1975-06-27

ROUTINE PROCEEDINGS


Mr. Walter Baker (Grenville-Carleton):: I rise to ask leave to present a motion of urgent and pressing necessity under the provisions of Standing Order 43 arising out of the suspension for three months, without pay, of Arthur Stewart from the Department of Supply and Services, particularly in view of the fact that Mr. Stewart is a public service union leader and his comments may have been made in that capacity and are worthy of investigation in an open and public manner. I move, seconded by the hon. member for Winnipeg North Centre (Mr. Knowles):
That the suspension of Mr. Arthur Stewart from the Department of Supply and Services be removed and that he be restored forthwith to his office within the department with all the rights and privileges thereof pending the report hereafter referred to and, further, that his comments on the operations of the department be referred to the Standing Committee on Public Accounts for review and report.


Some hon. Members:: Hear, hear!


Mr. Speaker:: The motion being presented under Standing Order 43 it requires unanimous consent. Is there such consent?


Some hon. Members:: Agreed.


Some hon. Members:: No.


EXTERNAL AFFAIRS
Mr. Stuart Leggatt (New Westminster):: Mr. Speaker, I, too, rise under the terms of Standing Order 43 on a matter of urgent and pressing necessity. In view of the recent report that South Korea has intensified its alert, and in view of the fact that a North Korean general recently warned that war may break out at any moment, and mindful of yesterday's report that President Park Chung Hee has ordered his defence development agency to begin research on nuclear weapons to develop its own nuclear capacity independent of United States nuclear protection, I would move, seconded by the hon. member for Nanaimo-
Cowichan-The Islands (Mr. Douglas)-I am sorry: by the hon. member for Winnipeg North Centre (Mr. Knowles)-


Mr. Baldwin:: One is as bad as the other!


Stuart Malcolm Leggatt: I would move:
That the Secretary of State for External Affairs immediately withdraw the proposal for the sale of a nuclear reactor to South Korea in view of the growing crisis in the area.


Mr. Speaker:: Pursuant to Standing Order 43 the motion requires unanimous consent. Does the House give unanimous consent?


Some hon. Members:: No.


REQUESTED MODIFICATION OF STANDING ORDERS CONCERNING JUNE 24 AND JULY 1 HOLIDAYS-MOTION UNDER S.O. 43
Mr. Adrien Lambert (Bellechasse):: Mr. Speaker, under Standing Order 43, I ask the unanimous consent of the House to introduce a motion on an important matter of urgent necessity.
Considering that under Standing Order 2(3) the House does not sit on June 24 and July 1 and that when those days fall on a Tuesday hon. members have to be in the House on Monday, the eve of those holidays, preventing them to attend festivities in their constituency, I move, seconded by the hon. member for Rimouski (Mr. Allard):
That the House approve an amendment to Standing Order 2(3) by adding the following:
When the holidays of June 24 and July 1 fall on a Tuesday, the
House will not sit on June 23 and 30.


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


Some hon. Members:: Agreed.


Some hon. Members:: No.


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


Mr. Speaker:: Order. On the motion put by the hon. member for Bellechasse (Mr. Lambert), I understand there were some discussions. I was listening to see whether or not there was unanimous consent and I thought I

June 27, 1975
Transport
heard some noes. However, they were not very distinct so I wonder whether I might put the question again. [Translation]
The motion moved by the hon. member for Bellechasse (Mr. Lambert) pursuant to Standing Order 43 requires the unanimous consent of the House. Is there unanimous consent?


Some hon. Members:: Agreed.


[Stage Direction]
Motion agreed to.
Mr. Speaker:: The hon. member for Bellechasse (Mr. Lambert), seconded by the hon. member for Rimouski (Mr. Allard) moved:
That when the June 24 and July I holidays fall on a Tuesday, the House shall not sit on June 23 and 30.
Does the House agree to the said motion?


Some hon. Members:: Yes.


[Stage Direction]
Motion agreed to.

Mr. David Orlikow (Winnipeg North):: Mr. Speaker, I rise to move a motion pursuant to Standing Order 43. My motion is based on the announcement by the CPR that it proposes to lay off for 11 weeks 3,000 maintenance workers. I would therefore move:
That this House instruct the Minister of Transport to meet with the railway unions and the CPR to discuss the proposed lay-off of 3,000 maintenance workers for 11 weeks this summer and to inquire into the effects of such lay offs on the movement of grain in the 1975-76 shipping season.
The motion is seconded by the hon. member for Winnipeg North Centre (Mr. Knowles).


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


Some hon. Members:: Agreed.


Some hon. Members:: No.


TRANSPORT
Mr. Andrew Brewin (Greenwood):: Mr. Speaker, I, too, wish to move a motion under rule 43 on a matter of urgent and pressing necessity. In view of the fact that plans for the development of the aircraft known as the STOL plane for intercity traffic using the Toronto Island Airport will

cost the taxpayers of Canada in the fairly near future hundreds of millions of dollars, and in view of the fact that a cheaper alternative to a short-haul intercity passenger air service could be met by developing better use of rapid intercity rail service, I move:
That this House instruct or request the Minister of Transport to refer this particular aspect of his transportation policy to the transportation committee of the House and set up a public inquiry where interested citizens and experts may state their views on the matter.


Mr. Speaker:: Order, please. Pursuant to Standing Order 43 this motion cannot be presented without the unanimous consent of the House. Is there unanimous consent?


Some hon. Members:: Agreed.


Some hon. Members:: No.



ORAL QUESTION PERIOD


Hon. Robert L. Stanfield (Leader of the Opposition):: Mr. Speaker, I have a question for the Acting Prime Minister on the subject of the sale of a nuclear reactor to Argentina. Is it the position of the government that the contract for the Cordoba nuclear generating plant, which was made effective by an exchange of letters in September, 1974, made provision for subsequent negotiation of safeguards and, if so, will the government table the documents containing those provisions for the subsequent negotiation of safeguards?


Hon. Mitchell Sharp (Acting Prime Minister):: Mr. Speaker, the answer to the first part of the question is yes, the contract is subject to a bilateral agreement on safeguards. Indeed, I had a conversation with the Ambassador for Argentina this morning, and next week our ambassador in Buenos Aires will be having discussions with the foreign minister of Argentina on the negotiations that have been proceeding for sometime toward the completion of the safeguards agreement. There are two particular points outstanding about which I spoke to the ambassador this morning.


Robert Lorne Stanfield: Mr. Speaker, will the government table the provisions relating to the contract of September, 1974 which make allowance for the subsequent negotiation of safeguards? Furthermore, will the government inform the House when the Atomic Energy Commission of Canada was first informed that the contract, which it thought was completed and was acting on, was subject to further negotiation of safeguards?


Mitchell William Sharp: Mr. Speaker, I will try to comply with the request of the Leader of the Opposition. I am informed there is no doubt about the fact that the fulfilment of the contract itself depends upon a bilateral agreement on
June 27, 1975

adequate safeguards. I will endeavour to obtain the necessary information to supply the Leader of the Opposition.


SUGGESTED MORATORIUM ON SALE OF NUCLEAR REACTORS PENDING AGREEMENT ON SAFEGUARDS BY EXPORTING COUNTRIES
Robert Lorne Stanfield: Mr. Speaker, it seems very clear that the contract was in fact completed without any such provision, and that is why I asked the Acting Prime Minister if he will table those provisions. In view of the obvious second thoughts of the government with regard to this sale, will the government now finally agree to a moratorium on the sale of all nuclear reactors and materials until all the exporting countries with techniques have a chance to sort this all out and save the world from a plight of awesome proportions?


Mitchell William Sharp: Mr. Speaker, for the reasons that have been given by the Prime Minister and other ministers, the answer to the question is no. We believe we have a responsibility, and I hope the Leader of the Opposition agrees, to see that the advantages of the peaceful use of nuclear energy are not denied the needy countries of the world.


ELEMENTS IN DETERMINATION OF CREDIBILITY OF COUNTRY TO WHICH NUCLEAR REACTORS SOLD
Mr. James Gillies (Don Valley):: Mr. Speaker, yesterday the Prime Minister told us in the House that the key factor involved as far as CANDU sales was concerned would be "the . . . credibility that might be forthcoming on the part of a country that says it does not want to explode a nuclear device". I would ask the Acting Prime Minister what are the essential elements in the determination of this credibility as far as Canada is concerned in making the sales of nuclear reactors?


Mitchell William Sharp: Quite obviously, Mr. Speaker, it might differ from country to country. Just as has been said by the Prime Minister, we have to take into account the credibility of the undertakings which are given, and this is why We are trying to insist upon as tough safeguards as possible, and why we are also promoting the application of the same safeguards by other countries. As I said yesterday in the House of Commons, even if we have the toughest of all safeguards, at some time a country might denounce an agreement, an international agreement or even a non-proliferation treaty. Therefore, it is important that all countries which are supplying nuclear technology should agree with Canada on the need for adequate safeguards.


GOVERNMENT VIEW OF CREDIBILITY OF SOUTH KOREA IN VIEW OF PROPOSED SALE OF NUCLEAR REACTOR
James McPhail Gillies: Mr. Speaker, perhaps the Acting Prime Minister is aware of the speech of the head of the United Nations yesterday who claimed the only way good results could come is for each country to see its own moral responsibilities rather than relying on bilateral or multilateral agreements. My question to the
Oral Questions
Acting Prime Minister is this: has the government decided, in the light of its emphasis on credibility, that the government of South Korea at the present time is fully credible so far as Canada is concerned in terms of the sale of a CANDU reactor?


Mitchell William Sharp: We are
still continuing our negotiations with South Korea.


James McPhail Gillies: Given the fact that two of the Acting Prime Minister's colleagues were in Korea yesterday and reportedly said that the sale is to all intents successfully finished, what provisions will Canada implement to immediately deactivate or make impossible to use any sort of CANDU reactor that we supply to Korea in the event that the government's confidence in credibility proves to be untrue.


Mitchell William Sharp: I do not know that one can give a very satisfactory answer to that question. It is a very hypothetical question.


An hon. Member:: That is the key question.


Mitchell William Sharp: Of course, it is. It is the key question about Canada. Is Canada going to abide by its obligations? I believe we will, but of course we are free to denounce the non-proliferation treaty if we wish to do so. It is our view, as the Government of Canada, that we should not but not only that, that we should try to make sure that other countries abide by the same undertakings we do. But I say to my hon. friend there is no way by which one can bind even Canada eventually not to denounce a treaty of this kind. My hon. friend is asking a hypothetical question that is beyond answer.


PUBLIC SERVICE
Stuart Malcolm Leggatt: Mr. Speaker, my question is directed to the Minister of Supply and Services. It concerns the suspension of Mr. A. J. Stewart, the union president of some 8,000 workers in the minister's department, for a period of three months without pay involving a loss of $6,000 to $7,000. In view of the fact that the article which appeared in the Ottawa Citizen, which apparently prompted this suspension, did not raise anything that is not common knowledge, and in view of the fact that Mr. Stewart acted throughout only in his representative capacity, would the minister advise how workers in his department can be represented by a trade union official if their union representative is not entitled to comment upon matters that affect the working conditions and jobs of his members?


Hon. Jean-Pierre Goyer (Minister of Supply and Services):: Mr. Speaker, if the hon. member had any criticism to make about my department, he had every opportunity
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June 27, 1975
Oral Questions
to do so by appearing before the parliamentary committee. I noticed his absence.
As for the attitude of a union member who is at the same time employed by the department, the reason he was suspended is that he directly criticized high officers in general about not only departmental administration but also departmental policy. The officials of my department felt that he had gone beyond all limits.


ALLEGED THREAT BY DEPARTMENT OF SUPPLY AND SERVICES TO DISCIPLINE UNION LEADERS WHO CRITICIZE WORKING CONDITIONS OF EMPLOYEES
Stuart Malcolm Leggatt: Mr. Speaker, my supplementary question concerns the fact that Mr. Stewart, on repeated occasions according to this article, had requested meetings with the minister asking that an informal committee be set up composed of labour and management in order to discuss the problems he raised in the article. The problem is that the minister and his staff left no alternative to Mr. Stewart. Is it to be the policy of this minister that in his department union leaders will be disciplined-and I might say that the suspension notice contains a threat of further discipline-if they have the temerity to criticize the working conditions within the minister's department which directly affect their workers and particularly the potential loss of their jobs through mismanagement? Will the minister advise the House if that is to be the future policy of his department?


Jean-Pierre Goyer: Mr. Speaker, it is the absolute responsibility of any union representative to try and improve the working conditions of union members. This is a basic responsibility which I fully respect within my department. As a matter of fact, there were but a few grievances which have been settled through the normal process. I have asked Mr. Stewart to meet with my two deputy ministers, which he did. Later, he sent me a letter advising me how satisfied he was with the result of this meeting. Employer-employee relations are therefore excellent. Now, I know that Mr. Stewart is working keeping in mind a forthcoming election. Perhaps all he needs is a little publicity.
serious charges that Mr. Stewart makes in the article in the Ottawa Citizen.


Jean-Pierre Goyer: Mr. Speaker, first I accept the criticism relating to the policies of my department voiced by my colleagues in the House and Canadians in general. That is the way it should be. However, I do not think it proper that employees of my department publicly criticize departmental policies. That is the role of members of this House or taxpayers. Otherwise, you have anarchy in a department. I want to make it quite clear that if the hon. member has anything to say against the department, he has every opportunity to do so, and let him do so. As to labour relations within my department, the hon. member fails to understand what I said. There was a productive meeting between Mr. Stewart and the two deputy ministers and the problems were entirely solved in that area. However, when a meeting with the minister is necessary, I am available not only to union officials, but to any employee in my department.


SUSPENSION OF MR. STEWART-SUGGESTED REFERENCE OF ALLEGATIONS TO PUBLIC ACCOUNTS COMMITTEE
Walter David Baker: Mr. Speaker, in view of the minister's statement a few moments ago that he is prepared to accept criticism-and I am sure he would not want the precipitous action of his deputy minister to leave the impression that there was in fact something amiss in his department as described by Mr. Stewart- would the minister be now prepared to agree to have the Stewart allegations submitted to the Public Accounts Committee for review and report and to have a report made to this House with respect to this matter, if things are as good in his department as the minister says?


Jean-Pierre Goyer: Mr. Speaker, if the hon. member refuses to do his own homework when I appear before a committee and ask the necessary questions, or make use of the oral questions period in the House, or the order paper for that matter, I think he refuses to carry out his duties.


REASON FOR ALLEGED REFUSAL OF MINISTER TO MEET MR.
[Stage Direction]
STEWART TO ESTABLISH INFORMAL WORKING COMMITTEE [English]
OF MANAGEMENT AND LABOUR	FINANCE
Stuart Malcolm Leggatt: By the way, Mr. Speaker, I am not a member of that particular committee, so it is not surprising I have not attended the deliberations.
My final supplementary is as follows. In view of the legitimate concern that everyone has about the minister's department, how is it that the minister has in fact refused-I will have to repeat the question I asked originally-to meet with Mr. Stewart and to set up an informal working committee so that working conditions can be worked out with the minister? I would like the minister's response to that because surely that is one of the most


ALLEGATION MINISTER TOLD BRITISH COLUMBIA FOREST INDUSTRIES TO TAKE HARD LINE ON WAGE NEGOTIATIONS- MINISTER'S POSITION
Mr. John A. Fraser (Vancouver South):: Mr. Speaker, I have a question for the Minister of Finance. In view of reports which emanated yesterday from the British Columbia Federation of Labour that the management of the largest forest companies in B.C. were deliberately taking a hard line on wages as a result of an invitation to do so by the Minister of Finance in the conversations held with them during the consensus talks, and in view of the very grave effect that particular allegation has in terms of
June 27, 1975

the climate of negotiation which is taking place in the province at this time, would the minister tell the House exactly what conversations did take place, and if such instructions or such suggestions were not in fact made by the minister to the operators of the forest companies in B.C., would he make that absolutely clear to the House at this time?


Hon. John N. Turner (Minister of Finance):: Mr. Speaker, I can make that clear. I said nothing specific to the forest industry about labour negotiations in any way whatsoever. The tenor of our remarks during consensus discussions are in the documents already tabled in the House.
[DOT] (U30)


John Allen Fraser: In view of the seriousness of the allegation, I invite the minister again to make it categorically clear that at no time was it pressed upon the managers of the forest companies in the province of British Columbia that that was the place to hold the line on wages and to use that particular province as an example for wage negotiations in the rest of the country, which is the substance of the allegation. It is a very serious one.


John Napier Turner: I can make that clear and repeat that what the hon. member has stated is so. At no time did I make those representations.


CRIMINAL CODE
Joseph Adrien Henri Lambert: Mr. Speaker, I have a question for the Solicitor General of Canada.
A few days ago I asked a question of the Solicitor General about a resolution addressed to him by the Quebec Provincial Police asking that capital punishment be reinstated for premeditated murders. Can the minister say to the House today whether he received that resolution and whether he gave an answer and, if so, what was it?


Hon. Warren Allmand (Solicitor General):: Mr. Speaker, I read about that resolution in the newspapers, but as far as I know I have not yet received it in my office. When we do receive it, we will prepare a reply.


Joseph Adrien Henri Lambert: Mr. Speaker, I have a supplementary question. May I urge the minister to ask his officials, in view of the seriousness of the situation, to examine carefully the mail arriving at his office, so the minister may consider carefully that very important question, answer that resolution and inform the House about it as soon as possible.


William Warren Allmand: We do give serious consideration to all correspondence of this nature, especially from police asso-
Oral Questions
ciations, and I will make inquiries today to see whether such a letter has been received at my office.


FINANCE
Hon. Herb Gray (Windsor West):: Mr. Speaker, I have a question for the Minister of Finance. It has been reported that the minister said yesterday in Toronto that the investment tax credit proposed in the budget should generate $8 billion in capital investment over the two year life of the credit. Has the minister set up a system to monitor the operation and actual results of this tax credit program, and if so, can he tell us how the monitoring is to be carried out and if it will produce interim reports before the end of the two year period?


John Napier Turner: Mr. Speaker, I will have to check the tapes of what I said in Toronto yesterday. That is not exactly how I put it.


An hon. Member:: Let's have the tapes.


John Napier Turner: I will produce the tapes.


Some hon. Members:: Oh, oh!


John Napier Turner: I want to assure the hon. gentleman that there is no Rosemary in my office.


Some hon. Members:: Oh, oh!


John Napier Turner: What I said is that if the 5 per cent were geared against that amount of capital investment, it would apply to that amount of investment. I did not say it would in any way generate that amount of investment. Of course, the monitoring is built in the income tax system itself. The credit cannot be claimed unless there are receipts for the building equipment.


Herbert Eser (Herb) Gray: Can the minister explain why he was willing to have a special monitoring program set up to study the effects of the tax cuts in the 1973 budget and is not as yet willing to set up a separate program to show the effects of this very important proposal?


An hon. Member:: The one in 1973 did not work.


John Napier Turner: Mr. Speaker, that is not the answer at all. The answer is that credit can only be claimed for income tax purposes if the necessary receipts are produced.


PROPOSED FEDERAL-PROVINCIAL CONFERENCE-ALLEGATION FEDERAL POSITION NON-NEGOTIABLE
Mr. Stanley Knowles (Winnipeg North Centre):: Mr. Speaker, I wish to direct a question to the Minister of
29576- 38Vi

June 27, 1975
Oral Questions
National Health and Welfare. In view of the fact that the conference this fall between the minister and the health ministers of the provinces was set up prior to the announcement made in the budget and was therefore on an open basis, and due to the fact that that conference is jeopardized by the non-negotiable position now taken by the federal government, will the minister do his best to get this conference back on the basis on which it was originally called?


Hon. Marc Lalonde (Minister of National Health and Welfare):: Mr. Speaker, I see no reason why the conference should not be held as planned, to study the same topics that were on the agenda. It had been agreed that we would meet in the fall to examine the report of the officials who are now looking into the possibility of giving greater coverage to the services under the hospital insurance plan in exchange for the elimination of certain of the more costly services provided at the present time. Federal and provincial officials have been working along that line for months. As far as the federal government is concerned, it is certainly willing to participate in that conference in the fall.


Stanley Howard Knowles: I would ask the minister as a supplementary question if what he has now said means that the reports that the federal government's position at this conference is non-negotiable are incorrect?


Marc Lalonde: There is nothing that is non-negotiable, except that we have given notice that we intend to terminate the present agreement on hospital insurance five years from now. But we have five years in which to find a new formula for cost sharing. I cannot imagine that we should be unable to reach an agreement in that five-year period. In fact, as I indicated yesterday, I have reason to believe that we could reach one much sooner.


EXTERNAL AFFAIRS
Mr. Claude Wagner (Saint-Hyacinthe):: Mr. Speaker, my question is addressed to the Acting Secretary of State for External Affairs. Would the minister inform the House if he is prepared to give a statement on motions with respect to the participation of the PLO at the conference on crime prevention in Toronto next September? As rumour has it, this is a subject which has already been discussed in cabinet recently, and rumour also has it that a conclusion has been reached.


Mitchell William Sharp: Mr. Speaker, I can confirm the first rumour, namely, that the matter has been discussed in cabinet. I can deny the second rumour that a decision has been reached.


COMMUNICATIONS
Gerald William Baldwin: Mr. Speaker, I have a question for the Minister of Communications. In light of the decision of the court of first instance in the province of Quebec with regard to the dispute between the Government of Canada and the government of Quebec as to cable television, is it the intention of the minister and the government to recommend an appeal with participation by the federal government in connection with the course of that appeal?


Hon. Gerard Pelletier (Minister of Communications):: I understand that this is the advice of the government's legal advisers, Mr. Speaker.


Gerald William Baldwin: The issue is a very narrow issue, and it will take some time to process such an appeal to the Supreme Court of Canada, leaving the cable television industry in some confusion. While recognizing the problems of unilateral action in the Supreme Court by the government, will the minister review that procedure to see if some device could be worked out whereby, with some form of consultation, a decision can be reached fairly rapidly, in the form of the government going directly to the Supreme Court, as it is entitled to do under the provisions of the Supreme Court Act?


Gérard Pelletier: I am prepared to accept the hon. member's suggestion, Mr. Speaker, and to reconsider it very carefully. But I would also like to reassure him. I do not think the decision made recently in the Mont-Joli case, which deals with a minor technical aspect, is anything to shake the confidence of cable broadcasters in the federal government's jurisdiction.


FISHERIES
Mr. Donald W. Munro (Esquimalt-Saanich):: Mr. Speaker, my question is addressed to the Acting Prime Minister. In view of the rapidly depleting stocks of whales and the widespread concern for the preservation of this threatened species, is the Acting Prime Minister in a position to confirm the report contained in a telegram to the Prime Minister today that Canada cast the deciding vote at the international whaling conference presently underway in support of Japan's request for an increase in the harvest of whales?


Mitchell William Sharp: No, Mr. Speaker. Not in the form of a report but I will make inquiries.
June 27, 1975


EXTERNAL AFFAIRS
Mitchell William Sharp: Mr. Speaker, may I give an interim answer to the question which the Leader of the Opposition asked me earlier. I would direct his attention to a statement made by my colleague the Minister of Energy, Mines and Resources on December 20, 1974, in this House as recorded at page 2428 of Hansard. In dealing with the more stringent safeguards in respect of the sale abroad of Canadian nuclear facilities and materials my colleague said:
Not only will these binding safeguards apply to all future sales, but the government has decided to negotiate additional safeguards in respect of uranium supply contracts already approved. Existing contracts and contracts pending will be allowed to proceed during the course of the next calendar year while new safeguards are being negotiated.


Robert Lorne Stanfield: Mr. Speaker, a supplementary question. I am sure the Acting Prime Minister will agree that does not answer my question. Can the Acting Prime Minister table in this House the provisions of the contract with Argentina which allow it to be reopened or more accurately, which allow the subsequent negotiation of safeguards. Can the Acting Prime Minister table this information so that we will all be aware of what prudence or lack of it the government of Canada showed when it negotiated this contract in 1974?


Mitchell William Sharp: Mr. Speaker, the contract was negotiated in 1973. As I have said in the House we are now endeavouring to enter into bilateral agreements on safeguards with the Argentine and this is a requirement of the supply of that reactor.


Robert Lorne Stanfield: A further supplementary. Will the Acting Prime Minister stop trying to be evasive and say whether the government is prepared to table this alleged provision or is he in fact admitting there was no set provision for the negotiation of safeguards and the government is trying to make up for its imprudence?


Some hon. Members:: Hear, hear!


Mitchell William Sharp: Mr. Speaker, I think the government is being very straightforward and honest.


An hon. Member:: A straightforward cover-up.


Mitchell William Sharp: What my colleague the Minister of Energy, Mines and Resources said on December 20, 1974 is that we were increasing our safeguards-


An hon. Member:: What are they?


Mitchell William Sharp: -and that all contracts under way or at any stage would be subject to the same safeguards. Surely, the Leader of the Opposition wants the government to follow that policy-or does he?


An hon. Member:: Table the documents.


An hon. Member:: What are they?
Oral Questions


Robert Lorne Stanfield: Mr. Speaker, one further supplementary question. I ask the Acting Prime Minister again whether he was prepared to table the provisions that he alleges were part of this contract negotiated in 1973. I take it the Acting Prime Minister is now conceding that there were no provisions in that 1973 agreement in regard to safeguards and his position is that subsequently, in December of 1974, the government decided it had been imprudent and would try to reopen those contracts to provide at this late date some adequate safeguards?


Hon. Donald S. Macdonald (Minister of Energy, Mines and Resources):: Mr. Speaker, I might point out to the hon. gentleman that the contract in 1973 was on the basis of the existing safeguards arrangement and that was a condition of the contract. Of course, at the subsequent date the government put a higher standard of safeguards on uranium, technology and equipment. As the Acting Prime Minister has indicated, we are in the process of negotiating a stiffer set of safeguards with Argentina.


An hon. Member:: Table them.


FISHERIES
Francis Andrew Brewin: Mr. Speaker, my question is supplementary to the question of the hon. member for Esquimalt-Saanich.


Donald W. Munro: So is mine.


Francis Andrew Brewin: Well, I think I have the floor. I should also like to get the attention of the Acting Prime Minister. In view of the fears expressed by groups of naturalists all across Canada to various members of government that the Canadian delegation to the International Whaling Commission meeting in London has taken the compromising stand of not adequately supporting measures of conservation for this disappearing species will the minister give an undertaking to the House now that either he or some other appropriate minister will report fully to the House on the stand the Canadian delegation took on this issue and what the results of the meeting have been?


Mitchell William Sharp: Mr. Speaker, I will endeavour to fulfil that request. I do not know whether there will be time to have a full scale debate on the matter in the House but I am sure the minister who has direct responsibility will be happy to supply whatever information is available.


AERONAUTICS ACT
Mr. Dan McKenzie (Winnipeg South Centre):: Mr. Speaker, in the absence of the Minister of Transport I will direct my question to the Acting Prime Minister. In view

June 27, 1975
Oral Questions
of continuing revelations concerning the activities of air carriers and travel agencies, will the Acting Prime Minister check immediately on possible violations of the Aeronautics Act prohibition against discriminatory rates and report his findings to the House?


Mitchell William Sharp: Mr. Speaker, I will direct this representation to the Minister of Transport.


AIR CANADA
A. Daniel McKenzie: A supplementary question, Mr. Speaker. Since it is standard practice for shareholders in a company to seek to recover funds spent by management in an illegal or unauthorized manner, will the minister ask the CNR, as a principal shareholder of Air Canada, to initiate such actions in regard to any under the table payments made by the current management of Air Canada?


Mitchell William Sharp: Mr. Speaker, I will see that the attention of the Minister of Transport is drawn to this question.


GASOLINE-SUGGESTED REDUCTION IN SPEED LIMIT TO CONSERVE GASOLINE AND SAVE LIVES
Mr. Hugh Poulin (Ottawa Centre):: Mr. Speaker, I will direct my question to the Acting Prime Minister or the Minister of Energy, Mines and Resources. In order to conserve gasoline and save lives, will the minister or the government seek through co-operation with provincial governments a maximum speed limit for motor vehicles on Canadian highways of 55 miles an hour? If this co-operation is not forthcoming will the government consider introducing such legislation in this House as a matter of national concern relating to conservation?


Donald Stovel Macdonald: Mr. Speaker, the government has already sought the co-operation of provincial governments in this regard. I regret to say the first response has been negative. However, we intend to seek the co-operation of provincial governments on a lower speed limit which, of course, can yield benefits not only in terms of gasoline saved but will have a great safety advantage for all Canadians. As to the question of whether we should take over jurisdiction in the default of action by provincial governments, I would have to reflect upon that.


FOOD PRICES REVIEW BOARD
Mr. Jack Marshall (Humber-St. George's-St. Barbe):: Mr. Speaker, I have a question for the Minister of Consumer and Corporate Affairs. In view of the fact that the Food Prices Review Board report on fisheries indicated a wide discrepancy between the wholesale and retail prices for groundfish-from 49 cents per pound to $1.08 per pound-does the minister intend to bring this to the attention of the director of the combines investigation branch?


Hon. Andre Ouellet (Minister of Consumer and Corporate Affairs):: Mr. Speaker, this report by the Food Prices Review Board is now under study by officials of my department. It is an excellent report, and I hope we will be able to take action following the recommendations stated in this report.


CONSUMER AFFAIRS
Jack Marshall: In view of the fact that the appendix to the Speech from the Throne indicated that the government would be introducing anti-profiteering legislation, could the minister indicate when that legislation will come before the House?


André Ouellet: As soon as possible, Mr. Speaker. I hope the present legislative program will be approved quickly to enable us to proceed with other bills announced in the Speech from the Throne, and I hope it will be in the very near future.


THE CANADIAN CONSTITUTION
Mr. Ray Hnatyshyn (Saskatoon-Biggar):: Mr. Speaker, I should like to address my question to the Acting Prime Minister. On October 2, 1974, the Prime Minister indicated the government's intention to proceed with negotiations with the provinces to the end that provision for amendment of our constitution within Canada could be attained. Would the minister advise the House what initiatives are being taken by the government in this regard?


Mitchell William Sharp: Mr. Speaker, I know the Prime Minister continues to have an active interest in this subject. I am not quite sure to what stage he may have carried on his conversations. I will make inquiries.
June 27, 1975


FINANCE
Mr. Perrin Beatty (Wellington-Grey-Dufferin-Water-loo):: Mr. Speaker, my question is for the Minister of Finance. In view of the fact that one of the rationalizations which the minister used on Monday night for the ten cents a gallon excise tax on gasoline was that it would encourage Canadians to use public transportation. What will those Canadians who live in rural areas be expected to do when there is not adequate public transportation, such as in southwestern Ontario? Does the government intend to take immediate action to provide adequate transportation or will there be a provision for rural Canadians to have this unfair and arbitrary tax rebated?


John Napier Turner: Mr. Speaker, that matter has been brought up by the hon. member on several occasions with the Minister of Transport.


Henry Perrin Beatty: And he hasn't done a thing.


AIR TRANSPORT
Mr. Heath Macquarrie (Hillsborough):: Mr. Speaker, in the absence of the Minister of Transport, I will direct my question to his parliamentary secretary. It is in reference to the long negotiations for regular scheduled air service between Canada and Cuba. Considering there have been recent important bilateral discussions, is it now possible to give an indication as to the commencement date for this very important transportation link?


Mr. Cliff Mclsaac (Parliamentary Secretary to Minister of Transport):: Mr. Speaker, I know that discussions are continuing. I will take notice of the hon. member's question and report to him later.



SOCIAL SECURITY


Mr. Lincoln M. Alexander (Hamilton West):: Mr. Speaker, I have a question for the Minister of National Health and Welfare whose name was featured very prominently in the minutes of the Standing Committee on Labour, Manpower and Immigration when I asked the Minister of Manpower and Immigration why he had not brought in amendments to the Unemployment Insurance Act. The minister replied, and I quote from page 18:12:
The fundamental reasons why we have not brought them in yet is because parallel to that development of those amendments ... there is
Oral Questions
at some stage going to have to be a reconciliation and a harmonization of the interface between the Unemployment Insurance benefit program particularly, and all the ramifications of it, and the rationalization of the income security system.
My question is simply this: Has this reconciliation, harmonization and rationalization taken place?


Marc Lalonde: Mr. Speaker, a committee of officials is examining this matter. I understand that a report will be submitted in the near future to the minister responsible and that the cabinet as well as the federal-provincial conference of welfare ministers will have the opportunity to study its recommendations.


Lincoln MacCauley Alexander: If those criteria have not been met, particularly with regard to the provinces involved, can the minister now advise whether the provinces were informed as to the probable amendments and, if so, what was their opinion? If not, because of the whole problem of income security as it relates to employables and unemployables, will the minister assure the House that before his amendments are brought in, the advice of the provinces will be sought in order that the whole program can be dovetailed, as the Minister of Manpower and Immigration indicates it should be?


Marc Lalonde: Mr. Speaker, the hon. member is confusing two aspects of the matter. The amendments put forward earlier differ from the present discussions on gearing the unemployment insurance program to the proposed guaranteed income program.


Lincoln MacCauley Alexander: It looks as though the minister is trying to evade the question. In light of the fact the minister is now seeking some sort of income security program, which calls for the involvement of the provinces and which includes unemployment insurance, before bringing in amendments to the Unemployment Insurance Act, will the minister, in his capacity and as part and parcel of the approach that his colleague is taking, ensure that the provinces are involved with these amendments in order that we can have some concrete dovetailing in terms of rationalization, harmonization and reconciliation?


Mr. Speaker:: Order, please.



ADMINISTRATION OF JUSTICE


Mr. Howard Johnston (Okanagan-Kootenay):: Mr. Speaker, I direct my question to the Minister of Justice. It follows questions directed by myself and the hon. member for Northwest Territories to various other ministers over the past several months. What steps has the minister taken to see that the inquiry into the Panarctic aircrash

June 27, 1975
Oral Questions
will resume, either as the much-delayed inquest or as the federal inquiry requested by the territorial coroner?


Hon. Otto E. Lang (Minister of Justice):: Mr. Speaker, I do not have anything further to add at this point in time.



FINANCE


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


John Napier Turner: Your people were right.


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


John Napier Turner: If the fuel is being used for farm purposes, yes.



PETROLEUM PRODUCTS-OBSERVANCE BY RETAILERS OF REQUESTED DELAY IN IMPOSITION OF TAX

Mr. Leonel Beaudoin (Richmond):: Mr. Speaker, I should like to ask the Minister of Finance a question.
In his budget speech, he prayed the companies-rightly so, I believe-to wait 45 days before increasing their oil prices. Can he confirm whether he has taken the necessary steps to ensure that his prayers be answered by these companies?


John Napier Turner: I must take another look at the budget to find out whether there were indeed any such prayers.


Léonel Beaudoin: Mr. Speaker, I should like to put a supplementary. The Minister of Finance does not seem inclined to pray this morning. In any event, he requested quite firmly in this case that oil companies wait at least 45 days before boosting their prices by $1.50 a barrel. Can the Minister of Finance tell us whether he made the necessary arrangements so these companies accept to wait 45 days before they apply that increase of $1.50 a barrel of oil?


Donald Stovel Macdonald: Mr. Speaker, I believe so. The same waiting periods were used for the last price increase, and companies accepted the requirement. I can state that we are now subsidizing companies in eastern Canada to reduce prices. If they are not prepared to accept such a waiting period, there might be also a slight delay in the payment of the subsidy.
(Mr. Johnston.]



PENITENTIARIES


Mr. J. P. Nowlan (Annapolis Valley):: Mr. Speaker, I had a loaded question for the Prime Minister, but I do not want to put it to the Acting Prime Minister because he is such a poor actor.


Some hon. Members:: Oh, oh!


John Patrick (Pat) Nowlan: I will direct a question to the Solicitor General and save my other one. It has to do with the Farris inquiry into the New Westminster problem that is now underway. I think the minister is aware of the substance of my question. As I understand, it, Chief Justice Farris is considering what procedure to follow with the hostages that are apprehensive about giving evidence in public.


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


John Patrick (Pat) Nowlan: St. Boniface, you should be quiet after what happened in Manitoba a couple of days ago.


Some hon. Members:: Hear, hear!


John Patrick (Pat) Nowlan: Has the minister consulted with his officials at New Westminster to ensure that the hostages who are apprehensive about giving evidence in public can give that evidence in camera, if necessary, without their names being published on the record so that any repercussions or reprisals which the hostages fear will not take place?


William Warren Allmand: When the commission was set up it was agreed that in general the hearings would be public, but that the commissioners would have the right to hold parts of the proceedings in camera if it were considered necessary for the security of penitentiary employees or penitentiary security arrangements. The commission is an independent one. Those are the terms of reference and the commissioners themselves can decide whether to take certain evidence in camera. The hon. member is correct when he says that some of those who may be giving testimony are afraid that their lives might be in danger or that they would not be able to work any longer in the penitentiary service.



ROUTINE PROCEEDINGS


Gerald William Baldwin: Mr. Speaker, in light of the fact that the House saw fit some time ago to give unanimous consent to the passage of a motion which, as I understand it, takes effect at once, so that June 30 will not now be a day for parliamentary business, may I ask the government House leader whether he has any proposition to put before us
June 27, 1975

which we might have to consider and, if he has such a proposition which involves additional hours of sitting, will he be able to inform the House what we shall be doing on those days during those hours?


Mitchell William Sharp: Mr. Speaker, I share the optimism of my colleague, the House leader of the official opposition, and hope he is right in assuming we shall get unanimous consent to the motion I shall be bringing before the House today which will declare June 30 and July 7 days upon which we do not sit and establish additional hours to make up for that time. I can say it is my intention on the evening of next Wednesday and during the additional hours on Thursday, to call Bill C-8.


Donald W. Munro: I rise on a point of order, Mr. Speaker, relating to a supplementary answer given by the Acting Prime Minister. I got the impression that the hon. gentleman had introduced the nuclear explosion tactic in order to divert the attention of the House from the whaling situation about which I had just asked a question. I am surprised that the Acting Prime Minister should have given such an offhand answer, because I am sure that a matter of this importance would have been dealt with in cabinet. For the Acting Prime Minister to say he would check to ascertain what stand Canada took on the matter came as a surprise to me. The supplementary question I had intended to ask was this. Has a decision been reached in cabinet to take a stand at the whaling conference and, if so, what is it?


Mitchell William Sharp: Mr. Speaker, the stand which was taken in cabinet on the whaling conference was that instructions be given to the Canadian delegation to endeavour, as it has in the past, to ensure that the International Whaling Commission adopts adequate conservation measures for whales.


Robert Lorne Stanfield: That is almost as strong as your nuclear position.


CRIMINAL CODE
Donald W. Munro: for leave to introduce Bill C-396, to amend the Criminal Code (humane traps).
He said: The purpose of this amendment is to prohibit the use of leg-hold snares and other inhumane types of trap where a practical alternative is now available or becomes available in the future, to promote the eventual phasing-out of such traps, and to encourage the correct setting of traps meant to cause instantaneous death.


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

Mitchell William Sharp: That the House shall not sit on June 30, 1975, and July 7, 1975;
That the House shall sit for the consideration of government bills for the following additional hours:
July 2, 1975-8.00 p.m. to 10.00 p.m.
July 3, 1975-11.00 a.m. to 1.00 p.m.
July 8, 1975-11.00 a.m. to 1.00 p.m.
July 10, 1975-11.00 a.m. to 1.00 p.m.
And; that, for the purposes of any order made pursuant to Standing Order 75a, the aggregate of four of the aforementioned additional hours shall be deemed to constitute one sitting day;
Provided that proceedings pursuant to Standing Orders 15(2) and 40 shall be taken up on any of the aforementioned days at the times prescribed by the said Standing Orders.


[Stage Direction]
Motion agreed to.

Mr. Speaker:: I have the honour to inform the House that a message has been received from the Senate informing this House that the Senate unites with the House of Commons in the appointment of a special joint committee to review and report upon matters bearing upon the development of the national capital region and improving the programs and operations of the National Capital Commission, and that certain honourable senators have been appointed to act on the said committee.


MISCELLANEOUS PRIVATE BILLS AND STANDING ORDERS
Mr. Gerard Loiselle (Saint-Henri) moved:: That the petition of Richard Fritz and Marianne Strass, filed after the time limit specified under Standing Order 90, be referred to the Standing Committee on Miscellaneous Private Bills and Standing Orders, together with the eleventh report of the Clerk of Petitions thereon presented to the House on Wednesday, June 25, 1975, for any recommendations the committee deems advisable.


[Stage Direction]
Motion agreed to.

[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

June 27, 1975
Order Paper Questions
questions will be answered today: Nos. 2,394, 2,471, 2,531, 2,648 and 2,770.
Would you be so kind as to call starred questions Nos. 2,269 and 2,440?
I ask that the remaining questions be allowed to stand. [Text]


Mr. Malone: 1.	Has the government designated a Senator to act as its spokesman on issues related to the Province of Alberta and, if so (a) what is the Senator's name (b) does the Senator receive any extra remuneration (c) did the Senator acquire any extra office staff, equipment or funds?
2.	How many cheques has the Senator presented on behalf of the government to any person or groups of persons in the Province of Alberta?
3.	What are the names of the person or persons who have received cheques through the Senator?
4.	Was the Senator directly involved in negotiating for any such funds and, if so, who are the persons or groups of persons with whom the Senator had such involvement?


John Mercer Reid: Mr. Speaker, the answer is as follows: 1. No.
2.	Not Applicable.
3.	Not Applicable.
4.	Not Applicable.


Mr. Macquarrie: With reference to the answer to Question No. 39, Part 3, what is the precise dollar value of defence equipment sold by Canada to each country named, for each year contained in the answer?


Mr. Gaston Clermont (Parliamentary Secretary to Minister of Industry, Trade and Commerce):: In so far as
the Department of Industry, Trade and Commerce is concerned, a detailed reply cannot be prepared, because the information available to the Department has been provided on a confidential basis by the Canadian companies concerned.


Mr. Stanbury: Is it the intention of the government to introduce legislation to deal with national emergencies without the necessity of invoking the War Measures Act and, if so, on what date?


John Mercer Reid: Mr. Speaker, the Government has nothing to add at this time to the statement to the House made by the Prime Minister on April 9, 1974, in answer to a question by the hon. member for the Yukon, whereby he said that the government did not feel any need at the time to bring forth such legislation but that he would "very gladly discuss the matter with the leaders of other parties and if they felt it would be a good idea to take this kind of action on a contingency basis for some

future situation I would certainly arrange such a meeting."


Mr. Cossitt: 1.	Did the government receive notice from the Government of Ontario that it is withdrawing from Emergency Measures Organization participation aijd, if so (a) on what date (b) on what date will such participation cease?
2.	Will the government continue financial participation to an extent that will match the funds withdrawn by the Province?
3.	What is the present government policy in regard to civil defence and the Emergency Measures Organization?


Right Hon. P. E. Trudeau (Prime Minister):: 1. (a) The
Government of Ontario's decision was communicated to the Minister of National Defence by a letter on May 1, 1975. The decision was to withdraw from the emergency measures program as it now exists in favour of a fresh approach based on a "lead ministry" concept, (b) It is the stated intention of the Ontario Government to conclude the current program as of December 31st 1975.
2.	Federal funds under the Financial Assistance Program are made available on the basis of a pre-determined minimum to each province or territory with the remainder being allocated according to population.
3.	The Federal Government policy is to plan for the effective discharge of its own statutory emergency responsibilities, and to support provinces and municipalities in their emergency roles through the provision of specialized services and financial, planning and training assistance. Civil defence functions are considered to be part of the wider spectrum of emergency measures. In March of 1974 the government announced various changes in its organizational and administrative arrangements for dealing with emergencies. One of these changes was the replacement of the Emergency Measures Organization by the National Emergency Planning Establishment.


Mr. Whiteway: For the year 1974, how many (a) trucks and cars were registered in Canada (b) traffic fatalities were there (c) injuries were there resulting from traffic accidents?


Gaston Clermont: Statistics Canada reports that in 1973 there were: (a) 1,799,042 motor trucks and truck tractors and 7,866,084 passenger automobiles (including taxicabs and drive yourself) registered in Canada, (b) 6,706 traffic fatalities and (c) 223,777 injuries resulting from traffic accidents. The comparable national figures for 1974 are not yet available.


Mr. Cossitt: Have public funds been spent in any way whatsoever other than in Ottawa or at Harrington Lake in connection with any place owned by the Prime Minister or any place with which he is associated and, if so,
June 27, 1975

what are absolutely all details including the (a) amounts spent (b) exact location (c) purpose?


Pierre Elliott Trudeau: No.


Mr. Landers: With respect to the nursing crisis at the Saint John General Hospital in Saint John, New Brunswick, what does the Minister of Manpower and Immigration intend to do to alleviate the nursing shortage in Saint John-Lancaster?


Hon. Robert K. Andras (Minister of Manpower and Immigration):: Officers of my Department met with representatives of the Saint John General Hospital on Tuesday, June 17 to consider action to solve these problems. In the short-term we expect to admit for six months up to 45 non-immigrant nurses for the Saint John General Hospital and ten non-immigrant nurses each for two other Saint John hospitals. Some prospective non-immigrant nurses are now residing in the State of Michigan and may be admitted to Canada if they meet normal immigration criteria and are likely ultimately to pass the examination of the New Brunswick Association of Registered Nurses. Our Detroit office has scheduled the prospective Filipino nurses for interview on June 20. A medium-term solution will likely involve the hospitals and my Department in the recruitment of qualified propective immigrants. A longterm solution should involve the Provincial Government and the hospitals in a review of training needs and facilities and in the negotiation of competive wage rates.


Mr. Speaker:: The hon. member for Bellechasse (Mr. Lambert) on a point of order.


Joseph Adrien Henri Lambert: Mr. Speaker, I would ask the parliamentary secretary, who just answered questions, if notice of motion No. 38, that has been on the order paper since March 26, 1975, will receive special attention and if I may hope to have an answer very soon, since the budget debate is in progress and the questions raised in that notice also have special relevancy to the budget debate.



GOVERNMENT ORDERS


[Stage Direction]
The House resumed, from Thursday, June 26, 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).
Mr. Speaker:: The Minister of State for Urban Affairs (Mr. Danson).


Mr. Malone:: A point of order, Mr. Speaker.
The Budget-Mr. Malone


Mr. Paproski:: On a point of order, Mr. Speaker, I think the hon. member for Battle River (Mr. Malone) still has a few minutes left of his speech. I do not think he had finished.


Walter David Baker: On the same point of order, Mr. Speaker, I understand the hon. member for Battle River has four or five minutes left; I forget the exact time.


Mr. Speaker:: The hon. member was, of course, speaking to the subamendment yesterday on which debate was concluded by the taking of the vote last night. That is the situation he is in. Where a member has a few remarks to make to conclude his speech, it would require, I would think, the unanimous consent of the House for him to conclude those remarks at the present time. If there is some assurance that the hon. member has only a few minutes left, I would ask the House whether it gives unanimous consent to the hon. member for Battle River (Mr. Malone) being given the opportunity to conclude his remarks.


Some hon. Members:: Agreed.


Mr. Speaker:: The hon. member for Battle River.


Arnold John Malone: Thank you very much, Mr. Speaker, and I express my appreciation to the House for extending me a few moments to add a few comments at this time. Last night I was enthusiastically chastising the government for their grab-and-run budget; the vote was then called and by 24 votes we find we are still here this morning, haunted by the same budget. If hon. members opposite take any gratification from this, it is only because the vote was taken here and not in the country. The fact of the matter is that if it had been taken there, we would have had a very different response.
I should like to take a very few minutes at this time to give representation to what I think ought to be included in the budgetary considerations as the government reviews the budget and makes adjustments to any future budgets. I should like to put on the record something that I think is an extremely important problem to the Canadian people, and it relates to fires and deaths associated with fires in this country. In the year 1974, 725 persons in this country died from fires. But what is interesting is that seven out of ten of these deaths were people who lived in single or dual family dwellings. The important thing I want to stress is that we make it mandatory in this country to have fire protection equipment in institutions, hotels and apartment buildings, yet we have no such regulations for homes. It is of interest to note that this equipment is a tax write-off for institutions but there is no such tax write-off for individual home owners.
The National Research Council of Canada estimates that smoke detectors would have saved 41 per cent of lives lost in fires between the years 1956 and 1960. Had we had smoke detection equipment in homes across Canada, this would have meant the equivalent of saving 200 Canadian lives during that period. Across the last decade the number of deaths and the amount of dollars lost by way of property damage have indeed been extremely high and the rate has been increasing. The total number of residential

June 27, 1975
The Budget-Mr. Danson
fires in Canada in 1972 alone was 50,552, and the property damage amounted to $82,187,000.
I need not document further the damage that is being done in homes across this country and the loss of life that is taking place through the lack of programs to assist Canadians to prevent fires. However, I want to take a few moments in concluding yesterday's remarks to make what I think would be a useful suggestion to the government. We do have in this country programs like National Fire Prevention Week on which considerable money has been spent on advertising, but the fact of the matter is that the program in many ways has really been unsuccessful. Each and every year property damage and loss of life as a result of fire are increasing. Therefore, I would submit to the government that it seriously take into consideration giving a full tax write-off on any fire safety equipment that individuals instal in their homes, in small businesses or in farming operations.
I think this is a request that is not too gigantic to ask of the government, especially in light of the fact that had all Canadians had fire satefy equipment in their homes, this country would have saved something in the neighbourhood of $80 million a year, according to the National Research Council, and something in the order of 200 lives per year.
I wanted to wrap those remarks up yesterday, Mr. Speaker, by making a representation on this issue. Since most of the fires in homes in Canada occur in family homes of low income, I think it is necessary that as a nation we move away from an advertising campaign to something that does make real economic sense. I would, therefore, encourage the government to take into consideration granting complete tax write-offs on any fire safety equipment installed in homes, small businesses or farming operations so that we in this country can tackle what is a shameful situation and reduce the number of lives lost and the property damage caused by fires. Certainly we are not paying attention to the individual in the same way as institutions. I simply encourage the government to take that representation into consideration.


Hon. Barney Danson (Minister of State for Urban Affairs):: Mr. Speaker, I am pleased to take part in this debate and to follow the hon. member for Battle River (Mr. Malone). I am glad the House saw fit to give him additional time to speak about a rather important aspect of the whole housing scene, one to which Central Mortgage and Housing Corporation addresses itself very seriously indeed. I was also interested in his suggestion that the budget be subject to a vote of the people of this country. The success the Minister of Finance (Mr. Turner) has had in taking his budgets to the people across the nation for a vote has been pretty good and I would not mind trying this again. I think all hon. members have recognized the enormity of the task faced by the Minister of Finance, one that he has faced very squarely and honestly.
In so far as the housing measures are concerned, I am far less interested in speechmaking than I am in getting on with the job. Certainly I would have liked more funding; that is no secret-any minister would. I am sure the Minister of Finance would have liked to provide more. But I am by no means shattered by this situation. This is the

reality that we have to face when we have the responsibility of government, not the theories of those who do not have that responsibility. I have been given substantially more tools to do the job and I plan to use those tools as effectively as I can.
In terms of the capital funds allocated for housing-this does not include land and infrastructure or other activities in the social and organizational field of Central Mortgage and Housing Corporation-these amount to an increase in our budget for housing alone of 20 per cent, from $1 billion to $1,200 million. Then other non-capital budgets of CMHC apply to other programs, so we are approaching a total outlay of $2 billion by the federal government in the housing field alone. Housing is the highest priority of the government in this budget. No other single item for this year has been allocated such high priority or so much additional funding-an extra $200 million this year, with five months of the year already gone. It is the largest single item, which indicates that even in these very difficult times of tough economic circumstances, the government continues to give housing the priority it has given for all this time. There is no doubt that this will have a significant effect on continuing efforts to produce housing for Canadians in 1975.
There is equally no doubt that we have programs at our disposal to build homes for Canadians in the moderate and low income ranges. Our assisted home ownership and assisted rental programs have met with unquestioned success, and new funds will guarantee their continuation. Never in the history of federal government housing programs has everything moved so well, with such success, for the right people in the right income ranges. This is coupled with the 100 per cent increase in privately-funded Assisted Home Ownership Program grants, from $600 to $1,200 yearly. Family people in the low income groups can borrow money privately if these rates are too high, so we are able to subsidize them by another $100 a month instead of $50 a month as it was previously. We have granted an increase of 50 per cent, from $600 to $900, under the rental assistance program. This should go a long way toward providing more Canadians in the lower and middle income ranges with good and affordable housing.
I must admit that these last two subsidy programs have been slower in moving than I had hoped, but they have only been in force for two months. I think hon. members opposite should realize that after the long delays in committee in getting this legislation through, these programs have only been in force for two months. As I pointed out before, the success of these programs depends to the greatest extent on the participation and co-operation of approved lenders: the banks, the trust companies, the caisses populaires, the insurance companies and other institutions some of which, in my view, up to this time have not played the role they should in providing mortgage money. I refer to pension funds, union funds and other sources, including investment corporations which are just coming on stream.
Clearly, there are very heavy demands on capital markets and, secondly, there has been a scarcity of capital funds for new residential construction in the lower and moderate income ranges. Indeed, the resale of existing
June 27, 1975

housing has increased some 75 per cent this year, creating a very heavy demand on these markets. I have urged, as have my officials, the lending institutions to make certain a greater proportion goes into new housing. This assistance to housing is just as important, I realize, but in the long run it is not getting at the root of the problem by creating the supply for the ranges we need, which has been the case for so long. This additional subsidy should help immeasurably.
There are some technical problems, for instance in respect of periods of amortization, which we have been able to work out with the lending institutions and the programs are beginning to catch on, particularly in the limited dividend area. I think this will be sufficient if the funds come in. As they come on stream, I think these funds will be used for mortgages in respect of low income people and government-supported programs; that is the object of the exercise at this time. I am hopeful that even more funds will become available as a result of the budget and the minister's extension of the waiver of withholding tax and its applicability to mortgage funding. I think this will make available to us significant amounts of mortgage funds which will find their way into National Housing Act programs.
I should also point out that the industry itself is making considerable progress in shifting production into this price range. I have found this especially encouraging. When the Assisted Home Ownership Program was originally announced, many were skeptical and suggested that the limits were not high enough-I agree that they were not- to provide the type of homes required. Builders were building homes which at that time Canadians could no longer afford. Now builders see that the financing is there, the market is there, and they are building successfully to that market, providing good housing and not continuing to construct homes that Canadians can no longer afford.
It is interesting that the unsold stock of new houses today is double that of last year but it is in the wrong price ranges. Houses are not selling in these price ranges, but this is what builders were building and getting away with. Now they have found a good and substantial market, with a continuing mortgage market, in the lower income range and they are building in that range as quickly as they can, getting the funds to do so. We are helping them in this regard.
I should like to turn for a moment to the issue of provincial requests for substantially increased housing funds. Members will recall that I met with my provincial ministerial housing colleagues a few weeks ago in a working session to discuss the general economic outlook, the housing market situation and their inevitable request for increased funding from the federal government. This was a continuation of the process I promised the housing ministers from the provinces at our first meeting on January 30: I promised regular consultation. These are not well-staged programs of federal-provincial conferences in the conventional sense; they are shirt-sleeve working sessions, with only one official each, in one room really getting to grips with the problems. Quite frankly, things are working out, with good interchange, and we are prepared to continue as long as they are.


An hon. Member:: Do they wear neckties?
The Budget-Mr. Danson


Barnett Jerome Danson: As a matter of fact, they take off their neckties and their jackets and roll up their sleeves. I think we are perhaps accomplishing more in three or four hours' work at these sessions than we might at a two-day, formalized conference where everybody has to be at his best.
In the public context at least, the main story that emerged in the media was, of course, that the provinces, particularly Ontario and to a lesser extent Alberta and British Columbia, wanted huge increases in their capital budgets. I recognize and empathize with the fact that my provincial colleagues do have very real priorities, as do we, in the field of housing. That is one reason I met with them and am in contact with them so often on a regular basis. I want to say, as I have said before, that I continue to be prepared to work with them in this type of consultation in order to achieve the common objectives which I am sure we all have as Canadians.
Immediately following the budget speech on Monday night, I telexed each of my provincial colleagues and reiterated the fact that I wanted to continue this consultation. I also said I would be prepared to discuss with them further financial assistance to the extent that they use up their current budgetary allotments from CMHC for pro-vincially-initiated programs which can provide accommodation for people with even lower incomes than can be served by programs which are not conventional but, rather, important, new and innovative such as AHOP and rental assistance programs. I put special emphasis on senior citizens' housing in that area. It is a personal bias which I hope to express in emphatic terms as the minister, and I hope most hon. members agree with that.
The point is that at the current stage of play, as of last Thursday the provinces had used up 54 per cent of their allocated budgets. I am not criticizing them for that, as it takes time to get into operation, but we have been able to use up something in excess of 80 per cent on our direct programs. We have worked with the provinces and we want to see them use up these funds during each year. We want to try to accelerate the procedures and help them to do that. First of all, we want to see these funds used up.
The only other criterion for additional assistance would be their ability to ensure production of quality accommodation for low income people before the end of the year, or as much before the end of the year as possible. I will be very responsive to any proposal they bring forward. I have asked that my deputies and their deputies right across the country meet very soon to discuss these matters. When that process is completed, I intend to meet with my provincial colleagues, again in September, to review the overall situation and to reconsider the reallocation of any unexpended or uncommitted funds at that time, so that we can make certain we do not end up the year with funds left over which should have gone into housing for more Canadians.
I wish to make one more point before leaving this part of my remarks, and I make it because I think it is valid and important. I believe that Canadians who need shelter, care very little which level of government delivers the help as long as it is done reasonably quickly and meets their very real needs. While we must all be accountable for our taxing and spending powers, the people are not that much interested in our flag waving or pinning federal,

June 27, 1975
The Budget-Mr. Danson
provincial or municipal denominations on dollars that are provided to build homes. If the provinces put up their own money for housing-as Ontario did recently-then I am the first one to commend them for it. This meets the problem between the have and the have-not provinces. The have provinces are able to do these things; they have developed the delivery mechanisms to use up their funds more quickly. It is much more difficult for the have-not provinces even to accept some of the programs, because some of them involve shared costs and they do not have the funds to share the costs. This is another problem with which we struggle. Usually the most vocal provinces are the wealthier provinces. This I find somewhat disturbing. I hope they understand the priorities we must have right across the country for the less favoured parts of the nation. I think we can achieve many more results by our actions than by our rhetoric, and especially rhetoric through the press. We all represent the same citizens; they are the same voters and the same taxpayers. We have that basic responsibility to them.
The third main area with which I wish to deal concerns the remarks on the budget measures for housing which have been made thus far by hon. friends opposite. I do not intend to deal with them on a point by point basis in this particular discourse, but I should like to congratulate hon. members on the sincere and useful contributions they have made to the debate. It is my impression that the contributions and advice dealing with housing measures in the budget have been given responsibly and were founded on sincere, honest convictions for the most part. There are obvious points of disagreement or differences in judgment and, I regret, some startling disagreements in arithmetic. However, I wish to take fully into consideration the points that have been made.
We cannot be all things to all people. We are proceeding on the basis of factual, not theoretical, knowledge concerning what we know we can do in the remaining months of this year. As I said, I do not take hon. members' advice lightly. I know we can deliver good housing for Canadians with the programs we now have. These are programs for which people are actually lining up. The success has been phenomenal. Without this infusion of funds, these programs would have had to be severely restricted. Now they can be continued. That is not to say they are engraved in stone for all time; we are constantly reviewing their effectiveness. There are no other shoes to drop; these are the programs for this year within the limits of the funding, and I think people realize that we intend to get on with the job.
I listened with considerable interest to the proposals made by hon. members opposite, which I will take into any further deliberations with the provincial ministers. I want to do everything to ensure that my remarks are, mercifully, as brief as possible. I know that is a disappointment to my hon. friends opposite. I will begin to conclude by dealing with the over-all housing start picture for 1975 as I see it at this point in time.
As hon. members know, the goal I set when assuming this portfolio last August-not quite a year ago-was 210,000 starts. That was the figure considered to meet the requirements of Canadians for 1975-the net figure on net

family formations. I admit it is not what we would like to achieve; we would like to do better still. However, under current economic conditions I cannot guarantee we will achieve even that objective in the current economic climate. I will do everything within my power to come as close to it as I can, not because of a numbers game but because I recognize these figures represent the fulfilment of the aspirations and needs of very many Canadians. I look forward to the time when we can do longer-range planning. We must work within annual budgets. We need longer-range planning to smooth out the hills and valleys in the housing picture.


Robert Lorne Stanfield: We have heard that for years.


Barnett Jerome Danson: My provincial counterparts and I are addressing ourselves to this problem, as are my officials at CMHC. I recognize that the Leader of the Opposition (Mr. Stanfield) said we have been trying to do that for years. I do not suggest it is an easy job. I just say I will try to do it, I am looking for ways to do it. We are moving in an extremely thorough way, because it takes that sort of thorough and exhaustive examination. I do not say I have the perfect solution. I think we can do better than we are doing now, so does the president of CMHC, and we are determined to try to do so. It is necessary that we have an industry that is geared up. The suppliers are geared up. Employment is more certain and people know where they are going. We will have a much more stable industry, which is better for the economy, is more efficient, will bring down costs for the consumer and also make our programs go even further.
The $200 million budgetary increase, which gives us an over-all budget of $1.2 billion for housing, will help significantly toward that goal, provided it is all taken up. The increases in home ownership and rental assistance grants should also help achieve that goal. As I stated, that mark is difficult to judge at this moment. When we originally brought in that legislation, the lenders were enthusiastic. They had the funds. There were what I believe to be unconscionable delays in the committee. I pleaded with the committee to get the bill through quickly because I was afraid of what in fact happened. The market changed. Economic conditions changed in the meantime, and I regret that the lenders then had moved into the retail market. The capital market had been restricted.


Lincoln MacCauley Alexander: That is an irresponsible statement.


Barnett Jerome Danson: There were greater demands upon the capital market because of the difficulties in other countries which are normally capital markets. I should like to quote from the transcript of that meeting. I offered to sit 24 hours a day, all through the weekend, if we could only get the legislation through. I shall not go into the details; I only refer the hon. member to the transcript where I said those things.
Unfortunately, for a number of reasons-I am not criticizing individuals because they were examining important legislation very carefully-the situation did shift in the meantime, did change, and it is now just coming back. We must remember that under the Assisted Home Ownership Program those funds are not expended generally until the homes are built. In the limited dividend program we start
June 27, 1975

to move very much more quickly. We feel that this new measure will help immeasurably so long as the funds are there.
My people from CMHC are in touch with lenders all across the country making certain they understand the program. They are getting a reading on the sort of programs there will be. I was in Montreal just the other day, where I spoke to several lenders. I was somewhat encouraged by what I heard. So this cannot be a firm commitment, it is subject to general economic circumstances across the country, but we have the tools to do the job and I am darned sure we will do that job in the best way it can be done this year.


Steve Eugene Paproski: How many single dwellings?


Barnett Jerome Danson: I shall not become involved in the numbers game of single family versus multiple family dwellings. My hon. friend from Edmonton Centre (Mr. Paproski) recognizes that the need for rental accommodation is extremely important. It is the closest thing we have to a crisis today, with vacancy rates hovering below 1 per cent in most major cities in this country. The pressure on rents is building up. This, of course, must be a very high priority which my colleague the Minister of Finance shares, and one which my colleagues in the provinces share with me.
I am enough of a realist to realize that it takes a great deal of teamwork in this whole exercise to make it work. I am talking about team-mates in the provinces, in the municipalities, the lending institutions, the tenants associations, the co-operative and non-profit groups, the Metis and non-status Indians, as well as many others. This is the sort of teamwork we need, to pull together and to serve the people of Canada. There will not be lack of concern or lack of teamwork. But this teamwork is not working without difficulty. There are difficulties. There are political and other situations, but there will not be any lack of effort or commitment on my part or on the part of this government.
We have a much better chance of succeeding and maintaining the inherent strength of our economy by taking these tough measures at this time. I am not referring to housing measures. They are liberalized. I am referring to the tough posture that it is necessary to take at this time. I know that many people are disturbed by some of the measures, but most Canadians will realize that although it is uncomfortable, in the long run we will continue to enjoy the stable growth to which we have been accustomed and in so far as housing is concerned we will continue to have, in both quantity and quality, the best in the whole world.


Some hon. Members:: Hear, hear!


Barnett Jerome Danson: This is not by accident; it is by design that this government has increased the budget for housing year after year since it came into office. I hope this growth will continue. Canadians are faced with a challenge which they expected. They may like it, or not, but they are prepared to face it. They have realized in recent months, if not in recent years, that the rates of growth and the expectations have been realistic and we are realizing them, but also that they were unsustainable and in some
The Budget-Mr. Orlikow
cases downright immoral in a world where we have learned to think in terms of shortages of our resources.
My colleagues on this side of the House, on that side of the House and down at the end of the House appreciate the situation as it is. We are committed at the very highest level to continuation of the best direction in housing we can get this year, especially for people in the lower middle-income group who have the toughest time. That is my commitment to the House.


David Orlikow: Mr. Speaker, this country is in trouble. We have an unemployment rate, seasonally adjusted, of over 8 per cent, an increase in the cost of living and an increase in the rate of inflation higher than we have had since World War II. All the predictions which the Minister of Finance (Mr. Turner) made in his November, 1974, budget have proven to be incorrect. His prediction that we would have a real growth rate of 4 per cent this year has proven to be completely illusory, as most of us on this side of the House said when he made it last November.
Faced with that, and faced with demands from many sectors of society that the minister do something, he brought forth a budget-but not the budget he would have wanted to produce. We have it from reliable sources that in fact the Minister of Finance went to cabinet with the proposal that they implement, by statute, wage and price controls and that he balance the budget by cutting expenditures by $5 billion. Fortunately, the cabinet was much more realistic, in terms of what the cost to the economy and to the social fabric of this country would be, and rejected those proposals. So the minister, still feeling that he had to respond to the newspaper columnists and the editorial writers who were saying that something had to be done, brought forward a budget. Let me quote from a report of the speech the minister gave yesterday in Toronto which appeared in today's Globe and Mail:
Canadians have to convince themselves that there are no easy or even consistent solutions-and certainly no painless ones-to the economic problems of inflation, recession, the energy shortage and the difficulties in developing new energy supplies, according to finance minister John Turner.
Then he said that the budget is not just an economic document, it is also a "human, psychological and political" one. He said that the finance minister has a responsibility "to make a statement of accounting to the people-where we are, where we are trying to go and how we will get there". How the minister proposes to get there is pretty obvious when you look at his budget. His proposal to change the unemployment insurance system is in fact a tax on working people, and to the extent that the increased costs are met by the employer it will be a tax on the consumers.
His gasoline tax is one of the most regressive taxes ever proposed by any finance minister in Canada. His proposal to reduce the share of the money spent to provide hospital care from the 50 per cent which the federal government has paid will be a direct charge on the people of Canada through increased costs to the provincial governments, and his proposals to add $200 million to the budget allocated to housing would be a joke if it were not so deadly serious.

June 27, 1975
The Budget-Mr. Orlikow
Let us consider what the minister proposes with regard to changes in financing the unemployment insurance fund. This is one of the most regressive and outrageous proposals with which any government and any parliament has had to deal. Up to the present employers and employees have absorbed the cost of the Unemployment Insurance Commission's initial benefits in administration, with the employer rate being 1.4 times the employee rate. The government's share was confined to the benefit cost for extended benefits as well as the excess costs of initial benefits that were due to a national unemployment rate greater than 4 per cent.
The new proposal will change the level at which additional government contributions are figured from 4 per cent to the last eight-year average. As the minister pointed out, had this formula been in operation in 1975 the bench mark for federal contributions would have been 5.3 per cent rather than the present 4 per cent. A bench mark for 1976, under the new scheme, assuming an unemployment rate of 7.5 per cent for 1975-it will be probably higher than that-will be in the neighbourhood of 5.8 per cent. If the unemployment trend continues in 1977 as it has the last year or two, we will see the bench mark rising to 6 per cent.
At the time the Unemployment Insurance Act was last revised, the then minister of labour, the present Postmaster General (Mr. Mackasey), explained that the 4 per cent unemployment level was, if not the acceptable level, at least the normal historical average. He argued then that the obligation of the government to provide additional funding to the plan when unemployment exceeded that level would act as a strong incentive for the government to work toward full employment.
Under this new plan, the government is abdicating its responsibility for bearing the cost of unemployment and in a very real sense is placing a much greater share of the burden on the backs of the employed workers and small businessmen. There have been charges in this House and outside that there are large numbers of people ripping off the unemployment insurance system. I have not accepted that, but let us assume that some people are ripping off the system. What the minister is now proposing is not that those people who are ripping off the system be penalized, oh no: what he is proposing is that the hundreds of millions of workers who take their work seriously-


Steve Eugene Paproski: Old people.


David Orlikow: -older workers, people who have worked consistently over the years and people who may never have made a claim under the unemployment insurance plan, are the people who will have to pay higher premiums. It is not surprising and it was not an accident that just before the Minister of Finance came to that portion of his speech on Monday might, the Postmaster General walked out of this House. He should not have walked out of the House: if he had the courage of his convictions he should have resigned from the cabinet.


Some hon. Members:: Hear, hear!


David Orlikow: Let us now consider the tax on gasoline which the Minister of Finance has proposed. It is interesting that the minister made this proposal at a time when the Minister of Energy, Mines and Resources (Mr. Macdonald) was not in the House; he was out of the city. The Minister of Finance made a proposal which, in hearings before the committee which deals with energy some months ago when the question was raised about a tax on gasoline, the Minister of Energy, Mines and Resources rejected as government policy. With this proposal the Minister of Finance wipes out what had been government policy up to now and initiates a new policy. In a budget which is supposedly designed to combat inflation, this is a measure which can have only one effect, and that is to aggravate the inflationary pressure on the economy without in any way cushioning the impact of higher prices on low income Canadians and depressed regions.
The increase in the wellhead price of oil from $6.50 to $8 per barrel which the minister announced will add over $1 billion to the cost of domestic oil. It will have a substantial impact on industrial and transportation costs, with ramifications which will be felt throughout the Canadian economy. The increase of $1.50 per barrel and the ten-cent per gallon increase in excise tax will increase the consumer price index by about 2 per cent in one fell swoop; and this in a budget which is supposed to be dealing with the sharp increase in the cost of living.
The increase will mean a rise of five cents per gallon in the price of both gasoline and home-heating oil. Those who heat their homes with oil will pay an additional $50 or so in the next heating season. For car drivers, the increase in the price of gasoline of five cents, coupled with the new excise tax of ten cents per gallon, will mean an increase of 15 cents per gallon, for a national average of around 85 cents a gallon for regular gas and a yearly increase in cost to the average motorist of about $75.
Let me pause for a moment to point out what I hope is an anomaly which the minister did not think of and which I hope is not a deliberate policy. Here, again, we see that the proposals of the minister are weighted in favour of those who have, and against ordinary citizens. The minister has said that this excise tax of ten cents a gallon will be paid by those who use gasoline for pleasure. A spokesman for his department has said that people who use their cars for business and who are now permitted to deduct, as an income tax deduction, expenses incurred in the pursuit of business will be able to deduct that percentage from the excise tax which they pay in the course of the year Someone opposite is shaking his head. He should check with the Department of Finance and the Department of National Revenue.
Who are these people? They are businessmen, selfemployed and others; they are doctors, lawyers and architects. The Department of National Revenue told me today that a professional man can claim as car expenses the operating expenses of a motor vehicle, that is, licence fees, insurance, ordinary repairs, gas, oil, grease and service charges. He may also claim a major accident repair if the accident occurred when he was on business. In addition, a person may claim capital cost allowance-that is, depreciation-on his car. This is also prorated between personal and business use. He must keep a record of his
June 27, 1975

total mileage. He must be able to say what percentage of his mileage was for business and what percentage was for pleasure. Mileage from home to office and back is not considered business use. He can only claim his business mileage.
I have in the past taken this up with accountants in the department. Some doctors can charge up to 25 per cent of their total car use. What does that mean? If the depreciation of the car is included, they probably have expenses of $2,000 to $3,000. If they can deduct 25 per cent of that, we are talking about a deduction of about $750. A doctor is probably in the 50 per cent tax bracket, so we are talking about a real deduction in income tax of hundreds of dollars. The ordinary worker who drives perhaps 10 to 20 miles each day to and from work-in most cities there is no public transit which an ordinary worker can use- cannot deduct anything for income tax purposes or receive a rebate on the tax which is now being proposed.


The Acting Speaker (Mr. Boulanger):: Order, please. It being one o'clock, I do now leave the chair until two o'clock this afternoon.
At one o'clock the House took recess.


[Stage Direction]
AFTER RECESS

The House resumed at 2 p.m.
David Orlikow: Mr. Speaker, when I began my speech before lunch I said I wanted to deal with four aspects of the budgetary proposals which were the main components of the speech by the Minister of Finance on Monday night. They were the provisions with regard to unemployment insurance, the increase in the price of gasoline with the excise tax of ten cents per gallon, the effect of the budget on health care, and the effect on housing.
Just before I began my speech the Minister of State for Urban Affairs (Mr. Danson) spoke. I think he would have been much more comfortable if he could have avoided making a speech in this budget debate. If ever a housing minister was sabotaged, it was the present minister as a result of the budgetary proposals. All the budget will do is give him another $200 million. That will not even take care of the increased cost of housing, the increased mortgage rates and local taxes.
This budget exposes this government as the charlatans they are and always have been. They have run away from the problems of housing, abdicated their responsibility and sloughed it off to the private sector. The private sector has never met this responsibility, for the obvious reason that they cannot make money in providing housing for the bulk of people who cannot afford to pay the prices asked.
The Canadian Council for Social Development, the Economic Council of Canada, and every other organization interested in adequate housing for Canada has estimated that we need at least 250,000 housing units each year for probably the next ten years. This government and this minister announced months ago that their objective for 1975 was only 210,000 units. Housing starts from January to the end of May show that we are only building houses
The Budget-Mr. Orlikow
at an annual rate of 160,000 units, about one-third less than the minister and the government announced they intended for this year. In the budget speech on Monday night the minister said, as reported at page 7022 of Hansard:
Residential construction has been the major domestic source of weakness in the economy.
To counteract this, the minister proposed to increase the subsidies paid under the private AHOP and private limited dividend programs. These were the measures introduced as amendments to the National Housing Act this spring-measures which were supposed to attract $1 billion of private funds into the housing market. As the Minister of State for Urban Affairs admitted a week ago, and as we predicted last spring, this program has failed completely. Statistics from the national accounts show that in the first quarter of 1975 business investment in residential construction continued to decline as a percentage of the gross national product. It dropped to 4.6 per cent from a high of 5.6 per cent in the first quarter of 1974 despite increased subsidies to attract private capital into the rental and privately-owned housing market. We have no figures on how much money the government will spend on these programs, but no matter what the government is willing to do the program simply will not work.
If we add up everything the minister has proposed, including the $200 million announced on Monday night, the total budget for housing this year will be $1.6 billion. Eight years ago when housing costs were probably half of what they are today, the budget for Central Mortgage and Housing was $1.5 billion and represented 14.3 per cent of the government's total budget. This year it will only be 5.4 per cent of the total budget.


Mr. Watson:: Explain the difference.


David Orlikow: I will come to that, Mr. Speaker. The hon. member for Laprairie (Mr. Watson) asks about public housing. Let us look at public housing, particularly in my province. I would like to hear the hon. member for Laprairie and the other hon. member from the Montreal area who has been here for too many years get up and talk about how much the Liberal government of Quebec is putting into public housing this year with assistance from this very generous federal government. In my province, this government reduced the funds available for public housing to $15 million this year. That was a very substantial decrease. I want the hon. member for Laprairie to remember that. The minister for urban affairs in Manitoba who is responsible for housing has said that that province could use another $25 million.
At the conference which the provincial ministers had with the federal minister, the Manitoba minister in charge of housing repeatedly urged the minister to release more money for public housing. He told the minister that while AHOP money is being used to the full extent, it is not going to those who need housing the most. Those people need accommodation and housing units; the hon. member for Laprairie knows this. Despite all that Ottawa has put into AHOP and limited dividend housing, these people simply cannot afford to purchase a home; they must rent.

June 27, 1975
The Budget-Mr. Orlikow
The tragedy in this country, the disgrace to government and parliament is that there are tens of thousands of people in every city, one of the worst of which is Montreal, and if the hon. member for Laprairie does not know how bad it is, I refer him to an article in Weekend magazine of about three weeks ago which describes how housing units are being destroyed in that city to make way for the Olympics-


Prosper Boulanger: That is not true, and you know it.


David Orlikow: I would be happy to debate this matter with the hon. member who is interjecting, but he should make his own speech.


Prosper Boulanger: I will.


David Orlikow: There are tens of thousands of people in every city of this country-families with two, three and four children-who cannot afford to buy houses. In fact, they cannot afford to rent at the commercial market rates. These are the people who need public housing units. They are the ones being destroyed by this government's callous disregard for their needs. There is no commitment on the part of this government to provide funds for people who need housing.


Prosper Boulanger: Mr. Speaker, will the hon. member permit me to ask one question?


David Orlikow: Yes, Mr. Speaker.


Prosper Boulanger: Does the hon. member know that in my constituency in Montreal-


Mr. Deputy Speaker:: I simply ask the hon. member to speak to the Chair now that he has obtained from the hon. member permission to put a question.


Prosper Boulanger: Thank you, Mr. Speaker; I am sorry. Does the hon. member know that in my constituency in Montreal a workingman today can buy a four-bedroom house for $22,500?


David Orlikow: What I am concerned about and what I am talking about


Some hon. Members:: Answer.


David Orlikow: Of course I know that, Mr. Speaker.


Prosper Boulanger: Then say it.


Some hon. Members:: Hear, hear!


David Orlikow: How many times does one have to repeat a statement to get it through the thick head of the hon. member opposite? The point I have repeatedly made in this House is that there are tens of thousands of people- husbands with incomes of $5,000 or $6,000 a year, with two or three children-who cannot afford to buy houses, even with AHOP. They are the ones I am talking about. The hon. member should know that is a fact.


Prosper Boulanger: We know that people on social welfare cannot buy houses.


David Orlikow: I do not mind the hon. member interjecting, but I only have another three or four minutes and I would like to continue my speech. As far as housing is concerned, the government has not met the needs of those in the bottom 40 per cent of the income bracket. That statement has been echoed by every mayor in this country, with the possible exception of the mayor of Montreal who is not very concerned about housing.


Some hon. Members:: Oh, oh!


David Orlikow: It has been echoed by every provincial premier whether he be NDP, Liberal or Conservative. It is recognized by every person who is interested.
In the few minutes I have left, I want to deal with the proposal by the minister unilaterally to change the basic principle which we have followed in the financing of medical and hospital care, where Ottawa pays 50 per cent of the cost. This principle has been established for as long as we have had medical and hospital insurance. Many of the provinces-I think especially of the one to come in last, Ontario-were very hesitant to come into these plans. They did not want universal plans; they thought voluntary plans were better. The reason they came into them was that they could not refuse; their voters would have been very angry if they had not picked up the money which Ottawa was making available.
The Minister of Finance now says, in effect, that it does not matter that a province has been in from the beginning or that the government urged, enticed and pressured the provinces to come in. Despite that, and despite the fact that health costs increase from 18 per cent to 20 per cent a year, the government have decided they cannot afford it. As soon as they can change the agreements, either by law or by giving notice, they will pay substantially less than 50 per cent, and the government are telling the provinces now how much less they, the government, are going to pay. Is it any wonder the provincial ministers of health are upset? I could quote from a telegram which the Manitoba minister of health sent to the Minister of National Health and Welfare (Mr. Lalonde); however, my friend opposite would say that is purely partisan politics.


Prosper Boulanger: Of course.


David Orlikow: For his benefit I will quote from a communique sent to the Minister of National Health and Welfare by the Quebec minister of social affairs. I think that province has a Liberal government. I quote:
I deplore the unilateral setting of a ceiling without notice of federal participation in medical insurance-The evolution of medical care cannot be carried out in such a short time-span and this federal decision causes major uncertainties in its administration by the provinces.
Is the Quebec minister of social affairs a socialist?


Prosper Boulanger: Did you read what he said last night?


David Orlikow: additional $200 million a year for health services by the year 1980.


Mr. Deputy Speaker:: Order, please. I regret having to interrupt the hon. member, but the time allotted to him has expired.


Léonel Beaudoin: Mr. Speaker, it gives me pleasure to rise today on behalf of my party and my fellow citizens of the riding of Richmond that I have the honour to represent here in this august place to comment the last budget just introduced by the Minister of Finance (Mr. Turner).
We must indeed take the trouble to give it very serious examination since this is a policy that will set the path for our economy to the extent possible for the months to come, at least in view of the fact, as was suggested by the Minister of Finance in his last budget speeches, that we can no longer talk of long term nor even middle term.
Indeed, we must now face very rapid economic fluctuations that prevent the government administration from operating in its usual way, with the result that we and the Canadian public realize quite well that, faced with those constant changes in the economic situation, the government must first try by all possible means to catch its breath and gain time hoping that that time will normally arrange things, before thinking in terms of an overall long term policy.
But before going any further and giving my opinion on the contents of this budget speech, I would like to obtain your permission, Mr. Speaker, as well as that of my colleagues in the House to emphasize in a particular way the terrific job that two of our colleagues are now doing. I am just coming back from a trip I made in western Canada with the committee on immigration policy commissionned to travel across this country to gather the opinions and suggestions of Canadians on the future Canadian immigration policy.
I even had to cancel the trip I was supposed to make with that committee in the Maritime provinces this week to stay in Ottawa and comment on the budget speech. I would like to congratulate in a very special way the hon. member for Scarborough East (Mr. O'Connell), chairman of that committee on immigration policy of which I am part as well as its co-chairman, Senator Maurice Riel, for the fantastic way in which they are currently carrying out their heavy responsibilities. Their mandate is a big one and they are fulfilling it with a tact and a determination truly worthy of mentioning. The committee on immigration policy is now doing a job of very great importance to all Canadians.
I believe that this committee is now responsible for establishing what kind of Canada we shall have in the future. Everywhere we went, we were very cordially received and we met interesting and interested people. The only sad thing-and I am very sorry about this since I have the privilege of representing a Quebec constituency-is that we had our worst audiences in Quebec in cities such as Sherbrooke, Montreal, Trois-Rivieres and Quebec City. Very few people came. There will always be some
The Budget-Mr. Beaudoin
people, and perhaps in Quebec more than anywhere else, to criticize when we establish new immigration policies.
Yet, our French-speaking groups in western Canada took an active part in our hearings. We were able to note their great determination to remain French. Despite the many problems that they must face, they not only succeed in keeping their language and traditions, but they are increasingly asserting themselves. They have both feet on the ground. They have true pride and patriotism. They are about 90,000 in Manitoba, 35,000 in Alberta and 10,000 in British Columbia. They are a living example for us.
Indeed, after noting this pride, this open-mindedness and this assertion of our western French Canadians, I was even more disappointed to find in Quebec this dream that certain people have of isolating Quebec and forcing it to become self-centered, supposedly to assert their cultural or other identity. This is not the way to assert oneself, far from it, and our French Canadians of western Canada can teach us a very valuable lesson on this point. I will come back to this another time, Mr. Speaker. For the moment, I shall speak only of general matters and thank you, Mr. Speaker, for having allowed me this departure from the subject.
I now come back to the matter under discussion, the budget speech. The first thing that comes to mind is that with such a budget, there will certainly not be elections this year. If there were, this government would lose quite a few feathers. Indeed, there are several very unpopular measures in this administrative policy which affects most Canadian citizens. The most negative effect to Canadians is no doubt the exaggerated increase in the price of gasoline for personal purposes. This very strict measure directly affects the whole population, and especially workers who cannot deduct the cost of personal transportation to and from their place of work, for income purposes. Indeed, when that 15c. a gallon increase was announced, C. D. Howe Institute economist Judith Maxwell clearly stated that it would primarily affect workers using private automobiles to go to work. Combined with the parallel increase on fuel oil, this clearly means that once more ordinary people will be in for it. They will pay most of the cost now imposed by the Minister of Finance (Mr. Turner). It should be noted, Mr. Speaker, that this is no novel thing under this government. But there must be an end to that, because the ordinary citizen's ability to pay is not infinite.
This unacceptable increase in the price of gasoline will indeed have immediate negative effects of a serious nature on the economy. Because this measure, I would say a very harsh one for the small wage earners, will immediately cause an increase of about 2 per cent in the cost of living, and thereby fuel inflation. This is also the view submitted by the vice-president of the Toronto Dominion Bank, Mr. Douglas Peter, who said yesterday, and I quote:
The increase in the price of gasoline is an economic faux pas. The timing of such a measure is bad, and will feed inflation.
On the other hand, it is clear this increase will seriously affect our important automobile industry, which is not faring too well as it is. All this means that we must denounce the gas price increase since its sole guaranteed consequences will be to undermine the national economy by aggravating inflation, further stifle taxpayers, surely

June 27, 1975
The Budget-Mr. Beaudoin
worsen unemployment in the automobile industry and cause many costly bankruptcies among car dealers and their suppliers. I think that it is not excessive to contemplate a 25 per cent reduction of new car sales.
I would now like to discuss briefly the housing sector which will be affected by the provisions of the budget. I have sufficient experience in residential construction to know that it is a key factor of our economy. We can even say that the general economy of the country is faring well providing that the health of the building industry be good and flourishing. This industry provides a tremendous number of jobs, from that of wood cutter to landscaper through the intermediary manufacturing jobs and so on. Therefore, I have been quite happy to learn that the CMHC was granted an additional $200 million and that grants for housing financed on the private market had also been increased. I congratulate the minister for this good action.
Unfortunately, I have to tell him that these grants are not sufficient. I feel the minister and his advisers forgot to assess in depth the housing situation in this country. The falloff of starts in the residential sector has become alarming, as Mr. Blair, Vice-President of the Canadian Real Estate Association said:
At the present time, starts revolve around 170,000 after falling to 122,000 last year. With a bit of luck, we shall reach 180,000 new units this year. Mr. Turner completely overlooks that simple fact.
In other words, the $200 million will not have much effect since they will help raise the number of housing starts by only 6,000 to 7,000 at the most. However, I should like to make a suggestion to the minister considering the galloping rise in land costs in our major metropolitan areas such as Montreal, Vancouver, Toronto and Edmonton, where very recently I was able to check the situation on the spot. That excessive speculation is seriously slowing down the number of housing starts. The federal government with the co-operation of the provinces should have acted long ago to create a body empowered and commissioned to follow the situation closely to prevent the ill effects of the problem. There is another aspect I should like to point out about the budgetary measures on housing and it is the removal of the 5 per cent tax on insulating material. I cannot help mentioning it, because it is too ridiculous. For all practical purposes, it is all eyewash and means hardly anything. It is fair to say that it represents something like $45 per housing unit.
I am aware of the fact that whoever speaks must say something. As his budget was a little thin, the minister had to stuff it a little, but I feel that this step is somewhat simplistic and will have no impact whatever on the prices of lodgings. If the government had really wanted to set home construction in motion again, it should have, as I suggested on many occasions, removed the federal tax on all building materials. It would have considerably increased the number of new house starts, without losing anything taxwise, because of the jobs it would have created and all the direct and indirect taxes that it would bring in the federal treasury over and above the income tax being levied on those workers' salaries and on this whole area of the economy. Then, the Minister of Finance would not have had to be ashamed of such a measure, and I am

sure that all my colleagues in the House would have applauded and commended the minister, whatever might be their political hue.
However, I would have greatly wished that a correction had been made to what is commonly referred to as the $500 subsidy to new home buyers. Since one of the main eligibility criteria is the fact that the applicant must be a first time home buyer, there is a serious prejudice for farmers who sell their farms to build a new house. They are not eligible for the $500 government grant because they owned a home before; this is clearly unfair since a farm is nothing other than a business. The situation is exactly the same as if the $500 grant were to be refused someone who wants to build a home, under the pretext that he owned a restaurant, a plant or some other business.
The Minister of Finance did not include that provision in his budget, but I do hope the Minister of State for Urban Affairs (Mr. Danson) will take note of my proposal and, as soon as possible, correct that anomaly and so help increase the number of new housing starts.
With regard to the control of public expenditures, I am happy that the government has finally recognized the principle I have voiced on several occasions. The government must at all cost watch its expenditures very closely, just as a private enterprise must if it does not want to go bankrupt and be, as the saying goes, "in the red everywhere". I do not know whether businesses are operating in the red everywhere in the country because Parliament does, but I do know deficits are accumulating. This is the first time, in a very long while, that the federal government makes an effort to contain the increase in its expenditures. One can but approve, for instance, measures aiming at a restriction of fees paid to consultants and of civil servants' travel costs. I hope this is only the first in a series of measures to reduce unnecessary expenses. We might dwell on them at length, because we are not short of them.
On the other hand, other measures concerning restrictions of expenses are much less acceptable because they still affect average Canadians. There is, among others, the matter of unemployment benefits which will not be accessible any more to people aged 65 or over; furthermore, the recent legislation concerning old age security is very incomplete, and both measures combined will undermine considerably the purchasing power of some senior couples. It will be, for instance, the case for the 65 years old man who will see himself deprived of his unemployment benefits, on the one hand, while, on the other hand, his wife will not be entitled to the spouse old age security pension if she is under 60. It will therefore be a serious injustice to those senior couples who will henceforth be forced to try and live the two of them on one old age pension, while, at the same time, supporting the price increases in the fields of gas, heating oil, food, drug and other fields. In view of the circumstances, I ask the Minister of National Health and Welfare (Mr. Lalonde) to amend as soon as possible his latest piece of OAS legislation by making it possible for the spouse of a pensioner to automatically receive her pension, no matter what her age.
Furthermore, the decrease from 75 to 66 per cent of the special unemployment insurance rate will seriously affect
June 27, 1975

the unemployed with dependents because of a loss of revenue.
With regard to job creation, I should like to point out, Mr. Speaker, that there exists an enormous need in this field due to the high rate of unemployment which tends to persist and which we should make every effort to reduce, because it will have a paralyzing effect on our economic growth.
Indeed, most people have become aware that several of our major industries must reduce their staff or temporarily suspend some of their operations because of the present market situation which increases unemployment considerably. One only has to take a close look, for instance, at the automobile industry which is experiencing a serious slowdown and which will be affected to a still greater extent by the increase in the price of gasoline. Lately, our pulp and paper companies have been experiencing cut backs in orders which forced them to make special arrangements. For example, the Abitibi Paper Company Ltd. stopped production somewhat at two of their mills in June; so did the Quebec North Shore Paper, at Baie-Comeau. Therefore I was happy to see the minister of finance emphasize job creation and the large amounts he has provided for that purpose. However, I would like to draw the minister's attention on the contradiction in this budget between the will to create jobs and the fact that at the same time, he wants to curtail the expansion of the public service. Perhaps the minister could give more explanations on this subject.
On the other hand, we must say we are satisfied with the 285 million dollars allocated for the new Local Initiatives Program focused on the needs of the municipalities, because they need help badly at the present time.
These are the main issues I wanted to deal with, for the time being. Now, if we consider the budget on the whole, we come to the realization that it is very weak and is only meant to keep the country afloat until the present storm, hopefully, abates a little and finally ceases altogether.
If we compare the Canadian economy with that of other western countries, we are forced to admit, Mr. Speaker, that it is in a relatively healthy state. This is due mainly to our plentiful agricultural production and natural ress-ources and it is expected to last as long as consuming countries retain the ability to pay for our products. We must not overlook the recession which has severely stricken all countries in the world and may one day compel them considerably to cut down their purchases of our raw materials and manufactured products, which would place us in a precarious position, namely declining productivity and increasing unemployment and so forth. On the other hand, we must also keep in mind that there are at present enormous foreign investments in Canada, which binds us, so to speak, to the fluctuating world economy and particularly to the tottering American economy. Then, I think that unfortunately we must recognize that to a very large extent our future does not depend anymore on what we do or on administrative provisions but on the fact that Canada follows the lead of the world economy.
This is probably why this budget made us realize that this government can no longer plan a long term policy because it must use every effort to maintain its balance under the pressure of the world economy turmoil.
The Budget-Mr. Beaudoin
Within the margin of action it has left, the government could be blamed for its lack of firmness and dynamism in dealing with all economic problems.
The time has certainly come to adopt drastic and efficient measures like those that we have seen proposing for a long time. Yes, it would be time to establish a guaranteed income system that would give security to Canadian citizens in this difficult period. Yes, it would be time to reduce to 60 the age for voluntary retirement which would create several employment opportunities for the young people that this government supports through unemployment insurance or social welfare. Yes, Mr. Speaker, it would be time to finance municipalities and school boards without interest to let them take a breath. It would be time to take such measures, but I am afraid that once more this firefighting government we have at the federal level will arrive with its solutions when the fire has destroyed everything.
This government sometimes takes excellent measures from our proposals but often it is too late. It was again the case for the last budget presented by the minister last November. The minister will recall what I told him at that time:
Several of the proposed measures are good, but they come too late to give results.
And last Tuesday, June 17, in the Senate, Senator Maurice Lamontagne said that the economic forecasting of the federal government in the last 20 years was always wrong and had disastrous effects.
As a result, government action has always been too late and has thus contributed to intensifying both cyclical inflation and unemployment rather than attenuating them.


Mr. Bechard:: Someone else may have another opinion!


Léonel Beaudoin: Yes, sir. This is why we are
parliamentarians.
Consequently, governments have always acted too late to fight the effects of recession and this is what I fear will happen once again.
Moreover, this government takes a very narrow attitude in its budget. First, it gives no specific diagnosis of the general situation of the Canadian economy. It simply announces higher prices for gasoline and heating fuel and offers as a compensation the timid and unsure infusion of millions of dollars to try to bolster the economy. Second, the cost of living goes up by 2 per cent simply because of the stiffer gasoline prices, not to mention the expected increase in the cost of food and other goods. And the Minister of Finance dares to ask workers to restrict their salary demands. Where is the logic in all this? When we take the trouble to make a serious analysis, we find that the speeches of the Minister of Finance do not change much from one time to the next and that the one we are now considering is mostly a good stylistic exercise about our national economy. In fact, we can sense that the government is in a hurry to adjourn the proceedings of the House for the summer to prevent members of Parliament and the press from talking too much about this meagre budget.
To sum up, we can therefore say that those who will lose more because of the budget are the average Canadians

June 27, 1975
The Budget-Mr. Ethier
who are being squeezed like lemons by the government. This must be the reward given by the Liberal party to the Canadian people to thank them for having supported it in the last election.
The last thing I want to say is that we are now getting into a funny world and the greater our natural resources become, the greater our poverty will become due to direct taxes on these resources.


Mr. Denis Ethier (Glengarry-Prescott-Russell):: Mr. Speaker, I had not intended to participate in this debate as I thought I should give the time to more qualified members of the House to speak on this important subject, but after hearing the hon. member for York-Simcoe (Mr. Stevens) and the long monologue of the hon. member for Battle River (Mr. Malone), I thought my qualifications were not all that bad. So here I am, offering my two cents.
[ Translation]
I am very pleased to take part in the budget debate and contrarily to what I heard from the opposition members I would like to congratulate the Minister of Finance (Mr. Turner) for bringing in his fifth budget. As he said at the outset and I quote:
This has been a tough budget to prepare.
And I entirely agree with him. He listed later on several reasons why it was difficult for him to prepare it, as there was need on the one hand to restrain inflation which is still threatening and on the other to make sure that every Canadian wishing to work has his place on the labour market. And to this, let us add a serious world problem, namely the rocketing prices of oil and even a possible scarcity of this precious product in many countries, including ours.
I am convinced, Mr. Speaker, that the minister's task was further complicated by the total lack of positive criticisms from the opposition because certainly the Canadian voters represented here by opposition members deserve the same treatment as those represented by government members when such a budget is prepared. But as a result of that total lack of constructive and positive criticism, the minister had to spend much more time consulting different social groups in order to steer a middle course and draft what I call a balanced budget; I hasten to explain that I do not mean a balanced budget in financial terms but rather in the sense that we attack inflation while maintaining our priorities of creating jobs for all Canadians willing to be members of that group of Canadians at work.
I perfectly agree with that part of the budget which suggests tightening up the terms of the Unemployment Insurance Act. It is suggested that the penalty be increased from three to six weeks for those who voluntarily leave their jobs; I would have suggested that we simply refuse to pay any benefit to those who quit their jobs, except when they do so for acceptable reasons.
In my opinion, Mr. Speaker, far too many Canadian workers see that legislation as holiday insurance and they do not realize that this could cost millions of dollars to good Canadians who keep their jobs.

Many Canadian workers will greatly appreciate another amendment to the Unemployment Insurance Act which provides for a 25-week sickness benefit period instead of 15 as is now the case. I would have preferred that benefits be paid for a period of up to 52 weeks to those that are ill, in the same way as to those who are looking for a job. I am also pleased to note that $450 million are earmarked for creating jobs under various programs as vocational training, placement and mobility, summer jobs and activities for students and a new local initiatives program that will give priority to municipal projects.
Since 1971-72, more than $550 million have gone to such programs, but provinces reserve the right to give those moneys to municipalities of their own choice. I noticed that the Toronto government did certainly not favour the eastern constituencies I am representing, because out of the $126 million received by the province of Ontario, the provincial constituency of Prescott-Russell got a mere $300,000 and that of Glengarry a mere $350,000. But a Toronto suburban constituency got more than $6 million. In order to correct such discrepancies, I would strongly urge that any new joint program should first be negotiated with an undertaking-I would even say with a commitment-from the Ontario government, that the eastern constituencies I am representing be recognized as part of that province, and that a fair share of the money go to Glengarry-Prescott-Russell, as compared to the Toronto area constituencies.

Much more could be said of all that is rosy in this budget, such as the increased funding for CMHC, increased tax credits, the increased rate of return on investment in Government of Canada annuities which are held by more than 200,000 Canadians, and removal of the 5 per cent sales tax on insulation materials. But as a responsible member of this government, I should like to discuss the less rosy measures in the budget, such as the special excise tax on gasoline which will cost ten cents a gallon more for personal travel.
Although this measure is criticized vigorously by the opposition and even by Bill Davis, the premier of this province, we must appreciate the fact that we still enjoy a much lower cost of gasoline than most countries in the industrialized world. The Premier of Ontario seems to forget that offshore oil, which supplies our eastern markets, costs some $11 a barrel, but because of the quick and wise action of this federal government in imposing an export tax on oil exports to the United States we still enjoy $8 a barrel oil, even with this latest $1.50 per barrel increase.
I say the Premier of Ontario should also be reminded of the fact that in order to guarantee a supply to our Canadian market we had to reduce our exports from 1,200,000 barrels a day to some 450,000 to 500,000 barrels a day presently and gradually to reduce exports until such time as the Canadian market will consume all the Canadian production, leaving us no revenue from export sales to cushion or, in plain terms, to reduce the price for our offshore purchases.
June 27, 1975

Therefore, as a responsible member of this government I support this excise tax, and by the same token I sincerely deplore the fact that the premier of this province, on the eve of a provincial election, chooses to play this political game when he knows full well that there was no other way of guaranteeing a subsidy for offshore purchases and-I repeat-giving us the privilege to enjoy lower than world prices and continuation of a one-price system for Canadian consumers. One must also appreciate the fact that this excise tax will in no way cause an increase in the cost of consumers products, since the tax will cover only gasoline used in private automobiles, pleasure boats, motorcycles and snowmobiles. The tax will not affect fishermen or farmers, nor will it affect commercial and industrial users.

It is easy, Mr. Speaker, to criticize measures like the excise tax on gas, particularly for the opposition members who know very well that because of their lack of courage they will never be in office. As I said before, presenting a budget is not an easy task, and again it is most important that there be courageous people for making decisions for the well-being of the majority of Canadians, even though that involves a few sacrifices from some taxpayers. I am convinced that is why Canadians chose courageous people to form their government.

Mr. Speaker, in a slight change of tempo I want to talk of the problems we face in eastern Ontario, and most of all in my riding of Glengarry-Prescott-Russell. As I mentioned previously, Queen's Park does not show-or, should I say, has never shown-any concern for our region, so I plead with this government to give every possible consideration to assisting this part of the province. I might suggest a few ways in which this government could help. First, by reinstating my riding as one of the designated areas. I must admit that we did belong to a designated area and the Prescott part of my riding obtained numerous substantial grants and attracted many industries. For this I am grateful. But the Glengarry part of my riding was not prepared then to accommodate industries as it is today.
Therefore, I ask that this riding be reinstated as a designated area. I am convinced that within a few months we would attract enough industry to our area to guarantee full employment at home and to eliminate travelling long distances to work centres such as Cornwall and Ottawa. Such action would serve two purposes. First, it would guarantee full employment; second, it would contribute to the energy-saving program by reducing travelling distance to work.
Another means of assisting us in Glengarry-Prescott-Russell would be to consider extending the boundaries of the national capital region. On Monday, June 23, prior to the budget presentation, the President of the Privy Council (Mr. Sharp) proposed that a special joint committee of the House of Commons and the Senate be appointed to study and report upon matters bearing upon the development of the National Capital Commission. I sincerely hope that the members appointed to this committee will give serious consideration to my request of extending the boundaries to include municipalities such as Rockland and Clarence, and also the remaining part of the township of
The Budget-Mr. Ethier
Russell which was not included in the 1958 boundaries. Since the major employer of the residents of these municipalities is the federal government, in an effort to decentralize government services I suggest some government branches could be moved to areas such as Rockland. I am sure this municipality would welcome such a move.
Some may recall my maiden speech in this House when I suggested that something should be done in our district to cater to the ever-increasing tourist industry. I still maintain that position. I would recommend that our government discuss with the province of Ontario the possibility of transforming the vast Larose forest into a national park. Everyone knows the beauty of this vast region, but still it is not a tourist attraction. It could very well become one, should both governments agree.

Mr. Speaker, playgrounds, an open air theatre and a bicycle path could be developed; given the natural and well-wooded aspect of the area, a zoological garden could be established as the one at Granby which is an attraction for millions of tourists every year.
I do not think I am mistaken when I say that all the schoolboys in my constituency have gone to Granby and visited the zoo; we could have that kind of touristic attraction a few miles only from the National Capital if the two governments could come to an agreement. The new Highway 417 would make that area more accessible. Here, I wish to congratulate the government of Ontario for this first concrete gesture they have made in our area. But many shopkeepers on the old Highway 17 have been adversely affected by the opening of the new highway; their concern for the future, which I understand quite well, incites me to make these requests. I understand also that this matter is under provincial jurisdiction, but, knowing the snail's pace of Queen's Park, I ask my colleagues to give me their support so that we may help the people of my constituency whose businesses depend solely on the users of Highway 17.
In the southern part of my constituency, along the St. Lawrence, the Province of Ontario has organized two parks; I am convinced that this action helped all the businesses along the St. Lawrence. But on the northern side of my riding there is nothing to help businessmen on Highway 17 who were hard hit by the opening of new Highway 417.
I would like the government to consider the possibility of undertaking negotiations with the province of Ontario within a joint program financed on a 50-50 basis for the development or one or two parks along the Ottawa River, and if the province does not want to participate in such a program, perhaps even consider the possibility of an entirely federal project so those honest people will not be forced to close their businesses and go settle elsewhere.
Another point that is of great concern to me is the slow progress in the negotiations with Quebec and Ontario about building a new bridge between Grenville and Hawkesbury. In view of the danger existing on the present bridge if the tonnage limits are not respected, and considering the lack of interest of both provinces involved I would propose that this government build immediately a new bridge, even if it has to pay the entire cost. It is unthinkable that in 1975 provincial governments like

June 27, 1975
The Budget-Mr. Fraser
Ontario and Quebec would disregard people to the point where simple matters of financing such an urgent construction would be delayed.
I understand this would impose an additional burden on this government but in face of such a danger it is important that we continue to show that we are a responsible government and we accept such challenges because the safety of those using that bridge is at stake.
In concluding, Mr. Speaker, I want to state again my support for this budget as well as my entire confidence in the Minister of Finance.


John Allen Fraser: Mr. Speaker, I should like to begin my contribution to this debate on the budget by assuring the hon. member for Glengarry-Pre-scott-Russell (Mr. Ethier), who just spoke, that not only do members on this side of the House support some of his suggestions with regard to parks, but I can tell him, with the utmost solemnity, that we remember every word of his maiden speech.
It is probably of some comfort to the hon. member to know that despite all the months that have passed since he made his maiden speech, it is still being discussed on this side of the House, and that is no doubt why there is such a tremendous crowd here this afternoon which assembled when the rumour buzzed around the building that the hon. member for Glengarry-Prescott-Russell was indeed going to rise and take part in this debate. I want to say with the utmost sincerity that we welcomed his contribution which will be remembered just as his maiden speech was remembered.
I want to say, on behalf of myself and some of my colleagues from the province of Ontario, that out of courtesy we would like to extend some of the remarks the hon. member made this afternoon to the premier of his province as well as to the leader of the opposition in the province of Ontario. He may have some difficulty in giving any comfort to the leader of the opposition in the Ontario legislature with respect to the 10 cents a gallon price increase.
So far the debate has been interesting because there have been some criticisms of the budget-and I will be making some criticism of the budget also-even from members of the government who wished that some of the measures could have been extended further. There have also been some government members who defended the budget and attempted to explain the grave difficulties which the Minister of Finance (Mr. Turner) faced in trying to determine what sort of budget should be brought down to meet the exigencies of the present situation. But I think it is fair to say-and I do this with the utmost seriousness-that this budget has been just as difficult to draft as have previous budgets for a number of years.
I think it is fair for us all to ask ourselves why budget after budget which has been presented in the House has called upon the finest rhetoric the government can muster to defend it, and has brought down the vituperation of the opposition, the press, and the knowledgeable people in the world of economics, business, industry and labour. I sug-

gest that the reason it has been so difficult to bring down budgets which would satisfy the Canadian people is that for a number of years we have not been facing realities. I say this not in a pejorative sense and in as non-partisan a way as I can.
The fact remains that year after year this country, along with other countries in the industrial world, has been determined to live beyond its means, hoping that some day somehow the productivity of tomorrow will make up for the excesses of today and yesterday. When we as parliamentarians consider this difficulty, let us forget partisanship and let us ask ourselves collectively in this difficulty what it is about our society or the leadership in that society-and there is leadership from both sides of the House-and what is the difficulty that is causing us to bring down budgets year after year to which the traditional response is that they are inadequate, that they do not show thrust or direction.
When a budget shows restraint it is usually too much restraint, and the accusation is that it is cruel and vicious. When a budget tries to meet other problems, the criticism that greets it is that it is too sloppy, too soft, not tight enough. This dilemma has been facing not just the Liberal government, which happens to be unfortunate enough to have to come up with an excuse each time a budget is brought down, but the whole country.


Some hon. Members:: Hear, hear!


John Allen Fraser: It is facing the whole country because not just governments, not just parties, not just politicians, but the whole collective Canadian society has been unrealistic as to what we can expect.


Some hon. Members:: Hear, hear!


Mrs. Holt:: Right on.


John Allen Fraser: But, for instance, you cannot continue to inflate the money supply beyond productivity without inducing domestically excessive inflation. This is not the time to go into a long statistical account to illustrate what we all know, namely, that over the last decade we have pushed the money supply beyond productivity. It is true that some of our inflation has come to us from other countries, but if you would take a look at the way most of the industrial countries have behaved in the last decade you would see they have done the same thing as we have. So, collectively we have been inflating our currency beyond productivity.
I am sure that with the hon. members here this afternoon it is not necessary-but perhaps it is proper at least to observe so that somebody has some confidence that we are thinking about these things-to say that one cannot continually cheapen the currency and expect to lick inflation. The excuse is that in the short term it has been necessary to meet immediate and sometimes crucial situations, and I think any intelligent person recognizes that. But surely it is time that all hon. members came to realize that sooner or later we will have to have a budget that starts to set a direction for the coming years.
I have heard the argument that there is no marketplace any more, and I have heard the great economist, Galbraith, put it forward. I have also heard him lose this proposition
June 27, 1975

in a debate with students in England. But the fact is that there is a marketplace and that it is an essential utility if we understand that it is there for a purpose. But when any government, year after year, distorts that marketplace by inflation, you do not get the utility out of the marketplace that you should get. This leads to waste and lack of productivity. It also does something else which I know every member in this House is concerned about: it leads to terrible waste in human resources. We have an unemployment rate which is serious.
Given the advantages that this land possesses, and there is no one in the House who would disagree with me in that, and in saying that I am not being pejorative but I am trying to speak about problems which we should try to solve together, the Minister of Finance for several years put forward an argument which caught the fancy of many people. He said that the problem of inflation existed because there was too much demand and not enough productivity. That can be a cause of inflation But if you are increasing the money supply constantly beyond productivity, it does not matter how hard you work on the production side, you can never meet the demand that is created by the excessive production of money. These are truths which lie hidden behind the walls of Academe. These are self-evident truths, but I come back to what I said some time ago, and that is that collectively we have not been paying attention.
We can talk about trying to have a consensus in this country so that we can meet these problems. I suggest, with great respect, that there is already a great consensus in this country, at least to the extent that most people do understand what the problems are. There would not be any difficulty in getting the average person to understand the problem of inflation. There would not be much of an argument in talking to the ordinary Canadian on the street about uncontrolled government spending. There would be no argument from anyone about the concern about the automatic, ever-increasing size of government. There would also be very few arguments today about the fact that some wage demands seem to be completely disproportionate to reality. There would be no argument, from those people who understand how an economy really works, as to the necessity to produce real wealth or else there cannot be a greater share for anyone.
Those are things upon which I suggest there is a consensus. What obligation does that put upon us? Surely it puts upon us the obligation to recognize that the public is not nearly as ingenuous, naive or uncaring as perhaps we sometimes think. Perhaps it puts an obligation on us to recognize that the Canadian people do appreciate and understand the difficulties facing this country.
Most Canadians have an immense amount of common sense. We say over and over again that the route we have followed has been pressed upon us by the demands of the electorate. I suggest that that is only partially true, and in many cases not very true at all, because it is not very often that the man in the street suddenly decides to develop a Petro-Can. These ideas emanate from the administration, from the minds of politicians and from the cabinet rooms of not just the federal government but of governments across this country. Many of these schemes to which we
The Budget-Mr. Fraser
have become committed may be good things in themselves, but in the total picture they are not justified because we do not have the productivity to justify them. They are not the result of public demand, but of politicians asking themselves what to do next to keep the public happy.
Surely it is time that all of us in this House recognized that it is a grim reality that we cannot live beyond our means and that there must be discipline in what we do in economic affairs, because if there is not, we will not meet the fundamental social needs of this country in the coming years. It is not because we do not want to meet the fundamental social needs that I say we must exercise discipline, care, prudence and thrift; it is because we have to meet those social needs. That is what ultimately determines the quality of Canadian life. There has not been much said about that so far in this debate.
I wish to draw to the attention of all hon. members the fact that unless we come to grips with reality, and unless we come down with the next budget showing a direction and a long-term process of changing to adapt back to reality, we will be listening here time after time-and it will not matter which government-to governments defending unpopular budgets which do not solve the problems, and the opposition and the critics in the country hurling invective at the government for not being able to do it. The problem we have cannot be solved with a short-term palliative, and it does not matter what sort of financial genius exists.
Essentially I say to my hon. friends opposite that I recognize that it is embarrassing and frustrating for the government to have to be in the position of defending this budget. It is embarrassing and frustrating for the Government of Canada to have to be criticized by the economists of this country, who say that perhaps the government should not have brought in the budget at all, but in view of the fact that it had so few options the budget is not so bad because it really did not do very much.
Those are the facts, and I think I have an obligation to say, because I think most of us believe it, that in the long run we have to be much more sensible than we have been in the past or we will be back here time after time defending budgets which really do not accomplish anything.
Someone said not too long ago that the problem was that governments are pulling levers which are not connected to anything. There is a lot of truth in that when it comes to trying to use budgets every few months to try to meet short-term problems without being able to come to grips with the long-term problems. The Minister of State for Urban Affairs (Mr. Danson) today in his speech on housing was saying very clearly that it is very difficult to have a long-term plan.
The hon. member for Glengary-Prescott-Russell said he was going to give us his two cents worth this afternoon, and I suggest he give it to the Minister of State for Urban Affairs because he needs every penny he can get. Everyone in this chamber knows that $200 million is better than nothing and that it is a lot of money, but it will not be sufficient to meet the real needs. The hon. member for
7150

June 27, 1975
The Budget-Mr. Fraser
Mercier (Mr. Boulanger) said that in his riding a working man could buy a house for $21,000. I am glad that is so, but in my riding that is absolutely impossible.
We do have a problem. The Conference Board of Canada in its report on budget night said this:
Housing is intended to be, again, marginally stimulated through the increase in AHOP grants and through the removal of the 5 per cent sales tax on insulation materials. But the stimulus here, to the extent that it really operates, is more likely to stimulate demand than supply of new housing-and could, conceivably push the economy even more quickly to a severe housing shortage within the next year. The key issue of finding increased stimulus to expanding supply of new housing has not been directly addressed in this budget.
Why is that so? It is not because there is a single member on the government side who does not want to increase housing. It is not because the members of the government do not care. It is because we have gotten ourselves into a situation where we cannot manoeuvre, and we are starting to face the reality that we do not have the resources to meet the real needs of the country.
I want to say something about some individual items in the budget, and I will pass over them quickly. It is interesting that the government felt it necessary to end government annuities. I give the government credit that at least in ending them it increased the return for those who have bought these annuities. But I ask hon. members what it signifies when a government finally says it cannot give government annuities? It signifies that the government recognizes that it has not got sufficient confidence in what is going to happen in the future to commit itself to the long term. If the government recognizes that, then how do the people all across the land feel? People wonder why the ethic of thrift and prudence seems at times to be going out the window.
During the last election campaign I spoke with a man in my riding who had worked all his life and retired on a small annuity of about $170 per month. He told me how it had been depreciated by inflation, and then he said with a great deal of bitterness and rancor, "I taught my kids to save; I should have taught them to spend."
The end of the annuities is a signal that once governments thought with a certain amount of assurance that they could look to the future with some confidence in the stability of money supply but rising prices have put an end to that; it is a signal to all of us.
There is very little direction in this budget, Mr. Speaker, and I do not say this with any vituperation. The Unemployment Insurance Act had created a kind of unofficial full employment target by punishing the government's revenues. When unemployment reached over 4 per cent it was a way of saying to the government, "Let's get this under control because now it is going to cost the taxpayer a lot of money". On Monday night, for the purposes of unemployment insurance payments, the government removed the 4 per cent benchmark and replaced it with an eight year moving average. That is a signal to us all that things have got out of control and there is no certainty of where we are going.
Another interesting feature of the last few weeks was the exchange between myself, the Minister of Finance,

and the Minister of Labour (Mr. Munro). The Minister of Finance apparently has indicated that as to the labour share of net national income, labour is now going back up to where it ought to be, at 73.3 per cent, and yet in fact labour is still below what it was four years ago at 75 per cent, and significantly below labour's share in the United States of 76 per cent. There was nothing in the budget to indicate where we are going on any of these things. The minister just does not know and that is the result of going on year after year, lurching from one budget to the other.
I should like to deal now with the ten cent tax on gasoline. Hon. members will recall that in the budget speech the Minister of Finance said it was a conservation measure. As reported at page 7032 of Hansard he said:
The increased cost of gasoline resulting from these measures should encourage motorists to make their driving habits more efficient in terms of saving gasoline.
He went on to say:
Both improved driving practices and better operating characteristics can make significant contributions to needed fuel conservation.
In his speech the Minister of Energy, Mines and Resources (Mr. Macdonald) said, as reported at page 7074 of Hansard:
I could spend a good deal of time, if it were available, talking on the positive side, the conservation argument.
When the Minister of Finance was questioned on this in the last day or so he made it quite clear that conservation was not the basis of the tax-the purpose of the tax was to raise revenues. The same situation exists with the present tax on small boats and outboards. The government has not given us the conservation effects of the 10 per cent tax on those products because the reason is really financial.
Hon. members should study very closely the words of the Minister of Regional Economic Expansion (Mr. Jamieson) in regard to the ten cents per gallon tax on gasoline as being the fairest way to meet the needs of the moment. Again as reported at page 7074 of Hansard, he said: Nevertheless, on balance it is a more proper way of doing it than to use the technique proposed opposite, namely, to do it through general taxation or something of that sort. I do not believe that would turn out to be anything as fair in the long run.
I would ask my friends on the government side whether it is now government policy to say that a regressive tax of this nature is fairer than a tax based on a progressive income tax act. I do not think there is a member on the government side who would want to say that, after due reflection. That is why we say that if you are going to put a tax like this on, it should come out of general revenue. That is the only fair way to do it. When suggestions are made that somehow or other the private consumer of gasoline will find ways to cut down consumption, that is hardly credible because it is so very difficult to do.
Another reason why it is incredible is that if the consumer conserves his gasoline then the government is not going to get the tax revenue it needs. You cannot have it both ways, Mr. Speaker. There are ways to conserve gasoline, but at the moment when you do not have a transportation system which is adequate in most parts of the country, and hundreds of thousands of people have to drive for 40 minutes to and from work, a tax which visits itself more severely on the less affluent is not fair. If you claim it is for conservation purposes but cannot justify
June 27, 1975

that with figures, then you are faced with the question of what to do when the consumption of gasoline goes down. If it goes down then you do not get the ten cents per gallon you need for revenue.


An hon. Member:: But you won't need so many gallons.


John Allen Fraser: My hon. friend opposite says we won't need as many gallons. I would point out, Mr. Speaker, that this ten cents per gallon tax is not there to subsidize the private consumer; it is there to subsidize industrial users. That consumption will still increase. It has nothing to do with whether you cut down consumption in your private motor car. If money is needed for subsidies it should be taken out of general revenue, which is a form of tax.
It is interesting that the effect of that tax is pretty severe already in terms of its psychological impact. A headline in the Toronto Star for June 26 reads "2,000 ask new contract after budget raises prices". None of us are so ingenuous as to think that is not going to be on the bargaining table starting this week.
One of the problems is that it is such a direct tax-it is such an obvious tax, so very, very visible. Psychologically it has a damaging effect.
Another thing that should be pointed out is that when the Conference Board made its report on the budget it said:
The increase in the price of gasoline and other energy prices will have the effect of increasing the consumer price index by as much as 1 per cent to 2 per cent over the coming year.
Those are the facts, Mr. Speaker. It is time that hon. members started to face the realities of economics in this country. If we do not we are going to be back to budgets that satisfy nobody and fail to give any direction to the economy.
In conclusion, Mr. Speaker, I repeat that the Minister of Finance did not know what to do in this budget, for the reasons I have expressed. This is a direct result of year after year ignoring economic realities that ought to be obvious to everyone.
It is one thing to criticize this budget. I would be the first to say that is easy to do. That is obvious because everyone who got up on the opposition side found a lot of things to criticize about it. That is not a difficult task. The question really is: what are we, as members of parliament in a democratic institution, going to do about it?
We cannot go on budget after budget tinkering here and there in the hope of buying enough time for something to happen that will improve events. This course which we have in fact been following denotes the inability of a democracy to manage its affairs effectively. This is not to be taken lightly-


Mr. Deputy Speaker:: Order, please. I regret to interrupt the hon. member, but the time allotted to him has expired.


John Allen Fraser: Mr. Speaker, I wonder if I could ask the indulgence of the House to complete my remarks.


Mr. Deputy Speaker:: That can only be done with unanimous consent. Is it agreed?
The Budget-Mr. McRae


Some hon. Members:: Agreed.


John Allen Fraser: I thank my colleagues for their generosity.


André Ouellet: We will remember your speech.


John Allen Fraser: Thanks. I'll send you a copy of it.
This is not to be taken lightly because the implications are serious indeed. It is not extreme to suggest that if this parliament, this democratic institution, can no longer effectively control the direction of our economic affairs, if we can no longer completely respond to the needs of our people, if we fail to indicate by sound policies that not only now, but into the future, our democratic decisionmaking process works, people will eventually turn to something else.
It is, I am convinced, a truism that our institution's strength is dependent to a considerable degree on the confidence that people place in it. It is also true that, as confidence wanes, the vitality of the institution is eroded. However, the fault does not lie with the institution itself. The fault is with the people who are in control of the institution. That includes not just the government, but everybody in this House. It is a failure largely of understanding, and to some degree of the will to use this democratic institution as an effective instrument of our will.
The country is basically sound. We are blessed with resources and capable people. I read a remark recently in Stud Terkel's book "The Great American Depression," and I quote:
There was nothing sick about our country, it was just mismanaged.
I say to hon. members of this House that it is time we quit the mismanagement.


Some hon. Members:: Hear, hear!


Mr. Paul E. McRae (Fort William):: Mr. Speaker, I am pleased to have the privilege to speak in this budget debate. Up until this afternoon I found it rather meaningless and, to say the least, frustrating. Perhaps it is the traditional role in which we are cast. The government brings down the budget, and the opposition criticize and tear it apart, not so much piece by piece but by calling it a meaningless document. They talk about lack of leadership, and many other wild statements are made. If I suppose that the roles were reversed and the opposition were the government, they would try to make a reasonable case and we in the opposition would perhaps do the same kind of thing they are now doing.
I was very pleased to hear the hon. member for Vancouver South (Mr. Fraser) speak today. He did what I hoped would be done, that is, enter into a meaningful approach to the debate. I do not agree with everything he said, but I certainly find many of his statements reasonable. As a friend and colleague, I must say I enjoyed his speech more than any of the others in this debate.


Some hon. Members:: Hear, hear!


Paul Edmund McRae: As I develop my thesis, our paths will cross from time to time.
A very interesting paper was recently produced by a member of the other House, Senator Lamontagne. It deals
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with the whole notion of budgets and the reason for them. He states that budgets should be designed to act in an anti-cyclical fashion. They should be designed in such a way as to cool an economy that is rising too rapidly, or to speed up an economy that is slowing down.
Senator Lamontagne points out that in 1954, 1957, 1960, 1963, 1967, 1970 and 1974, very regular intervals, we have had recessions in Canada, the United States, and most of the industrial world. There has been a regularity about these recessions.
He goes on to show that one of the problems has been that people who make up budgets, not only in Canada but in all countries of the industrial world, do not deal with things which lie behind the actual economic state of affairs. In other words, we wait until we are in the middle of a recession before we begin to stimulate the economy, and we wait until we are at the peak before we try to slow it down. He strongly suggests that anti-cyclical measures should be taken much sooner.
With regard to the recession of late 1974 and 1975, perhaps at the time of the budget last May we should have had the mildly expansionary activity that we got in November. Certainly even in November expansion was required. One of the serious problems we face today is the fact that the United States, on which we depend so much because of our close trade links, was still talking restraint in late 1974. The anti-cyclical problem was not being faced. It should have been faced at least a year ago.
According to Senator Lamontagne and economists I have read and spoken to, it appears we have passed the bottom of the recession and are moving into a somewhat expansionary era. It is hoped that by the end of this year the growth rate will increase somewhat in the industrial world.
In designing a budget at this time, June 1975, we have to consider this as an in between period. The essence of the budget should show some mild restraint. That is how I would describe this budget. It is not an expansionary budget. It shows mild restraint We are in a period of inflation, but the inflation rate in the past five months has been around 8 per cent as opposed to 15 or 16 per cent for the same period last year. Therefore, there has been a decline in inflation. There is, however, a great deal of fear that, with an expanding economy, the inflation rate will again go up. That is a fear which must be carefully considered.
Unemployment is too high. There is no question about that. It is however, considerably lower than the rate in the United States-about 2 percentage points lower-and we must remember that we have the fastest growing labour force in the industrial world. It will in fact take us at least four or five years until the population figures start moving in the other direction. With the very large number of young people presently coming on to the labour market it is a pattern we shall not be able to get away from for the rest of this decade.
Statements have been made that we do not have much control over our eceonomy because the recession is international in its nature. We are criticized as a government, for saying so on the ground that this is not an adequate

excuse and that we should be exercising more control over our own affairs. Nevertheless, demand in Canada is beginning to rise. There is a growth factor present. The growth rate is possibly running at about 1 per cent at this point, and it will likely increase to 3 or 4 per cent by the end of the year. So there is a measure of strength in domestic demand and this is something we should not forget.
I differ from the hon. member for Vancouver-South as to the real value of the marketplace when it comes to ensuring competition. I tend to be more sympathetic to the Galbraithian point of view that the marketplace, at least as it applies to a large sector of our economy, does not really exist in practice, or, that if it does, it exists at a level which is almost impossible for national governments to control. Multinational corporations control the degree to which the market is established by such means as advertizing, and the degree to which prices are administered. This is an aspect we must seriously consider. I do not believe national governments have come to grips with the problem of dealing with this kind of price setting mechanism because it is really external to any one of them, and will require a further degree of international control.
The Minister of Finance told us that in his approach to the budget he had two or three options open to him. As he went through the options available it became apparent that he really had only one option open to him, or perhaps two. The option which had to be thrown out immediately was that of a very tight deflationary policy which would have solved the problem by creating massive unemployment, something which is totally unacceptable to any party in the House or to any group in the country. The other was to put in place a very tight control mechanism. This option is relatively attractive at the present time. I do not think that last May, or even last fall, it had much merit because we were still in a heavy demand situation- inflation was the result of excessive demand, and controls at that point would only have exacerbated shortages.
The nature of the inflationary situation has changed to the present, where the pressure can now be described as cost push, and we are in a situation where a much better case might be made for controls. However, I reject a policy of controls even at this point because, as the Minister of Finance has indicated, Canadians really are not willing to accept what would be involved.
One just has to visit a store like Canadian Tire, for instance, where there are thousands of different items on display, if not hundreds of thousands, to realize the range of the items which would have to be controlled. Multiply this by myriads of stores in this and other fields- take a look through the Yellow Pages of the telephone book and note the wide variation in the manufactured goods available-and one begins to understand the complexity attached to doing a decent job of exercising control. The bureacracy required could be staggering. For this reason, while the option of controls makes a good deal more sense today than it did a year ago, it is one which at the present time is just too difficult to put into practice, especially when one considers that inflation rates have gone down to 8 or 9 per cent.
The only option the minister had left was to try to more finely tune the budget-bring the economy under a little more control, given the fact that we are possibly just
June 27, 1975

beginning an upsurge. In these conditions the budget we are considering, one showing mild restraint, is likely the only one possible.
I should like to deal for a few moments with this notion of restraint. The government is certainly in a difficult position when it comes to exercising restraint, because, out of the $29 billion or $30 billion allotted in our estimates, only about $10 billion is really controlled by the federal government. The other $20 billion reflects payments of a statutory type, payments to provinces and so on. When the Minister of Finance talked about reviewing the whole of the health services of the country he was thinking in terms of a longer period, trying to do something about the $20 billion. But in terms of the present budget the $9 or $10 billion was the area he had to work in and he did achieve a cut of around a billion dollars. Some hon. members may say this is not true because so far we really have not cut down anything. Nevertheless, the minister has done something by taking a billion dollars out of what would have been spent.


An hon. Member:: What would have been spent?


Paul Edmund McRae: But that is the nature of the enterprise. I might point out that hon. members on the other side spend a good deal of time suggesting projects we should spend money on; as near as I can figure the cost of those suggestions adds up to something like $2 billion.
There are some advantages to the budget. There are some good things in it. But I think they are limited.


Donald W. Munro: Hear, hear!


Paul Edmund McRae: As the hon. member for Vancouver South indicated, the extra $200 million directed to housing represented an increase of 20 per cent as compared with $1,200,000,000. This is for the balance of this calendar year.


An hon. Member:: Fiscal.


Paul Edmund McRae: I would have liked to have seen more money allocated in that direction. However, this would probably have meant abandoning some other concepts, possibly the concept of restraint. If there is any way of extending government expenditures I believe it should be in the direction of housing and that these allocations should be made as soon as possible.
I was very pleased to learn of the increased funding made available for employment. This extra 450 million to be spent over the next two years will be spent almost directly on the creation of jobs. I hope the orientation will be directed to a much greater extent to communal projects, and that communities will come together with the federal government and develop worthwhile schemes.
There is one point which seriously concerns me. Missing from the budget was any mention of additional sums for senior citizens. We have still not solved the problem of the senior citizen who is in trouble. I am not talking about the senior citizen who manages to get to Hawaii during the winter and so on; there are still senior citizens who basically are in trouble. For instance, I think the supplement to senior citizens could be shifted. Perhaps more people could become eligible for it and the amount could be
The Budget-Mr. McRae
increased. On the other hand I realize the constraints within which the minister has to work.
I should like to spend the last few minutes of my speech talking about energy, a matter that interests me a great deal. If I may say a brief word about natural gas, I think the increase in natural gas prices from 82 cents to $1.25 per thousand cubic feet is inevitable, certainly in a province like Ontario. Without this increase the extra gas needed would not have been allocated by the Alberta government. I do not see how we could have avoided this kind of increase.
However, I am very concerned about the long term energy problem this country is going to face. In 1970 the industry said that we had 727 trillion cubic feet of natural gas reserves. These reserves have now been reduced to something like 50 or 60 trillion cubic feet, quite a substantial reduction in view of the fact that we have only consumed 10 trillion cubic feet in the interval. But we are in a bind here. We must increase exploration and become far more conscious of the fact that energy is going to become more costly, more scarce, and that it will have to be used with care. This applies not only to natural gas but to all petroleum products.
With regard to the $1.50 increase on a barrel of oil, from $6.50 to $8, this was the amount that members of the opposition said they wanted. A year or a year and a half ago when that statement was made, at no time did anybody ever say it was not correct. Here again the problem is the very great oil shortage for the future. In order to become self-sustaining in oil, if that is possible-and I am not at all sure it is possible-we will have to put a lot more money into development and exploration.
The 10 cents a gallon increase on gasoline also bothers me a great deal. I do not think that any member of the House, in any party, would say that there should not be a single price for oil across Canada. I think that is a basic element in our energy policy, one that I hope is accepted by all members of this House. I hope the fact is also accepted that we had to reduce our exports to the United States. At the time when we set up this price mechanism in order to equalize prices, our exports and imports, roughly speaking, were about equal. We were exporting the same amount of oil to the United States as we bought off the east and west coasts.
However, the position has changed, and it has changed partly because of our own doing. It has changed because belatedly-I think there is no excuse for this-the National Energy Board declared that we do not have the amount of oil we thought we had. I think there is negligence there that is almost criminal in terms of the energy board's telling us this at this late date. Nevertheless, that is the situation.
There is no question that we must cut back and that we must raise taxes some place to pay for a single price. A further reason for the single price is that the U.S. price is now lower than the price we pay off the east coast. This is why we must raise about $350 million a year.
The hon. member for Vancouver South indicated that he would have preferred to get these funds out of general revenue. The government decided to put a 10 cents tax per

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The Budget-Mr. McRae
gallon on gasoline. I see problems either way. I hope we will be given some figures to indicate where the break even point is-in other words, the point where average Canadians would pay more out of general revenue through increased income tax than they would by paying 10 cents a gallon. We must remember that a senior citizen, for example, probably only drives two or three thousand miles a year, and therefore, I think those on an average income should pay less by reason of the 10 cents tax than through income tax.
However, this has created one problem that concerns me, and I think will concern members from northern Ontario and from outlying parts of the country where population is somewhat sparse and distances between communities are great. In order to get to their jobs and to go from community to community, people in these areas are going to use more gasoline than those who live in the more populated areas of Canada. This is a problem that I hope the minister will consider, and perhaps will make some exceptions to make the situation more equitable. Some people have to drive 30 or 40 miles to work by car, and in some cases like this a car pool is not even possible.
Having said that, although I do not like this method of conservation of energy, I think people will tend to use energy products more carefully. Conservationists tell us that by increasing the cost of fuel you do effect some conservation, and I think this is likely true.
I should like the government to consider for the future some serious conservation efforts, perhaps through the issue of coupons which would allow individuals to purchase gasoline to a certain amount free of the tax. I am told that the average car owner in this country uses 700 gallons of gasoline a year. I suggest that 300 or 400 gallons might be allowed free of tax, with purchases over that figure being subject to a more severe tax.
The reason I make that suggestion has not so much to do with the tax itself as with the problem of conservation. The hon. member for Vancouver South talked about our living beyond our means, and in saying that I think he means living beyond our resource means. He nods his head in agreement, and this is something he and I have talked about many times. There is no question we are in a precarious position resource-wise in the long term, and I think the seed of conservation has been sown in this particular budget. This is only a start, and will only be a start until we seriously do something like I suggested. We should make people far more conscious when they pull up to the gasoline pump of the fact that they should only use 300 or 400 gallons a year. I suggest that in the future this may be one of the necessary approaches.
I would hope that we will be more conscious of the need for conservation and the need for decreasing energy demand. We must work on the demand side of energy far more than on the supply side. I am very concerned, for instance, when the Ontario government talks about hydro projects in the next 10 years amounting to $30 billion or $40 billion, when we have $15 billion to $20 billion going in at James Bay, and the prospects of up to $107 billion to $120 billion in energy development in the next 10 years. Just imagine the distortion that will create. Where is Mr. 
Danson going to get his money for housing when these things are going on? The distortion in the money markets will be considerable. We have to be very careful about this kind of thing, and I make a very strong plea to the government and this House of Commons in respect of a much more serious approach to conservation.
Let me summarize. This is a budget of mild restraint which comes at a time when the economy is beginning to improve. My concern is with the 10 cent gasoline increase, and particularly with the hardship this will create in northern Ontario. I see some value in this kind of tax in terms of conservation, and am hopeful in the long run that it will be modified so as to overcome some of the problems that will be created.
Let me say one other thing. I am somewhat unhappy that funds were cut for the balance of this year from Petro-Can in order to accomplish some restraint. If we are to become self-sustained in energy, and if we are to move away from 90 percent foreign ownership in this industry toward a Canadian energy industry Petro-Can is a vital step. I am sure that full funds will be available for this development next year. In the meantime we hope this bill will go through before we leave in July so that we will have a really viable Canadian industry next year.


Walter David Baker: Mr. Speaker, I was wondering whether the hon. member would permit just one question.


Paul Edmund McRae: Yes, if I can hear it.


Walter David Baker: I want the hon.
member to know that I personally share many of his concerns of which he spoke regarding the budget, I might say in a very thoughtful way. Having regard to what he said about the 10 cents tax, does he not agree that the 10 cents per gallon tax for equalization purposes, as we have been told, as applied to motor vehicle operators is in effect loading on one group of Canadians the cost of solving a problem that is the responsibility of every Canadian? Does he not agree with that general proposition?


Paul Edmund McRae: I am not sure I would disagree with the intent of what the hon. member is saying. What we have not seen, and what I think we should see, is the relationship between the number of miles driven by people and their incomes. I do not think we have seen this relationship and how this may affect the situation. I have not seen those figures but I hope they are produced at some time. It may be we will find this is not really a regressive tax. It may be the very opposite, but I do not know. I should like to know the answer to this before saying yes or no to the hon. member's question.


Walter David Baker: Perhaps I might ask the hon. member one further question. Would he undertake to urge the production of these figures by the Minister of Finance (Mr. Turner), as I think they will be extremely important to the consideration of the bills which are to follow this budget? Would the hon. member do that?


Paul Edmund McRae: I would hope the minister will produce those, and I will certainly ask for them.
June 27, 1975


Walter David Baker: Thank you.


Mr. Bill Kempling (Halton-Wentworth):: Mr. Speaker, I guess it has to be one of the highlights in the life of a member of parliament to rise in the House of Commons in a budget debate on Friday afternoon after two o'clock, with the House in full attendance, the galleries loaded, the press gallery overflowing, all waiting to hear every word in order to report it to tl)e people of Canada.


An hon. Member:: Take heart, Bill.


Stanley Howard Knowles: Don't disappoint us.


William James Kempling: Mr. Speaker, I should like to add some comments to those made by my colleagues on the budget presented by the Minister of Finance (Mr. Turner) last Monday. I enjoyed some of the comments of the hon. member for Fort William (Mr. McRae). I understand he has some expertise in energy. I do not know where he learned his economics, but I do not think it was in the marketplace. However, some of the points he made were quite valid.
As many members have pointed out, this is the fifth budget presented by this Minister of Finance, and I think it is a fair comment on the part of the press in this country and most members, at least in the opposition, that this is probably the worst budget ever presented to the people of Canada. In a document as important as the budget one looks for a theme, a thrust, or some direction, but we find no theme, no direction and no thrust in this budget. It is a rather sorry document and really unworthy of the minister, for I have always felt he had more intelligence and integrity than to put before this House and the people of Canada such a weak and colourless document.
Why is this so at a time of high interest rates, high unemployment, when we have serious housing problems with climbing mortgage rates, falling economic activity, balance of payments problems, and labour unrest? Why are we now presented with a budget that fails to deal with these basic problems?
One has the strong feeling that there was originally much more in the budget. One has the feeling that the minister had provisions in his original budget proposals to deal with these problems, but that when the budget date was postponed to June 23, in those intervening days from the original date a horrendous surgery job was done and the hodge-podge presented on the evening of June 23 is the result of that surgery.
The minister played his hand in an obvious power struggle. I think it is very obvious to the people of this House, at least those on this side, that he played his king knowing someone else would play the ace. It is fair to say that he has dragged so much from the pot and played his hand so poorly in that portfolio we can only really judge him as a lousy poker player.
We have been struggling with inflation for several years. Groups of people in this country from all walks of life have brought to this government their concerns about inflation. Labour unions, the Canadian Federation of Independent Businessmen, the Chamber of Commerce, industry associations, I think every bank president, the
The Budget-Mr. Kempling
provinces, the Economic Council of Canada, OECD and many more have all commented on the effects of longterm inflation and have urged the government to take some firm initiatives to break inflationary expectations.
Indeed, the thrust of questions in this House since the minister was given the finance portfolio have urged him to take firm action to come to grips with inflation. The Leader of the Official Opposition (Mr. Stanfield) has said time and time again, both inside and outside this House, and again in his speech yesterday, that our party would co-operate in any real initiative on the part of the government to deal with inflation. No meaningful program has been put forth to contain inflation and break inflationary expectations.
We saw the beginnings of some initiatives in this regard with the establishment of the Prices and Incomes Commission in 1969. I was not a member of the House at that time, but I was in business and I could see the effects of inflation and felt this was possibly an initiative. The fact is I recall that at one time the Prime Minister (Mr. Trudeau) informed the country that inflation had been beaten. What we have had is deception. Every budget presented by the minister until this budget had some thrust and direction, albeit weak and ineffective as results have shown. However, they did contain something, while this budget is devoid of thrust and purpose.
We heard the minister say we must increase supply in order to overcome inflation. At the time that was the solution. The supply has in fact increased. Some prices have gone down, but in general prices have gone up and inflation remains high. We have heard about disposable income and how much better off we are compared to other nations. It is senseless to relate the price of gas in Canada to the price in Japan. We could take the same approach because it depends what statistics one looks at. The price of gas in Saudi Arabia is 15 cents a gallon and in Tibet it is six dollars a gallon.
The minister spoke of the underdeveloped third world countries, but he did not mention the underdeveloped regions of Canada which are suffering from high unemployment. Many of these regions are faced with problems as severe as those in some of the underdeveloped countries.
What a slap in the face the minister delivered to the automobile industry with the ten cents a gallon excise tax! The automobile industry today is in serious trouble. It is being taxed and regulated, directly or indirectly, to such an extent that its recovery will be retarded further by the budgetary measures. Automobile production is already down 16 per cent and there are lay-offs at this date involving nearly 13,000 workers in production and parts manufacturing. How many more will be put out of work? We do not know. I know there are 9,000 unemployed rubber workers who face a very bleak future.
I am sure the people in the tourist division of the Department of Industry, Trade and Commerce greeted the minister's announcement of an additional gasoline tax with the same sense of outrage with which it was greeted by all the provincial tourist officials and the people of Canada.

June 27, 1975
The Budget-Mr. Kempling
Much of our industry has difficult times ahead. I know this because I have been involved in industry for a number of years. At a time when we have undercapacity in many of our industries, partially idle plants, and machinery running at half capacity, the minister gives a 5 per cent investment tax credit which will have little effect in the short run. I agree that in the long run it may have some effect but in the short run it will have little effect.
Business was looking for a restructuring of capital cost allowance to reflect inflation, and alternate or optional ways to value inventories to reflect replacement cost. An initiative in this area would have had a dramatic effect on cash flow and would have put some measure of reality into profits. The government profits immensely from the present regulations in respect of capital cost allowance and inventory values, just as it profits from inflation.
Then to add to the already sad picture we have the budget announcement that we are to receive legislation from the Minister of Manpower and Immigration (Mr. Andras) to move the benchmark of 4 per cent in the UIC to 5.3 per cent and float that benchmark each year based on an eight-year average. That was something else. At 4 per cent the fund was to be self-sustaining when premiums from employees and employers are combined. Now that benchmark will move up and the UIC premium contributions will be increased to finance unemployment, much of which has been created by lack of firm initiatives by the government.
With the removal of the ceiling on the amount of money paid into the UIC fund from general revenue, a measure passed during the twenty-ninth parliament, the government removed the pressure to account to parliament for unemployment levels in Canada. Now to finance further unemployment insurance and unemployment the UIC premiums will go higher. Now the pressure is really off. All the minister will have to account for in the future are changes in the unemployment statistics produced each month by Statistics Canada. Each month we will hear a slick answer to those statistics, and after a few days of rumblings the ministers and the government will settle back and await next month's edition.
On Thursday we heard a dull speech from the Minister of Energy, Mines and Resources (Mr. Macdonald). The weak points he made about the amount of gasoline used by snowmobiles and outboard engines shows how far down the barrel the government is trying to dig to justify the ten cents excise tax on gasoline. He then went on to take another kick at the provinces about the provincial retail tax on gasoline, but did not mention the federal sales tax on gasoline and how much it has increased as oil prices advanced in previous years. The amount of gasoline consumed by outboard motors and snowmobiles is hardly worth mentioning when compared with total consumption. I am amazed that he did not mention lawnmowers, chainsaws and mopeds.
The biggest lie of all was the $1 billion cut in federal spending. How can one increase spending estimates and at the same time cut a billion dollars? In my opinion that was a cheap underhanded con job the Minister of Finance handed us. If someone in the private sector tried to get away with that type of financial sleight of hand he would be prosecuted under the Combines Investigation Act for

misleading advertising. How can one cut from the budget and the estimates something that is not in the estimates? Aside from that untruth, why should government spending not be cut? Every time we mention cutting government spending one of the members of the government always points the finger at the opposition and says that we want to cut mothers' allowances pensions, veterans allowances or some such nonsense. We say there are many government programs that could be trimmed. I am sure every member of the House would gladly forego receiving the multi-coloured annual reports from departments and Crown corporations.


Some hon. Members:: Hear, hear!


William James Kempling: I am sure there must be a competition between government departments and Crown corporations to see who can produce the fanciest report. I would gladly accept a plain black and white report, without photograph, in an effort to reduce the billion dollars the people of Canada pay annually for the printing of government documents and reports. What about that useless department, Information Canada? It is a sham when members opposite stand up and say that is a great thing. What about the duplication of the National Film Board and the film production facilities of numerous government departments? Why do we not place the sale of government publications with libraries in Canada so that they might have some revenue, and put some of them in the private sector and get rid of the fancy, expensive Information Canada stores?
Do we really need a billion dollars worth of private consultants? I am sure some consultants are necessary, but surely not one billion dollars worth. Consultants really represent a cop-out for the bureaucrats. They either do not know how, or do not want to make decisions, so they hire a consultant. If that consultant does not produce the type of report that is wanted they hire another man. That has to be the biggest pork barrel ever created. Where are the priorities?
In my business life I have had to do many tough things. There is hardly a company in business today that has not had at some time to tighten the reins, to cut back or to set priorities. I wonder where is the management in various government departments. I cannot believe that it is not possible, on a national account basis, to practice some economy in government departments. As we see it from the calculations we have done, government spending will increase by 16 per cent in this fiscal year. There is not a member in this House who has not had representations from his constituents about government spending.
The Minister of Finance spent an hour and 45 minutes on Monday in an orbital dialogue about the economy. He said inflation, recession, and energy were the major problems facing the country, and then proceeded to do virtually nothing about these problems. He could have said it in about ten minutes. He could have said that the oil producers of Canada will not only fuel the nation, they will finance it as well, because that is what is happening.
He could have simply said that those of us who work will pay for those who do not work or cannot find employ-
June 27, 1975

ment because the government cannot put policies in place to create sustained employment. He might have added that the government cannot meet its housing goals, so those who are able to buy a house will pay higher prices and higher mortgage rates. That is the effect of the budget. We are going to pay more to heat our homes and to drive our cars because the government needs more revenue to finance the 8 per cent or 9 per cent unemployment which, it is forecasted, will occur this year. The government needs $3,750,000,000 to finance that unemployment.
Instead of the drivel he delivered on television to the people of Ontario about an energy shortage which they may face in five or ten years, the minister could have said that he and his cabinet colleagues cannot make up their minds about the ground rules for exploration above the 60th parallel and they will not face the facts of life as a government about oil and gas off Labrador with the province of Newfoundland, so everyone will pay more for gasoline all across Canada. He could have explained that, because the government cannot make up its mind about the resources off the east coast, it will let the other nations of the world deplete our fishing grounds and they do not have a sufficient patrol presence to do anything but take pictures in daylight hours.
He could have explained why we are selling nuclear reactors to Argentina and South Korea at special low interest rates so they can meet their energy needs. Why he could not conceive of putting those reactors in the Mari-times to ease the energy needs there is beyond me. It is something that I will never understand, why we pour millions of dollars into the underdeveloped nations and ignore the underdeveloped regions of Canada. Some explanation from the minister would be welcome.
Between budgets the minister has played probably the cruelest game of all, because in fact he gave the impression that something would be done about inflation. The government had a contingency plan; we were told time and time again that it had such a contingency plan, but as the budget was presented it became evident that no action to contain inflation or to break the inflationary expectations would be taken. Each budget was weaker and weaker, until the sorry mess was created with which we were presented on Monday evening.
In the weeks leading up to the various budgets the minister had hard questions put to him, and we got the usual replies from him that we would have to wait until the budget to get the answers to our questions. After the budget we were treated with replies which said, "We will have to let the budget work to see the effect it will have on the economy". In fact you can place numbers beside the pat answers the Minister of Finance gives to questions on the economy and on inflation, and you can predict the answers he will give with unbelievable accuracy.
The consensus the minister was trying to achieve was doomed from the start. The lack of firm action from the government to break inflationary expectations has given credence to some of the demands of labour on industry. The wage scales in our industry as compared to the wage scales of our competitors are putting us in a very uncompetitive position.
The increase in UIC contributions and the 10 cents excise tax on gasoline will make it extremely difficult for
The Budget-Mr. Watson
industry to settle wage demands in the months ahead. The other evening I spoke to some people at STELCO who are in the process of negotiating, and they are very disturbed about the contents of the budget. Other colleagues of mine have spoken and will be speaking on the lack of adequate housing provisions in the budget and the copping out on medicare.
Prior to the budget last Monday the message I received from people to whom I spoke about the economy was "for God's sake do something about inflation". For the minister to imply that the people of this country would not accept strong, meaningful action to contain inflation and to break the inflationary expectations indicates to me that he and his advisers are far removed and insulated from the economic realities of life in Canada. It shows in fact that the government is leaderless and afraid to act.
I know there are other speakers who want to speak before five o'clock, so I will conclude my remarks by merely saying that it was a sorry, dismal budget and I think it was unworthy of the hon. gentleman. As was stated in the Globe and Mail, it was a budget without courage and sometimes with cruelty. Let me be a little more basic and say that it was a gutless budget from a gutless government, and I cannot support it.


Ian Watson: Mr. Speaker, I am very happy this afternoon to be able to take part in this debate. I think we all realize that this budget is not necessarily a popular budget, but that does not mean that it is not a reasonable and sensible budget. I feel it is, and I believe that once it is fully explained the Canadian public will agree that it is a sensible and reasonable budget under the circumstances which face Canada right now.


Some hon. Members:: Hear, hear!


Some hon. Members:: Oh, oh!


Walter David Baker: Give them more credit than that.


Ian Watson: I suppose that most of us are receiving criticism about one measure in particular, namely, the excise tax on gasoline. It seems clear, and I think the public is becoming aware of it now, that when we were obliged to do this, it was not solely for conservation but for the purpose of subsidizing one area of the economy. For example, we are subsidizing by this 10 cents excise tax the people who are using heating oil. We decided that this was a necessary measure, and if we are going to encourage auto owners to use smaller cars, to make fewer non-essential trips, and to conserve energy, then this is one of the steps that must be taken.
The Canadian public has to know that we were faced in these circumstances with a situation where, for quite a number of months when the world oil price rose, we were able to pay for the million or so barrels of oil we import daily from Venezuela and the Arabian countries, by charging the amount we were paying extra for these imports to the Americans in the form of an export surcharge. But in the last few months our oil exports to the Americans have decreased. The result is that we have been running an increasingly large deficit in this subsidy from which almost everyone in Canada benefits, certainly everyone in
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June 27, 1975
The Budget-Mr. Watson
the eastern provinces and, as a matter of fact, everyone outside of Alberta.
Who will pay for this subsidy deficit? We say that not everyone will pay for it, certainly not the people who will need to pay for heating oil. We say that the people who will have to pay for it are those driving automobiles. I quite agree that this will still result in a number of inequities, and some of those inequities hit people in my constituency in particular very hard indeed, because many of them belong to the category of people who have no alternative but to use automobiles in order to get to work because we do not have the kind of public transit systems in this country we should have.
I now come to the real disappointment for me in this budget, or in the matters related to the budget, and that is that a few days before it the Minister of Transport (Mr. Marchand) announced his new transportation policy reflections, and there was no mention whatsoever of the vital question of urban transit. I find it very hard to justify this in my own mind. I find it impossible to justify the lack of action on the question of urban transit when we are paying an oil subsidy, which amounts to approximately $1.5 billion per year. If on reasonable grounds we brought in an excise tax on gasoline, why in doing these things did we not at the same time,-when we had the opportunity- announce a clear cut program for urban transit?
On June 17, 1974 the Prime Minister (Mr. Trudeau) indicated that we would institute a program in which we would pay 100 per cent of the cost of new commuter vehicles manufactured in Canada, and 50 per cent of the cost of new stations and platforms forming part of that system. We also agreed to bring in a program which would pay 25 per cent of the capital cost of all vehicles purchased each year for public transit and suburban transit vehicles, systems, machinery and equipment. We indicated that we would encourage urban transit system innovations with demonstration projects financed by the federal government. We also indicated that the government and its departments would try to make the best use of existing railway rights of way and track in urban suburban areas for new commuter and urban transit lines with a view to reducing the high initial cost of such systems.to Canadian municipalities. These were some of the promises made during the last election campaign. I say to the Prime Ministei that not only the Canadian public but also the members of the Liberal caucus hold him to these promises, not four years from now, but within a very short time. We are expecting action on urban transit, and there is no way hon. members on this side will accept long delay, and I am sure the public will not either.


Some hon. Members:: Hear, hear!


Walter David Baker: That is a good streak of independence.


Ian Watson: In my own area there is a particular example of how urban transit has become the focal issue of people's concern.


I would like to show, Mr. Speaker, how public opinion in my constituency is several years ahead of government action. In 1971, for instance, when the traffic on one of the bridges, the Mercier bridge, became very difficult, the public started to make increasing use of the railway system of the area. In the fall of 1973, when the oil crisis was at its worst, the public concentrated on the issues of energy conservation, pollution, and the growth concept which, until then, had been translated into building larger roads, more powerful cars, and so on.
An increasing number of Canadians from all parts of the country started to think about public transportation, which saved energy and reduced pollution, as a solution to the growth problem. The population of areas like the south shore, and Chateauguay was no exception, joined in this great national movement. Because of the energy crisis which had begun in 1973, the public began considering public transportation systems as desirable solutions, and we must give the public credit for urging the federal and provincial governments to review their respective transportation policies. At that time, the Chateauguay population was fed up with the pitiful traffic conditions on the Mercier bridge at rush hour. During the rush hour, this is the most congested of all roadways giving access to the island of Montreal. I started to receive many letters and phone calls from unhappy people. In February, the decision made by the Canadian Transport Commission in the Barry case in Ontario made the public hope that it might be possible to reinstate passenger rail service in the area. These problems show clearly that we do not have any other alternative at least in the area I represent. For instance, on April 11, 1974, Paul Berthiaume, State Minister for Transport in the province of Quebec announced and I quote:
No new bridge will be built on the St. Lawrence River until the south shore obtains a fully integrated public transport system.
The fact is that there are only two lanes in each direction on Mercier bridge and that the access to that bridge is so difficult that it is almost impossible to create lanes for buses and cars with no more than three passengers.
The access to Mercier bridge is so difficult that the highway department cannot reverse the traffic flow in the third lane at peak hours. The fact is that the bridge is the only access to southwestern Quebec and the other region. Mercier bridge opens on the Indian reserve that is absolutely opposed to the construction of other bridges or highways crossing the reserve. For all the reasons I just mentioned, a public transportation system is essential but buses or cars cannot use that bridge for the reason I gave. And the only alternative for public transportation is to use the existing railways. The federal government has jurisdiction over railways and I am very disappointed that a few days before the budget, this government did not choose to announce a final program on public transportation. We should put as much pressure as possible on this government to convince it that such a program is needed now and not later.
June 27, 1975

As I said earlier, Mr. Speaker, we are stuck in too many areas of the country-and my area is certainly no exception-with a situation where automobile owners may feel justified in paying the ten cents excise tax on gasoline as a fee for their pleasure driving. But with good reason they are not going to be happy about this ten cents per gallon fee for driving for which there is no alternative as a means to travel to and from work. This is true everywhere in Canada and it relates to a number of mistakes which have occurred in the way our cities have been planned since World War II.
In my view, we have made a number of serious errors in the use of our powers through the Central Mortgage and Housing Corporation as a lender. We had and still have the opportunity to use this lending power to force municipalities to do things in a sensible way. I would argue, and the facts support me in nearly every city, that we have not done things properly. Our suburbs could have been much better planned aesthetically, architecturally, and in relation to traffic and access to schools and from the point of view of green space, parkland and recreational facilities.
Model cities in the United States and Europe demonstrate what is possible. The technology was there long ago, and indeed Williamsburg, Virginia, which was built 200 years ago is much better planned than most of our subdivisions.
We have sacrificed time and time again at the municipal level for things which were not in the public interest. We have sacrificed good design and planning to various selfish interests and conflicts of interest in almost every municipal jurisdiction in Canada. The result is shown in many of the problems that are surfacing now such as outlandish taxes in some suburban areas. With the rise in energy costs we are finding that we have built suburbs that are totally dependent on the automobile, with no provision for foot paths, bicycle paths or easy access to any form of public transit. We are facing the mistakes of many years of negligence and poor planning, and yet through CMHC the federal government had power to do things differently.
I am always amazed at the kind of criticism of housing that comes from the opposition, Mr. Speaker. They harp on the amount of housing and do not have much to say about quality, planning, or long term approaches.
Presumably the injection of $200 million into housing as announced in the budget means that local CMHC offices will be told to spend the money in two, three or four weeks, and hundreds of builders will be lined up with plans that make varying degrees of sense. A lot of them will be accepted. Such housing may be more or less adequate from the construction point of view, but the minister must be prepared to take sterner measures and insist upon the proper location of such housing close to existing schools, public transit, recreational facilities and so on. Unless he is prepared to tie all those things together when he lends the money to build more of these low cost homes with this $200 million, we will end up with more developments on the fringes of existing suburbs where they are
The Budget-Mr. Watson
serviced inadequately and where their existence serves to increase taxes for everyone in the municipality concerned.
We have gone through all this before. When will the government wake up and use the power it has? I do not entirely blame Central Mortgage and Housing because the federal government has always been reluctant, claiming that it is within provincial jurisdiction and constitutionally we should not interfere.
We have seen the results of planning being left in the hands of the provinces. We should not lend another cent unless we attach more stringent conditions. Even if new construction were slowed down for a few months, it would be worth while because in the long run everyone would be better off.
As an example of the kind of thing which we have power to do something about I would mention new cities. There is the proposed southeast city here and the one at Pickering. Regional government is opposed to a model city which would have the effect of bringing down prices for new house buyers in the Ottawa area by at least $10,000. We have continued resistance by regional government which favours real estate speculators who happen to have bought land in the other direction. The phony arguments that have been advanced in this House as well as publicly by regional government and the provincial government of Ontario to the effect that this land is incapable of supporting housing are nonsense. The recent report has shown clearly that the land can support housing. As a matter of fact, this so-called high water table which was the focus of criticism will be an asset when artificial lakes are created and form part of the green areas and contribute to the aesthetics of what will be a fine model city.
I hope that the government in its wisdom with this budget is not including any cutbacks in money that might be allocated for southeast city. It is the same kind of nonsense in my view as not acting on urban transit right now. It is irrational for the President of the Treasury Board (Mr. Chretien) to refuse to allocate funds, or to go slow on the allocation of funds for southeast city when one of the main pressures on salaries in the Ottawa area, and government in general, has been house prices. These prices have in effect fired the fuel of inflation in Canada. Government salaries have been pushed up because of house prices, and this has been reflected by the example set elsewhere in the economy.
Why are we not doing anything about something that could reduce house prices by a very major percentage? To cut back on model cities or land assembly programs is a nonsensical approach toward saving which I find impossible to support. I intend to continue to criticize. I hope there is no such holdback. I hope the government will do everything possible to encourage more land assembly projects across Canada.
It is a provincial tragedy, and almost a national tragedy, that although Canada has had a land assembly act on the books since 1953 or 1954 through which Ontario could have acquired land all around Toronto to permit housing to be developed at a fraction of what it now costs to acquire a lot, that the powers that be in Ontario never, up until the last year or so, when it was obvious the horse had left the
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June 27, 1975
The Budget-Mr. Watson
barn years before, decided to move into land assembly. It will do some good, but it is a tragedy that the province did not act much earlier to take advantage of this land assembly program which could reduce land speculation, and push down house prices.
I want to make reference to two or three other areas before finishing. I hope that the budget, with its implications of restraint, will not result in any cutback in the Department of the Secretary of State with regard to student exchanges. I know that the student exchange program has the support of all parties in this House. I fail to understand why the department has not extended that program even further. In the exchanges between Quebec and the other provinces there is a lack of growth which I find hard to understand. I urge the government to expand and not, by any stretch of the imagination, even to consider cutting back on that program.
In its spending considerations I urge the Department of the Secretary of State to look at the way it is spending money on the bilingualism program. In my view, there is a very serious lack of result in the program as it affects senior and higher level civil servants. This business of sending people to Quebec City for a year, with all expenses paid, plus every possible amenity, is producing results of some kind. However, when one considers the cost, it is highly doubtful that it is justified when an equivalent amount of money could be used to encourage bilingual education in an area where everyone recognizes it counts most, the pre-school and primary school levels.
I must say that even in the national capital area we are not doing nearly enough in this regard. Anyone in the Ottawa area who has tried to send their children to a good French language school will back me up in what I have to say. I strongly urge the government to consider a program of subsidizing pre-school education, not only in the national capital region but in other parts of this country. This kind of encouragement of bilingualism would produce far more results than anything any government has done.
Certainly the kind of efforts we have seen emanating from the province of Quebec have not done that. Bill 22 was purportedly supposed to support the French fact. In
some respects, it is acceptable, when it encourages the use of French as a language of work and gives every Quebec worker the right to work in his own language. Some of the complaints about that bill are exaggerated. They are simply not supported by the way in which the bill is being applied. However, there are other parts of the bill which by their heavy handed intrusions into areas of individual freedoms of choice have generated a large amount of animosity. The net result is when you get this attitude toward a piece of legislation, anything that relates to it comes under suspicion. The ultimate result is that the legislation is largely negative in influence and impact.
We at the federal level should be doing some things which should have been done many years ago and which are still necessary in encouraging bilingualism. We should put money where it really counts, making our youngsters bilingual early, at the easiest time of their lives to become bilingual.
If there is to be a cutback in the Department of the Secretary of State I hope that it does not touch these two areas, bilingual education and student exchanges, both of which offer more hope for Canada than almost anything else.


Stanley Howard Knowles: Mr. Speaker, I rise on a point of order. May we who are here wish you, the other occupants of the chair, those at the table, all hon. members, and our staff a happy weekend and a happy first of July.


Some hon. Members:: Hear, hear!


The Acting Speaker (Mr. Bechard):: It being five o'clock, this House stands adjourned until two o'clock p.m., Wednesday, July 2, 1975, pursuant to the provisions of the order passed today.

I wish to thank the hon. member for Winnipeg North Centre (Mr. Knowles). In return, I wish every one of you a happy weekend, warm and busy.
At 5 p.m. the House adjourned, without question put, pursuant to Standing Order.

Wednesday, July 2, 1975