1975-02-14

THE LATE ARTHUR LAING


Hon. Mitchell Sharp (President of the Privy Council):: Mr. Speaker, I know that it is unusual to interrupt the business of the House at this time, but I feel that all members would wish to join me in remembering our late friend and fellow parliamentarian, Arthur Laing. All of us would wish to express not only our very real sadness and sense of loss at this time, but also our great respect and affection for Art, to his wife and to his family.


Hon. Robert L. Stanfield (Leader of the Opposition):: Mr. Speaker, I would like to associate myself and my party with the remarks of tribute to Art Laing made by the government House leader. I had the good fortune of being in Nova Scotia in the early 1950s when Art Laing came there on occasion as a member of parliament. He certainly served his party well both provincially and federally. Although, as I have said, he was a good servant of his party, he was a man who was very fair and open in dealing with all Canadians whatever their political stripe might happen to be. I liked him very much and I would like to associate myself and my party with the tributes paid by the government House leader, and extend our sympathies to Mrs. Laing and the family.


Mr. Stanley Knowles (Winnipeg North Centre):: Mr. Speaker, when Arthur Laing first came to this House in 1949, those of us who were here immediately found him to be a most likeable person. As the years moved on, we came to like him even more. I think it is significant that we are departing slightly from our practice this morning by referring to him, because all of us want to pay our respects to our late friend and colleague. He did his work well as a private member. He held three portfolios with distinction. Indeed, the last one he held for only a few months, yet I suppose he is still remembered for the good job he did as Minister of Veterans Affairs. My colleagues and I are happy to join the government House leader and the Leader of the Opposition in paying our respects to Arthur Laing's memory and in extending our sympathy to his family.


Mr. Eudore Allard (Rimouski):: Mr. Speaker, although I did not have the pleasure of knowing the late Arthur Laing, on behalf of both my party and myself I wish to join the leader of the House, the Leader of the Opposition and the representative of the NDP in offering his family our most sincere condolences.


Hon. John N. Turner (Minister of Finance):: Mr. Speaker, I wonder whether the House would permit me a moment or two just to add a few personal words about Arthur Lairig. I had a long and close association with him, not least as his parliamentary secretary in this House for 2'A years. Arthur Laing came from a pioneer British Columbia family. The Laing farm used to be on Sea Island next to the Grauer farm where the Vancouver airport is now situated. He and my mother were classmates and graduated together from the University of British Columbia in 1925. We have known the Laing family at least that long.
No one knew the province of British Columbia better than did Arthur Laing. He possessed warm qualities of integrity and sincerity, and no one who ever met him, even casually, failed to be impressed by those qualities. I think it is fair to say that as a politician he was unexcelled, particularly in the small towns and northern reaches of this country. He was a first-rate parliamentarian. He was very much at home in this House of Commons-he loved this place. He defended three portfolios with remarkable success. I believe he is going to be missed, not only by a good many members of this House who knew him but by many, many people in this country. I add my sympathy to that expressed by the House leader and other hon. members who have spoken, for his widow Geraldine, his daughter Linda and the other members of the family.


Mr. Len Marchand (Parliamentary Secretary to Minister of the Environment):: Mr. Speaker, I wonder if I might also be permitted to say just a few words. I would like to join the House leader in his words of tribute to Arthur Laing, and also the expressions of sympathy for Mrs. Geraldine Laing. I served as Mr. Laing's special assistant for almost three years during his term of office as Minister of Indian Affairs and Northern Development, from January, 1966, until the election of 1968. I wish to underline what was said by the Minister of Finance: Arthur Laing was a man whose integrity was unquestioned, as was his service and dedication to his country. He initiated a number of new policies during his term of office as Minister of Indian Affairs and Northern Development, when I was with him. He was particularly development conscious, not only of development of resources but development of people. He was very much concerned about this. During his term of office he often encouraged the Indian people, for instance, to get up on their hind legs, to start speaking and doing things for themselves. This sometimes got him into a bit of trouble, but his accomplishments during that period will long be remembered by his many friends.

February 14, 1975
Privilege-Mr. Watson


Mr. John A. Fraser (Vancouver South):: Mr. Speaker, as the present member for Vancouver South and one who ran against our friend Arthur Laing in the 1968 election and was soundly trounced because of his superior political abilities, I say with a great deal of sincerity that I am sure my colleagues from British Columbia would want to be associated with the tributes that have been made in this House today. I would also like to say-I think I can say this on behalf of the electors of Vancouver South-that our friend was regarded, through all the years he served that community, with great affection and great admiration. That affection was a rare thing and rose continually above the partisan political scene within which we find ourselves.
I should like to end on a personal note, Mr. Speaker. I knew Arthur Laing for many years. Even though I was his political opponent, he treated me with extraordinary kindness and generosity and, with respect to my own political ambitions, a great deal of encouragement. It speaks very highly of him when I say he understood the political process and realized that people needed encouragement to enter this field. In this regard he rose beyond party and partisan politics. It is my very great privilege, Mr. Speaker, to endorse the comments that have been made and to express to Mrs. Laing and the family our deepest sympathy.



ROUTINE PROCEEDINGS


Mr. Ian Watson (Laprairie):: Mr. Speaker, I wish to raise a question of privilege concerning a position taken by Air Canada which affects my rights as a member of this House and which I believe affects the rights of all members of the House. The episode started with an incident on Dominion Day, 1973, when the chief shop steward and a number of other employees at the power plant in Dorval were obliged to work on the national holiday by Air Canada. He left work early and was penalized. Some of his fellow workers contacted me about this penalty which they felt was poisoning labour-management relations at the Air Canada power plant, at Dorval.
There was an exchange of correspondence between myself and the Minister of Transport as well as between other members of parliament and the ministers concerned. The final result was a Canada Labour Relations Board hearing on December 4, 1974. At Mr. Morrison's request I attended that hearing to lend him moral support. It was apparently my presence at the hearing as an onlooker that sparked Air Canada into making a formal representation to the Canada Labour Relations Board asking for a ruling which would forbid individuals with a complaint before that board to contact members of parliament. In other words, Air Canada, a Crown corporation, on December 4,
[Mr. Marchand (Kamloops-Cariboo).)
1974, made a formal request to the Canada Labour Relations Board for a ruling that persons making use of the board's services be prohibited from complaining to their members of parliament. The lawyer for Air Canada said:
I still feel that at some point the board should pronounce itself on this issue.
He went on to say:
That interference from outside sources, and I am referring particularly to outside political sources, should try to influence the parties or the board in any fashion whatsoever is a practice which is probably not that new and yet I find it, as I have said before, (a) most objectionable and a pernicious practice which I think must be terminated. Now, whether the president of the board can do so with a decision or whether it would have been the intention of the board to even pronounce itself on this question and include remarks in its decision to that effect, I don't know. I would strongly suggest that this be the case.
Later he said:
I will insist that the board perhaps include some remarks in the decision on that ground.
Since, Mr. Speaker, to the best of my knowledge neither the hon. member for Vaudreuil (Mr. Herbert), myself nor anyone else in parliament has made any representations to the Labour Relations Board, I can only conclude that the Air Canada representative was objecting to my presence as an onlooker and a moral supporter of Mr. Morrison at the Labour Relations Board hearing, and that he was objecting and asking for a ruling on the letters which I had written on Mr. Morrison's behalf to the Minister of Labour, to the Minister of Transport and to the executive assistant to the president of Air Canada.
I must apologize to you, Mr. Speaker, for the delay in raising this question of privilege. My office made two requests of the Labour Relations Board for a transcript of the hearing but was unable to get this transcript. Only after I was supplied with a tape of the hearing by the Labour Relations Board was I able to have a transcript made in my office from the tape which was eventually supplied to me. The issue would be serious enough if the representatives of a private corporation had objected to citizens contacting their member of parliament. But it is incredible that a federal Crown corporation should make a formal representation to the Canada Labour Relations Board for a ruling prohibiting citizens appearing before the board from contacting their members of parliament.
Mr. Speaker, this is the most unbelievable episode I have come across since being elected to this House. Air Canada, in making this kind of representation, was acting not only in breach of the rights of all members of parliament but it was acting in contempt of parliament itself. I believe that there is a prima facie breach of privilege involved in this incident, and should Your Honour so rule I would be ready to move that the matter be referred to the Standing Committee on Privileges and Elections.


Mr. Hal Herbert (Vaudreuil):: Mr. Speaker, I rise to speak in support of the question of privilege raised by the hon. member for Laprairie (Mr. Watson). Mr. Morrison one of my constituents-I say this to show the relevance of my being involved in this matter-has been coming to me regularly since my election in 1972. For the information of hon. members he, as shop steward, protested
February 14, 1975

against excessive overtime being worked at Dorval. His position is supported by a letter from the Minister of Labour of November, 1972. This situation continued through 1973 to the mid-summer of that year when the incident to which the hon. member for Laprairie referred took place.
The real issue facing us is not the matter itself which gave rise to the complaint before the board, but whether action has been taken which is discriminatory and is intended to influence not just the actions of the individual concerned but the actions of every other person in a similar position. In other words, the message, according to the remarks of the lawyer appearing before the board, is clear and it is this, that nobody whose employment stems from this House-that is, no one who is employed by a Crown corporation, or by the public service for that matter-shall approach his member of parliament until such time as he has exhausted all the regular channels open to him. I suggest that it must be clearly established as the right of everyone to be able to converse freely and without restriction with their members at all times.


Some hon. Members:: Hear, hear!


Harold Thomas Herbert: I just want to add that in reviewing the voluminous correspondence on this subject, I do not find anything that would indicate any interference with the case itself. The question has always been one where we have been trying to obtain information to be able to assess for ourselves whether an individual is being fairly treated. It is on this basis that I support the motion of the hon. member for Laprairie. I suggest that possibly it might be better referred to the transport committee since the Ministry of Transport is also aware of the situation. At any rate, I will accept whatever decision Your Honour makes in this respect. I support the reference to a committee so that this matter can be fully studied and all persons will realize that in the future they will not be penalized if they take advantage of what I consider to be their right and privilege to discuss the subject with their member of parliament.


Some hon. Members:: Hear, hear!


Mr. Dan McKenzie (Winnipeg South Centre):: Mr. Speaker, I rise on the same question of privilege. I certainly support the two government members. We have a similar problem in Winnipeg with the finance branch of Air Canada. Air Canada is not living up to union agreements dating back to 1973. The unions made representations to members of parliament and the Minister of Labour (Mr. Munro) was asked about a month ago to intervene in that labour problem. So far the minister has not offered the services of his office to straighten out the labour problem in Winnipeg, and I believe the finance branch problem of Air Canada should also be discussed by the Standing Committee on Privileges and Elections.


Mr. Speaker:: Of course, the individual merits of the case concerning labour relations within Air Canada do not constitute the issue before us at this time. The issue is whether there has been an effort to interfere with the ability of a member of this House to function in his capacity as a member of the House of Commons. The allegations put forward by the hon. member for Laprairie
Contaminated Foods
(Mr. Watson), supported by other hon. members, are most serious, and I hope hon. members will understand if I take some time to carefully review and consider them before deciding whether to refer this matter to the standing committee. I propose to examine the matter and the precedents carefully, and will try to give a decision on Monday or Tuesday.


AIRPORTS
Mr. Sinclair Stevens (York-Simcoe):: Mr. Speaker, I rise on a question of urgent and pressing necessity to propose a motion under the provisions of Standing Order 43. This matter concerns the proposed airport at Pickering. Its urgency results from the advice of the Minister of Transport (Mr. Marchand) to this House on Monday, in reply to oral questions, that he hoped the cabinet would soon make a decision on whether to proceed with the Pickering airport development, and his further opinion that, if the development proceeds, the estimated costs would have to be revised, yet such revised figures have not been compiled to date. In view of the fact Air Canada has now indicated that travel is slowing down on the airline, with consent I would move, seconded by the hon. member for High Park-Humber Valley (Mr. Jelinek):
That this House is of the opinion that the government, before making a decision with respect to building the Pickering airport, should provide this House with an opportunity to have a full debate on the question.


Mr. Speaker:: The motion is proposed pursuant to Standing Order 43. Is there unanimous consent that it be debated?


Some hon. Members:: Agreed.


Some hon. Members:: No.


Mr. Speaker:: There is not unanimous consent. The motion cannot be put.


REPORTED CONTAMINATED FOODS CONSTITUTING HEALTH HAZARDS-REQUEST FOR UNANIMOUS CONSENT TO MOVE MOTION UNDER S.O. 43
Mr. Paul Yewchuk (Athabasca):: Mr. Speaker, I rise under the provision of Standing Order 43 to ask unanimous consent of the House to consider a matter of urgent and pressing necessity. In the past few weeks there have been innumerable reports concerning serious hazards to human health in Canada. There have been reports of contaminated hamburger, contaminated cosmetics, contaminated cheese, contaminated cottage cheese, contaminated ice-cream, arsenic pollution, asbestos pollution, all posing serious human health hazards. The Minister of

February 14, 1975
The Canadian Economy
National Health and Welfare (Mr. Lalonde) has been virtually silent on these matters. I would therefore move, seconded by the hon. member for Annapolis Valley (Mr. Nowlan):
That the minister be instructed to make a statement on motions in the House of Commons as to what action he is taking to assure Canadians that their health is being adequately protected.


Mr. Speaker:: The motion is put forward under the terms of Standing Order 43 and it cannot be debated without the unanimous consent of the House. Is there unanimous consent?


Some hon. Members:: Agreed.


Some hon. Members:: No.



THE CANADIAN ECONOMY


Eudore Allard: Mr. Speaker, under the terms of Standing Order 43, I request unanimous consent of the House to move a motion dealing with an extremely serious matter which calls for the application of emergency measures.
Considering that the price of milk has just gone up from 48 cents to 51 cents a quart, that the cost of butter may also rise by 12 cents before spring, and that those food products are essential to the diet of Canadians and especially that of children, I move, seconded by the hon. member for Villeneuve (Mr. Caouette):
That this House study at the earliest the possibility of adopting a consumer price compensated discount applicable to all food products that are considered essential, in order that Canadians can have access to important foods whose prices are now much too high.


Mr. Speaker:: The House has heard the hon. member's motion. Pursuant to Standing Order 43, this motion requires the unanimous consent of the House. Is there unanimous consent?


Some hon. Members:: Agreed.


Mr. Speaker:: The question is on the following motion moved by the hon. member for Rimouski (Mr. Allard), seconded by the hon. member for Villeneuve (Mr. Caouette):
That this House study at the earliest the possibility of adopting a consumer price compensated discount applicable to all food products that are considered essential, in order that Canadians can have access to important foods whose prices are now much too high.
Is the motion carried?


Mr. Drury:: Mr. Speaker, on a point of order, I clearly said "no".


Some hon. Members:: Oh, oh!


Mr. Speaker:: With all due respect to the Minister of Public Works (Mr. Drury), when I asked whether there

was unanimous consent there was a stony silence on both sides of the House. In any event, if by any chance I made an error in not hearing anyone say "no", it is too late. I listened very carefully, and I was quite certain. It was extremely quiet when I asked.


Mr. MacFarlane:: On a point of order, Mr. Speaker, some of us sit very far back. I said "no" quite clearly.


Mr. Speaker:: Is it the pleasure of the House to adopt the said motion?


Some hon. Members:: Carried.


Some hon. Members:: No.


Mr. Diefenbaker:: If the Speaker does not hear any opposition and goes ahead with the motion, it is too late for those who are sound asleep opposite to have a second bite at the apple. The hon. member who tells us he said "no" has that type of voice which as far as we are concerned in western Canada has not been heard since the buffalo ceased to roam. In all seriousness, once Your Honour went ahead with the reading, that was the end of the matter.


Mr. Speaker:: Order, please. Not much can be served by further discussion. I had already asked whether it was the pleasure of the House to adopt the motion, and I believe the hon. member is seeking to explain this motion.


Charles Mills (Bud) Drury: On a point of order, Mr. Speaker.


Mr. Speaker:: Order, please. The hon. member for Rimouski (Mr. Allard) quite properly has the floor to speak to a motion put before the House. If there are points of order, I shall be happy to hear them in due course. However, I think we ought to respect the fact that the hon. member for Rimouski has the floor.


Some hon. Members:: Hear, hear!


Eudore Allard: Thank you, Mr. Speaker. My first words are to thank the right hon. member for Prince Albert for upholding the views of the House.
It is an extremely important matter, namely the price of butter and milk. Our children need those products. As far as I am concerned, I am just as sure as you are, Mr. Speaker, I heard absolutely nothing. You asked twice whether there was unanimous consent and nobody answered. Then I said: Agreed. And I want the House to abide by your ruling.


Mr. Speaker:: Is the House ready for the question?


Charles Mills (Bud) Drury: On a point of order, I am not sure I caught the entire content of the motion, but it did appear to me that there is some question about whether it is in order in the sense that it is a private member's motion recommending a variation in ways and means. Such a motion, according to my understanding, is not in order. This is the point I wished to raise earlier.
February 14, 1975


Mr. Speaker:: Standing Order 43, as the hon. minister well knows, is usable only upon the unanimous consent of the House, and I have yet to learn of any restriction upon what this House can do by unanimous consent.


Some hon. Members:: Hear, hear!


Angus (Gus) MacFarlane: I should like to rest assured that the right hon. member for Prince Albert (Mr. Diefenbaker), when referring to my voice-


Some hon. Members:: Louder.


Angus (Gus) MacFarlane: When referring to my voice, the right hon. member should recognize the human frailty of his own ears and not accuse me of not having answered, because I did.


Mr. Speaker:: All those in favour of the motion will please say yea.


Some hon. Members:: Yea.


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


Some hon. Members:: Nay.


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


Mr. Speaker:: Call in the members.


Mr. Speaker:: I declare the motion defeated.



ORAL QUESTION PERIOD


Hon. Marcel Lambert (Edmonton West):: Mr. Speaker, my question is to the President of the Treasury Board. Can the minister advise the House the state of the negotiations between the Government of Canada and the general trades who are now in a position to strike? Does the minister intend to do everything possible to avoid a strike and so avoid the disturbance to the public who are absolutely defenceless in these matters and whose rights, frankly, are paramount of override certain private rights.


Hon. Jean Chretien (President of Treasury Board):: Mr. Speaker, it is true that the union is in a position to strike. The employees have not gone on strike yet. The parties met yesterday and another meeting is scheduled for this afternoon. We are doing everything we can to settle the dispute.


Marcel Joseph Aimé Lambert: A supplementary question, Mr. Speaker. Will the minister confirm that the union in question is voting on a new conciliation report which is being presented both to the government and to

Oral Questions
the employees in question? If so, when does he expect to know the result of that vote? Does he anticipate taking action to see that the designated employees carry out their obligations as designated employees and fulfil their obligations to the public?


Joseph Jacques Jean Chrétien: Mr. Speaker, at the present time, the parties are holding discussions. I have no comment to make. I hope they will come to an agreement. I have no other comments to make. It is obvious that those who do not have the right to strike will have to stay on the job. Such are the terms of the collective agreement.


AIR TRANSPORT
Mr. Bill Kempling (Halton-Wentworth):: Mr. Speaker, I wanted to direct a question to the Minister of Transport but I see he has left the House. I will direct it to the Acting Prime Minister. A Canadian Pacific Airlines flight on December 20 out of Amsterdam, with 130 passengers on board, was denied landing rights at Montreal because the snow clearance crews had gone on an illegal strike. The aircraft was diverted and was again denied landing rights at Toronto because of the illegal strike of snow clearance workers there. Then the aircraft was diverted to Ottawa and denied permission to land, but was finally allowed to land here after being held in a holding pattern. It was then held on the main runway for 40 minutes until the taxi strips could be cleared. As illegal strikes of ground service crews create potential dangers for passengers and aircrews, what does the minister propose to do to ensure the safety of passengers, aircrews and aircraft in such circumstances?


Mr. Cliff Mclsaac (Parliamentary Secretary to Minister of Transport):: Mr. Speaker, if I may answer the question, we were in touch with CP Air this morning and I am advised that they have not heard of the particular incident to which the hon. member refers. I remind him that at the time in question, Toronto and Ottawa airports were never shut down or in a non-operating state. If the hon. member would be good enough to inform me of the flight number, date and time, we could check into the matter further.


William James Kempling: Mr. Speaker, I will not only tell the parliamentary secretary the flight number and the time; I will tell him the name of the pilot as well so that he can make a thorough investigation. May I ask a supplementary question-


Some hon. Members:: Oh, oh!


An hon. Member:: Why not tell what you know now.


Some hon. Members:: Oh, oh!


Mr. Speaker:: Order, please. The hon. member should be permitted to ask his supplementary question.


William James Kempling: Mr. Speaker, this is not the first incident of this kind. I suggest that the minister should recommend to the Minister of Justice an amendment to the Criminal Code which would make it a criminal offence for ground crew personnel to strike illegally in circumstances where such action would affect the safety of passengers, aircrews and aircraft in flight at the time of an illegal strike. Will the minister undertake to do that; or must we wait until there is a disaster before the government acts in this regard?


Joseph Clifford McIsaac: Mr. Speaker, I can only repeat that CP Air advised us this morning that they know nothing of the particular incident reported by the CBC. Until we either prove or disprove that the incident took place, I can only point out that the airports were operating. If the hon. member wishes to give us the details that he has, we will check with CP Air and try to determine the facts.


AIR CANADA
Stanley Howard Knowles: Mr. Speaker, may I direct a question to the Minister of Labour? In view of the assurances the minister gave to the hon. member for St. Boniface, to the hon. member for Winnipeg South Centre and to me on December 11 that he would intervene in the dispute of the finance branch employees of Air Canada at Winnipeg and try to resolve the differences that still existed, and in view of the fact that this dispute is still a very serious one, can he tell the House what he has done about it, what were the results of his intervention, and if he will continue to make his good offices available to settle this dispute?


Hon. John C. Munro (Minister of Labour):: Mr. Speaker, I have been advised that our mediation services have been working on this question. I cannot give an up to date report but I will endeavour to do so at the beginning of next week.

In reply to the hon. member for Winnipeg North Centre with respect to the finance branch situation in Winnipeg, the latest report is that Air Canada has offered to open up the agreement to discuss classification, and we are now waiting for a reply from the union.


HOUSING
Miss Flora MacDonald (Kingston and the Islands):: Mr. Speaker, my question is directed to the Minister of State for Urban Affairs. Given that in the last quarter of 1974 housing starts declined by 35 per cent, aggravating the unemployment situation because there were 220,000 fewer workers in the construction industry, is the minister
February 14, 1975


COLONS DEBATES
[Stage Direction]
now prepared to concede that his present grab big of programs, including those in Bill C-46, will do little to alleviate this serious crisis? Also, are his plans to stimulate immediate growth and employment in the houst construction industry in these winter months limited to those enunciated yesterday by the president of CMHC, that is, to plans which are a rehash of earlier, inadequate programs.
Hon. Barney Danson (Minister of State for Urban Affairs):: Mr. Speaker, I am delighted that the hon. member asked her question in that way, because our programs are indeed innovative and designed to produce a good deal of additional housing in the coming year. I only wish the House would pass the legislation before it and that our friends opposite would not hold it up, so that we could get the houses built which the people of Canada want.


Some hon. Members:: Hear, hear!


Flora Isabel MacDonald: A supplementary question, Mr. Speaker. Given that the drop in housing starts and lay-offs in the construction industry reflect the inadequacies of the very programs of which the minister speaks, and given that the recent figures released by CMHC showing that of the thousands of inquiries regarding the $500 grant to first-time purchasers of new homes only 676 applications have qualified for approval- a far cry from the 62,000 the minister so confidently predicted-would the minister give immediate consideration to extending the program to first-time buyers of existing housing?


Barnett Jerome Danson: Mr. Speaker, the program is intended to stimulate the construction of new housing, not all that much of which starts in January. Nevertheless, there are parts of the country where it can start and the new program will enable it to start. The hon. member should look behind her. If the hon. member for York-Simcoe will allow the budgetary provisions to go through, we can then get on with the housing legislation. People are waiting for that legislation. The builders, lenders and purchasers are all ready to move as soon as we get through that legislation.


Some hon. Members:: Hear, hear!


Flora Isabel MacDonald: The minister did not see fit to answer the question. If the figure of
62,000	which the minister confidently predicted would qualify for the $500 grant is so far off base, with only one-hundredth of that figure qualifying in the first month, what assurance do we have that his prediction of 210,000 housing starts this year is not similarly inflated?


Barnett Jerome Danson: Mr. Speaker, I put 210,000 as a floor for this year. We will target for more. We have to be realistic in terms of international conditions. If we relate the situation to that of our principal trading partner, it gives us great consolation because we are doing about 4l/2 times as well as the United States in providing housing in this country.


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


MEASURES TO COUNTER POSSIBLE INFLATED PRICE SITUATION
Mr. Stan Darling (Parry Sound-Muskoka):: Mr. Speaker, as a Darling I am certainly delighted to be recognized on Valentine's Day.


Some hon. Members:: Hear, hear!


Stan Darling: My question is supplementary to the darling of the press, the Minister of State for Urban Affairs. In view of the fact that housing starts in urban areas registered a decline of 49 per cent-from 13,506 in January, 1974, to 6,955 in January, 1975-and because continuation of this trend will undoubtedly result in a reduced number of available units which, when and if mortgage rates decline, will create an inflated price situation as far as existing units are concerned, will the minister inform the House of the measures he will take to counter the possibility of this situation developing?


Barnett Jerome Danson: Mr. Speaker, I am pleased to enter into this sweetheart arrangement with the hon. member. If he will read the legislation and the opportunity this gives to Canadians, particularly young, low-income Canadians and first-time home owners, he will see there are a lot of provisions in the legislation. If we could only get it through the House, into committee and on the books we could get to work building the houses. I know the housing industry is ready to build. Thousands of Canadians across this country are most anxious to take advantage of these programs. They are good programs and we want to get them on the books so we can get housing going.


Stan Darling: I hope that out of the many thousands of houses the minister has promised for this year, a great many will be built in rural Canada and in small communities because we are the ones who are presently getting the short end of the stick.


Barnett Jerome Danson: Mr. Speaker, that is a very high priority in our plans. I appreciate what the hon. member is suggesting.


SUGGESTION GOVERNMENT PROVIDE FINANCIAL ASSISTANCE UNDER RRAP TO INSULATE HOMES AND CONSERVE ENERGY
Mr. Jack Marshall (Humber-St. George's-St. Barbe):: Mr. Speaker, I have a supplementary question for the Minister of State for Urban Affairs. In view of the recommendation in Canada and the United States that in order to conserve energy there should be a direct thrust toward insulating homes, will there be any thrust under the Residential Rehabilitation Assistance Program with regard to financing in the coming months?


Barnett Jerome Danson: Mr. Speaker, this is part of RRAP. In response to the request of the Minister of Energy, Mines and Resources, I am looking at further measures with regard to taking new initiatives to conserve energy in older homes as well as in new homes.

February 14, 1975
Oral Questions


UNEMPLOYMENT INSURANCE
Eudore Allard: Mr. Speaker, I wish t* put a question to the Minister of Labour, to the Postmaster General or to the latter's Parliamentary Secretary.
It appears that all coded mail is being boycotted in the Montreal post office. This large volume of mail items includes numerous cheques addressed to unemployed people, cheques that are stuck there. Is the minister in a position to inform the House whether he intends to take steps to correct this situation so that unemployed people may receive their benefits?


Hon. Bryce Mackasey (Postmaster General):: Mr. Speaker, I am always interested in problems of unemployment insurance, particularly the distribution of cheques. I will find out if there is any reason for unemployment insurance cheques being unnecessarily delayed.


ROYAL CANADIAN MOUNTED POLICE
Mr. Andrew Brewin (Greenwood):: Mr. Speaker, my question is addressed to the Solicitor General. In light of recent revelations of the role played by the CIA in the subversion of the democratic government of Chile, do the Royal Canadian Mounted Police, in screening refugees or other immigrants from that country, still avail themselves of reports from the CIA?


Hon. Warren Allmand (Solicitor General):: Mr. Speaker, since the RCMP has no foreign intelligence capacity, from time to time when it is necessary they request information from foreign police forces and foreign intelligence agencies in Britain, United States, Europe and elsewhere. In the case of the special program for Chilean refugees, information was requested on some of the applicants from these foreign intelligence agencies. I am not sure if the CIA was one or not. They could have been. However, let me say this: the criteria for entry of those refugees were Canadian criteria and the screening was done by RCMP officers and Canadian immigration officers in Chile. The entry was decided by our people. I am under the impression that when it is necessary for us in Canada to obtain information, we may still ask for that information from the CIA and other foreign agencies, but it is in accordance with our policy and our law.


EXTERNAL AFFAIRS
Francis Andrew Brewin: In the absence of the Secretary of State for External Affairs I will address my supplementary question to the Acting Prime Minister. It has been reported that the Canadian Ambassador to Chile recently gave to General Augusto Pinochet, the military dictator in Chile, a series of gifts, including coloured illustrations of varieties of Canadian fish, and at the same time expressed the cordial greetings of the Government of Canada. While I appreciate the necessity for diplomatic courtesy, was it under the instruction of the Canadian government that Mr. Ross made this presentation and expressed these cordial greetings to one who is not only a dictator but who has presided over the destruction of fundamental rights in his country-


Mr. Speaker:: Order, please. The hon. member has described a presentation and asked whether it was made on instructions. That surely ought to be enough.


Mitchell William Sharp: Mr. Speaker, I do not know whether our ambassador acted under instructions. I do think it is important in international relations, however, that the people of Chile and the government of Chile have a good view of democracy in Canada. Therefore, I think it is wise that we maintain these kinds of relationships.


UNEMPLOYMENT INSURANCE
Mr. Allan Lawrence (Northumberland-Durham):: Mr. Speaker, I regret I was only able to give the Minister of Manpower and Immigration a couple of hours' notice of this question. Can the minister inform the House whether any special emergency measures will be implemented to speed up the processing of unemployment insurance claimed by the workers of the General Motors, Oshawa, plant who were laid off in January? Some of these workers have been back on the job for a few days now but are still waiting for their original claims to be processed.


Hon. Robert K. Andras (Minister of Manpower and Immigration):: It is correct there was a lay-off on January 10, I believe, of some 8,000 workers, a very large number of people. As of this week, all the claimants who registered at that time are in receipt of reporting cards and the process is taking place. Registration, of course, does not of itself trigger the reporting cards, though this, I believe, was the information I got from the hon. member's office today. There certainly was a slight delay in issuing some cards because of the number of claimants. I would add that where there are to be lay-offs of any magnitude at all it would be very helpful if employers were to take us into their confidence in advance so that we could make these

February 14, 1975
Oral Questions


Joseph Jacques Jean Chrétien: Mr. Speaker, incomes obviously increase because of inflation, but I expect to table the estimates for the fiscal year 1975-76 before the House on Wednesday. The hon. member will then realize that expenses increase accordingly as well.


LABOUR CONDITIONS
[Stage Direction]
inquiry whether airline flight attendants

Mr.  R. Gordon L. Fairweather@Fundy-Royal: Mr. Speaker, I have a question for the Minister of Labour. I wonder how he will respond to the request by airline flight attendants that the Canadian Labour Code continue to govern their employment arrangements with Canadian airlines, and that they are entitled to the same rights as any other females in the labour force.


John Carr Munro: Mr. Speaker, I met with the airline flight attendants the day before yesterday. I believe my colleague, the Minister of Transport, met with them also. We are endeavouring to arrive at a solution which will be to the satisfaction of the attendants. Our position is that the code should govern, but there are other factors which the Department of Transport are putting forward with respect to the safety aspects.


Mr. Fairweather:: Mr. Speaker, I hope the minister's view will prevail, because on the basis of the information I have, the view of the transport officials on the pregnancy of flight attendants has about as much reality in 1975 as the horse and buggy.


AGRICULTURE
Mr. Doug Neil (Moose Jaw):: Mr. Speaker, my question is addressed to the Minister of Agriculture. I should like to welcome him back from Mexico. In view of the continued very heavy United States imports of fat cattle under 700 pounds which are not subject to Canadian quota-over
7,000	heads of these cattle entered Canada in the last quarter of 1974-and in view of the statement the minister made last Saturday in Edmonton to the Western Stock-growers Association that these imports represent an unnatural trading pattern, suggesting, by implication at least, that no action is being planned to plug this legal loophole which has helped to further depress our feed cattle markets, has the minister given consideration to requiring that all commercial imported cattle be subject to Canadian quota requirements?


Hon. E. F. Whelan (Minister of Agriculture):: Mr. Speaker, I want to say in respect of the trip to Mexico to which the hon. gentleman referred, that I left on Monday,

travelling one day there, and came back yesterday; so I was there two days on government business. I can say that some of my discussions will prove to be successful in helping Canadian cattle producers, especially those in western Canada. Regarding the importation of cattle under 700 pounds, they do not come within the average quota from the United States and that is not the normal trading pattern. I intimated that I felt very strongly that this was not the normal trading pattern. We are making representations and reviewing the whole program at the present time. I hope to be making some suggestions and taking some action very shortly in this respect, as we do not like what is happening.


NEGOTIATIONS BETWEEN CANADA AND UNITED STATES RESPECTING LIVESTOCK PROBLEMS
Mr. G. H. Whittaker (Okanagan Boundary):: Mr. Speaker, my question is for the Minister of Agriculture. Will he inform the House whether he and his colleagues, the Minister of Industry, Trade and Commerce and the Secretary of State for External Affairs, have resumed negotiations with the U.S. government in respect of recent livestock problems that border on a near trade war, and will these negotiations include a personal exchange between the minister and Secretary Butz?


Eugene Whelan: Mr. Speaker, I can say that while I was in Mexico I did talk to one of the undersecretaries, Mr. Long, who deals directly with these problems. I am not saying I made any gains at all, but our officials were discussing this matter with U.S. officials as late as two weeks ago. I do not know whether any discussions took place in the past week, but there is certainly no trade war at all. There are more restrictions placed on our trade with the United States that we would like to discuss, but there is no trade war at the present time, as far as I am concerned.


FOOD PRICES
Mr. James A. McGrath (St. John's East):: Mr. Speaker, is the Minister of Agriculture aware of the fact that the Food Prices Review Board is currently undertaking a study in respect of a food policy for Canada? Bearing in mind that today is Valentine's Day, will the minister assure the House that he and his department are prepared to co-operate with Mrs. Plumptre to the fullest extent on this very important subject?


Eugene Whelan: Mr. Speaker, regarding the review the hon. member mentions, the Prime Minister announced that we were going to develop a food policy for Canada. As I have stated, our officials have always worked in very close co-operation with the Food Prices Review Board, and any help we can give them we will give. We are working on a food policy; I can assure the hon. member of that.

unfortunate situations as palatable as possible in terms of rendering our services quickly.


Allan Frederick Lawrence: The information I had as late as last night was that a number have still been unable to get their reporting cards from the UIC, as a result of which their claims have not been processed; and, of course, this penalized them because they were not able to get supplementary unemployment benefits from their own union. Do I understand, now, that the minister is assuring the House that by far the great majority of them will at least have their reporting cards by the end of this week?


Robert Knight Andras: That is the information I have, Mr. Speaker. I might inject one caveat. Not all the claimants did register at that time on January 10, some came afterwards, I presume for reasons of their own. The bulk of the situation is well in hand but, having been reminded by the hon. member, I will put a close follow-up on it.


FINANCE
Mr. Arnold Malone (Battle River):: Mr. Speaker, I should like to direct this question to the Minister of Finance. I notice that last night I received a letter in my mailbox from him giving notice of a meeting on March 5; he was asking people to check his mandate at that time. I cannot attend then, so I should like to do it now. In view of the recent concern about energy and policies put forth to conserve energy, would the minister reconsider the idea of taxing small aeroplanes, especially in light of the fact that many small aeroplanes get as high a gas mileage as middle-sized automobiles? Certainly his proposal is going to put at least a $30 million crimp on the aeroplane industry in this country.


John Napier Turner: Mr. Speaker, we discussed this matter thoroughly when the excise bill was before the House. There is nothing to add at this stage except invite the hon. member, as I did, to come to this town hall meeting, as a resident of Ottawa-Carleton, together with other members of the House who are residents in the riding, including the hon. member for Edmonton West, and I will try to expand on my answer at that time.


Arnold John Malone: Mr. Speaker, anyone who looks at a map of Canada will realize that this is not a country in which use of the aeroplane should be restricted. In light of the fact that small aeroplanes use only .03 per cent of all the fuel used for transportation, would the minister table the data which led him to the conclusion there would be any significant saving in fuel? The calculation shows that in seven years you would only save five days of fuel if you stopped all small aeroplane traffic.


John Napier Turner: Mr. Speaker, there is nothing I can add to what was said during the three days of debate here.
Oral Questions AGRICULTURE


IMPORTATION OF POTATOES FROM UNITED STATES- GOVERNMENT POLICY
Hon. J. A. MacLean (Malpeque):: Mr. Speaker, I should like to ask the Minister of Agriculture if he could explain the rationale which allowed his department, I believe, to permit the import of ten million pounds of potatoes from Maine for processing, in light of the fact that maritime potato growers are still selling their produce at well below the cost of production.


Eugene Whelan: Mr. Speaker, I don't know whether the hon. member is referring to potatoes which were imported into Canada last year. If he is, these potatoes come in under our laws. At the same time we are exporting potatoes in processed form into the United States from the province of Alberta, so it is a movement of trade which has been customary in North America. It has always been so. If the hon. member is referring to something which happened just recently, I should like to have the information.


John Angus MacLean: Mr. Speaker, my understanding is that this permit was granted very recently. I would ask the minister this question as a supplementary. Considering the general market price of potatoes at the present time, would he look into the possibility that these imported potatoes coming on to the market in this country are being dumped, in the technical sense?


Eugene Whelan: Yes, we are constantly checking this; but actually there is no permit granted. Anyone can import potatoes as long as they meet tariff restrictions and grading standards. We have no permit system for importing potatoes, as there is in the United States when we are shipping our seed potatoes, etc., which is a very big market for us.


THE CANADIAN ECONOMY
Mr. Ron Huntington (Capilano):: Mr. Speaker, I have a question for the President of the Treasury Board. Has the hon. gentleman prepared statistics to show the benefit or gain to the treasury for each one-point rise in the cost of living index?


Joseph Jacques Jean Chrétien: Mr. Speaker, we do not keep such statistics. The question should rather be directed to the Minister of Finance, who charts the economic policy of the government.


Arthur Ronald Huntington: In light of that answer, could the hon. gentleman explain the statement of the secretary of the Treasury Board in an address to Canada Assistance Plan officials in which he said that for each one-point increase in the cost of living the federal treasury profited by some $300 million?
February 14, 1975

Oral Questions


ADMINISTRATION OF JUSTICE
Mr. Speaker:: Order, please. Before giving the floor to the hon. member for Nickel Belt, I wonder if I might ask for the direction of hon. members. The question period would normally expire at about 1.04. I wonder if hon. members would rather stay until then, to clean up the question period, and then come back, with the House in committee of the whole, at two o'clock? Is that agreed?


Some hon. Members:: Agreed.


PENITENTIARIES
Mr. John Rodriguez (Nickel Belt):: Mr. Speaker, in view of the fact that the Ontario government has closed down the Burwash minimum security prison in the Sudbury basin and relocated 200 jobs from that district, and in view of the fact that the federal government is seeking a site for a medium security prison somewhere in southern Ontario at a cost of $7 million, will the Solicitor General inform the House whether his department has investigated the possibility of transforming Burwash to a medium security prison and, if not, does he intend to do so?


William Warren Allmand: Mr. Speaker, we have already examined this possibility with the government of Ontario. Unfortunately, it does not seem that the Burwash institution would be satisfactory for federal needs. First of all, our policy now is to move into smaller institutions which accommodate 150 to 180 inmates. Second, we try to locate the institutions as near as possible to the major population areas from which the inmates come. Our need is in southern Ontario and not in northern Ontario, because most of the inmates come from southern Ontario. For these reasons we do not feel that Burwash is suitable at the present time.


John R. Rodriguez: Mr. Speaker, I fully realize that we from northern Ontario are very law-abiding citizens. However, in view of the fact that the minister's department has been looking around in the Barrie area, which is only an hour or an hour and a half from Burwash by car-I do not think that is very far-will the minister reconsider the Burwash institution for upgrading to a medium security institution? Would he please look at this situation again, in view of the fact it is not very far from the centres from which people come who commit crimes?


William Warren Allmand: As I said, Mr. Speaker, it is not suitable because of its size. Burwash is a rather large institution which would require a lot of work, at great expense, to put into the type of shape we would require. Consequently, I think it would be better for us to build the type of institutions we need near the areas where they are required.


GANGLAND SLAYINGS IN MONTREAL, QUEBEC-POLICE FORCES INVOLVED IN INVESTIGATIONS
Mr. J. P. Nowlan (Annapolis Valley):: Mr. Speaker, in view of the continuing blood bath in Montreal, would the Solicitor General tell the House whether the special group consisting of members of the RCMP, members of the Quebec Provincial Police and members of the Montreal police force which were used during the 1972, FLQ crisis, is to be reconstituted to deal with the mass, gangland slayings which may well have international implications and which will, if continued, undoubtedly affect security arrangements for the Olympic Games?


William Warren Allmand: Mr. Speaker, I will have to look into that matter. I can tell the House that there is very close co-operation among the RCMP, the Montreal Urban Community Police and the Quebec Provincial Police in respect of matters relating to crime. I will check into the representations made by the hon. member.


John Patrick (Pat) Nowlan: Mr. Speaker, the minister more or less anticipated my supplementary question. I intended to ask him whether he has had any recent communication with the Attorney General of Quebec or the Montreal police chief, in respect of what is becoming a national disgrace, to ascertain if there are any direct national or international implications to this disgraceful and sordid story and to ensure that there is the fullest co-operation between the three police forces.


William Warren Allmand: Mr. Speaker, I have had recent discussions with the Minister of Justice for Quebec, but not on that particular subject. I can tell the House that there are frequent consultations among the RCMP, the Montreal Urban Community Police force and Surete Quebec. I will check to see if more can be done and, in particular, I will look into the question raised by the hon. member.


EGG MARKETING
Mr. Perrin Beatty (Wellington-Grey-Dufferin-Water-loo):: Mr. Speaker, I have a question for the Minister of Industry, Trade and Commerce which arises from a recent report in the Kitchener-Waterloo Record, in which the Minister of Agriculture is reported to have stressed the need for the minister's department making available to the Canadian Egg Marketing Agency part of a $10 million per year fund to help promote export sales of Canadian agricultural products. The Minister of Agriculture is quoted as saying:
They'd better be giving them some or I'll break their goddamn necks.
I should like to ask the Minister of Industry, Trade and Commerce whether he found his colleague's logic persuasive and, if so, whether CEMA has access to some of that money.
3228

February 14, 1975
Oral Questions


Hon. Alastair Gillespie (Minister of Industry, Trade and Commerce):: Mr. Speaker, we are very anxious to assist in the export of Canadian eggs, and there have been representations made to a number of countries, particularly in the Middle East and elsewhere, with a view to helping the Egg Marketing Agency remove or reduce its surplus.


Henry Perrin Beatty: Part of that $10 million?


Eugene Whelan: Mr. Speaker, I rise on a question of privilege. I do not know which minister the hon. member was referring to when he referred to the Minister of Agriculture; but if he was referring to this one, I deny emphatically making that statement, and I don't care what paper it was in.


LABOUR CONDITIONS
Mr. Robert Muir (Cape Breton-The Sydneys):: Mr. Speaker, I have a question for the Minister of Labour in reference to the commission of inquiry set up two months ago to look into safety in the mines operated by the Cape Breton Development Corporation. Having regard to the time-frame, is the minister in a position to tell us when we may expect an interim or final report?


John Carr Munro: Mr. Speaker, I cannot give an answer right now, but I will check into it. I believe it will be some time yet.


FISHERIES
Mr. John Reynolds (Burnaby-Richmond-Delta):: Mr. Speaker, I had a question for the Solicitor General but I see he has escaped. Instead, I will direct my question to the Minister of State for Fisheries. Has the minister received a request from the British Columbia government for further assistance in respect of the salmon enhancement program and, if so, has he replied to that request?


Hon. Romeo LeBlanc (Minister of State (Fisheries)):: Mr. Speaker, during the very useful discussions held with the minister responsible for fisheries in the province of British Columbia, in October we did look at all the problems involved in this proposed development. We discussed not only financial aspects, but the allocation of resources in terms of protecting spawning rivers. We are working very closely with B.C. at the official level in the preparation of proposals which will go forward in due course. This is a most imaginative and remarkable program suggested by my predecessor.


John Douglas Reynolds: Mr. Speaker, would the minister advise the House who the submission is going to, the provincial government or the federal cabinet, for approval?


Roméo LeBlanc: Mr. Speaker, cooperation is ongoing between the officials of my department and the provincial officials. There are also discussions at the ministerial level.


PUBLIC SERVICE
Mr. Otto Jelinek (High Park-Humber Valley):: Mr. Speaker, my question is directed to the President of the Treasury Board and it follows my motion of yesterday dealing with the fragmentation of union power within the public sectors. In view of the increasing number of walkouts and strikes within individual and essential public sectors of our economy, with one of which we are presently being faced, can the minister advise the House whether his department or any other department has given consideration to the possibility of single sector bargaining and, if not, would he now be prepared to consider this method of negotiation as an answer to some of the problems plaguing the essential services of this country?


Joseph Jacques Jean Chrétien: Mr. Speaker, the hon. member should know that a joint committee of the House and of the Senate is studying the Finkelman report on this subject. If he has particular views on the issue he could make representations to the committee. Of course, a bill on this subject will be brought before the House after the committee has reported to the cabinet.


Otto John Jelinek: Could the minister then explain whatever happened to the leaked memorandum of the recommendation submitted to the cabinet by the Minister of Labour regarding labour relations in Canada, which dealt in part with the problem of fragmentation within the single public sector of our economy along the lines which I suggested in my motion yesterday and as I have suggested in the past?


Joseph Jacques Jean Chrétien: Mr. Speaker, I am not very concerned about what can be written outside the House or about some comments that can be made at this time. The House has the opportunity to review the situation. If the hon. member has definite views on the subject, he should inform the committee.


MANPOWER
Mr. Donald W. Munro (Esquimalt-Saanich):: My question is addressed to the Minister of Manpower and Immi-
February 14, 1975

gration. I am sorry the Minister of State for Urban Affairs has left, because this question would have interested him. Since unemployed persons may receive unemployment insurance benefits even when not registered with a Manpower placement centre, what measure is the minister taking to ensure that these persons are available for employment and accept appropriate employment when it is offered?


Robert Knight Andras: Although the question does not make it clear, the hon. member must be referring to union hiring halls in the construction industry. I would assure the hon. member that we have negotiated an understanding with 175 of these hiring halls that the Unemployment Insurance Commission will have access to the records related to the verification of the availability for work of their members within the hiring hall system. I would also add that union hiring halls are the offshoot of negotiations between management, the businesses involved and the unions, and have not been instigated by the federal government. Much of this of course is under the jurisdiction of the provincial governments. To return to my first comment, we have been negotiating satisfactory arrangements for the monitoring of these activities with the union hiring halls, and this has been going on for the last several months.


Donald W. Munro: I would ask the minister if he can clarify when these arrangements were made for co-ordination between Manpower centres and union hiring halls, because we hear that the construction industry in British Columbia has great difficulty in finding manpower for their operations.


Robert Knight Andras: These negotiations have been under way over a period of about a year, I think. We have had great success in reaching agreement with the various unions involved in every province with the exception of the province of Quebec which has special problems at present.


Mr. Speaker:: Order, please. Before calling orders of the day, I wonder if we could have the consent of the House to return to the introduction of bills so that the hon. member for Capilano may have leave to introduce a bill which was overlooked earlier. Is that agreed?


Some hon. Members:: Agreed.



ROUTINE PROCEEDINGS


Arthur Ronald Huntington: for leave to introduce Bill C-377, respecting the interprovincial enforcement of alimony and maintenance orders.
Income Tax Act
He said: Mr. Speaker, this is the reintroduction of a similar bill presented to the twenty-ninth parliament by the hon. member for York North (Mr. Danson). I continue to be concerned at the injustice imposed on thousands of deserted or divorced mothers who have obtained maintenance orders in one province that cannot be enforced because the deserting or departed spouse takes up residence in another provincial jurisdiction.
This bill, which purports to establish, with the approval of all provinces, an agency to enforce in one province alimony and maintenance orders issued in another, is admittedly only a first step. It is hoped that from this bill will flow a government measure providing for the automatic and guaranteed payment of alimony and maintenance orders awarded by the court and for the federal and provincial governments to be responsible for collecting these payments. 1975 is International Women's Year. This bill is a compassionate measure to correct an area of injustice to thousands of mothers.


[Stage Direction]
Motion agreed to, bill read the first time and ordered to be printed.
Mr. Speaker:: It being one o'clock, I do now leave the chair until two o'clock this day.
At 1.08 p.m. the House took recess.


[Stage Direction]
AFTER RECESS

The House resumed at 2 p.m.


[Stage Direction]
The House resumed from Thursday, February 13, consideration in committee of Bill C-49, to amend the statute law relating to income tax-Mr. Turner (Ottawa-Carle-ton)-Mr. Laniel in the chair.
The Chairman:: When the committee rose last evening clause 7 as amended was under consideration. It had been suggested that it be stood, but at the request of the hon. member for York-Simcoe it remained under discussion. The hon. member for York-Simcoe.
On clause 7.


Sinclair McKnight Stevens: Mr. Chairman, when I asked that clause 7 be not stood I intended it to be open for further discussion and debate with specific reference to the real estate implications of this section. My colleague from Kingston and the Islands wishes to make some remarks on clause 7, and I would like to defer my time to her, although I will have some further comments to make myself.
While I am on my feet perhaps I should make some passing comment in regard to the unfortunate reference made by the Minister of State for Urban Affairs during question period today when he implied that I had been

February 14, 1975
Income Tax Act
instrumental in holding up this bill. I realize that perhaps the minister is not in touch with reality and with what has actually been transpiring on the bill, but I would point out for the record that this bill arises out of the November 18 budget brought down by the Minister of Finance. The Minister of Finance chose not to introduce the bill to this House until December 20, and I would suggest that the government had it completely within its power to have brought this legislation on much sooner last year, but it chose not to do so.
When we returned in January this year the government could have given this legislation top priority to ensure that there would be the maximum debate time afforded to it. But it chose not to give it particular priority. In fact when it did bring it on for debate, I think the government took three separate days out of the debate to consider other matters rather than getting on with discussion of this bill.
As you undoubtedly know, Mr. Chairman, notwithstanding the time delays since November 18, the Minister of Finance has just very recently tabled about 40 amendments to the bill. With all due respect, if the government keeps introducing legislation that is so inadequate and has so many obvious mistakes in it that it has to be amended by the government before it can be passed, surely we cannot be faulted for giving some type of prudent review to the legislation before us.


Some hon. Members:: Hear, hear!


Sinclair McKnight Stevens: If we wanted to be purely political I could perhaps accept the comment made by one of the hon. members on the government side. He asked why we could not let the legislation go through and accept the faults- because there are faults-and then criticize the government later? Politically that may be right, but I think as members of parliament we should do what is right for the people of Canada.


Flora Isabel MacDonald: Mr. Chairman, I would like to make a few comments on subclauses (2) and (3) of clause 7 which, as I understand it, implement paragraph (12) of the Income Tax motion. It seems to me this provision would mean that carrying costs on land awaiting development will not be chargeable against other income but can be taken into account only when the land is sold.
As the hon. member for York-Simcoe pointed out last night, and as I mentioned in the House on second reading of this bill, this particular measure may well force many small developers out of business. It is these small developers who make up about 90 per cent of the entire industry. They are the ones who actually build most of the homes constructed in this country. So the government, which seems to be trying to increase the amount of land on the market at the moment to stimulate house construction, may end up by achieving the exact opposite result of depressing construction by making it hard for those in the industry to survive. The goal is admirable, but the means are very questionable.
We have asked the Minister of Finance if he will not make a distinction here between land speculators who buy and sell land but who do not develop it, and land develop-

ers who do much of the construction themselves. The minister said last night that he has reviewed this very carefully but finds it extremely difficult to do, and I would like to ask him why he finds it so difficult. Or does the government object to making the distinction between speculators and developers in the first place? I would like to direct that question to the Minister of Finance and also to his colleague, the Minister of State for Urban Affairs, who may have a somewhat different point of view in this regard.
As the minister must surely know, this measure will penalize many small developers who must bear the carrying costs of the land, not because they are unwilling to put it on the market but because of the long delays in securing planning permission and equally in the servicing for land on which they intend to build.
[DOT] (M10)
The average delay between applying for planning permission from a municipality to build and getting both that permission and the servicing necessary before construction can begin, is from two to five years. I want to ask the minister if there is any provision in this bill, or if he will insert one, to enable developers who have already applied for planning permission and for servicing to deduct the carrying costs of the land in question as they have been able to do up until now?
I would also like to get some clarification from the minister on whether the measures proposed in this bill will have the effect of enabling developers to charge the carrying costs of land against their income when the land is sold? In other words, when this clause is passed they will not be able to write off the carrying costs of undeveloped land they own, but when they sell it will they be able to write off those charges, and if so, will they be able to write them all off at once? If this is not possible it seems likely that most of these firms will simply pass on to the home buyer the several hundred million dollars of cost that this measure means they will incur, so that what the minister thinks he is gaining now with more land on the market, he will be losing five years from now in higher land and home prices.
My interpretation of the remarks of the Minister of Finance last night is that the full carrying costs of land will be chargeable against tax when the land is sold. But, if this is so, where is the effectiveness in his policy? Large developers will still gain the tax advantages of carrying land-they will simply gain them a little later. The people squeezed will be the small developers who cannot afford to wait for the tax write-off because of existing liquidity problems, and many may be forced out of business.
Yet these small developers are the builders and construction firms contributing most to housing in this country. They make up 90 per cent of the industry. But they are not the ones who hold the bulk of land designated for future development. As CMHC figures show, the vast proportion of land around Canadian urban centres is owned by five or six mammoth development corporations. They have the financial resources to resist pressure to put land on the market, because they can afford to wait until the land is sold to take advantage of the tax write-off. This would seem to be what this legislation proposes, Mr. February 14, 1975

Chairman, and surely this is not the situation we want to encourage.


John Napier Turner: Mr. Chairman, the hon. member for York-Simcoe has just nodded-giving me permission to say something. The simple answer to the question of the hon. member for Kingston and the Islands is, first of all, whether or not a plan is filed, the expenses incurred after May 6, 1974, are the ones disallowed until the land is brought into development. She is perfectly right in her assumption that once the land is brought into development the carrying charges become expenses calculated against income for taxation purposes.


William James Kempling: I have a couple of brief remarks on clause 7 that I should like to place on the record, Mr. Chairman. With this proposal to discontinue the practice of permitting land developers to deduct the cost of carrying land from income earned in the taxation year, I assume the minister's position is one of not allowing the deduction of the carrying charges it would cost the land developer to bring the land on to the market.
The fact is, however, that it is not the cost of the raw land that is the problem in bringing more land on to the market. This is not the holdup stopping lots for housing coming on the market, and I am sure the minister knows this. The holdup is the red tape at the municipal and provincial level, and the lack of funds for servicing land. It is not true to say in general that land developers are holding back land that would otherwise be developed quickly, in the hope of a rise in prices.
In my view this clause will do nothing to bring land onto the market more quickly; indeed, it may be counterproductive. If developers have to increase their lines of credit with the various banks and places where they get money, that is going to be reflected in the price of land. This provision is, in a sense, inflationary. Maybe the minister will not agree, but if a careful study is made I think we will find it will increase the final price of serviced land and add an extra burden to housing prices and the market in general.
Could the minister tell the House if his department has done an in-depth study on this subject and the income tax laws that, in my view, preclude the deduction of the carrying costs of land pending development, will only increase the overhead expenses of the developer, and which will do little to bring more land onto the market quickly? Has the minister done a real good study of this area, or is it a popular political move?


John Napier Turner: Mr. Chairman, that is almost throwing my motives into question, but I know the hon. member well enough to know that was not his intent. The government has done an in-depth study, particularly the Minister of State for Urban Affairs and CMHC.


Mr. Gilbert:: Last night the hon. member for York-Simcoe got up and pleaded on behalf of developers, and the Minister of Finance quite rightly pointed out that the amendment really does not affect the individual-because the individual in the first place who owns property cannot charge any carrying charges against income-but directs itself to the developer.
Income Tax Act
Then the hon. member for Kingston and the Islands made a careful plea this afternoon on behalf of developers, at the same time saying that the land encircling the large urban areas is owned by five or six big developers. This is the substance of the Dennis report, which quite clearly said that in all the major cities across the country land is controlled on a land banking basis by five or six developers.
The CMHC report, which indicates the CMHC estimates of ten year requirements, and the acreage controlled by six leading developers, shows that in Calgary 7,500 acres are required for the next ten years, and it is all controlled by those six developers. In Montreal, 12,000 acres are required, and of this the six big developers control 3,000 acres. In Toronto the requirement is 19,600 acres, and six developers control 18,000 acres of that. That is the very reason why one of the main components in the high costs of housing is the cost of land.
Let me direct the attention of the hon. member for Kingston and the Islands to the names of the developers in these areas named who control such vast amounts of urban land. In Toronto three films own in excess of 15,000 acres. They are Bramalea Development Corporation, Canadian Equity and Development Corporation, and S. B. McLaughlin Associates Ltd.
Canadian Equity, which owns Don Mills development and the Erin Mills New Town, is controlled by the Cadillac Development Corporation and by the Bronfman (Seagram's) interests. A large shareholder in Bramalea is Eagle Star Insurance, which also holds an interest in another large corporation, Trizee Corporation.


An hon. Member:: When will you deal with developers in B.C.?


John Gilbert: I will come to those in B.C. Other large land holders in the Toronto area are George Wimpey (Canada) Limited, Monarch Construction Limited and Richard Costain (Canada) Limited. All are wholly owned subsidiaries of British building companies.
Another is Markborough Properties Limited, among whose major stockholders are George Wimpey and the Royal Bank. Kaufman and Broad, Inc., a major American developer, recently acquired the prime land holdings of Revenue Properties Limited by having acquired all the shares of its subsidiary, the Victoria Wood Development Corporation.
These are Toronto developers about which the hon. member for York-Simcoe, the hon. member for York Centre, the hon. member for Kingston and the Islands and the hon. member for Halton-Wentworth are so concerned.


Flora Isabel MacDonald: No. The
hon. member is all mixed up.


John Gilbert: Let me draw the attention of the committee to Cadillac Development Corporation Ltd. This corporation is one of the major holders of land in and around the Toronto area. Let me put on record the earnings of the company and the taxes it has paid because some hon. members suggest that we are striking at the small developer. There are few small developers engaged in hous-

February 14, 1975
Income Tax Act
ing development. Cadillac owns over 5,000 acres in metropolitan Toronto. It has a 40 per cent interest in Canadian Equity and is responsible for managing the Erin Mills New Town development. In addition it controls, entirely or in part, some 13,200 residential dwelling units.
Cadillac had net earnings from 1966 to 1971 of approximately $62,968,000. Since Cadillac has been more adept at utilizing the loopholes provided in Canada's tax laws than most other companies, it paid during this period a total of $20,506 in taxes, an infinitesimal amount.
Let me put some more figures on record concerning another developer, Markborough Properties, Ltd., about which the hon. member for Kingston and the Islands and the hon. member for York-Simcoe are so concerned. Mark-borough Properties is developing 3,000 acres north of Toronto in the Mississauga-Streetsville area, to be known as Meadowvale. In addition the company is planning a residential development in Agincourt North, to be called either Brimley Wood or Brimley Forest. Markborough did not pay one cent in income tax to the federal and provincial governments between 1966 and 1970. During this time the company's net earnings were $12.1 million. Is this a small developer who needs our protection?
Large developers can get away with not paying taxes because of large loopholes in existing tax laws. The hon. member for Kingston and the Islands, who has become the spokesman on this topic for the Conservative party, may not be aware of all the tricks of large developers. For example, a developer will set up another company, to which he will charge interest, carrying charges, municipal taxes, and so on; and these amounts are set against profits or income from properties. The result is that the developer incurs little or no liability for taxes. Another result has been that developers have been able to charge higher prices for land.
The Minister of State for Urban Affairs is aware of the problem, and has attempted to make the large developers put some of their land holdings in urban areas on the market.


Sinclair McKnight Stevens: Of course you are laughing when you say that.


John Gilbert: Only if we close tax loopholes which developers like Cadillac, Bramalea, Markborough and all the others have taken advantage of can we bring more of their land on stream. These companies have used tax loopholes which provide for the setting off of carrying charges, municipal taxes, against income and profits to avoid paying taxes.
I approve of this amendment to the Income Tax Act. Land banking is important if we are to bring down the price of land. At present five or six major developers bank land around our major cities. The federal government itself has engaged in land banking, in an effort to bring down the cost of land. It has not succeeded too well; prime land in the major urban areas of the country still remains in the hands of five or six large developers. The provisions of this bill will make sure that these private developers will not keep on doing what they have done for the past ten years.

The Minister of State for Urban Affairs will not achieve his target of 210,000 homes unless we close tax loopholes and force these large companies to sell their properties. If they cannot charge interest and municipal taxes against income, they will not find it profitable to hold on to their properties. No longer will they escape taxes; they will pay tax on profits and income. The Income Tax Act must be so amended if the Minister of State for Urban Affairs is to achieve his goal of 210,000 starts for 1975.
Last night the Minister of Finance said that no private individual, no private home owner, can charge interest paid or municipal taxes against income. Why should these large developers be given an advantage that is not available to the home owner? Eliminating these advantages would result in lower land costs, and this I support. Probably the most significant factor in today's housing costs is the high cost of land; that is why I was mortified to hear the hon. member for Kingston and the Islands, the hon. member for York Centre, and the hon. member for York-Simcoe, talk in support of developers, to the disadvantage of the average Canadian home owner. It is useless talking about a $500 grant for first time home buyers unless we can bring land costs down, and we can only do this by closing tax loopholes. This the Minister of Finance is about to do.
I commend the Minister of Finance for what he has done in this area in Bill C-49. I do not like what he has done with regard to oil corporations but I commend him for what he has done in closing tax loopholes available to land developers. His reasons for so doing are obvious. His officials, and the Minister of State for Urban Affairs, must have told him what is happening around our large cities and how five or six developers control all land. He knows that the federal government must engage in land banking on a massive scale, for only in that way can we bring land prices down across the country.
This being so, I was most surprised to hear the comments of the hon. member for Kingston and the Islands. She is certainly progressive on social issues. However, when it comes to economic issues it would be a retrogressive step on her part to condone the outright pillaging of moneys from ordinary people with regard to the cost of homes. I would think she would assume the basic principle that has been stated so many times by members of her party, and indeed all parties, that housing is a basic human right to be enjoyed by all Canadians. It is their right to have a home at a reasonable cost. If we are to have this as a basic right we have to bring down one of the main components in the high cost of housing. That is the high cost of land. For the hon. member for Kingston and the Islands to make a tearful plea to me on this point is really shocking at this time of the day.


Mr. Cafik:: Mr. Chairman, I had no intention of intervening at this particular stage. I already made my position clear with regard to the subject matter presently being considered.
I share some of the concerns of the hon. member for Kingston and the Islands in terms of the effect of this on small developers. I must say I do not feel that the comments made by the hon. member for Broadview in any
February 14, 1975

way indicate that the position I have taken means I am trying to protect large developers-to the contrary, Mr. Chairman. One of the consequential effects is that this provision will have a tendency to drive out those small developers who do not have the liquidity to be able to go through the long haul and stay in the business of building houses.
It seems to be precisely in the interest of the large developer that this kind of provision ought to go forward because, if the small developer is not allowed to stay in business, this will reduce competition. We will be concentrating more and more on putting the development of housing in this country into the hands of those very people about whom the hon. member for Broadview quite rightly complains.
I share the hon. member's view with regard to the large developers. I also share his view that this particular provision ought to be there in that respect. However, I am disappointed that the Department of Finance has not been able to find a way to make a distinction between the large developer and the small developer who is legitimately trying to develop his land and, not by any lack of goodwill or seriousness about building on his part, is forced, by municipal bylaw into methods of getting approval which result in delays for months and often years before he can proceed with his legitimate development. It is these people I am very much concerned about, Mr. Chairman.
I have had representations from small builders in my constituency and elsewhere who are deeply concerned that they will be adversely affected. If they are adversely affected it will not be in the public interest because competition is a fundamental way of guaranteeing a fair deal for the consumers.
I certainly hope some way will be found to make that kind of distinction between the large corporation and the legitimate small developer who wants to provide homes and perform a useful function in society. In fact he is responsible for a lot of the pressure and competition to keep house prices at reasonable levels.
There is no question that the high cost of land is one of the most fundamental elements in the excessive cost of housing. We have to attack that in many ways. However, that problem largely has to be resolved at the municipal and provincial levels. It is they who place roadblocks in the way of those legitimately trying to develop land. They force the developer to hold land for extended periods of time, at very high costs. That, of course, is ultimately passed on to the consumer.
In my earlier remarks on this subject I mentioned the difficulties involved with impost fees placed on land costs in municipalities. They clearly have an adverse effect on keeping down housing costs.
Getting back to the original point, I am disappointed that to date a way has not been found to make that distinction between the large developer and small legitimate developer who will be adversely affected. It will have a consequential effect on competition in the housing field which does not appear to be in the interests of the consumers of this country.


Sinclair McKnight Stevens: Mr. Chairman, I realize that the hon. member for Broadview could hardly finish his speech
Income Tax Act
without breaking into laughter about some of the facts he was putting on the record, but I take it he must have felt he had some purpose in putting down a lot of misimpressions.
This is not a question of doing something that will seriously affect the large developers in this country. The hon. member for Broadview knows that. If he is concerned about the tax position of some of those companies, he should realize that if this amendment goes through today and becomes law, it is not the big companies that will worry about it. They have sufficient other resources and sufficient write-offs to offset, for many years, whatever will be the tax implications of this clause.
As the hon. member for Ontario stated, it will be the smaller developer who will feel the crunch. It might be helpful if we came down on these lofty, vain figures that have been bandied about, and dealt with a few specifics.
If I understood the hon. member for Broadview correctly, he stated that Central Mortgage and Housing Corporation said there is a need for 19,000 acres of developable land in the Toronto area. And lo and behold, he added up the acreage that belonged to various companies and it came to 18,000 acres. He created the impression that they are the demons. That is totally ridiculous.
The actual fact is that in the Toronto area there are probably one million acres that could potentially be developed. CMHC stated that in their opinion there is an immediate need for 19,000 acres to be brought onto the market.


John Gilbert: No, no, in a ten year period.


Sinclair McKnight Stevens: All right, in a ten year period. My point is that it is a governmental responsibility at all three levels that those 19,000 acres are not being brought on more quickly than in past years. It is the bureaucracy that the NDP caucus and the Trudeau Liberal caucus love so much that is the main impediment to the development of serviced land in this country.
When developers are held up from bringing land into a serviced condition so they can build houses, and cannot charge the expenses of carrying that land against their income, that is only complicating the problem. Let us be specific. The land component of a serviced lot is roughly 50 per cent.
In the Toronto situation lots are commonly selling for $20,000. If a developer is forced to carry land that is worth $10,000 a lot, that means he has to pay roughly $1,000 at 10 per cent interest each year. He has to pay between $400 and $600 on account of taxes. The minister is saying that neither of these items will be chargeable against his income. This means that a man who is in the 25 per cent tax bracket has to pay between $300 and $400 a year. Between $1,500 and $2,000 has been added to the cost of land before a house can be built on it. An hon. member said he might have to sell it to build a house on it. But to whom would he sell it? The municipality is refusing to acquire the land. The Minister of Finance says he doesn't care why he does not develop the land; he insists that a tax be paid notwithstanding the fact that owners are laying out maybe $1,600 a year in direct expenses.
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Income Tax Act
If this type of philosophy were applied by the Department of Finance to business generally it would bring most businesses to a halt. Give the Minister of Finance encouragement and he may pull this kind of a trick on all business.


Mr. Saltsman:: An excellent suggestion.


Sinclair McKnight Stevens: Let us not get our eye off the ball. The net result will be higher prices for homes. There is no way of avoiding it. The minister knows it, and for him to suggest this is chargeable once the lot and the home are sold without revealing that the builder has to add the cost of carrying the $2,000 per lot to the sales price, is not being fair in his presentation. Various developers have been mentioned. As I have already said, the ten largest developers in the country, those the hon. member for Broadview likes to refer to, are building collectively less than 10 per cent of the homes in the entire country.


An hon. Member:: Nonsense.


Sinclair McKnight Stevens: The hon. member says nonsense. He mentioned Cadillac. I should like him to tell us how many homes Cadillac built in the last fiscal year. The total number of homes built by Cadillac was 2,000-2,000 homes in 1973 out of a total of 268,000 built in the nation. I think he would be a little more responsible if he would start talking a few facts instead of conjuring up a lot of ridiculous rubbish for the record in Hansard.
The hon. member for Ontario who says he wishes there were some way to help a small businessman in this development phase. I say there are obvious ways in which he could be helped. For example, why cannot the Minister of Finance say that deductions may be made against income earned by a builder in the process of building homes? These are the people about whom we are talking. What would be wrong with an amendment to make it clear that, whatever his net earnings with regard to these homes, he could charge the carrying cost of the inventory on land against his revenue from the homes he is selling? This would certainly get around the Spadina member's comment last night when he was worrying about his friends with parking lots in downtown Toronto.
The fact is that ultimately a builder needs an inventory, and that inventory has to be backlogged for five years. Surely the carrying costs are properly chargeable expenses against the income the developer is making. Again, if we are anxious that undue profit should not accrue to big developers or companies, let us put a ceiling on it and say that carrying costs are chargeable up to a certain limit only, beyond which they are not deductible.
There are all kinds of ways in which the legislation could be improved if the cold-hearted minister had the will to help the consumer and home buyer in this country.


Mr. Guay (St. Boniface):: Now you have spoiled it all!


Sinclair McKnight Stevens: I believe the committee is disposed to stand clause 7. I should like to propose that the clause be stood and that, before we return to it, the minister should review the position to see whether amendment is possible to ensure that small builders will not be inadvertently

hurt by this provision. If it is designed to catch the speculator, if it is designed to put more land on to the market, let us not act exactly in reverse and simply complicate a problem which the Secretary of State for Urban Affairs is at a loss to deal with already. Let us stand the clause on the understanding that the minister will return to it with an amendment, which hopefully will meet our requests.


Max Saltsman: Mr. Chairman, I do not think this clause should be stood. I am quite prepared to support it because I think it will do some good. I do not see it as constituting a cataclysmic reform. Indeed to some extent I am in sympathy with the position taken by the hon. member for York-Simcoe. While he is being reactionary he is at least being logical. He points out that the entire income tax system is loaded with all sorts of devices whereby losses in one sector can be charged against profits in another.
Shopping centres, for example, have grown and expanded by exploiting taxation policy. They take their losers, the ones they hold on to, the inventory in other words, and write them off against their profitable operations. In this way they get a nice government subsidy for uneconomic expansion. This is what is being done throughout the economy.
Is the existence of such a system an argument for saying, as the hon. member suggests, that the particular proposal in the clause before us should be extended to apply to industry as a whole? Maybe it should. Maybe we should not allow these write-offs. I see the hon. member shaking his head. He is not prepared to be a red tory.
I do not know whether this provision will lower the price of land to the buyer of a home. I doubt very much that it will. I do not think anything we have done to date by way of taxation law has resulted in lowering the price of land to the final purchaser. But this legislation is at least meritorious in that, while we do not know whether the price to the consumer will be lower, it will not increase, and the government will get some revenue it can use to build public housing and correct some of the deficiencies in the housing market that exist today. That in itself is worth doing.
I listened with a great deal of care to the hon. members who talked about the small developer versus the large developer, and suggested we should act rather more kindly toward the small speculator as opposed to the big speculator. What is the difference? Surely a speculator is a speculator; the size does not much matter. The small speculator has just not had the opportunity to shove it into us as much as the big speculator, but he is on his way up, and this legislation is helping to give him a boost so that eventually he will be in the grand category of the big knife. He now is only the little guy and is only ripping us off by a little bit, and according to some he is entitled to some consideration. I would hate to have a lawyer come into court and defend me on that basis.


John Napier Turner: Gilbert would.


Max Saltsman: No, the hon. member for Broadview is an excellent lawyer and his clients are all innocent. I really
February 14, 1975

do not see how you can make any distinction in law or in legislation between the small speculator and the big speculator. If you take a look at the land question you will find that everyone who owns property, no matter how much or how little, is in fact a speculator and gains by any increase in the value of land. There is no one happier in a city like Toronto than those people who own little houses and find the price of land is rising and they benefit enormously overnight. They are not active speculators, but in fact they get the same benefits any other speculator gets.
If you want to go back far enough to find out who the real speculator is, and I am not suggesting that he is unjustified, you will find it is the farmer. He is the man who puts the big price on his land. Mind you, the land passes through a number of hands and the price is exaggerated as it moves on from speculator to speculator. This proposal has another merit in that it will kill some of that speculation, but if it is going to hurt anyone it will hurt the primary speculator. It is not going to be as attractive for one speculator to buy from another speculator and sell to a third speculator, because at every stage there are costs of interest, taxes and such things.
The primary speculator is the farmer who continues to farm the land, or the hobby farmer who buys it from the real farmer and holds the land until the price is right. These people are able to write off all the costs of holding that land. I do not know of any government that is willing to move as far as to cut off this feature, but those are the facts.


John Napier Turner: Is that in your leadership program, Max?


Max Saltsman: No, I do not think even I would be prepared to go that far. I am daring up to a point, but I am not prepared to ignore every bit of wisdom in this society. I might say that I can get into enough trouble on this question without any advice from the other side.


Donald W. Munro: You are doing pretty well.


Max Saltsman: I am doing well. It seems to me that when we are debating something as important as this we should have some straightforward arguments without a lot of bleeding all over the place for the small speculator, as if there were something particularly noble about what he is doing as opposed to what the large corporations are doing. They are both engaged in the same nasty business of getting everything they can for themselves by holding land for as long as possible, and writing off all the costs against the land in order to make a big gain. I think we have to stop that, to whatever extent possible.
There are those who suggest that perhaps the guilty people in this whole business of land speculation and rising house prices are the municipalities. They may be correct. Perhaps the municipalities are the guilty ones in that they encourage these groups to develop lands in their areas, even though these groups take the attitude that the land is theirs and no one must trespass. In any event that is what we are dealing with, and in this legislation the very least we can do is make sure that the government gets some revenue with which, hopefully, it will be able to
Income Tax Act
carry out some progressive measures in the form of public subsidized housing for those at the lower income level.


Mr. Baker (Grenville-Carleton):: Mr. Chairman, I understood that the minister was prepared to stand this clause.


John Napier Turner: We have the resources portion in there too and we cannot split them.


Walter David Baker: I do not think there would be any difficulty in that regard from our point of view. I see they are having a little discussion over in the NDP.
I stood up to say one or two things about this particular portion of the bill. Just a few minutes ago the hon. member for Waterloo-Cambridge said he did not believe this particular change would do anything toward lowering the price of homes. I suppose he is right, it is not going to lower the price of homes. In fact I suggest it will increase the price of homes. I wonder where these people get the idea that the cost of servicing a property, the cost of building a home, the cost of owning it and the cost of owning the land before it is developed-or after-the cost of holding the land in inventory, and the cost of municipal taxes and all these other things before the house goes on the market, are to be paid by someone other than the eventual owner?
Just like the cost of the linen that hangs in this chamber these costs are going to come out of the pockets of the taxpayer who eventually buys the house. The difficulty, of course, is that the more you load on to the cost of a single family home, the more you load on to the cost of a condominium or an apartment, the higher is the price to the eventual purchaser. All these carrying charges and other costs related to the property, whether a single family home or a condominium, will be paid by the purchaser. All these costs, including maintenance and whatever else required, will be added into the cost to some poor man or woman who wants to buy a home.
The whole object of this, from our point of view, is to get the minister to reconsider this. We are not a bunch of national bleeders like the NDP. We are putting a reasonable proposition to the minister which we think will decrease the rate of escalation in the price of real estate, with the hope that somehow it will level out, Mr. Chairman. We are not suggesting this will lower the price or will end the general increase.
The federal government's program to finance sewage treatment plants and their extension, and storm drainage systems, is aimed at lowering the cost of homes and housing. The proposal we put forward represents one thing we can do here to slow down the rate of increase.
Some hon. members have suggested that this measure will result in the movement of land. Some people believe this will force the movement of land from one person to another, and thus to the ultimate owner. Of course it does not encourage that. What it really does is encourage the movement of land from one speculator to another speculator as the cost of carrying that land increases, and as the impediments get greater. We all admit there are impediments to development. What we should be concerned with is the fact that this land is merely moved from one speculator to another, and there are no two ways about
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that. There are some bete noires in our land development areas where the movement of land is slow. These people have been unresponsive to the housing need in their areas. They have had legitimate pressures on them with regard to the slowness and unresponsiveness of the neighbourhood groups that the hon. member was referring to and the person who, after all, in a democracy has the right to express himself. But I do not believe that we should contribute to the tax laws, to the back-up behind the dam, with respect to the availability of land, but more particularly with respect to its cost. That is exactly what this provision will do if it is allowed to stand.
If it is the wish of anyone to accuse the municipalities of being slow, whether or not the accusation is justified-and I think that in some cases it is-if it is their wish to accuse some provinces in this country of being slow with respect to the land development policies-and some parties tend to do that, not for any noble purpose but for a political purpose which I could only call crass and unworthy of them-then rather than having the Minister of Finance cause further difficulties in this whole dreadful field of housing with this legislation, the Minister of State for Urban Affairs should look into the matter. Those in this House who are accusers of other jurisdictions should go to the Minister of State for Urban Affairs and say to him: "Your job, Sir, is basically to provide financing for municipalities and provinces. Your job is not to deal with money markets so that your policies will sustain high interest rates; your job is to urge the provincial governments to modify their laws where they are wrong, change their procedures where they are inadequate, and coordinate their housing policies with those of the Minister of Finance so that nothing is done to slow them up". If there is some way that you can open that gate, then there may be some justification for using the tax laws of this country to do this.
The tax laws of this country should do nothing to exacerbate the problem which faces our country in terms of housing. I think it would be well for all of us to take a serious look at this matter and not have a knee-jerk reaction to big developers and small developers as if there were something wrong with making profit.
This country was not built by governments. Many needs have not been met by governments; many needs have been met because entrepreneurs have decided to go into a particular field and make a legitimate profit. If there is some reason for attacking profits, let the government stand up and look the profiteer in the eye. But let us not use the tax legislation to do indirectly what the government does not seem to have the courage to do directly, if in fact there is profiteering. It is no good trotting out the catechism every now and again and saying that all corporations and all businesses are bad, because that is not so. It is a dishonest argument. Some of them are bad, and I would be prepared to admit it, but those should be dealt with directly. In a field where there is a real social need, surely the federal government should not put a stumbling block with its left hand in the way of what it is trying to do with its right hand.
The Minister of State for Urban Affairs is making a lot of noise as he goes from place to place talking about

increasing the supply of homes; at least, he is pointing in the right direction. But whether he is using the right shoes to get there is a question that you and I could debate from now until the cows come home. The problem is that the Minister of Finance is impeding the efforts of the Minister of State for Urban Affairs with regard to housing. So I ask the minister to consider whether this is not a rare opportunity for the two ministers to get together and start to kick with the same foot, or be in track, as some people say.
If we do stand this clause, I hope the minister will consider this suggestion from the point of view of price and input into the cost structure of owning, acquiring and renting accommodation for Canadians in this country.


John Gilbert: Mr. Chairman, before we stand this clause I would like to reply to the statement of the hon. member for York-Simcoe with regard to the building record of Cadillac last year. It is probably true that they built the number of units mentioned by the hon. member, but that does not mean they kept this up. They probably took a rest. They are very clever with regard to controlling their inventory, and if it is not to their advantage to build, they do not build. In fact, they held off last year.
The more important thing is to make a distinction between land developers and home builders, and I was surprised at the hon. member for Ontario who did not make the distinction. He thinks that there are big developers and small developers. Let me tell the hon. member that there are no big developers and small developers. There are big developers and small builders, and the small builders who build the homes have to go to the big developers to get the lots, and then they pay the highest possible price that the developer demands. This is the problem.
The day of the small builder holding land is gone, and, as the hon. member for Kingston and the Islands said, the CMHC survey indicates that in the main cities five or six land developers control the land. What happens is that the small builders, and there are very few of them left, have to go to the big land developer to get the property and they pay the highest possible price.
That is why I was really surprised that the hon. member for Ontario was taken in by the simplistic argument of the hon. member for York-Simcoe. The day of the big land developers is with us. They have control of the land surrounding the cities. They are the ones who have the great advantage of tax loopholes and who have been able to write off the land cost against their incomes. We have had a record of at least ten years of that.
When the hon. member for Grenville-Carleton says that the NDP is a party of national bleeders, then I say that any person who protects the developers is a financial squeezer. He is just protecting the financial squeezers, and I am really surprised that the hon. member for Grenville-Carleton would be taken in by that. I am doubly surprised by the hon. member for Ontario, because his is the government that is trying to bring in certain measures to release land on to the market and to reduce the sales tax on building materials. Do you know, Mr. Chairman, what we had to do? We had to set up a monitoring committee. In fact, I do not even know if it has been set up as yet. It was to be made up of representatives of the Ministry of State for Urban Affairs and the Department of Consumer and
February 14, 1975

Corporate Affairs to make sure that these builders have passed on to purchasers the reduction in the sales tax. That indicates the confidence that the government has with regard to builders. The builders never passed it on with regard to land and they will not pass it on with regard to building materials. When I hear the hon. member for York-Simcoe pleading for the developers and trying to make a distinction between the large developers and the small developers, it makes me laugh.


Sinclair McKnight Stevens: Mr. Chairman, as I indicated earlier, I would like to make some progress here. If it is the will of the committee of the whole, perhaps we could stand this entire clause. Before doing so, it may be helpful if the minister could clarify two points. I wonder if he can tell us what his estimated revenue from this tax will be; and second, does he agree that in the case of an apartment developer this tax is something which the apartment developer will have to live with and will have to include in his over-all cost of the rental accommodation until such time as he may resell the property? In short, most apartment developments are built and rented, the net result being that this cost is something the developer cannot recover other than out of rent, and this cost will be instrumental in increasing that rental level due to the fact that the tax must be covered by the apartment developer in some way.


John Napier Turner: Mr. Chairman, the estimate on the revenue was set forth in the budget speech and in the documents at $25 million.


Sinclair McKnight Stevens: Mr. Chairman, can the minister answer my second question? Does he agree that in the case of apartments this is a charge which will not be recoverable by the developer until he actually sells the apartment building? In the meantime, presumably, it is going to have to be covered out of additional rent.


John Napier Turner: The hon. member is right when he says that the charge is only recoverable as an additional charge; but that is only one of the costs calculated in rent, and setting rent is a complicated business, as the hon. gentleman and his friends know.


Gérald Laniel: Shall clause 7 carry?


Some hon. Members:: Stand.


John Napier Turner: Stand clause 7, Mr. Chairman, and perhaps we could move to clause 8.


Gérald Laniel: Does the committee agree that clause 7 shall stand?


Some hon. Members:: Agreed.
Clause 7 stands.
On clause 8.
Income Tax Act


John Napier Turner: I have a minor technical amendment because of a typographical error, which adds the word "the" before the word "business" at line 4 on page 24. I therefore move:
That clause 8 of Bill C-49 be amended by striking out line 4 on page 24 and substituting the following:
"not carry on the business in Canada."


Stanley Howard Knowles: Are you sure it was typographical? They always blame the printer.


Sinclair McKnight Stevens: Mr. Chairman, I was wondering if the minister could give a brief explanation as to why he felt it necessary in subclause (1) to change "receivable" to "due" in that, as I would understand those two words, receivable is certainly a more limiting concept than referring to something as being due.


John Napier Turner: The use of the word "receivable" in the old section did not cover those receivables which, although due, were not actually received. The reserve is meant to be claimable for amounts which, although receivable by the vendor in the year, are not actually received until the subsequent year.


Gérald Laniel: Order, please. I think that we should deal with the amendment first. Shall the amendment carry?


Some hon. Members:: Agreed.
Amendment (Mr. Turner (Ottawa-Carleton)) agreed to.
Clause 8, as amended, agreed to.
On clause 9.


John Napier Turner: This whole clause is a consequential amendment anyway, but I have a technical and relieving amendment to the clause adding the words: "or the acquisition of property" in lines 27 to 29 on page 24. Without these words the interest expense on money borrowed to acquire resource property could not be added to the exploration and development expense account. Consequently a deduction is now available for this interest expense. I move:
That clause 9 of Bill C-49 be amended by striking out lines 27 to 29 on page 24 and substituting the following:
"purpose of exploration or development or the acquisition of property and the expenses incurred by him in respect of exploration or development or the acquisition of property."


Marcel Joseph Aimé Lambert: I am a little concerned, Mr. Chairman. Already the people in the business of oil development have expressed their feeling that there is going to be a difficulty. There is going to be a fuzziness because of the difficulty of determining exactly what is what. The minister is building up some problems for himself in determinating the allocation of the cost. With the greatest respect, I ask the minister to stand this clause because I think it is one that we want to look at in the total picture of royalties and exploration and development expenses-the treatment of the oil and gas industry.


John Napier Turner: I would agree with that. Would the hon. gentleman agree to pass the amendment to the clause?


Marcel Joseph Aimé Lambert: Yes.

February 14, 1975
Income Tax Act


John Napier Turner: Shall we pass the amendment to the clause and stand the clause?


Gérald Laniel: Shall the amendment carry?


Some hon. Members:: Carried.
Amendment (Mr. Turner (Ottawa-Carleton)) agreed to.


Gérald Laniel: Is it agreed that we stand clause 9, as amended?


Some hon. Members:: Agreed.
Clause 9 stands.
Clauses 10 and 11 agreed to.
On clause 12.


John Napier Turner: I have a technical amendment here to correct the French translation to correspond with the English.

I move that clause 12 of the French version of Bill C-49 be amended by striking out line 15 on page 26 and substituting the following:
. . . vente de biens immeubles,...


Gérald Laniel: Shall the amendment carry?


Some hon. Members:: Agreed.


[Stage Direction]
Amendment agreed to.
Sinclair McKnight Stevens: Mr. Chairman, this clause is a very important clause which deals with a very large subject, and I feel it would be helpful if the minister could give us a little detail concerning the implication of the clause and the full impact of the measure he is proposing.


John Napier Turner: I set that out fully in the budget speech, but I will be glad to address myself to it again now. The clause proposes to reduce the maximum amount of a reserve which may be deducted by trust companies and other lenders of money, and to include in the assets eligibility for the reserve bonds and debentures held in the guaranteed fund of trust companies. There is a technical amendment in the clause to replace the words "principal amount by amortized cost." Subsection (3) of the present tax act permits reduction of the reserve to the extent of IV2 per cent specified assets of trust companies and other money lenders. The amendment will leave the maximum rate of the reserve at 1V2 per cent for the first $2 billion of specified assets but will restrict the rate to 1 per cent of the remainder of the specified assets.
Mind you, Mr. Chairman, a similar amount is being applied to the reserve which may be made by life insurers and by banks and credit unions under the act and the income tax regulations. Consequently all similar financial institutions will be depleted similarly with respect to these reserves. That is the purpose of it. I think I should note that the only financial institutions which at present have specified assets in excess of $2 billion specifically covered by this amendment will be the six largest banks.


Sinclair McKnight Stevens: Am I correct in stating that this is something only in reference to mortgages and related securities and that there is a different standard with regard to lending activities by chartered banks?


John Napier Turner: No, Mr. Chairman, we are talking about the reserve of the institutions that can be set aside for tax purposes as against the value, for tax purposes, of their assets. We are lowering the amount of reserves in those institutions to 1 per cent for that amount of reserve over $2 billion.


Sinclair McKnight Stevens: Is this new standard something that will be applicable to the general lending activity of the chartered banks? I am not talking about debentures or mortgages, but the ordinary commercial consumer business lending of the chartered banks.


John Napier Turner: It is not a new provision. There is a present limit on the reserves for tax purposes of IV2 per cent that is built up against all liabilities of the institution. We feel that based on the experience of the last generation of our banks the reserve is high enough to bring some of that back into tax. We are suggesting, though, that the first $2 billion be protected by the 11/2 per cent, but when they reach over that we lower the percentage from 1 Vi per cent to 1 per cent.


Sinclair McKnight Stevens: Can the minister give an estimate of the amount of revenue he anticipates being generated as a result of the change?


John Napier Turner: Mr. Chairman, that is in the supplementary information to the budget filed in the House; it is $45 million.


Marcel Joseph Aimé Lambert: This is a once in a lifetime operation; it is a windfall because of the change in the tax. I am not too sure that the arguments are strong one way or another on it. We know that banking assets have gone up because of inflation, and naturally the reserves have gove up. We know that in certain bank stocks there may have been some losses tucked away against those reserves, but I am not too sure that the picture is entirely the same as it was last year.
There is one area that still puzzles me, Mr. Chairman, and that is why the minister and his advisers moved in on the life insurance companies. We know that the major life insurance companies are mutuals and their shareholdings are owned by policy holders. Every amount of tax is going to be a diminution of benefit under an insurance policy in some way or other. It is not there as a profit for somebody who is going to benefit as a result of the operations of the insurance company on behalf of others.
The Canadian life insurance companies are all mutuals; certainly the major ones are. Even when they started taxing the earnings that are applied toward policies-I suppose this was three or four years ago-the result was an increase in the premiums or a decline in the dividends that accrued toward the policies. I think this thing is self-defeating. Why does the minister feel that he has to move in on Canada's mutual life insurance companies? As the hon. member for Grenville-Carleton said, with the left
February 14, 1975

hand the government is doing something which absolutely stultifies what it is trying to do with the right hand. The government encourages people to save, and one of the major ways of saving is life insurance; one of the major investors in residential mortgages and other types of financing is Canada's insurance companies. But the minister turns around-although his predecessor was the first to do it-and whips off the revenue. What justification is there for this? As far as I am concerned, if I have to pay $10 or $5 more per thousand for insurance as a result of this action, there is no incentive to save, and this is because of taxation. I think this provision is counterproductive and I wonder why it was included.
As far as other insurance companies in Canada are concerned, we know that they had a $200 million loss last year. That was the shortfall between damage claims paid out and premium revenues plus the earned income on prepaid premiums. One of these days the minister is going to have to look at the insurance industry to see how healthy it is, because they cannot stand those losses any more.


Max Saltsman: Mr. Chairman, I should like to rise in support of the question raised by the hon. member for Edmonton West, if not the answer he received. I notice the minister was sort of shaking his head.


John Napier Turner: Because you come from Waterloo.


Max Saltsman: The hon. member for Edmonton West made an excellent point. The Minister of Finance seems to be playing a curious shell game-taking away from one group of savers and bringing another group of savers into the picture. In one clause we will be asked to consider registered retirement savings plan benefits and home ownership plan benefits. The minister's surveys must have indicated that here is another group of suckers ready to be enticed at some point. The idea is that you take away from one group that is already with you and say to another group "Look at the benefits we are giving you". The result does not increase the pool of savings, however, but merely transfers benefits from one kind of investor to another.
That is a curious policy and as far as I can see it is ineffectual. Whatever this party's feelings about mutual and life insurance companies may be, in fact they are primary investors in mortgages and, thus, housing. If we are trying to stimulate housing it makes no sense to take benefits away from that group and give them to another.
In every budget the minister points out how many hundreds of thousands of people have been removed from the tax rolls. Yet every year we have more and more people on the tax rolls. If you total the nurtfbers of people he claims to have removed from the rolls over the last four years, it would mean that nobody in Canada would be paying any tax.
I think this is a good question, Mr. Chairman, and I would like to hear the minister give his rationale for encouraging one group to save as against another.


John Napier Turner: Mr. Chairman, I want to say to the hon. gentleman that I do not mind him wanting to go into the insurance aspect since he repre-
Income Tax Act
sents Waterloo. I am sure it is incidental that his views on that subject are different from views he expressed earlier on real estate.


Max Saltsman: On a point of order, Madam Chairman, I am sure the minister means what he says but, like many others, he sees two facts and jumps to three conclusions. There are a number of insurance companies in my riding and, although I do not think they contributed to my campaign or support me, I do represent them. Sometimes they criticize me. Let me say, however, that shortly before coming to the House I received a brief from the local real estate investors in my constituency. These constituents have a right to be represented and heard as well.


John Napier Turner: Madam Chairman, I was not trying to suggest otherwise. I am glad to hear the hon. member's explanation. There is nothing wrong with representing constituents; he was elected to do just that. We are talking about reserves for losses, which have nothing to do with the rate of premiums or the costs of the companies. You decide in any business what is a legitimate reserve to put against losses, and you do it on the basis of your experience in that institution. You allow for reserves, and for the imposition of taxes on money so reserved. We are not talking about a great variation in the percentages. The amount concerned is about $2 billion. We are cutting the rate back from 1.5 per cent to 1 per cent. This is not a big deal. It does not interfere with the cost of doing business and does not affect insurance companies in this country which do not have assets of $2 billion. This affects only the six largest banks.


Sinclair McKnight Stevens: Madam Chairman, does this provision deal solely with mortgage reserves?


John Napier Turner: No, with total reserves of the company.


Sinclair McKnight Stevens: Did the minister wish to say something?


John Napier Turner: No, Madam Chairman.


Sinclair McKnight Stevens: I understand that chartered banks have a second formula for calculating their reserves on general loans which are not secured by mortgages or similar types of real estate security. I am asking the minister to compare the formula governing the general lending activity of banks with the new formula which he is proposing for mortgage reserves.


John Napier Turner: Madam Chairman, there is no new formula. As I indicated, we are lowering the rate from 1.5 per cent to 1 per cent, which would involve about $2 billion.
Clause, as amended agreed to.
On clause 13.


John Napier Turner: Madam Chairman, I wish to move a technical amendment to this clause, which would make the applicable date after May 6, and not May 6, 1974.1 move:
That clause 13 of Bill C-49 be amended by striking out line 16 on page 28 and substituting the following:

February 14, 1975
Income Tax Act
(2) This section is applicable after
Amendment (Mr. Turner (Ottawa-Carleton)) agreed to.
Clause, as amended, agreed to.
On clause 14.


Max Saltsman: Madam Chairman, what is the rationale behind allowing scientific work done by a corporation to be deducted in the year of its choice? Presumably the deduction will be made in the year when it is most profitable. Section 37 of the Income Tax Act already confers substantial benefits on those doing scientific research in Canada. Do the representatives of the industry suggest to the minister that the present generous provisions are not enough? Is that why he has improved write-off provisions? Also, will the minister tell us what are the safeguards in this bill? How can we make sure that the benefits of scientific research expenditure, which should accrue to the benefit of the people of this country, do not accrue to the people of other countries?


John Napier Turner: Madam Chairman, this provision seeks to lengthen the period in which expenditures for scientific research can be claimed. Say, for instance, the hon. member and I went into business as equal partners and decided to spend $100,000 on scientific research. If, in the next two years, we did not make much profit, we could find that the limited period in which research expenditures could be claimed would deprive us of our ability to deduct an adequate amount. In other words, it has been found that the short period in which expenditures can be claimed has discouraged research expenditures. If the hon. gentleman and I could claim research expenditures over five or ten years, we should probably take more risks and spend more on scientific research. I think he and I agree that such activity is in our national interest. That is the purpose of this provision.
What is the guarantee? First, the activity must be certified by the Department of Industry, Trade and Commerce. Section 37(3) of the statute now reads:
The minister may obtain the advice of the Department of Industry, Trade and Commerce, the National Research Council of Canada, the Defence Research Board or any other agency or department of the government of Canada carrying on activities in the field of scientific research as to whether any particular activity constitutes scientific research.
The Minister of National Revenue reinforces the importance of the certificate.


Max Saltsman: Madam Chairman, I want to know what guarantees there are that scientific research done in Canada would be of benefit to Canada. I do not doubt that research must be certified as being scientific research; the fact remains that this research is largely done by international corporations. How can we be sure that scientific research done in this country is for the benefit of Canadians, and will not be transferred to the head offices of foreign companies?


John Napier Turner: Madam Chairman, section 37(2) of the act deals with that point. It says in part:
There may be deducted in computing the income for a taxation year of a taxpayer who carried on business in Canada and made expenditures in the year in respect of scientific research carried on outside Canada, all such expenditures of a current nature made in the year

(a)	on scientific research related to the business and directly undertaken by or on behalf of the taxpayer;. . .
In other words, a Canadian subsidiary can contract with a parent in the United States to do research directly related to the subsidiary's work in Canada. I continue:
(b)	by payments to an approved association, university, college, research institute or other similar institution to be used for scientific research related to the class of business of the taxpayer.


Max Saltsman: I appreciate the minister reading these sections, but what guarantee is there that we are encouraging research which will accrue to our national interest? We take care of the national interest in other legislation. For example, the foreign investment review bill has laid down criteria having to do with whether the proposed take-over is in the national interest. Let us be certain research accrues to the benefit of Canada. Consider the matter of patents. Hardly any patents are taken out in this country. New discoveries have been made, and, where a patent has been taken out, it has been taken out by the head office of an international company, which gets the benefit. I realize that this is hardly the time for a fight about guarantees, but we must make sure that our tax system provides for the benefits of research to accrue to Canadians.
Nevertheless, it is important to make this point and to point out the inadequacy of this provision, particularly when the minister is increasing the benefit substantially to these companies through clause 14. Under these circumstances, the government has a responsibility to start designing legislation that will assure the House that the money being expended will accrue to this country.
I have one other question for the minister. Looking at the clause, it appears the minister is allowing the companies to capitalize their expenditures by permitting them to carry them out over a number of years or choose a particular year in which they can be written off against investment. This is a form of capitalizing expenditures in the same way that machinery is capitalized over an extended period of time. Normally, anything considered an expense has to be written off in the year it occurred.
Since this provision has this element of capitalization, and since the minister's objective is to improve the incentives for scientific research in Canada, why not simply go to a capitalization approach rather than this very awkward and involved method?


John Napier Turner: Because you cannot write off a capital asset in one year. You are then stuck by whatever the depreciation clause is. Here the businessman has the optioil of writing it off in one year or over several years, depending on his profit picture against which he can write off an expense. We are giving him the option. If we were to capitalize it, he would be caught with the depreciating rate on a diminishing balance, depending on the class of expense. We are doing a little better for him this way.


The Assistant Deputy Chairman:: Shall clause 14 carry?


Some hon. Members:: Carried.
February 14, 1975


[Stage Direction]
Clause agreed to.
Clauses 15 to 17 inclusive agreed to.
On clause 18.
John Napier Turner: Madam Chairman, I have another correction to the French translation to correspond with the English. I move:
That clause 18 of the French version of Bill C-49 be amended by striking out line 42 on page 32.
Amendment (Mr. Turner (Ottawa-Carleton)) agreed to.
Clause, as amended, agreed to.
Clauses 19 and 20 agreed to.
On clause 21.


John Napier Turner: Madam Chairman, we introduced a technical amendment at lines 43 and 44 on page 34 clarifying the coming into force of the amendments to Section 49(2).
That clause 21 of Bill C-49 be amended by striking out lines 43 and 44 on page 34 and substituting the following:
"(3) Subsection (1) is applicable after May 6, 1974 and"
Amendment (Mr. Turner (Ottawa-Carleton)) agreed to.
Clause, as amended, agreed to.
Clause 22 agreed to.
On clause 23.


Donald W. Munro: Madam Chairman, I am not sure whether this is the place to raise this question. I do so for the purpose of clarification. I have a number of questions to ask about the difference between the actual amount of dividends and the taxable amount. In clause 23 there is reference to property "other than property acquired" subsequent to so-and-so. Is this the correct place to raise this matter or should it more properly be raised under clause 70? If so, I will defer my remarks until we reach clause 70.


John Napier Turner: Madam Chairman, this clause deals with technical amendments concerning stock dividends. I will undertake to give the hon. member the right to speak on clause 70, if it is relevant there, or try to find a place for him to introduce this.


[Stage Direction]
Clause agreed to.
On clause 24.
John Napier Turner: Madam Chairman, I have an amendment to clause 24. This amendment at line 38 on page 37 merely corrects a reference. I move:
That clause 24 of Bill C-49 be amended
(a)	by striking out line 38 on page 37 and substituting the following: ''paragraph 59(2) (d) or (e)"
and
(b)	by striking out line 45 of the French version on page 41 and
substituting the following:
"(ii) des frais d'exploration, ou"
Amendment (Mr. Turner (Ottawa-Carleton)) agreed to.
Clause, as amended, agreed to.
On clause 25.
Income Tax Act


John Napier Turner: Madam Chairman, I have another technical amendment at lines 7 and 8 on page 46, changing the application date from 1974 to read "1972". There is no change in policy here from the proposal in Bill C-49.1 move:
That clause 25 of Bill C-49 be amended by striking out lines 7 and 8 on page 46 and substituting the following:
"(5) Subsection (1) is applicable to the 1974 and subsequent taxation years, subsection (2) is applicable the 1972 and subsequent taxation years."
Amendment (Mr. Turner (Ottawa-Carleton)) agreed to.


John Gilbert: Madam Chairman, I would like the minister to give us an explanation of the registered home savings plan which is part of this clause. The way I read it, at the moment persons can claim up to $1,000 a year to a total of $10,000.


John Napier Turner: That is not where it is. Mr. Gilbert: Is that not the one?


John Napier Turner: No.


John Gilbert: I will accept the explanation of the minister with the right to speak on it at the proper time.


John Napier Turner: Keep your eyes open. You are not in the right spot now.
Clause, as amended, agreed to.
On clause 26.


Marcel Joseph Aimé Lambert: This clause deals with a new principle. It is a question of property, personal property and eligible capital property. Then there is the question dealing with the principal residence.


John Napier Turner: I think I can explain that.


Marcel Joseph Aimé Lambert: I want to make sure that in this particular instance we are not introducing through a wedge in the door taxation of the principal residence. I know it deals with exchange.


John Napier Turner: Madam Chairman, this is a relieving amendment to extend the period of time during which an individual may be absent from his residence and still retain full exemption on its disposal. There are Canadians who work abroad in foreign based companies, foreign based service offices and armed personnel. As a matter of fact, the need for this amendment was drawn to my attention during the 1972 general election.


Robert Lorne Stanfield: You learned quite a bit during that election.


John Napier Turner: I learned a lot during the campaign. I learn something every time I go out and meet people in my constituency. Since the Leader of the Opposition lives there, I will be glad to take him around and introduce him to some of the people in my constituency. I am sure we will both learn something.

February 14, 1975
Income Tax Act
The need for this amendment was drawn to my attention by an armed services officer, who complained that under the statute as it now exists he had been abroad so long in the service of the country that he would be subject to a capital gains tax when he got back. This extends the four year restriction period to cover situations where an individual moves in the course of his employment.


Marcel Joseph Aimé Lambert: I was hoping the minister would extend the interpretation to foreign service officers or members of the armed forces who rent their homes while abroad on duty, who on their return are posted to another part of the country and dispose of their homes without re-entering them. This is an area which has not been covered by the amendment. I think such taxpayers should be protected from the imposition of the capital gains tax since there has been an involuntary abandonment of a technical residence.


John Napier Turner: I do not know how we would police the other step the hon. member suggests. I think we should take this step first. If a person returned from foreign service and sold the house while he was still a resident of Canada, he would qualify. If he lived in it for one day he would be all right.


Marcel Joseph Aimé Lambert: That might cost a lot of money.


John Napier Turner: It would depend on how much the home was worth.


[Stage Direction]
Clause agreed to.
On Clause 27.
Sinclair McKnight Stevens: This is a clause which touches on the tanning industry and the production of leather footwear. Since this industry has found itself in unfortunate straits, can the minister explain why he feels it is necessary to add this new burden of taxation to those who are employed in the industry? Can he tell us how many employees will be affected and what the estimated gross revenue to the treasury will be?


John Napier Turner: We do not have those figures. I would point out that income from adjustment assistance benefits, being revenue, is taxable in the same way as, for example, unemployment insurance benefits are taxable. It applies to those who work in the clothing and textile industry, just as it applies to those who work in the auto industry, or the auto parts industry, for example.


Sinclair McKnight Stevens: Is there no way to streamline this procedure? Why should it be necessary for one department of government to make grants and for another department to turn around and tax them? I realize this is all in accordance with a beautiful civil service dream-to make grants which appear to be beneficial on the surface and then to pull the money back by way of taxation. It is not enough for the minister to say he is now including the leather tanning industry and the footwear industry simply because others are affected. That is missing the whole point. Why should it be necessary to continue this complex formula of making grants and then recovering them
through taxes, especially when we consider that this is a depressed industry which has suffered terribly as a result of the importation of foreign goods in this field due to the approach taken by the Department of Industry, Trade and Commerce?


John Napier Turner: The act takes into account all sources of income including adjustment assistance benefits, Canada Pension Plan payments, unemployment insurance, scholarships, bursaries and so on. You name it.


Sinclair McKnight Stevens: Do I take it from the minister's comments that the government is not even giving consideration to the possibility of a streamlining process in this area, even when it involves workers in a depressed industry?


John Napier Turner: We are always ready to adopt new methods which appear to be an improvement on the old.


[Stage Direction]
Clause agreed to.
On Clause 28.
Marcel Joseph Aimé Lambert: Something is being done here with regard to maintenance payments. There are real inequities here under the law. Initially, there was a decree, an order or a judgment. Now I see there is reference to a written agreement. I am glad to see that improvement. It seems to me that such orders shall provide for the maintenance of minor children; it is exceedingly hard on the caring spouse to tax such money as income. I realize it can be said that the spouse, if she is in a taxable position, can claim the children as hers, but in effect the benefit goes to the paying husband, or vice versa.
I should like to see some relief for the woman who is separated or divorced from her husband and looking after the children, one who is not able to get the child-care allowance because she is not working. Under the income tax act we blithely tax her on the total amount she receives, including what is paid for the care of the children, and in too many instances that amount is far less than it really costs to maintain children. I should like to bring a degree of realism to this picture so that their position could be alleviated.


John Napier Turner: Clause 28 is consequential upon clause 31. We allow a taxpayer to deduct maintenance; we are just talking about deductibility here, the deductibility of an alimony payment. At the moment it can only be deducted if it is paid directly to the other spouse. Now we are extending the deductibility if payment is made to a third person for the benefit of the spouse or the children; for example, to a university for education, to a mortgage company, etc. This is a relieving amendment and I do not think the hon. member will quarrel with it.


Walter David Baker: This question of the written agreement has always caused a lot of trouble. I suppose this is being done by the department for the purpose of control. Has the department taken a look to see if there is some other way this can be done? I would say as


a practising lawyer that this used to cause a great deal of difficulty.


John Napier Turner: I think it is very useful that the hon. gentleman keeps in touch with the law. He may need it again, one never knows, and that goes for all of us, including my parliamentary secretary and myself. The Department of National Revenue needs some sort of evidence of separation unless it is reduced to some form of writing. At one time they had to do it by decree, but the hon. member knows that we extended that a few years ago.


Walter David Baker: Yes, it has been broadened.


Stanley Howard Knowles: Four o'clock.


John Napier Turner: Perhaps we could pass clause 28 as we can deal with the same subject under clause 31.


[Stage Direction]
Clause agreed to.
Sinclair McKnight Stevens: Madam Chairman, I rise on a question of privilege. I believe the minister unintentionally misinformed the House in respect of clause 12. I was wondering if he would review his answers to some of my questions so that perhaps we could have a clarification on Tuesday. I was simply asking about the difference between two types of reserves and I do not believe the answer was clear. It seems that really there was a slight misleading in the answer we got from the minister.


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


The Acting Speaker (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.


Mr. liefebvre:: Madam Speaker, I think you will find there is a general agreement to take private members' notice No. 18 standing in the name of the hon. member for St. John's East (Mr. McGrath).


The Acting Speaker (Mrs. Morin):: Is that agreed, and that the other motions will stand?


Some hon. Members:: Agreed.
Fisheries



PRIVATE MEMBERS' NOTICES OF MOTIONS


James Aloysius McGrath: That, in the opinion of this House, the government should consider the advisability of bringing in legislation to amend the Government Organization Act providing for a separate Department of Fisheries.
He said: Madam Speaker, as a result of the amendment to the Government Organization Act passed by this House early in 1971 Canada has no department of fisheries. Up to that time a separate department of fisheries had existed in this country going back to the time of Confederation. And rightly so, Madam Speaker, because not only back in the early days of the history of our country, but right up to the present time, the fishing industry has assumed an important place in the over-all economy of our country and, more particularly, in the economy of the Atlantic provinces of Canada, the eastern portion of the province of Quebec and the Pacific coast.
As a result of the Government Organization Act amendment in 1971, what was known as the department of fisheries was merged with the new Department of the Environment. That department assumed as well responsibilities in a number of other areas of concern and for a number of other statutes which up to that time had been the responsibility of other departments of government, such as the Department of Transport and the Department of Energy, Mines and Resources, just to mention two.
We opposed that aspect of the Government Organization Act because we felt, and put forward arguments in support of that feeling, that as a result of the merging of the responsibilities of fisheries with those of another department, which would have other responsibilities as well, this would diminish the relative importance of the fishing industry in the over-all governmental structure in Canada. This was especially true at a time when the fishing industry was facing very serious problems arising from the development of new technology which made it possible to harvest large quantities of fish never before possible, and at a time when it suddenly appeared that the great infinite fishing potential of the northwest Atlantic was threatened with virtual extinction. I might say that subsequent events have proven that our fears were well founded.
To illustrate the importance of fisheries and the need for a separate department, let me just glance at the estimates for the Department of the Environment for 1974-75, which indicate that out of a total budget of $351 million, the fisheries and marine services of the department, as it is now known, accounts for $164 million, or over half of the budget for that department.
It is true that we now have a Minister of State for Fisheries as a result of an announcement by the Prime Minister (Mr. Trudeau) and an order in council passed on August 8, 1974, setting up a separate Minister of State for Fisheries; but that minister does not preside over a department of fisheries. He is not responsible for the budget of a

February 14, 1975
Fisheries
department of fisheries because there is no department of fisheries. The budgetary responsibilities for the Department of the Environment are quite properly those of the Minister of the Environment.
I do not know exactly what role fisheries plays in relation to the Department of the Environment, although it has been spelled out in the order in council that the minister is responsible for a number of acts, including the Coastal Fisheries Protection Act, the Fish Inspection Act, the Fisheries Act, the Fisheries Development Act and the Fisheries Price Support Act; in other words, all of the statutes relating to fisheries. He does not in fact have the administrative responsibilities because he does not preside over a separate department of fisheries.
At a conference of the Atlantic provinces candidates of the Progressive Conservative party at Charlottetown, Prince Edward Island, in 1972, and again in Halifax in 1974, a resolution was passed calling for a separate department of fisheries in order to give fisheries its proper recognition within the Canadian economy. We called for the establishment of a separate department of fisheries, and under this new department for the launching of a vigorous, new, aggressive program to extend Canada's managerial control to the extremities of this country's continental shelf for the sake of the conservation and management of its marine resources. That is the policy of this party.
The government discovered to its dismay, as it faced its electorate in 1974, that this had become a real issue in the Atlantic provinces. So the Prime Minister (Mr. Trudeau) made a promise that the government would establish a separate department of fisheries, and I quote from the Montreal Star issue of June 27:
The Liberal Atlantic conference resolution called for the establishment of a separate department of fisheries.
That was subsequently confirmed by a statement made by the Prime Minister.
That is a policy of the present government. The Liberal National convention of 1973 passed the following resolution:
In view of the increasing importance of the fisheries to the people of Canada, particularly to the people of the coastal provinces, that there be re-established immediately a department to take charge of this area to be known as the Department of Fisheries and Marine Resources.
I am calling upon the government in this resolution which is now before the House, and which I hope will command the support of the House, to proceed with the implementation of that resolution passed by the Liberal party of Canada at its convention and of the resolution of the Liberal candidates from the Atlantic provinces at their meeting in Halifax last year, as well as the subsequent promise made to the people of Canada by the Prime Minister following the conference of Liberal candidates in Halifax.
The reasons, to any one interested in fisheries-and certainly that includes all members from the Atlantic provinces and a good many of the members from the province of British Columbia-are very obvious, not only because of the serious problems facing the industry but because of the importance of the industry. For example, in

1973 the total value of Canada's fisheries amounted to over $301,687,000. This represented a total in landings of 2,179,-
119,000	pounds of fish. That shows it is an important industry. For example, in my own province there are approximately 20,000 people who are directly or indirectly involved in the fishing industry. Indeed, it is our most important industry. That industry is going through a tremendous change, not only because of new technology but because of our failure to exercise the right and responsibility which are ours to extend our control for the purposes of management and conservation over the continental shelf.	.
Hon. members talk of the Law of the Sea Conference which was recently concluded at Caracas and which will be resumed next month in Geneva. We may or may not obtain agreement at that conference. Our chances are much better than they were before, thanks to the support of the United States Congress. But the fact is that we may not be successful. In the event that we are not successful, I believe that the government has the responsibility, and in fact it is its intention, I believe, to take the necessary unilateral action.
Of course, when you contemplate taking this kind of unilateral step, it is a measure of the concern that is felt in this country over what is happening to our fishing industry. In 1974 the fish landings in Canada declined over those in 1973, and the decline is a gradual one reflected in yearly declines.
For example, last year fish landings declined as follows by province: Newfoundland had a 24 per cent decline; Prince Edward Island, a 43 per cent decline; British Columbia, a 25 per cent decline; and New Brunswick, a 12 per cent decline. Notwithstanding inflation, there was a concomitant decline in the value of these landings as well. These declines in catches mean, of course, that there is a decline in the earnings not only of the fishermen but of the fish companies as well. This is probably the most serious problem facing the industry today because expenses are not only continuing but, due to inflation, are escalating. Owners of deep sea trawlers returning today with less than a total catch have to pay the expenses of the trip. The fishermen, of course, participate in a share of the catch, and the result is that their earnings decline accordingly.
That, I may add, is the subject right now of a very serious dispute in the province of Newfoundland which has practically tied up the total industry. We are now in the grip of a strike of deep sea trawlermen over what is known as the co-adventurer system, a system which has been in effect not only for generations but for hundreds of years whereby the fishermen participate in the catch with the ship owner, and if there is no catch they have no earnings. The expenses of the fishermen continue. They have to feed, clothe and house their families at the same inflated rates as everyone else, and of course if they do not earn money on the voyage, they cannot go to the supermarket to buy the groceries necessary to feed their families, or continue to heat their homes, or provide clothing for their children. So our Newfoundland deep sea fishermen today are on strike. They are striking for an end to the co-adventurer system. There is much sympathy for them.
February 14, 1975

I personally support their stand because in this day and age it is generally recognized, given the importance of the industry to Canada and given the fact that the industry contributes substantially to Canada's balance of payments and to helping feed the world, that Canada's fishermen should operate under some system of guaranteed income. Our fishermen are striking for this very principle. What the outcome of this strike will be is difficult to say, but certainly the government of Canada has a great responsibility. Indeed, under the constitution the government of Canada has all the responsibility for fisheries: it has total jurisdiction. Whatever jurisdiction is enjoyed by the provinces is enjoyed by the advice and consent of the federal government through an exchange of notes. Yet so far as this dispute involving the industry in Newfoundland is concerned, a strike which could have very serious consequences for the economy of our province, thus far the government of Canada is but a passive bystander.
I hope that the new minister of state responsible for fisheries will discuss with his counterpart in the province of Newfoundland ways and means in which the government of Canada can assist directly in bringing about a settlement of that dispute. I have no hesitation in saying that I admire the present minister of state responsible for fisheries. I think he is trying to do a good job. He has shown that he can apply whatever ability he has to the industry because he is able to bring to it the sympathy and understanding of one who comes from the north shore of the province of New Brunswick. The only thing I regret is that, because of the limitations of the present statute on the government's organization, the minister cannot be truly effective as the fisheries minister because he does not have the ultimate responsibility of presiding over a department of fisheries of Canada.
That brings me to the resolution which is now before the House. The industry is in great distress. This industry employs many thousands of people in the Atlantic provinces and many more thousands are dependent upon it. This applies to the Pacific fisheries as well and, of course, to a lesser extent, to the inland freshwater fisheries. This industry is going through the most serious crisis of its long and troubled existence. Now more than ever before we need to address ourselves to this problem by having the activities of the various statutes of this parliament dealing with fisheries under a separate administration and under a separate department, as it was up to 1971. I call upon my colleagues in the House, and particularly my colleagues who sit on the opposite side of the House, to address themselves to this resolution in a sympathetic way, bearing in mind the fact that their party and their caucus is indeed committed to do just that, so that we can get on with the job of dealing with the very serious difficulties facing the industry today.
Just to give an idea of how serious the problem is, even if we do succeed in March at Geneva in obtaining agreement to extend our control for purposes of management and conservation over the continental shelf and its extremities, it is estimated that it will take at least five years for us to bring just the groundfishery, the mainstay of the industry, back to the stage where it was before the
Fisheries
present overfishing began to take its toll. It will take five years to bring it back to the commercially viable industry that it was for many years. That I merely state to illustrate the seriousness of the problem.
I do hope that hon. members of this House support the resolution because it commits the government to nothing. It does not commit the government. It would merely add strength to the resolutions already adopted by the Progressive Conservative caucus, by the Progressive Conservative convention by the Liberal convention, and by the Liberal Atlantic caucus. Perhaps as a result of this resolution the government may see fit to amend the Government Organization Act and once again institute a separate department of fisheries which would then be able more properly to address itself to the very serious problems facing this industry.


Mr. Herb Breau (Parliamentary Secretary to Secretary of State for External Affairs):: Madam Speaker, I am happy to take part in this debate, first of all to thank the hon. member for St. John's East (Mr. McGrath) for having taken this opportunity to draw the attention of the House, however generally, to certain fishing matters.
He will note, on listening to my speech, that I do not agree with his proposals regarding organization, but I can say that I do share his concern about the situation of the fisheries, not only now but generally.

I believe in the immediacy of the problem in the fishery, and I hope the problems we have will give the government the opportunity, and the public support which I think is needed, to intervene in the fishing industry. I believe there is a need for state intervention in this industry at this time.
One of the problems in the industry has been due to the fact that in some areas it is a seasonal industry. Added to that is the fact that we are dependent on the United States in that three quarters of our production is marketed in the United States, at least from eastern Canada. I believe this has made us dependent on a marketing organization or a marketing structure which has been playing with the industry for years and which makes the fishing industry an uncertain one for the fishermen as well as for the plant.
I hope that this bad side of the cycle which we see now in marketing, regardless of the reasons-which are different from other aspects of marketing-will be corrected.
So I say, I hope that the government will intervene in the fishing industry, and that the industry will understand and accept the type of intervention which I think is needed. I do not speak of intervention in the sense that the government has to take over the industry; I hope the government will intervene, as it has in the last year in some cases, to give financial support or price support or provide financing for inventory, for stocks, or to help the industry with storage. I believe we are going to be involved in such a way and that we might as well take positive action and have some permanent organizations placed on the statutes and put in operation in this country.
I believe that we should have a marketing organization funded by the government which will have enough money

February 14, 1975
Fisheries
to build sufficient storage in Atlantic Canada and which will be in a position to study the marketing structure of our product in the United States. This will give us better information than we have now so that we are less dependent on those who market fish abroad. This marketing agency should have enough capital to build storage for the fishery, and to lend the fishery money so that fishery products can be stored in eastern Canada, so fishermen will not have to go out and distress sell, which kills the market. This happens mainly with small, Canadian owned companies which do not have financing, and God knows that in Canada we cannot depend on the banks to help, especially small Canadian entrepreneurs in situations like this.
I believe representatives from the fishing industry should be represented in the marketing organization, including fishermen and plant owners, as well as representatives of labour, consumers, the federal government and provincial governments. This agency could guarantee that fishermen would be paid a certain price. It should be in a position to know in advance what price the market will bear for our products and thereby guarantee the plants a price for a certain quota so that the fisherman is assured of a fair price. For example, in my constituency in February and March the fisherman is planning. He has to plan. He has to spend money to repair his gear and his boat. On the other hand, there is no certainty about the price he is going to receive. I believe this is very detrimental to our industry and the people who operate it.
I assure the hon. member that I share his concern about the immediate problems. I hope that the government will profit from this crisis and intervene in the fishing industry in a way which will give us permanently more information in our hands and better protection for our plants and for our fishermen. I also hope that the government and the Minister of State (Fisheries) (Mr. LeBlanc) will look at the tariff situation. For example, if we ship our fish products by blocks to the United States, there is, I believe, no tariff at all, or very little; but as soon as we touch it, or as soon as there is any attempt at any value added tax or forward integration, the tariffs go dramatically up.
I believe the government of this country should make an attempt to negotiate with the Americans, perhaps in the context of the current GATT negotiations, in order to get a better deal for the fisheries. I do not know the situation in the west coast fisheries but I suspect it is about the same. In the case of the Atlantic provinces, it is the nicest example of economic colonization that we have seen in this country for some time.
I find it difficult to reconcile the objectives expressed by the hon. member on the question of government reorganization with his party's stated concern about government spending and red tape. When one talks about cutting out agencies or services within departments and establishing them in new, smaller departments, that can only lead to more bureaucratic organization.
In my constituency fishing is the most important industry, if not in financial terms then certainly in terms of people. At no time, however, has any fisherman or any fishing co-operative, plant worker or owner brought up this question. What they are concerned about is the gov-

ernment's responsiveness to their problems. The case I have referred to was dealt with by the Department of Industry, Trade and Commerce. The Law of the Sea Conference is a matter for the Department of External Affairs.
I think it was a good move to merge the department of fisheries, which I believe was the smallest department, with the Department of the Environment because there is a direct relationship between environmental matters and fisheries. Generally speaking, the most important aspect of our fisheries is the protection of resources.


James Aloysius McGrath: You are speaking against the policies of your own caucus.


Herb Breau: No, I am not. At the Halifax meeting we discussed government organization as far as fisheries was concerned, and out of that came a resolution entitled "The Atlantic Liberal Action Plan". That resolution was to the effect that there should be a minister responsible for fisheries matters. In my view that is what we have, and a good one.


James Aloysius McGrath: That is not what the resolution said.


Herb Breau: Yes, it is. I have not got it in front of me but I will be happy to send a copy to the hon. member. The Atlantic Liberal Action Plan makes very good reading for anyone interested in Atlantic matters, as I know the hon. member is. Being from Newfoundland he certainly understands the importance people attach to their regional identity. When he refers to the minister of fisheries as being from the north shore of New Brunswick, however, I must point out that the minister is from the east shore and that he understands why it is important to the Atlantic provinces to retain proper geographical definition.
There are not only the day to day problems of the fisheries to be concerned about; there are occasions when disaster or disease might strike the resource, and here the responsiveness of the government is very important. On many occasions since the new department was set up I have brought problems to its attention and have always received an excellent response.


An hon. Member:: What about the pollution of the Bay at Caraquet?


Herb Breau: That is one of the bays that produces the best oysters in the world. There was urgency to that problem and the government gave $150,000 to deal with it immediately so that the reputation of such a good product would not be ruined. Because there was a bigger department with a bigger budget and better organization, it was possible to transfer funds from one part of the department to another. There was no red tape. The people working in the same regional office in Halifax had contact with the office here, and the problem was solved very quickly.
Another example of the work of the Department of the Environment regarding an important aspect of the industry is the creation of the small craft harbours branch, which has proven to be an effective and responsive arm of government.


The Acting Speaker (Mrs. Morin):: The hon. member for Winnipeg North Centre (Mr. Knowles).
February 14, 1975


An hon. Member:: On fishermen?


Stanley Howard Knowles: Madam Speaker, I hear some hon. members expressing surprise that I should be speaking on this motion, but after all someone should speak for the third, fourth and fifth parties in this House and no one in this House can challenge my right to do so.
The hon. member who has just taken his seat chided the hon. member for St. John's East (Mr. McGrath) for what he regarded as a mistake in geography, so I think it is only proper for me to pick him up on something that he said. He said that one of the things that has to be done for the fishing industry is to protect our resource, to protect the sea. May I remind him that we must also protect our inland lakes and rivers? That gets me into this debate in another way because in the Winnipeg area we have the Freshwater Fish Marketing Corporation which has some problems to which I hope the government is giving attention.
Despite the way in which the Parliamentary Secretary to the Secretary of State for External Affairs (Mr. Breau) skirted the issue in the motion and seemed to express complete satisfaction with the present arrangement, it certainly was my understanding during the election campaign that the Liberals in the Atlantic provinces, like the Conservatives, were promising a separate department of fisheries. I understand that our candidates in that area were doing likewise. By bringing to this debate the approval of the third party and the fourth party, and the independent member for Moncton (Mr. Jones), I am making it unanimous.
I notice that some of the British Columbia members are wanting to get into this debate so I shall take only a few moments. I want to support the motion and I suspect that, even though it appears that it is due for the usual treatment in that the motion is going to be talked out, the government does not mind the subject being discussed, and aired in this House. Indeed, despite all the defence which may be put up respecting the fisheries activities of the federal government being under the Department of the Environment, everyone must realize that it is awkward to have a statute which says that the Minister of the Environment (Mrs. Sauve) is the minister of fisheries for Canada, and to have an order in council which says that the hon. member for Westmorland-Kent (Mr. LeBlanc) is Minister of State with responsibilities for administering the various acts of parliament relating to fisheries.
In one way or another this mix-up ought to be straightened out. I think it would be better for the activities which come under the Department of the Environment, and better for those which relate to fisheries, if this confusion could be resolved. It seems to me that the way the hon. member for St. John's East (Mr. McGrath) suggests is the logical way to go about it, and I hope the government will give this matter consideration, no matter what the fate of this afternoon's motion may be.
I enjoyed my hon. friend's attempt across the way to chide my friends to my right, who are usually on an economy kick, for wanting to establish what he called a
Fisheries
new agency. I do not think it is fair to label a request for a department of fisheries a request for a new agency. After all, a fisheries branch or department is as old as Canada itself.
I commend the hon. member for St. John's East for raising this matter this afternoon. I can see that his motion will suffer the usual fate. Come five o'clock, we shall still be dealing with it. Nevertheless, I hope the government will give the matter consideration. Perhaps this is already taking place.


John Douglas Reynolds: Madam Speaker, I do not intend to speak long on this motion, as others from other parts of Canada also wish to speak on it. Let me say that I support it. There are in my riding several harbours, among which are Steveston Harbour, one of the finest fishing harbours in British Columbia, Ladner Harbour, and Gunderson Slough. In addition, there is resident in my riding Mr. Homer Stevens, chief of the United Fishermen and Allied Workers Union. He ran against me in the last election but came in last; but that does not mean that he does not know how to run a fisheries union, because he is well respected by his men and has a great knowledge of the fishery.
I support the hon. member's motion and will not repeat what he said because he spoke so well. What concerns me is a statement made by my hon. friend of the Liberal party regarding government involvement in fisheries. I sometimes wonder-perhaps this question should be on the order paper-how many fishermen are involved in the work of the department of fisheries. I say this because when Roberts Bank was built in my area, it was built in one of the finest crabbing areas of British Columbia. I talked to fishermen about it and to government people. The fishermen said that they had talked to Department of the Environment people, to fisheries people, to Department of Public Works people and others, and had been assured that the superport would not kill off the crab in those waters. According to the experts, engineering feasibility studies had been done, and everyone was certain the crab would not be killed. It is sad to report that now you no longer find crab around Roberts Bank superport, especially on the southern side, because the tides did not do what department of fisheries experts had predicted.
The fishermen of my riding have often said that nobody listens to them, and that is why this motion is so important for the fishermen of this country. We need a separate department of fisheries with a minister who is not responsible to other ministers and who can stand on his own two feet and tell other ministers what needs to be done. For these reasons I support the motion moved by the hon. member for St. John's East (Mr. McGrath), and I will now sit down to allow other members to participate in this debate.


Len Marchand: Madam Speaker, at the outset let me say to colleagues who have spoken that I will bring their representations to the attention of the Minister of State (Fisheries) (Mr. LeBlanc). Hon. members have raised valid points which merit examination.
The question which the hon. member has raised in his motion is essentially one of concept and of perspective, so

February 14, 1975
Fisheries
a reply to it must begin with a re-examination of the temporal and conceptual background. It is particularly important that we trace our way back to the events that led to the present combination within one federal department of various components which previously, to one degree or another, functioned separately.
The department of fisheries was established as a separate entity about 40 years ago. We have learned a lot since then, environmentally speaking. In 1968 the fisheries department was amalgamated with forestry. Four years ago, in 1971, came a much larger move toward unification, the creation of the Department of the Environment. The choice of this name was in itself not simply a matter of new symbolism but a reflection of changed perceptions, a new way of looking at the world and at ourselves, not only in Canada but throughout the world.
The creation of Environment Canada was a response by the people of this country, through their government, to a challenge which, although it did not sneak up on us overnight, did shock and startle the world because of the abruptness of our recognition and the immensity of the threat. It was not that we had not been warned. Ecologists, conservationists, wildlife people, people who specialized in meteorology, in fisheries, in the uses of land, had all warned us for years that trouble was on the way. The fact that at a governmental level these warnings were coming from different offices, from separate observation posts, was in itself an indication of the kind of trouble we were in, in Canada and elsewhere on this spaceship we call Earth.
The great service done for us by people like the late Rachel Carson was that they reconnected us with reality. They opened the eyes of the world to the inter-relationship of the various components of the biosphere. More important, they gave back to an urban world a country person's sometimes native recognition of the fact that we are not strangers or separate in the biospheric mosaic. They reminded us that we do not so much come into this world as out of it.
As we commenced this voyage of rediscovery, it became very clear that the problems of the environment were, at their core, problems of human perception; not the result of malevolence or greed, but mostly of a failure to see that everything was connected to everything else. We were in trouble because of a fragmented, unreal perception of the physical world and an exaggeration of its capacity to absorb abuse.
The next phase was to do something about changing our thinking. In arriving at true environmental wisdom, part of the task has been to avoid mistaking the symptoms for the cause. Polluted rivers and streams and coastal areas, smoke stained skies, thermal inversions, possibly even weather fluctuations, were the outward manifestations not of a self-destructive attack by man on the environment but of a distorted comprehension of the way that this infinitely intricate biospheric engine works and fits together.


George H. Whittaker: The hon. member uses big words.


James Aloysius McGrath: On a point of order, Madam Speaker, I say, with the greatest respect, that the hon. member is not
addressing himself to my motion and that the rule of relevancy applies even to parliamentary secretaries.


Len Marchand: Madam Speaker, I thought my remarks were extremely relevant. I have always assumed that in private members' hour members are given some latitude. In any event, if we are to invoke the rule of relevancy I suggest it should also apply to the remarks the hon. member made earlier.


The Acting Speaker (Mrs. Morin):: Order, please. The parliamentary secretary should deal primarily with the motion before the House.


Len Marchand: Madam Speaker, I was addressing myself to the motion.


Stanley Howard Knowles: And talking it out in the process.


Mr. Crouse:: Madam Speaker, would the hon. member permit a question? I have listened with great interest to what the hon. member said. I am looking at a full page advertisement which lists 34 items put out by the Prime Minister (Mr. Trudeau) and the representatives of his party during the July 8 election compaign. As item 24, the Prime Minister stated under "fisheries" that he would appoint a full-time minister to administer the fisheries program. Unfortunately this has not been done. We have a Minister of State for fisheries. How does the hon. member relate his comments to the pledge made to the people of Atlantic Canada that we would have a full-time minister with sufficient clout to look after the immense problems the fisheries are facing at this time?


Len Marchand: Madam Speaker, the answer to that question is self-evident. As stated by the hon. member who introduced the resolution, we have a minister who is working full time. He is a very good minister. He understands the problems of the fishing industry. This minister is working extremely well with the whole community of fishermen.


Some hon. Members:: Hear, hear!


Len Marchand: Since the name of the problem was fragmentation-tunnel vision-it followed that we must avoid compartmentalized and ill-coordinated solutions. The goal, as many of our young people put it, has been to get our thinking together.
The creation of the federal Department of the Environment was a signal that the government of Canada was determined to the fullest practical extent to begin our response by bringing our approaches into a co-ordinated pattern. It was decided not to strike simply at symptoms, not only to control, not only to cure or to rollback, but to prethink and prevent. It was decided, for example, that the problem of eutrophication or any other form of pollution in the Great Lakes, or air pollution in Toronto or Montreal, or the conservation of the polar bear, or the salmon, or the optimum use of land, were all part of one major operation, the preservation and enhancement of the Canadian environment.

February 14, 1975

Let me tell the House how this has worked so far in terms of actual programs. One of the major ventures in which Environment Canada is presently engaged is in cleanup of industrial water pollution. The strategy here has been to establish national base line standards, a sort of minimum platform for water quality across the land. It is a program of point-source control regulations aimed at the rollback of water pollution. Regulations are scheduled for about 20 industrial sectors. The first industry to come under these regulations was the pulp and paper industry. The chlor alkali industry, Canada's major source of mercury contamination, was next. Regulations have been issued for the petroleum refining industry. Guidelines for the fish processing industry will be forthcoming.
My time is rapidly running out. Perhaps I might skip some of the remarks I would have made if I had had a little more time.
Perhaps the greatest challenge that our society faces in meeting the challenges of our time is the achievement of a sane, reasoned balance of interests and objectives. We cannot set our resource and environmental goals as if they were separate and then plot lonely paths toward them. The quality of life, the quality of the environment, is a blend of physical and economic values. In pursuing our goals, success lies in the reasonable tradeoff. The achievement of solutions is not a matter of winning an adversary debate, not, for instance, a matter of energy winning out over environment, or vice versa. It is a matter of recognizing that total victory for one side means defeat for all.
The reconciliation of resource, conservation and environmental interests is a necessity of today, both in the private sector and in the public. It is very much in the interests of Canadians that zealotry, extremism and overkill be avoided, that we seek that state of total national well-being which reflects both environmental and economic health. The health, the productivity, of our fisheries is an aspect of the total well-being not only of Canada, but of the world.
The preservation of our natural environment is similarly crucial. It is a healthy thing that these aspects of our heritage be looked upon by people working closely and in concert; healthy for Canada, healthy for the fisheries. We have recognized from the beginning the special importance of the fisheries to Canada. One only has to look to the Government Organization Act, 1970, to see that the Minister of the Environment (Mrs. Sauve) is also the minister of fisheries for Canada. As a further demonstra-
Fisheries
tion of this concern, the government in August, 1974 appointed a Minister of State to assist the minister in fishery matters.
It is my view, Madam Speaker, that on the basis of the historical evidence, the scientific evidence, on the basis of common sense, the present unified structure gives us the most effective instrument setting in which to meet and deal with the problems we now, and will in the future, confront.


Mrs. Iona Campagnolo (Parliamentary Secretary to Minister of Indian Affairs and Northern Development):: Madam Speaker, I represent a constituency in which there is a considerable number of fishermen, and I feel I should be allowed an opportunity to express some of their concerns.
For many years the fishermen in my area have been discriminated against in matters of safety and security on the coast. It is only recently, through the representations of the new Minister of State (Fisheries) (Mr. LeBlanc), that we have been able to get the beginning of a successful hearing to once and for all bring to the attention of the people on the coast the difficulties with which we are faced.
There is not sufficient security for our fishermen. We are lacking in naval power in the coast guard. We are lacking in a number of areas which the Minister of State (Fisheries) has finally brought to the attention of the Department of National Defence and other departments. The fishermen's union, the co-operatives in British Columbia, and by that I mean all the companies, are indeed pleased with the progress that has been made on security.
With the present Minister of State (Fisheries), we have an opportunity to prove further to the fishermen of this country on the east coast, the lakes and northern areas that he is indeed a man who can take on the responsibility of fisheries. He has sufficient clout to take on the job he has.
In my particular area the fishermen are heartened as never before, because for the first time they have a fisheries minister they can talk to directly.


The Acting Speaker (Mrs. Morin):: Order. The hour provided for the consideration of private members' business has now expired. It being five o'clock, this House stands adjourned until Monday next at 2 p.m.
At 5 p.m. the House adjourned, without question put, pursuant to Standing Order.



END OF VOL. Ill

[Stage Direction]
February 14, 1975
[Stage Direction]
now prepared to concede that his present grab bag of programs, including those in Bill C-46, will do little to alleviate this serious crisis? Also, are his plans to stimulate immediate growth and employment in the house construction industry in these winter months limited to those enunciated yesterday by the president of CMHC, that is, to plans which are a rehash of earlier, inadequate programs.
Barnett Jerome Danson: Mr. Speaker, I am delighted that the hon. member asked her question in that way, because our programs are indeed innovative and designed to produce a good deal of additional housing in the coming year. I only wish the House would pass the legislation before it and that our friends opposite would not hold it up, so that we could get the houses built which the people of Canada want.


Some hon. Members:: Hear, hear!


Flora Isabel MacDonald: A supplementary question, Mr. Speaker. Given that the drop in housing starts and lay-offs in the construction industry reflect the inadequacies of the very programs of which the minister speaks, and given that the recent figures released by CMHC showing that of the thousands of inquiries regarding the $500 grant to first-time purchasers of new homes only 676 applications have qualified for approval- a far cry from the 62,000 the minister so confidently predicted-would the minister give immediate consideration to extending the program to first-time buyers of existing housing?


Barnett Jerome Danson: Mr. Speaker, the program is intended to stimulate the construction of new housing, not all that much of which starts in January. Nevertheless, there are parts of the country where it can start and the new program will enable it to start. The hon. member should look behind her. If the hon. member for York-Simcoe will allow the budgetary provisions to go through, we can then get on with the housing legislation. People are waiting for that legislation. The builders, lenders and purchasers are all ready to move as soon as we get through that legislation.


Some hon. Members:: Hear, hear!


Flora Isabel MacDonald: The minister did not see fit to answer the question. If the figure of
62,000	which the minister confidently predicted would qualify for the $500 grant is so far off base, with only one-hundredth of that figure qualifying in the first month, what assurance do we have that his prediction of 210,000 housing starts this year is not similarly inflated?


Barnett Jerome Danson: Mr. Speaker, I put 210,000 as a floor for this year. We will target for more. We have to be realistic in terms of international conditions. If we relate the situation to that of our principal trading partner, it gives us great consolation because we are doing about 4 lA times as well as the United States in providing housing in this country.


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



MEASURES TO COUNTER POSSIBLE INFLATED PRICE SITUATION

Stan Darling: Mr. Speaker, as a Darling I am certainly delighted to be recognized on Valentine's Day.


Some hon. Members:: Hear, hear!


Stan Darling: My question is supplementary to the darling of the press, the Minister of State for Urban Affairs. In view of the fact that housing starts in urban areas registered a decline of 49 per cent-from 13,506 in January, 1974, to 6,955 in January, 1975-and because continuation of this trend will undoubtedly result in a reduced number of available units which, when and if mortgage rates decline, will create an inflated price situation as far as existing units are concerned, will the minister inform the House of the measures he will take to counter the possibility of this situation developing?


Barnett Jerome Danson: Mr. Speaker, I am pleased to enter into this sweetheart arrangement with the hon. member. If he will read the legislation and the opportunity this gives to Canadians, particularly young, low-income Canadians and first-time home owners, he will see there are a lot of provisions in the legislation. If we could only get it through the House, into committee and on the books we could get to work building the houses. I know the housing industry is ready to build. Thousands of Canadians across this country are most anxious to take advantage of these programs. They are good programs and we want to get them on the books so we can get housing going.


Stan Darling: I hope that out of the many thousands of houses the minister has promised for this year, a great many will be built in rural Canada and in small communities because we are the ones who are presently getting the short end of the stick.


Barnett Jerome Danson: Mr. Speaker, that is a very high priority in our plans. I appreciate what the hon. member is suggesting.



SUGGESTION GOVERNMENT PROVIDE FINANCIAL ASSISTANCE UNDER RRAP TO INSULATE HOMES AND CONSERVE ENERGY

Jack Marshall: Mr. Speaker, I have a supplementary question for the Minister of State for Urban Affairs. In view of the recommendation in Canada and the United States that in order to conserve energy there should be a direct thrust toward insulating homes, will there be any thrust under the Residential Rehabilitation Assistance Program with regard to financing in the coming months?


Barnett Jerome Danson: Mr. Speaker, this is part of RRAP. In response to the request of the Minister of Energy, Mines and Resources, I am looking at further measures with regard to taking new initiatives to conserve energy in older homes as well as in new homes.

February 14, 1975
Oral Questions



UNEMPLOYMENT INSURANCE


Eudore Allard: Mr. Speaker, I wish to put a question to the Minister of Labour, to the Postmaster General or to the latter's Parliamentary Secretary.
It appears that all coded mail is being boycotted in the Montreal post office. This large volume of mail items includes numerous cheques addressed to unemployed people, cheques that are stuck there. Is the minister in a position to inform the House whether he intends to take steps to correct this situation so that unemployed people may receive their benefits?


Bryce Stuart Mackasey: Mr. Speaker, I am always interested in problems of unemployment insurance, particularly the distribution of cheques. I will find out if there is any reason for unemployment insurance cheques being unnecessarily delayed.



ROYAL CANADIAN MOUNTED POLICE


Francis Andrew Brewin: Mr. Speaker, my question is addressed to the Solicitor General. In light of recent revelations of the role played by the CIA in the subversion of the democratic government of Chile, do the Royal Canadian Mounted Police, in screening refugees or other immigrants from that country, still avail themselves of reports from the CIA?


William Warren Allmand: Mr. Speaker, since the RCMP has no foreign intelligence capacity, from time to time when it is necessary they request information from foreign police forces and foreign intelligence agencies in Britain, United States, Europe and elsewhere. In the case of the special program for Chilean refugees, information was requested on some of the applicants from these foreign intelligence agencies. I am not sure if the CIA was one or not. They could have been. However, let me say this: the criteria for entry of those refugees were Canadian criteria and the screening was done by RCMP officers and Canadian immigration officers in Chile. The entry was decided by our people. I am under the impression that when it is necessary for us in Canada to obtain information, we may still ask for that information from the CIA and other foreign agencies, but it is in accordance with our policy and our law.



EXTERNAL AFFAIRS


Francis Andrew Brewin: In the absence of the Secretary of State for External Affairs I will address my supplementary question to the Acting Prime Minister. It has been reported that the Canadian Ambassador to Chile recently gave to General Augusto Pinochet, the military dictator in Chile, a series of gifts, including coloured illustrations of varieties of Canadian fish, and at the same time expressed the cordial greetings of the Government of Canada. While I appreciate the necessity for diplomatic courtesy, was it under the instruction of the Canadian government that Mr. Ross made this presentation and expressed these cordial greetings to one who is not only a dictator but who has presided over the destruction of fundamental rights in his country-


Mr. Speaker:: Order, please. The hon. member has described a presentation and asked whether it was made on instructions. That surely ought to be enough.


Mitchell William Sharp: Mr. Speaker, I do not know whether our ambassador acted under instructions. I do think it is important in international relations, however, that the people of Chile and the government of Chile have a good view of democracy in Canada. Therefore, I think it is wise that we maintain these kinds of relationships.



UNEMPLOYMENT INSURANCE


Allan Frederick Lawrence: Mr. Speaker, I regret I was only able to give the Minister of Manpower and Immigration a couple of hours' notice of this question. Can the minister inform the House whether any special emergency measures will be implemented to speed up the processing of unemployment insurance claimed by the workers of the General Motors, Oshawa, plant who were laid off in January? Some of these workers have been back on the job for a few days now but are still waiting for their original claims to be processed.


Robert Knight Andras: It is correct there was a lay-off on January
10,1	believe, of some 8,000 workers, a very large number of people. As of this week, all the claimants who registered at that time are in receipt of reporting cards and the process is taking place. Registration, of course, does not of itself trigger the reporting cards, though this, I believe, was the information I got from the hon. member's office today. There certainly was a slight delay in issuing some cards because of the number of claimants. I would add that where there are to be lay-offs of any magnitude at all it would be very helpful if employers were to take us into their confidence in advance so that we could make these