1975-02-19

ROUTINE PROCEEDINGS


Hon. Robert L. Stanfield (Leader of the Opposition):: Mr. Speaker, I rise on a question of privilege concerning what I think is the most ancient privilege of the House of Commons under our parliamentary system, the right of the House of Commons to control supply. It might be said that that right is more than a privilege; it is the raison d'etre of the House of Commons. Without that right, we do not have a parliamentary system.


Some hon. Members:: Hear, hear!


Robert Lorne Stanfield: Under the present Standing Orders which govern the examination of estimates and the voting of supply, in view of the rulings of the Chair on the interpretation of those Standing Orders and the pressures on standing committees when they are considering the estimates, as well as the utter impotence of the House of Commons at the report stage of the estimates-except if the government is in a minority position-the House must reject expenditures which are in the public interest in order to reject expenditures which are considered to be not in the public interest. But even when the government is in a minority position there is no way, under the existing rules as interpreted, for the House to reduce or to eliminate expenditures not considered to be in the public good, except by eliminating those which are considered to be in the public good. Due to these fetters on the House of Commons, we are not far from the point when we will no longer have a responsible House of Commons in a parliamentary system.
Today, I believe, the President of the Treasury Board (Mr. Chretien) will lay before the House the main estimates of the government for the next fiscal year. These estimates will later be supplemented by supplementary estimates. The estimates, including supplementaries, will probably exceed $30 billion. After an examination which would be farcical if it were not tragic in its implications for this House and the Canadian people, those estimates involving that vast supply of money will be voted to the disposal of the government, perhaps without being reduced by one dollar or even one cent. This futile exercise will have served only to hold up the examination of the government's legislative program by this House and its committees.
The government leader of the House has already conceded-graciously, I might add-that the procedures of the House dealing with supply are unsatisfactory, but no concrete action has been taken to correct this. Once again the estimates will be presented in the House and we will have to deal with them with unsatisfactory procedures which leave the House impotent. I realize that the minister may refer this question, with others, to the Standing Committee on Procedure and Organization, but that has not yet been done. The motion has not been brought forward and no report that committee makes to remedy our supply procedure with regard to estimates can be brought forward and adopted by this House in time to apply to the consideration of the 1975-76 estimates.
I submit it is essential that we have an ad hoc pro tem remedy for this predicament, for this loss of our ancient privileges. If you agree, Mr. Speaker, that I have a question of privilege, I would move, seconded by the hon. member for Saint-Hyacinthe (Mr. Wagner):
That the Standing Committee on Procedure and Organization be authorized to meet forthwith to consider, report upon and recommend a sessional order that will allow debate, amendment, and vote by the House with respect to a selected number of estimates in the main estimates for 1975-76 or upon any portion of each estimate so selected; and that the committee report back with its recommended sessional order within ten days from the adoption of this order.


Mr. Speaker:: The Leader of the Opposition (Mr. Stanfield) was good enough to give the Chair notice of his intention to raise this question of privilege. He indicated only that it related to the examination of the estimates, without giving the detail contained in the motion. Hon. members frequently raise grievances questioning the opportunity of members, under the existing Standing Orders of the House, to put questions in the question period, to receive answers to questions in writing, to debate or amend and, now, to examine the estimates. These are all very important grievances.
This grievance relates to the examination of the estimates. As the Leader of the Opposition has said, it is without question parliament's most important function to examine the spending power of the government of the day. As important as the grievance may be, and as valid and as widespread as the support may be for the grievance or the concern about the status of this House to examine the estimates, the fact is that this status has been arrived at by a series of agreements and amendments to the Standing Orders in the orderly and regular process of establishing the Standing Orders of the House.
While there may be legitimate cause for concern and, indeed, complaint as long as the procedures conform to the Standing Orders, I am not in a position to say that procedures which conform completely to the Standing Orders of this House can in any way constitute a question of privilege.

February 19, 1975
Main Estimates


MAIN ESTIMATES, 1975-76 EXPLANATORY STATEMENT BY THE PRESIDENT OF THE TREASURY BOARD
[Stage Direction]
A message from His Excellency the Governor General transmitting estimates for the financial year ending March 31, 1976, was presented by Hon. Jean Chretien (President of the Treasury Board) and read by Mr. Speaker to the House.
Hon. Jean Chretien (President of the Treasury Board):: Mr. Speaker, the main estimates which I have just tabled contain $28.2 billion in budgetary items and $1.3 billion in loans.


Some hon. Members:: Shame.


Joseph Jacques Jean Chrétien: What is wrong?


Some hon. Members:: Hear, hear!


Joseph Jacques Jean Chrétien: The loans are at about the same level as they were last year, but the budgetary total is $6.2 billion greater. The growth is largely related to the inflation that has affected the world and to the steps the government has taken to counter some of its effects on Canadians. The most significant single step, in dollar terms, is our $1.3 billion program to subsidize consumer prices of products of the oil industry. But the total increase in other transfer payments to aid Canadians has been even larger, about $1.9 billion. Some of these payments go in the first instance to the provinces, such as hospital and medicare payments, and some go to individuals, such as family allowance payments.
Then, of course, the estimates reflect the growth in the operating costs of departments-Post Office, Transport, Defence and all the others-which unfortunately enjoy no exemption from inflation or the need to service a growing population.

Hon. members will surely remember that when he brought down the budget last fall, the Minister of Finance (Mr. Turner) foresaw budgetary expenditures of about $28,750 million for 1975-76. Taking into account the funds that were not spent, that is the difference between estimated and real expenditures, I believe I shall be in a position to introduce supplementary expenditures of some $1,200 million during the year, without exceeding the total expenditures forecast by the Minister of Finance.
The Minister of Finance stated in November last that government outlays, in terms of budgetary expenditures, costs, old age security and guaranteed income supplement, will probably increase by 15 per cent during the financial year 1975-76. That rate of increase would therefore be considerably less than that he expected for 1974-75, namely 25 per cent. We are determined to maintain a rate of increase of about 15 per cent, unless, of course, exceptional circumstances arise. Some could occur similar to those which forced us to pay very high indemnities for oil products; this considerably increased our expenditures this year.


The government is again publishing a booklet entitled "How Your Tax Dollar is Spent" to explain many aspects of the main estimates. This year we are providing much more information in this booklet on the details of government spending.


Some hon. Members:: Hear, hear!


Joseph Jacques Jean Chrétien: Because of this, members of parliament and the general public should be able to see more readily the immense variety of demands made upon the federal government. They also may gain a better appreciation of the difficult choices which always have to be made in attempting to meet all these demands.


Mr. Walter Baker (Grenville-Carleton):: Mr. Speaker, before I comment on the statement which has just been made, I wish to thank the President of the Treasury Board (Mr. Chretien) for his courtesy to the opposition in sending them copies of this document and to compliment him on his continuing habit of sharing bad news with everybody in the House of Commons.
My hon. friend, the Leader of the Opposition (Mr. Stanfield), called attention today to the difficulty which parliament experiences with respect to controlling supply. We rise again to protest because government spending seems to have taken on a life of its own, much like the sucker that shoots from the side of a tree". This year the gardener promised to begin pruning and he promised that his shears would be sharp. Well, Mr. Speaker, the only thing sharp about the President of the Treasury Board's pruning of the estimates is his practice of telling parliament and the people that government spending will be moderated, when in fact he has permitted that spending to increase by $6.2 billion or 28 per cent over the main estimates of last year.
What kind of moderation is 28 per cent? What kind of example is the government setting? The 1975-76 main estimates propose budgetary expenditures of $28.2 billion. This is $6.2 billion, or 28 per cent, more than the 1974-75 main estimates. It is $2.8 billion, or 11 per cent, above the forecast expenditures for 1974-75, taking into account approved and expected 1974-75 supplementary estimates.
[DOT] (M20)
If you add the expected 1975-76 supplementary estimates in accordance with the statement of the Minister of Finance (Mr. Turner) in his budget of November, 1974, the increase in 1975-76 expenditures over those for 1974-75 is 15 per cent. This will make the percentage increase between those two years appear smaller, but only because the new Supplementary Estimates (D) will make the percentage increase from fiscal year 1973-74 to fiscal year 1974-75 larger than it is now. This government has acquired the habit of spreading various estimates over the fiscal year. How many supplementaries are expected this year? That is a question that ought to be answered. By how much money will they raise the expenditure planned in the main estimates?
We will be examining in detail the expenditures of each department, but speaking generally we note from examining the objects of expenditure columns that there is little evidence of restraint or even attempted restraint. We note

that man-years are scheduled to increase by over 11,000. That is hardly evidence of restraint in hiring. We note that the fees for professional and special services will increase by $100 million, which is evidence of complete disregard for restraint on the part of the President of the Treasury Board. They will increase from $780 million to $982 million this year.
In conclusion, Mr. Speaker, we in the opposition demand three things from the President of the Treasury Board. First, he must assure the House that when supplementary estimates come to the House they reflect expenditures that could not have been foreseen and are not just the expansion of existing programs. Second, he must justify, in detail, increases in manpower and in consultants' fees. Third, he must specify what impact on inflation, what impact on interest rates and the money supply, and what impact on Canadian attitudes toward restraint these increases will have.
Parliament and the Canadian people must know whether this government believes that these increases in government spending will be of small economic impact or whether they are merely evidence that this government, which has promised restraint, has at long last admitted it has lost control completely. We look forward to the examination of these estimates, Mr. Speaker.


Mr. Stanley Knowles (Winnipeg North Centre):: Mr. Speaker, like the hon. member for Grenville-Carleton (Mr. Baker), I thank the President of the Treasury Board (Mr. Chretien) for locking us in his office between one and two o'clock this afternoon so we could take a broad look at the estimates that he has tabled today and at the various statements and press announcements he has now released.
I think the first thing to be said about estimates of this magnitude-it needs to be said to my friends to the right, as well as to the country as a whole-is that civilization costs money. If we are going to build a decent civilization for the human beings who live in this country, we may have to spend even more than the amount in these estimates. We do not go along with the line that every time there is a proposal for government expenditure, it is a case of waste and carelessness.
We are concerned when there is waste and we want the estimates to be examined carefully. I hope that as a result of the motion on the order paper in the name of the President of the Privy Council (Mr. Sharp) calling for the Standing Committee on Procedure and Organization to review our procedures, we will be able to do something this session about the way we are dealing with supply and expenditures.
However, Mr. Speaker, I think the more important matter for us in this House to consider today is that taxation and the spending of money by governments is not just a bookkeeping operation, not just taking in money and passing it out, but is an attempt to distribute the jobs and the wealth of this country in a way that will meet this nation's problems, in a way that will meet the problems of our people.
In one of the press releases the minister gave us today in his office but which he did not read into the record there appears this paragraph:
Main Estimates
The broad theme underlying planned expenditures for economic development and support in 1975-76 continues to be that of encouraging stable and balanced growth of the national economy-
Listen to these words:
-and a more equitable distribution of income and employment throughout Canada.
Those are wonderful words, but they are hollow when they come from this government. This is a government that at the present time, in the face of 800,000 persons being unemployed, shows nothing but complacency toward that disaster. This is a government which this very week is engaging in conferences with the provincial welfare ministers regarding a guaranteed annual income plan. In the early part of 1973 such a proposal was put before this House and we and the provincial governments were led to believe that the first steps toward implementing that plan would be taken some time in 1975. But this week the provincial ministers of welfare are being told that the plan is at least 2 Vi years down the road.


An hon. Member:: Just before the next election.


Stanley Howard Knowles: One of my
colleagues in the back says, "Just before the next election." More than six million people are affected by this situation. I suggest that we are prepared to take the minister's words as a test to apply to the government. Are its policies aimed at a more equitable distribution of income and employment throughout Canada? We say that on the basis of that test, this government is failing miserably. And my friends to the right, if they were to follow the line we have heard from them today, would fail even more miserably.


Some hon. Members:: Oh, oh!


Stanley Howard Knowles: We thank the minister for having given us a preview of the estimates. I suppose I would not be revealing a secret if I said that in his office the minister suggested the hon. member for Grenville-Carleton would want to cut down on expenditures, and that I would ask for more money to be put into our economy. That is only a recognition of the fact that civilization does cost money; that we are going to establish an equitable distribution of employment and income in this country only when we really address ourselves to the problem. This has not been done by the Minister of Finance (Mr. Turner) in his taxation policies or by the President of the Treasury Board in his spending policies. Equitable distribution of income and employment is a goal we must still pursue.


Some hon. Members:: Hear, hear!


Mr. Adrien Lambert (Bellechasse):: Mr. Speaker, at the time of the budget speech, on November 18, 1974, the Minister of Finance (Mr. Turner) presented the House with estimates that had been prepared by officials of various departments and which gave a general idea of the economic and financial situation in the country. Today, however, the President of the Treasury Board (Mr. Chretien) advises us that the estimates will involve additional

February 19, 1975
Main Estimates
outlays of $1.2 billion to give the country the services and the administration Canadians need. But when we examine in committee the expenditure made by the various departments, we realize there would be ways of reducing them in many cases and using the money in other fields to render greater service to the population.
The minister's statement and the covering document outlined the main measures contained in the budget. We can see that 27.8 per cent of a budget of $28,242 million are spent for health and welfare. It is quite natural because all the efforts of a country, a family or an individual are aimed at protecting health, and at meeting physical needs. It is quite natural that a high percentage of the expenditures be earmarked for health and welfare.
There is a second item which also takes an important part in the budget, namely economic expansion and support. I do agree that efforts must be made in this area but I ask the government, the cabinet and the President of the Treasury Board to consider the matter seriously before the subsidies which have been granted to big corporations are paid to see if the millions of dollars Canadians pay to expand or maintain their industries are really productive and create employment. If necessary, we should make comprehensive inquiries to see if money has been wasted and to prevent this from becoming scandals.
A third item that is also very important is the public debt. I think we could speak about it two days and two nights, and there would be more to be said.


An hon. Member:: Two months.


Joseph Adrien Henri Lambert: Yes, for two months more. It is an important item. It is ridiculous to see how this item is considered as sacred. No one is able, in the existing system, to reduce it. We can discuss the others, but not this one. It is untouchable, it is more sacred than God himself.
I think that our financing system in the public sector could be modified by making greater use of the institutions at our disposal, if only one act were changed-the Bank of Canada Act-so that the government can ask this institution, which we really own, to provide the public sector with the credits it needs at an interest rate covering administration costs only.
After all, Mr. Speaker, what is a monetary system? I always thought it had to be a service, like the postal service, for instance. The monetary system must also be a service. It must be under government control and adjusted to the needs of the people. The day we stop allowing the tradesmen of the nation's credit to get richer because they have the privilege of making as many loans and deposits as they want under legislation that was enacted by parliament, but which should be amended, we will be able to lower the cost of servicing the debt. These billion dollars can be used to provide better services, to finance, for example, local initiatives programs. Every day people ask that their projects be accepted because they want to work. It would not cost one cent more to Canadians, nor to the government. The Minister of Manpower and Immigration would be very happy to approve more projects and Canadians would be happy to be able to earn their living.


Hon. Mitchell Sharp (President of the Privy Council):: Mr. Speaker, before finally moving on to other business, may I make an announcement about the disposition of the estimates and ask whether the House might agree to a procedure that would assist the Leader of the Opposition and myself in having a look at the rules of the House in relation to the estimates.
First of all, the motion of reference of the estimates will be made by Monday so that the examination can begin. I wonder whether the House will be disposed to pass now, without any debate, government order No. 10 which appears under Government Business. I would point out that that particular motion does provide for a temporary as well as a permanent change in the rules. It would enable the committee to deal immediately with this and other suggestions.


Walter David Baker: Mr. Speaker, I am very worried about the procedure that has been proposed by the government leader. My worries and fears are that if the opportunity is not given to all members of parliament, not just the House leaders and not just the party leaders but all members of parliament in their capacity as members of parliament, to debate and discuss questions of procedure, then the amendments that would be proposed could be restrictive and not encompass the views of many members of the House who have been here a long time and who have every right to make an input.
Having said that, I want to say that we are quite prepared, if that is the case, to enter into a debate with respect to those matters immediately. I might remind you, Mr. Speaker, that that matter has been kicking around on the Order Paper for some time, that a tour of the Mother of Parliaments has taken place, that other members have studied and read on that matter, and that all members, and particularly members of the opposition, are anxious to have those changes. If the government House leader is also anxious to have those changes, let him bring them about in a way that is not restrictive of the rights of parliament.


Some hon. Members:: Hear, hear!


Mr. Speaker:: I assume that the matter can only be dealt with upon unanimous consent. I take it that it is not necessary to ask whether there is unanimous consent.


Mr. McGrath:: I should like to raise a point regarding the point of order before this matter is settled. I do not think it is asking too much to ask for an assurance from the government House leader-


Mr. Speaker:: Order, please. In fairness, because the President of the Privy Council had made what could be construed as a comment when he put the suggestion forward, I felt it proper to allow the hon. member for Grenville-Carleton (Mr. Baker) to make a comment in response. The fact of the matter is that the President of the Privy Council was seeking something that could only be done by unanimous consent. If there is unanimous consent, it could be done now; if there is not, it would not be in order to debate the matter. In fairness, having allowed comments on both sides, I cannot let the matter go
February 19, 1975

any further because it cannot be debated without unanimous consent.


PRIVILEGE
Mr.   Jacques-L. Trudel@Montreal-Bourassa: Mr. Speaker, I rise on a question of privilege.
Many federal employees are now denying some members of this House the services to which they are entitled, especially the manpower and immigration office in Montreal. Our secretaries try to obtain information for themselves or for the members, but it is denied to them when they ask in either language.
When a French-speaking individual applies to those offices and the employee is English-speaking, the information is denied to him. When English-speaking individuals make inquiries, they are turned away just as we are and just as are those who were asked to inquire.
Not only do I consider the situation is very serious, but I think we should refer the problem to the Committee on Privileges and Elections so as to settle once for all this matter which prevents people and members from obtaining services. I therefore ask you, Mr. Speaker, to defer immediately the matter to the Committee on Privileges and Elections so that we may know how to deal with it.


Mr. Rod Blaker (Lachine-Lakeshore):: Mr. Speaker, I rise to support, as strongly as I can the representations made by the hon. member for Montreal-Bourassa (Mr. Trudel). I would argue seriously and sincerely that he has a valid question of privilege. If at any time I, as a member of parliament, am denied the right to address citizens in Montreal in the language of my choice, I submit that I am handicapped in performing my functions properly and to the best of my ability.


Some hon. Members:: Hear, Hear!


Roderick Blaker: The procedure currently under discussion in the House-that is the representation made by the hon. member for Montreal-Bourassa as a question of privilege-may be an awkward one to consider although I would argue it is a valid question. I think the underlying point should be made that we members of parliament from Montreal have certain responsibilities with respect to assuring our constituents, whether they be French or English, that there is an official policy on bilingualism and that the federal government stands for bilingualism.


Some hon. Members:: Hear, hear!


Roderick Blaker: It seems to me that, short of a motion under Standing Order 43, there is no way in which such individuals as the Acting Prime Minister, the Minister of Manpower and Immigration (Mr. Andras) or the President
Main Estimates
of the Treasury Board (Mr. Chretien) may wish to assure this House that all members of parliament and indirectly through them, all members of the population, have access to the language of their choice when dealing with the federal civil service.


Some hon. Members:: Hear, hear!


Hon. Robert K. Andras (Minister of Manpower and Immigration):: Mr. Speaker, I fully appreciate the concern expressed by hon. members. Although this is a matter of personnel policy under the direction and mandate of the President of the Treasury Board (Mr. Chretien), it happens that organizations under my direction have been involved in this situation. I want to assure the House that it is government policy and the policy of the Department of Manpower and Immigration and the Unemployment Insurance Commission to provide service to the public in both official languages and that in the offices-


Mr. Fairweather:: That is the law.


Robert Knight Andras: -under discussion there are bilingual people designated as such whose job and responsibility is to provide service in either of the two official languages. Any failure or refusal to do so by any individual is completely unauthorized.


An hon. Member:: Fire them!


Robert Knight Andras: Where such failure has been established we are prepared to take disciplinary action.


An hon. Member:: Fire them!


Mr. Tom Cossitt (Leeds):: Mr. Speaker, I rise on the same question of privilege. At about a quarter to two this afternoon, my office was in communication with the Unemployment Insurance Commission office located at 7510 Viau Street, Montreal and was advised by the person who answered the telephone that the entire staff was refusing to speak the English language until they were paid additional money by the President of the Treasury Board (Mr. Chretien). I think, Mr. Speaker, as hon. members opposite have said, that this is an infringement on the rights of members of parliament who attempt to get information from the UIC. It is also an affront to the Canadian public who, by virtue of the Official Languages Act, have a right to expect to be addressed in both languages when calling offices in areas designated as bilingual.
In bringing bilingualism to this country, the government has made much of the fact that they were in favour of bilingualism, so I am sure they will agree that this matter should be dealt with speedily by this House in order that those offices not rendering proper service in both languages in designated bilingual districts can be immediately dealt with. If employees refuse to offer those services to the Canadian public, they should be disciplined immediately by the Minister of Manpower and Immigration (Mr. Andras).


Joseph Jacques Jean Chrétien: Mr. Speaker, I have instructed the officials in my department to inquire into that subject. If officials work-
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February 19, 1975
Privilege-Mr. Reid
ing in any department do not comply with the acts of the Parliament of Canada, they will be suspended for their acts.


Mr. Speaker:: Order, please. I presume no other member wishes to contribute to this point. It raises, of course, a most serious question. It is not identical to, but is associated with, the other very difficult question of privilege raised by the hon. member for Laprairie (Mr. Watson) regarding the functioning of members outside this House of Commons, this chamber, and interferences with their capacity to operate in areas of this sort. As hon. members will know, by its very nature it raises an extension of the traditional position that has been taken regarding questions of privilege. I am examining the precedents carefully in respect of the alleged question of privilege of the hon. member for Laprairie, and I would propose to do the same with respect to this question of privilege and, as soon as possible, rule on the validity of both at the same time.


MR. REID-ATTENDANCE OF MEMBERS OF HOUSE OF COMMONS BEFORE SENATE COMMITTEES
Mr. John M. Reid (Parliamentary Secretary to President of the Privy Council):: Mr. Speaker, I rise on a question of privilege which affects the rights of all members of the House. Unfortunately the matter only came to my knowledge a short time ago. I should like to raise the matter now with the possibility of arguing it more fully tomorrow. The question of privilege which concerns me is the matter of members of this House of Commons appearing before committees of the other place to make presentations to them on legislation which has gone through the stages of consideration in this House. I understand that there are procedures and traditions of the House that mitigate against this happening. I should like to develop my argument about this more fully tomorrow.


An hon. Member:: Who put you up to that, John?


An hon. Member:: Can't you leave Herb alone?


Mr. Lawrence:: The only answer is to get appointed there.


Mr. Speaker:: Order, please. Motions.



AGRICULTURE


Joseph Adrien Henri Lambert: Mr. Speaker, I rise under the terms of Standing Order 43 to request unanimous consent of the House to move a motion on a matter of urgent and pressing necessity.
In view of the great difficulties experienced last year by farmers to get binder twine, and this even at exorbitant prices, and in view of the fact that sizeable quantity of hay could not be harvested and that there is a current shortage

of feed with the result that cattle wintering costs have risen sharply, I move, seconded by the hon. member for Roberval (Mr. Gauthier):
That this House instruct the Standing Committee on Agriculture to study without delay what are the steps to take to ensure the supply of binder twine in proper time and avoid speculation by unscrupulous profiteers.


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


Some hon. Members:: Yes.


Some hon. Members:: No.


Mr. Speaker:: As there is no unanimous consent, the motion cannot be put.



VETERANS AFFAIRS


Stanley Howard Knowles: Mr. Speaker, I ask leave to present a motion under the provisions of Standing Order 43. I am sure that many hon. members will agree with me that the difficulties being faced by Hong Kong veterans-and I mention also when added to the premature deaths of many of them-make this a matter of urgent and pressing necessity. I trust that those on the government side, some of whom know about the motion, will agree to it.
I therefore move, seconded by the hon. member for Humber-St. George's-St. Barbe (Mr. Marshall):
That the Minister of Veterans Affairs be asked to make a statement to the House, at an early date, indicating the intention of the government with respect to the unanimous request of the Standing Committee on Veterans Affairs, made on October 22, 1974, that the disability pensions of all Hong Kong veterans who are out of the labour market be increased to 100 per cent.


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


Some hon. Members:: Agreed.


Some hon. Members:: No.


Mr. Speaker:: As there is not unanimous consent, the motion cannot be put.
February 19, 1975



BILINGUALISM


Thomas Charles Cossitt: Mr. Speaker, I rise to seek leave to propose a motion under the provisions of Standing Order 43. I feel it should have the unanimous support of all members, especially of those on the government side who have continually expressed their sincerity in wishing to enforce the provisions of the Official Languages Act.
I move, seconded by the hon. member for Winnipeg South Centre (Mr. McKenzie):
That in view of the fact that certain unemployment insurance commission offices in the city of Montreal, including specifically the one serving northeast Montreal at 7510 Viau Street, are refusing to speak both official languages to claimants and the general public, the House requests immediate government action to enforce the provisions of the Official Languages Act requiring services in both languages and that those refusing to serve the public in both languages should be immediately disciplined following this illegal action.


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


Some hon. Members:: Agreed.


Some hon. Members:: No.


Some hon. Members:: Oh, oh!


Mr. Diefenbaker:: The Liberals said no.


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



AGRICULTURE


Mr. Leonel Beaudoin (Richmond):: Mr. Speaker, I rise pursuant to Standing Order 43 to seek the consent of the House to move a motion in a case of urgent and pressing necessity.
Since agricultural producers face unbearable prices concerning costs of production such as hay, for instance, whose unprecedented price has risen to $100 a ton, and since the Department of Agriculture does not seem to be able to cope with the serious situation we face and offers no short-term solution to avoid the bankruptcies and the massive exodus that we witness every day, I move, seconded by the hon. member for Bellechasse (Mr. Lambert):
That the House open discussion on the serious problems now facing Canadian agriculture in order to bring immediate compensation and provide our farmers with the assistance they urgently need, including all the necessary information concerning the difficult decisions and choices they will have to make this year.


Mr. Speaker:: The House has heard the hon. member's motion. This motion, proposed under the terms of Stand-
Hours of Sitting-House of Commons ing Order 43, requires the unanimous consent of the House. Is there unanimous consent?


Some hon. Members:: Agreed.


Some hon. Members:: No.


Mr. Speaker:: There is not unanimous consent; therefore, the hon. member's motion cannot be put.



SOCIAL SECURITY


Mr. Rene Matte (Champlain):: Mr. Speaker, pursuant to Standing Order 43, I rise on a matter of urgent and pressing necessity to request unanimous consent to introduce an important motion, surely of the utmost interest to all members and the Canadian people.
I move, seconded by the hon. member for Rimouski (Mr. Allard):
That the House recommend detailed study of the guaranteed minimum yearly income program, as proposed by the Social Credit Party of Canada, in order to help the Minister of National Health and Welfare (Mr. Lalonde) in the submission to the provinces of a more appropriate and more adequate plan for social security.


Mr. Speaker:: Although I am sure, this is quite an interesting and significant suggestion, I regret it is not strictly a case of urgent and pressing necessity. Therefore, the motion cannot be put.



SUGGESTED EXTENSION OF HOURS OF SITTING-REQUEST FOR UNANIMOUS CONSENT TO MOVE MOTION UNDER S.O. 43

Mr. Ed Lumley (Stormont-Dundas):: Mr. Speaker, I rise to propose a motion under Standing Order 43 on a matter which I deem to be of urgent and pressing necessity. Whereas the orderly progression of the business of this honourable House has slowed almost to a standstill because of prolonged and sometimes unnecessary debate on bills now before the House, which, in turn, has caused an unprecedented backlog of legislation important to millions of Canadians, I move, seconded by the hon. member for York West (Mr. Fleming):
That the House give immediate and serious consideration to extending the hours and even the days of sitting until such time as required to complete the disposition of bills on the order paper.


Some hon. Members:: Hear, hear!


Robert Gordon Lee Fairweather: Come back in, Reid.


Some hon. Members:: Agreed.


Some hon. Members:: No.


Some hon. Members:: Hear, hear!
28996-8'/2

February 19, 1975
National Defence


Mr. Speaker:: Order, please. Notwithstanding the
immense, and evidently widespread, popularity of the suggestion contained in the motion, I have consistently taken the position that suggestions for changing procedures of the House may be important and valid but can scarcely be considered as matters of urgency.


Walter David Baker: On a point of order, Mr. Speaker, I want it to be amply clear that members on my side of the House were prepared to agree to that motion.


Some hon. Members:: Oh, oh!


John Mercer Reid: On a point of order, Mr. Speaker-


Robert Gordon Lee Fairweather: You had left the House. Sit down.


John Mercer Reid: As there seems to be unanimous agreement-


An hon. Member:: No, no; Sharp said no.


Mr. Speaker:: Order, please. Let us understand one another clearly. If support for the substance of the motion is as widespread as it seems, surely ample machinery exists to implement that worthwhile suggestion.



NATIONAL DEFENCE


Mr. Dan McKenzie (Winnipeg South Centre):: Mr. Speaker, I rise to request leave to propose a motion of urgent and pressing necessity pursuant to Standing Order 43. As the Minister of National Defence (Mr. Richardson) has allowed Canada Trust to establish a retirement savings plan for the Canadian Armed Forces, as the Canada Trust plan will be in direct competition with the RRSP's offered by military credit unions which provide full financial services to forces personnel at military bases and have offices on those bases, as military credit unions provide RRS plans containing the same advantages as are contained in the minister's proposal, and as the Canada Trust plan could affect membership and loss of funds of military credit unions, I move, seconded by the hon. member for Victoria (Mr. McKinnon):
That this House refer the whole matter to the Standing Committee on External Affairs and National Defence for a complete study and a report from the Minister of National Defence.


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


Some hon. Members:: Agreed.


Some hon. Members:: No.


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



CRIMINAL CODE


John George Diefenbaker: for leave to introduce Bill C-379, to amend the Criminal Code.


Some hon. Members:: Explain.


John George Diefenbaker: Mr. Speaker, with the indulgence of the House, I wish to make a short statement in connection with this amendment. I realize that normally this is not allowed, but I hope that in view of the fine spirit of unanimity which is present today, I will be permitted to mention what I have in mind.
Across our country today there is a carnival of gun murder. Thugs go here and there, intimidating or committing murder. Almost an open season exists. The reason is that there is no serious penalty against those wrongdoers who carry guns. I feel a minimum penalty for carrying a firearm should be added to any other sentence that may be given for the commission of a crime to the end that it will not be popular for those who carry guns to be in possession of them when endeavouring to commit an offence. What I propose is this;
Every one who carries or has in his possession a firearm for the purpose of or while committing an indictable offence, is guilty of an indictable offence and liable to imprisonment for not less than five years.
If that were done as well as putting an end to allowing people out on parole before the completion of the five-year sentence, it would go a long way towards ending or greatly reducing the amount of crime committed today by those thugs who carry revolvers and other firearms.


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

[Stage Direction]
(Questions answered orally are indicated by an asterisk.)
['Agreed.']
John Mercer Reid: Mr. Speaker, the following questions will be answered today: 919, 1,011, 1,032, 1,082, 1,108, 1,111, 1,117, 1,149, 1,166, 1,168, 1,214, 1,217, 1,237, 1,259, 1,260, 1,307, 1,317, 1,321, 1,329, 1,335, 1,358, 1,371, 1,452, 1,465 and 1,470.
Mr. Speaker, if questions Nos. 149, 391 and starred question No. 196 could be made orders for return, these returns would be tabled immediately.
I ask, Mr. Speaker, that the remaining questions be allowed to stand.

February 19, 1975



Mr. Forrestall: Does the government have the technological capability and yard capacity to provide a Canadian-built and Canadian-operated icebreaker with polar capability for continuous progress through 7 to 10 foot ice in this decade?


Hon. Jean Marchand (Minister of Transport):: No, the
Canadian government does not have such capability, but Canadian designers and shipyards do. The Ministry of Transport has commissioned a design through a Canadian design consortium for a Polar Class 7 icebreaker which will be capable of continuous progress through ice up to 7 feet thickness. The design is expected to be completed in 1976 and if a decision is made to construct such a vessel it should be in service in this decade.


SPACE PROGRAMME
Mr. Herbert: 1.	Do space programmes require (a) a continuous research and development programme (b) a high investment in facilities and test equipment (c) a well-trained technical source of manufacturing people?
2.	Is it possible for Canada to identify continuing space programmes in order to maintain this expertise?


Hon. C. M. Drury (Minister of State for Science and Technology):: 1. (a) Yes; (b) Yes; (c) Yes.
2.	The government maintains an overview of space activities including research and application programme in order to ensure a reasonable balance of effort and the optimum use of resources. Examples of current government space programs include the Communications Technology Satellite project of the Department of Communications and the program of application development for remote sensing of earth resources and environmental factors carried out by the Canada Centre for Remote Sensing of the Department of Energy, Mines and Resources.


LIP-APPROVAL OF PROJECTS
Mr. Cossitt: During the time that the Honourable Jack Davis acted as Regional Minister in regard to the approving or disapproving of Local Initiatives Programme applications, what are the full details of all projects not approved by the Minister or his office, including, in each case (a) the nature of the project (b) the names and addresses or organizations or persons on the project application (c) the date of application (d) the amount of funds requested (e) all reasons for disapproval given in any manner whatsoever by the Minister or his office?


Robert Knight Andras: Not available. Only the Minister of Manpower and Immigration approves or disapproves Local Initiatives Programme applications, although he does receive recommendations from Members of Parliament of all parties, provincial governments and others.
Order Paper Questions


LIP-MR. RICHARD DICERNI'S RESPONSIBILITIES
Mr. Cossitt: 1.	With reference to the memorandum dated January 25, 1973 to the Minister of Manpower and Immigration on the subject of the Local Initiatives Programme and signed by the Deputy Minister, Mr. J. M. Desroches, who is the Mr. Dicerni referred to on page 2, what was his job designation and what were his duties?
2.	Is this individual the same person as Mr. Robert Dicernie, Special Assistant to the Minister of Manpower and Immigration as of the date on which the memo was written?
3.	(a) What was the exact relationship of Mr. Dicerni to the Local Initiatives Programme (b) was one of his tasks to advise LIP officials in regard to projects that were to be approved for political considerations?
4.	(a) What is meant by the following sentence on page 2 of the memo "Mr. Dicerni will give us a decision in writing on whether the case is to be approved or not" (b) does this refer to LIP projects to be approved or disapproved because of political considerations?
5.	(a) What is meant by the following sentence on page 2 of the memo "As soon as we have a clear picture of costs we shall report to you whether we can accommodate all decisions"-(referred by Mr. Dicerni)-"within the existing budget..." (b) does this refer to whether or not there were sufficient funds to cover projects which the Minister desired to have adopted for political purposes?
6.	On what date and for what reason did Mr. Dicerni cease to be connected with the Local Initiatives Programme?
7.	(a) What is his present position in government service (b) is he connected with the Unemployment Insurance Commission (c) do his present duties include performing any actions that are taken for political considerations and, if so, what are these duties and actions?


Robert Knight Andras: 1. Mr. Richard Dicerni was employed as Special Assistant to the Minister of Manpower and Immigration from November 27, 1972 until September 1, 1973.
2.	See (1).
3.	(a) As a Special Assistant to the Minister of Manpower and Immigration Mr. Dicerni performed duties assigned to him by the Minister; (b) The task Mr. Dicerni carried out with regard to LIP was to maintain liaison with Members of Parliament and to consult with the regional Ministers, as described in Sessional paper 291-2-2319.
4.	(a) and (b) One of the functions Mr. Dicerni performed was to inform the Department of ministerial decisions taken with regard to LIP Projects.
5.	(a) and (b) It is the function of the Department to advise the Minister of the availability of funds in light of approvals. This is done on a regular basis.
6.	See 1 above.
7.	(a) Mr. Dicerni is presently Secretary to the Unemployment Insurance Commission; (b) See 7(a); (c) No.


POST OFFICE DEPARTMENT-TRANSLATION OF DOCUMENTS
Mr. McKenzie: 1.	What documents of any and all description (such as any type of form, records, stationery, employee directives, etc.) within the entire Post Office Department have to be translated into the French language?
2.	Retroactive to what date will all past records of the Department have to be translated?
3.	At what date must all of these translations be completed?
4.	What amount of money was spent in the years 1973 and 1974 for translating such documents?

February 19, 1975
Order Paper Questions
5.	What will be the total cost of translating all existing documents, forms, stationery, records, etc. within the Department's entire operation?
6.	What is the total additional yearly cost of ordering all new forms, stationery, etc. in two languages compared to the cost in one language?


Mitchell William Sharp: I am informed by the Post Office Department and the Department of the Secretary of State as follows: 1. All documents as defined in the question have been made available in both languages for many years.
2.	Therefore the question of retroactivity does not arise.
3.	Not applicable.
4.	It is difficult to provide a precise answer to the question in terms of the Post Office Department, since, in order to achieve greater efficiency, the Government of Canada has consolidated all translation, interpretation and terminology services under a single administration, designed to serve all the departments and public bodies which depend on them. Costs are not apportioned according to the types of activities mentioned above. However, the total demand for translation as represented by the number of words is available for the years 1972-1973 and 1973-1974. The production in words for 1972-1973 was 2,561,671; for 1973-1974 it was 2,668,059. On the basis of an analysis of operating costs for the Translation Bureau, the total operating costs are estimated at about ten cents per word for the two years in question.
5.	Not applicable.
6.	Since bilingual forms and documents have been standard practice for so many years, it is not feasible to make a meaningful cost comparison at this time.


DEPARTMENT OF COMMUNICATIONS-TRANSLATION OF DOCUMENTS
Mr. McKenzie: 1.	What documents of any and all description (such as any type of form, records, stationery, employee directives, etc.) within the entire Department of Communications have to be translated into the French language?
2.	Retroactive to what date will all past records of the Department have to be translated?
3.	At what date must all of these translations be completed?
4.	What amount of money was spent in the years 1973 and 1974 for translating such documents?
5.	What will be the total cost of translating all existing documents, forms, stationery, records, etc. within the Department's entire operation?
6.	What is the total additional yearly cost of ordering all new forms, stationery, etc. in two languages compared to the cost in one language?


Mitchell William Sharp: I am informed by the Departments of Communications and the Secretary of State as follows: 1. Documents required either for purposes of service to the public or communication with employees are translated as required from one official language to the other and distributed in both official languages.
2.	Documents still in current use such as referred to in answer number 1 which were not initially produced in the two official languages, either have been translated, or are now being translated.

3.	The translation of all such documents referred to in number 1 and 2 above will be completed in the first half of 1975.
4.	It is difficult to provide a precise answer to the question in terms of the Department of Communications, since, in order to achieve greater efficiency, the Government of Canada has consolidated all translation, interpretation and terminology services under a single administration, designed to serve all the departments and public bodies which depend on them. Costs are not apportioned according to the types of activities mentioned above. However, the total demand for translation as represented by the number of words is available for the years 1972-1973 and 1973-1974. The production in words for 1972-1973 was 1,662,567; for 1973-1974 it was 1,370,760. On the basis of an analysis of operating costs for the Translation Bureau, the total operating costs are estimated at about ten cents per word for the two years in question.
5.	Information not available.
6.	Information not available.


PURPOSE OF PUBLIC AFFAIRS BRANCH-POST OFFICE DEPARTMENT
Mr. Beatty: 1.	(a) What is the purpose of the Public Affairs Branch of the Post Office Department (b) does it have authority to act on complaints by customers?
2.	On what date was it established?
3.	How many employees belong to this Branch?
4.	(a) What is the present budget of the Branch (b) what are the component parts of the budget (c) what has been the total cost of the Branch to the taxpayer since its creation?


Mr. Raynald Guay (Parliamentary Secretary to Postmaster General):: 1(a) The purpose of the Public Affairs Branch of the Post Office is twofold: (1) to achieve public understanding and acceptance of Post Office policies and plans; (2) to provide expertise to management in the areas of communicating with specific publics, (b) Public Affairs personnel do respond to complaints by customers, but the responsibility to resolve customer problems lies with Sales and Customer Service in the Marketing Directorate.
2.	In 1970, the Information and Public Relations Branch became the Public Affairs Branch.
3.	There are 41 employees at Headquarters, of which 24 are information officers, and an additional 44 employees, in the four regional and 14 district offices, of which 33 are information officers.
4.	(a) The operating budget for 1974-75 is $1,798,631,
including salaries. The advertising budget is $220,000; (b) The component parts of the budget include advertising, publications, audio-visual, special events, language quality, media relations, national news desk, press gallery liaison, and administration and production, (c) 1970-71, $1,510,758,	including	$650,000	for	advertising;	1971-72,$1,385,922,	including	$500,000	for	advertising;	1972-73,$2,011,987,	including	$655,000	for	advertising;	1973-74,$2,091,148,	including	$655,000	for	advertising;	1974-75,
$2,018,631, including $220,000 for advertising.
February 19, 1975


INSTITUTE OF OCEAN SCIENCES, PATRICIA BAY
Mr. McKinnon: 1.	Was a press release issued by Environment Canada indicating the estimated cost for the Institute of Ocean Sciences at Patricia Bay as 20 million dollars and, if so, for what reason does this figure differ from the 1974-75 Estimates total cost of $10,750,000?
2.	Has a decision been made to include additional organizations and, if so, what are they?


Mr. Len Marchand (Parliamentary Secretary to Minister of the Environment):: 1. A press release was issued on December 10, 1974 the estimated cost for the Institute of Ocean Sciences at Patricia Bay, B.C., as $20,000,000. The figure of $10,750,000 in the 1974-75 estimates was based on a 1972 preliminary Task Force report. The wharf-marine facilities cost was estimated at $1,936,000 and the buildings facilities at $8,814,000. Consultant Design Architects were subsequently engaged and in April, 1974, the wharf-marine facilities design was completed, tenders called and Treasury Board approved an expenditure of $4,200,000 for that purpose. The concept design for the building facilities was completed in May, 1974 and the estimated cost was
Order Paper Questions
indicated as $12,063,000 in 1974 dollars. However Treasury Board asked that escalation be applied to this estimate which resulted in an increase in the estimated building facility costs to $16,198,685. With the addition of the wharf-marine facility cost of $4,200,000 the total estimated cost of the complex is now $20,398,685 with a 1978 completion date. This figure will be included in the 1975-76 estimates.
2. No decision has been made to include additional organizations at this time.


NUMBER OF PUBLIC SERVANTS IN CANADA, 1965-73
Mr. Gauthier (Roberval): In the years 1965 tp 1973 inclusive, how many public servants were there (a) in Canada (b) in each province?


Mr. Gaston Clermont (Parliamentary Secretary to Minister of Industry, Trade and Commerce):: Statistics Canada reports the following figures providing the details concerning the number of federal public servants in Canada and in each province through the years 1965 to 1973 inclusive.
Federal Government Employment by Province-Number of public servants as at March 31
1965	1966	1967Newfoundland and Labrador	10,526	10,525	10,640Prince Edward Island	2,173	2,227	2,099Nova Scotia	18,711	19,278	19,358New Brunswick	14,257	14,696	15,595Quebec	66,605	68,673	76,300Ontario	129,231	134,672	141,203Manitoba	24,240	24,793	25,877Saskatchewan	10,687	11,510	12,045Alberta	19,359	19,518	21,265British Columbia	26,654	27,642	29,169Yukon Northwest Territories	2,840	3,034	3,242Total-in Canada	325,283	336,568	356,833
'Number of employees in each province not available.


CNR-LANGUAGE TRAINING
Mr. Cossitt: 1.	(a) Is a survey form being circulated to CNR employees in regard to language capabilities (b) are such employees being asked if they are willing to take language training in one of the official languages and, if so (i) to what regional areas of CNR are such surveys being distributed (ii) have these been sent or will they be sent to employees of the Eastern Region?
2.	(a) What persons authorized this survey (b) what are the names of all persons in government who in any way recommended or promoted the making of such a survey by CNR?
3.	Is this survey another attempt by the government to promote bilingualism in Canada including areas that are predominately English speaking?


Jean Marchand: The
Management of Canadian National Railways advises as follows: 1. (a) Yes. (b) Yes. (i) Atlantic, Great Lakes and Mountain Regions, (ii) Yes, they have been distributed.
2. (a) Chairman, System Policy Committee on Bilingualism. (b) Commissioner of Official Languages.
1968	1969	1970'	1971	1972	197310,637	9,954	9,439	8,888	10,3322,174	2,117	2,073	2,215	2,29019,537	24,639	23,838	25,445	25,02314,584	14,546	14,509	15,343	15,21374,110	72,545	74,447	79,589	85,319144,195	143,556	152,658	161,390	170,11724,765	24,491	25,160	25,161	25,44412,144	12,318	12,264	13,676	13,90721,392	21,354	22,203	22,859	24,35030,140	29,845	32,365	34,642	35,7152,832	3,000	1,117 2,145	1,271 2,140	1,102 2,447356,510	358,365	365,486	372,218	392,619	411,259
3. The Commissioner of Official Languages reports directly to Parliament and not through a Minister. Questions may be put to him directly.


PORT OF VANCOUVER-SEAPLANE OPERATIONS
Mr. Huntington: Have rigid operational procedures been issued for seaplane operations, landing and taking-off in the Port of Vancouver and, if so, would the Minister provide a copy of the regulations and, if such regulations cannot be made available, for what reason?


Jean Marchand: Special procedures are in effect at Vancouver Harbour which were promulgated in an Aviation Notice dated May 6, 1974. These require seaplane operators to use designated routes and altitudes when entering or leaving the harbour area. A copy of the Aviation Notice follows. Seaplane operations

February 19, 1975
Order Paper Questions
conducted in the Port of Vancouver are from a licensed airport and are in accordance with the section 529 of the Air Regulations which reads as follows: 529. Except when taking off from or landing at an airport or military aerodrome or except as specifically authorized by the Minister, aircraft shall not be flown (a) over the built-up areas of any city, town or other settlement or over an open-air assembly of persons, except at an altitude that will permit, in the event of an emergency, the landing of the aircraft without undue hazard to persons or property on the surface; such altitudes shall not in any case be less than one thousand feet above the highest obstacle within a horizontal radius of two thousand feet from the aircraft; and (b) elsewhere than over any area mentioned in paragraph (a), except at altitudes of not less than five hundred feet above the surface of the ground or water, unless such flight may be made without undue hazard to persons or property on the surface.
Aircraft Operations-Vancouver Harbour
In the interest of promoting safe operating techniques within the Vancouver Harbour and reducing noise exposure in adjacent noise sensitive communities, no aircraft shall cross the built-up area of Vancouver below 2000' ASL. Aircraft operating to and from the Harbour will be expected to follow the procedures outlined below: 1. All aircraft shall maintain a listening watch on advisory frequency 122.9 Mhz.
2.	Arriving aircraft shall transmit on frequency 122.9 Mhz. Abeam Point Grey or Atkinson followed by a second transmission approaching Third Beach. This transmission will advise the position, height and intentions of flight.
Example: "C-FABC" Pt. Grey for the Harbour, with the altitude followed by a second report. "C-FABC approaching Third Beach for the Harbour".
3.	Departing aircraft shall transmit the intended direction of take-off on 122.9 Mhz., remain over the water and reduce to cruise-climb power when safe. This will be followed by advisory reports over Lions Gate Bridge, and Point Grey or Atkinson advising altitude and intention of flight.
Example: "C-FABC"-on take-off (Eastbound) (Westbound) followed by a second report. C-FABC by Lions Gate (with altitude) for Point Grey (Atkinson).
Note: Aircraft intending to transit the Vancouver Positive Control Zone shall contact the Vancouver Tower on 124.0 Mhz. when operating at or below 2000' ASL or Vancouver Radar on 125.2 Mhz. when operating above 2000' ASL.
Refer to VFR Supplement for VFR procedures within the Terminal area.


PRINCE ALBERT NATIONAL PARK-REPORT ON PUBLIC HEARINGS
Mr. Clark (Rocky Mountain): 1. On what date will the government publish reports on the public hearings, which ended in 1971, concerning Prince Albert National Park?

2. As of December 15, 1974, had the report or reports concerning the 1971 public hearings on the Park gone to translation and (a) if so, on what date (b) if not, for what reason?


Hon. Judd Buchanan (Minister of Indian Affairs and Northern Development):: 1. A firm date has not yet been fixed, but it is expected to be in February.
2. (a) The report was sent for translation December 10, 1974. (b) Not applicable.
1974 OFY PROGRAMME-PROVINCIAL ALLOCATION


Mr. Marshall: 1.	Under the 1974 OFY Programme, what amounts of money were allocated to each province and how many jobs were created in each province?
2.	What were the specific criteria used to determine the allocation of OFY monies to each province in 1974?
Hon. Robert K. Andras (Minister of Manpower and
Immigration): 1.			
	Jobs	Provincial	
Province	Created	Allocation *	Newfoundland	1,340	1,013,000	(included in theseNova Scotia	1,341	1,141,000	provincialPrince Edward Island	218	192,000	allocations theNew Brunswick	1,120	951,000	sum of $200,000Quebec	8,815	9,255,000	which was utilizedOntario	7,705	7,731,000	to fund projectsManitoba	1,347	1,252,000	of merit whoseAlberta	1,893	1,728,000	activities extendedSaskatchewan	1,150	1,110,000	beyond a givenNorthwest Territories	289	150,000	Management Area)British Columbia	2,276	2,114,000	Yukon	31	16,000	
2. The funds for the 1974 Opportunity for Youth Programme were allocated to the Department's 33 Management Areas, which covered all of Canada, using the formula which is described below. A Management Area was comprised of several Canada Manpower Centres. One-third of the OFY funds was allocated to the Management Areas on the basis of the distribution of the population 15 to 25 years of age in the areas as revealed by the 1971 Census. The remaining two-thirds were distributed in accordance with a prescribed formula which takes into account: (a) the number of jobs of a type considered normally available to young people, by area; (b) the population, 15 to 25 years of age, by area. The number of jobs available and the number of persons 15 to 25 years of age had been combined in the form of a Youth Job Availability Index for each Management Area. The numerator of the Index was the number of jobs available to young people in the Management Area; the number of persons 15 to 25 years of age was the denominator. The occupations included in the Index were restricted to those in which students and other youth could be expected to readily obtain work on account of the low skill and low experience requirements. The Youth Job Availability Index gave the relative position of each Management Area in terms of readily available job opportunities for young people and the
February 19, 1975

number of persons in the youth age group (15-25). This Index was then related to the youth population in the area (Population 15-25/Student Job Availability Index), the results of which formed the basis for the allocation of the two-thirds portion of OFY funds. In other words, the funds were allocated to the Areas by taking into consideration job availability and the number of young persons in the Area. The total funds allocated to a Management Area was the sum of the funds distributed on: (1) the basis of the youth population in the area, and (2) the funds allocated using the ratio of Youth Population/Youth Job Availability Index. The total funds allocated to a province was the sum of the funds allocated to all Management Areas within that province.


SUBSIDIES FOR NATURAL MILK
Mr. Lambert (Bellechasse): 1.	From October 1973 to January 4, 1975, how much did the government pay in subsidies for natural milk?
2.	How much money was paid to each province?


Hon. E. F. Whelan (Minister of Agriculture):: Subsidies paid were for natural milk (fluid milk): 1. $108,772,197.18.
2. Newfoundland, $617,203.73; Prince Edward Island, $469,810.03; Nova Scotia, $4,604,787.87; New Brunswick, $2,779,441.85; Quebec, $26,188,963.29; Ontario, $45,524,396.51; Manitoba, $5,148,415.44; Saskatchewan, $3,872,297.47; Alberta, $7,962,313.85; British Columbia, $11,604,567.14.


CBC PROGRAMME &quot;BYE-BYE 74&quot;
Mr. Herbert: Is it CBC policy to deride the Stations of the Cross and the feelings of Canadians as was done on the programme Bye-Bye 74?


Hon. James Hugh Faulkner (Secretary of State):: I am
informed by the Canadian Broadcasting Corporation as follows: No Religious programme, together with programmes including the serious discussion of religion form a regular part of the television and radio schedules of the CBC. The CBC French television network production of December 31, 1974, '"Bye-Bye 74' was a variety programme. The episode in question in the programme was a satirical one, in no way intended to deride religious practices.


DEPARTMENT OF INDIAN AFFAIRS AND NORTHERN DEVELOPMENT-NUMBER OF EMPLOYEES AND SALARIES
Mr. Paproski: 1.	How many full-time employees were under salary in the Department of Indian Affairs and Northern Development on (a) January 1, 1974 (b) January 1, 1975?
2.	How many people in each of these years received salaries of (a) under $10,000 (b) between $10,000 and $20,000 (c) between $20,000 and $30,000 (d) over $30,000?


J. Judd Buchanan: 1. (a) 8,955; (b) 9,151.
2.	1974: (a) 5,518, (b) 3,124, (c) 302, (d) 11; 1975: (a)
4,228, (b) 4,257, (c) 623, (d) 43.
Order Paper Questions


DEPARTMENT OF SECRETARY OF STATE-NUMBER OF EMPLOYEES AND SALARIES
Mr. Paproski: 1.	How many full-time employees were under salary in the Department of the Secretary of State on (a) January 1, 1974 (b) January 1, 1975?
2.	How many people in each of these years received salaries of (a) under $10,000 (b) between $10,000 and $20,000 (c) between $20,000 and $30,000 (d) over $30,000?


James Hugh Faulkner: 1.
January 1, 1974 January 1, 1975
(a) (b)	2,164	2,411(a)	856	784(b)	942	1,099(c)	355	513(d)	11	15


MINISTRY OF STATE FOR URBAN AFFAIRS-NUMBER OF EMPLOYEES AND SALARIES
Mr. Paproski: 1.	How many full-time employees were under salary in the Ministry of State for Urban Affairs on (a) January 1, 1974 (b) January 1,1975?
2.	How many people in each of these years received salaries of (a) under $10,000 (b) between $10,000 and $20,000 (c) between $20,000 and $30,000 (d) over $30,000?


Hon. Barney Danson (Minister of State for Urban Affairs):: 1. (a) 184; (b) 230.
2. January 1, 1974: Under $10,000, 75; $10,000-$20,000, 72; $20,000-$30,000, 34; over $30,000, 3; January 1, 1975: Under $10,000, 70; $10,000-$20,000, 99; $20,000-$30,000, 44; Over $30,000, 17.


CANADIAN COMMITTEE ON OCEANOGRAPHY
Mr. Forrestall: Who are the members of the Canadian Committee on Oceanography and how frequently and on what dates did they meet in the past six months?


Charles Mills (Bud) Drury: In so far as the National Research Council of Canada is concerned, the answer is as follows: Dr. J. D. Keys (Chairman), Mr. H. O. Buchanan, RADM. A. L. Collier, Dr. A. E. Collin, Mr. F. A. A. Fergusson, Dr. G. Filteau, Mr. A. H. Green, Mr. N. Haffey, Mr. R. G. Head, Dr. M. J. Keen, Dr. D. J. Le Roy, Mr. J. R. H. Noble, Mr. W. A. O'Neil, Dr. G. L. Pickard, Dr. E. R. Pounder, Dr. C. H. Smith. The Canadian Committee on Oceanography has not met within the last six months.

February 19, 1975
Order Paper Questions


GOVERNMENT POLICY CONCERNING RESIDENCE OF APPLICANTS FOR GOVERNMENT POSITIONS
Mr. Forrestall: Is it the policy of the government, when hiring through the Public Service Commission, to accept applications from citizens resident in any place in Canada for any job offered regardless of the location of the job opening and, if not, for what reason?


James Hugh Faulkner: I am informed by the Public Service Commission as follows: In accepting applications for appointment to positions in the Public Service, the Public Service Commission is governed by two sections of the Public Service Employment Act: (a) Section 13 of the PSE Act states "Before conducting a competition the Commission shall (a) determine the area in which applicants must reside in order to be eligible for appointment;..." (b) Section 19 of the PSE Act states "Where an appointment is to be made to a local office, the Commission in making the appointment from outside the Public Service shall, whenever it is in the best interests of the Public Service to do so, give preference in appointment to qualified candidates who reside in the area served by the local office over qualified candidates who do not so reside." To carry out and give effect to Section 19 of the Act, the Commission has adopted Public Service Employment Regulation 10 which states: "Where an appointment is to be made to a local office from outside the Public Service in either of the occupational categories referred to in the Public Service Staff Relations Act as the administrative support or the operational category, preference in appointment shall be given to qualified candidates who reside in the area served by the local office over qualified candidates who do not so reside."
In categories other than the administrative support or operational, the Commission, in determining the area in which applicants must reside pursuant to Section 13 of the PSE Act, is influenced by: (a) The extent to which the area of competition must be extended to ensure that an adequate number of candidates is attracted from which to make a suitable selection, and (b) The need to confine expenditures to reasonable levels, consistent with the objective of appointing the best available candidate for the position to be filled.


&quot;RADIO TELEVISION CANADA&quot; ILLUSTRATED BOOKLET
Mr. Herbert: With reference to the illustrated booklet Radio Television Canada what was (a) the number printed (b) the distribution (c) the cost of this publication?


James Hugh Faulkner: I am informed by the Canadian Broadcasting Corporation as follows: (a) 50,000. (b) The booklet is being made available to the general public including Members of the House of Commons and Members of the Senate, libraries and schools, government information offices, CBC listeners and viewers and other individuals or agencies requesting information about the national broadcasting service, (c) Total cost including layout, design and printing of this publication was $27,972.14.


AGRICULTURE-REMOVAL OF QUOTAS ON PRODUCTION
Mr. Robinson: Does the Minister of Agriculture consider that the farmers should produce more and, if so, is the government considering the removal of quotas on production so that Canada can provide more food for the world's starving millions?


Eugene Whelan: The Minister has stated on numerous occasions that he urges farmers to produce more, and that he is confident farmers will expand production if given adequate incentives to do so. The government does not impose production quotas on farmers. Marketing institutions such as the Canadian Dairy Commission, the Canadian Wheat Board and some producer marketing boards use marketing quotas to achieve orderly marketing for the purpose of forestalling shortage and surplus situations, and to enable all producers to have equal access to the market. These marketing quotas do not restrict production and removal of them would not increase the output of food from Canadian agriculture.


CHILEAN IMMIGRANTS
Mr. Huntington: Have Chilean immigrants arriving via Cuba and Mexico been allowed by Ottawa to enter Canada after having been refused entry by Vancouver immigration officials and, if so, what are the reasons for the overruling?


Robert Knight Andras: The Department of Manpower and Immigration has no knowledge of any Chilean immigrant arriving via Cuba and Mexico after having been refused entry by Vancouver immigration officials.


ATLANTIC REGION-ALL-WEATHER HIGHWAYS
Mr. Howie: Are there any plans to, in co-operation with the provinces, provide a complete network of all-weather highways through the Atlantic region, connecting to major markets in central Canada and the United States?


Jean Marchand: Although the Ministry of Transport presently has no programme for assisting the Atlantic Provinces in improving their primary highway network, we are constantly reviewing the highway needs of each region in Canada as they relate to the national interest.


DEPARTMENT OF MANPOWER AND IMMIGRATION-CLUSTER MANAGEMENT SYSTEM
Mr. Whittaker: Has the Pacific Region of the Department of Manpower and Immigration implemented the Cluster Management System for Canada Manpower Centres within that region and, if not, does it intend to implement such a system?


Robert Knight Andras: The Pacific Region of the Department of Manpower and Immigration has not yet implemented the cluster management system for Canada Manpower Centres. However, development work on the concept is con-
February 19, 1975

tinuing and it is anticipated that it will be introduced later this year.


QUESTIONS PASSED AS ORDERS FOR RETURNS
Mr. Clark (Rocky Mountain): 1.	On how many occasions in the life of the 29th Parliament has a public servant, other than a .translator, participated in a caucus meeting of the (a) Liberal (b) Progressive Conservative (c) New Democratic (d) Social Credit Party?
2.	In each such case, what was (a) the name of the public servant (b) the dates of the participation (c) the subject-matter discussed?
3.	On how many occasions in the life of the 29th Parliament has a public servant who was involved in preparation of a particular piece of legislation discussed the substance of that legislation with the caucus of the (a) Liberal (b) Progressive Conservative (c) New Democratic (d) Social Credit Party before that legislation was tabled in the House of Commons?
4.	In each such case, what was (a) the name of the public servant (b) the dates of the participation (c) the subject-matter discussed?
Return tabled.


OVERTIME PAY TO PUBLIC SERVANTS EARNING $18,000 OR MORE
Mr. Orlikow: 1.	How many Public Servants, by departments, commissions, Crown corporations, etc. earning over $18,000 a year in the past year received overtime pay?
2.	Of this number, how many received overtime pay (a) up to $1,000 (b) between $1,000 and $2,000 (c) between $2,000 and $3,000 (d) between $3,000 and $4,000 (e) between $4,000 and $5,000 (f) $5,000 and over?
Return tabled.


PUBLIC SERVANTS IN RECEIPT OF REMUNERATION FROM MORE THAN ONE DEPARTMENT
Mr. Herbert: Did any public servants in the last year for which the information is available receive any remuneration from another department while receiving full annual salary from their proper department and, if so, how many received such a remuneration and what were the circumstances that lead to the approval of this "double-dipping"?
Return tabled.


Mr. Stevens:: Mr. Speaker, I rise on a point of order. Questions Nos. 636 and 637 were originally placed on the Order Paper of the twenty-ninth parliament on February 28 of last year as questions Nos. 222 and 225. The parliamentary secretary has only two parliamentary days left to save the government from going into year two in answering these questions. One deals with the Olympic program about which members are entitled to some information. The second deals with the information service officers retained by this government. Perhaps the parliamentary secretary can accept the challenge of saving the government from continuing this Rip van Winkle type of approach in not answering these questions.
Order Paper Questions


John Mercer Reid: Mr. Speaker, I take no responsibility for the answering of those questions. My duty is to report them. I suggest the hon. member take up his quarrel with the relevant ministers who are obviously not doing their work.


Some hon. Members:: Oh, oh!


John George Diefenbaker: Mr. Speaker, the admission just made by the parliamentary secretary will be generally received with acclaim on this side of the House. In fact, the only criticism will be its limitation to the few ministers.
I again raise a matter which reveals the complete contempt this government shows toward questions for which they have answers but refuse to give them. I refer to question No. 1,256. It was placed on the Order Paper last fall and answered in a way that had no regard to parliamentary procedure or to truth.


Some hon. Members:: Oh, oh!


John George Diefenbaker: I put the question back on the Order Paper with a slight alteration on February 5. I simply asked about the pension received by a former minister of the Crown, the Hon. John Whitney Pickersgill, and the salary he received when President of the Canadian Transport Commission. The government and the department are deliberately causing an affront to parliament by not answering. They have the information. They do not want to reveal it. They contemptuously treat members of parliament as though they were not here or had no right to examine anything connected with expenditures.


Mr. Orlikow:: Mr. Speaker, I placed starred question No. 196 on the Order Paper last October 1.1 asked:
How many public servants, by departments, commissions, crown corporations, etc. earning over $18,000 a year in the past year received overtime pay?
The second part of the question asks how many received overtime pay up to $1,000 and so on. I do not mind if the parliamentary secretary does not give a verbal answer, but I see no reason for him to ask that it be made an order for return. People are interested in the answer to this question. It should be printed in Hansard so they can get a copy and see what are the facts.


Mr. Clark (Rocky Mountain):: Mr. Speaker, I rise on a point of order. I want to draw the attention of the parliamentary secretary to the continuing failure to reply to question No. 782 which has been on the Order Paper in various forms since the last session. It seeks to elicit information as to the number of individuals employed in Crown agencies who began their public service careers in the political offices of ministers of the Crown. The question has acquired particular urgency following the recent Batten report which indicates that the major recruiting office for officials of the Unemployment Insurance Commission is the political office of the Minister of Manpower and Immigration.


Mr. Schumacher:: I should like to bring question No. 1,223 to the attention of the parliamentary secretary in the absence of the Solicitor General. This question has now

February 19, 1975
Order Paper Questions
been on the Order Paper for almost a month. It relates to the number of prisoners released from our penal institutions and to certain crimes committed by people who should not be at large. It is of some urgency and I hope an effort will be made to answer this question.


Stanley Howard Knowles: I rise on a point of order having to do with the point raised by my hon. friend from Winnipeg North. It seems to me that what my hon. friend presented was not just a grievance but a request that the rules be followed. In my view there should either be a ruling or an offer by the Parliamentary Secretary to the President of the Privy Council to put the answer to that question on record in Hansard.
My hon. friend referred to question No. 196, which was a starred question, and according to Standing Order 39(2) (A) he has a right to an oral answer. He did say he was prepared to accept the answer being put on record in Hansard, but I really think it is going too far to reply by saying that a return would be tabled. Perhaps the parliamentary secretary would agree to printing the answer in Hansard.


Mr. Speaker:: The hon. member will realize, I am sure, that the House has already passed an opinion on this matter when an order for return was made. Hon. members were asked whether it was the pleasure of the House that this be done, and it was done. We cannot go back over that ground. Perhaps the suggestion offered by the hon. member could be considered by the parliamentary secretary.


Stanley Howard Knowles: Perhaps there could be unanimous consent that the answer to that starred question be printed in Hansard.


Mr. Speaker:: Is it agreed?


Some hon. Members:: No.


Sinclair McKnight Stevens: Mr. Speaker, the parliamentary secretary suggested that I take up my grievance with the two ministers responsible. Could he be more specific? I think there are about five ministers who might possibly be involved.


Thomas Charles Cossitt: I rise on a point of order to call attention to the fact that it will soon be Easter again and that question No. 25 has remained unanswered since last Easter in the old parliament and again in this parliament. It is a simple question. It asks how much was paid from public funds for two specific trips made to the Caribbean for holidays by the Prime Minister and a second trip to Switzerland. Surely, all the bills and accounts have now been received and been paid. I believe I am justified in bringing up this matter again, as I have brought it up on several earlier occasions, without receiving any response from the parliamentary secretary. I think an answer to question 25 should now be available and I can only assume, because it has not been provided, that the government is trying to hide information from the Canadian parliament and the Canadian people. We are getting rather tired of information to which we are entitled being denied us.


Some hon. Members:: Hear, hear!


Thomas Charles Cossitt: Members on that side of the House are afraid of the consequences if the Canadian people are given these facts. I believe it is about time we got answers to our questions within a reasonable period of time and not six, eight, or ten months after they have been put down.


Some hon. Members:: Hear, hear!


Mr. Coates:: I do not wish to complain about questions which are still unanswered. I did that a while ago. But something has to be done if there is to be any sense of order in this chamber. What is happening now is what I predicted on Monday would happen, and it will be repeated indefinitely unless things are done properly; hon. members will use devices which go against the rules because the rules are not suitable in meeting the circumstances of the day. We have to move forward along the lines suggested by the hon. member for Grenville-Carleton (Mr. Baker) so as to ensure that Your Honour is not put through the tortures of the damned trying to get us to the business we are supposed to be considering because the government is not handling the affairs of the House properly.


MOTIONS FOR PAPERS
John Mercer Reid: Would Your Honour be so kind as to call Notice of Motion No. 24?


Mr. Speaker:: Notice of Motion No. 24.
COPY OF AIR CANADA CONTRACT AS REVISED Motion No. 24-Mr. Mazankowski:
That an Order of the House do issue for a copy of the Air Canada contract and all additions, revisions and amendments thereto.


John Mercer Reid: The Air Canada contract contains considerable confidential information relating to the organization, operation and maintenance of the Air Canada lines. Air Canada's competitors are not obliged to provide such information or expose their contractual arrangements to similar scrutiny. To place Air Canada in such a disadvantageous position would not be in the public interest. Under these circumstances would the hon. member agree to withdraw the motion?


Robert Gordon Lee Fairweather: How can a monopoly be at a disadvantage?


An hon. Member:: Transfer for debate.


Mr. Speaker:: Transferred for debate. Shall the remaining notices of motion for production of documents be allowed to stand?


Some hon. Members:: Agreed.



ORAL QUESTION PERIOD


Robert Lorne Stanfield: In directing my question to the Minister of Finance, I would remind him that on January 28 he said he had informed labour leaders in Vancouver, I think it was, some time previously that from his point of view the addition of a COLA clause made a good deal of sense because it responded to the cost of living rather than anticipating rates of inflation which hopefully would not be attained. I would surmise that following this statement most labour leaders would think that a COLA clause was well within the ground rules of the Minister of Finance related to restraints and the policy of consensus he is trying to attain. Is this statement that a COLA clause makes a good deal of sense still the minister's view?


Hon. John N. Turner (Minister of Finance):: Yes, sir. There may be situations in negotiations between employers and labour where a COLA clause would be less inflationary than a clause based on future rates of inflation which might be a self-fulfilling prophecy. Each case must be examined on its merits.


Robert Lorne Stanfield: I should like to ask the minister whether his statement that from his point of view the addition of a COLA clause made a good deal of sense would not be taken to be a declaration of a much more general nature than he has indicated. Specifically, I would ask the minister whether it is the policy of the government in discussing a consensus with labour leaders and others to approve of the presence of a COLA clause in a contract. Would any contract negotiated with such a clause in it be regarded by the Minister of Finance as being out of order?


John Napier Turner: As I indicated to the hon. gentleman rather fully last Thursday, just after orders of the day were called, we are at the exploratory or evolving stage of this consensus and the government has not yet put forward any proposals. We are listening to labour, management, professionals and consumer groups to find out what aspects of moderation in their claims against the economy are possible.


Robert Lorne Stanfield: Having told us that in his view a COLA clause would not be considered to be excessive in the case of labour contracts in the private sector, would the hon. gentleman indicate his attitude toward a COLA clause in a public service contract?


John Napier Turner: Mr. Speaker, I have said that in general terms it may be that negotiation or settlement of any particular COLA clause would be less inflationary than a settlement which tried to anticipate future rates of inflation as a direct linear projection of the current rate. So far as public sector negotiations are concerned, it depends on the particular situation. I have full confidence that the negotiator on behalf of the govern-
Oral Questions
ment will take all factors into consideration, and the man in charge of negotiations for the government is my colleague the President of the Treasury Board.


PUBLIC SERVICE
Hon. W. G. Dinsdale (Brandon-Souris):: Mr. Speaker, I have a supplementary question for the President of the Treasury Board. In light of the fact that a make-up pay boost is one of the basic requirements of continued negotiation with the postal unions with reference to the current troubles and has also been underlined by the Postmaster General from time to time as being one of the reasons for the continuing malaise among postal employees, would the President of the Treasury Board put forward some sort of proposition that would get negotiations started again with this important sector of the public service?


Joseph Jacques Jean Chrétien: Mr. Speaker, we undertook negotiations. I believe one group applied for conciliation, and we will be present. Everything is proceeding normally. We hope a common ground can be found, to the satisfaction of both parties.


Walter Gilbert Dinsdale: A further supplementary question, Mr. Speaker. With reference to the specific question that I asked the President of the Treasury Board, is he considering the make-up-in-the-pay-cheque proposition that is regarded as basic to any resumption of negotiations with the postal workers?


Joseph Jacques Jean Chrétien: Mr. Speaker, I do not believe a move in that direction would be appropriate. The hon. member should know a $500 payment was made to all civil servants whose contract was not negotiated in 1974. Post office employees were paid that $500, as was every other government employee.


FINANCE
Mr. Edward Broadbent (Oshawa-Whitby):: Mr. Speaker, I have a question for the Minister of Finance. Considering the fact that among those most seriously affected by the current rate of inflation, which is running in the neighbourhood of 10 to 12 per cent, are the six million Canadians who would be positively affected by the introduction of some form of guaranteed minimum income program at this time, would the minister inform the House why under the existing circumstances the government has reached the decision-if indeed it has-that it does not

Oral Questions
now intend to proceed with this kind of program for those in the country who need it the most?


John Napier Turner: Mr. Speaker, that question ought to be referred to my colleague the Minister of National Health and Welfare who spoke on behalf of the government at a federal-provincial conference.


John Edward Broadbent: A supplementary question, Mr. Speaker. I saw the minister winking across the House, which surely suggests we should take his answer with some skepticism. I am asking him this question as Minister of Finance, and I think it is a reasonable assumption for us to make if past practices of parliamentary government have been observed by the cabinet, that he played a crucial role in this decision. Is it his view as Minister of Finance that the government cannot afford to implement this program at this time?


John Napier Turner: Mr. Speaker, I want to assure the hon. gentleman that no question that he has put to me so far has made me blink. The hon. gentleman ought to refer to the address my colleague made to the federal-provincial conference of welfare ministers; the government's position is contained fully in that document.
Mb-. Broadbent: A final supplementary question. I am in fact referring to an earlier speech made by that minister in November, when he documented the problems of the poor in our society. I conclude with this question. Is it the minister's view, as Minister of Finance, that the $500 million only that the federal government would have to put up under changes to the Canada Assistance Plan- which would be the best route to take in this regard-are beyond the fiscal capabilities of this government?


John Napier Turner: Mr. Speaker, my view was expressed by my colleague at the conference.


PUBLIC SERVICE
René Matte: Mr. Speaker, I have a question for the President of the Treasury Board.
Could he tell the House whether the government is considering generalizing the policy already partially established of hiring private contractors to do the work usually done by the public service employees now on strike and, second, does he consider normal that the same work in the same department is paid at different levels depending on whether the employee belongs to the public service or works for a private contractor, in which case his salary is much higher?


Joseph Jacques Jean Chrétien: Mr. Speaker, in cases where external help is required, we must take into account the fact that these employees are hired only temporarily, and sometimes even for a few hours or a few days, and their salary basis cannot be the same as that which applies to people who work throughout

the year. When employees are on strike, as they are now, it is not government policy to hire staff from the private sector to replace them. However, when public servants are illegally on strike, I believe the government is entitled to replace them by people from the private sector.


USE OF PAY RESEARCH BUREAU AS BASIS FOR NEGOTIATION WITH GENERAL LABOUR AND TRADES GROUP
Mr. J. M. Forrestall (Dartmouth-Halifax East):: Mr. Speaker, I want to direct a question that is supplementary to the earlier questions asked of the President of the Treasury Board. In view of the fact that a confidential report prepared by the federal pay research bureau has indicated that the workers in the general labour and trades group are paid at a lower rate than those in comparable positions in the private sector, and because it has been intimated that unless these anomalies are corrected the public service will face a severe labour shortage within the next decade, will the Minister indicate whether or not he would consider using this report as a basis for further negotiations, in an effort to resume settlement talks in the public interest?


Joseph Jacques Jean Chrétien: Mr. Speaker, we do not accept the premise contained in this question. I think there is no problem at all at this time getting employees to work for the government.


J. Michael Forrestall: A further supplementary question, Mr. Speaker. May I ask the minister whether or not he is, in fact, in possession of a confidential report from the pay research bureau which indicates that members of the general labour and trades group are paid at a rate substantially lower than or not comparable with the general prevailing rates in the given zones and areas across the country?


Joseph Jacques Jean Chrétien: Mr. Speaker, I am told that this statement is incorrect. Sometimes we are not talking about the same kind of employees. Some who work in maintenance positions cannot be compared with those who work in the construction industry, and so on. I think they do compare with people having similar occupations in the private sector. If we are wrong in some instances then we will be willing to correct those errors, but I am told that there are no such errors at the moment.


FINANCE
James Aloysius McGrath: Mr. Speaker, my question is supplementary to that posed to the Minister of Finance by the Leader of the Opposition regarding his pursuit of voluntary restraints and guidelines. Is the 28 per cent increase in federal spending represented by the estimates that have now been put before the House within government guidelines, and if not is the minister trying to tell us that he is in the position of imposing restraints on others that he is not prepared to impose on the government?
February 19, 1975


John Napier Turner: Mr. Speaker, the main estimates tabled today by my colleague the President of the Treasury Board include only authorized expenditures as of this date. I said on budget day, and the President of the Treasury Board repeated today, that in comparing total outlays-budgetary, non-budgetery, including supplementary estimates, all loans and obligations of the government, the old age assistance plan, unemployment insurance-the total outlays for 1975-76 over 1974-75 are still estimated to be in the range I projected on budget night.


James Aloysius McGrath: A final supplementary question, Mr. Speaker. Has the minister in fact set down guidelines on government spending, and is in fact the current increase in government spending within these guidelines?


John Napier Turner: Mr. Speaker, as the President of the Treasury Board answered, subject to situations we have not contemplated up to this moment, we hope that the projected increases in expenditures as estimated in the budget will be fulfilled. I would refer the hon. gentleman to the statement of the President of the Treasury Board earlier in the session.


PUBLIC BUILDINGS
Mr. Bill Clarke (Vancouver Quadra):: Mr. Speaker, I should like to draw the attention of the Minister of Public Works to a recent advertisement in Vancouver under the public works banner and over the signature of Mr. MacLeod, regional manager of property services, which calls for lease proposals for 206,000 square feet of air conditioned office space in the city of Vancouver. The description, occupancy date and location required for this space were such that only one building, the nearly completed Bour-dignon building in the Marpole area, could possibly qualify, and all other developers were therefore prevented from submitting proposals. I would ask the minister whether he will conduct a thorough investigation into what appears to be a sham advertisement calling for proposals, to the detriment of the taxpayers, especially in view of the fact that the Department of National Revenue had already agreed to lease the Bourdignon building before this advertisement was placed, as evidenced by the statement of government employees that the Income Tax Department in Vancouver would be moving in July of this year into a Marpole building.


Charles Mills (Bud) Drury: Mr. Speaker, without agreeing in any way that this is a sham advertisement, I would be glad to look into the matter.
Oral Questions ESTIMATES


DATE OF TABLING SUPPLEMENTARY ESTIMATES D, 1974-75
Mr. Lloyd R. Crouse (South Shore):: Mr. speaker, I have a question for the President of the Treasury Board which relates to a question asked by the Leader of the Opposition. Now that we have had the bad news in respect of expenditures for next year, will the minister tell the House when he proposes to table Supplementary Estimates (D) for 1974-75, and how much more money will be added to government expenditures for that year?


Joseph Jacques Jean Chrétien: Mr. Speaker, we are getting ready to table out final estimates in the House in the next few days.


FINANCE
Lloyd Roseville Crouse: Mr. Speaker, I have a supplementary question for the Minister of Finance, that minister who, when he is not winking and blinking, may be nodding. In view of the statement by the President of the Treasury Board that there are to be additional estimates tabled, which I understand will be in the nature of something in excess of $500 million, will he explain why in his budget of November 18 he forgot about supplementary estimates (D) when tabling the expenditures amounting to $24,850 million?


John Napier Turner: Mr. Speaker, these were not forgotten, but it will take me some time to explain to the hon. member on an appropriate occasion.


UNEMPLOYMENT INSURANCE
Mr.   Sean@: Mr. Speaker, my question to the Minister of Manpower and Immigration concerns a confidential report about the unemployment insurance commission, commissioned by the government at considerable cost to the Canadian taxpayer and submitted by York Advertising Limited of Ottawa. In this report there are very disturbing findings such as that on page eight which refers to "programs we have witnessed appear to be based on some combination of hunches and ad hockery", as well as the observation on page 26 that "the UIC has been considered a dumping ground for incompetents and a career deadend".


Some hon. Members:: Order, order!


Mr. O'Sullivan:: In view of the concern of members of this House about the Unemployment Insurance Commis-

February 19, 1975
Oral Questions
sion and the very disturbing implications of this report, will the minister table it forthwith in the House?


Robert Knight Andras: Mr. Speaker, I will note the hon. member's representations.


AGRICULTURE
Mr. J. H. Horner (Crowfoot):: Mr. Speaker, I should like to ask the Minister of Agriculture whether he or his department have considered the possibility of averaging the floor price for beef cattle, which he started on August 12, 1974, every six months rather than yearly?


Eugene Whelan: Mr. Speaker, we looked at that suggestion and decided such a program would be so hard to administer it would be impossible to put into place.


INCOME TAX
Mr. Lome Nystrom (Yorkton-Melville):: Mr. Speaker, I should like to ask the winking Minister of Finance whether he has received a telegram from Premier Blakeney requesting "a delay in the passage of the portion of the income tax bill dealing with non-deductibility of royalties until after the first ministers' conference"? In view of the premier's desire to seek an accommodation, I should like to ask the minister whether he is considering that very reasonable suggestion?


John Napier Turner: Mr. Speaker, in the last two days I have been out in Vancouver and I have not seen this particular telegram. I think we have to look at the request with both eyes open, and I do not think it is cause for change.


Lorne Edmund Nystrom: Mr. Speaker, in view of the minister's answer, I should like to ask whether he is not now ready to accept or consider that proposal to delay proclaiming this clause until after the first ministers' conference, again in the interest of confederation and unity?


John Napier Turner: Mr. Speaker, we dealt with this in the committee of the whole during the debate on the income tax bill. At that time I said the answer was no and I repeat it now before the whole House.


Some hon. Members:: Hear, hear!


AGRICULTURE
Mr. Claude Wagner (Saint-Hyacinthe):: Mr. Speaker, I have a question for the Minister of Consumer and Corporate Affairs.
Since our poultry producers are so literally outraged by massive US chicken imports that this morning in Saint-Damase, in the beautiful riding of Saint-Hyacinthe, some of them set fire to shipments from the United States, can the minister, in cooperation with his colleague the Minister of Agriculture, assure that Canadian consumers, and Quebec consumers in particular, will not be the victims once again at the retail price level of that new war between American and Canadian producers.


Hon. Andre Ouellet (Minister of Consumer and Corporate Affairs):: Mr. Speaker, I will be glad to talk it over with my colleague the Minister of Agriculture.


Claude Wagner: Mr. Speaker, I have a supplementary for the Minister of Agriculture. Considering that our poultry slaughter houses are importing increasing amounts of US chickens to remedy their shortages of fresh chicken, and considering also that the Poultry Producers' Federation is prepared to increase the quotas of our own producers in the event of better control over chicken imports, can the minister state his policy on that, and more particularly could he tell the House whether he intends to intervene, first, at the import level and, second, at the level of his provincial counterparts to develop with them a policy that would be more favourable to our own producers of fresh chicken?


Eugene Whelan: Mr. Speaker, contrary to what was said in the House yesterday, the poultry stocks are not higher than last year. Actually, they are a little bit lower. The poultry producers have organized themselves, without any national marketing agency, in respect of controls and cut-backs to the extent of 10 per cent in production. They have agreed to that. Without any real guarantee of supply management in respect of such an agency, there is very little I could do as far as controlling imports from another country, at least without getting into what the hon. member has suggested, another so-called trade war.


HOUSING
Miss Flora MacDonald (Kingston and the Islands):: Mr. Speaker, since the minister of State for Urban Affairs has stated it was his intention to monitor the reduction of sales tax on building materials to see that the paving is passed along to the consumer, will he tell the House how this is planned and when it will take effect so we do not have a repetition of the monitoring of the removal of the
February 19, 1975

sales tax on clothing, in respect of which stores are notified in advance of any inspection?


Barnett Jerome Danson: Mr. Speaker, as I stated in the House before, this is carried out by the materials monitoring group of Central Mortgage and Housing Corporation. The indications so far are that the sales tax reduction is being passed on. I am never satisfied, nor are they, and there are continuing inspections and reports which are being accelerated so they will come in more frequently than normal. I am keeping a close eye on the situation.


Flora Isabel MacDonald: Mr. Speaker, will the minister indicate to the House when we can expect a full report on the effects to the consumer of the reduction in the sales tax on building materials?


Barnett Jerome Danson: Mr. Speaker, I had not anticipated at this point having a full report. I want current reports on a very regular basis so that we can monitor continually. After a reasonable period of time, I would be very happy to report on the net impact of this. As the hon. member can appreciate, the net impact at any given time is difficult to follow. However, by constant monitoring and questioning we are able to isolate those areas where it is being passed on, as well as those areas where it might not be passed on, and that is where we have to concentrate.


CONSUMER AFFAIRS
Mr. Steven E. Paproski (Edmonton Centre):: My supplementary question is for the Minister of Consumer and Corporate Affairs. Will the minister indicate to the House whether or not he has received the results of the national survey mentioned last November on sales tax monitoring?


André Ouellet: Mr. Speaker, there were delays in the compilation of the information provided by importers and manufacturers. I hope to have that report by the end of the month.


THE CANADIAN ECONOMY
Robert Lorne Stanfield: Mr. Speaker, I should like to direct a question to the Acting Prime Minister. There seems to be some difference in view between himself and the Minister of Finance about certain aspects of the anti-inflation program. Could he tell us who is in charge of this program of the govern-
Oral Questions
ment, is this program directed by the Prime Minister or is it in the charge of a particular minister?


Mitchell William Sharp: The
hon. gentleman has tried to point out differences between the Minister of Finance and myself but he has not succeeded. It has been a lamentable failure. I am very happy to have my colleague here to affirm the policy of the government with respect to this and other matters.
In so far as the anti-inflation program is concerned, this is a joint undertaking of several ministers. If it is under any general direction, it is under the direction of the Prime Minister. Of course, my colleague, the Minister of Finance, has a very important part to play because he is one of the most valuable citizens in this country.


Some hon. Members:: Hear, hear!


Robert Lorne Stanfield: It may not be very reassuring but it at least has been some clarification for the Acting Prime Minister to have expressed some doubt as to whether the program is under any general direction.
I should like to ask the Acting Prime Minister whether there is any way in which he can convince any reasonable person that the statement made by the Minister of Finance with regard to COLA contracts on January 28 bears any resemblance to the interpretation which he tried to place upon it in the House recently.


Mitchell William Sharp: The hon. gentleman will have noticed that the Minister of Finance has agreed entirely with my interpretation.


AGRICULTURE
Léonel Beaudoin: Mr. Speaker, I want to direct a question to the Minister of Agriculture.
Since the agricultural issues have not been dealt with in the budget speech this year, in spite of the continuing difficulties in that basic sector of the Canadian economy, could the minister advise the House whether he intends to require special subsidies to cope immediately with the situation, or whether he will wait for the eventually forthcoming supplementary budget of the Minister of Finance to obtain the money required for appropriate action?


Eugene Whelan: Mr. Speaker, I have been successful in getting money for agriculture for any legitimate reason nearly any time I wanted, and I am sure that is a known fact.


SHORTAGE OF HAY-POSSIBILITY OF IMPORTATION FROM UNITED STATES
Léonel Beaudoin: Mr. Speaker, I have a supplementary.

February 19, 1975
Oral Questions
In view of the lack of fodder, particularly hay, in eastern Canada, whose prohibitive price is $100 a ton, and considering that farmers have lots of difficulties in getting some because there in no more supply, could the minister tell the House whether he will take the necessary action to import hay from the United States or elsewhere to allow cattle feeding?


Eugene Whelan: Mr. Speaker, my department and I have done our best to ensure that there is not that kind of shortage. Up to date, I have not received any official request from the province of Quebec.


NATIONAL DEFENCE
David Orlikow: I should like to direct my question to the Minister of National Defence and ask him whether, in view of the promise made by the Prime Minister and the Minister of National Defence last June that there would be 800 aerospace jobs provided in Winnipeg, including personnel working on base for Canadian Aviation and Electronics, and that DND Boeing 707s would be serviced by CAE, and in view of the fact that a contract for a transfer has now been let, has the minister any information which will give some encouragement to the people now working at CAE that they will not be in the unemployment lines in the very near future?


Hon. James Richardson (Minister of National Defence):: Mr. Speaker, the commitments that were made in June are in the process of being fulfilled. One was that the Boeing 707 repair overhaul would be undertaken in Winnipeg, and that is taking place. Another commitment was that there would be a larger Air Canada presence, and there has been an announcement of a new hangar which is to be constructed. At the same time we set as an objective the creation of 800 jobs. That objective is in the process of being fulfilled. No time limit was set on it.
So far as CAE employees are concerned, every attempt is being made to find work for them at Transair or elsewhere, but particularly at Transair where Boeing 707 work is being done.


David Orlikow: Mr. Speaker, I would like to ask the minister the following question. In view of the letter which he wrote and which appeared on June 14 in which he said that overhaul work on DND Boeing 707s will be done in Winnipeg by CAE in Air Canada buildings, will the minister explain why that is not being done and will he tell members of the House, and particularly workers at CAE, whether arrangements have been made by the government with Transair so that at least the first call for the jobs which will be created at Transair will be given to those people at CAE who have already lost their jobs earlier with Air Canada and are now losing their jobs at CAE?


James Armstrong Richardson: At the time when that statement was made we were mainly concerned with having Boeing 707 work done in Winnipeg so that we could establish a major repair and overhaul capability in that city. Now that has been achieved. At the time, CAE appeared to be the only company that was able to perform that work, and we did not know until my colleague, the Minister of Supply and Services, set out to write a contract, that there was another firm that could do the work. He was responsible for the contract and he gave it to Transair.


HANGAR AT WINNIPEG-DATE OF CONSTRUCTION AND FOR WHOM CONSTRUCTED
A. Daniel McKenzie: I have a supplementary question for the Minister of National Defence. I understood the minister to say that a new hangar is under construction in Winnipeg. I wonder if he could inform the House for whom the hangar is being constructed.


An hon. Member:: Where is it being constructed?


James Armstrong Richardson: I do not believe I said it was under construction. It has, however, been announced by the chairman of Air Canada, the names of architects have been announced, and it is a project that is clearly underway. However, I am certain that the actual construction has not started.


A. Daniel McKenzie: Could the minister tell us if the Minister of Supply and Services has found any further contracts for CAE in Winnipeg?


James Armstrong Richardson: I cannot answer on behalf of the Minister of Supply and Services, but of course there is other work and that company is capable of doing the work, and I expect that they will have additional work in the months ahead.


BUSINESS OF THE HOUSE
John George Diefenbaker: Mr. Speaker, I should like to direct my question to the government House leader. Having regard to the salutary spanking which the parliamentary secretary gave to ministers of the Crown earlier-


Some hon. Members:: Hear, hear!


John George Diefenbaker: It was a most unique occasion-I have never witnessed it before. May I ask the minister, knowing his desire to make parliament work, following his post-graduate course in London recently at Westminster, and because of the fact that Mr. Speaker very properly stated that he cannot do anything about protecting the right of members to secure information, will he get in touch with the various ministers in the cabinet, having first himself examined the questions, and point out to them the admonition that was given to them today by the
February 19, 1975

parliamentary secretary, and at the same time let this House know that it is going to operate properly and questions will be answered, however embarrassing to the government?


Some hon. Members:: Hear, hear!


Mitchell William Sharp: Mr. Speaker, I have already done so. I have already spoken to my colleagues. I have been told by them, however, and I have examined the question as well, that there are some questions being put on the order paper-


An hon. Member:: That are embarrassing.


Mitchell William Sharp: Not that are embarrassing but that involve an enormous expenditure of public funds. When questions are asked, I think they should be put in a form that can be answered quickly and with a minimum of expense.


John George Diefenbaker: Mr. Speaker, a supplementary question to one of the ministers who was spanked, the Minister of Transport. I have every sympathy for a minister who is spanked by a parliamentary secretary-but then every minister has my sympathy. I should like to ask the Minister of Transport to tell us what is the reason for the delay over months-and on the last occasion over two weeks-in answering a question regarding one of our former colleagues, the Honourable Mr. Pickersgill. There is no difficulty there and an answer should not take months. Why the delay?


Jean Marchand: Mr. Speaker, sometimes in life there are coincidences which nobody can foresee. At the very moment the hon. gentleman was asking this question, I was signing the answer in my book.


John George Diefenbaker: Mr. Speaker, such an unusual act on the part of the government deserves the highest commendation. Those that see wrongdoing and finally act deserve every commendation.


An hon. Member:: How long has it been in your book?


AGRICULTURE
Mr. John Wise (Elgin):: Mr. Speaker, my question is for the Minister of Agriculture. On January 24 the minister indicated in the House that a review of the dairy industry had been completed and that an index formula for milk pricing had been finalized. I should like to ask the minister whether he intends to make this formula available for study to the dairy farmers of Canada, producer associations, provincial marketing boards and other interested groups in the industry prior to the implementation of such a program?
Oral Questions


Eugene Whelan: Mr. Speaker, I do not remember the exact verbiage I used on the date the hon. member mentions.


An hon. Member:: Did you say garbage?


Eugene Whelan: But a policy has been developed after a long period of study with input from all the organizations and the provinces. We will have final discussions with the people most concerned, the dairy farmers of Canada, before the final formula is presented to the industry.


John Wise: A supplementary question, Mr. Speaker. Is it the minister's intention to introduce this program on or about April 1, the beginning of the normal dairy year?


Eugene Whelan: Mr. Speaker, I hope to have it at least by that time but sooner if at all possible so that people can understand the policy and it can be explained to them before it is actually put into use.


POST OFFICE
Stanley Stanford Schumacher: Mr. Speaker, my question is for the Postmaster General. Is it government policy that effective March 3 or soon thereafter the Post Office prestamped envelopes will no longer carry the image of the Queen and if so, what will be represented?


Hon. Bryce Mackasey (Postmaster General):: Mr. Speaker, we have been issuing stamps for many, many years that do not carry the image of the Queen. We will carry the image of the Queen in future years, however, as we have done in the past as well, as, who knows, some day pictures of past Postmasters General.


EXTERNAL AFFAIRS
[Stage Direction]
\
Mr. Lincoln M. Alexander (Hamilton West):: Mr. Speaker, my question is for the Acting Prime Minister. On January 24, my colleague the hon. member for Wellington-Grey-Dufferin-Waterloo brought to the attention of the Acting Prime Minister the tragic death of a young boy in Hamilton as a result of a motor vehicle accident. The vehicle was driven by one Thomas Martin. At that time the hon. member asked whether the government was prepared to serve notice on the government of the United States that it should amend the extradition treaty to ensure that the charge of, criminal negligence was included. The minister said that this particular point was not raised when he signed the last extradition treaty but that he would take the situation under consideration. This is a very important matter. I wonder whether the minister followed it up and if he has a reply for us?

Oral Questions


Mitchell William Sharp: Mr. Speaker, it is my understanding that the Department of External Affairs is consulting with the Department of Justice on this question.


MANPOWER
Mr. Jack Marshall (Humber-St. George's-St. Barbe):: Mr. Speaker, my question is for the Minister of Manpower and Immigration. In view of the fact that the increasing unemployment rate is particularly affecting people in the age bracket 15 to 25, and in view of the high rate of unemployment in the Atlantic region, I wonder if the minister is considering, with the increasing number of applications of the Opportunities for Youth program, increasing the funds available to that program in order to be able to stop the steady increase of unemployment for those particular individuals?


Robert Knight Andras: Mr. Speaker, we are always giving ongoing consideration but no such decision has been made, although the matter is under review at the moment.


AGRICULTURE
Mr. S. J. Korchinski (Mackenzie):: Mr. Speaker, a question for the Minister of Agriculture. A lot of young farmers have been encouraged to enter the cattle industry as a result of the government's policy of making loans available under programs such as the Farm Credit Corporation and the Farm Improvement Loans. There is now a slump in the cattle industry, however, as a result of the government's inactivity. Is the government now prepared to defer interest payments or reorganize the Farm Credit Corporation so that as much of the industry as is possible can be salvaged?


Eugene Whelan: Mr. Speaker, I do not deny that the government did lend some money to help young farmers enter the cattle industry, but I think the hon. member should remember that the provinces did much more to encourage this than the federal government. Any reasonable or responsible request for deferral by any farmer who finds himself in difficulty, will be dealt with sympathetically by the Farm Credit Corporation.


Stanley James Korchinski: A supplementary question. Inasmuch as some of the programs have been "stop loss" rather than "make profit", has the government given any consideration to picking up the tab for interest on Farm Improvement Loans?


Eugene Whelan: Mr. Speaker, I do not think we have given any concentrated consideration to this but I would be only too willing to discuss it with my colleague who has jurisdiction over the Farm Improvement Loan program, the Minister of Finance.


REQUEST FOR TABLING OF CORRESPONDENCE WITH PROVINCES ON CANADIAN EGG MARKETING AGENCY
Mr. Jack Murta (Lisgar):: Mr. Speaker, I should like to address a question to the Minister of Agriculture who on Monday night indicated some willingness to table the telegrams sent to him concerning the operations of CEMA by the provincial ministers of agriculture. There are indications that CEMA is in very bad financial trouble and is not getting the necessary co-operation from the provinces. In view of the urgency of the matter, I wonder whether the minister would table the correspondence so that either the Standing Committee on Agriculture or the House could see exactly what the situation is in regard to the Canadian Egg Marketing Agency?


Eugene Whelan: Mr. Speaker, during the course of debate the other night I reported to the House that most of the provinces had committed themselves to paying the money. Some of them have paid it. I would say that CEMA is in a better financial position than it has ever been. We are following the proper course, asking permission from the senders of the telegrams, the provincial ministers, to table the telegrams in this House. I hope to have that authority shortly.


AIR CANADA
A. Daniel McKenzie: Mr. Speaker, I rise on a point of order. Last Friday the hon. member for Winnipeg North Centre asked the Minister of Labour if mediation services would be assisting in the serious labour problems of the Air Canada financial branch in Winnipeg. The minister announced that he would look into the matter and report early this week. I wonder if the minister can now report.


Hon. John C. Munro (Minister of Labour):: Mr. Speaker, I think that particular altercation took place in December and was resolved, although the basic problem has not been resolved. I understand Air Canada indicated they are prepared to open up the agreement and discuss classifications. We are awaiting a reply from the union. This was my information as of a day or two ago, but I will check again.


Mr. Speaker:: Orders of the day.



GOVERNMENT ORDERS


[Stage Direction]
The House resumed, from Tuesday, February 18, consideration in committee of Bill C-49, to amend the statute law relating to income tax-Mr. Turner (Ottawa-Carle-ton)-Mr. Laniel in the chair.
The Chairman:: When the committee rose last evening, clause 69 was under consideration.
On clause 69.


Sinclair McKnight Stevens: Mr. Chairman, I would draw the minister's attention to subclause (3) of clause 69. My remarks may touch on clause 70 as well. The minister received a letter from a gentleman living in British Columbia who said that he cannot work because of a heart condition. At the age of 50 he cannot work at all. The impact of the income tax law is such that he finds himself paying about ten times the amount of tax paid by others who, because of the peculiar wording of the act, are entitled to various exemptions and deductions.
I shall refer to the letter but not reveal the name of the writer. The letter is dated February 3, 1975. The writer says that he wrote to the minister a year ago complaining that a person under age 65 who is forced to retire on pension for medical reasons is victimized by our tax laws. He pointed out as follows:
-a person such as myself, forced to retire from the public service at age 50 because of severe cardiac condition and unable to work, received no tax relief. I can claim neither the age deduction nor the disability deduction because I am not confined to bed or a wheelchair.
The writer of the letter then suggested:
Canada Pension paid on a disability basis prior to age 65 should be tax deductible ... the disability deduction should be allowed those who are unemployable on medical certificate even though their condition does not confine them to bed or wheelchair.
The minister replied in part as follows:
-there are, of course, situations where an individual cannot be gainfully employed because of disability although he is not confined to bed or wheelchair. It would be difficult, however, to distinguish in the tax law between the varying degrees of disability or incapacity, some of which would preclude gainful employment, others of which would not seriously impair earning ability.
This B.C. constituent comments on the minister's letter and says:
The validity of this view escapes me. Surely, a person is disabled and unable to work, or he is not; the question being one for medical decision. In my own case, I have been medically certified by the Department of National Health and Welfare as unable to work both for the purposes of the Public Service Superannuation Act and the Canada Pension Plan. What more proof can be required to establish disability?
There are many who are not yet 65 but who for various reasons cannot work. The income tax law does not provide relief for such people who through no fault of their own are placed in an awkward position. The writer of the letter, whose 1974 income was $6,312, compares his position with that of a person aged 65 or more. According to his calculations, he pays $579.40 in tax whereas the pensioner with whom he compares himself pays only $53.60 I wonder if the minister can explain this anomaly. What is the reason for it? I ask this question because several people in
Income Tax
my constituency are similarly placed. Will the minister consider reviewing the pertinent sections of the act in order to provide relief for people caught in such unfortunate circumstances?


John Napier Turner: Mr. Chairman, I
remember the particular case to which the hon. member refers. We do receive letters of that sort. I have said on other occasions that the income tax law is a global law and it is difficult to gear it to individual circumstances. We have extended, during the last three years, deductions and exemptions for the handicapped. The clause presently before the committee will further extend them. When I received the letter, which speaks for itself, there was no way to draw a line or to provide significantly different relief for that particular case without extending the law into areas in which its administration might be open to abuse. We are continually studying these cases but we must draw the line somewhere. We have extended decuc-tions and exemptions again in the budget, as is evident if one studies this and other clauses. I do not have anything to add to what I said in the letter which the hon. gentleman quoted.


Sinclair McKnight Stevens: Mr. Chairman, could the minister hazard a guess as to how many people find themselves in circumstances similar to those outlined by the writer of the letter?


John Napier Turner: No, Mr. Chairman, we could not even hazard a guess. These relieving amendments usually come about because of letters which I or the minister of the day may receive from individual Canadian citizens or from their members of parliament. Or amendments are introduced as a result of the representations of members of parliament. That is how the current increases or extensions of deductions and exemptions have found their way into the bill. We receive correspondence from various parts of the country. At the moment, however, the type of case illustrated by the hon. member is not so widespread as to justify, in our opinion, remedial relief through the tax law rather than by other means.


Sinclair McKnight Stevens: Can the minister give the committee an estimate of the number of inquiries he has had concerning this type of problem?


John Napier Turner: I cannot answer precisely, but there have not been very many.


Sinclair McKnight Stevens: Mr. Chairman, may I raise another question which is not related directly to clause 69? Can the minister say whether his department is considering giving income tax relief to those who must wear artificial limbs? As I understand it, they are now caught in the position where this necessary item is rapidly increasing in price and there is no provision for any type of deduction in respect of the cost of an artificial limb.


John Napier Turner: Mr. Chairman, I have a feeling, as does the assistant deputy minister, that it already qualifies as a medical expense.

February 19, 1975
Income Tax


Sinclair McKnight Stevens: I would like the minister to expand on this. That was my impression until I started to check into it. I was speaking not to the departmental people but to tax consultants, and I could not get confirmation that it was deductible-certainly not 100 per cent.


John Napier Turner: Mr. Chairman, we will give the hon. member the answer to that question as soon as we look at the regulations. It is a medical expense. We will get the section in a minute.


Mr. Jones:: Mr. Chairman, I would like the minister to explain fully subclause (5) on page 178. I would like to know the purport of this provision. Considering the high unemployment situation, how does the minister define the words "perpetual poverty"?


John Napier Turner: Mr. Chairman, I will be glad to do my best to satisfy the inquiry of the hon. member. This amendment makes a relieving change to subsection 110(2) of the act under which a member of a religious order who has taken a vow of perpetual poverty may deduct from his income an amount equal to his earned income. Earned income is generally income from employment and business. The deduction equals the income which goes to the order and is not taxable to them. Earned income is generally income from employment and business.
Although paid in respect of employment or past employment, superannuation and pension benefits do not form part of the taxpayer's earned income. This amendment, therefore, provides that a taxpayer who is a member of a religious order and has taken a vow of perpetual poverty may deduct superannuation and pension benefits as well as earned income from his income, the reason being that superannuation benefits are not within the general definition of "income" under the Income Tax Act. This amendment will result in a retired member of a religious order being put in the same taxation position as a member who continues to work in a religious order.


Leonard C. Jones: Mr. Chairman, I do not know how to figure out "perpetual poverty". There are a lot of people in perpetual poverty vis-a-vis a lot of other things. How do you define that? Does a person have to belong to a religious order to get in on this deal?


John Napier Turner: Mr. Chairman, this is not the vow one takes when becoming a member of parliament. It is a vow taken in a religious order, under the rules of that order, whereby a man or woman who becomes a member of a religious order of a denomination that recognizes the vow of poverty disclaims any future right to income, the income going to the order. He or she has no future right to that income.
For many years it has been recognized under the Income Tax Act that the deduction from income is equal to what he or she earns by way of employment in a hospital or school. The money is transferred directly to the order. He or she does not get it and therefore pays no tax on it. However, since the definition of "income" within the act does not include superannuation benefits, this is an extension to ensure that such benefits are now included.


Leonard C. Jones: If a person is entitled to superannuation or pension benefits, apparently through the order, he must have obtained vested rights in superannuation or some type of pension. He would not, then, be perpetually in poverty. He must have a right: he is not poor.


John Napier Turner: His employer, the hospital or what have you, may have contributed to that pension plan. The man or woman has disclaimed a right in it and has assigned it to the order. The amendment provides that he or she is not taxable on it, in the same way that no tax is paid by those who have taken a perpetual poverty vow during their working lives. There is nothing revolutionary about this. It is just a fact that now in hospitals, schools, and so on, members of religious orders who work for nothing, assigning their money to the order, have an extension of that principle upon retirement.


Flora Isabel MacDonald: Mr. Chairman, I ask for clarification on a matter raised by the hon. member for York-Simcoe concerning persons who are forced to retire on pension for medical reasons and feel they have been victimized under the tax law. In his reply the minister indicated that he felt there had not been a sufficient number of representations made to provide for remedial action in this regard. However, in a letter which he wrote earlier, the minister said this had not been brought about because it would be difficult to distinguish, under the tax law, between varying degrees of disability or incapacity. In other words, he stated previously in writing that no changes had been made because of the difficulty of applying medical standards to this problem. He now seems to be saying there are not enough representations to justify remedial legislation. Which of the two reasons does the minister now wish to put forward to these people?


John Napier Turner: Madam Chairman, that is not what I said. I asked the hon. member for York-Simcoe how many cases there were. I said there had not been many representations. My reason for excluding this type of deduction is the one I gave to the person who wrote to the hon. member for York-Simcoe, namely, that it would be very difficult to draw a line to include this type of deduction in a global statute such as the Income Tax Act which applies to Canadians generally. I would advise the hon. member for York-Simcoe that I now have the section which allows as a medical expense an artificial limb, iron lung, and so on: it is section 110(l)(c), item (9).


John Wise: Mr. Chairman, I have a question with regard to travel expenses incurred for medical purposes. The case I have in mind concerns dialysis patients who sometimes find it necessary to travel a considerable distance at regular intervals in order to receive treatment. Are such travelling expenses covered in this bill or are they allowed as a medical deduction?


John Napier Turner: Yes, Mr. Chairman, within a certain mileage. There is a limit. We incorporated this provision in the last budget. As a matter of fact, the former member for Skeena, Frank Howard, was particularly interested in this. I am trying to get the particular section. We dealt with this matter in the last bill.


[Stage Direction]
Clause agreed to.
February 19, 1975
[Stage Direction]
On clause 70.
John Napier Turner: Mr. Chairman, there is an amendment which I want to withdraw, and I want to substitute another one. There have been several representations, particularly from the hon. member for Duvernay and the hon. member for Lac-Saint-Jean, with regard to the definition of "interest" under this exemption. Hon. members will recall that in the budget of May 6, 1974, reinstated by the budget of November 18, 1974, there was a deduction from income of the first $1,000 of interest. The bill reflects that as net interest. The hon. member put it to me that this might militate against farmers who had borrowed by way of mortgage to finance their farm operations. He put it to me that gross interest would be a fairer way of calculating it. We have looked into this question very carefully and I now propose an amendment to clause 70, page 180 of the bill.
The amendment I am now proposing will have the effect of eliminating the requirement that the deduction in computing taxable income in respect of interest earned be in respect of net interest. As originally proposed, the interest which could be deducted was limited to the taxpayer's interest income minus the deductible interest expenses which he incurred in the year. This approach was proposed in order to eliminate the possibility that a taxpayer might simply borrow funds to generate interest or dividend income which would be free of tax, while at the same time deducting from his income the cost of borrowing the funds. While I am satisfied that there was good reason for this limitation, it has been drawn to my attention that it created serious difficulties for taxpayers who had borrowed funds for legitimate business purposes and were claiming the interest expenses on the borrowed funds.
The taxpayers most affected by this limitation were unincorporated businessmen, unincorporated farmers, members of partnerships and individuals who had borrowed funds to invest in rental housing. The effect of this limitation was to ignore the distinction between what I might term business borrowing and the income generated by what are essentially personal investments unrelated to the carrying on of the business. Under these circumstances, rather than penalize these taxpayers I am proposing this amendment which will ignore interest expenses for the purpose of the interest deduction and will give the deduction for the first $1,000 of gross interest or dividend income.
The reason I have presented this amendment as being effective only for 1975 and subsequent taxation years is to ensure that taxpayers will have their 1974 refund cheques expedited. If a change were to be made effective for 1974, it would mean a delay of at least four weeks, and possibly longer, in sending out refund cheques. This delay would be caused because all the 1974 returns are structured to reflect the net interest concept. Every return which has been processed would have to be redone. The Revenue Canada computer would have to be reprogrammed and every cheque which has been written but not issued pending the passage of Bill C-49 would have to be redone. Having regard to the cost in time, money and inconven-
Income Tax
ience it appears to be the wiser course to make this amendent effective for 1975.1 therefore move:
That clause 70 be amended
(a)	by striking out lines 39 to 49 on page 178;
(b)	striking out lines 38 to 51 on page 180.
This has the effect of converting the definition of net interest to gross interest. I would like to withdraw from the table-I do not need to withdraw it from the committee because it has not been presented-the amendment I circulated earlier. Hon. members will now be provided with copies of the amendment I have just moved.


Mr. Hamilton (Qu'Appelle-Moose Mountain):: Mr. Chairman, I wish to deal with matters which are not dealt with in the amendment.


Mr. Bawden:: I, too, wish to deal with the clause as amended.


Stanley Howard Knowles: So do I.
Amendment (Mr. Turner (Ottawa-Carleton)) agreed to.


Francis Alvin George Hamilton: Clause 70 embodies the government's proposal to encourage Canadians to save a little more. Provision is now made in the tax return for the deduction of up to $1,000 in respect of interest receipts and dividends. This is, of course, a welcome concession, a welcome addition to the tax law. Then, again, there is the $2,500 which is deductible in respect of registered retirement savings funds and the $4,000 in respect of those self-employed.
The question I wish to put to the minister has to do with a wider difficulty which the world is facing in an economy which is increasingly capital-intensive. Projects undertaken today cost ten times as much as they did only a few years ago. As a result, economists are advising governments to adopt taxation measures which encourage more individuals and companies to save. These small concessions I have mentioned go in the direction of meeting this request by the economists, but they do not even begin to meet the tremendous demand for capital. In the field of energy-related enterprises alone, the United States will in the next 25 years be requiring between $750 billion and $1,000 billion. In Canada, a nation with one-tenth of the wealth of the United States, we expect to be called on to provide $250 billion of capital to meet the needs of energy-related enterprises.
If we divided the number of years left in this century into $250 billion, we would find that Canada has to raise $10 billion a year to finance energy-related enterprises alone. This involves an important political issue. We have seen over the last 30 years a large segment of the industrial and resource field get into the hands of people in other countries who could provide the capital needed to enable development to take place in that period. Today, the investment needs in the field of energy alone are ten times greater.
There is no point our looking any more to the companies to which we could at one time turn for help in developing Canadian industries; demand for capital is now worldwide. We are dealing, as I say, with the need of $10 billion a year for the energy sector alone, yet all the minister can

February 19, 1975
Income Tax
do in this budget is provide that if an individual gets $1,000 by way of interest, he can deduct it. I suggest that if the minister is to respond in any realistic way to Canadian needs, he will have to revise his parameters. Only a certain proportion of income can be saved; the rest has to be used in meeting living costs. All those who can save because the family is raised, because they already possess their cars and television sets, must be encouraged to change their habits from those of a consuming society to those of a saving society. Before you can get them to save, you have to give them inducements to save, with the knowledge that at the end of the saving period they will still be able to enjoy the value of their money.
Therefore I come back to the other statement, that I do not think we can rely any more upon large international companies and accumulations of capital from Europe or the United States to help us out. We are faced with the fact that we must increase the amount of savings in Canada on the part of individuals, on the part of institutions that specialize in savings, so as to meet our capital requirements. Unless we do this, we will end up by turning this country over to outside investors who do not necessarily put Canadian interests first.
I put it to the minister that even these large companies cannot cope with this situation. Companies of the world have always relied on the generation of enough earnings and profits to provide the capital flow that will enable them to pay some dividends to their shareholders and to use the balance for new investment. Using the Canadian figures that the NDP are fond of quoting, the profits, for example, of Canadian oil companies are double or triple what they were two years ago. This is true. But if you add up all the profits of the oil companies in Canada, they came to less, at the end of 1974, than one-tenth of our annual need for capital investment in energy-related projects in Canada.
The Minister of Energy, Mines and Resources has warned the Canadian nation that we need $101 billion over the next ten years, which is $10 billion a year, the figure which I have quoted. Yet the Minister of Finance of the same government apparently is not listening to this warning. He has come along with a reduction, a combination of both interest and dividend payments, of $1,000. This is a mere pencil-scratch. Since we cannot get the money for capital flow from the profits of these companies, what are we going to do, Mr. Chairman? We must revise our whole tax structure to put the emphasis on saving, not on consuming. This is a task all nations in the western world will have to undertake during the next 25 years.
My question to the minister is this: Is the recommendation of the Carter royal commission, now eight years old- namely, that we should end double taxation in respect of Canadians who buy equities in Canadian industry-going to be adopted? As the committee probably remembers, the Carter royal commission recommended we should not tax twice Canadians who invest in their own country; we should only tax them once. Then the Benson reform came along and provided a 20 per cent dividend credit on a grossed-up type of income. This was a help. However, Canadians who need capital desperately if they are ever

going to own their own country are still being doubly taxed if they invest in Canadian resource industries.
The first recommendation of the Carter Commission was that we should integrate corporation tax with personal income tax so as to remove this double taxation. I ask the minister whether this idea is dead. The alternative recommendation was to pass these taxes through to the individual shareholder of the company and make provision for giving him a credit on his individual tax form. I should like to know whether this concept of Carter is dead, in view of the great need for savings in Canada.


John Napier Turner: Mr. Chairman, the proposal for integration was not quite as the hon. gentleman set forth. Mr. Carter proposed integration to eliminate so-called double taxation by removing the tax on corporations and transferring funds through taxation of individual Canadians on every source of income. Integration was rejected as an option in tax reform and in the statute that was approved as of January 1, 1972. So one could say that integration is not recognized in the statute or in the budget.


Francis Alvin George Hamilton: That is my point, Mr. Chairman. Neither in the budget of 1972 nor in the statement of 1972 was it recognized; nor is the pass through to the shareholder recognized. I would ask the minister this question: In view of the fact that the situation in 1972 is not the situation of 1975-$1 billion a year covered most of our capital rquirements in the energy related industries three years ago, whereas today we need $10 billion a year-is this Carter proposal dead entirely, or is the minister still willing to consider it for some future budget?


John Napier Turner: Of course, Mr. Chairman, the gross-up of the dividend credit is a type of partial integration which is available to the shareholder even if the company is not in a tax position or because of deductions does not pay tax. We recognized some of the necessity for saving in this budget, as we did in earlier budgets. For example, there is the $1,000 interest exemption, the $1,000 dividend exemption that is taken on top of the gross-up. Then there is the registered home ownership savings plan which permits deduction of amounts up to a maximum of $10,000 for each partner of the marriage or, if [DOT] both are working, up to $20,000 cumulatively. Then there is the capital cost allowance extension without a terminal date, the two-year write-off, and for manufacturers and processors the 40 per cent tax rate.
In other words, Mr. Chairman, over the past two or three years we have made some attempts to arrive at a reallocation that is acceptable. I do not argue with the thesis advanced by the hon. gentleman that in tax statutes we must weigh the balance of convenience against the balance of philosophical assumption as between incentives on one hand and equity to the taxpayer on the other. So incentive is only part of the application of a tax statute. But I do not quarrel with his general thesis, namely, that we must encourage and inject more savings into our economy if we are to respond to our capital requirements.


Francis Alvin George Hamilton: I thank the minister because that is exactly what I have been
February 19, 1975

saying. All the techniques that the minister has listed are movements in the right direction. The only suggestion I would put to the minister is that we as one of the western nations must redirect our tax system so as to reward those who save and produce. But we must do so far more rapidly than has been the case to date, even in this improved budget as compared with previous budgets. In effect, I am asking the minister to keep this option open. Even if the principle of equity disappears in the process, we must try to emphasize savings.
Most tax money which is returned to the consumer encourages more spending, which is the currently accepted way to revitalize the economy. But this is not necessarily the right approach over the long term when we have to increase the gross capital stock of the country. I will come later to the other proposal of more rapid velocity flow, but I should like the committee to understand that I support any proposal in the budget that provides incentive to save, even in small amounts. We must start right away to put emphasis on changing the habits of Canadians and get them to devote 10, 15 or 20 per cent of their incomes to savings. This we must do if we are to build up the capital pool that we need in this country.


A. Daniel McKenzie: Mr. Chairman, my question to the finance minister concerns interest income deductions. For 1974 a husband may claim up to $1,000 tax-free income a year, but may not make any claim in regard to interest received by his spouse. I should like to ask the minister if he is contemplating any change this year, or will he consider making a change next year to allow the spouse's interest to be claimed?


John Napier Turner: Mr. Chairman, the hon. gentleman is right in his assumption that the interest deduction is only available to the person receiving the interest against that person's income tax. If the wife and the husband both have interest income, each can use the separate interest exemption against his or her income, but they cannot transfer that exemption. I did make one exception to that rule in the budget, namely, with respect to couples 65 years of age and over where one partner to the marriage is receiving income, that partner can use not only the additional exemption for those 65 years of age and over which is applicable to himself or his wife but also the exemption available to the other partner if that partner is 65 years of age or over.


A. Daniel McKenzie: I also asked the minister whether he was planning to make any change this year in respect of this interest.


John Napier Turner: No, I would not count on it, Mr. Chairman.


A. Daniel McKenzie: Mr. Chairman, I received a letter from a Vancouver real estate firm in respect of the interest income deduction. In this letter the writer points out:
-it has now come to the writer's attention from the Vancouver daily Province that if an individual owns an apartment building and has a mortgage or bank loan against the property and consequent interest charges thereon, then the interest charges must be set off against the $1,000 interest earned allowance.
Income Tax
In view of the following this would not appear to be fair or reasonable.
1)	The mortgage and bank loan has probably been set up for some time and was not done in order to take advantage of the budget proposals.
2)	The purpose was to produce investment income the net of which is taxable.
3)	Other points in the budget re depreciation were made in order to create a climate whereby investors would be inclined to produce rental accommodation. This would appear to be working against that possibility.
The writer therefore is of the opinion that mortgage or bank interest paid on this type of investment and interest paid in connection with operating a business should not be considered and should not have to be deducted from the $1,000 allowance.
In addition, an individual may have retained Canada Savings Bonds and used them as collateral for the bank loan rather than cash them in. It is to be presumed that the federal government did not want bonds cashed in or they would not have made them so attractive.
I wonder if the minister is considering this type of complaint.


John Napier Turner: Mr. Chairman, I think we dealt with matter that in the amendment the committee just passed, namely, that the interest is now considered for 1975 and subsequent years on a gross basis rather than a net interest basis. This meets the problem the hon. member has just described.


Mr. Munro (Esquimalt-Saanich):: Mr. Chairman, I have a series of questions I should like to put to the minister for the purpose of clarification. The first is in respect of page 178 and the amendment to 110.1(1) (b) (ii), the taxpayer's grossed-up dividends for the year. I note that is defined on page 180, but I find myself at a bit of a loss to understand what exactly is the taxpayer's grossed-up dividends for the year. Is it the dividends increased by the one-third which the shareholder has to declare as earned dividends for the year?


John Napier Turner: The answer is yes.


Donald W. Munro: That being so, I wonder why the nomenclature has been changed, because normally when one receives a statement of dividends it refers to the taxable amount of dividends. Why is that term not used to simplify matters for simple souls like myself who have all the difficulty in the world in trying to work out their income tax, rather than using a new term, that is, "the taxpayer's grossed-up dividends"?
My second question is related to the extraordinary practice adopted, and to the comments of the hon. member for Qu'Appelle-Moose Mountain who indicated the need for savings. There is actually a penalty being imposed on those who have saved because of the necessity of having to gross up their income by declaring more income than they have actually received. I am wondering how this extraordinary practice ever crept into our law and, having done so, why it was retained. Has that been lost in history?


John Napier Turner: I got the preamble but I did not get the question.


Donald W. Munro: My question relates to this grossing up of dividends and the desire-in fact, the need in this society of ours-to save. A person who has
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February 19, 1975
Income Tax
saved and draws dividends is penalized for saving because he has to declare more revenue than he actually receives- one-third more as far as dividends are concerned-and he has to pay taxes on that extra income. I know this is not new in the bill, but it has been puzzling me for many years. I have received numerous complaints from people who say they refuse to sign the statement that they have received this income, because they have not received it.
I see the minister blinking, winking and sniggering, but this is one of those things that ministers do. People who have put a good deal of effort into laying aside money in order to earn an income when the moment comes to retire are now penalized for having done so. About a month ago I made a plea for those members of our society who are over 65. I maked this plea for all members of our society who are still trying to save and are being taxed on income they are not receiving. There is a tax rebate, but it still does not bring the dividends down to the actual amount received by the bondholder or stockholder.


John Napier Turner: The story behind this gross-up is a long one. The House went into it in great detail when we were discussing tax reform. In respect of income against which the tax rate is 40 per cent or less, the taxpayer in Canada who receives dividend income gets an advantage from the gross-up and that advantage encourages savings. The hon. gentleman ought to recall that the amount of the gross-up is also reflected in the tax credit against taxes.


Donald W. Munro: It is reflected against what?


John Napier Turner: The taxpayer gets a bigger tax credit because of the gross-up until his income reaches the stage where he would be paying at the 40 per cent rate. Until that point the gross-up is an advantage to him or her.


Donald W. Munro: I must say that this baffles me. Perhaps my mathematics are not as good as those of officials of the Department of Finance. I will have to take the minister's word for it, because I do not follow this.


John Napier Turner: I think the best thing I can do for the hon. gentleman is to send him a letter in which I will outline the gross-up provision. It has caused confusion, and I am sure I receive as many letters about it as the hon. member. I will set it forth in a letter.


Donald W. Munro: I would be very happy if the minister would do that. I should like to ask one more question for clarification. Again, this relates to page 178 and the $1,000. Let us take the hypothetical case of a person who spends up to the hilt of his income but has an income which is taxable. Can he claim the $1,000 whether he saves or not?


John Napier Turner: No; the exemption from taxable income is only in respect of interest or dividend income. The clause reads;
For the purpose of computing the taxable income for a taxation year of 
an individual... there may be deducted from his income for the year an amount equal to the lesser of
(a) $1,000, and-


Donald W. Munro: But that has been amended.


John Napier Turner: In other words, you claim either $1,000 of interest or dividend income or whatever your interest or dividend income was up to $1,000. So it is only interest or dividend income.


Mr. Andre:: You should have said "the lesser of".


John Napier Turner: That is right. It is your actual interest or dividend income up to $1,000.


Donald W. Munro: I am sorry, but I found it very confusing to read, and I am sure that those of us who within the next month or two will be filling in our income tax forms will find it even more difficult. I have another question with regard to page 179, the recurrence of paragraph (2) in this case, and page 181, section 110.2. The recurring paragraph (2) again lists those elements which may not be included, such as, "For the purposes of this section, interest shall not include any amount," etc. Presumably the section is 110.1-or is it 110.2?


John Napier Turner: On page 179 the section is 110.1.


M. Munro (Esquimalt-Saanich):: It refers back? Are these the exclusions?


John Napier Turner: That is right.


Mr. Lessard:: Mr. Chairman, I would like to say a few words of thanks to the minister and express my satisfaction, and that of all my colleagues who made representations to him, and introduced the amendment which has just been moved and passed; this amendment will obviously be advantageous for a special group, for which I have a soft spot, the farmers, and of course the small investors.
I also wish to congratulate and thank the minister. The clause which authorizes an exemption of $1,000 in investment income meets the request I have made repeatedly, not only to this minister but also to his predecessors in past years as well as to the right hon. Prime Minister. I am personally very happy to see that this is now becoming part of our legislation, and that Canadians will be encouraged to save for their old age, to take care of themselves.
However, I should like the minister to explain to the House what interpretation applies to credit unions, savings unions and other similar Quebec savings and investment groups: will their members be authorized to deduct the interest on their investments in these savings groups, under this new exemption?


John Napier Turner: Yes, Mr. Chairman.


Stanley Howard Knowles: Mr. Chairman, first I should like to make a brief comment on the very
February 19, 1975

human reply made by the Minister of Finance to the hon. member for Esquimalt-Saanich a few minutes ago when he said that these words mean "your interest up to $1,000." This is very simple, is it not? Why cannot that language be used in a thousand other places?


Donald W. Munro: I am right with you.


Stanley Howard Knowles: Why cannot that simple language be used in income tax legislation and pension legislation? Yesterday we had before us a bill to amend a dozen different superannuation acts, and that unclear language appears all the way through it-"the lesser of" this and that. When one looks at it, one must translate it into double negatives and go back again, but the minister himself can stand up and in a split second say that what it means is "your interest up to $1,000." I was glad to see the mandarin sitting in front of the minister laugh as he did. I hope he got the hint.


John Napier Turner: The mandarin sitting in front of me was smiling because this was drafted by the Department of Justice.


Stanley Howard Knowles: But the Minister of Finance used to be the Minister of Justice. Why did he not do something about this when he was there?
We are now on clause 70 which runs from page 178 to page 185. It does quite a few things, but in the main it does two things: it provides for a $1,000 interest deduction from one's taxable income which applies to the taxation year 1974, and it provides for the deductibility of $1,000 pension income which will apply to the taxation year 1975. My friends to the right have already expressed their welcome acceptance of the $1,000 interest deduction, and I join with others in saying that this is fine for those who have interest income and can get this extra advantage. I say the same thing with respect to the deduction that is to be allowed for pension income which will apply in the taxation year 1975, with which taxpayers will be coping when they complete their returns in April of 1976.
I say, on behalf of persons over 65, and the pensioners under 65 in some cases who will benefit from this, that for all of them it will be very welcome. But the minister knows very well what I will say: what about the 50 per cent or more of persons 65 and over who pay no income tax? The statistics back up the percentage I just gave. There are about 1,800,000 Canadians of 65 and over who draw old age security, and more than half of those who draw old age security also draw the guaranteed income supplement.
If they are drawing the guaranteed income supplement, it means they have little or no other income. The guaranteed income supplement is already non-taxable, so I submit that it is not a far-out estimate that about half of our senior citizens 65 and over already pay no income tax, so this benefit-which is welcomed by those who do pay tax; by those who have savings, to use the language of my friends to the right-does not apply to those persons who should be remembered but whom this minister has forgotten.
The minister may want to tell me that this is one of the budget bills and is not a bill in the name of the Minister of
Income Tax
National Health and Welfare. But I remind him that on more than one occasion when an election was ensuing, budget speeches told us of improvements that were going to be made in the pensions of senior citizens and others. The minister is smiling and acknowledging that he has done this himself. I say to the minister that if he is really concerned about the income position of our senior citizens, he should be matching these income tax deductions with an increase in the basic amount of old age security so that improving the position of senior citizens will be put into effect across the board and will not apply to only half or less than half of those who are in that category. I hope the minister will comment on that.
The minister said earlier today that his views were expressed at the conference of provincial health ministers by the Minister of National Health and Welfare with respect to a guaranteed annual income. As I said to my colleague when he made that reply, "That is what bothers me". It was the minister's answer on that that the Minister of National Health and Welfare had to make. He is in a pretty key position as keeper of the treasury. I should like to hear from him how he managed to forget the other 50 per cent of senior citizens. My friend from Esquimalt-Saanich wants to go further than the Minister of Finance, in relieving those over 65 of income tax. If he can carry that through, that is fine, but even that program, no matter how much you provide income tax deductibility for senior citizens, will be of no help to those who do not receive enough income to pay any income tax at all.
Mr. Chairman, there is another question I want to put to the minister which is quite unrelated to what I have been talking about, but it will save me jumping up and down and perhaps when the minister replies he will deal with it as well. At the top of page 183 of Bill C-49, there are some words that indicate what happens with reference to this $1,000 pension deduction in the case of a taxpayer and a spouse. The minister was good enough to give a simple answer to the hon. member for Esquimalt-Saanich. I wonder if he will give me an equally simple answer as to what the words at the top of page 183, lines 1 to 20, really mean.


John Napier Turner: Mr. Chairman, public pensions and the Canada Pension Plan now have an index system to a certain extent. We have indexed the guaranteed income supplement and the old age pension to protect people 65 and over against the erosion of the purchasing power of the dollar. This is to protect those citizens who have saved or contributed to non-public, private pension plans, including most of the workingmen and women in this country. I think we are putting them in a position where the erosion of what they might have otherwise expected from their pensions by reason of inflation over the last 18 months is somewhat compensated by rendering the first $1,000 free of tax; in other words, putting the workingmen and women of this country, particularly those who have private pension contracts with employers, in the same position as those with public pension plans.
The hon. gentleman also asked about the exception that I mentioned to the hon. member for Winnipeg South Centre when he inquired whether the $1,000 interest
28996-9%

Income Tax
exemption was transferable from one spouse to another. I said it was not, and the only exception to that was the exemption against income tax given to everybody of 65 and over. Obviously, the exemption can only be an exemption against income, and in the situation of most married couples 65 and over, it is only one of the couple receiving income against which the exemption can be used. As additional relief for couples 65 and over, the spouse who files an income tax return because he or she has income can use as an exemption not only the extra $1,000 but also the exemption available to the spouse which the spouse would not be able to use otherwise because there was no income available.


Stanley Howard Knowles: That is the age
exemption?


John Napier Turner: This is the age
exemption.


Stanley Howard Knowles: I appreciate the fact that the minister is making it clear that when there is only one taxpayer of two persons in a marriage, that taxpayer can claim the 65 or over age exemption for both parties. What I see at the top of page 183, however, has to do with the $1,000 pension income on top of the age and other exemptions. What I am asking is, if there is a taxpayer who already gets the $1,000 extra exemption because he is over 65, and another $1,000 because his spouse is over 65, and if he has pension income of over $1,000 and so does his spouse, do both of them get the extra $1,000?


John Napier Turner: No, Mr. Chairman, only the spouse who files the return. In other words, the $1,000 pension income is not transferrable. If the other spouse has other sources of income, that exemption will be available. The hon. gentleman stated the case correctly for the 65 and over exemption, but there is no cumulative privilege for the $1,000 pension.


Stanley Howard Knowles: Mr. Chairman, I do not think the minister is satisfying me as easily as he satisfied the hon. member for Esquimalt-Saanich. Looking at the language at the top of page 183, it reads:
(5) Where the spouse of a taxpayer
(a) has attained the age of 65... has received pension income in the
year...
the taxpayer may, in addition to the amount, if any, deducted by him . .. deduct an amount equal to the amount, if any, by which the lesser of
(c)	$1,000, and
(d)	the spouse's pension income or qualified pension income, as the
case may be, for the year
exceeds
(e)	the amount deductible in the year by his spouse under subsection
(1) or (2) as the case may be.
The minister just said it is not transferrable at all, that if one spouse is the taxpayer he claims only the $1,000 pension income exemption, but this clause seems to say there is something in addition that he can deduct. My unprofessional reading of this leads me to believe he can deduct something, but I cannot figure out what it is. Surely the minister is not right in saying that this clause provides there can be no additional deduction when the

words I have just read say he may deduct such and such. What is that such and such?


John Napier Turner: Mr. Chairman, we will look into that question.


Stanley Howard Knowles: Mr. Chairman, may we just wait a minute so there can be communication with those who know? I hope my point is clear. The minister has said there can be no extra deductibility, yet the words at the top of page 183 seem to suggest there can be deductibility in addition to what the taxpayer has already claimed.


An hon. Member:: Is that true?


John Napier Turner: I just want to make sure this is right, Mr. Chairman.


Stanley Howard Knowles: I suspect other members want to speak on this clause, so maybe my friend will work on it and get some word from upstairs, and we can come back to it later. I think the question deserves to be answered. While that is being done, Mr. Chairman, may I pose another question to the Minister of Finance? In doing so I want at the outset to admit and declare a conflict of interest.


John Napier Turner: You are not that old.


Stanley Howard Knowles: Let me say at
the outset also that having declared the conflict of interest in what I am going to raise, if the deduction which I think ought to be allowed is granted, I will not claim it when I file my income tax return. I am not putting on any halo; I just want to do what is right.


Mr. Nowlan:: You have never taken your halo off.


Steve Eugene Paproski: If Moses could deduct it, why couldn't you?


Stanley Howard Knowles: I happen to be a member of the International Typographical Union. I do not believe he was. Are there any other members here? The International Typographical Union has a pension plan which is in some difficulty. If I retire-and I say "if"- there may not be any money in it for me, so that is that. However, questions have been raised in the last year or so about the rights of the members of the International Typographical Union to claim a deduction for the payments they are making into that pension plan, on the ground that it is not the usual type of pension plan but a fraternal benefit arrangement. It was recognized for tax deductibility for many years, but within the last couple of years the plan has been questioned. Actually, the matter has been under dispute or discussion between the union and the Department of National Revenue. It may even be under appeal at present.
It strikes me, as I read the language of the bill, that the Department of National Revenue may have to disallow these payments into that plan. But I appeal to the minister to look again at the law or to ask the people of his department to look again at the law. The reason I do so is
February 19, 1975

that the workers, the members of this union, are making contributions which are reasonably substantial. The plan has been set up solely for the purpose of providing pensions for their fellow workers. The money is not put away in a registered retirement savings plan or in a trust company; it is held by the union which operates on a "pay as you go" basis. Pensions are paid each year to those who have retired, out of the funds which come in each year from those who are working.
My point is this; Canadians who are in this union are making payments into a fund the purpose of which is to provide pensions. They make these payments in the hope that when they retire they will get their pensions from this same fund. Yet, as I said, the Department of National Revenue is questioning the right of the members of that union to claim deductibility. It was Mr. Abbott many years ago who brought in the provision allowing for deductibility of trade union dues and who separated pension plan payments from other income. This worked well for years. Now there is this trouble. While the Department of National Revenue is considering the matter in terms of the law as it now is, would the minister look at it and consider my contention that the law ought to be changed to cover this kind of case?


John Napier Turner: Mr. Chairman, I will certainly do that.


Mr. Patterson:: Mr. Chairman, I wish to ask another question about the $1,000 exemption which has been included for the express purpose of encouraging savings. Senior citizens receiving the old age pension are not affected by this particular exemption. Yet, if my information is correct, interest from savings does affect entitlement to GIS. Will the minister clarify this point? If I am right, I suggest that the law will discourage savings, whereas those who have been less thrifty and have spent all they earned will benefit: such people are entitled to OAS and GIS, whereas those who have saved money and enjoy interest income will not be entitled to GIS or will not be able to participate fully in that program.


John Napier Turner: Mr. Chairman, the hon. gentleman is correct in his interpretation. The incentive to save, in other words equalization for those who have taken pains to provide for themselves, is recognized by this exemption of $1,000. Equalization is not included under GIS because the GIS is an income tested supplement to the old age pension. So in recognition of the incentive and because we want to encourage people to save for themselves, we have allowed this interest exemption from income.


Alexander Bell Patterson: It seems to me that those who did not save will receive assistance from society, whereas those who have saved or who have denied themselves will be penalized. I wonder if the minister could consider this particular point and declare that GIS shall not be affected by interest income.


John Napier Turner: Mr. Chairman, I think we have an answer for the hon. member for Winnipeg North Centre. The way the bill is now drafted, it provides that if the non-taxable spouse is not in a tax bracket and has pension income of, say, $500, that pension income is
Income Tax
deducted from the marital exemption available to her husband. What this transfer does is restore the full exemption despite the pensionable income but does not transfer the pensionable income exemption. Does the hon. member follow? In other words, the pension income is exempted as a deduction from the marital exemption available to the other spouse but the total exemption is not transferred. So what I said to the hon. gentleman still stands: the pension exemption of $1,000 is not transferred to any pension received by the other spouse who is not otherwise taxable; that is not considered in lowering the marital exemption available to the taxable spouse. I hope that is clear.


J. Michael Forrestall: As clear as mud. Would the minister mind repeating it?


John Napier Turner: If the hon. gentleman consults legal counsel, the hon. member for Broadview, I think this will be explained.


Mr. Gilbert:: I will charge a fee.


Stanley Howard Knowles: Mr. Chairman, I think the minister has been able to state it in such a way that he can contend he did not make a mistake in what he said previously. At least it is a fact that an exemption of up to $1,000 is available, but it is under a different name. You can do it by the restoration of the marriage exemption, which otherwise would have been lost.


John Napier Turner: If the hon. gentleman wants to put it that way, we were both right.


Stanley Howard Knowles: I still think that the wording on page 183, between lines 1 and 20, could be improved. Instead of using wording like "the lesser of" this or that, why cannot the Department of Finance come up with better language, or if Finance cannot do it, why cannot the Department of Justice do it? In another moment I shall defer to someone else. The minister, in replying to my initial comments about his not doing anything for those senior citizens who are not taxable, was trying to make the point that those who live only on OAS and GIS are getting escalation, and he says that all he is trying to do is provide a comparable improvement to those who have other income as well. I point out that those who have other income as well also have their OAS escalated. May I also remind him that this escalation about which he, the Minister of National Health and Welfare and others over there boast so often, is always behind. It never keeps the retired person up with the cost of living, let alone up with the standard of living or in line with the gross national product.
If the minister now says that the 45 or 50 per cent of old age people who have other income and who suffer from inflation need restoration of their income or the protection of this $1,000 exemption for taxation purposes, I say to him that the other 45 or 50 per cent who are not in the tax bracket need it even more. I suggest that the minister go back to cabinet and get together with the Minister of National Health and Welfare. Let him face this problem and come back some time soon with a substantial increase in the amount of the basic old age security pension.

Income Tax


Alexander Bell Patterson: Mr. Chairman, in order to further encourage savings, will the minister consider making interest income non-income for guaranteed income supplement purposes?


John Napier Turner: As I said earlier, the guaranteed income supplement is an income test situation and all sources of income are taken into consideration. We have to provide for the savings incentive by reason of the exemption now before the House.


Leonard C. Jones: I would like further clarification of the definition of "qualified pension income" which appears on page 182. Unless there have been some changes, qualified pension income is defined as income received by the taxpayer in the taxation year in the amount prescribed, and it goes on with a lot of rubbish which apparently is technical, legal jargon about being received by the taxpayer as a consequence of the death of his spouse. Then on page 183 it refers to the spouse of a taxpayer and benefits received by the taxpayer as a consequence of the death of his spouse, which does not make any sense to me.


John Napier Turner: Mr. Chairman, we cannot follow the hon. member. Is this on page 182?


Leonard C. Jones: Page 183.


John Napier Turner: Mr. Chairman, I
wonder whether the hon. member would repeat the question.


Leonard C. Jones: I ask the minister to look at the definition of "qualified pension income," particularly the last words. This is on page 182. The last part is "received by the taxpayer as a consequence of the death of his spouse." On page 183 it states "where the spouse of a taxpayer has received qualified pension income in the year". That does not seem to make good sense. I do not know whether this is the justice department or the Department of Finance. There is something wrong.


John Napier Turner: Mr. Chairman, I do not think there is any conflict there. The words on page 182 are:
-were read without reference to the words "if before the end of the year the taxpayer has attained the age of 65 years,") received by the taxpayer as a consequence of the death of his spouse.
There is no conflict there. One refers to the transfer payment and the other to the type of income that is eligible.


Leonard C. Jones: It is received in consequence of the death. The other spouse is dead. It then says "where the spouse of a taxpayer". You are just talking out of this world.


John Napier Turner: As I said earlier, there is no problem. One has to do with his receipt of income and what qualifies for the exemption. The other has to do with the transferability of the spouse's eligibility in the 65 and over situation. There is no conflict here. We will look into the point raised by the hon. member, but I assure him we think his concern is unfounded.


Mr. Neil:: Mr. Chairman, I would like some clarification. "Pension income" and "qualified pension income" are

described on page 182. It does not include Canada Pension Plan income. There may be a situation where a person is in receipt of old age security plus Canada pension and is taxable. Someone else might be in receipt of old age security, Canada Pension and a private pension of about $1,000. The $1,000 private pension would be exempt from tax. He might pay tax on the Canada Pension and old age security pension. This places a person with a combination of Canada Pension and a small private pension in a much better position than someone who is only in receipt of the old age security pension and the Canada Pension. Am I correct in this assumption? If I am correct, this seems to be an unfair situation.


John Napier Turner: Mr. Chairman, the Canada Pension and the old age security amounts are not eligible for this interest deduction because they are publicly financed plans, whereas private pension plans are contributed to by the taxpayer.


Douglas Charles Neil: Mr. Chairman, the Canada Pension is contributed to by the taxpayer and by his employer. I am pointing out that there is a situation where a person might have a small private pension in addition to his Canada Pension. He is in a much better position than a person with only the Canada Pension and old age security. This seems unfair because the Canada Pension has been contributed to by the taxpayer and his employer, but it is not eligible for any deduction.


John Napier Turner: Mr. Chairman, there are two reasons why these payments have been excluded: first, they are already indexed; second, they are heavily, and properly, subsidized from the public purse. For those reasons it was felt it was not appropriate to render them eligible for further tax deductions.


Lorne Edmund Nystrom: Mr. Chairman, there is no doubt that, if not millions then certainly hundreds of thousands of Canadians, will be very happy with a pension deduction, interest deduction and dividend deduction. I want to present the argument to the minister that even though a lot of people will be happy, this measure is not based on equity. As the hon. member for Winnipeg North Centre pointed out, there are many people who do not have other pensions. My grandparents and many others of their generation in Saskatchewan are basically poor. All they receive is the old age pension and the guaranteed income supplement. This provision will be of no value to them; it will not give them any additional tax exemption. That is why I resent this type of move; I do not believe it is based on equity.
The same is true of the interest and dividend write-offs. I am as concerned about people saving as the hon. member for Qu'Appelle-Moose Mountain. It is possible to write off $1,000 in interest and dividend income. With today's interest rates, you can have savings of $10,000. When you look at $10,000, you are looking at the upper income bracket. The average worker might be able to write off $50, $100 or $200. He will be pleased with that.


Harvie Andre: The word is "incentive."


Lorne Edmund Nystrom: This is where I disagree with the members of the Conservative Party. I do not think this type of
February 19, 1975

move provides any incentive except to those in the upper income bracket. What about those who do not have any savings? We would be better off if we spent this money on providing a tax cut. That would put the funds where they are needed, to buy food, clothing and the other necessities of life. It would help stimulate the economy. This would create more work and the economy would be in a much better position. But when you have this type of program, again the wealthier persons in our country will get the advantage. I am sure that statistics will bear that out. It will help some working people and some ordinary farmers by letting them write off $50 or $100 per year, but will also help people like, for example, lawyers, accountants, doctors and businessmen who have $8,000 in savings or $10,000 or $20,000 invested in stocks or bonds. I think that is the wrong way of going about it.
This is a very attractive little gimmick. As I said at the outset, it will make people very happy, but I don't think will work toward a more egalitarian society; and if you have a more egalitarian society I think society in general will be stronger. You will give people the basic necessities of life and also a greater incentive to work. I do not buy the old argument that you must give those who have money greater incentive so that it will trickle down from the top to the bottom.
The hon. member for Qu'Appelle-Moose Mountain said we will need a lot of money in the future to provide energy in this country. I agree: we will need billions and billions of dollars. But I do not think you can raise it this way. There are other ways of raising that money. You will not raise it by providing even greater incentives for those in the top income bracket of this country. I believe in the Carter principle which says that a buck is a buck. Why should I pay tax on my parliamentary indemnity? But if I have a couple of thousand dollars in the bank, why should I not pay tax on the couple of hundred of dollars I get as interest?


Harvie Andre: You could leave it in the bank, because other people need it.


Lorne Edmund Nystrom: Perhaps the business community will borrow that money and reinvest it. I do not buy that type of free enterprise argument. I think you can raise a lot of capital in this country in many other ways, and it strikes me as rather strange that whenever we talk about equity in Canada or whenever we talk about putting more money in the pockets of the little guy, the Conservative Party reacts very violently. I think the way to stimulate the economy is to help the little people in this country and give them more incentive to enjoy life, to be productive in the economy. If you do that, the beneficial effect on the economy will be widespread. It will be a very positive factor in the economy.
Therefore, I wish the Minister of Finance would not travel this route. I wish, instead, we would take the funds we have available, provide tax cuts for the ordinary person and low income earner and in that way stimulate the economy for all Canadians.


John Gilbert: Hear, hear!
Income Tax


Sinclair McKnight Stevens: I have two or three questions to put on this clause. I should like the minister to explain the reasoning behind the requirement that the interest credit to be allowed must be generated within Canada as opposed to sources outside Canada. Undoubtedly the minister has received letters from pensioners in this respect. I have one before me, a letter from a man 80 years old who receives a pension from England. He is 100 per cent disabled as a result of war injuries. He is receiving a First World War pension from Great Britain, and he points out that because of its wording this clause will be of no assistance to him since it will not apply to his interest income from the British Isles.


John Napier Turner: Foreign pension
income will qualify for the $1,000 exemption on pension income. Foreign interest will not qualify for the $1,000 interest exemption. The purpose is to encourage savings, and it is to encourage savings in Canada. That is the policy reasoning.


Sinclair McKnight Stevens: Was any consideration given to providing an exemption in a situation of this kind? Could the clause not have been drawn in such a way as to apply to new investment, leaving existing interest, from whatever source, as a basis for the exemption?


John Napier Turner: No, Mr. Chairman; that would be an administrative nightmare.


Sinclair McKnight Stevens: I thought the bureaucracy liked those nightmares. Coming back to the question of the $1,000 eligibility for both the husband and the wife, let us assume that the wife has the $1,000 interest income: as I understand it, she will be entitled to the $1,000 exemption. What happens to the husband's ordinary claim for deductibility in respect of his wife? Is it lowered by the amount of her interest receipts?


John Napier Turner: Not in 1975; but in 1974, yes. There is no way we can make that adjustment in time for 1974 because some returns have already been filed.


Sinclair McKnight Stevens: But the situation to which I referred will be caught in 1975 and ensuing years?


John Napier Turner: It is the same principle as I discussed with the hon. member for Winnipeg North Centre. The interest income of the spouse will not be considered as lowering the marital exemption of the taxpayer.


Sinclair McKnight Stevens: Up to $1,000?


John Napier Turner: Right.


Sinclair McKnight Stevens: The minister has undoubtedly received representations and briefs from the life insurance industry concerning his proposal. In particular, the industry feels it has been let down very badly. The minister's predecessor, Hon. E. J. Benson, at the time he proposed a 15 per cent tax on the investment income of life insurance companies stated that in equity this would be the net income tax position the companies would have to endure. The industry now feels this clause fails to take into account the 15 per cent the companies are required to pay

Income Tax
on their investment income and that the pass-through provisions do not properly take into account the fact that those who are saving through life insurance companies have lost the 15 per cent. When the money is finally taken out they are not given a credit for this.
I understand the industry has placed alternatives before the minister and has been turned down with regard to all but possibly the alternative which I understand is already in existence in Australia, Great Britain, Germany, Holland and South Africa. Under this proposal, 50 per cent of allowable premiums could be deducted in calculating income, up to a maximum of $1,000 less any amount claimed under the exempt investment income provision. There would be a limit on premium rates to prevent abuse. The deduction would not apply to registered policies and would be confined to policies on the life of the taxpayer, his spouse or a dependant child. Would the minister indicate his attitude toward this representation, and does he propose to move an amendment to accommodate this point?


John Napier Turner: Mr. Chairman, the matter is still under consideration. As a matter of fact, I signed a letter to Mr. Tuck, general manager of the Association of Life Insurance Companies, today. We allow as an exemption, under the $1,000 exemption feature, that portion of the policy which is surrendered and bears interest. We made that recognition of the interest content in the policy. We are looking at the general 15 per cent on a different basis. As for the deductibility of the premium, the principle is that if it is deductible on the way in, it is taxable on the way out. Insurance policies are not taxable on the way out, and for that reason we have not allowed the deductibility of premiums.


David Orlikow: Mr. Chairman, I join the hon. member for Yorkton-Melville in registering my objection to the kind of principles in our income tax laws which in my view create a situation where people at the bottom of the taxable income range pay a much greater proportion of their income in tax than do people in the high income brackets.
Looking through my files this afternoon I came across an article by David Crane who was with the Ottawa bureau of the Toronto Star for several years. The article was written in 1973 and he analysed some of the information released by the revenue department relating to the year 1971. According to this article, in 1971 there were 265,000 old age pensioners, who reported incomes averaging $4,385. They paid an average federal income tax of $415 each; those in Ontario paid another $114 each in provincial tax. On the other hand, four of the richest people filing tax returns in Canada in 1971 ended up paying no federal or provincial income tax. The combined incomes of these four unidentified persons amounted to almost $1.5 million. Each had annual earnings of at least $200,000. Another four wealthy people, each with an annual income of at least $100,000, reported earnings that added up to $517,-000-but they also managed to avoid paying income tax.
In 1971 there were 204 Canadians with incomes of $25,000 or more who paid no income tax. Of the people with incomes of $25,000 to $50,000 a year, there were 128 who avoided paying income tax of any kind. I should like

February 19, 1975
to know how they do this. I am not talking about people who broke the law, but about people who used provisions placed in the income tax law over many years giving precisely the kind of exemption we are discussing now. The $150 or $200 interest that I will earn because I have some savings bonds I will not pay income tax on, though I do pay the regular rate on my parliamentary indemnity.
To go back to the four people with an income of more than $200,000 each, together these four reported receiving wages and salaries of $255,000, business income of $155,000, rental income from properties they owned of $10,000, gross dividends from shares in corporations of $255,000, bank interest of $59,000, income from foreign investments of $769,000, and so on. These four people with, as I have said, a combined income of almost $1.5 million were able to claim $2,632,000 in deductions. These included medical claims of $10,000, alimony of $100,000, charitable donations of $9,000-they were not very charitable-and personal exemptions and pension plan contributions of $6,000. They also claimed $2,286,000 in deductions from investment income. This covered a wide variety of allowances ranging from interest costs on money borrowed to make new investments, depletion allowances on oil, gas and mining investments, and investment advice and accounting costs.
The point I am trying to make is that over the years we have made our income tax laws more and more complicated. Every clause we have added has benefited almost exclusively the people in the middle and upper income brackets. Like the Carter commission, I believe that a buck is a buck. I do not think it matters whether a person earns his living as an electrician or as a carpenter receiving an hourly wage, or whether he has an investment portfolio which pays him two, three or five times as much as a person who works with his hands; he has income from which he derives benefit, so surely he should pay tax on his total income.
I cannot even accept the idea that what we should do today is encourage savings. We have almost one million people unemployed. The reason they are unemployed is that the people of Canada do not have the money with which to purchase the goods we produce: they do not have the money required to buy automobiles or to buy houses.


Harvie Andre: This sounds like social credit.


David Orlikow: No, it is not social credit. What I am saying is that in this day and age we want to encourage people, particularly those in the lower income brackets, to live better and to spend more money. If instead of giving tax exemptions to people in the upper and middle income brackets the Minister of Finance would close off these tax loopholes, he could do what my colleague from Winnipeg North Centre has said, namely, sharply raise the basic pension paid to old age pensioners. He would be able to increase the basic exemption for people paying income tax and he could probably cut the income tax rate for all taxpayers.


Mr. Guay (St. Boniface):: That is what they should start doing with the provincial income tax rates in Manitoba.


David Orlikow: If the hon. member for St. Boniface wants to discuss income tax in Manitoba, I would be very happy to debate it with him in his own constituency in Winnipeg.
February 19, 1975

I would be happy to ask the people of his constituency whether they prefer a system where, if you make less than $9,000 a year, you do not pay for hospital care or medical insurance, or a system where a person earning over $9,000 does pay for such things.


A. Daniel McKenzie: Tell us about the auto pact.


David Orlikow: I would be happy to discuss the auto pact with the hon. member for Winnipeg South Centre any time he wants. I suggest that he should come to my office tomorrow morning and we will call a couple of agents-


The Deputy Chairman:: Order, please. I think we should direct our attention to clause 70 as amended.


David Orlikow: I was trying to stick to clause 70, Mr. Chairman, but I was rudely interrupted-perhaps not rudely, but loudly interrupted by members on both sides. Let me conclude by telling the minister that I hope if he continues as Minister of Finance, before his next budget, which will probably be coming forward in a couple of months, he will take the time to read the Carter commission report and take to heart some of the basic recommendations made in it, so we will have a tax system that will stop being of major benefit to people in the middle and upper income brackets and will become one that is fair to all taxpayers in Canada.


Mr. Stanbury:: Mr. Chairman, I am not rising to answer the hon. member for Winnipeg North; I am sure the minister will do that, but I wonder for how many years we will hear statistics quoted from 1971. There have been many amendments to the Income Tax Act since then, and I venture to say that the 1971 statistics quoted by the hon. member could not apply to the last couple of years.
I rose to ask the minister whether any lower age limit was contemplated in respect of the advantage provided as a pension income exemption, or whether in fact a person of the age of 25, for example, leaving employment could take out his pension entitlement to the extent of $1,000 tax free?


John Napier Turner: I am advised that we have allowed in this bill for legitimate early retirement in so far as eligible pension payments are concerned.


An hon. Member:: Maybe I can retire early.


John Napier Turner: As a matter of fact, we might help the hon. gentleman in that respect.


Richard J. Stanbury: Mr. Chairman, I wonder if it is the intention of the legislation to allow persons who repeatedly leave employment at an early age to take out each time up to $1,000 of pension entitlement tax free. I should think this might amount to an abuse and I wonder if it has been considered.


John Napier Turner: If it is an abuse, we will look at it in a different light.


David Orlikow: Mr. Chairman, the hon. member chided me for quoting statistics for 1971. I can only say that the
Income Tax
article from which I quoted was written in 1973 and reported on the latest figures available. There must have been a report in 1974 for 1972. I want to tell the hon. member that I intend between now and tomorrow afternoon to call the revenue department and get those figures. I am certain they will not be very different, because there are just as many people availing themselves of these loopholes now in order to avoid paying tax. I will get that information for tomorrow if it is at all possible.


Stanley Howard Knowles: The rich get richer and the poor get poorer.


Richard J. Stanbury: Mr. Chairman, the point is that changes were made in the law which did away with some of those so-called loopholes and I think the hon. member will find some improvements in the statistics since then. I should like to ask a further question about this clause. Is it intended that a person rolling over one registered retirement savings plan to another, who does not use the entire proceeds from the first plan in doing so but gets a refund, will be able to use the pension exemption against such refund?


John Napier Turner: The RRSP is only available to somebody over 65, so that I cannot conceive of that happening. What the hon. gentleman is suggesting is building up a pension of over $2,500 or $4,000, and he is asking if it can be claimed as an exemption under the pension provisions. I do not think so.
Clause as amended agreed to.
On clause 71.


Sinclair McKnight Stevens: Mr. Chairman, perhaps the minister could explain why in the ways and means motion it is stated that for 1975 and subsequent tax years individual taxpayers will be required in computing taxable income to go to section 109.1, 110.1, 110.2, 110 and 111 respectively in that year, whereas the proposed section, clause 71, has the same sections but 111 is missing? I think there should be an explanation. I may make some comments after I have heard the minister explain why section 111 is deleted.


John Napier Turner: This reference has been misinterpreted in some quarters and by some commentators as being relieving in nature in that it would increase the deductible amount of non-capital loss. This was never the intention. The section was dropped because of confusion and because it was not absolutely required to give meaning to the ways and means motion.


Sinclair McKnight Stevens: Is the minister stating that there is no difference between the wording which appears in the ways and means motion and the section as it appears in clause 71?


John Napier Turner: That is the view of the department and the Department of Justice.


[Stage Direction]
Clause agreed to.
Clause 72 agreed to.
On clause 73.
February 19, 1975
[Stage Direction]
Income Tax
John Napier Turner: Mr. Chairman, we tabled an amendment, which I should like to move now. The amendment is as follows:
That clause 73 of Bill C-49 be amended
(a)	by striking out line 26 on page 188 and substituting the following:
"been paid out of the exempt surplus, as defined by regulation (in this part referred to as exempt surplus) of"
and
(b)	by striking out line 33 on page 188 and substituting the following:
"of the taxable surplus, as defined by regulation (in this part referred to as taxable surplus) of the affiliate"
These two changes makes specific reference to the fact that there are two terms, "exempt surplus" and "taxable
surplus". These are terms defined in the regulations under the Income Tax Act but are not terms defined within the act itself. This is merely a technical amendment.
Amendment (Mr. Turner, (Ottawa-Carleton)) agreed to.
Clause as amended agreed to.


B. Keith Penner: It being six o'clock p.m., it is my duty to rise, report progress and request leave to consider the bill again at the next sitting of the House.
Progress reported.


The Acting Speaker (Mr. Penner):: This House stands adjourned until two o'clock tomorrow afternoon.
At six o'clock the House adjourned, without question put, pursuant to Standing Order.

Thursday, February 20, 197S