no less at this time and, depending on the response of the economy, it should not hesitate to do more along these lines.
He also stated that selective measures will be taken to create jobs, assist housing, and sustain business investment, but without increasing the over-all expansionary thrust of government policies. He is on the right track here too, as long as this means doing as much as possible through private free enterprise and not increasing government expansion and involvement.
The savings of $1 billion in government spending-and hopefully more later, if necessary-must be absolute savings, not savings shunted quietly to other areas of government spending, and not on a larger total budget. There must be true, tough restraint of government spending. The minister has designated four areas of saving.
First, almost $1 billion will be cut from non-statutory areas. While protecting Canadian ownership and control of vital areas-areas such as natural resources, which will be helped through Petro-Canada-and while helping to build our long-term economy by using the departments of Industry, Trade and Commerce and External Affairs, we can do more for less, by increasing the flexibility of government's role and by asking Canadian businesses, "How
The Budget-Mr. Philbrook
do you think we should help you?" We can cut expenses on capital expenditures, which is wise; and introduce efficiencies in operating expenditures. The minister has made a good start here with cuts in consultants' fees and travel costs.
Second, and equally important to people I talk to, growth of the civil service will be controlled. The total salary budget will be reduced by 1 per cent next year. In fact the growth in the salary budget and the numbers of civil servants should be no greater than the annual change in the gross national product, and preferably less. There must be no discrimination against any group of workers, including civil servants, nor should there be favouritism. The public feels strongly that if pay and benefits in the civil service are to be comparable with the private sector, so should performance. "Shape up or ship out," the people say. Traditionally job security has been the attraction, not money. Governments could not and would not fire people, not even the worst, but no one can have it both ways. Canadians want a lean, dynamic civil service in keeping with the times. So, I believe, does the Liberal government.
Third, there are to be cuts in hospital and medical care costs, an area to which I have long been exposed as a physician. These costs have escalated out of all proportion, to the point of bringing diminishing returns on our investment. It is sadly ironic that this should be so, as Canadians are among the healthiest and best cared for people in the world.
The Minister of National Health and Welfare (Mr. Lalonde), speaking for the government, has introduced a valuable, necessary, and less expensive approach to positive health, as set out in "New Perspectives on Health for Canadians." The approach is based on physical fitness and sensible life style. Still, the traditional and more expensive practice persists, the practice of treating disease after the fact with professional personnel and hospital-like institutions. The public and the provinces must respond to these new initiatives if costs in this costly area are to be controlled. Budget ceilings are a harsh but last-ditch measure.
Fourth, and finally, the public has demanded the tightening of unemployment insurance payments. It wants new regulations to eliminate abuses, while affording those in genuine need the help they deserve. A responsible society and government can do no less in the interests of both its economy and moral fibre.
Those are my main comments on the actual budget, Mr. Speaker.
Measures to create jobs are essential, of course. Jobs will be created in many different ways. The increases in the price of oil and gas, while unpopular with some people, will be accepted by most as realistic-


Mr. Rondeau:: How do you know?


Frank A. Philbrook: -especially if supplies are thus protected and new sources developed in the process. How do I know? I know because the Canadian people are realistic and gutsy.
At home, Canada must put her own house in order. In doing so we may need to protect ourselves from certain

June 26, 1975
The Budget-Mr. Nystrom
international forces, but certainly not to the extent of isolating ourselves.
Canada is increasingly becoming one of the great countries of the world, one of the major trading nations, as well as a good neighbour. Economically we should capitalize on our strengths and our good name, to increase our overseas trade with many other countries, developed and developing, while maintaining our traditional trading relations with the United States. And, contrary to some impressions, there are many new opportunities. The poorer countries need our help as they try to survive and industrialize. They are discovering new material and managerial resources of their own. I could cite, for example, Middle East countries and certain Latin American countries. Even better, both sides, developed and developing, are beginning to prefer trade to aid.
In front of the Parliament Buildings there stands a statute of Sir Galahad and on it are inscribed the prophetic words, "If I lose myself, I save myself." I prefer to believe that these words have been inscribed through no coincidence and that they have the ring of truth, a truth which applies to us now. We have seen enough of confrontation and conflict in our time, both here and abroad. Perhaps by working together, by losing ourselves for each other, as we can with voluntary restraint and foreign aid, we shall begin to solve some of our most deep-rooted problems and begin to save ourselves.


Mr. Lome Nystrom (Yorkton-Melville):: Mr. Speaker, I see the Minister of Finance (Mr. Turner) is already running out.


Mr. Turner (Ottawa-Carleton):: No, I will be back soon.


Lorne Edmund Nystrom: Many people of this country say that the budget we are discussing is probably the worst that has been introduced during the seven years I have been a member of parliament.


Stanley Howard Knowles: There has not been a worse one for a good deal longer than that.


Lorne Edmund Nystrom: My colleague, the hon. member for Winnipeg North Centre (Mr. Knowles) suggests that there has not been a worse one for a lot longer than seven years. The budget, of course, will bear hard on the working people, the ordinary citizens of Canada. It will aggravate unemployment, increase the rate of inflation, and hit the ordinary Canadian hard. For these reasons I think the Minister of Finance ought to resign.


Some hon. Members:: Oh, oh!


Joseph-Phillippe Guay: I thought you were a prospective leader of your party.


Lorne Edmund Nystrom: I repeat, he should resign. If he cannot take the economy out of its present tailspin, if he cannot create jobs, cannot reduce the inflation rate and help ordinary citizens of this country to live at a better standard, he should resign.
Consider about four or five of the minister's proposals. They are all terribly regressive. He will impose a ten cents per gallon excise tax on gasoline and hurt all people, no matter whether they drive a Cadillac, a Ford or an old

Pontiac. That tax will literally put many people in this country back on foot. Many will no longer afford the luxury of being able to drive. People all across the country resent this proposal. I know that the people of my riding are furious about the ten cent excise tax on gasoline. The tax will only aggravate our problems. It will also balkan-ize this country into producing and consuming provinces.
The tax imposes on the taxing powers of the provinces in the field of resources. There was no consultation; it is to be applied unilaterally by Ottawa and will do nothing to unify this country, will do nothing to smooth over feelings that exist as between one part of this country and another.
The budget treats the unemployment insurance plan regressively. Unemployment insurance rates are to go up. This increase is nothing more or less than a disguised tax on the ordinary people of this country and the small businessmen who cannot afford to pass the increased costs on to the consumer.
The Minister of Finance complained that high wages paid in Canadian industries are undermining our ability to compete in the markets of the world. His proposals in this regard would hit heavily the ordinary working people of this country. His proposals are nothing if not regressive.
The Minister of Finance announced a cutback of federal funding in the field of health and medicare. That proposal, too, will hit low income people hardest. The effect is bound to be an escalating increase in the cost of health care. I am sure the members from the Atlantic provinces in particular must be very concerned about that announcement in the budget. These things come down very hard on the ordinary working people.
Look at the omissions. There is nothing for farmers, the average worker, the low or middle income people, or the poor. There is nothing whatsoever to increase the minimum wage, to help the old age pensioner, to help regional disparity, to remove the inequities in this country, and nothing for native people, the Indians and Metis. There is nothing in this budget to remove the inequities between the different groups of people in this country or various regions.
When a government brings down a budget it ought to lead, not abdicate with respect to the economic problems that we have. The Minister of Finance is very fond of saying, "I cannot do much. It depends on the United States. Maybe there will be an upturn in the American economy in the last half of this year." He is abdicating the responsibility he has as Minister of Finance, which is to guide the Canadian economy.
The Minister of Finance is content to pick out certain scapegoats and blame the problems on them. He places the cost of unemployment on the workers by increasing the rate they have to pay to the Unemployment Insurance Commission. He places the additional cost of health and medical care on the provinces. He places the cost of the eastern oil subsidy on the motorists and working people.
This minister shrugs off the responsibility of funding Petro-Canada, which was referred to by the member who spoke previously. Instead he gives more incentives to private oil companies to explore for gas and oil. The time
June 26, 1975

has come when that responsibility should rest on the Canadian people through the federal government and the various provinces of Canada.
This minister shrugs off his responsibility toward housing. What does he put into the housing program? He put in an additional $200 million which will only build about 8,000 dwellings in this country, which is far too few compared to the number of people in Canada today who need housing. A large part of that money will go to encourage the private developers to build houses. Where is this government when it comes to building the houses itself, putting money into public housing, stopping the land speculators, and creating land banking around large cities? Where is the government when it comes to bringing down interest rates, controlling mortgages, and doing something meaningful to help meet the housing crisis? It throws a few peanuts to the elephants and says, "Look boys, build a few more houses for the poor people of this country." The housing crisis will not be solved in that way.
Surely the responsibility of this government is to lead. It must help those who need help the most. Perhaps that is how one differentiates the Liberal party from a democratic socialist party. We believe in a more egalitarian, more equal society where all those living at the low income level receive a much greater share of the national wealth, a much greater share of the income we have.


An hon. Member:: We have the guts to do it.


Lorne Edmund Nystrom: I would like to see a Liberal government with a few guts. What it lacks is intestinal fortitude. We never see that demonstrated on the other side of the House. All you have to do is look at the seven or eight major areas of the budget. I will take them one by one.
First, there is the excise tax. How many times in the last year and a half has the government acted unilaterally with regard to resource taxation or developing resources in Canada without consulting the provinces? How much of a strain has there been placed on confederation between the producing provinces and Ottawa? The ten cents a gallon tax on gasoline will bring in $350 million to the federal treasury from the ordinary people. This is again an infringement on provincial rights.
This tax will affect everyone. There are people in my constituency who have to drive 30, 40 to 50 miles to work and back again at night. They have to pay the extra tax the same as someone living in a city. People living in the suburbs around the big cities must also pay the tax. It affects everyone in the same way.
This tax is immoral and unequal. It will affect everyone, the working man in a factory who is not organized in a trade union, as well as the doctor or lawyer. That is not the way to remove the inequities and injustices in this country about which the Prime Minister spoke so many times back in 1968.
There will be an increase in the price of natural gas. The ordinary homeowner in Canada does not have a choice of whether he should heat his home in the winter. The hon. member for Winnipeg North (Mr. Orlikow), and everyone else, all have to heat their homes. It gets cold here. This unfair and unjust tax that affects us all will increase the cost of fuel.
The Budget-Mr. Nystrom
Second, there is the matter of job creation. When the minister said he would bring down a budget I thought he would put a lot of money into projects that would create jobs in Canada. In his budget the minister announced there would be $450 million spent on the creation of jobs in the next few years. Where will these jobs be created? Most of the money will go into extending existing programs such as LIP, the student employment program, or others in the series of ad hoc programs in which the government is involved.


An hon. Member:: Are you against that?


Lorne Edmund Nystrom: I am not against it. We have all kinds of programs; LIP, LEAP, LUMP and what have you. They are all ad hoc in nature. They do not have long term ramifications in terms of developing a country with full employment, or in terms of processing our raw materials and resources. Why do we as a country not start putting more money into developing our own resources and creating jobs on a permanent basis? That is something the government is not prepared to do.
Third, I thought the government was concerned about the cost of living and about bringing down inflation. My understanding from statistics is that the gasoline tax of ten cents a gallon will increase the bill an ordinary motorist pays for his gasoline by $75 a year. Natural gas for home heating will add an extra $65 a year to the home heating bill, again an increase in the cost of living. It will add about two points to the consumer price index. This budget was supposed to deal with inflation and get the economy back on its feet.
Another major area where the government opted out is housing. It has allotted only $200 million which will build about 8,000 units. Most of the money will be for the private market. The time has come for governments, not just the federal but all levels, to get serious and put a lot more money into public housing. We need the units. It is about time we put much greater emphasis on public housing.
It is time we took the whole area of housing out of the private market and made it a social right for the people of Canada. This government should control interest rates and remove speculators from the field. It should encourage provincial and municipal governments to undertake public land banking and make serviced lots available at cost to the home buyer rather than having the speculator or middle man taking out his profit. These are things that could have been done if this budget were to have a long term effect on the Canadian people.
Another area is the whole question of unemployment insurance. We have had an unemployment insurance plan where, if the unemployment rate goes above 4 per cent, the government steps in and pays the cost. Under the new proposal, it is my understanding that it will base that rate on a sliding eight year average. If this were in effect in 1975, the unemployment rate average would be 5.3 per cent. Above that, the government would come in and subsidize the plan. But I would suspect, Mr. Speaker, that it means that the ordinary working people of this country are going to be paying more in unemployment insurance premiums, as well as the business people. Big corporations, of course, will pass it on. But the small businessman is also

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going to be hit. He is not going to be able to pass it on as readily.
Again, Mr. Speaker, it is absurd because once you make $8,500 a year or more your contributions to the UIC do not rise-they have reached the ceiling. So this again is a very regressive way of taxing the ordinary working people whereby those making more than $8,500 do not face increased premiums. But for anyone earning under $8,500 the premiums form a larger share of their incomes. This is nothing more and nothing less than a disguised tax on the working people of Canada. It is a means of getting more revenue to rescue the unemployment insurance fund and, on top of that, one thing that worries me is that we are moving away from the 4 per cent rate as the special rate for unemployment insurance. Does this mean the government has given up on getting unemployment down to a 4 per cent rate? Does it mean that it will accept an unemployment rate of 5.3 per cent or 6 per cent, which is what the average will probably be in a year or two in this country?
It also means that in the future-at least in the next four or five years-the government is probably going to get out of paying anything at all into the unemployment insurance fund if the unemployment rate keeps going up as it is today.
It is no wonder that the Postmaster General (Mr. Mack-asey), who is very interested in the present unemployment insurance plan, accidentally got up and left the House when the Minister of Finance reached this part of his speech in the budget presentation on Monday night. I hope that all of us in the House will hear an address by the Postmaster General in the budget debate, and I hope he will be speaking on the changes to the Unemployment Insurance Act as announced in the budget brought down on Monday night. I am sure it will be interesting to know what is going on in the mind of the Postmaster General as he sees the unemployment insurance plan changed and bastardized in the way that happened to it here in the House on Monday evening.
Another area of concern to me is what the government has done in the matter of health care. Health care is one of the most important areas about which all of us must be concerned. As parliamentarians we should be trying to place as much money as possible into preventive medicine, into curing diseases which are presently incurable, into research to help the disabled, and into making sure that those who are poor receive the best medical treatment without having to worry about cost. They should not have to worry about where the dollars are going to come from to pay for the drugs and treatment they need.
As parliamentarians we should be working with the provinces to make sure we have medicare, to make sure we have pharmacare, to make sure that there is a lot of research being done to find a cure for cancer and to find cures for other diseases. But is is clear from the speech of the minister on Monday night that the federal government has given notice of its intention to cut back on its contribution to hospital and medical care.
What does it mean? Perhaps it does not mean a great deal in the Province of Ontario, or in the Province of

Alberta or British Columbia, our wealthier provinces. But what does it mean in the Atlantic provinces, or in Manitoba or Saskatchewan if the agricultural economy goes into a slump? It means that a great deal more money from our provincial treasuries will have to go into medicare, into health, in order to keep the standards of those provinces up to the national standard.
What it means is that in Newfoundland, New Brunswick, and a few other provinces over the next few years the standard of medical care is going to go down. It will go down in the poorest provinces of our country, again hitting hardest those people least able to afford to pay.
If any province decides to fill up the gap it will probably have to impose fees; it will probably have to increase its premiums for hospital and medical coverage. It will probably have to cut back plans to expand medical facilities planned today. This again is hitting at the ordinary people, those who can least afford to pay.
When one goes over all the things that have happened, one finds there is one thing the Minister of Finance has done again. It is something he always does in his budgets, that is, give more to the corporations in this country. He is giving them an investment tax credit, which I am sure makes Liberal members happy and I know it makes one member back there very pleased. He is also giving greater concessions to the resource companies to explore and develop our resources in Canada.
I believe the budget should have done two or three things radically different if it were to have any real impact for the benefit of the Canadian people. First of all I believe that in the short term the government should have put a lot more money into housing. Some of the provinces have called for a billion dollars to go into the housing market. If that much money-or nearly that much money-had been injected into housing the minister would have created a lot of jobs on the houses to be built. He would have created jobs in B.C., Quebec and New Brunswick where the forest industries are, where the people who belong to the IWA are being laid off because there is not enough housing or construction going on in Canada today.
He would have provided jobs in every industry connected with those things which go into a house, the furniture industry, the steel industry, everything that goes into a house. There is no quicker way to stimulate the economy than to build houses in Canada, and this is something we could do if the government had a different set of priorities.
Second, I believe the government should have allowed a tax cut in the budget for low income earners. People with low incomes need the money. They would have spent the money; as they purchased consumer goods they would have created jobs. As they bought the things they need they would at the same time have stimulated the economy. Again, we would have suffered less of an aggravation to the unemployment rate.
It is time we in this country started to think of the fundamental and basic questions about where we are going. I am concerned that we are not an independent country and I believe the government through its budgets, through its Throne Speeches, through its legislation must place an emphasis on gaining control over our economy.
June 26, 1975

We must also be looking at the resources which this country has, and deciding who owns those resources. For me, Mr. Speaker, it is the Canadian people. And those resources, as Premiers Blakeney, Schreyer and Barrett have said, should be developed primarily under public ownership between the provinces and Ottawa so that the benefit can stay at home with the Canadian people, so that we keep those profits at home and plan the whole economy for all of us. Those resources should be processed in this country to provide jobs for Canadian people.
It is time, too, that we took a look at our financial institutions and at investment in Canada, and that we as a people through our federal government, through our provinces and municipalities, made the decisions as to where the investment capital should go. We should make the decision, not leave it to the large multinational corporations to decide where it should or should not go.
We need a national development plan so that we can have balanced growth, a dispersement of growth all across Canada. People in Toronto, Vancouver and Montreal, in large part, are worried about growth in this country- growth in the cities. But there are areas in our country, such as the prairies and in the north, the Atlantic provinces and parts of Quebec, that need growth, that need more jobs, that need greater development. The only way we are going to get this development is if the people, if governments in this country acting for the people, make the investment decisions, not the private sector.
If we are to plan this country we also need a transportation system which removes the inequities and anomalies which exist in the freight rate structure we have today. We need an agricultural economy which is sound; we need guaranteed prices giving farmers the assurance of a decent standard of living. That, Mr. Speaker, is what our party is talking about.
We are talking about a more egalitarian society, one in which all Canadians, regardless of the colour of their skins, or whether they are male or female, or born in Toronto or Northern Quebec, will have an equal opportunity to enjoy the benefits of this country. We do not just mean equal opportunity in the sense of just saying the words or hearing the words spouted off. We mean equality of conditions, we mean people in all regions having the same basic conditions from which to start. That, Mr. Speaker, is what our party finds needs changing, and that is what we find is lacking in the budget today.


Mr. Arnold Malone (Battle River):: Mr. Speaker, I personally believe that every member of parliament ought to be as constructive and positive as possible in any debate in this chamber. With that premise in mind I set about to analyze the budget speech delivered by the Minister of Finance (Mr. Turner) on the evening of June 23 in an attempt to discover and congratulate him for his constructive contribution to the country. That task was an awesome challenge. A positive speech in response to the June 23 budget would take approximately 22 seconds.
In fairness, however, I think there can be little doubt that the Minister of Finance has clearly identified a number of the problems facing the Canadian society at the present time. A very careful content analysis of his
The Budget-Mr. Malone
address will indicate that the minister has pinpointed many of the major problems that face Canadians.
He was not thorough, however, in his search, and notably missing is any relief for Canada's senior citizens, those on fixed incomes, and the 20 per cent of Canadians who are considered poor by international standards.
For whatever mild congratulation the foregoing may have been toward the minister's attempt to rectify Canada's problems, I am sincerely afraid that is the limit to which I can extend myself. For on the one hand, while the June 23 budget speech identified many of the major problems that are facing Canadians, the solutions offered to rectify those problems in almost every case are either non-workable or, in fact, will worsen the situation the minister identified. Even if he were to get full marks for recognizing Canada's major problems, it would be only reasonably that he be graded a zero for his offering of solutions.
It is now my intention to analyze parts of the budget speech in an attempt to illustrate the attachment of the wrong methods to some correctly stated needs.
The minister commenced his speech by proclaiming:
This has been a tough budget to prepare.
If the minister thinks it was a tough budget to prepare he should have tried listening to it. He also told us that:
World recession has put the brakes on our own economy.
In truth what he should have told us is that our economy has put the brakes on our economy. Five successive budgets by the same minister have finally got entangled in their own mesh, to the point where nothing seems clear as directives for the Canadian people.
On the first page of the minister's budget speech he stated:
The disposable incomes of the average Canadian remain high.
That statement was intended to bolster the Canadian public with a feeling of hope. However, even the most insensitive person must be compelled to ask the question, so what? What does it matter if the average disposable income is high, if those who are indigent, those who are senior citizens, and all those who are on fixed incomes are boxed into an insulting economic strait-jacket? To be persuaded by the mathematics of averaging simply means that the Minister of Finance has chosen to ignore one end of the human spectrum. Without a doubt this minister would conclude, if his head were in a fire-box and his feet on a block of ice, that on the average he would feel pretty good. To proclaim that Canada's average disposable income remains high is admitting in this House that one simply does not care about the economic condition of the senior citizens and all others on fixed incomes. That is a deplorable admission, and the fact is there was no hope in the budget for them.
I wish to continue with consideration of comments by the minister in the very first page of his budget speech. He stated:
At the same time we are confronted with major problems in the field of energy ... We are fully conscious of the short-term adverse effects of a sharp increase in domestic price of oil and natural gas ... We have to recognize the long-term need to develop new sources of supply in
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Canada and to promote greater economies in the consumption of these scarce resources.
If ever there was an example of a minister in conflict with himself, it certainly must be obvious in those words. For once having stated that he was fully conscious of the short-term adverse effects of sharp increase in price, he went on to ignore his own position and announced an increase on gasoline by 10 cents per gallon in the form of an excise tax. What was more important was that not one single penny of the collected tax will be ear-tagged to assist in increasing the search for supply.
One thing we know for certain, and that is either the premise or the conclusion is absolutely wrong. If those are the judgments the minister makes while fully conscious, then there ought to be some skepticism as to whether he fully understands the difference between the state of consciousness and being in a state of coma.
To assume that increasing the price by 10 cents per gallon through an excise tax would assist in preserving petroleum resource was mere guess work. The fact is that on the first day of questioning following the budget speech the minister conceded he did not know whether or not there would be any conservation of fuel as the result of the increase in price. It may well be that the minister has simply transferred the burden of the federal government's responsibilities on to the backs of a selected few automobile operators. With all those exemptions for commercial use, I challenge that the government has even a studied opinion as to how much of the gasoline used in Canada will be subject to the excise tax.
The opportunities for abuses are considerable. The need for an administrative supervisory body is extensive. I challenge the minister to clarify immediately, for all members of parliament and the nation in particular, what net gains he anticipates when the administrative costs are deducted. A failure to respond to that question simply implies that the government has made a hasty, rash, harsh and cruel decision without any knowledge of what the net gain might be.
Truly, the imposition of the 10-cent excise tax on a selected group of Canadian automobile operators must make a farce of the words the minister used in his opening paragraph:
But it also must be a human document.
The minister also told us:
Economics is too important to be left to economists.
A more correct statement might well have been that economics is too important to be left to Liberal spenders. What more dramatic example do we need than to point to the fact that government spending has increased 99.5 per cent since the present minister took office only 40 months ago? The fact that the cost of living has increased by 32.6 per cent in that same period certainly is ample justification now to demand that this government get off of the backs of Canadians.
Instead, however, what the government has chosen to do is to up the price of gasoline with an excise tax, to shift the burden of responsibility for health care from the federal government to the provinces, to shift the burden of unemployment insurance from the government to the workers and the employers, and it has refused to offer a

meaningful stimulus to housing in Canada but claims to be cutting government spending while at the same time increasing it considerably. Obviously one is compelled to ask, "Is that a human document"? If that is the perspective of this government, then truly it envisions a harsh concept of humanity. I would have thought that humanity might have implied a more emphatic concern and willingness to accept responsibilities rather than simply to shift them from the federal level to the backs of the Canadian people.
Let us take a look at some other true identification of Canadian problems and irresponsible solutions thereto. The minister has stated, as reported on page 7022 of Hansard:
Residential construction has been the major domestic source of weakness in the economy.
There can be no doubt of that fact. He went on, however, to shrug his shoulders and excuse himself from a responsible solution. The minister claimed, as reported on page 7022 of Hansard, that:
The sharp decline in U.S. residential construction which provides the most important single market for Canadian lumber has severely curtailed the demand for exports of wood products.
Can the minister truly take such a position when in fact the number of housing starts in Canada in 1975 has been approximately one half that of the previous year? Canada is presently suffering one of the worst years for housing construction in recent history. The $200 million offered to CMHC will be little stimulus to the housing construction industry. Moreover, it is discrimination in that it affects only a portion of the Canadian population.
One certainly needs to challenge why the government did not take into account considerations to reduce the mortgage rates on homes. At the present rate of 11% per cent mortgages, a $30,000 home across 20 years would cost $76,646. However, if the federal government could have ensured a lower mortgage rate, say of 8 per cent, that same house across the same time frame would have cost only $59,642. That difference in mortgage rate would represent a savings to the home owner of $17,000. In turn such a tremendous saving would have been a stimulus not only to the housing industry but would have greatly enhanced employment opportunities by creating a tremendous stimulus throughout the whole construction community.
Or, on the other hand, why was it that the government did not choose to remove completely the 5 per cent tax on building materials? In doing so it would have been in a position to wipe out a whole bureaucracy at the same time. Unfortunately every time the government chooses to save money it has to establish a bureaucratic agency to administer the savings and, as a result, use the savings to pay the bureaucracy. One of the roles of the federal government ought to be to envision the complicated and make it simple; this government has the unique ability of observing the simple and prescribing the complicated. The Liberal philosophy is that there is nothing so simple in the Canadian way of life that cannot become more governed, more controlled, or more bureaucratically operated.
The $200 million offering is like spitting on a forest fire. The cost of housing in this country has risen so dramati-
June 26, 1975

cally across the last four years that the government has to concede to give either a major incentive to all potential home builders or tell the people squarely that, as Canadians, they do not have the right to own their own homes.
Then, of course, there was the announcement that the sale of Government of Canada annuities will be discontinued. The position the government has taken is that it will remove itself from that burden also by shifting the responsibility to the private sector. That act in itself may not be wrong in principle. But certainly one needs to ask what was the stimulus that caused the government to get out of the annuities business? Clearly members of the government have recognized that inflation and high interest rates in recent years placed the government in a disadvantageous and embarrassing position. The fact that the government has decided to get out is a clear signal that it sees no escape from the present problems of high inflation. It simply is not in keeping with the character of the Liberal government to give up one of its bureaucratic agencies except in the face of fear. Now that the Liberal government has wrestled inflation to the sky, it is time to get out of the Government of Canada annuities and transfer that burden to a more efficient sector.
Finally, Mr. Speaker, a content analysis of the budget speech can only lead one to conclude that the minister did, in fact, have his own instincts quashed by cabinet. Throughout his presentation on the evening of June 23 he continually built a strong case for the use of controls to bring about a sense of balance to our economy. The following series of quotations from the budget speech all indicate the minister, in fact, wished that he would have had the strength to have persuaded cabinet to have adopted some form of mandatory controls. He claimed, as reported on page 7022 of Hansard:
We need strong employment growth to get unemployment down ... The key to this is a better performance on costs and prices.
Later on he stated the following:
Wholesale prices are already moving up more rapidly again. The fact is that we have been building serious cost increases into our economy which threaten to erode the competitive position of our industries both at home and abroad.
Then at another point he went on to proclaim that:
The preponderance of evidence, however, is that wages and salaries, whether fringe benefits are included or not, are rising much more rapidly in Canada than in the United States.
A few moments later he stated:
What is surprising and disturbing is the size of recent increases in Canadian wages and salaries and their continuing acceleration in a period of slow growth and high unemployment.
As further evidence of the fact that the minister would have wished to have employed some form of stronger action, he went on to say:
A number of recent wage and salary demands appear to bear little relationship to economic reality.
He continued to build his case for strong controls when he stated:
A continuous depreciation of the Canadian dollar over any length of time is no substitute for bringing the spiral of our costs and prices under control.
The Budget-Mr. Malone
And finally he concluded:
Unless we as a nation are able to conduct our affairs in a way that will maintain confidence at home and abroad in the soundness of our economy, we risk paying a heavy penalty in terms of lower capital investment, lower output, lower employment and lower real income.
All those statements by the Minister of Finance are serious charges against our society. Throughout all of those quotations the minister has accurately indicated some of the very devastating repercussions that could happen to Canada if we did not reverse some of the present anomalies. Certainly the minister cannot build such a strong argument for the need to get our economy back into line, and then simply dismiss it by saying that the public is not willing to accept controls at this time. I challenge-did he ask for public consensus when he imposed the ten cents excise tax? Surely the minister could not have bowed out on such a weak excuse especially when he stated, as recorded at page 7024 of Hansard: "Consensus on a set of voluntary guidelines has not been reached". How can the minister reconcile the conflict in respect of this statement:
... we did not reject controls in principle ... Indeed, in one respect, they would have had advantage over a voluntary consensus.
Despite that recognition, he had previously stated:
. .. inflation ultimately inflicts grievous damage to the fabric of society. It lowers the living standards of those on fixed incomes, including pensioners. It leaves people without reliable, understandable guide-posts by which to arrange their economic affairs. It injects grave uncertainty into the decisions on family budgets, housing, savings and provisions for old age. It provokes deep frustration, social tension and mistrust of private and public institutions.
If anything is clear, Mr. Speaker, it is the fact that the Minister of Finance built the case to introduce controls. It is only because he was unable to persuade his cabinet colleagues of the urgency of Canada's present crisis that he sloughed off all the arguments in favour of restoration of a stable economy with the simple words, "The Canadian public would not accept these measures at this time." Certainly this minister never checked with the Canadian public before he imposed a ten cents per gallon excise tax. Should he have done so, it is almost certain that there would have been no consensus in favour of such a move. As reported at page 7025 of Hansard the minister stated:
I come now to specific measures. None is more important than the control of public expenditure.
Then he went on to talk about a $1 billion cut in federal spending, only to concede that this year it will cost the Canadian people considerably more to operate and to maintain the federal government. Surely it is pronouncements such as these that bring about the great distrust in the Canadian society, making the average citizen wonder what it is all about.
If there is one thing that is clear in listening to the June 23 budget it is that the statement of what is wrong with the country does in fact bear some resemblance to reality. It is just as clear that all of the solutions offered in no way enhance the Canadian lifestyle, do nothing to decrease inflation, and do nothing at all to assist people on fixed income, the senior citizens and the indigent. Those are the people who suffer most as a result of the ever spiralling
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government mismanagement which destroys the lifestyle of so many important Canadian people.
Certainly this country must ask questions when 20 per cent of our population is considered poor by United Nations standards. In these circumstances there is some reason to ask ourselves what went wrong in the last 40 months of the management of the economy by the Minister of Finance. If we graded the minister by giving him a zero, he might well come to us, appeal to us and say, "Sir, I do not deserve such a grade," and the only thing we could respond to that is that zero is the lowest we give. The responses which the minister gave can be challenged.


Some hon. Members:: Order.


Arnold John Malone: It is extremely important-


Some hon. Members:: Oh, oh!


Mr. Deputy Speaker:: Order, please. I think the House should let the hon. member complete his remarks. He only has a few seconds left.


Arnold John Malone: Mr. Speaker, I should like to share for a moment some other examples of the dangerous things which the government has done to destroy the fabric of life, not only in this country but abroad. It has been mentioned in the budget speech that the government was going to try to enhance development in underdeveloped countries. May I cite one example of how in recent years the government has done exactly the opposite? Although it may now take a different approach, the harsh realities of the recent past are inexcusable.
The country of Tanzania is in the business of farming sisal fibres. Canada was one of the main importers of this fibre which is used for binder and bailing twines in this country. What did the Government of Canada do? It imposed on those people of a developing nation a 22.5 per cent import tax. What it did to them was to destroy their sisal fibre industry which was so important to them, and what it did to the Canadian farmer was to increase the cost of that fibre by 30 per cent, to farmers whose cost of farm machinery and other costs have been accelerating at a tremendously rapid rate.
If there is one thing that is clear, it is the need within the nation to accept the fact that this country must develop a policy with regard to developing countries that will enhance trade-


Mr. Deputy Speaker:: Order, please. I regret to interrupt the hon. member, but it being 9.45 p.m. it is my duty, pursuant to section 6 of Standing Order 60, to interrupt these proceedings and forthwith put the question before the House. The question is on the motion of the hon. member for Oshawa-Whitby (Mr. Broadbent).
All those in favour of the subamendment will please say yea.


Some hon. Members:: Yea.


Mr. Deputy Speaker:: All those opposed will please say nay.


Some hon. Members:: Nay.


Mr. Deputy Speaker:: In my opinion the nays have it.
And more than five members having risen:


Mr. Deputy Speaker:: Call in the members.


Mr. Speaker:: I declare the amendment lost.
Amendment (Mr. Broadbent) negatived.


Mr. Speaker:: It being after ten o'clock, this House stands adjourned until 11 a.m. tomorrow, pursuant to Standing Order.
At 10.22 p.m. the House adjourned, without question put, pursuant to Standing Order.

Friday, June 27, 1975