1975-05-02

ORAL QUESTION PERIOD


Hon. Robert L. Stanfield (Leader of the Opposition):: Mr. Speaker, I wish to put a question to the Minister of National Health and Welfare.
Would one be right in stating that the federal-provincial conference on welfare had to be postponed to prevent the collapse of his welfare policy review program?


Hon. Marc Lalonde (Minister of National Health and Welfare):: No, Mr. Speaker.


Robert Lorne Stanfield: Is it true that even after the six meetings the minister had with his counterparts on the review and all the preparations, a proposal was made to them to retain the professional services of a group of consultants whose task would be to assess the cost in each province of the new programs proposed by the federal government? The purpose of the study would also be to determine to what extent the government is better able to supervise those new programs and many other elementary matters.


Marc Lalonde: No, Mr. Speaker.


Robert Lorne Stanfield: Mr. Speaker, will the Minister of National Health and Welfare make a statement on motions at his earliest convenience to inform the House precisely where matters stand? I ask this in view of reports coming out about the difficulty the minister is having and in view of the vast importance of this whole question to not only the taxpayers of Canada, but the people of Canada who may need to benefit from this program.


Marc Lalonde: No, Mr. Speaker, but I shall be pleased to table the communique of the conference as soon as I can.


GUARANTEED ANNUAL INCOME-REASON FOR NEED FOR CONTINUING STUDY OF SUBJECT
Mr. Lincoln M. Alexander (Hamilton West):: Mr. Speaker, I have a supplementary question for the Minister of National Health and Welfare. After some six conferences over the past two years costing some $2 million to $3
million, why did this week's conference have to instruct officials to get back to work on some concrete proposals?


Marc Lalonde: Mr. Speaker, I would not want to accept as accurate the figures mentioned by the hon. member. As for the second part of his question, we have agreed at each level of government that the work performed on the general formula for the guaranteed income supplement discussed at the last conferences did meet the objectives of all government levels; we agreed to proceed immediately within that general framework. We have thus agreed to examine specific proposals concerning the cost of the proposed program, especially the kind of recipients covered by such a plan and various other technical questions which we will be in a position to consider at least partly at the next conference to be held, I hope, in September.


GUARANTEED ANNUAL INCOME-AREAS IN WHICH NO AGREEMENT IN CABINET-POSSIBLE USE OF OUTSIDE CONSULTANT
Lincoln MacCauley Alexander: A supplementary, Mr. Speaker. It appears to me there is no agreement as to cost, no agreement concerning the administration of the program, no agreement with respect to income, no agreement with respect to an appropriate time period, no agreement with respect to taxation, and no agreement with respect to what constitutes a family unit. Has the minister been able to reach an agreed position with his own colleagues on these specific matters and, if so, have proposals been submitted to his provincial counterparts?


Marc Lalonde: Mr. Speaker, officials from both government levels have been working on various hypotheses in the past two years, especially over the last six months; numerous alternatives have been considered by them. Efforts now remain to be made with a view to agreeing on a specific proposition or a very limited number of alternatives in respect of which the ministers could make much more final and specific decisions than those arrived at so far. That is the normal evolution of the reviewing process. This corresponds to the approach to the situation that we had proposed two years ago, and we are still within scope of the objectives we had set in the working paper submitted in the House two years ago. I have no reason to believe that we are not meeting all the objectives we had laid down when the paper was submitted in the House two years ago, and I sincerely hope that the programs whose implementation we had proposed within a certain time schedule mentioned in the working paper will be ready on time. I must also inform the hon. member that yesterday

May 2, 1975
Oral Question
we reached complete agreement with all provinces concerning an extremely important aspect in the review of social security, and more specifically social services. This represents a major step forward in the social security review.


Lincoln MacCauley Alexander: It is certainly amazing that after two years work the minister has not been able to arrive at an agreement with his colleagues with respect to the matters to which I have just referred. Is the minister now telling us that after 600 studies-and if he believes it or not, these are the figures I throw out-and after spending $2 million, the orange paper is a bust and that the situation now requires an outside consultant to come and advise the minister what to do?


Marc Lalonde: Mr. Speaker, the answer is negative, as negative as can be. Furthermore, I shall send to the hon. member a copy of the communique of our conference which will prove, once again, to what extent the hon. member is ill-informed.


THE CANADIAN ECONOMY
Mr. Edward Broadbent (Oshawa-Whitby):: Mr. Speaker, I have a question for the Acting Prime Minister. Since Mr. Andre Raynauld, the Chairman of the Economic Council of Canada, yesterday forecast, before Senate Committee increasing levels of unemployment during the coming year, I should like to ask the Acting Prime Minister whether in the government's consensus-building discussions with business, labour and other groups he and his colleagues have indicated any intention to reduce levels of unemployment by certain fixed percentage points, say by 2 per cent per year for the next two years, in the same way as they have proposed specific targets for the reduction of levels of inflation?


Hon. Mitchell Sharp (Acting Prime Minister):: One of
the main purposes of the exercise which is now proceeding to obtain a consensus is so to create stability in the Canadian economy that levels of unemployment are reduced.


John Edward Broadbent: Mr. Speaker, I have a supplementary question for the Acting Prime Minister. Since the government has, I understand, set not general targets but specific targets for the reduction in the level of inflation, would the minister explain to the House why, in light of the Minister of Finance's claims recently that we are experiencing inflation because of increasing labour costs- that is a view I do not share, but that is his assessment- the government does not think it appropriate to indicate specific targets for a reduction in the level of unemployment?


Mitchell William Sharp: Mr. Speaker, I must repeat what I said before. It is the view of the government, and particularly of the Minister of Finance, that a continuation of the recent rate of inflation would jeopardize employment opportunities in this country. I do hope we have his support for that point of view.


INFLATION-POSSIBLE STUDY OF EFFECT OF INCREASE IN PRICE OF NATURAL GAS ON EMPLOYMENT AND EXPORTS
John Edward Broadbent: A final supplementary question for the Minister of Industry, Trade and Commerce. Since the recent decision of the Alberta arbitration board on gas pricing will lead to a doubling of the field price of natural gas and will have a major effect nationally, and particularly in Ontario both on consumers and industry, increasing the cost, for example, over-all of the product by some $920 million, has the minister's department, concerned as it is directly with employment and exports, made an assessment of the impact of this kind of increase in the price of gas upon the industrial community of Canada, particularly in terms of its effect on employment?


Hon. Alastair Gillespie (Minister of Industry, Trade and Commerce):: Mr. Speaker, we have not completed an assessment of that impact and I can assure the hon. member that it is the kind of thing we are looking at very closely. We are concerned about its impact on particular parts of the country, on particular industries and on the potential for particular industries.


PUBLIC WORKS
Mr. Andre Fortin (Lotbiniere):: Mr. Speaker, I should like to put a question to the Minister of Public Works.
The minister will doubtless remember that some two months ago he told the House that his department was looking into the possibility of changing the regulations with a view to erecting retaining walls along the St. Lawrence river to protect its banks from the effect of navigation and erosion. Having made this commitment, is he now in a position to announce a new policy on the building of those retaining walls which protect riverside properties?


Hon. C. M. Drury (Minister of Public Works):: No, Mr. Speaker, I am not in a position to make any statements, at this time, on retaining walls.


André-Gilles Fortin: Mr. Speaker, I have a supplementary question.
Can the minister advise the House whether he will make public a new policy, since riparian owners are seriously threatened in early spring; even landslides are occurring in Deschaillons, Napierville, Lotbiniere and St. Antoine de Tilly. The department is always late sending
May 2, 1975

its inspectors. Can he assure the House that necessary steps will be taken to protect these landowners?


Charles Mills (Bud) Drury: Because of the rainfall and the resulting erosion, I must advise the hon. member that this is not a federal responsibility. The federal government is mainly concerned with the effects of navigation on erosion. Although we are looking for solutions, the cause he is talking about does not exist at this time.


André-Gilles Fortin: Mr. Speaker, I want to ask a final supplementary question.
If the minister wanted to go into politics, he would certainly have an excellent future, for he is very good at evading the issue. He knows what I mean. The rainfalls did aggravate the situation, but that does not settle the matter of the erosion caused by navigation, since ships have a much larger tonnage now and their speed is not the same as when the regulations were passed. I shall ask the minister when those regulations will be changed as regards the prescribed distance of 3,000 feet from the shore, a question he refuses to answer now. So I ask him again. Will he change these regulations, in order to take into consideration the tonnage and speed of ships, and to protect the property on both shores of the St. Lawrence River?


Charles Mills (Bud) Drury: Mr. Speaker, I accept what the hon. member said. We are reviewing the regulations as rapidly as possible.


AVAILABILITY OF FUNDS FOR CONSTRUCTION OF RETAINING WALLS
Mr. Bernard Loiselle (Chambly):: A supplementary, Mr. Speaker.
Can the minister assure us that his department has the necessary funds to build the walls required under current standards? I shall not criticize the fact that these standards have been increased, such as the 3,000-foot limit, but I would like to know if the walls which are to be erected where the shores are less than 3,000 feet from the channel will indeed be built.


Charles Mills (Bud) Drury: Mr. Speaker, some credits have been approved by Parliament, but unfortunately all the funds required for this purpose, this year, were not allocated.

[DOT] (U20)


EXTERNAL AFFAIRS
Right Hon. J. G. Diefenbaker (Prince Albert):: Mr. Speaker, I would direct a question to the Secretary of State for External Affairs which has to do with an attache in the Chinese embassy who was expelled by our country. This matter was before the House on April 29 at which
Oral Question
time the minister indicated that because of the possibility of relations with mainland China being exacerbated as a result of any revelations he would not go into detail. I now ask whether he has had brought to his attention a broadcast last night over the CBC in connection with this matter in which the CBC reported that this man was expelled from Canada at the request of the United States administration because he was engaged in activities detrimental to the United States. Now that this statement has been made by the CBC in its news, and whatever criticism there may be of the CBC there has never been criticism of the factuality or objectivity of its news items-


Some hon. Members:: Oh, oh!


John George Diefenbaker: -is the minister prepared to go further than he went the other day before these revelations were made?


Hon. Allan J. MacEachen (Secretary of State for External Affairs):: Mr. Speaker, I certainly congratulate the right hon. member for his sense of humour. I certainly appreciate it in this context. I am afraid I cannot go much further than I did the other day, even as a result of further speculative reports by the CBC. I will say, however, that the action taken by the government of Canada was not taken at the request of any other government.


John George Diefenbaker: Could the minister not go a little further as there apparently is no danger to security in what was done. Surely there is no reason that this should be covered up in this way, otherwise it would appear that the government has the sense of humour in evidently trying to keep from parliament that which has become public knowledge?


Allan Joseph MacEachen: Mr. Speaker, I have stated that the particular member of the embassy was asked to withdraw because of activities which were considered to be incompatible with his status as a representative in Canada. I believe I am obliged to deal with the matter in a way that will maintain the good relationship between Canada and China and I think further disclosure of details would certainly not be in the public interest.


EXPULSION OF PRESS ATTACHE OF PEOPLE'S REPUBLIC OF CHINA-METHOD BY WHICH ACTIVITIES CAME TO KNOWLEDGE OF GOVERNMENT
Mr.  R. Gordon L. Fairweather@Fundy-Royal: I have a supplementary question, Mr. Speaker. I gave the minister's office notice that I would pursue this today so I hope the minister can be a little more forthcoming than he was to the right hon. member for Prince Albert. How did the matter first come to the attention of the government of Canada and under whose auspices? Who first informed the Government of Canada that the actions of the Chinese diplomat were incompatible with his status here?


Allan Joseph MacEachen: Mr. Speaker, that conclusion was reached by the Canadian Government


An hon. Member:: That is not the question.

May 2, 1975
Oral Question


Allan Joseph MacEachen: -and not at the request of any other government.


Mr. Fair-weather:: Mr. Speaker, did the process result from osmosis or did somebody initiate some warning? Surely, candour would assist the government in its relationship with the People's Republic of China rather than a cover-up.


Mr. Speaker:: Order, please. The hon. member for South Shore.


LAW OF THE SEA CONFERENCE-GOVERNMENT PROPOSALS AND ATTITUDE TOWARDS SHARING REVENUE FROM OFFSHORE RESOURCES
Mr. Lloyd R. Crouse (South Shore):: Mr. Speaker, I understand that the Secretary of State for External Affairs will shortly be going to the Law of the Sea Conference in Geneva and we on this side of the House wish him every success in his efforts.


Some hon. Members:: Hear, hear!


Lloyd Roseville Crouse: Since the legal regime and the international machinery that would be required for the national management of offshore resources could affect the thinking of people and governments on the whole problem of utilizing increasingly scarce international resources, has the minister discussed revenue sharing with the Minister of National Revenue and will he be taking new proposals to Geneva regarding the establishment of revenue sharing.


Allan Joseph MacEachen: Mr. Speaker, the question of so-called revenue sharing will be discussed at the conference. Our delegation has been authorized by the Government of Canada to explore the possibility of a system of revenue sharing under certain conditions, one of which is that the sovereignty to the end of the continental margin would not in any way be jeopardized but that Canada would be prepared to consider the possibility of revenue sharing under specific conditions.


Mr. Speaker:: One supplementary by the hon. member for South Shore.


Lloyd Roseville Crouse: Mr. Speaker, will proposals of revenue sharing of income from resources be confined to resources outside the 200-mile economic zone or is this to be within the 200-mile economic zone as well, and will the minister be going to Geneva authorized by the government to make firm, specific proposals to the conference with regard to this very thorny problem which is very important to many of the conference delegates.


Allan Joseph MacEachen: Certainly, the proposals will not cover any area within the 200-mile economic zone. That is not part of the suggestion. I will be authorized, as the delegation is authorized, to explore the concept of revenue sharing within certain conditions, one of which I have already mentioned. The purpose, of course, is to attempt an accommodation at the conference as the hon. member realizes with regard to the difference of opinion between countries like Canada and other countries on the question of the

area beyond the 200 miles. It may be that some accommodation can be reached through exploring the concept of revenue sharing. This is what the delegation and I will be attempting to do.


LAW OF THE SEA CONFERENCE-AUTHORITY OF MINISTER TO COMMIT CANADA TO PROPOSALS ON SHARING REVENUE FROM OFFSHORE RESOURCES
Robert Lorne Stanfield: Mr. Speaker, a supplementary question for the Secretary of State for External Affairs. In view of the very crucial nature of the final week or so of this conference if the Government of Canada is to achieve the objective it is seeking of recognition of Canadian interests as far out as the edge of the continental slope and the 200 mile limit, and in view of the possible necessity of Canada making some kind of proposal with regard to revenue sharing to get some agreement with other countries with regard to that, is the minister authorized by the cabinet to make a proposal or to commit Canada to a proposal on revenue sharing in that zone beyond the 200 mile limit when he goes to Geneva or is he simply authorized to discuss, listen and report back?


Allan Joseph MacEachen: Mr. Speaker, at the present time the Canadian delegation has not been authorized to engage in discussions with respect to revenue sharing. It is a changed position for the Government of Canada to agree at this point, in the interests of over-all settlement, to undertake the exploration of revenue sharing, which implies in principle that the Canadian government will accept that concept under certain conditions. The Government of Canada has not authorized the details of specific offers. That would have to be considered by the cabinet in light of further discussions at Geneva.


LAW OF THE SEA CONFERENCE-POSSIBILITY OF PROPOSAL THAT NATIONS CUT FISHING QUOTAS BY 40 PER CENT
Mr. Jack Marshall (Humber-St. George's-St. Barbe):: supplementary question, Mr. Speaker. In view of the fact that the Minister of State (Fisheries) made a request to other nations to cut their quotas by 40 per cent, when the Secretary of State for External Affairs visits Geneva will he be furthering those overtures and has he a definite policy to propose?


Allan Joseph MacEachen: Mr. Speaker I must confess that I am not informed about that proposal of the Minister of State (Fisheries). If it is a matter that involves ICNAF, then it would really have to be dealt with apart from the Law of the Sea Conference.


LAW OF THE SEA CONFERENCE-POSSIBILITY OF BILATERAL AGREEMENTS ON SHARING REVENUE FROM OFFSHORE RESOURCES IF CONFERENCE FAILS
Mr. James A. McGrath (St. John's East):: My supplementary question is for the Minister of State for External Affairs, Mr. Speaker. May I ask the minister if his pro-
May 2, 1975

posals for revenue sharing, in addition to being presented to the conference as a whole, will also mean that Canada is prepared to take advantage of the presence in Geneva of countries that have historic and traditional fishing rights off Canada's east coast and will he meet on a bilateral or multilateral basis with those countries to form the basis of what could be a revenue sharing agreement in the absence or breakdown of agreement at Geneva?


Allan Joseph MacEachen: Mr. Speaker, the Canadian delegation will be exploring this concept with other delegations. There is a particular working group, as I understand it, that will be dealing with questions of the continental margin and revenue sharing. It is presumably within this particular group that the major discussions will take place. Naturally, when I go to Geneva I expect to hold bilateral discussions with other countries as well as engaging in multilateral discussions.


NATURAL GAS-AMOUNT OF PRICE INCREASE MINISTER INTENDS TO PERMIT
Mr. T. C. Douglas (Nanaimo-Cowichan-The Islands):: Mr. Speaker, my question is for the Minister of Energy, Mines and Resources. At page 5329 of Hansard for last Wednesday the minister said he would use his best efforts to see that the price for Alberta gas moving out of the province was kept well below the $1.15 per thousand cubic feet which was just given in an arbitration award. The press now reports the minister as saying that he has in mind to raise the well head price from 45 cents per thousand cubic feet to 70 cents or 80 cents per thousand cubic feet. I should like to ask the minister if he intends to have this price range in mind when negotiating with the Alberta government, and can he give the House an assurance that this is the price range that will obtain either as a result of negotiations or of exercising the power he will have when the Petroleum Administration Act is given Royal Assent?


Hon. Donald S. Macdonald (Minister of Energy, Mines and Resources):: Mr. Speaker, if I could correct one element, the current prices vary in range. Some contracts are as high as 60 cents per thousand cubic feet, so we are talking about a range of prices. I do not think it would be desirable at this point, when I am hoping to negotiate with the producing provinces on this question, to set out figures in advance that would be targets-


Mr. Horner:: Do you still believe in fair market value?


Donald Stovel Macdonald: I still believe it is useful to have a discussion with the provinces and not in effect to lock in that discussion in advance by setting a specific price. I think the hon. member for Crowfoot would agree with me on that.
Oral Questions


NATURAL GAS-DATE OF ANNOUNCEMENT OF EXPORT AND DOMESTIC PRICES
Thomas Clement (Tommy) Douglas: A supplementary question, Mr. Speaker. In view of the fact that the minister has already named a price to the press, I cannot see why he would not name a price to the House of Commons.


Mr. Knowles (Winnipeg North Centre):: That is par for
the course.


Donald Stovel Macdonald: Read the story again.


Thomas Clement (Tommy) Douglas: The
minister was going to make a statement some time ago regarding the export price of natural gas and this was delayed because of the visit of American officials who were requesting that the price increase be phased in. I want to ask the minister now how soon he will be able to make a statement regarding the export price. Does he hope to be able to make a statement regarding the domestic price at the same time and on what date does he anticipate making a statement with respect to the two price ranges?


Donald Stovel Macdonald: Mr. Speaker, the hon. member should distinguish between an informed press speculation and what I may have said. I think it would be desirable not to set a price in advance and I refused to do so. With regard to the export price, I hope to be able to make an announcement on Monday. This is not related in any sense to the domestic price, of course. I expect the decision on the domestic price will take place after full discussion with provincial governments and an announcement certainly will not be made next week.


NATURAL GAS-REFERENCE TO STATEMENT ON PRICE ATTRIBUTED TO MINISTER IN &quot;GLOBE AND MAIL&quot;
Thomas Clement (Tommy) Douglas: A further supplementary, Mr. Speaker. The statement contained in the Globe and Mail of May 1 reads:
In an interview, Mr. Macdonald said he thinks an increase to a well head price of 70 cents or 80 cents-


Mr. Speaker:: Order, please. Would the hon. member please put his question.


Thomas Clement (Tommy) Douglas: Mr. Speaker, I will ask the minister if such an interview took place. If so, this could hardly be described as a speculative story.


Donald Stovel Macdonald: Such an interview took place, Mr. Speaker, but I would say that the report does not do justice to what I said.


NATURAL GAS-DATE ON WHICH STAGING OF PRICE INCREASE BEGINS
Mr. James Gillies (Don Valley):: Mr. Speaker, my question is also for the Minister of Energy, Mines and Resources following the line of questioning raised by the
5416

May 2, 1975
Oral Questions
hon. member for Nanaimo-Cowichan-The Islands. Since the province of Alberta has said it is willing to stage increases in natural gas prices, if an arbitration award of $1.15 is to come into effect on November 1, has the minister been able to ascertain from the government of Alberta whether it is thinking of staging that arbitration price after November 1 or before?


Donald Stovel Macdonald: Mr. Speaker, in general terms the discussions have been with regard to a price change effective November 1 and it is for a staged increase some years thereafter rather than between now and then.


HOUSING
Miss Flora MacDonald (Kingston and the Islands):: Mr. Speaker, a question for the Minister of State for Urban Affairs. I should like to direct his attention to the contingency plan he intends to present to cabinet. Having allowed four months to pass before recognizing the need for such a move to combat the housing crisis, can the minister now inform the House when this contingency plan will be presented to cabinet, how long he anticipates it will take to gain approval and when we can expect government action to deal with this critical situation?


Hon. Barney Danson (Minister of State for Urban Affairs):: Mr. Speaker, there is no dramatic contingency plan.


An hon. Member:: That is for sure.


Barnett Jerome Danson: This is a process to which I committed myself with the provincial housing ministers at the conference in January. Our own programs, which were instituted by my predecessor, are going extremely well. Regrettably, those which are in provincial hands are not moving as quickly as I would like, so we have to find ways to get them moving faster.
O)


POSSIBILITY OF NUMBER OF STARTS THIS YEAR REACHING 230,000
Flora Isabel MacDonald: was hoping the minister would report as to how successful he had been in persuading his cabinet colleagues of the need for action. In light of the minister's statement in his speech yesterday that he remains optimistic that the number of housing starts this year will meet the demands of new households, and in view of the fact-


Some hon. Members:: Question.


Mr. Speaker:: On a supplementary would the hon. member be good enough to put the question.


Flora Isabel MacDonald: Since CMHC has predicted that 230,000 new households will be formed, I am wondering if the minister is now optimistically predicting that there will be 230,000 new housing

starts this year. Can he relate these two statements emanating from his department?


Barnett Jerome Danson: I do not have to convince my colleagues of the importance of housing in our society. They are deeply committed to that'and have shown it in many ways. With reference to the other question, I think it will be a very difficult year in which to reach the target of 210,000 starts-


Flora Isabel MacDonald: 230,000.


Barnett Jerome Danson: -but I am convinced it can be done. With reference to the 230,000 figure, there are family non-formations as well. I am not familiar with the two statistics. My information, resulting from studies I have done, indicates that 210,000 starts meets family formations, less those family formations that do not take place.


CRIMINAL CODE
Mr. John Reynolds (Burnaby-Richmond-Delta):: Mr. Speaker, I have a question for the Solicitor General. Can the minister advise the House whether he has ever made a statement that he would resign if capital punishment were reinstated or whether he would have to consider resigning if capital punishment were reinstated?


Hon. Warren Allmand (Solicitor General):: Mr. Speaker, when I met privately with the leaders of the Atlantic police associations on Monday in Moncton, I was asked certain questions about what parliament might do in this regard, and I said privately to some of those policemen that I could not be associated in any way with an execution, with capital punishment.


Some hon. Members:: Hear, hear.


William Warren Allmand: After that meeting one of the policemen from the meeting, in answering questions to the press, repeated what I had said and I was asked later to confirm this by the press. In fact, I did state publicly something to that effect to the press, but it was not put in the terms reported in the press. It was not a threat; it was just a statement of my position.


REQUEST FOR DEBATE ON ABOLITION OF CAPITAL PUNISHMENT
John Douglas Reynolds: In
view of the minister's personal viewpoint on this subject, would he consider bringing back a debate to this House to abolish capital punishment entirely, so that the country will know what the law will be and so that the minister and the cabinet will not have to worry about the problem in the very serious decisions they will have to make in the next two or three months?
May 2, 1975


William Warren Allmand: That is under consideration. As the hon. member knows, the present law will expire in 1977, and this parliament will have to deal with the issue by then, so we will have to make a decision as to when such a bill or such a debate will take place.


TRANSPORT
Mr. Jack Murta (Lisgar):: Mr. Speaker, I would like to direct a question to the Acting Prime Minister. There have been very vague statements made by the Minister of Transport in which he said that there will not be any change in the Crowsnest Pass rate for 1975, but that he would not commit himself after that time. The minister responsible for the Wheat Board made statements in which he said that the "Crow" rate will remain as long as farmers want it. In view of these statements and other statements circulated by various levels of government and farm organizations, I would like to ask the Acting Prime Minister if he is prepared to give the government's unqualified commitment to the effect that the Crowsnest Pass rate will remain in force.


Mitchell William Sharp: Mr. Speaker, I would want to see whether there is such a conflict as suggested by the hon. member. Certainly, we have no legislation in contemplation which would change the situation.


FREIGHT RATES-REQUEST FOR REPORT ON MINISTER'S INTERVENTION TO PREVENT INCREASES
Mr. Les Benjamin (Regina-Lake Centre):: Mr. Speaker, I will also direct my question to the Acting Prime Minister on the subject of freight rates. Last Tuesday the Minister of Transport said, in reply to my question about across-the-board increases in class freight rates effective next Monday, that he would get in touch with both railways that same day or the next day to see if what he said in Calgary was carried out. I would like to ask the Acting Prime Minister whether the minister did in fact get in touch with both railroads, whether the cabinet is aware of what response the railroads made and whether the railroads will see to it that what the minister said in Calgary is carried out in regard to across-the-board freight rate increases.


Mitchell William Sharp: Mr. Speaker, the Minister of Transport has not yet reported to his colleagues on the discussions he has had. I will inquire of him. It might be appropriate, however, that he report to the cabinet before any announcement in the House.
Oral Questions EXTERNAL AFFAIRS


LAW OF THE SEA CONFERENCE-REQUEST FOR REPORT ON POSSIBILITY OF AGREEMENT ON OBJECTIVES
Mr. Hugh A. Anderson (Comox-Alberni):: Mr. Speaker, I wish to direct a question to the Minister of National Revenue, but first I would like to welcome him home after attending the Law of the Sea conference in Geneva.
Due to the vital interest of many Canadians in the Law of the Sea conference, can the minister advise the House whether in his opinion there will be any draft articles approved by the conference, and if not would the minister comment on whether he sees any appreciable progress toward achieving a consensus on establishing an international law for the world's oceans and seas?


Hon. Ron Basford (Minister of National Revenue):: Mr. Speaker, one of the reports I received in Geneva concerned the very substantial work the hon. member for Comox-Alberni had performed as a member of the delegation.


Some hon. Members:: Oh, oh!


Stanley Ronald Basford: It is really too early to answer the hon. member's question in any definitive form. The Canadian delegation has been pressing and working very hard for the Canadian position at the conference. My colleague the Secretary of State for External Affairs will be present at the conference next week, and he will be able to report definitively at the time of the conclusion of the conference on how successful we have been.


POSSIBILITY OF FEDERAL-PROVINCIAL AGREEMENT ON INTERMEDIATE HEALTH CARE
Mr. F. Oberle (Prince George-Peace River):: Mr. Speaker, my question is supplementary to a number of questions directed to the Minister of National Health and Welfare earlier. Could the minister inform the House whether the conference of first ministers of health and welfare of the provinces addressed itself to the dilemma of the ever increasing cost of delivery and maintenance of acute hospital beds and other hospital services, and in light of that, has it been possible for the conference to reach a consensus on the need for a cost sharing program in the field of intermediate health care?


Marc Lalonde: Mr. Speaker, again at the last conference of health ministers, I sent a copy of the press release to all hon. members and this has been fully reported by the press. The two levels of government agreed to make an intensive review of the various services as they exist now, to provide citizens with health services at a lower cost than the one imposed by institutions such as hospitals, which are certainly very expensive. Meetings of federal and provincial officials already took place during the last weeks, and a report is to be submitted for consideration of ministers next fall.
295 57 -67'/2

May 2, 1975
Oral Questions


Frank Oberle: Since it has been the objective of the federal government for the last three years to enter into such a program, has the minister now proposed to the provincial ministers a program which would be less rigid and more conducive to the real need within the provinces so that the provinces could make use of it?


Marc Lalonde: That is what we are doing now, Mr. Speaker, but, of course, we remain within the provisions of legislation adopted by Parliament in that field in the last years.


HOUSING
Mr. Stan Darling (Parry Sound-Muskoka):: Mr. Speaker, may I direct my question to the Minister of State for Urban Affairs? Will the minister inform the House how many applications were received for limited dividend housing, a program which I understand closed on April 30, and,if he is satisfied with the number?


Barnett Jerome Danson: Mr. Speaker, I have some preliminary figures. There have been 246 proposals for projects from across the country, for a total of 22,623 units involving $540 million. The call was for $200 million. The over-all cost of the units is between $20,000 and $25,000. These will have to be assessed as to value. From all indications, it looks as if we received proposals for more than double the number of units we called for. This is encouraging and it can be done, hopefully, under the new legislation, with private lenders. I am delighted with the size of this response. I am interested in seeing the breakdown by region and by city, to make certain that all parts of Canada participate.


Stan Darling: A supplementary question, Mr. Speaker. I wonder, because of the great need for housing, if the minister would not consider re-opening the program and allowing additional proposals, which will provide much needed housing for the country.


Barnett Jerome Danson: Yes, Mr. Speaker, I will certainly do that and use the recent legislation which allows private lenders to put up the money, which we will subsidize, so that more low-cost rental units can be built.


REGIONAL ECONOMIC EXPANSION
Mr. Elmer M. MacKay (Central Nova):: Mr. Speaker, my question is directed to the Minister of Regional Eco-

nomic Expansion. I should like to ask the hon. gentleman if there has been any recent development in the long saga of Metropolitan Area Growth Investments Limited in Nova Scotia, whether this $20 million experimental corporation has become active after a three-year gestation period, and whether all executive positions are now filled and the company is ready to report progress?


Hon. Donald C. Jamieson (Minister of Regional Economic Expansion):: Mr. Speaker, considerable progress has been made. I believe I advised the hon. member that the nominees of both the provincial and federal governments have actually been appointed. The present situation is that a federal and a provincial nominee are active as interim co-chairmen until such time as a recommendation goes forward with regard to a permanent chief executive officer. In the meantime, there is quite a bit of work being done. I was talking to the Minister of Finance of Nova Scotia recently and he is satisfied that the plan is moving ahead at a reasonable pace after, regrettably, a number of unfortunate delays.


Elmer MacIntosh MacKay: A supplementary question, Mr. Speaker. For the record, is the minister saying that the company is actually in operation now and that projects are under
way?


Donald Campbell Jamieson: Mr. Speaker, I would not want to be that specific without obtaining further information. My impression is that it is not, in terms of projects, other than looking at them in a general way. The primary aim at the moment is to get a chief executive officer. As I said, this is proving somewhat difficult.


SOCIAL SECURITY
Stanley Howard Knowles: Mr. Speaker, may I direct a couple of questions to the Minister of National Health and Welfare, with further reference to the conference of the last couple of days? The minister having indicated that there was agreement on one matter, the extension of certain services, will there be early legislation on that matter? While I am on my feet may I ask the minister if, with respect to the continued consideration of the guaranteed annual income, he is in a position to report to his provincial counterparts that he has the backing of the federal Minister of Finance?


Marc Lalonde: Mr. Speaker, as the hon. member knows, the legislative program of the House is extremely heavy, and I cannot anticipate the possibility of introducing a new bill in this area before the next session. We have discussed this matter with my provincial colleagues and they agree on this.
Moreover, I can assure my hon. colleague that the whole Cabinet is at one about the major priority to give social security and I think the government action during the last
May 2, 1975

few years stands as clear evidence before the whole population.


Stanley Howard Knowles: A supplementary question, Mr. Speaker. In view of the minister's reference to the heavy order paper, I wonder if he has looked at it recently and seen how light it is, and does he know that there is only one item on it in his name?


Marc Lalonde: Mr. Speaker, it is not a question of knowing how many items are on the order paper in my name, but of thinking about the legislative program which the government has tabled in the House.


POST OFFICE
Mr. Bill Clarke (Vancouver Quadra):: Mr. Speaker, my question is directed to the Postmaster General. Since the Auditor General has again criticized the Post Office for selling non-postal items to the public without parliamentary authority, a practice which continues today, will the minister tell the House why this program was entered into without proper authorization and why suitable accounts had not been established to determine whether or not the program was profitable?


Hon. Bryce Mackasey (Postmaster General):: Mr. Speaker, a better authority on the subject is the deputy minister, who has appeared before the miscellaneous estimates committee to explain precisely the reasons for this. I assume the minutes are available. If I am wrong, I will find out for the hon. gentleman and report back on Monday.


IMMIGRATION
Mr. Walter Baker (Grenville-Carleton):: Mr. Speaker, in the absence of the Minister of Manpower and Immigration, may I direct my question to the Acting Prime Minister? Can the minister tell the House whether the government intends to diminish or has diminished funds for second language training in English at Algonquin College, Ottawa, bearing in mind the importance of the college to the area in which it is located and to the teachers involved? Also, does the minister's department intend to implement this withdrawal, if it is going on, in centres like Toronto, Hamilton and other places in Canada?


Mitchell William Sharp: Mr. Speaker, I am unaware of this but will make inquiries. If the minister is here, he will answer, or I will endeavour to get the information.
Oral Questions EXTERNAL AFFAIRS


PROPOSAL TO COMPENSATE MOZAMBIQUE FOR LOSSES FROM BLOCKADE OF RHODESIA-AMOUNT OF CANADA'S CONTRIBUTION
Mr. Howard Johnston (Okanagan-Kootenay):: Mr. Speaker, my question is addressed to the Secretary of State for External Affairs and follows on the question I asked the minister yesterday. In light of reports that Canadian officials have said that no specific funds are being discussed in terms of compensating Mozambique but that Canada has agreed in principle to contribute to any general fund for the purpose, can the minister estimate how much will be earmarked as Canada's share of the fund being set up at the Commonwealth conference to compensate Mozambique, a non-Commonwealth country, for losses incurred in blockading Rhodesia.


Allan Joseph MacEachen: Mr. Speaker, I cannot give that detail. I will attempt to obtain more details and provide them later.


PROPOSAL TO PROVIDE FUNDS TO AREAS WISHING TO BREAK AWAY FROM SOUTH AFRICAN CONTROL-CANADIAN POSITION
Howard Earl Johnston: A supplementary question, Mr. Speaker. Can the minister, in the interests of candour, tell the House if Canada has agreed to involve itself in providing funds to encourage forces within southwest Africa with plans to break away from South African control?


Allan Joseph MacEachen: No, Mr. Speaker.


OLYMPIC GAMES
Mr. Otto Jelinek (High Park-Humber Valley):: Mr. Speaker, my question is directed to the Postmaster General. As high quality counterfeit Olympic coins are being produced and distributed abroad, can the minister advise the House as to the steps the government is taking to end this activity and how can Canadians be assured that these or other counterfeit coins will not find their way into our markets?


Bryce Stuart Mackasey: Mr. Speaker, the hon. gentleman is quite accurate in his description of events. There is obviously some indication of an international ring of counterfeiters working primarily on the continent of Europe. We are aware of this and our police force is working closely with Interpol. It is also true that, in all probability, some of the principals involved are Canadians. There is little evidence, however, that these imitation Olympic coins are a threat to Canada. I suggest that people who want to buy these coins should protect themselves by buying from authorized dealers, such as chartered banks and other reputable firms, and we are prepared to provide the list of dealers to people. In

May 2, 1975
Privilege-Mr. Herbert
other words, let the buyer beware if somebody is offering him a bargain in this field.


OLYMPIC COINS-POSSIBILITY OF ISSUANCE OF GOLD COIN
Otto John Jelinek: A supplementary question, Mr. Speaker. As the minister earlier this week neither denied nor confirmed that gold coins will be minted in order to supplement the sagging coin program, and as Simpson's of Toronto are already taking orders for just such Olympic gold coins, will the minister not take the House into his confidence and let us know whether gold coins will be minted, as Simpson's obviously already know.


Bryce Stuart Mackasey: Mr. Speaker, the coin program is not sagging, which is good news. Actually, now that the uncertainty as to whether there are to be Olympic games next year has been cleared up, the coin program is going along very well. As to whether there is to be a gold coin, I will take the House into my confidence. I assure the hon. member that such a decision has not been made by the cabinet. In so far as people taking orders in Toronto, they take them at their own risk. They will be quite red in the face if they are unable to deliver the orders in the event that we determine not tp issue gold coins, but proceed in some other manner.



ROUTINE PROCEEDINGS


Mr. Hal Herbert (Vaudreuil):: Mr. Speaker, I request your indulgence while I explain the various incidents that lead me to raise this question of privilege at this time. I had attempted to raise the matter in private members' hour, where it would be more appropriate, but our rules do not permit that procedure. I have risen in private members' hour in this House on several occasions, on points of order, to protest the procedure allocated for private members' business. The daily correction procedure does not cure the recurring problem which affects the rights of all members.
On Tuesday of this week, private members' business was not called until 5:45 p.m. due to preceding votes. The item called was No. 40, which was the thirtieth item on the list of public bills which are presently before the House. Speeches by the introducer of the bill and by others acknowledged that this bill, C-240, had effectively been superseded or made redundant by another bill, C-208, which had passed second reading, committee discussion and report stage and was awaiting third reading. The first item of business listed on the order paper that day was Bill C-208, an act respecting National Heritage Day.

It is my understanding that Bill C-208 was not called because the government is to introduce a comprehensive bill dealing with all holidays. Recognizing that the Department of the Secretary of State is not progressing as fast as many of us would like, I agreed on March 14 in this House to an amendment to the Canada Day bill, Bill C-231. An intervention by the hon. member for Winnipeg North Centre (Mr. Knowles) on that occasion suggested that a member could not propose, himself, that the subject matter of his own bill be sent to committee. This point of order was upheld by the Chair. On Tuesday last I was advised that an agreement had been reached that the bill under discussion would be withdrawn and that unanimous consent would be requested for the withdrawal. Thus, when the member sponsoring the bill rose at a half-minute to six and was recognized, I assumed it was for this purpose. I was also under the impression, from the procedure followed on the previous point of order, that the sponsoring member would be out of order in making the proposal to send the subject matter to committee. Mr. Speaker, I called "No" on Tuesday at 6 p.m. and was prepared to speak at that time. I was not heard or recognized, in the noise, as everyone rose to leave the House.
I would like to make five points. One, the first item of business, Bill C-208, was not called and there was no indication from the government that it wished this item of business to remain at the head on the list. I would point out, Mr. Speaker, that such an indication is very important, since National Heritage Day has already been incorporated into labour agreements and members receive many letters from workers who maintain that they are being deprived of an assumed benefit due to the lack of progress of this House on a measure that would receive all-party support if it were called.
My question deals with the procedure that was followed at precisely 6 p.m. on Tuesday last. The amendment by the member was out of order. Why was it not so ruled? Why was that member permitted to stand again and be recognized for a second time, when at least three other members had risen and had not been recognized?


Mr. Speaker:: Order, please. The hon. member ought to proceed to develop a question of privilege if he feels that in some way the procedures that were adopted in respect of private members' business treated him unfairly. However, there is certainly no point in the hon. member carrying on a discussion as to whether or not any decision or action taken by the Chair was consistent with the circumstances at that time or was in order or out of order. That simply constitutes an appeal to the person now occupying the chair against the person occupying the chair at that time. The hon. member ought not to use his time on that question.


Harold Thomas Herbert: I apologize, Mr. Speaker. The point I want to make is this: when we have already reached six o'clock, would it not be a preferable procedure for the Speaker to ask if there is agreement that he should not see the clock, in order that noise and confusion that often occurs at that hour should not hide from the Speaker the wishes of the members? "Unanimous" means every member present, and if there is in fact unanimity, then nothing is to be gained by rushing our procedures just because the hands of the clock have passed 6 p.m.

My last item in this question of privilege deals with the way we proceed at 5 p.m. on Mondays, Tuesdays and Thursdays and at 4 p.m. on Fridays. It is my understanding that the responsible minister is required to indicate the willingness of the government to allow a measure to retain its position on the order paper if that measure is not to be proceeded with at that time. In order to have that specific indication, it is essential that the measure be called.
My several interjections on this subject arise from the difficulty we experience in finding out precisely what business is to be brought before the House. With so much committee work, it is obviously impractical for each member to be present at all times and therefore ready at all times to debate a specific measure on which he or she has an interest. The government House leader is rarely in a position to determine precisely when debate on a government bill will terminate and, under these conditions, must maintain some flexibility as to the next item that he will call.
However, the calling of private members' business is an entirely different matter. A start is made at a specific hour. Our rules require that we follow the order as it appears on the order paper. The member, therefore, has a right to assume that the first item of business will be called unless there has been an indication from the government of a reason to allow the measure to stand. It is agreed that the House must retain flexibility; however, the rights of members to participate in subjects of interest to them must also be respected.
Mr. Speaker, I would request your comment, at your convenience, on the various points that I have raised so that a judgment can be made on whether a motion is necessary to attempt to bring some order to private members' business.


Mr. Speaker:: I will, of course, take the matter the hon. member has been dealing with under advisement. However, I should say at once that there are two obvious comments. The first is that the government, as such, really has no particular control over the conduct of private members' business. An indication of consent or otherwise from the government as to the ability of a bill or any other measure to stand and retain its priority is no different from the indication of any other member of the House. Private members' business is exactly as it is described, an hour set aside in which it is the business of all members of the House to participate in those measures. The consent given at any time for a measure on the order paper under private members' business to retain its priority would be quite valid during that time with or without the consent of anybody on behalf of the ministry.
The second point is that the procedures which have been adopted are matters of convenience. They are a departure from the strict interpretation of the rules which would require calling, seriatim, at every private members' hour, all such items on the order paper. Initially, the very filing of private members' bills and their selection for consideration is a departure from the strict interpretation of the rules. Those departures are a matter of custom and are for the convenience of members so that we can operate with reasonable smoothness and not waste too much time on a number of technical interpretations of the rules. The
Dredging
Chair can do nothing more than implement that kind of custom. If it turns out that this kind of custom is not universally accepted, the Chair will have no recourse except to go back to the technical arrangements that have been described by the hon. member.
It seems the Chair ought to let the matter stand, in the hope that the hon. member and others who are concerned about the problem might work it out internally by speaking to the parliamentary secretary to the government House leader and, if necessary, to the other House leaders in order to ensure that there is understanding as to how the business ought to operate.


SOCIAL SECURITY
Hon. Andre Ouellet (Minister of Consumer and Corporate Affairs):: Mr. Speaker, on behalf of the Minister of National Health and Welfare, I am tabling in both official languages two copies of the communique from the federal-provincial conference of welfare ministers.


PUBLIC WORKS
Charles Mills (Bud) Drury: Mr. Speaker, in reply to a question asked in the House by the Leader of the Official Opposition (Mr. Stanfield) earlier this week, I stated that I would make an announcement on the subject of dredging on Thursday or Friday. I am now in a position to make that statement. Let me begin by saying that we are faced with a situation in which the individual companies making up practically the whole of the dredging industry are facing prosecution in the criminal courts with respect to dredging contracts. We are also faced with a situation where dredging must proceed or continue in order to ensure continued public safety and to avoid major economic disruptions.
Let me first advise the House of the measures the government intends to take immediately in order to protect the public interest in future dredging contracts. I will discuss existing dredging contracts later.
First of all, action has been taken to strengthen the terms and conditions in the new contracts by requiring the contractor to agree to full disclosure of all factors on which his bid is made, and the nature and extent of any communication relating to the work or the cost of the work between the contractor and any other person. This requirement will provide the Crown with additional information for use in determining the validity of the bids. An interdepartmental committee under the chairmanship of Public Works will analyse and review bids. This commit-

May 2, 1975
Dredging
tee is composed of those departments and agencies involved in the administration of dredging contracts that is, the departments of Public Works, Transport, the National Harbours Board and the St. Lawrence Seaway Authority.
Second, Mr. Speaker, the invitations to tender, and new contracts will require the contractor to warrant that there has been no collusion whatsoever-


Some hon. Members:: Oh, oh!


Charles Mills (Bud) Drury: between the contractor and any other person in respect of the tender or the contract or the work under the contract. Future contracts will provide that should these conditions be breached, payments under each contract will be limited to the lesser of 90 per cent of the contract price or the audited cost of the labour, plant and material to the contractor, excluding profit and overhead. Furthermore, new contracts will require contractors to retain all related documents for a period of five years rather than the two-year period now required.
With respect to existing contracts, hon. members are aware that under dredging contracts progress payments are made for completed work and a percentage of the contract price is held back until a certificate of completion of the work has been issued. One obvious means of protecting the public interest where companies have been charged under the Criminal Code is for the government to withhold both progress payments and holdbacks, but the legality of this procedure is currently under challenge in the courts.
We recognize that the dredging work must continue and that there are third parties involved who may suffer if payments are withheld. Keeping in mind the above considerations, we will seek guarantees equal to a minimum of 10 per cent of the value of the existing dredging contract from those companies charged under the Criminal Code.
By these means, Mr. Speaker, we expect to attain our two objectives of protecting the public interest and of ensuring that the necessary dredging is carried out, while leaving to the due process of law the problems which have arisen from contracts already concluded.


Mr. Speaker:: Order. I note the minister has taken three or four minutes in which to make his statement, and I would suggest that opposition comments should certainly not be longer.


James Aloysius McGrath: Mr. Speaker, the fact that the minister could make such a statement with a straight face stretches even the substantial credibility he enjoys in this House. We understand and appreciate the government's position. Yesterday, the president of one of Canada's major dredging companies said, and I quote him: "They are in a bit of a quandary mainly because no one else is able to do the dredging work but the companies charged". I do not accept this, and I am surprised the minister accepts it.
The steps the minister now proposes in his statement should have been taken when he was president of the treasury board and was faced with six different reports from the Auditor General, going back to 1963, suggesting there were serious irregularities in dredging contracts in

Canada. What does the minister mean, for example, by his statement that warranties will be required from contractors to ensure that there will be no collusion? What about the ordinary business practice of bonding? To ask these companies for warranties is tantamount to the FBI asking Bonnie and Clyde for a warranty to keep the peace. It is incredible. It is beyond me how the minister could make such a statement.
We are not at all satisfied with the guidelines announced by the minister. In my view, he has merely compounded the embarrassment in which he finds himself. There was a simple, logical and sensible solution and he should have announced it today, namely, that the biggest dredging company in Canada, the only company in Canada, the only company that has not been charged before the courts-that is to say, the Department of Public Works-would carry out this work at least until these charges had been disposed of.


Some hon. Members:: Hear, hear!


John Edward Broadbent: Mr. Speaker, the gist of the minister's statement amounts to the kind of logic one would follow if one said to a man recently convicted of robbing a bank of $100 million; "we are going to solve that problem in the future. There will be no problem at all with this man; we will just get a signed statement from him promising not to do it again."
The procedures the minister outlined do represent some technical improvements over existing laws under which virtually all the major dredging companies are presently being prosecuted for defrauding the people of Canada of millions of dollars. Although it is important to tighten up the law and the investigative procedures to make certain that contracts are honoured, if one is dealing with a group of individuals or corporations that are basically dishonest, if such turns out to be the case-if they are convicted; and there are certainly strong prima facie grounds for believing this is the case-then no matter how tight the procedures are, they are still going to take the chance if their basic inclination is to indulge in criminal activity.
We in our party do not believe that this kind of activity should be left to the private sector at all. Surely, if a case ever existed for public enterprise, this is it. There is only a handful of companies. Even if they are honest, every economist knows that no effective competition takes place in a sector of the economy where only a few firms are operating. So there is no effective competition there.
The NDP believes the Department of Public Works should be doing this work itself. There is no need to contract it out. All the work is being done for the public or for public agencies; it is a continuing operation for which the government should assume responsibility. If in marginal cases private individuals or companies want service, they could go to the government and hire government dredging operators. There is concern for those employed by these private dredging companies. It is our view that should the government take over these operations, the employees now working for the private companies should be hired by the Department of Public Works.
May 2, 1975


André-Gilles Fortin: Mr. Speaker, I first wish to express my regret that only an English copy of this statement was made available to us, not that I have particular separatist or nationalist feelings, but rather because I think the minister does not in the least try to respect both official languages in this House when he issues those statements. That is indeed shocking.
Mr. Speaker, this statement by the minister today is meant to give the impression that his department will take the necessary steps to restore public trust in the dredging contracting out system, although this is by no means achieved in spite of the government's good intentions. We should be aware that the companies concerned in that statement now have legal troubles, but that those troubles finally amount to very little. The companies have been organized and clearsighted enough in the past to set up subsidiaries which would not ruffle the political feathers of the government of the day. Dredging contracts were awarded to different series of companies according to government colour. Just remember when Prime Minister Bennett was in office for instance. I was reading a document to that effect no later than yesterday. When government change occurs, other companies get the contracts. What is more amazing is that we are realizing today, through revelations in this House, that companies in both cases belonged to the same people: that was a case of collusion.
Mr. Speaker, the assurances or intentions stated today in the House by the Minister of Public Works (Mr. Drury) show that he cannot take any step or that he is not interested anyway in taking any step to prevent the collusion of dishonest companies and to prevent those companies from ripping off public funds and depriving people of their interests. May I remind the minister once again that in the future, if he had the kindness and the regard to issue his statements in French or keep them in his office, we would reach approximately the same point. I think, Mr. Speaker, the minister should be scolded a little more by his party so that he would respect that entity, for it is one. As I said, such unilingual statements are an outrage.


Robert Lorne Stanfield: Mr. Speaker, I should like a little information from the minister regarding the practices followed by the Department of Public Works. Is it the practice of the Department of Public Works, when tendering a dredging contract, to develop its own bid? I do not mean simply to develop a rough estimate, but to put in a bid of its own-as is common practice, for example, in the department of highways in my own province-as a means of having a really solid check on the competitiveness of any bidding put forward?


Charles Mills (Bud) Drury: Mr. Speaker, perhaps the hon. gentleman has reference to the quality of the estimates made. We have some direct experience, particularly on the west coast and with the Mackenzie River, of the elements of dredging contracts, such as overhead, transportation, equipment costs, and so forth. These are tested against the bids that are put in. Under the new system, all the elements making up the total bid will have to be spelled out, and these will
Dredging
be compared with own our government experience of the various elements. So that what the hon. gentleman is suggesting will be done.


Robert Lorne Stanfield: A supplementary question, Mr. Speaker. I do not want to misinterpret what the minister has said, but am I to take it that to date, in terms of asking for bids before letting a dredging contract, there has in fact been no accurate or precise computation of the costs of the project by the department which could by any stretch of the imagination be regarded as a sound method of comparison by which actual bids could be judged?


Charles Mills (Bud) Drury: Mr. Speaker, the hon. gentleman used the term "by any stretch of the imagination". There have been, and there will continue to be sound estimates made. Certainly, they are not "off the top of the head" bids. The hon. gentleman will appreciate that there will be, in the Department of Public Works alone, some 75 contracts for dredging in various parts of Canada. Some are quite large; others are very small indeed and may be done entirely from the shore. I cannot assure the hon. gentleman that this rather elaborate procedure has been applied to every single contract, but in the case of the larger contracts a serious analytical appraisal has been made in order to arrive at a valid over-all price.


John Edward Broadbent: Mr. Speaker, may I ask the minister this question? Most dredging operations are done for the federal government. I do not know what the percentage is, but I am sure that substantially 80 or 90 per cent of dredging is done for the federal government. In view of the fact that there are very few firms now in the field, and that quite apart from the question of honesty in this sector of the economy, it is widely accepted that there is very little competition but there is what economists call price leadership-which means implicity that the biggest firm sets the price and the others fall in line-would the minister tell the House why the government did not decide to take over dredging operations and get the Department of Public Works to do them?


Charles Mills (Bud) Drury: Mr. Speaker, I think the hon. gentleman has a slightly incorrect picture of the dredging industry. What he says is true of very large contracts, such as the port of Vancouver, the Fraser River, the Mackenzie River and the St. Lawrence River, but in this country a very considerable number of relatively small ports require a limited amount of dredging for a relatively short period. A great many small contractors in the past have effectively and efficiently been doing this work.
To suggest that the dredging industry in Canada is comprised of only four or five firms is really not correct. For large contracts there are relatively few contractors who have the necessary equipment. But there are a great many small contracts for dredging for a relatively short period of time in the year, and their services are usable for other purposes at no cost to the Crown.


John Edward Broadbent: A supplementary question, Mr. Speaker. I will accept the minister's description of the operation in Canada, but it seems to me he is locked in to part of my argument anyway, so I want to see what his answer is. Assuming there are few big firms available to deal with the major operations under the control of the federal
5424

May 2, 1975
Dredging
government, why not create within the Department of Public Works a section that would be exclusively concerned with doing dredging work in the large contract areas the minister referred to, leaving smaller private firms to do the smaller, private projects?


Charles Mills (Bud) Drury: Mr. Speaker, perhaps the hon. member is asking me to point out the disadvantages of pure socialism in the dredging industry. I think an equal case could be made for nationalizing all the railways, the assumption being that government can do things better than anybody else. That is not an assumption I am prepared to accept.


André-Gilles Fortin: Mr. Speaker, I should like to put a rather brief question to the minister.
When his department calls for tenders for a specific dredging job, does it check the financial structure of the companies, to see if there are ties, by association, financial arrangements or otherwise between them, and whether the companies are associated or really truly different? What guarantees does his deparment have that there is no collusion of the type we have witnessed in the past?


Charles Mills (Bud) Drury: Mr. Speaker, in brief, the answer is yes. An endeavour is made to obtain, seek and receive such information; that is what is meant when we say that information will be given the government on all ties or relations of the company tendering for the job.


Mr. Lambert (Edmonton West):: Mr. Speaker, the minister has said that one of the improvements in the procedures is to be obtained by the establishment of an interdepartmental committee composed of people from the Department of Public Works, the Department of Transport, the National Harbours Board and the St. Lawrence Seaway Authority, who will screen these contracts. Will he kindly advise who screened or examined these contracts in the past? Also in what way does he feel this interdepartmental committee or interagency committee will improve matters?


Charles Mills (Bud) Drury: Mr. Speaker, in the past each agency, whether it be of the federal government or of some other level of government, has done its own screening. In the case of some of the public agencies, they have little direct experience in dredging. The Department of Public Works carries out substantial dredging operations, mostly on the west coast and in the Mackenzie River areas, and consequently it has direct experience in costing. The National Harbours Board and the St. Lawrence Seaway Authority do not carry out dredging operations themselves but merely have it done by contract, and we will be able to make available to them the experience of the Department of Public Works.


Marcel Joseph Aimé Lambert: Mr. Speaker, is it a natural conclusion from this, that notwithstanding many years of exposure to dredging work which these people have, the National Harbours Board and the St. Lawrence Seaway Authority for the past number of years have been uninformed and, therefore, incompetent.


Charles Mills (Bud) Drury: Mr. Speaker, they have been operating on the thesis that the competitive system was not afflicted, if I can use that term, with collusion; and if there is bona fide competition, then a competitive tendering system will produce the kind of results one seeks. The Department of Public Works is in a better position than the agencies I have mentioned to carry out tests as to whether these are valid or perhaps unreasonable bids.


Mr. Speaker:: Order, please. At the moment I see four hon. members who wish to ask questions. I propose to recognize the hon. member for St. John's East (Mr. McGrath), followed by the hon. member for Nanaimo-Cowichan-The Islands (Mr. Douglas) and then the hon. member for Hamilton West (Mr. Alexander), with the hope that this will cover the subject matter.


James Aloysius McGrath: Perhaps to facilitate the timing I will ask my two questions at once, Mr. Speaker. Considering the fact that by the minister's own admission a considerable lobby of professional expertise exists within his own department, I should like to ask why the minister did not exercise the option to carry out this dredging work in whole or in part through his department by making use of the dredging equipment already owned by these companies or perhaps by renting or hiring it. When the minister replies, perhaps he could explain to the House what he means by the word "warrant". What does that mean, and why did the minister not demand some kind of financial bond from these companies to ensure that collusion practices were not taking place?


Charles Mills (Bud) Drury: If one looks at the history of current problems, he will see there has not been any complaint that the work being done is inefficient or badly performed. The problem here has been the result of alleged collusion among the principals, having nothing to do with the managers or the subcontractors failing to do the right thing in the best way or in terms of efficiency. There have been charges which allege collusion in making representations to the government. These measures will enable us to test the validity of those representations. Full and complete disclosure as to the various elements making up the bids will enable us to examine them and apply to each of the elements the kind of procedure the Leader of the Opposition (Mr. Stanfield) has suggested.
It has been asked why we did not hire the dredges and services rather than the total services of the contractor. Had we been more suspicious of them at an earlier time, and had these companies come under the new provisions of the Combines Investigation Act, then I think the hiring of the equipment and managing it ourselves would not necessarily have been a more efficient operation than that which has taken place in the past. This would not have served to cure the problem in respect of alleged collusion.
In relation to the required warranty, I am advised by law officers of the Crown that this explicit warranty against collusion will be helpful in establishing a case where there is suspicion or a charge of collusion. The fact of the warranty having been given will enable us to invoke more easily and more effectively the law in respect of agencies who are subsequently found or suspected to be guilty of that practice.
May 2, 1975


Lincoln MacCauley Alexander: Noting that strange explanation about the warranty, Mr. Speaker, and with all due respect to the Minister of Public Works (Mr. Drury), I wish it were possible to ask questions of the Minister of Justice (Mr. Lang). I hope there will be some form of statutory declaration in respect of these bid warranties, because to me a warranty means absolutely nothing when you remember that every Tom, Dick and his brother can give a warranty.
The establishment of an interdepartmental committee seems to make sense. I appreciate the reason the Solicitor General (Mr. Allmand) is not involved, because that would also involve the RCMP. However, because of the importance of this matter I wonder why there has been no reference to the Department of Justice being represented on this interdepartmental committee. I ask this question because of the modus operandi of which we are not yet completely aware. I am sure the Attorney General is aware of it through the RCMP, and I am sure the information is subsequently passed on to the Department of Justice. Why is it not spelled out here that the Department of Justice shall play an initial role through direct representation on this interdepartmental committee?


Charles Mills (Bud) Drury: Mr. Speaker, before this morning's session I explicitly suggested to the Minister of Justice (Mr. Lang), and he heartily agreed, that one of his senior officials should be on this committee. It is taken for granted that this basically technological committee will be supported by adequate legal advice. It goes without saying that the Minister of Justice will through his representative participate in respect of legal questions, and he has explicitly agreed to do so.


Lincoln MacCauley Alexander: Mr. Speaker, if the Minister of Justice is to be involved, and there is no doubt about that, why cannot this be spelled out in the terms of reference by just adding the Department of Justice to this list which includes the Departments of Public Works, Transport, the National Harbours Board and the St. Lawrence Seaway Authority? I do not understand why there is hesitation in this regard.


Charles Mills (Bud) Drury: Mr. Speaker, if it would help the hon. gentleman, I would be quite glad to see it done.


Mr. Gilbert:: Mr. Speaker, in view of the massive evidence of collusion in respect of competitive bidding by the major dredging companies across the country, going back to 1963, what evidence has the minister that they ever indulged in real, competitive bidding? That is the first question. In view of what has happened in the past, what evidence is there that they ever indulged in real, competitive bidding, and what assurance has the minister that they will now participate in real, competitive bidding? Also, why is the minister convinced that the private sector can do a more effective job, in view of its past record, than his own department setting up a public agency to do the necessary work?


Charles Mills (Bud) Drury: Mr. Speaker, the last question is doctrinaire and I should not attempt to answer it. In respect of the earlier one, it is quite clear that the prima facie evidence
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at the moment is that there has not been competitive bidding.


Robert Lorne Stanfield: Why did you not find out?


Charles Mills (Bud) Drury: We perhaps will be faced with collusion in the future; but at least we will have some tests against which to examine payments in the future to see whether we should be suspicious of further collusion. Not only that, there will be a number of explicit sanctions in the new contracts which will make it very much more chancy or difficult to invoke legal technicalities in avoiding sanctions in the future.


QUESTIONS ON THE ORDER PAPER
Mr. Charles Turner (Parliamentary Secretary to Minister of State for Science and Technology and Minister of Public Works):: I ask, Mr. Speaker, that all questions be allowed to stand.



GOVERNMENT ORDERS


[Stage Direction]
The House resumed from Thursday, May 1, consideration of the motion of Mr. Lang that Bill C-41, respecting the stabilization of net proceeds from the production and sale of western grain and to amend certain statutes in consequence thereof, be read the second time and referred to the Standing Committee on Agriculture.
Mr. Fred McCain (Carleton-Charlotte):: Mr. Speaker, we seem to have before us today a bill which promises something which is to be desired by a segment of agriculture. However, it becomes merely another section of the ad hoc group of policies which have been introduced by this government in the field of agriculture. It is another inconsistency in the basic policy which agriculture has been seeking, in the sense that it limits itself to a particular sector of agriculture and does not apply in general terms the very principles upon which a healthy agriculture in Canada can be established.
I should like, first, to draw the attention of the House to the rather unkind remarks of the hon. member for Assiniboia (Mr. Goodale), inasmuch as he implied that everything said by anybody other than a member of the government had to be interpreted as being purely political and, therefore, inconsequential and something for which nobody in Canada should have any concern. I submit that nothing could be further from the truth. Probably no group in the political life of Canada has spent more time in considering what should be agricultural policy for this country than the members of the opposition. No party, by
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May 2, 1975
Western Grain Stabilization
virtue of the number of seats it holds in agricultural areas-this should be evident even to the hon. member for Assiniboia-has more agricultural support than the opposition. Therefore, there is a very important element of confidence in the opposition in respect of agriculture. This fact has been evident over a great many years.
So far as I am concerned, the field of agriculture should not be exploited as a political game. However, it should be discussed and from that discussion should evolve programs which can perhaps establish a healthy and viable agricultural industry in this country. I submit that this bill is but another piece of evidence of the lack of understanding by the government of a multitude of aspects of agriculture, and a reflection of agricultural input by an urban-oriented group of people who do not have the understanding of agriculture which is necessary to create policies which would be satisfactory and successful.
I find it very difficult on occasion to agree with the hon. member for Timiskaming (Mr. Peters), but I would have to say that in his remarks last night he illustrated beyond any question the idiocy of the formula which is to be the base upon which payments shall be made to those who will benefit under this legislation. Certainly, I think anybody who is familiar with agriculture would be quite capable of coming up with a simple formula based on the earnings of the farmer rather than based upon all the indices which have been dreamed up by somebody far, far away so far as his knowledge of agriculture is concerned.
Basically, everything that has been proposed from this side of the House has been completely rejected, out of hand, as being unrealistic. I wish to give an example of one error of the bill in specifying the expenses a farmer may have as part of his cost of production. There are two very important items deleted; I submit, perhaps by intent. The first is the rental cost, of which there is no mention. The second is the interest cost of the farmer who does not at this moment in time, or will at the moment in time of his application for assistance, have his farm paid for. The bill is designed to help the established, self-financed individual and it is prejudicial to individuals who do not have this healthy financial position. It would be very simple indeed, as a simplistic interpretation of the bill, to say that costs which will be taken into consideration in the filing of an income tax return shall be costs contributing to the cost of producing grain. That would cover the field. Often when we just listen, we delete, by oversight, some of the obvious things which are part of the cost of farming.
I submit this bill looks like the product of somebody who has dwelled too long in the marble halls of the autocractic structure of a government which has perhaps become a little bit egotistical in respect of its knowledge of agriculture and agricultural needs. This does not mean, Madam Speaker, that I am in any way opposing the principle of supporting the income of every farmer in Canada who has a reasonably sized unit. Such person is entitled to a good income, as is any other member of our society. This is something that was recognized until this government came to power some ten years ago. Since then we have been moving farther and farther away from the realities of a healthy agricultural industry.

This bill is a further example of the fragmentation of the government's approach to agriculture. This government has the audacity to say to farmers in western Canada that the Minister of Agriculture is incapable of administering their affairs. The government says "We shall pick at random somebody whom we think is more capable. We do not trust the Minister of Agriculture, so we will not put this stabilization program in his hands but will reserve the right to name someone else". This is an insult to the Minister of Agriculture and to agriculture itself. Once again we are to have an interdepartmental committee. I suppose that means it will comprise of somebody from income tax, somebody from statistics, somebody from transport, but no one agriculturally orientated and capable of understanding the problems of agriculture. The bill does not spell out who shall be on the committee, nor does past performance indicate that this government will put agriculturalists in charge of it.
In several places the bill leads me to believe that full consideration has not been given to those who may not be eligible to participate in this plan. For instance, if the minister decrees that a farmer is not eligible, and at a later date that farmer is reinstated as a result of an appeal to the Federal court, he may find himself in the second-rate position of an individual who has chosen, for the first time, to participate. I believe such person would be covered by clause 5 (2) of the bill, but his participation in the plan would be delayed and limited. This is not in line with the ordinary principles of justice which any citizen of this country has a right to expect.
The bill also overlooks regional requirements. Grain growing areas may be hit by strikes, by transportation problems, and so on; but there is nothing in the bill to cover such contingencies. Let us suppose that because of transportation problems it was impossible to move western wheat to Vancouver and the eastern outlets were already loaded to capacity. What would happen to the grain growing areas which might not receive any income because the grain could not be moved? There is in this bill no provision for relief to such an area.
The Minister of Agriculture has made derogatory remarks about Canadian marketing in general and has said some unkind things about potato marketing in New Brunswick in particular and the Atlantic area. I think this is another area in which the marketing of the crop will be a very important factor as to whether the producer of the grains referred to in the bill may or may not need help. One might wonder if this plan is intended to replace crop insurance. There does not seem to be any relationship between an individual who receives compensation through crop insurance and an individual who may have suffered a couple of years of hail damage and who applies for help under this plan. If I am wrong, I stand to be corrected. I see the minister responsible for the Wheat Board (Mr. Lang) shaking his head. A declining payment is available under crop insurance; it does not remain static. But a farmer whose crop is hit by hail or flood for two or three years in a row may find he is not eligible for stabilization payments.
May I call it one o'clock, Madam Speaker?
May 2, 1975


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


[Stage Direction]
AFTER RECESS

The House resumed at 2 p. m.
Fred Alward McCain: Madam Speaker, though the formula is somewhat confusing to a layman in the English language, as I am, one of the factors which is not given much consideration in the determination of what shall be part of a stabilization program seems to be capital cost. Capital cost is a very significant part of a business operation in any democratic country, yet in the formula described under this legislation I fail to see where there is any allowance for such cost.
I mentioned earlier that there was no allowance for interest charges. This is another factor which is apparently omitted but which must be taken into consideration if one is to arrive at a proper figure of cost for any agricultural product. It may vary from region to region of Canada, as the same product is produced in different areas and may not always have the same bearing upon the unit cost of the crop, but it is there as part of that cost and, as in every other business, it is a fundamental part of a sound operation and should be considered.
In principle, as I said earlier, virtually every individual concerned about agriculture would be prepared to support this bill, but it is legislation which by its very nature in meeting a specific purpose is extremely discriminatory. It may be said that this is an unkind statement from a politician on the left of Mr. Speaker, but let me cite, for instance, the treatment CEMA has received from the Government of Canada. Farmers under CEMA have been asked-as farmers under this legislation will be asked-to contribute to their own support. CEMA collects, through its producers, large amounts of money for support. So it will be with grain producers of western Canada, but they will have more than a matching contribution from the federal government which is intended to assist them in times of economic trouble.
Everyone knows the woeful position in which egg producers of Canada, under CEMA, found themselves; yet there has not been a suggestion by the government that it is prepared to match in any way the contributions which egg producers may have made for their own support. I submit that this is gross discrimination against the egg producers of Canada organized under CEMA, and they should certainly be parked at the minister's door-who knows which minister; he is yet to be appointed-asking for comparable treatment. I say it is discrimination and that this principle should apply to other agricultural items wherever they may be produced in Canada.
Another thing which is left completely uncertain in this legislation is this: there is no apparent room for provincial participation. At least, there is no mention of it. It does not, of course, preclude provincial participation. It is interesting to note that the Cattlemen's Association, in presenting their brief to the agricultural committee, made it a
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specific point to ask that the provinces not participate in the relief of agricultural economic problems anywhere in Canada. It is certainly to be hoped that under this act the provinces will not only be asked not to provide relief, but will be encouraged to abandon responsibility for the support of this agricultural program. Let us hope that the same philosophy, the same policy, will be extended to other agricultural products.
The discretionary clauses of this bill allow the minister to determine what the levy shall be when the fund is in surplus, and what the levy shall be when the fund shows a deficit; but in no instance do they impose a limit. The bill suggests that in normal times there is to be a 2 per cent contribution by the producer; that is, 2 per cent of sales should be the producer's contribution. Yet when it comes to the discretionary power of the minister, he is not bound by the limitation of the 2 per cent levy. How will those discretionary powers be used? Will they be used one way in an election year and another way after the election? Is this a particular political ploy aimed at attracting the votes of a particular segment of Canada's population, while leaving the rest at a loose end? Some people in agriculture, particularly in eastern Canada, are inclined to think that it might be.
The government's concern as evidenced in this bill for the western farmer is in sharp contrast to its lack of concern with respect to the cost of feed grains and regularity of the delivery of feed grains to eastern Canada from the west. Certainly, the government's concern for western farmers is in sharp contrast to its concern for the agricultural feeding sector in eastern Canada, the ability of which to produce has been impaired to the extent that in many instances producers can no longer produce eggs, beef and pork products for Atlantic provinces' consumption as cheaply as producers in other parts of Canada can produce and deliver them to Atlantic provinces' points of delivery.
If we are to be concerned about the welfare of the western farmer, why should we not extend our concern to all farmers across Canada by not introducing ad hoc pieces of legislation such as this which are designed to fit particular situations such as the one we are discussing? Instead, let us bring in a blanket piece of legislation which will look after the whole field of agriculture. All agricultural producers are crying for this.
For the benefit of the hon. member for Assiniboia, I suggest that such a policy has been proposed many times in this House. I ask him to read the statements on policy which have emanated from the opposition in election after election, stating that security of income of the farmer is of primary concern to this party. We say that agriculture should be treated as one industry and not fragmentized. Our policy would not pit one part of Canada against another but would be all-inclusive in its coverage.
I sincerely hope that under this legislation the grain farmer will not experience the problems which the potato producer, apple producer, grape producer and other producers all across Canada have faced when applying to the government for assistance. I hope that the discretionary power which is to be placed in the hands of the minister

May 2, 1975
Western Grain Stabilization
and his staff will be exercised in such a way that all who are to received aid will receive it equally. I hope their markets will not be categorized. Rather, I hope that their needs will be measured by the yardstick of lack of income alone.
I bemoan the fact that when the potato program was implemented in the Atlantic area, it was implemented in one fashion for those who shipped to the fresh market and in another fashion for those who sold to the processing market. It left those selling to the processing market in a position of disadvantage. If the discretionary powers in the bill allow the minister to be unkind to some and kind to others, they should forthwith be struck from the legislation.
This bill, Madam Speaker, is in support of a principle to which I subscribe wholeheartedly. However, it seeks to provide income maintenance for a sector of agriculture. I submit that the principle of sector by sector help is unacceptable, although the concept of income maintenance for agriculture as a whole has been accepted and always supported by the members on my side of the House. I appeal to the government to look on the industry of agriculture through a farmer's eyes and not through an urban dweller's eyes, and to quit frigging around with a policy of aiding the industry on a piece by piece, ad hoc basis. The time has long since passed when western members can stand in this House, grin and say, "We are being looked after, but the rest of agriculture in Canada is to be treated in a different light."
I have referred to the case of CEMA and of the potato industry. I beg this House to adopt a rational approach. Let there be more farmer input in the decision-making process. Let us use statistics of cost as our guide as to what is needed by a particular farmer in a particular region to maintain his income. Let us throw in the was-tepaper basket, where they belong, all the complicated formulas in this bill which must have emanated from one of the best mathematical minds in Canada-a mind highly qualified in mathematics but without any knowledge of agriculture. Let us make the legislation program easy to understand in its aims and income maintenance program. Let us put it into simple language which a farmer can understand. Let us get rid of all the gibberish in the bill; it will do nothing but confuse and establish an additional bureaucracy in this country.
There are three arms of government which are capable of administering this bill as it is presently constituted. It could be done by the prices stabilization board, perhaps it could be done by the Wheat Board, or perhaps it could be administered by the marketing arm of the Department of Agriculture. According to the way I read the bill, the program is to be administered by a minister to be named, together with a new bureaucracy which is to stand at his elbow and help him. Considering all the data which will need to be accumulated, the program should be in the hands of the Minister of Agriculture, otherwise that minister will not be doing his job: that is all we can assume.
The principle of the maintenance of farm income is good, Madam Speaker, but the fragmentation of the industry under different administrative bodies and interdepartmental committees is abhorrent to us.


John (Jack) Henry Horner: Madam Speaker, this is the most complicated piece of legislation I have seen in my 17 years as a member of this House. Anyone who can understand this bill can understand how the CPR arrives at its freight rate formula, which is certainly complicated. I will not deal with the complexities of the bill; I want to deal more with the principle underlying it. It has been suggested that this bill is much improved compared with the previous bill on this subject, submitted in 1971. I am not sure this bill is an improvement. Certainly, it is far more complicated. Some of the obvious loopholes of the 1971 bill are to be plugged by this bill. Yet when you try to plug loopholes in poorly drafted legislation, you are bound to establish more and more regulations and qualifications. Certainly, this bill does that.
Some call the bill calamity insurance, but I say it is calamity insurance for the government. It is not calamity insurance for the farmer; it is calamity insurance for the government. Any government of any province or of any country will from time to time be confronted with emergencies. When a national emergency is declared, whether it be a hurricane in Texas, a flood in the Ottawa Valley, or a drought in the prairies, the goyernment in charge must concern itself with the problem and try to bring about just treatment for the people affected. There must be just treatment for these people because of the emergency situation they have suffered through no fault of their own. This is often referred to as an act of God: it is out of the hands of both the individuals and the government.
This bill sets up a fund for the government, to be used in the event of a national emergency. The fund is contributed to at the rate of 2 per cent of gross sales by the producers, and 4 per cent of gross sales by the government. That concept is all right. Where, then, does it break down? There are many calamities that could occur in respect of which this fund could not be drawn upon. The government will be able to say to the people in those areas, "Sales have been good: this area does not qualify for assistance this year under this proposal and therefore we cannot make a payment." The government will have an excuse for not meeting the moral obligation it has when it takes office. I do not want to give this or any government any excuse for not assuming moral obligations they take on when they say they have the power, will and desire to govern.
The contributory fund is calamity insurance for the government; it is also insurance for the salesmen: however, it is not insurance for the producer. The producer may have a poor crop which may or may not be compensated for under this bill. He may have a good crop and it may or may not be affected by this bill. What will be affected by this bill is the situation when sales drop. When the Wheat Board or the agents of the Wheat Board fail drastically in selling six major grains, income will drop off and this bill will come into play. I want to make it abundantly clear that this is calamity insurance for the government and the salesmen. When the government takes office, it assumes the responsibility of looking after the citizens who elected it. From time to time those citizens are confronted with national emergencies which have been caused by acts of God. Grain producers are sometimes confronted with problems such as floods, hail,
May 2, 1975

drought or insects which compound the difficulties of agricultural production. This bill does not provide any insurance against those conditions.
It can be argued that this is an income stability bill and, therefore, it must protect the producer when he has a poor crop or when his rapeseed is set upon by beetles. The criticism of the original bill in not being regional also applies to this bill. The region constitutes the whole Wheat Board area which stretches from the Manitoba border into British Columbia. Any part of that vast area can have a crop failure, whether it be the desert in which I live, south and east of Hanna, the Peace River area, southern Saskatchewan or northern Saskatchewan. The interlake region of the province of Manitoba has often suffered drought and flood conditions. The regions to which I have referred will not be covered by this bill because stabilization payments are based on a percentage of the total sales. Therefore, those farmers would be better off buying crop insurance than putting their trust in this bill.
Another interesting question is, who can qualify? In the previous bill it was mandatory: in this bill it will be voluntary up to January 1, 1978. If you have not registered by that time, you cannot do so without the permission of the minister. The Minister of Justice who is in charge of Canadian Wheat Board (Mr. Lang) has often been accused in this House of setting up political machinery in western Canada comparable to nothing in the past. Clause 16 of this bill and its relation to clause 5 contributes to the political machinery the minister is attempting to set up on the prairies.


An hon. Member:: Shame on the minister.


John (Jack) Henry Horner: I am glad to hear that comment from a member on the government side. It gives me some hope that they will see the light. It is normally thought that we should have income stability to shore up the small producer. The basic concept of legislation presented to this parliament over the years has always been that the large producer can look after himself and we should do what we can to bolster the hopes and aspirations of the young farmer or small producer to keep him in business. Why has this been done? In the dairy industry we are continually losing farmers. In the hog industry we are continually losing hog producers.
When this legislation is examined in committee it will be clearly seen that it is more beneficial to the large producer than the small one. I do not think the federal government should contribute 4 per cent of the gross sales revenue to a fund to help the big producer. It would be more reasonable to expect the government to contribute to a fund which will shore up those who need shoring up. Every producer aspires to have a bigger operation.
How does this fund shore up the big producer more than the small one? The minister put it this way: he said, "You have to reward success; you cannot reward failure." That was his excuse when he was asked in the committee whether it was not true that this bill would help big producers more than small producers. To my mind, that is not good enough. The legislation before us will be of benefit to the big farmer, to the older farmer who is well established and who can keep up his sales in the five years preceding a calamity year. When a calamity year comes
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along, he gets by far the larger payment. And we are not talking, now, about $100 or $200 a month such as old age pensioners get; we are talking about payments running into thousands and thousands of dollars. As a person involved in agriculture, I want to encourage younger men to enter the business and take the risks that go with it. Farmers are confronted with hail, drought, floods, and so on, and I should like to see legislation enacted which would result in the degree of security which I believe the small farmer, the young farmer, needs today.
The previous speaker quite properly pointed out that the cost of capital was not provided for in this bill. Some time ago we passed legislation which will allow young farmers to borrow up to $150,000 under certain conditions. Having borrowed such a sum, a farmer must of necessity sell his crops every year before he can make repayment. If he hits two or three bad years in a row, he is bound to find himself in serious financial difficulties since he has not been able to build up a reserve. The well established farmer who has paid for his land and who has no need to buy new machinery is able to stockpile against eventualities.
From time to time, farmers do not sell all their grain in a crop year or in a calendar year. They may feel they will be obliged to pay too much income tax if they do otherwise, so they build up an inventory. In a bad year, their sales remain constant and they will be able to establish a far better average in the five years leading up to a calamity year. Young farmers will not be able to do this. The bill before us fails to give him the assurance which he is seeking and which parliament should be able to give him when we entice him to borrow $150,000 or more to get into the business of producing food.
Canada is a country likely to be beset by severe economic troubles later this year and in the years to come. However, we do possess certain abilities and one of them is the ability to produce agricultural commodities. In the past, sales of grain have favourably affected our balance of payments situation and no doubt this will continue to be the case in the years ahead. Looking at things from that aspect alone, I say the government has an obligation to ensure that sufficient numbers of young farmers get into the business. We are often told that the average age of farmers today is about 58, so there is obviously a need to encourage more young men to take on the debt load and to carry that load for the good of Canada. In the bill we are considering, I see nothing which would encourage hope in a young farmer and lead him to believe that if he does come up against a calamity year he will be shored up in any way by these proposals.
This having been said, I suppose one is led to wonder how the bill could be improved. Well, Mr. Speaker, before it can be improved it has to be understood in all its ramifications, and I do not think 5 per cent of the farmers in western Canada understand the mathematics or the mechanics of the measure.


James McPhail Gillies: Five per cent of the members of the House of Commons don't understand it.

May 2, 1975
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John (Jack) Henry Horner: One of my hon. friends has said that not more than 5 per cent of those who sit in the House of Commons understand it. I think he is right. If anybody believes he understands it, let him read clause 12 which deals with the calculation of individual stabilization payments, or let him look at page 5405 of Hansard and read the tables which the hon. member for Timiskaming (Mr. Peters) put on record, and try to determine what this complicated equation is leading up to.
It is my contention that the bill should be subject to exhaustive study to determine whether it benefits Canada. I have no doubt at all that it will benefit the federal government. It will give them an excuse; it will not have to measure up to its moral obligation to look after the farmers should a calamity take place. It will give the salesmen a sense of added security to the extent that if they do not sell the crops, the farmers will not be on their backs so badly.
The minister will admit that there are years when we have not gone out and sold out crops. I rarely give the minister in charge of the Wheat Board a pat on the back; I rarely think he deserves it. But he was instrumental in selling barley a few years ago. Mind you, Mr. Speaker, I think he sold it 50 cents too cheaply, so his intervention was really costly for the western farmer. But he knows what I am talking about when I say this bill will encourage the complacency which salesmen are inclined to feel when they are not obliged to make sales; and as a western farmer, I do not want my salesmen to feel such complacency-I want them to know that they have to sell, sell, sell. Also, as a taxpayer, I do not want the government to feel that it can avoid the moral obligation of aiding a region which has been beset by calamity or disaster.
The bill takes the place of two legislative enactments, one of which is the Prairie Farm Assistance Act. Prairie farm assistance payments would be applicable where there was a township with crops below an eight bushel average, but anything less than a township did not qualify. Finally, this was broken down to half a township, 18 sections, because they found out there were many pockets within a township that could not get a payment. Eighteen sections turned out to be too big a block and this was broken down further to 12 sections.
This bill deals with the whole of the prairie region right from the Ontario side of the Manitoba border clean through to the interior of British Columbia. Anyone who is seriously concerned with the plight of agriculture and the farmers, in view of past experiences with PFAA which this bill replaces, will realize that the bill will not apply one year in 20, and that it is no good. In 1971, passage of a bill similar to this through the House of Commons was prevented. This is a long story which other members have gone into, so I shall not do so; but its passage was prevented because the government of that day had broken the law. I am not going to make any wild accusations; the Prime Minister of that day admitted publicly that the government had broken the law. It just happens that the Prime Minister of that day is the Prime Minister today. The Minister of Justice, whose legislation broke the law in 1971, is today now trying to get through the House an even more complicated bill.

If there are some members on this side of the House who are slightly suspicious, can you fault them for that, Madam Speaker? I think the track record of this kind of legislation in the House of Commons bears very careful examination. For example, it is not regional enough. The equation relating to the accountable year is, in my opinion, inadequate. One simple change that could be made, if the government insists on this salve for their conscience, is to allow a producer to take the best three years out of the last five, rather than to insist on the last three absolutely in equating what payment will be made to him.
It is often said of some of the dryer parts of western Canada that crop cycles come once in seven years. Some people even say once every ten years. I would not like to see dry conditions for seven years, but I suggest that there are many parts of the prairies that could easily have seven years of dry conditions. Certainly, they can have three years of dry conditions. I can go back to recent history and recall that the years 1961, 1962 and 1963 were poor years. The year 1964 was not much better, and crop production improved a little in 1965.
If this simple change of letting a producer take the best three years out of the last five in equating his payment were made, it would allow some tolerance to take into consideration drought conditions from which particularly young farmers might suffer. It would not make any difference to a large, well established farmer because more than likely he has been able to build up the reserves on his farm and his sales will show greater continuity than is the case with a young farmer who is just starting out. So although my proposal would not affect, either plus or minus, large farmers, it may well be of benefit to small producers who have to sell every year and thus cannot build up any reserves.
Talking of building up reserves, it is of interest to note conditions today on the prairies. The Wheat Board has stated that on May 15 it is closing out all delivery permits for wheat. That is, at best, a threat. Why is the Wheat Board doing this, Madam Speaker? It is because 30 to 40 per cent of the grain is still on the farms and the farmers do not appear to be in any rush to deliver it. They are busy with seeding problems, road conditions, bans on roads, and the Wheat Board has commitments to meet and wants grain delivered.
I point this out merely to prove beyond a shadow of doubt to any of the non-farmers in the House this afternoon that it is accustomed practice for a well established farmer to build up the reserves on his farm, whereas a young farmer does not have that opportunity. He has a capital debt to meet, a family to raise and feed, and machinery to buy and pay for. He is the person we should be encouraging today, and this bill does not encourage him enough.
I trust this bill will be very thoroughly examined, with every opportunity given to witnesses to appear before the committee so the farm organizations and indeed the farmers themselves are made aware of its exact implications. I say that in view of the cut-off date of January 1, 1978. If you do not voluntarily come into the plan before 1978, under clause 16 of the bill you have to write to the minister and get his permission to come into the plan.
May 2, 1975

If I were a young farmer today who was starting out, I would see no security in the bill or any income stability either, and I would not be keen to join this plan. However, 15 years from now when I had built up my farm I might well think the measure would give me a little stability and that I should join it. But then I would have to have the approval of the Minister of Justice, and the Minister of Justice might well look up my track record and say, "That fellow's name is associated with an old political family of a different stripe from mine, and I am not going to let him come into the plan". As I read clause 16, I cannot qualify for the plan unless I do so before 1978; otherwise it would be a matter for the minister's prerogative. While he has been Minister of Justice, the minister's prerogative in many cases has not gone beyond his own personal feelings.
I am sure, Madam Speaker, you recognize that, being a woman and knowing something about women's groups bringing problems before the Minister of Justice at the present time. They feel that his own personal opinion is interfering with his reason and logic. I, as a wheat farmer, might well suspect that his own personal political views might keep young farmers who do not join this plan before 1978 from joining it afterwards.


James McPhail Gillies: Shades of Jimmy Gardiner.


John (Jack) Henry Horner: I think the hon. member is right-shades of Jimmy Gardiner. I think Jimmy Gardiner was a great westerner who did his best for western agriculture. But in doing so he attempted to gerrymander nearly every seat in Saskatchewan for his own political benefit. The point I am making, Madam Speaker, is this: in view of this provision about joining the plan before 1978, and in view of the complications of this bill, I think parliament would be very remiss if it were to pass the bill speedily. If the bill goes to committee, we would be very remiss if we did not spend a lot of time examining the bill thoroughly.
I have noted that some members advocate that the committee should travel. I am not one to suggest that members of parliament should go on junkets across the country, but I do know that some of these trips can be very beneficial. There is nothing like moving into a city where there is knowledge of the subject matter you are going to discuss and confronting the people there with the problems at the time of the committee's visit. That happened in respect of Bill C-176: I was delighted by the educational program the members of that committee undertook in respect of Bill C-176, and I was delighted by the desire of the people to participate in the discussions.
This bill is far more complicated. I know it pertains only to the Wheat Board region, but a committee travelling in that region would meet very knowledgeable and concerned audiences who I am sure would want to present briefs to the committee so that members might better understand this bill and the problems on the prairies.


Hon. W. G. Dinsdale (Brandon-Souris):: Mr. Speaker, when the minister responsible for the Wheat Board introduced this legislation at the second reading stage on April 28, he engaged in an historic review of recent events in dealing with agricultural problems. He took us back as far as 1968 and told us about the wonderful things that had
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taken place since then. Let me read one of the things he said, as recorded in Hansard of that day:
The consumers in this country are of course extremely interested in the production of grain.
I should like to begin my remarks by adding to that statement of the minister that the producers of Canada are also very interested in the production of grain. One of the omissions in the minister's historic review was the Lower Inventory for Tomorrow program which was introduced during the period to which the minister referred. The farmers on the prairies, who above all else want to produce grain to feed the hungry millions of the world, immediately dubbed that the "lower income for tomorrow" program, because it was absolutely inconceivable to them that a minister who had been given responsibility for the welfare of the grain producers in western Canada should have deliberately brought in a program designed to curb the capacity of western grain producers to do that which they know how to do best.
I do not know why the minister did not include a reference to that in his historic review, because I think that is one of the major facts of agricultural life in western Canada, or was during that period. I think it is also one of the reasons there has been growing instability in the prairie farm economy.
Shortly after the introduction of the LIFT program, the export market improved dramatically and, of course, the minister and the government took full credit for the booming market, completely oblivious of the fact that they had failed completely to anticipate it and had deliberately attempted to get wheat growers out of the wheat growing business.
The fact of life in terms of world food is that there is always a market for food and for grain which can never be met by our present productive capacity and techniques. This is the theme the hon. member for Qu'Appelle-Moose Mountain (Mr. Hamilton) has hammered on from time immemorial. When you have over half the world's population starving, there is obviously a need for Canadian production of all the grain it is possible to produce. It was this constant demand for grain, combined with growing famine, that brought about the booming exports to which the minister referred during his historic review.
There was also another interesting omission from the minister's remarks. He neglected to indicate that, currently, exports of grain are at a five-year low. This does not mean the market is not there. Canada, particularly the western part, has an obligation to meet the demands of the growing world market for foodstuffs.
The Minister of Justice (Mr. Lang) who is responsible for the Wheat Board, and the Minister of Agriculture (Mr. Whelan), have been out on the hustings during recent days. This is always an indication of something going badly awry with the dialogue between farm producers of western Canada and the Government of Canada. Even though the minister responsible for the Wheat Board suggested in his presentation of this legislation that it had been warmly received by the producers in the west, the fact that both he and his colleague have been out on the hustings is an indication that they are getting a different message from the grassroots producer.

May 2, 1975
Western Grain Stabilization
The Minister of Agriculture was out in the west last weekend and a headline appeared in the Brandon Sun, that great journal, on Monday, April 28, as follows: "Whelan says opposition delaying farm legislation".


Some hon. Members:: Hear, hear!


Walter Gilbert Dinsdale: Under that heading and the byline of Garth Stouffer, who is the associate editor of the Brandon Sun and a man very knowledgeable of agricultural matters, we find these words:
Arguing that opposition members of the House of Commons are afraid Liberal farm legislation might be "too good" and denouncing the media and others who made large of the egg scandal of last summer, Hon. Eugene Whelan rode through rainy Manitoba on Saturday praising farmers and calling on the rest of Canadian society to match the efficiency and productivity of the people on the land.
"If all other walks of life were as efficient (as producers) as the farmer," he told a meeting in the high school auditorium at Minnedosa, "there would be no inflation today."
He went on in like vein, telling the farmers what fine people they are. I think, in the words of Shakespeare, that he doth protest too much. When you see that sort of approach being made to the farmers, it is an indication that there is something badly amiss in communication between the government and farm producers.
The report goes on to stress in the following terms the fact that the minister was exceptionally cordial in trying to win friends and influence people:
About 45 minutes late for the meeting at Minnedosa, Mr. Whelan made up for his tardiness by standing outside the gym door after his address, shaking hands with most of the 200 who listened to him, in somewhat the manner of the parson saying goodbye to his parishioners on a Sunday.
Perhaps we could have added somewhat like the politician who shakes hands to win friends and influence people. The story says that he went further:
In addition to just shaking hands, the plain-spoken farmer who represents the urban riding of Windsor, also answered questions.
In fact, when particularly challenging arguments were thrown his way, Eugene Whelan appeared willing to spend the rest of the afternoon in man-to-man debate-
He really wanted to get his point home to each individual farmer.
-but his aides-who knew he had to return to Brandon, to catch a government jet for a trip to Portage la Prairie and then drive to an agricultural society meeting at Macgregor-urged him along to the front door and into a car for the trip south from Minnedosa.
What I want to stress here is the point that was repeated in the headline, "Whelan says opposition delaying farm legislation". In specific terms this is how he put it during his speech:
'The House is not moving on legislation as fast as possible,' he told the meeting, referring to legislation designed to set up an income guarantee subsidy program for agricultural producers and legislation designed to make for easier access into agriculture for young people, through changes in farm credit.
'It is taking too long,' he said. 'I feel there are people in the House of Commons-on the other side-who are afraid the legislation will be too good ... not that it will not be good enough ... and because they feel it will be too good they are holding it up so they can blame the minister of agriculture.'

As a matter of fact we are not blaming the Minister of Agriculture this afternoon. We are blaming the Minister of Justice who has some responsibility for the Canadian Wheat Board. It is passing strange to me that the Minister of Agriculture should be carrying the torch on the hustings for this legislation that is now being debated in the House of Commons when he has absolutely no responsibility for carrying that legislation through the House of Commons.
Incidentally the headline in the Brandon Sun is very similar to a press release by the minister responsible for the Canadian Wheat Board when he ran into difficulty with the predecessor to this legislation in his attempt to stabilize paririe farm incomes. On May 7, 1971, the hon. gentleman issued a press release in which he said that the opposition was holding up that valuable piece of legislation. It sounds like the same old record, over and over again.
The minister was doing this even though it was becoming abundantly clear that the bill would subsidize the incomes of prairie producers at the poverty level. As a result of the debate in the House of Commons, and as a result of the strong and growing protests from the producers that bill finally was withdrawn, and now some four years later it is turning up in a slightly modified form. Again the grain producers of western Canada are beginning to respond and point out some of the weaknesses in the legislation.
I think it is important that an extended debate be held in this House of Commons so that ultimately the producers will be able to make a judgment concerning whether this legislation does in fact do what it is purported to do rather than stabilize, as was the case in the former legislation, the income of prairie producers at the poverty level. I say the fact that the two ministers who are closely involved with agricultural matters have taken to the hustings is an indication that they are receiving a message somewhat similar to that which came from the farmers and producers back in 1970 and 1971.
I mentioned the appearance on the hustings of the Minister of Agriculture. The minister responsible for the Canadian Wheat Board was in the same area about five days earlier. I guess he was the John the Baptist announcing the coming of the Minister of Agriculture. Actually it is the Minister of Agriculture who should have responsibility for these matters. Not only should he be discussing them on the hustings among the farm community and attempting to unload the propaganda-and I use the word "unload" for obvious reasons-that this legislation is being delayed in the House of Commons, he should be carrying the legislation here in the House of Commons, because essentially it is a problem which comes under the jurisdiction of the Department of Agriculture and the Minister of Agriculture. The fact that it has been carried by the Minister of Justice who has some responsibility for the Canadian Wheat Board is an indication of how confused the government approach is to agricultural matters.
I shall deal with that in greater detail in a moment.
In this bill the line of demarcation is made crystal clear, even though it is confusing here in the House of Commons. The minister responsible for the Canadian Wheat Board was at a meeting in Brandon at which he dealt
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exclusively with his area of responsibility, which is transportation and grain handling. As I read the report, again published in the Brandon Sun of April 23, under the byline of Mr. Garth Stouffer, there is not one reference to the stabilization bill which is now before the House of Commons, and which was introduced for second reading by the minister responsible for the Canadian Wheat Board following his return from the hustings.
I wonder why the government does not recognize that, at long last, if it is to get its agricultural house in order it must make clear lines of delineation and demarcation concerning areas of responsibility. If it sends the Minister of Agriculture out to the hustings to discuss the western grain stabilization bill it must give that same hon. gentleman the responsibility of piloting that legislation in the House of Commons, and also of administering it under the jurisdiction of the Department of Agriculture.
As an indication of how the jurisdictional lines and the area of responsibility are being obscured in the government's approach to these matters, we might look at the responsibilities of the minister who administers the Canadian Wheat Board under the Canadian Wheat Board Act. He has, exclusively, a marketing role and has nothing to do with helping grain farmers maintain their income. The Canadian Wheat Board Act, Part I section 4, states as follows:
The Board is incorporated with the object of marketing in an orderly manner, in interprovincial and export trade, grain grown in Canada, and possesses the following powers:
(a)	to buy, take delivery of, store, transfer, sell, ship or otherwise
dispose of grain;
(b)	to enter into contracts or agreements for the purchase, sale,
handling-
(c)	to enter into ordinary commercial banking arrangements-
(d)	to acquire, hold and dispose of real and personal property-
(e)	to employ such technical, professional or other officers, clerks or
employees as may be necessary-
(f)	to establish branches-
There is nothing there about the area of responsibility that the minister responsible for the Wheat Board has assumed in conducting this bill through the House of Commons. If we are really going to come to grips with the long delayed programs for agriculture, Madam Speaker, the government must decide once and for all where the responsibility lies.
In his historic review the minister spoke as if everything wonderful had happened since 1968, but I should like to remind him that some of the programs he referred to came before 1968 under an administration that was closely geared and sensitive to the needs of the agricultural industry. I mention cash advances, ARDA, crop insurance, improvements to PFAA legislation, the pioneer bill in price stabilization for agriculture, the Farm Credit Corporation, and many other pieces of legislation which are now in need of up-grading but were not introduced by the present government.
I was pleased to learn that a former federal civil servant who has spent some years in Manitoba will return to Ottawa to look after the Farm Credit Corporation. I refer to Mr. Baldur Kristjanson who has had considerable
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experience in agricultural problems and understands them. I am sure he will be able to make a positive contribution toward resolving some of the all too obvious problems of the agricultural industry.
Perhaps I can relate some of the problems of the present bill to those of the bill that was first introduced in 1971. The matter of compulsory membership was one of the points in the earlier bill that was criticized. That bill made it compulsory for farmers to join the program, and the present bill seems to be disguised to give the appearance that the plan is voluntary. In effect, however, it is compulsory to an extent for some producers. It also discriminates against one particular group of producers by making it compulsory for them to join.
Under clause 5 (1) of the bill a person who is an eligible active producer, that is, a producer actually working on the land, as opposed to a producer recorded in a permit book who is a landlord or who holds a mortgage on land, of a producer, will, at the time the act comes into force, have three years to decide to cease participating under the act. Thus, between 1975 and 1978 a producer may elect to withdraw from the plan.
On December 4, 1974, the minister responsible for the Wheat Board issued a press release in regard to the stabilization plan. On page seven of that press release the title reads: "Participation Voluntary" and the release states that no farmer will be forced to participate in the plan.
I believe the minister is incorrect when he says that participation is voluntary. The dictionary definition of voluntary is that it is something brought about by one's own free will or choice. It is obvious that a producer does not have the luxury of free will or choice if a time limit of three years is imposed. Voluntary withdrawal from the plan should mean that at any time a producer can decide to abandon it. The minister's view of voluntary withdrawal as indicated in his press release is couched in terms of a restricting time period.
We had some acquaintance with the minister's press releases when he was piloting the earlier bill through the House. In reply to the accusation that we are delaying this legislation and all the wonderful farm legislation that the minister has in store for farmers in Canada, I would point to the minister's interjection in the speech made by the hon. member for Saskatoon-Biggar (Mr. Hnatyshyn) in debate yesterday, as recorded at page 5383 of Hansard.
The hon. member for Saskatoon-Biggar referred to the press release issued by the minister responsible for the Wheat Board, which had said that the legislation would be introduced within seven days. The minister interjected as follows:
Would the hon. member permit a question? I should like to ask whether he is aware that the reason for the delay in the introduction of the bill was the extensive consultations which were going on with the various farm organizations and our desire to incorporate positive suggestions into the bill. I hope the hon. member agrees that this was a desirable thing to do.
I hope the minister responsible for the Wheat Board will communicate that information to the Minister of Agriculture who just a week ago on the hustings was trying to blame the delay on members of the opposition. But here we have the minister responsible saying that the delay

May 2, 1975
Western Grain Stabilization
was deliberately engineered so that they could have closer consultation.


Mr. Lang:: But that was a reasonable time; this is just a filibuster.


Walter Gilbert Dinsdale: Everything the government does is reasonable-in its eyes alone. We leave the decision in this regard to the people of Western Canada who have demonstrated in no uncertain terms how they feel about the government's circumlocution in this respect.
In view of the matter I was discussing with respect to compulsory membership, I hope that not only will the ministers responsible go out and communicate with producers, but also when this legislation gets to the committee stage that there will be some direct consultation between the committee in the field and farmer producers of western provinces, because this was one of the major issues the last time the matter of compulsory membership came up, and it is still not completely clarified in the legislation as it has been reintroduced.
I wish to deal with another matter which should be brought to the attention of farmers of Canada as they contemplate this bill-it has already been said that this is a very complex bill-and that is the problem of regionalization. Several hon. members have referred to it, and because it has already been discussed I can be brief in my treatment of this subject. It is one of the major objections to the bill, and it is a carryover from the 1971 legislation.
This is one of the objections which forced the government to withdraw the bill in 1971, after the minister responsible for the Wheat Board indicated that it was great legislation and that the members of the opposition were negligent in their duty if they did not allow its quick passage through the House.
As I read the new legislation, payment to producers will only take place if the totality of the prairie provinces suffers from severe crop damage or depressed markets. The lumping of Manitoba, Saskatchewan, Alberta and some parts of British Columbia prevents an individual producer or localized region within a province from obtaining compensation if crop damage occurs. The minister has responded to this criticism by saying that the plan is not a form of insurance, but is a stabilization program. In the Globe and Mail of December 7, 1974, it was reported that the minister said at a press conference that he would propose continued study to see whether more regionalization could be put into the program. He added that too much regionalization, however, would make the plan little more than normal crop insurance.
Some hon. members have put forward the suggestion during this debate that perhaps this would be a more effective approach to the problem, and certainly that is an issue which can only be resolved by direct consultation with farmers. As reported in the Globe and Mail on December 7, the minister said, that this is not a crop insurance scheme, and that it is meant very much to complement existing insurance schemes.
Because this aspect of the bill is of great importance I feel that the minister should confirm in the House if his

proposal for a study into regionalization of the legislation has been initiated and, if so, when this study will be tabled or, possibly, presented to committee. Perhaps we will hear spokesmen from the government side who can respond to that point this afternoon. The government has been strangely silent in the House during this debate. It does not have much support in western Canada, that is true, but I think it has an obligation to speak in this House as well as on the hustings, as has been the case for the past few weeks.
Some departmental officials have stated that serious and frequent meetings took place among producer groups, bureaucrats, and government officials before the final drafting of the bill was completed. Also, localization of the stabilization program was a contentious issue in 1970, and it seems that the minister is responding too little and too late to this problem. Only after the bill was tabled in the House for first reading did the minister announce a proposal to study regionalization of the legislation.
These are just two examples of the kind of criticism which can be directed at the bill. It is similar to criticism which came forward in growing crescendo as the debate proceeded back in 1971. At that time spokesmen for the government complained that opposition members from western Canada were conducting a filibuster. We are hearing the same comments today. It is not a filibuster at all. We are pointing out specific problems in the proposed legislation as it is now enshrined in Bill C-41, and I suggest that it is incumbent upon the government to respond to those specific observations rather than just to make blanket charges as it is doing on the hustings. There have been some rumblings about it this afternoon, but in the main charges that opposition members are delaying the progress of this legislation have been made on the hustings. The government claims that this bill is so good that it would immediately establish the government's reputation once and for all in western Canada. That, of course, is patent nonsense.
The last word I want to say at this stage is that when the bill goes to committee there should be a dialogue, not only between the government and the people and between the bureaucrats and the people, but also between the elected representatives of the farmers serving on the agricultural committee and the people, so that we can deal with some of the obvious weaknesses, and many of the hidden weaknesses which can only appear as the debate on the subject continues.


Mr. Bert Hargrave (Medicine Hat):: Madam Speaker, I am delighted to take part in this debate. It was my privilege to be in my riding for most of last week and I had an opportunity to discuss with feed grain producers and wheat grain producers some of the aspects of this bill and Bill C-50, which is still at committee stage, and is the responsibility of the Minister of Agriculture (Mr Whelan).
I will refer to some of the comments and reactions of my constituents, but I want to start out by reading what I think is the best one liner which presently describes this most important new bill. It is taken from the February 1 issue of the "Rural Councillor", which is the official publication of the Saskatchewan Association of Rural Municipalities. Anyone from the west knows that that is a very
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influential and auspicious organization, for which there is no counterpart in Alberta or some of the other provinces. It is unique to Saskatchewan. Most of its pronouncements are worth reading and listening to.
I think it is worthwhile repeating in this debate how the Saskatchewan Association of Rural Municipalities described this bill:
Whenever the net cash flow from grain sales drops below the previous five-year average, the fund will trigger a payment large enough to keep the total flow to the prairies of net cash from grain sales at the five-year average. Each participating producer will share in the payment in the ratio of his contributions in the current three-year period (the current year plus the previous two) to the total contributions of all participating producers.
I am sure all of us will admit that this is a very complicated bill and that it introduces formulae which will scare most farmers to death when trying to understand them, but I think the above quotation is a pretty concise statement of the intent of the bill. Certainly the bill's title is simple enough and gives no hint of the complicated formulae which are an integral part of it. Nevertheless, it is useful to ask what are the intentions of the bill.
I think it is appropriate to go back in history and comment on the first prairie grain stabilization bill introduced in 1970, and debated in 1971. Incidentally it was introduced by the same minister responsible for the Canadian Wheat Board. I hasten to point out that I was not a member of the House then, but was keenly aware of the controversy surrounding the bill because of the personal involvement of my predecessor from the Medicine Hat constituency, the former minister of agriculture. That first attempt at grain stabilization, as we know, was withdrawn at the second reading stage. It is fair to ask why. Perhaps we can learn a lesson from history, now that we are debating the same topic five years later.
It seems to me that the first and foremost reason was that there had been a lack of meaningful communication with prairie grain producers-I am not speaking of grain producers' organizations such as the Canadian Federation of Agriculture, the wheat pools, the National Farmers' Union and other provincial grain organizations, although I am sure their views were made loudly known. I am speaking about individual grain producers. I suggest there was a lack of communication with individual grain growers. There was no opportunity to meet them at public meetings, which should have been held in farm communities, to enable those in authority to hear some genuine discussion regarding the bill which was proposed some five years ago.
There were some other drawbacks. The compulsory aspects of that first bill must have been a real factor in the opposition of farmers to the bill. Originally farmers were to be compelled to join the scheme. That, at any rate, was the proposal. In addition, the bill was not to be regional in application; it did not take into account crop failures arising from drought, for example.
If this new bill is to gain widespread support in this House and on the part of farmers, we should learn from our experiences and the lessons of history which show why the first prairie grain stabilization bill of five years ago was not acceptable. I suggest that our first responsibil-
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ity is to take the bill to the farmers. We cannot expect them to come to Ottawa and appear before our standing committee. I know that various farm organizations will indeed be in Ottawa. They have been here recently, making representations on Bill C-50, the agricultural stabilization bill. But that is not enough. You cannot expect individual farmers to come here and tell it "like it is", in their own words. It is right and proper for various farm organizations to come here but, as I say, that is not good enough. There should also be provision for public meetings at which an issue as important as this can be discussed.
I spoke about my chief concern relating to the new bill. I am concerned because in the bill there is lack of provision for a regional approach to problems. Surely this is necessary, despite obvious administrative difficulties which a regional approach may entail. I make this point even though some, probably the minister included, will argue that this aspect can be covered with crop insurance.
Why do I feel so strongly about the need for a regional approach? Let me tell the House a story relating to my constituency in southeastern Alberta. What I will say will apply as well to southwestern Saskatchewan, as both areas are in the same geographic weather belt. Without question, the No. 1 hazard in the area is not grasshoppers, is not hail, is not frost;-


Leslie Gordon Benjamin: It is Liberals.


Herbert Thomas (Bert) Hargrave: -is not insects; it is drought. Drought is an occupational hazard which has been with us ever since the first sod was turned. Like it or not, that corner of southeastern Alberta and southwestern Saskatchewan is known as the drought belt of Canada. Medicine Hat is often called the drought capital of Canada.
Let me tell an interesting story which members may want to hear. Many years ago the late Professor Evan Hardy was Professor of Agricultural Engineering at the University of Saskatchewan and I well remember how he said, in his large booming voice, why he came to the prairies from Iowa, his native state. He told the class that one day he had seen the map of North America, and across the southern portion of the prairies, where Canada is, was written the expression, "The Great American Desert." Obviously it was an old map; it may have been patterned after Palliser's work; I don't know. He said, "I must go and see the great American desert." So he visited the southern prairies and he said he was right under the "D" in the desert marked on the map. The way he told the story I have never forgotten. For those who live in the area, drought is an occupational hazard. In many respects we live in the great American desert and we are right under the "D".
I suggest that there is a connection between the hazards of grain growing in my area and conditions which give rise to the short grass ranching country in that same area. This is an area in which we produce cattle, because it is dry and semi-arid. If we had four or five inches more precipitation and ten inches less evaporation, we would be growing grain everywhere except where it is too rough. Grain growers face an extra hazard, in that spring seed bed cultivation and preparation brings about a severe loss of soil moisture, a loss that is not duplicated in the production of our native grass crop, a crop that in many years is

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produced almost totally from snow moisture, or late fall moisture from the previous year. True, we face risks of hail and frost, but these risks are minor compared with that of drought. These risks have been somewhat alleviated in recent years by various forms of technology. I am thinking particularly of the use of herbicides, much better mechanical cultivation, seeding and harvesting equipment, and of the benefits of large-scale farming. The fact remains that drought is still our No. 1 problem. I suggest that is why some regional concept ought to be introduced in this bill.
Although we face the problem of drought, we enjoy the benefits of our chinook winds in the winter. They give us the chance to graze our cattle outside for much of the winter. Those chinook winds, of course, bring about a fantastically high evaporation rate. The evaporation rate from water surfaces of sloughs, dams, and other water basins in the area is between 36 and 44 inches per year. That is the effect of these intensely hot winds. They dry up the moisture. That evaporation rate is equal to four times our normal total precipitation per year, which is between ten and 12 inches. That precipitation includes both rain and the snow equivalent.
It is important to appreciate the background for my concern. That is why I have just told the House this little story. Let me now digress again and make some more comments about the short grass ranching country.
The short grass ranching country, that semi-arid country for grain growing, is the original home on the prairies of the museum piece, the grain header. That was a very special harvesting machine that was designed to cut grain almost at ground level. It was designed for that area because the grain never grew tall enough to harvest with the traditional grain binder or the combine that came into use later.
The grain header, which was pushed by horses, was unique. It simply clipped off the heads, sometimes with stubble no more than one and a half or two inches tall, collected it in a header box pulled by horses, dumped it into piles, and so on. It was a great feat for a teamster to drive the six or eight horses which pushed the machine, at the same time steering it by means of a paddle in between the teamster's knees. That was a unique approach to that semi-arid short grass country that I represent.
I want to make a brief comment about the weather, as it is now a current topic of some considerable interest in hat part of the country. Until the third week in March we had one of the mildest and driest winters that I can remember. There were no severe snowstorms. We had very little snow. There was not enough moisture in the soil to freeze. It was a very pleasant winter to farm and run cattle. In effect we had a winter drought. That is not unusual in our area.
By mid-March there was absolutely no moisture in the soil. The ground was not frozen as there was nothing to freeze. The run-off from the snow, what little there was, was almost over. Conditions were so dry I estimated that approximately 75 per cent of my range for my cattle would not even germinate and turn green. That is a rather

extreme condition. I suggest it was as severe as the years 1936, 1973, and 1938, the low point of the thirties.
In the past six to seven weeks, some time after March 20 until at least yesterday, we had a fantastic amount of snow in the form of spring blizzards and rain. At one point we had between three and five feet of heavy wet snow in the area adjacent to the Cypress Hills. Most of that snow moisture has already soaked into the top soil. Very little has run off. We now have some grass and there are extremely good prospects because of these conditions.
In a period of six weeks we moved from a condition of extreme drought to one of well above average moisture. Our conditions are now such that we have enough moisture to grow a whole crop of native grass to produce the necessary feed, hay, feed grains and so on. However, one fact remains. Our growing season is almost one full month short.
There have been some serious new calf losses from exposure to the storm and calf scours. Even some mature cattle were killed in that storm in the Cypress Hills. However, on balance it was a good snowstorm in that it will do many, many times more good than the losses it caused because of its severity.
I come back to the bill to make a few further comments. There are some fundamental considerations we should note of when debating this bill. First, there is no question that both stabilization bills, Bill C-41 and Bill C-50, would me much better for all concerned if they were under one minister. It is the Minister of Agriculture (Mr. Whelan) who is responsible for ensuring that the farmers and producers will obtain a reasonable income from their operations. It is the Minister of Justice (Mr. Lang) who is responsible for this agricultural stabilization bill. Whether we agree or not, I am sure there are interlocking features in those two bills and it would be much better if they were under one minister.
I suggest there should be no limitation on size with respect to grain producers either as to acres, bushels, or dollars. By putting on a limitation we are inviting production inefficiencies. The $25,000 eligibility level is too low, especially with today's high grain prices. This figure no longer represents a large prairie grain farm.
As the Canadian Federation of Agriculture brief on this bill points out, the plan seems to reward good fortune or good luck, and penalizes misfortune or bad luck. The prime example of bad luck is the drought hazard.
It is fundamental that governments cannot treat one agricultural commodity different from another, particularly when the commodities concerned are those of surplus producers who depend on exports to market their surplus produce. That is fundamental. It applies to grain, cattle, and even potatoes. We are involved in an export of our surplus. It is fundamental that the stabilization approach for different commodities across Canada must be reasonably the same.
The voluntary aspects of this bill or the lack of them are of serious concern to us. In this bill it starts out with a voluntary approach, and reverts to compulsory participation later. If the plan is as good as the minister feels it is then surely it will sell itself, especially with the two to one
May 2, 1975

financing ratio involving the government and the taxpayers' money. Why is the compulsory feature necessary?
The various formulae required will be a major factor in selling the bill to farmers. Can it really be explained to farmers? Will the bookkeeping requirements be so immense that farmers will give up before getting started? The requirements are a bit scarey to me. What bothers the farmer is not so much the detail of keeping his books, but the matter of personal liberty infringement. No matter how often you assure the farmer that his books are not for public inspection and that no other use will be made of them, he is inherently suspicious of what use might be made of those records that he is required to keep.
One other failing relates to the producer of feed grains who is feeding them to his own cattle or hogs. Up until this time there is no provision for these grains to be included for the contributions. This feature is reported to be taken care of in the livestock stabilization plan, but so far I am not aware of this provision being allowed. This surely must be recognized. We must realize what a high percentage of feed grains are fed right on the farm and never go through the formal market, or a formal pricing agency on the prairies.
In concluding these remarks I should like once again to refer to two aspects which are of particular importance to me as the representative for Medicine Hat. First, I would stress the need for more attention to be given to the recognition of the hazard of drought. Some form of regional approach is obviously required. It has become evident that crop insurance is not the answer in the case of farmers who are exposed to extreme drought hazards. The premiums necessary to insure against them are so high that farmers would prefer to accept the risk.
The other point I want to emphasize is that surely the topic we are debating today, along with the agriculture stabilization bill presently in committee, should be taken to the farmers in the Wheat Board area of western Canada. Farmers should be allowed to appear in person, or through smaller organizations attend public meetings, hear explanations, and tell it like it is.


The Acting Speaker (Mrs. Morin):: The hon. member for Grenville-Carleton.


Daniel Aiken Lang: Well, well!


An hon. Member:: Farming in the Green Belt!


Walter David Baker: Mr. Speaker, I have listened carefully to the debate in the last two days, and I hope the cries of derision when a member from Ontario stands up to discuss a bill which relates basically to western agriculture do not indicate that those members concerned, who come from various parts of the country, feel in their hearts that the prosperity of western farming has nothing to do with the prosperity of our country as a whole. I believe, as do many other people, whether they are directly connected with the industry or not, that agriculture is of the greatest importance to the future of our country and, indeed, to the future of the world.
Western Grain Stabilization
What could be more important than the continuance in the bread basket of the world, of which Canada is one, of a strong and progressive grain growing capacity? The debate ought not to be limited, in my judgment, to those who have the honour to represent wheat producing areas. There is nothing which happens in the agricultural industry which, ultimately, does not affect us all.
We all know this to be true in the case of the oil industry whose affairs have occupied the House lately for a good many days. Attention is now being drawn to the natural gas industry, because suddenly what we have regarded for so long as an inexpensive fuel is becoming an expensive fuel for us. So we realize that what happens in one part of the country can deeply affect the lifestyle, the quality of life, and industrial progress in other parts of the nation.
Sometimes it seems to me that a failing among Canadians is the tendency to think too much along regional lines when we ought to be thinking of the nation as a whole. When I listen to my hon. friend from Medicine Hat, my hon. friend from Crowfoot, and others, and even to members on the other side when they decide to speak on agriculture from time to time, I do so with great respect because the agricultural industry is the foundation stone of progress in this country.
We are dealing today with a complicated piece of legislation. When I considered speaking on this bill I read it through from one end to the other and, having done so, I must say I shared the view expressed by my hon. friend from Don Valley that it is one of the most difficult bills with which we have been faced in the thirtieth parliament. This does not surprise me very much because its proponent is one of the most complicated and difficult ministers we have faced in this parliament.
I am sure that something as fundamental as this could not possibly be done in a more complicated way unless, instead of one lawyer looking after wheat in Canada there were two. It is an interesting thing-when you bring together a lawyer, a former law school dean, a Queen's Counsel, a Minister of Justice and put a plough in his hands, he does not know how to run it. The great difficulty he will encounter with respect to this bill will be to explain it to the agricultural community.
If the laws of the country are to mean anything, they should be understandable by the person who is engaged in the field. This applies equally to the thrust of government policy-not necessarily understandable by the druggist or by the teacher, but certainly by the farmer-and here I am thinking specifically of the bill before us. I am beginning to wonder whether the minister, with all his reputed wisdom, took this into due account and whether, with all his skills, he is likely to be able to establish in the minds of those who are intimately engaged in agriculture what this bill means, how it will operate, and what the benefits will be.
May I call it four o'clock, Madam Speaker?


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

Order of Business


PRIVATE MEMBERS' MOTIONS
[Stage Direction]
May 2, 1975

The Acting Speaker (Mrs. Morin):: Notice of Motion No. 2. The hon. member for Hamilton West (Mr. Alexander).


Some hon. Members:: Stand.


Harold Thomas Herbert: No.


Mitchell William Sharp: At the request of the government.


The Acting Speaker (Mrs. Morin):: The motion stands at the request of the government.
Notice of motion No. 15. The hon. member for Hamilton-Wentworth (Mr. O'Sullivan).
Shall the motion stand?


Harold Thomas Herbert: No!


Mitchell William Sharp: At the request of the government.


The Acting Speaker (Mrs. Morin):: Motion stands at the request of the government.
Notice of motion No. 19, the hon. member for Laprairie (Mr. Watson). Shall the motion stand?


Harold Thomas Herbert: No.


Mitchell William Sharp: At the request of the government.
Motion stands.


The Acting Speaker (Mrs. Morin):: Notice of motion No. 20, the right hon. member for Prince Albert (Mr. Diefen-baker). Shall the motion stand?


Harold Thomas Herbert: No.


Mitchell William Sharp: At the request of the government.
Motion stands.


Stanley Howard Knowles: Madam Speaker, I just want to know whether we are in the House of Commons or looking in on a Liberal caucus?


The Acting Speaker (Mrs. Morin):: Order, please. Notice of motion No. 28, the hon. member for Parkdale (Mr. Haidasz). Shall the motion stand?


Harold Thomas Herbert: No.


Mitchell William Sharp: At the request of the government.
Motion stands.


The Acting Speaker (Mrs. Morin):: Notice of motion No. 29.
[The Acting Speaker (Mrs. Morin).]


PERPETUAL BONDS, 1936 SUGGESTED REDEMPTION BY GOVERNMENT
James McPhail Gillies: That, in the opinion of this House, the government should reconsider its decision not to redeem the 3 per cent perpetual bonds, issued in 1936, through a scheme whereby (a) original purchasers would receive full face value for their bonds (b) all other holders would receive payment for each bond according to the market price for the year in which the bond was purchased (c) that an immediate freeze be placed on the market value of the bonds to prevent speculation.
He said: Madam Speaker, since I first proposed this motion over a year ago the government has in fact put a redemption date on perpetual bonds, which will require me to make a slight change in my motion. However, it does not change the substance of the material I want to present today.
By way of introduction to this topic I would like to stress that my purpose here today is twofold. Under the strictest definition of parliamentary procedure I am here to exercise my option of introducing a private member's motion on perpetual bonds. But on a different level, and in a humanitarian spirit, I am here to do the government a great favour. I intend to give the government the opportunity to discredit its nationwide reputation for inaction by calling on it to rectify an injustice that has loomed too large for too long.
On March 18 of this year the Minister of Finance (Mr. Turner) announced that on September 15, 1996 that the $55 million worth of Government of Canada 3 per cent perpetual bonds will be redeemed at par. The minister went on to say that these perpetual bonds issued in 1936 are unique in the federal government's debt structure. They were a relatively small issue, they are rarely traded, and they represent a method of financing that has not been used by major western nations in the postwar period.
What that announcement failed to mention, of course, was the plight of many holders of perpetual bonds who would receive only a fraction of their original investment if necessity compelled them to dispose of their bonds before the 1996 maturity date. What that announcement further failed to mention was that the government has been in a legal position to pay back these bonds since September 15, 1966, but that it has refused to do so.
In copies of many letters which I have on file, the Minister of Finance has responded to the urgent inquiries of holders of these perpetual bonds by quoting cold, hard economic facts. Read in chronological order, the substance of these letters becomes oppressively repetitious. To those Canadians who are original holders, many of whom are old age pensioners living on embarrassingly modest incomes, the minister seems to have turned a stone ear.
Throughout the form letters sent to those who are anxiously awaiting some encouragement that their investments will be honoured, there is the frequent reference to "setting a dangerous precedent by agreeing to protect bond holders from the vagaries of the market". There is, too, the verbal shrug that tells these people they must have misunderstood the purpose and meaning of these perpetual bonds when they were first offered. They may have believed they were buying a retirement annuity, but that mistake has cost many people dearly.
May 2, 1975

The saga of these perpetual bonds tells its own story. In 1936 the government of this country placed an ad in the September 10 edition of the Toronto Star announcing a wonderful new concept in financing, which read in part:
No one has ever lost a dollar of principal or interest by investing in Dominion of Canada bonds. From the standpoint of security of principal and ready marketability, there is no type of security available in this country that can compare with these Dominion of Canada bonds. We recommend these bonds for investment. The yield, approximately 3.11 per cent, is an attractive one.
Put an advertisement like that in the context of the year 1936 and it is easy to understand why Mr. Mackenzie King's government would have sold a total bond issue of $55 million. These bonds were sold at a time when most Canadians had lost their savings to the depression. They were sold at a time when a worker making $50 a week was considered highly paid. These bond holders were sold on the idea that a government bond was the highest security you could possibly own. Think of the general mistrust that people held for banking institutions, and you can realize that even with bank interest paying out 3 per cent these people had no logical reason, except fear for their savings, to buy these perpetual bonds. They were putting their faith in this country's future at a time when such faith was an expensive and rare commodity.
What is the record, Madam Speaker? Current market prices for the bonds, which sold in 1936 for $96.50, stand at between $36 and $40 today. That, I remind you, is in terms of today's dollars, which compared to the dollars of the 1930's is something quite different. In 1936 $1 would pay for five pounds of sugar, one dozen eggs, one quart of milk, one pound of butter and a pound of high grade hamburger. If the government pays these bonds back in today's dollars, you might be able to see some change after a dozen eggs and a package of chewing gum. In the simplest of terms in which I can phrase it, I am asking the government to repay the original holders of these perpetual bonds without shrinking behind technicalities.
My motion No. 29 should be slightly changed to read as follows:
That, in the opinion of this House, the government should reconsider its decision to redeem the 3 per cent perpetual bonds issued in 1936 on September 15, 1996 and redeem them instead through a scheme whereby (a) original purchasers would receive full face value for their bonds immediately-
Then (b) and (c) remain in the same terms.
What we call for with this motion is the simple application of commonsense and justice. For the many original holders of these perpetual bonds, redemption in 1996 means nothing whatsoever. These people should be allowed to redeem these bonds right now so they can get their money when they need it.
In the past, members of this chamber, such as the hon. member for Nanaimo-Cowichan-The Islands (Mr. Douglas), the hon. member for York North (Mr. Danson), a representative from the Social Credit party, and myself have met with the Minister of Finance in order to try to get something done in terms of justice for these people who bought these bonds in 1936. We are not here to pave the way for speculators who could easily profit should the government decide to give blanket recall to this $55 million issue.
Perpetual Bonds
However, what should be remembered and never be forgotten is that many Canadians currently holding these perpetual bonds are senior citizens who must surely be bitter about sinking their hard earned money into an apparently lost cause. I urge the government to help dispel the feelings of these Canadians who must surely sense a certain hypocrisy on the part of the government which only last election promised to take better care of its senior citizens. Many of these people feel that if the government were in fact serious it would make these perpetual bonds redeemable at face value, not in 1996, when unfortunately many of them will certainly be dead, but now when they need the money so badly.
This surely becomes a matter that is more than just dollars and cents. It is simply a matter of justice, a matter of honour. Even with the March 18 announcement to redeem these perpetuals in 1996, there are many original holders of these bonds who not only feel cheated out of their money; they must also feel a little foolish for investing the fruits of their labours in such an obviously futile exercise.
Surely this is not the only means we have at hand to reward these senior citizens who have worked for years, played an active role in Canada's development, and who now deserve a fair measure of the life to which all Canadians are entitled. Is it in fact fair to throw back into their faces the years of productivity and faith which they gave unquestioningly to the Government of Canada, by refusing to help them in this way?
I feel certain that the government recognizes its obligation to those who cared enough to invest in their country's future in the depth of the depression of the 1930's to do something now to assist them in their present position of adversity.
I realize the complex problems and difficulties of a government commencing on a program of assuring the value of bonds in an inflationary situation, and all the difficulties this would bring about in terms of debt refinancing and management. What we are asking for is simply to recognize the importance of taking that small portion of the outstanding debt of the Government of Canada today out of its portfolio. It is a minuscule portion, practically nothing. It amounts to only $55 million out of the total portfolio. These bonds were sold to a great many Canadians who really believed they were buying security that they could use to help support them in their old age.
Three per cent perpetual bonds have no place in the portfolio of the Canadian government's bond holdings. I urge the government to take some action, in the name of justice and equity, without in any way upsetting the whole pattern of government financing, to remove these perpetual bonds from its holdings, thereby rewarding these people and allowing them to recover their investment of 1936 in the form of security. I am sure these would never be used today, and will probably never be used again. The government should get these out of its portfolio by allowing these people to redeem their bonds at face value. This will assist them to deal with the problems they face when living in this inflationary economy.

May 2, 1975
Perpetual Bonds


Mr. Serge Joyal (Maisonneuve-Rosemont):: Madam Speaker, I listened very closely to the motion of the hon. member on the perpetual bonds, and was surprised to note, in the light of his statement, that his main arguments in support of the motion concern the protection of the senior citizens who bought those bonds in 1936, I shall come back to that aspect of his arguments shortly.
The government has always been concerned about ensuring, throughout the period of inflation we have known and unfortunately still persists, that our senior citizens have sufficient income to meet their needs with regard to housing as well as to current consumer goods. That aspect of his statement, if it were as solid as he endeavoured to prove, should suffice to convince the government to accept the motion he presented.
However, if we try to recall the situation when these bonds were issued in 1936, we realize that the situation was not exactly as he described it, and that the importance he gives to the quality of the holders of these perpetual bonds is not as crucial as he seems to suggest.
Before coming back to this aspect, I would like to remind the House that on March 18, 1975, the Minister of Finance (Mr. Turner) published a press release announcing that the $55 million of perpetual bonds of the Canadian government, which had been issued at 3 per cent, would be redeemable at par value on September 15, 1996. The Minister of Finance went on to say:
-that the perpetual bonds issued in 1936 were a unique form of financing in the debt structure of the federal government. In fact, it was a relatively small issue which resulted in few transactions. No other western industrial nation has used this method of financing since after the war. This decision to redeem the perpetual bonds on a precise date, thirty years after their maturity date, makes these bonds comparable to any other current bond issue of the Canadian government.
It is noteworthy to try to describe the political and economic situation of the period when these bonds were issued, and particularly to compare this with the situation in England at that time since the practise of issuing perpetual bonds in that country then seemed on the uprise. I will come back to this later by using a few figures to support my argument. In 1936, the Canadian government issued $55 million worth of perpetual bonds bearing interest at 3 per cent at a cost of $96.50. Those bonds, as I mentioned earlier, were perpetual. Consequently, they were eternal on the stock market and cannot be directly redeemed at maturity. This issue was offered either for cash payments or in exchange for some bonds which had reached maturity in 1936 and which had been issued for a 4-year period.
On the $55 million worth of bonds available, a number of bonds valued at $11.3 million were exchanged by bond holders, as I said earlier, whose bonds had reached maturity. Therefore, the people who have directly made some outlays and paid their bonds in cash in 1936 have bought $43 million in bonds.
According to original certificates, interest coupons should have been semi-annual and covered a period of 30 years, that is enough semi-annual coupons had been issued for 30 years, and the last of them was to become payable on September 15, 1966.

When those bonds were issued, their attraction on the Canadian market was strong enough since at that time they offered a fairly important yield, considering interest rates, all the more so as they had been widely distributed on the Canadian market. That was the first issue of perpetual bonds, and it aroused the interest of Canadian buyers so that an important section of Canadian investors decided at the time to invest in those bonds.
It should be noted however that at the same time, in the United Kingdom, that was a very important means of redeeming the national debt. In 1935, over 60 per cent of the United Kingdom national debt was financed through perpetual bonds whereas in Canada at the same time such bonds accounted all in all for only a limited fraction of the aggregate debt.
That is not without interest, and we should keep it in mind. As a matter of fact, as I said earlier, over 60 per cent of the United Kingdom debt was financed through that type of bonds, and I should specify what happened to them in the context of this period. Indeed both financial agencies and investors in the United Kingdom were perfectly aware of the implications and character of that kind of financing. Perpetual bonds were issued for the first time in the United Kingdom in 1853. That issue yielded an interest of 2lA per cent and was redeemable at par at government option at any time.
That issue was redeemed afterwards, and it can be remarked that in the whole history of the financing of the British debt, the 1883 issue was the largest ever. As a matter of fact, $257 million worth of bonds were issued in 1883 at an interest rate of 21/2 per cent, redeemable at any time after April 5, 1923, and, of course, with an option or at the government's convenience, and I insist on the "government's convenience", because, Madam Speaker, that was one of the simplest ways of financing the public debt. In fact, when the bond bears a surrender date, the government may decide, depending on the fluctuation in interest rates, to redeem or not to redeem it. If the interest rates decline while the option is open, the government may choose to redeem the bond and refinance it at a lower rate. On the contrary, if the interest rate is very high, the government may simply leave the bond on the market and wait for a more favourable stock market situation.
It is thought that more than $3.5 billion in this type of bonds are still circulating on the financial market of England and are redeemable by the government at any time, whereas I pointed out earlier that the Canadian issue totals only $55 million. Immediately, Madam Speaker, one considers the different emphasis that we in Canada have laid over the years on this type of public investment to finance the public debt.
In the United Kingdom, as I mentioned a while ago, the most interesting of these issues are those that were floated to finance the war debt bearing interest at 2lA per cent, as well as another issue whose actual objective was to finance the war effort and which bore interest at 3 Vi per cent, transacted on the financial market bearing interests at the relatively high rates of 16 Vi and 23 per cent. Anyone can realize, Madam Speaker, that such a form of investment in England was truly popular.
And it is here that attention must be paid to the remarks of the mover. All the bonds involved are redeemable at the
May 2, 1975

option of the government. All English financial institutions that are still dealing with such bonds know perfectly well that the holders of these obligations are subject to having their bonds redeemed as soon as the government considers that the rates of interest are diminishing and that it is in a position to refinance its debt at a lower cost.
Because of the historical principle which is involved in the bargaining of bonds in the United Kingdom, it is always advantageous to redeem these bonds the moment the interest rate starts going down. I should like to quote one of the factors of this institution which I feel perfectly characterizes the action the government took in its news release dated March 18. The principle is as follows:
The underlying rationale of this was to minimize public debt charges in the interest of taxpayers in general. In other words, it is absolutely clear that options to redeem undated or perpetual bonds were there to protect taxpayers and not investors.

What I mean by that, Madam Speaker, is that the interest in the government buying back those bonds is primarily to protect the taxpayer. Indeed, if the government decided to buy back the bonds for which it has a purchase option at a time when the interest rate is very high, the taxpayer of this country would be paying for the higher cost of refunding the debt. British institutions always recognized that that element was not the bjective pursued in the issuance of perpetual bonds. It was rather to bring relief to the taxpayer who has to pay a higher interest to refund the public debt. I think that element is very important. I do not mean to say that the mover was not aware at the element, quite the contrary, he gave it an extension which I think does not exist in this case. That element is represented by the holders of those obligations.
We did some research to try and determine what type of people on the Canadian market still hold perpetual bonds today so as to know, s the hon. member pointed out, whether those holders were small savers, small investors, and whether they were actually suffering any real damage from the government's decision to buy back those bonds.
It became evident, Madam Speaker, early in 1974-those are the latest figures we have-that 41 per cent of bond holders hold bonds payable to the bearer, meaning that it is rather difficult to determine exactly what is the quality, the income or the financing position of the holder. It also became evident that out of the $55 million worth of bonds $33 million were held by 3,946 investors. So, $561,000 or about 1 per cent, are owned by the same investors who bought in 1936. So, only $561,000 out of $55 million are still in the hands of the same investors. I think the possibility that a majority of those bonds being held by older people is quite questionable, Madam Speaker, since as the records seem to show only 1.7 percent of holders are the same people who bought those bonds in 1936.
Moreover, it has been established that only four people own over 50 per cent of the total amount of $561,000, that is, nearly $260,000. These may be their only savings or financial resources, Madam Speaker, but in view of the importance of the amount, it is very unlikely that their
Perpetual Bonds
circumstances are those which the hon. member described a while ago.
Finally, it has been established that out of the $33 million I mentioned earlier, $9 million have been held by the same investors since 1966, which means that two thirds of the total $55 million have been held by the same people since 1966. It is therefore very unlikely that these are senior people who are in the difficult circumstances the hon. member described a moment ago.
Therefore, I would like to stress that considerable changes have occurred since 1936 in the nature of perpetual bond holders. It is highly improbable these holders are elder people in a difficult revenue situation and therefore that they might suffer considerable loss when the government implements its decision to redeem the bonds in 1996.
Further, I would emphasize for the hon. member's benefit that the yield of these bonds since April 1974 compares favourably in my view with the prevailing market rates.
To illustrate, the interest rate was 8.33 per cent on April 30, 1974. It had decreased to 7.79 per cent in November 1974, it was up again to 8 per cent on February 28, 1975, that is three months ago, and since April 25, 1975 it has been 9 per cent.
Therefore, the return on these bonds to Canadian holders is in no way inferior to that on comparable bonds on the market. So it is highly improbable Canadian taxpayers will lose if the decision is implemented, as announced by the minister.
Quite the contrary, I believe that, according to the principles applied by British financial institutions, the government should take the opportunity of slumping interest rates to redeem bonds and refinance public debt, to the benefit of every Canadian taxpayer rather than that of one class of investors only.


Mr. Allan B. McKinnon (Victoria):: Madam Speaker, I wish to add a few words to the debate in support of the motion of my friend and colleague, the hon. member for Don Valley (Mr. Gillies), who was referred to in the House the other day by the right hon. member for Prince Albert (Mr. Diefenbaker) as one of the outstanding economists of Canada. I should like to support this motion not only because I share the high opinion of the hon. member for Don Valley as expressed by the right hon. member for Prince Albert, but also for humanitarian reasons.
I should like to say to the hon. member for Maison-neuve-Rosemont (Mr. Joyal), who has just spoken so eloquently, that I am not interested in the proportion that is being held by contractors and used as security by banks, and I am not interested in that proportion held by people who know what they are doing in today's shifty financial world; rather I wish to speak for the original holders. I consider it quite unfair for the Minister of Finance (Mr. Turner) to say, as he did on March 19 when speaking of these bonds, that the yield is now 8.52 per cent, compared to 9.5 per cent on current government bonds.
The hon. member for Maisonneuve-Rosemont is trying to peddle the same line, but he should know there is no

May 2, 1975
Perpetual Bonds
such yield to the original purchaser. The yield to the original purchaser is 3 per cent, and when the bonds were put on the market in 1936 the purchasers bought them in good faith. If you were old enough to buy a bond in 1936, without doubt you are now old enough to be an old age pensioner. They bought the bonds believing in the financial credibility of the government, and I believe this government should be fiscally responsible even though 40 years have elapsed.
These poor people who are now drawing their old age pension have supplemented their income with this miserable three per cent return on their original investment. But the original investment was made with very hard dollars indeed. As pointed out by the hon. member for Don Valley, in those days a dollar was something to behold as far as purchasing power was concerned, compared to today's super inflated dollar.
An old age pensioner would need to hold $50,000 worth of bonds before realizing any net gain from having entrusted the government with that money. In 1936 almost no one had $50,000. Everyone who bought bonds in a lesser amount is now receiving no material benefit whatsoever. The reason is that 3 per cent of $50,000 comes to about $1,500 a year. An old age pensioner with an income of $1,500 a year does not receive the guaranteed income supplement and would have been just as well not to have bought the bonds at all. Some of them gave up a tremendous amount in real money because they trusted the government of the day. For the past nine years, since it became legal for the government to pay off these bonds, these people have been waiting for some action.
This spring the Minister of Finance did finally agree to do something but the measure he took was of little value to the people about whom I am concerned. That is why the hon. member for Don Valley divided his motion into parts in order to make a case for the original purchasers of the bonds. Surely we can do no more than give them back their original money's worth. I would strongly recommend to the members of the government that for once in their long reign over this country they treat these old age pensioners with equity.


Stanley Howard Knowles: Madam Speaker, I wish to say a few words in support of the plea made by the hon. member for Don Valley (Mr. Gillies). I found it rather amazing to listen to the argument put forward by the hon. member for Maisonneuve-Rosemont (Mr. Joyal). If he could persuade the people who own these bonds that they are really getting 8 per cent or 9 per cent, he should go into the public relations business. Of course if he could get the government to depress the value of those bonds to $10, then $3 would be 30 per cent, and if he could get the government to depress it to $3, the interest would be 100 per cent. That sounds ridiculous, but I suggest that the arguments put forward by the hon. member and the Minister of Finance (Mr. Turner) are just as ridiculous.
The plea made by the hon. member for Don Valley, and supported by the hon. member for Victoria (Mr. McKinnon), is not that a bonanza be given to speculators who picked up the bonds in recent years but rather that we protect the position of the original purchasers. There are others who purchased in the years shortly after 1936 who

deserve some protection as well, and I think the hon. member for Don Valley has covered that very well in part (b) of his motion.
It seems to me that when the problem of these perpetual bonds finally became apparent to the Minister of Finance and he realized that he had to do something about them, there were two aspects to be considered.
One of the problems was that of the government itself. It is true that the bonds were perpetual. By all the dictionaries that means they would go on forever. But no government can rest easily with the idea of having bonds around forever and a day and a thousand years after that, so this government tried to find some way to get rid of the proposition.
The other aspect of the problem was the rights of the original holders and of those who obtained the bonds shortly after 1936.
Those were the two problems; one to get the government out of the business of perpetual bonds and the other, meet the needs and the rights of the holders of the bonds. The Minister of Finance came up with a clever idea to meet the first problem and get the government off the hook, but he has done nothing to meet the needs of the people who in good faith put their money in government bonds many years ago.
All the government has done is get itself out of the business. The other problem, namely, what to do for the people who hold the bonds, still stands. I think the hon. member for Don Valley is quite right in proposing this motion this afternoon.
I know we are continually fed the idea that when those people bought these bonds it was in the nature of a contract. That argument is advanced as well on the matter of government annuities. But, Madam Speaker, there are other bonds and investments concerning which the terms have been re-written. We have escalation of pensions of all kinds; Canada savings bonds have been improved so that there is more interest than was in the original contract. So I think it is unfair to discriminate against the holders of annuities and against those who bought these perpetual bonds in 1936.
Accordingly, Madam Speaker, I want to indicate full support for the position taken today by the hon. member for Don Valley.


The Acting Speaker (Mrs. Morin):: The hon. member for Vancouver-Kingsway (Mrs. Holt).


Walter Gilbert Dinsdale: The voice of the little people now.


Mrs. Simma Holt (Vancouver-Kingsway):: That's right; Madam Speaker.
The motion in the name of the hon. member for Don Valley (Mr. Gillies) embraces proposals which have been enunciated in the House for some time. Were it possible to find the original investors and authenticate those people who invested in Canada in its time of trouble, I would say certainly we should redeem these bonds immediately, or in 1976, 30 years later, instead of 60 years later.
May 2, 1975

If the argument the hon. member put forward was on humanitarian grounds, I suggest that there are other ways of using this $55 million. I would go even further and perhaps disagree with hon. members on this side of the House, and eliminate OFY grants and LIP grants, and use that money for the aged to travel and to make their golden years rich. I agree that they did invest, but we must remember that they invested at a time of doubt, when Canada was not secure and when, as the hon. member for Don Valley said, there was distrust in banks. At that time people took risks and gambled.
I would very much like to find other ways of using Canadian dollars for housing for the aged and for those who gambled in Canada's future, for travel, marketplace subsidies, and many more practical and realistic things, but it is virtually impossible for the fiscal agents of the government to determine the original purchasers. Those are the ones about whom we should be concerned. It is impossible for many reasons.
Only about 41 per cent of the issue is held in bearer form. Some original purchasers may have opted for bonds in registered form subsequent to their original purchase date. The date of registration would then have to be regarded as a date of purchase unless proof could be provided to the contrary. Some original purchasers could have switched from registered to bearer bonds, and have traded subsequently in the market. Bonds currently held by them could therefore have been purchased at prices below issue price.
There is another reason that it would be impossible to find the original purchasers. A requirement for proof of purchase would discriminate against investors holding bonds in bearer form in comparison with registered bond holders who have retained their bonds in this form since 1936. Many of the original bond holders are no longer alive, with the obligations being presently held in their estates, or with ownership transferred to their beneficiaries. Since these beneficiaries have not held these obligations since the issue date and have not personally suffered any hardship due to the low level of interest income or reduced market value of these securities, it would be necessary but invidious to determine whether such bonds should be redeemed at full face value.
Another difficulty is that the proposals will not compensate investors who sold or were obliged to sell at recent price levels below cost, although they may have held bonds for many years.
If compensation were to be paid, investors who purchased subsequent to the issue date-and in the words of the hon. member for Don Valley, "according to the market price for the year in which the bonds were purchased"-it would require proof of date of purchase and of price, since the records do not contain such information. Many investors would not now have purchase invoices and could therefore justly claim discrimination in favour of those investors who have retained these records, which would need corroboration in any case. If investors were not able to prove date of purchase it would be exceptionally difficult to determine on what basis compensation should be calculated.
Perpetual Bonds
The government may offer to purchase bonds at prices below par value, but it cannot compel a holder to redeem the bonds at any price below par value.
It would not be possible to compel bond holders who purchased their bonds after the issue date to redeem their bonds at some level based on the market price in the year of purchase. Bond holders wishing to retain their investment would, in effect, be obliged to accept a price which has been frozen should they wish to sell at a later date. This would be unacceptable to a large number of investors.
There are many investors who have purchased perpetual bonds in recent years because of their attractive market yields. These investors may not wish to redeem these obligations. A sudden freeze in price, and consequently the reduced marketability of the bonds, will therefore be discriminatory.
Various governments have from time to time reviewed their policies with respect to the 1936 issue, but all have consistently reached the conclusion that it would not have been generally in the nation's best interest to redeem or to fix a maturity date on these obligations. The sharp increase in the level of interest rates has again necessitated a reconsideration of this matter and, in particular, the reconsideration of possible ways in which the alleged hardships by a minority of investors could be alleviated.
Although the 1936 perpetual bond issue is unique, a change in yield or an offer of immediate redemption will contain the undoubted implication that holders of marketable government securities ought to be and are protected from the vagaries of the market. The encouragement or acceptance of such a principle, even in circumstances designed to alleviate hardships, would lead to demands for similar treatment by other investors in marketable securities of the government, the vast majority of which are now trading well below issue prices.
It may be argued that the adjustments in the rates on Canada Savings Bonds have already breached this principle. This is not, however, the case, since one of the essential features of the Canada Savings Bonds is the unfettered right conferred upon the holder to redeem the bonds for cash in full at any time.
Having regard to all the circumstances and, although not necessarily to the current advantage of taxpayers, the Minister of Finance (Mr. Turner) announced on March 18, 1975, that the 1936 issue of perpetual bonds would be redeemed at par on September 15, 1996. Legal process will be completed by June 7, at which time the Government of Canada will be irrevocably committed by law to redeem the bonds in 1996. Prior to the announcement, the bonds were quoted at $37.25 per $100 for a yield of 8 per cent in perpetuity. At the present time the bonds are trading at a price of about $45.25 for a yield of 8.67 per cent to maturity. This yield is now comparable to any other long term Government of Canada marketable issues. I therefore stand against the proposal, and I wish that this money and other moneys could be used to better benefit pensioners, if that is truly the concern of the hon. member for Don Valley.


Mr. Lloyd Francis (Ottawa West):: Madam Speaker, I certainly do not want to be the one responsible for talking

May 2, 1975
Perpetual Bonds
this matter out. There are only one or two points I wish to make.
I think the measures announced by the Minister of Finance (Mr. Turner) do not meet the problem. The real difficulty lies in the fact that the big, sophisticated investor and those who had bonds and securities, have unloaded them. The people holding bonds are the little people, and those are the people who should be helped. I think the motion is a good one.


Some hon. Members:: Hear, hear!


Cyril Lloyd Francis: I would like to make one suggestion which I hope the Minister of Finance will consider. In addition to the redemption date there should be an annual sinking fund. I think the Government of Canada should go into the open market and buy a certain number of these debentures each year. The effect will be to improve their price and reduce the supply on the market. As the debentures and perpetual bonds reach maturity, they would come much closer to their face value. It would be a very inexpensive measure compared with the figures dealt with in the budget of the Minister of Finance. But it would be a simple equity to the people who are deprived of their confidence in the government. Those people are mostly elderly people who did not know enough about the operation of financial markets to unload these bonds before they reached the disgraceful point at which they are now.


Mr. Ross Milne (Peel-Dufferin-Simcoe):: Madam
Speaker, I should like to make a few comments on this question.


An hon. Member:: Why don't you sit down?


William Ross Milne: Madam Speaker, I wish to speak on this subject, not because I have a financial background, nor because I am possessed of financial wizardry, as is the hon. member for Don Valley (Mr. Gillies), nor because I have established a reputation in the financial world, as has the hon. member for York-Simcoe (Mr. Stevens), but because I am concerned about it. This concern has been communicated to me in a number of letters. I think most members have received letters in response to the advertisement which was placed in the newspapers and which announced that the government will redeem these bonds in 1996 at par.
The point I make is this: where does one draw the limits, if one wants to be fair? I have listened to a number of solutions put forward by hon. members who spoke in support of this motion. Although their suggestions, if followed, might help to solve the problem for a number of people, they would only create problems for others. Unless the government could buy out the issue, I do not see where the difficulties could end. As I say, I have no background in finance and I am not a lawyer. But I have talked to a number of people knowledgeable in this subject who have practised law and who have settled the estates of rural people. Actually, I think we are talking about only some relatively small investments which many of our senior citizens possess.

If you talk to lawyers who deal with people's estates, particularly in rural areas, you will find that people possess a number of bonds which relate to utilities on which the interest rate is even lower than on the bonds we are considering. Certainly people many years ago bought bonds associated with railway projects, and with projects in which the government participated. Many of those bonds are almost worthless now. How are you to deal with such people? Some of them have been hurt badly as a result of investing in the investment climate of those days. They were hurt when they tried to reach for a star in a period of economic hardship. Are we to ignore this large group and show concern only for 148 people? I do not think anyone has said so far that there are only 148 bond holders left of the original number in 1936 who bought these bonds. Only 148 people hold these outstanding bonds. Suppose you do redeem these bonds, as some suggest, what are you to do about those who purchased bonds in 1937 and 1938?
It is difficult to define limits. For example, I suggest that members who have met constituents in their ridings in connection with the $500 first-time housebuyer program announced in this House and the $1,500 Ontario program which is aimed at the same end will know how hard it is to define the date on which the program was to start and the conditions which limit the program.
How would the proposal of the hon. member for Don Valley be carried out? How can we do what he suggests and be fair with other people? How can we deal fairly with people who held these bonds in the 1930s and the 1940s?


James McPhail Gillies: Look at section (b) of the motion.


William Ross Milne: Frankly, I do not know how you can validate the period in time at which these people purchased these bonds. Perhaps the difficulty would not be so great if the date of purchase could be verified, if it had been recorded-


James McPhail Gillies: Read section section (b) of the motion.


William Ross Milne: I have read it. I suggest that the hon. member, in his argument, did not say how he would handle this problem. I find that difficult to understand. I have all the sympathy in the world for those affected by the motion, and I agree with much that has been said on this subject, but I have yet to hear clearly how this suggestion is to be implemented.
I think the argument was advanced by the mover of the motion that, essentially, you would deal with the original purchasers. Again I say there are only 148 of those original purchasers left. Then it was argued, subsequently, that this provision should be extended to those who have held these bonds for nearly as long as the original purchasers. That is the point. How can you determine this?


James McPhail Gillies: Will the hon. member permit a question? Does the hon. member not think that section (b) of the motion deals with that particular problem?


William Ross Milne: That is the very point I was making: how does one validate the dates and the length of time for which people have held these bonds? Are you to take their word? How are you to do this? That is the entire problem.
May 2, 1975


James McPhail Gillies: All you need do is look at the bond register.


William Ross Milne: With respect, I do not think so. If there were some way of accurately knowing for what length of time people held these bonds, in the late 1930s or early 1940s, I could accept the hon. member's argument. We do not know for how long present holders have held the bonds.
I understand the hon. member for Vancouver Kingsway (Mrs. Holt) argued that there is no register, that there is no way to validate who held these bonds, and for how long. I am just arguing the case. I merely want to know how you are to treat fairly those people who held the bonds in the 1930s and 1940s.
There was also some question as to how good a value these bonds are. I was advised not long ago that there have been some sales, that there had been some movement of these bonds, and this puzzles me. If they are as bad a buy as some say, why would people given present day economic conditions be buying them?


James McPhail Gillies: They are speculating.


William Ross Milne: If they are speculators, that is fine.


Thomas Clement (Tommy) Douglas: They are paying 38 cents on the dollar.


William Ross Milne: I am merely trying to argue that perhaps the yield is not over 8 per cent. I do not follow the mathematics of this business and do not know if I am correct. I think the Minister of Finance (Mr. Turner) has looked at this problem; I think perhaps more than half the members of this House have talked to him about this particular problem, or they have written to him. Some have met with him, in the company of other members.
Perpetual Bonds
Let me indicate that I am in favour of some solution to this problem. I should be only too happy to respond favourably to my constituents who have written to me about this matter if there were some way-I am sure the Minister of Finance has said this too-to deal equitably with all those people who today hold those bonds, the maturity date of which is, as set out in the advertisement, 1996. To this day I have not heard how this problem is to be solved, except for those 148 previously alluded to. What are you to do with regard to the people who have held these bonds for almost as long as the original investors, who have incurred as great a penalty in their investment portfolio as the original investors, but whose length of possession cannot be validated?
I sympathize with those who mean well. But I suggest that many who bought investments in those days gone by may well have misunderstood the nature of these bonds.


Stanley Howard Knowles: Question.


William Ross Milne: Some may have thought that the bonds had no maturity date but were recallable. Probably a number of Canadian investors incorrectly assumed that the bonds would mature after 30 years. When the government decided not to exercise its call option, new certificates were issued, and now of course we have 30 years to wait before the government will call them.


The Acting Speaker (Mrs. Morin):: Order, please.


Mr. Prud'homme:: Madam Speaker-


The Acting Speaker (Mrs. Morin):: The hour set aside for private members business having expired and it being five o'clock, I do now leave the chair.
At 5 p.m. the House adjourned, without question put, pursuant to Standing Order.


END OF VOLUME V