1975-02-12

ROUTINE PROCEEDINGS


Mr. Stanley Knowles (Winnipeg North Centre):: Mr. Speaker, I rise under the provisions of Standing Order 43. I do so because all of us who represent constituencies in the Winnipeg area have been receiving telegrams stressing the urgent and pressing necessity of the situation that obtains with respect to Air Canada's finance branch employees at Winnipeg. I therefore ask leave to move, seconded by the hon. member for Winnipeg North (Mr. Orlikow):
That the Minister of Labour be asked to make an immediate statement on the results of his efforts to secure a settlement of the issues in dispute between the finance branch employees and Air Canada, at Winnipeg, in accordance with the assurance given to this House by the minister on December 11, 1974.


Mr. Speaker:: The motion having been proposed pursuant to the provisions of Standing Order 43, it cannot be debated without the unanimous consent of the House. Is there unanimous consent?


Some hon. Members:: Agreed.


Some hon. Members:: No.


EXTERNAL AFFAIRS
Mr. Derek Blackburn (Brant):: Mr. Speaker, I rise under the provisions of Standing Order 43 on a matter of pressing and urgent necessity with respect to the admission by a senior officer of the Niagara Regional Police Force that it is not uncommon for officers of his department to enter the United States illegally to effect or attempt to effect an arrest of a person or persons entering the United States from Canada. I therefore move, seconded by the hon. member for Winnipeg North Centre (Mr. Knowles):
That the Minister of Justice ask his Ontario counterpart to order the Niagara Regional Police Department to cease this illegal practice immediately.


Mr. Speaker:: The motion having been proposed pursuant to the provisions of Standing Order 43, it cannot be debated without the unanimous consent of the House. Is there unanimous consent?


Some hon. Members:: Agreed.


Some hon. Members:: No.


OPENING OF 1975 CANADA WINTER GAMES, LETHBRIDGE, ALBERTA-REQUEST FOR UNANIMOUS CONSENT TO MOVE MOTION UNDER S.O. 43
Mr. Cecil Smith (Churchill):: Mr. Speaker, I rise under the provisions of Standing Order 43 to request the unanimous consent of the House on a matter of urgent and pressing necessity to Canada. This matter concerns the opening of the 1975 Canada Winter Games in Lethbridge, Alberta. In view of the fact that the opening of these games can be considered a prelude to the 1976 Olympics in Montreal, where we hope Canadian athletic excellence will dominate, and because we are all looking forward to the possibility of the 1979 Winter Games to be held in the great city of Thompson, Manitoba, I would request the consent of the House to the following resolution with a view to further encouraging Canadian participation in competitive sports and fitness programs. Therefore, Mr. Speaker, I move, seconded by the hon. member for Battle River (Mr. Malone):
This House resolves that Mr. Speaker convey the following message to each of the competitors in the 1975 Canada Winter Games at Lethbridge, Alberta:
"Our best wishes to you and our appreciation of your spirit of sportsmanship and your dedication to physical fitness. The House of Commons of Canada."


Mr. Speaker:: It is certain that if a message is to be sent, it will have to go today because the opening makes it a matter of urgent and pressing necessity. The motion having been proposed pursuant to Standing Order 43, it cannot be debated without the unanimous consent of the House. Is there unanimous consent?


Some hon. Members:: Agreed.


Mr. Speaker:: With the consent of hon. members, in the circumstances I might take the liberty of presuming that if the matter were to be proceeded with by debate, there would be no contrary voice and I ought to be directed to send the message without the matter being debated.

February 12, 1975
Crown Assets


Some hon. Members:: Hear, hear!


[Stage Direction]
Motion agreed to.


Mr. Leonel Beaudoin (Richmond):: Mr. Speaker, under the terms of Standing Order 43, I request unanimous consent of the House to discuss an important and urgent matter.
In view of the high rate of unemployment, stemming from the progressive deterioration of all sectors of activity in our economy, which is creating a situation that could become disastrous over the short term, and in view of the fact that the Minister of Finance (Mr. Turner) is starting to recognize that the growing recession in the United States influences us directly, and that most of the ministers, through their attitude and almost explicit statements, indicate that the situation has gone beyond their control, I move, seconded by the hon. member for Abitibi (Mr. Laprise):
That the House of Commons be allowed to discuss now, without making politics out of it, the economic future of the nation, the emergency measures to be taken, the attitude we should adopt as responsible leaders, and the duty we have to inform all Canadians of the facts, to obtain their enlightened co-operation in order to get out of the impasse.


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


Some hon. Members:: Yes.


Some hon. Members:: No.


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



CROWN ASSETS


Mr. Jack Marshall (Humber-St. George's-St. Barbe):: Mr. Speaker, I wish to move a motion under the terms of Standing Order 43 on a matter of urgent and pressing necessity. Property and equipment located in western Newfoundland, known as the Pinetree radar site, and valued at several millions of dollars was left to the Canadian government by the U.S.A. when they vacated that site in 1971. This valuable property, which contains buildings, hardware and sophisticated equipment, has been left unattended and unprotected to the point where it has been vandalized to an extent that can only be termed as disgraceful, due to procrastination by government

departments and agencies over their particular interests. I therefore move, seconded by the hon. member for St. John's West (Mr. Carter):
That this House do order that the government immediately investigate the matter and that officials of the Department of National Defence, the Ministry of Transport, the Department of Public Works, the Canadian Broadcasting Corporation and Telesat Canada be directed to make a decision over disposal of the property and that security services be established immediately to prevent further deterioration, and further that the province of Newfoundland be consulted as to the future use of the site.


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


Some hon. Members:: Agreed.


Some hon. Members:: No.



MANPOWER


Mr. Adrien Lambert (Bellechasse):: Mr. Speaker, pursuant to Standing Order 43, I seek the unanimous consent of the House to discuss a very important issue which urgently requires immediate governmental action.
In view of the constantly decreasing number of housing starts, the thousands of layoffs in the textile and automotive industries, as well as the fearsome increase in unemployment generally over the past few months, I move, seconded by the hon. member for Abitibi (Mr. Laprise):
That the House examine immediately this serious problem and authorize additional credits for the Local Initiative Program, thereby permitting the Minister of Manpower and Immigration to accept more local initiative projects for the purpose of creating new jobs, and that the expiry date for submitting projects be postponed from January 31, 1975, to March 31, 1975.


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.


Some hon. Members:: No.


Mr. Speaker:: There is not unanimous consent; the motion therefore cannot be put.



QUESTIONS ON THE ORDER PAPER

[Stage Direction]
(Questions answered orally are indicated by an asterisk.)
['I am not in any way being facetious in this regard; I mean that comment very seriously. I am mindful, of course, of the fact that this matter was considered yesterday but, more importantly, that the question will be considered shortly by the House. Of course, on the same bill the House will be going into committee of the whole this afternoon. This will provide the hon. member and other members of the House not only with the opportunity, in committee, under clause 1 of the bill to make their comments, but it will enable them to question the minister and some of his colleagues on this very important subject. I think that will provide a more meaningful exchange than a special debate under Standing Order 26. For these reasons, I feel it would not be proper to allow leave under Standing Order 26 at this time.']
Mr. Maurice Foster (Parliamentary Secretary to Minister of Energy, Mines and Resources):: Mr. Speaker, the following questions will be answered today: 4, 33, 100 (supplementary), 683, 693, 777, 913, 956, 1,157, 1,210, 1,212, 1,240, 1,266, 1,269, 1,289, 1,290, 1,302, 1,310 and 1,316.
Mr. Speaker, if questions Nos. 9, 73, 293, 343, 368, 426, 522, 561, 986, 1,029 and 1,103 could be made orders for returns, these returns would be tabled immediately.
I ask, Mr. Speaker, that the remaining questions be allowed to stand.



Mr. Reynolds: 1.	What was (a) the name and location (b) the application number (c) the estimated number of jobs to be created (d) the total cost of the projects (e) the maximum possible grant allowances of all projects applied for in British Columbia under the special ARDA Programme of the Department of Regional Economic Expansion from February 8, 1971, to date?
2.	Can the Minister advise how much of a grant and how much in the value of loans have been made under the special ARDA Programme and/or any other Department Programme to Tofino Fisheries Ltd.?
3.	Who are the executives of this firm and are any Indians or non-status Indians?
4.	What is the number of employees in this operation and how many of these employees are Indians or non-status Indians?
5.	Can Indians, non-status or status, apply directly for grants under the special ARDA Programme?


Mr. Joseph-Philippe Guay (Parliamentary Secretary to Minister of Regional Economic Expansion):: applications remain confidential until an offer of assistance is accepted by the applicant. As of September 30, 1974, 175 applications had been received of which 108 are still in the active files. 1. (a) and (b) The list of applicants who have accepted offers is as follows: Project No. 49200, Lamalchi Bay Association, Chemainus; Project No. 49503, BCANSI Building Corp., Williams Lake; Project No. 49500, Kanata Cattle & Hay Project, Kamloops; Project No. 49509, Seabird Developments Ltd. Agassiz; Project No. 49508, Pacific Rim Mariculture, Bamfield; Project No. 49502, Rene E. Dumont, Tofino; Project No. 49511, Nicola Valley Indian Services Association, Merritt; Project No.
49514,	Fountain Ranch Ltd., Lillooet; Project No. 49510, Tofino Fisheries Ltd., Tofino; Project No. 49516, Spahomin Cattle Co. Ltd., Upper Nicola Indian Reserve; Project No.
49515,	Sliammon Band Drive-In Theatre, Powell River; Project No. 49100, Interior Native Driving School, Quesnel; Project No. 49517, Bella Bella Hotel, Bella Bella; Project No. 49519, Cowichan Indian Coop Farm Association, Duncan; Project No. 49521, Herbert C. Wood, Vevenby; Project No. 49520, Spallumcheen Developments, Enderby; Project No. 49525, Talbot Commercial, Parksville; Project No. 49522, Neskainlith Recreational Complex, Chase; Project No. 49529, Leonard George Guiding, Telkwa; Project No. 49527, Bella Bella Fish Processing, Bella Bella.
Note: When an offer has been accepted, the application number is discarded and a project number is assigned.
(c) Estimated number of jobs expected to be created as a result of accepted offers is 310. (d) The total cost of assisted projects is: $5,813,100. (e) Maximum possible
Order Paper Questions
DREE grant allowance (resulting from offers accepted up to September 30, 1974) is: $1,799,600.
2.	The grant offer made under Special ARDA (there are no loans available under the Program) was $553,100 of which $300,019.40 has been paid.
3.	Mr. A. G. Tullock, President; Mr. T. R. Wingen, Secretary; Mr. E. T. Easton, Comptroller; There are no people of Indian ancestry among the executives of the company but one native person is involved in the management of this firm.
4.	The Special ARDA Agreement with Tofino Fisheries Ltd. specifies 57 jobs or 684 man-months of employment are to be created. Two-thirds or more of the man-months of employment are to be available to people of Indian ancestry.
5 Yes-a majority of Special ARDA Applications for assistance in British Columbia are received from people of Indian ancestry.


AIR CANADA-CAR RENTAL FIRMS
Mr. Reynolds: 1.	With reference to Part 1 of Question No. 325 of the Second Session of the 29th Parliament, which states in part that "each of the three major car firms in Canada (Tilden, Avis and Hertz) were approached regarding participation in this programme", did one of these companies deny being given an opportunity to bid on the exclusive two-year bid signed between Air Canada and Avis and, if so (a) which one (b) is the government prepared to withdraw this statement or produce documents showing the other two companies were given bids?
2.	With reference to Part 3 of the same question (a) did Avis Canada advise the Cabinet that it would be selling its interest to Avis USA and, if so, did Cabinet give approval of this sale (b) did the then President of the Treasury Board, the Honourable C. M. Drury, have his Avis shares, which were being held in trust, recorded with the Prime Minister's Office?


Hon. Mitchell Sharp (President of the Privy Council):: 1. (a) Air Canada advises that it stands by the answer given to Part I of Question 325 asked by Mr. Reynolds in the Second Session of the 29th Parliament that "each of the three major car firms in Canada were approached regarding participation in this programme". The airline has no knowledge that one of these companies has denied being given an opportunity to bid on the contract, (b) Documentation and contracts between Air Canada and private companies are considered proprietary information.
2. (a) No. It is not customary for individuals or companies to advise the cabinet as such, of their intentions. The Foreign Investment Review Act, which was not in force when the sale in question was completed, puts prospective purchasers, and not sellers, under an obligation to inform the responsible authorities of their intentions. In this instance, the sale represented the exercise by the purchaser of the terms of a contract that had existed between the two companies since October 1960. Despite the absence, at the time, of any obligation to do so, the purchaser, Avis Incorporated of the U.S.A., did inform the Minister of Industry, Trade and Commerce, voluntarily, in June 1973 of the details of the proposed transaction, which was consummated well before the Foreign Investment Review Act was given royal assent in December 1973, subsequently proclaimed in March 1974. (b) The Prime Minister is aware that the shares in Avis Canada that were owned by

February 12, 1975
Order Paper Questions
the Hon. C. M. Drury were placed in a blind trust in 1962, when he was first elected to parliament. By this action the minister effectively removed himself from control or influence over the management or disposition of these shares. Enquiry of the trustee about trustee actions with respect to these shares and about the reasons for his actions would, in effect, be asking the trustee to violate the terms of the trust agreement.


GOVERNMENT SUBSIDIZATION OF CANADIAN COUNCIL FOR CLASSICAL RESEARCH
[Stage Direction]
Question No. 100-Mr. Allard: (Supplementary)
Does the government subsidize the Canadian Council lor Classical Research and, if so (a) for how many years (b) through what department (c) what amounts were granted in 1971, 1972 and 1973 (d) did the government make a grant as capital for the Council at the time it was created or at some later stage of its development?
Hon. James Hugh Faulkner (Secretary of State):: (a)
and (b) The Canada Council, while not an agent of the Crown, has subsidized the Humanities Research Council of Canada since the fiscal year 1957-58. (c) The figures available to the council are for fiscal years ending March 31: 1971-72, $209,807; 1972-73, $607,112; 1973-74, $312,795. (d) No, as far as the Canada Council is concerned.


TAXATION DATA CENTRE-KEYPUNCH OPERATORS
Mr. Clarke (Vancouver Quadra): In connection with newspaper advertisements and householder flyers published in October, 1974 by the Public Service, in the search for keypunch operators for the Taxation Data Centre (a) for what reason is it necessary to search for inexperienced people (b) how many people who were employed part-time or temporarily at the Taxation Data Centre during the 1973 income tax season returned to work at the Centre during the 1974 season (January to June) (c) is it expected at the time of hiring that the part-time and/or temporary workers hired for the Centre will be receiving unemployment insurance benefits after they are laid off upon completion of the peak season (d) what other employers in Ottawa hire keypunch operators and how many (e) how many jobs for keypunch operators were offered by Ottawa employers on the last business day of each month from August, 1973 to September, 1974 inclusive?


Mitchell William Sharp: I am informed by the Department of National Revenue, the Unemployment Insurance Commission and the Department of Manpower and Immigration as follows: (a) The lack of a sufficient number of experienced keypunch operators interested in part-time or temporary work makes it necessary to recruit from inexperienced people, (b) 3,758. (c) Depending upon the length of time a person has worked, he or she may be eligible to qualify for unemployment insurance benefits provided he or she meets the conditions of eligibility and entitlement, i.e. capable, available and searching for work. This applies whether the person worked in permanent or temporary employment, (d) The Department of Manpower and Immigration received job orders for 481 keypunch operators from the employers shown on the following list during the period February to September 1974 inclusive: Ottawa Employers from whom Canada Manpower received Job Orders for Keypunch Operators during the period February to September 1974, inclusive: Department of Energy, Mines & Resources; Department of National Health &

Welfare; Department of Industry, Trade & Commerce; Department of Supply & Services; Department of Indian & Northern Affairs; Department of National Defence; Canadian International Development Agency (CIDA); Unemployment Insurance Canada; Communications Canada; Labour Canada; Statistics Canada; Information Canada; Agriculture Canada; Transport Canada; Environment Canada; National Museums of Canada; Revenue Canada; The Defence Research Board; Post Office Department; Ontario Health Insurance; Manpower Temporary Services; University of Ottawa; Ontario Ministry of Revenue; Carleton Board of Education; Central Mortgage and Housing; Loeb M Ltd.; Defence Supply Agency; Farm Credit Corporation; Canadian Pacific; Bank St. Datsun; Canadian Bar Association; Triquetra Services Ltd., Data-cap Ltd.; Office Overload; Office Extras; Seguin, Prefon-taine, Patenaude; Welby Computers Ltd.; The Bay; A-One Data Services, (e) Jobs for keypunch operators offered through the Department of Manpower and Immigration by Ottawa employers on the last business day of each month from February to September 1974, inclusive, were as follows: February, 1953; March, 24; April, 29; May, 37; June, 43; July, 39; August, 37; September, 52. The Department of Manpower and Immigration has a computerized record of job orders. The form of record that allows extraction of the information requested is maintained for a seven month period, hence the provision or information is given for the period of February to September, 1974.


UNITED STATES DRAFT DODGERS
Mr. Halliday: To the knowledge of the government, who pays for the media advertising advising US draft dodgers or deserters how they may proceed to return to USA?


Mitchell William Sharp: The government has no knowledge of who pays for the media advertising referred to.


GRANTS TO SOREL SHIPYARDS
Mr. Laprise: 1.	Since the inception of the government's interim aid programme for shipbuilding, has a grant been made to the Sorel shipyard and, if so, what was the amount each year?
2.	Under the programme (a) how many ships were built (b) in what country is each registered (c) what was the amount of the grant for each ship (d) was the grant paid to the builder, the owner or the fitter?


Mr. Gaston Clermont (Parliamentary Secretary to Minister of Industry, Trade and Commerce):: 1. Since introduction of the Shipbuilding Temporary Assistance Program, the following amounts have been disbursed to the two shipyards located at Sorel:
United Towing and
Marine Industries Limited	Salvage
SCSll*	STAP	S.T.A.P.
$ *	$
November 27, 1970- March 31, 1971 PY 1971/72 FY 1972/73 FY 1973/74 April 1, 1974- October 31, 1974
427,104
1,447,565	-	-
815,938	3,398,914
468,766	5,721,637	173,655703,800	2,467,830	-
*Ship Construction Subsidy Regulations.
February 12, 1975

2. (a) Under the Shipbuilding Temporary Assistance Program, seven cargo vessels have been built at Marine Industries and three barges and one tug at United Towing, (b) The ships built at Marine Industries will fly the French flag, those built by United Towing are registered in Niger, (c) A total of $11,936,735 will be paid with respect to the seven cargo vessels, an average of $1,705,248 per ship. An average of $43,414 per vessel was paid on the tug and barges, (d) The amounts paid under S.T.A.P. go to the Canadian shipbuilder, not to the foreign shipowner or operator.


CBC-ACCELERATED DEVELOPMENT PLAN
Mr. Gauthier (Ottawa-Vanier): Within the CBC accelerated development plan (a) what localities (provinces, areas, or towns) were identified as priorities for the year 1975 (b) what services (radio or television) will be affected (c) what radius will be covered?
Order Paper Questions
1949 equalling 100, was at a level of 49.5 for the annual average of 1913 and at 224.9 for November 1974.
2.	(a) Consumer Price Index for (b) Percentage change since 3
Canada (1949 = 100)	years earlier
December 1953	115.8	+ 8.6" 1956	120.4	+ 4.0" 1959	127.9	+ 6.2" 1962	131.9	+ 3.1" 1965	140.8	+ 6.7" 1968	158.0	+12.2" 1971	176.1	+ 11.5November 1974	224.9	+28.6
Consumer Price Index components as at November 1974 (1949 = 100)


James Hugh Faulkner: The
CBC Accelerated Coverage Plan is a large, complex and highly integrated five-year undertaking involving 300 locations and 600 engineering projects. Names of the locations and the nature of the service to be provided are made public, step by step, as applications for licences are made to the Canadian Radio-Television Commission.


QUEBEC LIVING PLACES SEMINAR
Mr. Herbert: With reference to the answer to Question No. 280, did the Minister of State for Urban Affairs hope to convene a Quebec Living Places Seminar in March, 1974 and what are the reasons it has not been possible to finalize arrangements for such a seminar?


Hon. Barney Danson (Minister of State for Urban Affairs):: I am advised by Central Mortgage and Housing Corporation that it was considered appropriate to postpone the Quebec Living Places Seminar until after the master agreements with the province had been negotiated. These were signed in the fall of 1974. A seminar may be held in Quebec in early spring, and an invitation to attend will then be extended to all interested parties.


CONSUMER PRICE INDEX
Mr. Stevens: 1.	To the date this question is answered, what would be the current all-items Consumer Price Index if calculated from 1913 expressed in terms of 1949 equalling 100?
2.	(a) What was the all-item Consumer Price Index, if calculated from 1913, expressed in terms of 1949 equalling 100, as of December 1953, 1956, 1959, 1962, 1965, 1968, 1971 and 1974 (b) what was the percentage change from the preceding three year period for each such period?
3.	What would be the current Consumer Price Index for each of (a) food (b) shelter (c) services excluding shelter (d) goods other than food if calculated from 1913, expressed in terms of 1949 equalling 100?
4.	(a) What was the Consumer Price Index for each (i) food (ii) shelter (iii) services excluding shelter (iv) goods other than food if calculated from 1913, expressed in terms of 1949 equalling 100, as of December 1953, 1956, 1959, 1962, 1965, 1968, 1971 and 1974 (b) what was the percentage change from the preceding three year period for each such period?


Gaston Clermont: 1. The Consumer Price Index for Canada, calculated on the basis of
(a) Food	246.5
(b) Shelter	270.9
(c) Services Excluding shelter	302.4
(d) Goods other than Food	173.5
4. Consumer Price Index components (1949 = 100)
(a) (i) Food
December 1953	112.1
" 1956	117.5
" 1959	122.4
" 1962	127.8
" 1965	139.6
" 1968	154.4
" 1971	168.0
November 1974	246.5
(ii) Shelter	
December 1953	125.2
" 1956	133.5
" 1959	142.7
" 1962	148.6
" 1965	160.1
" 1968	185.2
" 1971	222.7
November 1974	270.9
(iii) Services Excluding Shelter	
December 1953	124.8
" 1956	138.5
" 1959	156.9
" 1962	167.5
" 1965	189.6
" 1968	219.3
" 1971	258.5
November 1974	302.4
(iv) Goods other	than Food
December 1953	112.8
" 1956	112.7
" 1959	118.4
" 1962	118.8
" 1965	122.5
" 1968	135.2
" 1971	144.4
November 1974	173.5
Percentage change since 3 years earlier + 3.4 + 4.8 + 4.2 + 4.4 -f 9.2 +10.6 + 8.8 +49.5
+ 14.2 + 6.6 + 6.9 + 4.1 + 7.7 +15.7 +20.2 +21.9
+ 18.1 + 11.0 + 13.3 + 6.8 +13.2 +15.7 +17.8 +17.9
+ 8.0 - 0.1 + 5.1 + 0.3 + 3.1 +10.4 + 6.8 +20.2

February 12, 1975
Order Paper Questions


PUBLIC WORKS-CONSTRUCTION OF BUILDING IN VILLAGE OF PORT STANLEY, ONTARIO
Mr. Wise: Has the government any plans to construct a new building in the Village of Port Stanley, Ontario and, if so (a) on what date is construction expected to begin (b) what is the expected date of completion?


Hon. C. M. Drury (Minister of Public Works):: A feasibility study is currently in progress relative to the provision of improved postal accommodation at Port Stanley. The implementation time frame cannot be identified at present and will be subject to establishment of Canada Post Office priorities and availability of funds.


NOISE LEVEL STUDY FOR CANADIAN NATIONAL RAILWAY, VANCOUVER
[Stage Direction]
Question No. 1,212-Mr. Huntington:	.
Will the Minister of the Environment release the noise level study done for the Canadian National Railway on waterfront activity in the City and District of North Vancouver and, if the study is not available, for what reason?
Mr. Len Marchand (Parliamentary Secretary to Minister of the Environment):: This study was developed without consultation with the Department of the Environment and was funded by the Canadian National Railway. This department does not have a copy of the report.


EXPENDITURES AND NUMBER OF TRAINEES UNDER BASIC TRAINING FOR SKILL DEVELOPMENT
Mr. Marshall: 1.	Under the Basic Training for Skill Development Programme (a) what amount of money was expended in Newfoundland during the fiscal year 1973-74 (b) what amount of money has been allotted for the fiscal year 1974-75?
2.	With regard to Newfoundland (a) how many persons participated in the Basic Training for Skill Development Programme in the fiscal year 1973-74 (b) how many persons are expected to participate in the fiscal year 1974-75?


Mr. William Rompkey (Parliamentary Secretary to Minister of Manpower and Immigration):: Amount of money expended in Newfoundland under Basic Training for Skill Development Component of the Canada Manpower Training Programme:
	1973-74	1974-75 (Estimated)
	*	$
(a) Purchases	2,440,572	2,001,,500(b) Allowances	3,099,318	1,884,.545Total Expended	5,539,890	3,946,045
Number of trainees who participated in the Basic Training for Skill Development Component of the Canada Manpower Training Program
in Newfoundland.	1973-74	1974-75	(Estimated)OO	2,394 ()>)	1,589


RELOCATION OF PARKS CANADA REGIONAL OFFICE FROM CORNWALL, ONTARIO
Mr. Cossitt: 1.	With reference to the answer to Question No. 1,045 to the effect that the Regional Headquarters of Parks Canada will be moved from Cornwall, Ontario to another more central location (a) on what date will this move take place (b) what would be the new location (c) is or has any place in the constituency of Leeds been considered for such location and (i) if so, what are all details (ii) if not, for what reason?
2.	Will the government give immediate consideration to relocating in the constituency of Leeds the Regional Headquarters of Parks Canada now in Cornwall, Ontario?


Mrs. Iona Campagnolo (Parliamentary Secretary to Minister of Indian Affairs and Northern Development):: 1. (a) No date has been identified, (b) The new location will be somewhere within reasonable commuting distance to the other federal government services from whom we require services and with the several departments of the provincial government with whom we have extensive cooperation and co-ordination in program achievement. Our investigations are centred within one hour commuting time of Toronto, (c) No. This would not provide us with the access to the provincial and other federal agencies mentioned in (b).
2. No.


ESTABLISHMENT OF NATIONAL PARK IN SOUTHWESTERN SASKATCHEWAN
Mr. Hnatyshyn: Is the government committed to the establishment of a national park in the grasslands area in Southwestern Saskatchewan and, if so, on what date will such a park be established?


Iona Campagnolo: The government is negotiating with the government of Saskatchewan to establish a national park in southwestern Saskatchewan. If the negotiations are successful, it is expected that a memorandum of intention will be signed in the near future. Until negotiations are completed, it is not possible to give a date for the establishment.

February 12, 1975


CANADIAN POLICE INFORMATION CENTRE-COMPLAINTS
Mr. Beatty: 1.	Since the creation of the Canadian Police Information Centre (CPIC), how many complaints have been received of arrests arising from misinformation in CPIC's data bank?
2.	Has the government investigated the complaint by Mr. Brian Bonn of 604-81 York Street, Kitchener that information claiming he had defaulted on payment of a 1965 fine was false and that he was unjustly arrested and, if so, what were the results of the investigation and what action was taken?


Hon. Warren Allmand (Solicitor General):: 1. None.
2. No complaint received.
Order Paper Questions


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


Hon. John C. Munro (Minister of Labour):: 1. (a) 743; (b) 787.


DEPARTMENT OF CONSUMER AND CORPORATE AFFAIRS- OPERATING BUDGET
Mr. Reynolds: What was the total operating budget for the Department of Consumer and Corporate Affairs for each year 1967 to 1974 and 1975 estimated?


Hon. Andre Ouellet (Minister of Consumer and Corporate Affairs):: Total Operating Budget for Department of Consumer and Corporate Affairs.
2.
(a) January 1, 1974-382		January 1, 1975-333
(b)	-293	-344(c)	- 56	-96(d)	- 7	- 14


MINISTRY OF STATE FOR SCIENCE AND TECHNOLOGY SALARIES OF FULL-TIME EMPLOYEES
[Stage Direction]
1966-67	$ 5,483,916
1967-68	11,338,200
1968-69	14,016,500
1969-70	15,927,000
1970-71	20,021,000
1971-72	25,235,000
1972-73	32,842,000
1973-74	36,728,000
1974-75	42,789,000
1975-76	51,508,000
*(actual expenditure) *
*The Department of Consumer and Corporate Affairs did not exist in 1966-67. The 1966-67 figure refers to programs that were located in various other Departments at that time.
Mr. Paproski: 1.	How many full-time employees were under salary in the Ministry of State for Science and Technology on (a) January 1, 1974 (b) January 1, 1975?
2.	How many people in each of these years received salaries of (a) under $10,000 (b) between $10,000 and $20,000 (c) between $20,000 and $30,000 (d) over $30,000?


Charles Mills (Bud) Drury: 1. (a)
159; (b) 157.


DEPARTMENT OF ENERGY, MINES AND RESOURCES- SALARIES OF FULL-TIME EMPLOYEES
Mr. Paproski: 1.	How many full-time employees were under salary in the Department of Energy, Mines and Resources on (a) January 1, 1974 (b) January 1, 1975?
2.	How many people in each of these years received salaries of (a) under $10,000 (b) between $10,000 and $20,000 (c) between $20,000 and $30,000 (d) over $30,000?
	1974	1975
(a)	84	59(b)	41	48(c)	27	36(d)	7	14


Maurice Brydon Foster: 1. (a) January 1, 1974-3,076; (b) January 1, 1975-3,167.
2. January 1, 1974	January 1, 1975
(a)	1,075	735(b)	1,572	1,892(c)	399	48330	57


QUESTIONS PASSED AS ORDERS FOR RETURNS
Mr. Reynolds: What are the names of all the lawyers used in British Columbia by the government or any Crown corporation?
Return tabled.

February 12, 1975
Order Paper Questions


FEDERAL ASSISTANCE TO STATE OF ISRAEL AND ARAB COUNTRIES SINCE 1967
Mr. Laprise: 1.	Since 1967, how much money has been granted to the State of Israel on an annual basis, in the form of (a) grants (b) loans (c) in the latter case, what was the interest rate?
2.	Since 1967, how much money has been granted to each of the Arab countries on an annual basis in the form of (a) grants (b) loans (c) in the latter case, what was the interest rate?
Return tabled.


NUMBER OF FEDERAL EMPLOYEES IN ATLANTIC PROVINCES
Mr. Coates: 1.	What is the total number of employees of the government located in the four Atlantic Provinces?
2.	Of that total number, what is the breakdown by province?
3.	Of the total number, by province, how many are permanent employees and how many are conditional from any point of view?
4.	Of the total number who are permanent, how many are in receipt of pay that is national and how many have their pay determined on a regional basis?
Return tabled.


CONTRACTS TO ARTHUR D. LITTLE COMPANY
Mr. Orlikow: Has any department, agency and Crown corporation given contracts to the Arthur D. Little Company and, if so (a) which ones (b) for how much (c) for what reason?
Return tabled.


LIP AND OYP-PAPER RE-CYCLING PROJECTS
Mr. Dick: 1.	(a) In each of the years that the Local Initiative Programme has been operating, how many applications were approved by the government granting funds for projects dealing with paper re-cycling (b) what were the names of each of the projects, for what community were they and how much money was granted in each case by the government?
2.	(a) In each year that the Opportunity for Youth Programme has been operating, how many projects have been approved involving paper re-cycling (b) what were the names of each of the projects, for what community were they and how much money was granted in each case by the government?
Return tabled.


DEFEATED LIBERAL CANDIDATES
Mr. Cossitt: 1.	Have any persons who ran as candidates of the Liberal Party in the General Election of July 8, 1974 received any appointments, employment or honours of any kind from the government and, if so, what are the names of such persons, when and what have they received and what is the exact renumeration involved in dollars in each case?
2.	What is the same information as above for any persons who served as Liberal Members of Parliament in the 29th Parliament of Canada and who did not contest the election of July 8, 1974?
Return tabled.


CMHC-AGREEMENTS WITH PROVINCES
Mr. Brewin: 1.	Has Central Mortgage and Housing Corporation entered into agreement with any of the provinces under the provisions of Part III of the Neighbourhood Improvement Programme passed on June 12, 1973 and, if so (a) which are the provinces (b) what are the dates of each of the agreements?
2.	(a) How many neighbourhoods have been approved by provinces or municipalities for contributions or loans under Part III of the Programme (b) in what provinces and municipalities (c) what are the amounts of the loans, actual and approved, under the Part?
3.	How much has been advanced by the Corporation in respect to section 27(2) of the Act to amend the National Housing Act passed on June 12, 1973 for the selecting of neighbourhoods, formulating and collecting plans to be implemented, acquiring or clearing land and for the cost of improving municipal and public utility services under the Part?
4.	What contributions, if any, have been made to municipalities by the Corporation for site clearance in accordance with section 27(4) of the Act?
5.	(a) What advances have been made to the Corporation out of the Consolidated Revenue Fund for the financing of neighbourhood improvement programmes (b) in what provinces (c) on what dates and in what amounts?
6.	(a) What advances has the Corporation made under the powers conferred by Part IV of the Act to amend the National Housing Act, passed on June 12, 1973, for the rehabilitation and conversion of existing residential buildings (b) in what provinces and municipalities have such loans been made (c) what are the amounts that the Minister has advanced to the Corporation for the financing of housing rehabilitation programmes from the passage of the Act up to the present time?
Return tabled.


MINISTRY OF STATE FOR URBAN AFFAIRS-RESEARCH EXPENDITURES
Mr. Symes: 1.	What was the total amount of money spent in each of the fiscal years 1972-73 and 1973-74 by the Ministry of State for Urban Affairs on contracts to outside persons and organizations for research, development and other consulting services?
2.	What are the names and addresses of these outside persons and organizations and what amounts of money were involved in each contract?
3.	What was the purpose of each contract and title of each report submitted?
Return tabled.


CIDA-AGREEMENT WITH GOVERNMENT OF ZAIRE
Mr. Grafftey: 1.	Did the Canadian International Development Agency enter into a contract or an agreement with the Government of Zaire or one of its departments which involves the services of a Quebec company named Sintec and, if so, on what date?
2.	(a) What was the amount of the contract (b) what services are to be performed (c) what part of the contract amount is a grant and/or a loan by CIDA?
3.	Is work on this contract being carried out at this date and, if not, for what reason?
4.	(a) Were tenders called for this contract and (i) if so, how many firms other than Sintec submitted tenders and did Sintec submit the lowest tender (ii) if not, for what reason (b) if Sintec was chosen from a short list of firms without tender, what other firms were on the list (c) what were the reasons for the choice of this particular firm?
5.	What are the names of the chief officers of Sintec and what are their academic and professional qualifications?
February 12, 1975

6.	(a) What other contracts has Sintec carried out for CIDA and for what amounts (b) has this firm had previous experience with (i) an overseas contract (ii) any other contract?
7.	Was Rene Mantha, co-ordinator of business agents for Local 791 of the International Union of Operating Engineers, employed by Sintec on a CIDA contract in Zaire and, if so, in what capacity and at what salary and allowances?
Return tabled.


DREE-TRANSFER OF EMPLOYEES TO REGIONAL OFFICES
Mr. Roche: 1.	What are the names and job titles of employees of the Department of Regional Economic Expansion who have been transferred (a) from Ottawa to regional offices (b) from regional offices to Ottawa since July,1973?
2.	What were the names, job titles and locations of all senior executives in the Department as of November, 1974?
Return tabled.


AIR CANADA-PERFORMANCE OF L-1011
Mr. Mazankowski: 1.	From March, 1974 to date, on a monthly basis, what was the record of on-time arrival and departure performance in percentage figures of the Lockheed L-1011, operated by Air Canada?
2.	(a) What was (i) the longest delay (ii) the average delay in each month (b) what was the major reason for delays?
3.	What is the system average of Air Canada's fleet on a monthly basis?
4.	Is the record of the L-1011 on-time performance satisfactory to Air Canada?
5.	(a) For what reason was the L-1011 considered over the Douglas DC-10 when Air Canada embarked upon the purchase of this type of wide-bodied aircraft (b) does the L-1011 cost of operation compare satisfactorily with that of the DC-10 (c) are documented statistics available and, if so, what are they?
6.	(a) What was the load factor for each month on all L-lOlls operated by Air Canada's scheduled service (b) what was the average load factor of Air Canada's total fleet for this period?
Return tabled.


Mr. Cossitt:: Mr. Speaker, I rise on a point of order in regard to question No. 534 the answer to which is four months overdue. It is with regard to Local Initiatives Program projects known as Research Anti-Poverty and Project Aldergrove. The question asks for details of these projects, details of RCMP investigation of the projects and the names of all those connected with the projects. In addition, I refer to questions 1,183 and 1,184 on the same projects, including inquiries concerning a certain Michael Carson in connection with them who was apparently the same Mr. Carson mentioned in the Norris report a few years ago in regard to the SIU-CSU situation. I am aware that the minister could have answered the question many weeks ago when the investigations by the RCMP were completed, and I can only assume that he or the government is trying to hide something by not answering the questions.
I should like to ask why these questions are not being answered, in addition to many other questions on LIP which have not been answered by the government. Surely some assurance should be given as to when they will be forthcoming.
Motions for Papers


Maurice Brydon Foster: I will take account of that inquiry and look into the matter.


Jack Marshall: Mr. Speaker, I rise with regard to the question that has been on the order paper since November 4 concerning property that was left by the American government to the Canadian government valued at many millions of dollars and containing sophisticated radar equipment which is of value to the Canadian government. It has been left to be vandalized over a period when the government agencies concerned are procrastinating over its use. I think that in three months I should have received an answer.


MOTIONS FOR PAPERS
[Stage Direction]
Motion No. 11-Mr. Marshall:
That an humble Address be presented to His Excellency praying that he will cause to be laid before this House a copy of all correspondence, wires, minutes of meetings having to do with highways programmes in the constituency of Humber-St. George's-St. Barbe during 1973 and 1974 between the government and the Government of Newfoundland.
Maurice Brydon Foster: Mr. Speaker, the notice of motion for the production of papers No. 11 is acceptable to the government subject to the usual reservations concerning confidential documents and authorization of the government authorities concerned.


Mr. Speaker:: Subject to the reservations and conditions expressed by the parliamentary secretary, is it the pleasure of the House that notice of motion No. 11 is deemed to have been adopted?


Some hon. Members:: Agreed.


Maurice Brydon Foster: Mr. Speaker, would you be so kind as to call notices of motions for the production of papers Nos. 17 and 22.


COPIES OF CORRESPONDENCE RELATING TO FEDERAL GRANTS ACCORDED TO UNITED AIRCRAFT
[Stage Direction]
Motion No. 17-Mr. Broadbent:
That an Order of the House do issue for copies of all correspondence between United Aircraft and the government over the past year and copies of contracts relating to federal grants accorded to United Aircraft over the past five years.
Maurice Brydon Foster: Mr. Speaker, the documents requested in this motion refer to correspondence which is commercially confidential, the release of which would be detrimental to Canadian production and exports. The contracts requested in the motion have already been tabled in the House by the Minister of

February 12, 1975
Canadian Automotive Industry
Supply and Services (Mr. Goyer). I would therefore ask the hon. member to withdraw his motion.


Mr. Edward Broadbent (Oshawa-Whitby):: Transfer for debate.


Mr. Speaker:: Transferred for debate.


COPIES OF STUDIES RELATING TO CANADIAN SHIPPING AND SHIPYARDS
[Stage Direction]
Motion No. 22-Mr. Forrestall:
That an Order of the House do issue for a copy of all studies, notes, position papers, memoranda, etc., relating to the requirements of Canadian shipping with respect to the proposed formula for import/ export conference rated seaborne trade, in terms of the number of ships required, the capacity of Canadian shipyards, the number of Canadian merchant seamen required, the level of ancillary shipyards, the number of Canadian merchant seamen required, the level of ancillary shipyard related industries of design capability, etc., in the event Canada ratifies the proposed Code of Conduct for liner conferences.
Mr. Cliff Mclsaac (Parliamentary Secretary to Minister of Transport):: Mr. Speaker, in view of the fact I commented on this motion previously, I would ask the hon. member to withdraw the motion.


Mr. J. M. Forrestall (Dartmouth-Halifax East):: Because of the importance of this matter to the Canadian shipping industry, I would like to have it transferred for debate.


Mr. Speaker:: Transferred for debate.


MOTION TO ADJOURN UNDER S.O. 26   LABOUR CONDITIONS LAY-OFFS IN AUTOMOTIVE INDUSTRY-EFFECT ON LABOUR MARKET GENERALLY
John Edward Broadbent: Mr. Speaker, I ask leave, seconded by the hon. member for Winnipeg North Centre (Mr. Knowles), to move the adjournment of the House under Standing Order 26 for the purpose of discussing a specific and important matter requiring urgent consideration, namelythat the depression which now exists in the Canadian automotive industry directly or indirectly affects one out of every six jobs in Canada.


Mr. Speaker:: Order, please. The hon. member gave the Chair, as required by the Standing Order, notice of his intention to put this motion. In dealing with the desirability of ordering time to be set aside for a special debate, I have regard first of all to the reasons which I gave, on January 27 of this year when the hon. member put forward a similar motion. I refer the hon. member to those reasons. I am sure he is motivated to propose similar consideration by the House of that aggravated problem by the worsening of the situation in the interval. Some of the reasons as to the reluctance to examine a specific industry in that way, in light of the obvious invitation to examine

the situation in other industries which would follow, are valid and I would refer the hon. member to those reasons.
However, there is an additional factor which I think is important and which I would express to the hon. member in this way because, indeed, he raises a subject which is very grave and must be of obvious concern not only to the members of this House but to all Canadians. Subsection 5 of the rule in this regard sets out the considerations which the Chair ought to have in determining whether a special debate should be held, and one of those is the probability of the matter being brought before the House within reasonable time by other means. I felt, on January 27, that the presence of an income tax bill before the House for second reading would give hon. members an opportunity to address themselves to the economic situation in general and to the situation in the automotive industry in particular. Indeed, if my judgment needed vindication in that respect, it was amply vindicated by the meaningful address that the hon. member for Oshawa-Whitby (Mr. Broadbent) made in this regard yesterday afternoon.


Some hon. Members:: Hear, hear!


Mr. Speaker:: I am not in any way being facetious in this regard; I mean that comment very seriously. I am mindful, of course, of the fact that this matter was considered yesterday but, more importantly, that the question will be considered shortly by the House. Of course, on the same bill the House will be going into committee of the whole this afternoon. This will provide the hon. member and other members of the House not only with the opportunity, in committee, under clause 1 of the bill to make their comments, but it will enable them to question the minister and some of his colleagues on this very important subject. I think that will provide a more meaningful exchange than a special debate under Standing Order 26. For these reasons, I feel it would not be proper to allow leave under Standing Order 26 at this time.



ORAL QUESTION PERIOD


Hon. Robert L. Stanfield (Leader of the Opposition):: Mr. Speaker, my question is for the Minister of Finance. The minister said in the House on Monday that the $3 billion cash deficit for the fiscal year 1975-76 forecast in his November budget will be substantially exceeded because of reduced revenues from the export sector and higher payments for unemployment insurance. Does this mean that the minister has given up on his employment projection of 250,000 additional jobs for 1975, given at the time of his November 18 budget, or what is the explanation for the substantially higher payments for unemployment insurance in the next fiscal year?
February 12, 1975


Hon. John N. Turner (Minister of Finance):: Mr. Speaker, as I said yesterday, because of the depth of the recession in the United States and its effect on our exports, the projections both for corporate revenue and for unemployment have been shaded down, so that the cash deficit of $3 billion predicted in the budget of November 18 will now be exceeded. I cannot give the hon. gentleman a fixed figure for unemployment. As I have told him and other members of the House, there are too many variables at play in the figure. In terms of new employment, at an appropriate time we will see the effect of the stabilization measures in the United States and how the stimulus injected into our country is taking effect. I will then be able to give a more precise answer to the House.


Robert Lorne Stanfield: A supplementary question, Mr. Speaker. The minister has used a good many words, but he has not denied that he said on Monday there will be a substantial increase in the pay-out for unemployment insurance in the next fiscal year. This means that the employment situation which he now foresees is substantially worse than he foresaw when he presented his budget. I am asking the minister whether he is just accepting this worsening of the employment situation and is taking the position that there is nothing he can do at the present time to offset this projected drop in business and increase in unemployment.


John Napier Turner: Mr. Speaker, that is not the conclusion I would draw from what I said. I do not attribute the increase in cash deficit, in numerical terms, either to a falling off of corporate revenues or to increased unemployment insurance pay-outs. I do not place emphasis on one or the other. In anticipation of declining United States, European and Japanese economies we introduced a stimulus into our economy on November 18. Lower payroll deductions beginning January 1 reflected reductions in the 1974 and 1975 income tax rates. Until we see how the American policy evolves and the effect of final measures enacted by the United States Congress, I think it would be premature to add stimulus at this stage.


Robert Lorne Stanfield: A final supplementary question, Mr. Speaker. Is the minister attempting to deny that he said on Monday there would be substantially increased payouts for unemployment insurance in the next fiscal year? I heard him and it is on the record-although he was using a different argument from the one he used today. I ask the minister, now that he is on record as admitting that the employment situation will be significantly worse than the situation he foresaw at the time of the budget, and as he has admitted that economic conditions now are substantially different from those he foresaw at the time of the budget, is the budget now inappropriate to that extent, or will the Canadian people be simply stuck with it because the minister does not know what to do with it?


John Napier Turner: Mr. Speaker, the answer to that is no.
Oral Questions


THE CANADIAN ECONOMY
Mr. John A. Fraser (Vancouver South):: Mr. Speaker, may I direct a question to the Minister of Finance? Since the government's effort in 1970 to arrive at a voluntary program of restraint was hopelessly one-sided to the extent that it asked workers to restrain their wage demands while leaving the government free to literally take away thousands of jobs as a result of government policy, does the consensus the government is seeking involve a government commitment on employment growth and, if so, when will the details of that commitment be made public?


John Napier Turner: Mr. Speaker, when the consensus evolves I will declare it to the House.	.


John Allen Fraser: A supplementary question, Mr. Speaker. Can the Minister of Finance advise the House whether labour representatives were given the government's own predictions as to the extent of expected unemployment during the coming year-it would be incredible if the government had no projections-and, if so, what were the government's projections several weeks ago when the meetings took place? Also, what is the government's present projection, in view of the figures released yesterday? I think the people are entitled to an answer from the Minister of Finance.


John Napier Turner: Mr. Speaker, I have never predicted unemployment figures, interest rates or exchange rates in this House, for reasons I have given on several occasions. As to the conversations with leaders of the labour movement-[DOT]


Robert Lorne Stanfield: Of course, they were privileged.


John Napier Turner: -they were privileged and confidential, on both sides.


John Allen Fraser: A final supplementary question, Mr. Speaker. Is the Minister of Finance telling this House that the government has no estimates of what unemployment may be during this coming year: is that what the minister is saying?


John Napier Turner: No, sir.


REQUEST FOR GOVERNMENT PROGRAM TO SOLVE PROBLEMS IN AUTOMOTIVE INDUSTRY
John Edward Broadbent: Mr. Speaker, I have a question for the Minister of Finance. Considering that the problems of the automotive industry are now worldwide, and considering that other national governments, specifically those of France, Great Britain and the United States, have recognized how important the automotive sector is to their national economies, does the Government of Canada plan to bring forward in the near future a national program which will deal with the severe problems our national automotive industry faces?

February 12, 1975
Oral Questions


John Napier Turner: Mr, Speaker, we will be meeting Mr. Dennis McDerment and the council of the United Automobile Workers in the next few days and discussing these various matters. We are concerned not only about the health of the automobile industry but also about the health of other industries in this country which are affected by current world conditions. Of course, the answer relating to any particular sector, again, depends on how effective any remedy might be.


John Edward Broadbent: Mr. Speaker, that is the standard answer. Has the minister considered, as one of the vast range of policy alternatives which I am sure passes through the government's collective mind, the possibility of reducing-indeed, of removing-the federal sales tax on automobiles for one year on condition that the automobile companies-this would be a means of forcing them to do so-bring down the price of cars they sell to Canadians to the level at which they are sold to Americans? Thus there would be a substantial shift in sales and a greater percentage of cars would be sold on the Canadian side of the border as opposed to the American side.


John Napier Turner: Mr. Speaker, that is one alternative, except that the revenue implications are quite severe. If that type of stimulus were to be introduced, it might be introduced into the economy generally.


TRANSPORT
John Edward Broadbent: Mr. Speaker, my question is directed to the Minister of Transport. Has the minister's department given serious consideration to evolving a plan with the automotive sector to transfer certain productive facilities away from automobiles to the production of interurban transit vehicles, because they undoubtedly represent the way of the future?


Hon. Jean Marchand (Minister of Transport):: Mr. Speaker, I have never heard of such a proposal, but I am ready to inquire and see if somebody has discussed that in the department.


UNEMPLOYMENT INSURANCE
Joseph Adrien Henri Lambert: Mr. Speaker, I should like to put a question to the Minister of Manpower and Immigration.
In view of the difficulties independent agricultural workers have in collecting unemployment insurance allowances because of the discrimination arising from Regulation 172-4(b) that arbitrarily sets gains at 50 per cent of the farm gross income, something that is entirely 
wrong and unfair, could the minister tell the House whether he will recommend that the regulation be amended to make it more consistent with facts and to do justice to this category of workers?


Hon. Robert K. Andras (Minister of Manpower and Immigration):: Mr. Speaker, as always, I will certainly give the hon. member's representation due thought.


REASON FOR DELAY IN PAYING BENEFITS
Mr. Andre Fortin (Lotbiniere):: Mr. Speaker, I have a supplementary question for the Minister of Manpower and Immigration.
In view of the bewildering increase in the unemployment rate, particularly in Quebec, and the delays in the distribution of payments through the famous electronic machine of the Montreal centralized system, is the minister in a position to order that an immediate inquiry be held on the efficiency of that office, the number of payments being made and of those that cannot be made, while families waiting for the allowances are practically starving? Can the minister promise the House he will have those delays investigated and assure the House that he will take the necessary measures so that unemployment insurance claimants get the money to which they are entitled since they contributed out of their labour?


Robert Knight Andras: Mr. Speaker, we analyse the effectiveness and speed of our services, which are very important for the reasons the hon. member has described, right across the country. According to my most recent information, the speed of the service is better than it was one year ago, which was better than it was two years ago. Notwithstanding that, if there is a local situation which is troublesome I will be glad to investigate it. I ask the hon. member to give me as much detail as possible, and I will make arrangements so that he and I can meet the chairman of the commission and look into the problem.


André-Gilles Fortin: A supplementary, Mr. Speaker.
Here is the particular point of the request I make on behalf of my colleagues and of my fellow citizens: Once everything is in order, the commission reserves itself a ten-day delay before ordering to start the payments. Is the minister aware of this situation? Does the minister have a solution to suggest to the people who will have to wait ten days, although their case is in order, to have their three meals a day at home, and does the minister intend to take steps to have the commission pay what is to be paid when the case is in order?


Robert Knight Andras: Mr. Speaker, I have already indicated that I will look into the situation the hon. member describes.
February 12, 1975


FINANCE
Hon. Marcel Lambert (Edmonton West):: Mr. Speaker, my question is directed to the Minister of Finance. In view of the obvious revision of the financial resources available to the government and to the economy, would the minister advise the House as to the revised figure he has arrived at respecting the cash requirements of the government for unemployment insurance payments in the fiscal year 1975, in light of the government's obligations? Will this figure possibly exceed the $2 billion reached in 1972?


John Napier Turner: Mr. Speaker, I will look into that.


ADMINISTRATION OF JUSTICE
Mr. J. P. Nowlan (Annapolis Valley):: Mr. Speaker, I should like to ask the Solicitor General a question on a serious subject. Before I do, without raising an official point of order I should like to draw attention to the fact that the reports filed under the provisions of the Official Secrets Act and the privacy act were distributed to the press at about 2.30 or 3 p.m. yesterday afternoon, and no copies were delivered to members of parliament.


Some hon. Members:: Shame.


John Patrick (Pat) Nowlan: While I know the image of the Solicitor General needs all the help it can get, I do not believe this insult to parliament should go unmentioned. I hope that future reports filed with respect to legislation will at least be delivered to members of parliament at the same time as they are sent to the august body up above.
My question obviously refers to the reports filed on wiretapping. In light of the assessment made in the final paragraph of one of the reports and the difficulty set out in that report in relation to the implementation of the act, is the minister prepared to refer both these reports forthwith to the Standing Committee on Justice and Legal Affairs, in order that any necessary changes for the proper administration of justice can be studied and implemented?


William Warren Allmand: First, on the point of order I want to say the law requires these reports to be tabled in the House of Commons under the rules of the House. They were prepared accordingly and that was done. It was done on Monday without my knowledge. The procedure is carried out through the office of the Clerk of the House and the reports are then printed in Votes and Proceedings. As soon as I found that this had been done, I advised those who I thought were the principal critics in the opposition parties.


Some hon. Members:: Oh, oh!
Oral Questions


William Warren Allmand: In the Conservative Party, I advised the hon. member for Fundy-Royal, telling him I would make copies available, and in the New Democratic Party I advised the hon. member for New Westminster and the hon. member for Broadbent.


Some hon. Members:: Oh, oh!


Mr. Speaker:: Before this non-point of order becomes any more complicated, may I say I have credited the question period with the amount of time taken by speakers on both sides, and perhaps we should return to the answer itself.


William Warren Allmand: I meant the hon. member for Broadview, not Broadbent. With respect to the question asked by the hon. member, I would say that several other reports are due on the same subject. Wiretaps relating to the Criminal Code are usually carried out under provincial attorneys general who report on the administration of this legislation across the country. I do not think we should refer this subject to a committee or take any action until we have received all the reports on wiretapping; they must be tabled at the end of the calendar year. In the meantime I will take the hon. member's suggestion into consideration.


John Patrick (Pat) Nowlan: I can understand, now, why the Solicitor General has so many escapees across the country: he does not know who are the spokesmen on the subject on this side of the House. I have a two-part supplementary to direct to the hon. gentleman. Can he assure the House that none of the 339 warrants authorized under the Official Secrets Act and 249 authorized under the privacy act was issued with respect to any of the members of this House? With respect to the 339 warrants issued under the Official Secrets Act, can the minister tell us how many are related to foreign subversive activity and how many are related to internal subversive activity?


William Warren Allmand: With respect to authorizations under the Official Secrets Act-those are the ones I must authorize, in accordance with the law-none was issued with respect to any of the members of this House. Warrants issued under the Criminal Code or in connection with criminal matters are usually authorized by judges, and I do not know whether any were authorized with respect to members of parliament. However, to my knowledge there were none; but then I would not be made aware of any. The hon. member is asking me, in the latter part of his question, for more information than the law requires me to report. I will look into that aspect and see whether I can provide him with the information.


UNEMPLOYMENT INSURANCE
Mr. Lincoln M. Alexander (Hamilton West):: Mr. Speaker, my question is directed to the Minister of Manpower and Immigration. Given the fact that increasing unemployment and higher benefits affect the contributions of workers and employers, and noting that the minister in his last statement dealt with what we call an

February 12, 1975
Oral Questions
unwarranted tax, can the hon. gentleman assure the House that there will be no further increase in employer-employee contributions this year related to unemployment insurance?


Robert Knight Andras: Mr. Speaker, I see no indication that there will be the requirement for an increase in the employer-employee premium rate this year.


CANADIAN BROADCASTING CORPORATION
Mr. W. C. Scott (Victoria-Haliburton):: Mr. Speaker, my question is for the Secretary of State, the minister who answers for the CBC. It concerns the refusal of the CBC to provide me with a transcript of the audio portion of the program "Ten Lost Years" telecast on the network on Sunday night, February 2. Will the minister instruct the CBC to provide me with that transcript?


James Hugh Faulkner: Mr. Speaker, I have spoken to the corporation about this. They would be pleased to provide the Standing Committee on Broadcasting, Films and Assistance to the Arts with a full screening of that program, which the hon. member could attend.


William C. Scott: I am not interested in the quality of the acting; I want a transcript of the words spoken on the air. I ask the minister again, will he see that I am provided with this transcript?


James Hugh Faulkner: In my judgment, they go together.


FINANCE
Mr. John Reynolds (Burnaby-Richmond-Delta):: Mr. Speaker, I wish to direct this question to the Minister of Finance. In view of the fact that Olympic coins are considered legal tender, and since British Columbia is to my knowledge the only province charging a 5 per cent sales tax, can the minister advise the House whether the imposition of such a sales tax is legal, and if it is not, will he see that the money is paid back to the people or credited to the Olympic fund?


Mr. Speaker:: Order, please. The rules of the question period clearly except asking a minister to give a legal opinion. The hon. member's question directly asks the minister whether the collection of the sales tax is legal, and this would appear not to be a proper question during this period. Perhaps an answer could be obtained in some other way.


John Douglas Reynolds: Mr. Speaker, perhaps I would be allowed to rephrase the question. Is the minister aware that British Columbia is charging a sales tax?


John Napier Turner: I will try to answer the question within the ambit of your ruling, Mr. Speaker. No tax attaches to Olympic coins which change hands at face value, but when they are sold by the banks for amounts above their face value, sales tax is applicable. Some of the provinces have agreed to waive the sales tax, but with respect to the first issue and the second issue some provinces have imposed a sales tax, including Manitoba, Saskatchewan and British Columbia.


Some hon. Members:: Oh, oh!


CANADIAN NATIONAL RAILWAYS
Mr. Les Benjamin (Regina-Lake Centre):: Mr. Speaker, I should like to direct a question to the Minister of Transport. In view of the fact that Canadian National Railways have been carrying on discussions with the Hilton International Hotels chain and the Trizec Corporation-American and British companies, respectively-with a view to selling off a major share of the Canadian National hotel system plus other properties, may I ask the minister whether or not CNR management informed the minister or the government of their wish to do this, whether or not the government was asked for approval or for an opinion and, if not, has the minister or the government conveyed to the CNR their views on this matter? If so, what were those views?


Jean Marchand: Mr. Speaker, we are aware of the proposal made by Trizec, Hilton, CNR and Air Canada. The matter is under consideration now, but there is no indication that a fast decision is going to be taken on this very important matter.


Leslie Gordon Benjamin: A supplementary question, Mr. Speaker. The minister has answered only part of my question. In view of the fact that this property is owned and paid for by the people of Canada and is public property, would the minister tell the House his position and the position of the government on the matter? Also, will they request or instruct Canadian National to hire management and expertise to run their hotel chain, thus retaining ownership in the hands of the Canadian public?


Jean Marchand: Mr. Speaker, most of the important airlines in the world, such as TWA, Pan American, Air France and many others, have developed some hotels all over the world. Is it a good thing for Air Canada to do the same? That is the question we are looking into. There is no doubt in my mind that CN cannot make a deal with the hotels without the approbation of the Government of Canada.
February 12, 1975


PUBLIC WORKS
Mr. Denis Ethier (Glengarry-Prescott-Russell):: Mr. Speaker, I would like to direct a question to the Minister of Public Works concerning the Perley Interprovincial Bridge between Hawkesbury, Ontario, and Grenville, Quebec.

Following receipt of the consultant engineers' report concerning the structure of the Perley bridge, the assessment of the department was that the bridge would be replaced as soon as possible if this highway link was to be maintained. Also, with restricted truck loading the bridge could be kept in service for three to five years.


Some hon. Members:: Question.


Denis Éthier: In co-operation with the provinces of Ontario and Quebec, load limits were imposed on October 22, 1974, and a control station on the Quebec end of the bridge was operated by the province of Quebec on behalf of Public Works.


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


Denis Éthier: Mr. Speaker, my question is as follows: considering that Quebec has not looked after that control station since January 22, 1975, could the minister tell this House whether that means that, on the one hand, no new bridge will be constructed, and, on the other hand, the bridge will remain in service for three to five years, as mentioned in the previous report, if the tonnage limit is not imposed?


Charles Mills (Bud) Drury: Mr. Speaker, I am grateful to the hon. member for having drawn to my attention the fact that-


Some hon. Members:: Oh, oh!


Mr. Hees:: You really must make your questions a little shorter.


Charles Mills (Bud) Drury: Mr. Speaker, I regret that illumination seems to distress the opposition. I am grateful to the hon. member for drawing the attention of the House to the fact that under the agreement with the province of Quebec the services offered by the minister of transport of Quebec do not seem to be provided. I will inquire into the matter. The fact that the control services are not operating does not mean that there will not be a new bridge, but we are continuing to proceed with negotiations with Ontario and Quebec in regard to financing of the new structure.


Mr. Francis Fox (Argenteuil-Deux-Montagnes):: Mr. Speaker, I also have a supplementary for the Minister of State for Science and Technology and Minister of Public Works.
Oral Questions
In view of the slowness of negotiations and the small priority the riparian provinces seem to give to the solution of that serious problem, particularly to the urgent need for a new bridge for the security of those using it and for the economic life of the region, can the minister inform the House whether he intends to take the necessary measures to guarantee the population that the bridge will certainly be constructed in the near future?


Charles Mills (Bud) Drury: Mr. Speaker, I can assure the hon. member that we will redouble our efforts to get the cooperation of the provinces.


CONSUMER AFFAIRS
Mr. James A. McGrath (St. John's East):: Mr. Speaker, I direct my question to the Minister of Consumer and Corporate Affairs. Does the minister propose to make any changes in the regulations pursuant to the packaging and labelling act concerning products that are packaged and labelled outside the country and normally imported into Canada?


André Ouellet: Mr. Speaker, newspapers reported lately that as a result of these new regulations some products would no longer be allowed into Canada. I think that the implications of these new regulations has been much exaggerated. In any case, the officials of my department are reviewing these regulations to determine whether corrections can be made to help some companies which import these products to continue their operations. If we find that such changes must be made, we shall announce them in the weeks to come.


James Aloysius McGrath: A supplementary question, Mr. Speaker. Would the minister conduct his own investigation into the alleged misleading packaging of baby food, instead of waiting for the results of an investigation that is currently taking place in the United States?


André Ouellet: Mr. Speaker, I would like to assure the hon. member that in cooperation with the Department of National Health and Welfare, we are studying the American report to see if it can apply to Canada. The legislation is almost identical, but considerable differences do exist between the American and the Canadian legislation, and the criticism that applies to the United States may not apply at all to baby food sold in Canada.
February 12, 1975



Oral Questions EXTERNAL AFFAIRS


GOVERNMENT'S ANTI-POLLUTION POLICY IN ARCTIC
Mr. Bob Wenman (Fraser Valley West):: Mr. Speaker, my question is for the Secretary of State for External Affairs. Has Canada been asked by the United States to modify its policy toward protection of the Arctic against pollution; and is the government considering changes to the law adopted in 1970 giving the Canadian government jurisdiction over pollution zones in the Arctic extending 100 miles from the Canadian coast?


Jean Marchand: Mr. Speaker, perhaps the hon. member will recall that the commitment made by the railways was to the effect that they would supply the CTC and the Department of Transport with information concerning costs. That information was to be transmitted to the provinces which asked for cost disclosure and information on a confidential basis. This has been done and all the provinces have received much of the information for which they asked. They are studying it now. At the meeting we are going to hold in a few weeks, I think we will be discussing those items.


Hon. Allan J. MacEachen (Secretary of State for External Affairs):: Mr. Speaker, I think I can assure the hon. member that the answer to both parts of the question is no.


ARGENTIA, NEWFOUNDLAND-CANADIANS EMPLOYED BY UNITED STATES GOVERNMENT DENIED RIGHT TO FORM UNION
Mr. Walter C. Carter (St. John's West):: Mr. Speaker, my question is directed to the Secretary of State for External Affairs and concerns a number of Canadian civilians employed by the United States government on the U.S. naval station at Argentia, Newfoundland. In view of the fact that these people are receiving wages less than the prevailing rate in the area, and in view of the fact that they have been denied the right to organize themselves into a union and thereby receive the benefits of collective bargaining, would the minister undertake to make representations to his counterpart in the United States government with a view to having this inequity removed, so as to ensure that these Canadians are paid wages that are at least comparable to those paid people in the federal civil service who are doing the same work in that area?


Allan Joseph MacEachen: Mr. Speaker, I thank the hon. member for his representation. I am not fully informed on the facts in question. I will attempt to inform myself, and if there is a basis for representations I will be happy to consider that course.


TRANSPORT
Mr. Mazankowski:: Mr. Speaker, having regard to the fact that the whole subject of policy formation and redress of such discriminatory freight rates seems to be in the hands of this so-called federal-provincial committee, will the minister undertake to take this House into his confidence and bring us up to date by giving us something in the form of a progress report or a statement on motions, so that we will be in a position to determine whether in fact any progress has been made or whether this committee is just being used as an excuse by the minister for failing to come up with an effective transportation policy?


Jean Marchand: Mr. Speaker, I think the hon. member should have more confidence in the provinces than he seems to have.


Donald Frank Mazankowski: I have confidence in the provinces.


Jean Marchand: We have transmitted the information, as we promised. I hope that shortly we will be discussing this disclosure bill during a debate here in the House. If the hon. gentleman wants to discuss whether we should respect the confidentiality of that information, I will be open to suggestions at that time. For the time being, I think the commitment of the railways was to the effect that they would provide the provinces with the information. The provinces want to determine whether there really is discrimination, and they want to be in a position to use the information they receive in presenting their case to the CTC.


Donald Frank Mazankowski: Mr. Speaker, having regard to the fact that the minister has seen the studies, and in view of the fact that there must obviously be some discrimination in respect of freight rates, is the minister going to bring forth a proposal to redress the discriminations and anomalies which are in existence?


Donald Frank Mazankowski: Mr. Speaker, my question is directed to the Minister of Transport. On January 22 and again on January 24 the minister indicated that studies respecting discriminatory freight rates as they relate to the western provinces were almost ready. Would the minister tell the House how much longer we will have to wait before these studies are completed? Could I also ask the minister whether he will be making a statement on motions, and can he advise the House whether any corrective measures will be brought forth at that time to eliminate the discrepancies and anomalies to which these studies are directed?


Jean Marchand: Mr. Speaker, I think that the groups or institutions which are in the best position to pass judgment on this are the provinces. They now have the information, and if they feel there is discrimination-


Some hon. Members:: Oh, oh!


An hon. Member:: Of course they feel there is
discrimination.


Mr. Diefenbaker:: Everybody knows there is discrimination.

February 12, 1975


An hon. Member:: You know there is; you are the Minis- [English] ter of Transport.
Oral Questions


THE CANADIAN ECONOMY
Jean Marchand: Mr. Speaker, perhaps hon. members would listen for just a minute. An hon. member suggests that everybody knows there is discrimination. The provinces insisted on receiving this information. If they knew the facts, I do not know why they would insist on that. They have the information now and they can pass judgment and use the figures in order to support their argument, if they think there is discrimination.


ATLANTIC PROVINCES-DISCONTINUANCE BY RAILWAYS OF LCL FREIGHT RATES
Robert Lorne Stanfield: Mr. Speaker, I wish to put a question to the Minister of Transport.
We hear that the railway companies have decided to drop on February 15 the special rates on less than a carload of goods. The minister has received representations from his Liberal friends and others, and he has promised an investigation. Could he inform the House on this most urgent matter?


Jean Marchand: Mr. Speaker, I regret but I did not understand very well everything the hon. Leader of the Opposition has said, except the first part and I do apologize. Could he repeat it?


Robert Lorne Stanfield: Mr. Speaker, I am sorry the minister is not completely bilingual.


Some hon. Members:: Oh, oh!


Robert Lorne Stanfield: The railways are dropping "less than car load" freight rates in the Atlantic provinces on Saturday, February 15. The Minister has received representations from both sides of the House, as well as from all parts of the Atlantic provinces, asking him to look into this matter. He has promised to do so and report back. Has he any information to give the House in this regard?


Jean Marchand: Mr. Speaker, since the Leader of the Opposition is perfectly bilingual, I can give him an answer in French.
There were discussions with the provinces of New Brunswick, Nova Scotia and Prince Edward Island, between the railways, the provinces and the people concerned on special rates, particularly on the so-called LCL rates. There was virtually perfect agreement with these three provinces. I received a telegram of protest from Newfoundland minister Rousseau; he seemed to be unsatisfied, but unfortunately there had not yet been any discussions with him. They are now underway and I have every reason to believe that there will also be an agreement in this case and that the province of Newfoundland will also be satisfied with the changes made, and that we will also be satisfied with the rates which will have been established.


REASONS FOR HIGH LEVEL OF INFLATION
Mr. Andy Hogan (Cape Breton-East Richmond):: Mr. Speaker, in view of what seems to be the steadily worsening position of labour relative to corporations, as illustrated by the decline in labour's share of the net national income from 73.8 per cent in 1970 to 69.1 per cent in the third quarter of 1974, and the increase in corporation profits from 11.5 per cent in 1970 to 17.6 per cent in the third quarter of 1974-


Some hon. Members:: Order.


Mr. Speaker:: Order, please. If the hon. member has a question, perhaps he would put it.


Andrew Hogan: Mr. Speaker, would the minister give the House his reasoning in claiming that the major driving force behind inflation is coming from the rapid escalation in wage and salary costs?


John Napier Turner: Mr. Speaker, I will send the hon. gentleman my full speech. When read in its full context, as it already has been by leaders of the labour movement, it did not prove offensive to them.


Andrew Hogan: Mr. Speaker, is the minister now saying that the increase in wages and salaries is not the major force behind our present inflation and, if so, what in his opinion is the major force behind inflation?


John Napier Turner: Mr. Speaker, I will send that speech by special delivery.


Some hon. Members:: Oh, oh!


EXTERNAL AFFAIRS
Mr. Perrin Beatty (Wellington-Grey-Dufferin-Water-loo):: Mr. Speaker, the Secretary of State for External Affairs has informed me that he has investigated the matter of the contract solicitation of the American Central Intelligence Agency for information about transportation technology. Could the minister make a report to the House at this time?


Allan Joseph MacEachen: Mr. Speaker, I do have some information. If hon. members will bear with me, I should like to inform the House that I have been assured there is no intention of having a study of a secret character carried out of any western country. Moreover, no contract has been or will be let for a study devoted to advanced transportation technology in Canada. There may be reference to Canadian developments in this field in a more general study but, as I pointed out in the House earlier, this will

February 12, 1975
Oral Questions
be based solely on unclassified information openly available.
I want to refer to one aspect of the letter which the hon. member was good enough to let me have-the letter which referred to classified information-and how that might be dealt with. I understand that this study, which is worldwide in scope and is dealing with new developments in transportation of a global character, will deal with some countries not as open as ours upon which the CIA may have classified information. If made available to the contractor, that information will have to be dealt with in the usually secure way.


Henry Perrin Beatty: I ask the minister the following question. When he asked the Americans for a report on this particular matter, did he ask them specifically to explain the two sentences which appear on page 4, which read:
Using his available resources, the contractor will acquire technical information and develop a data base on free world developments in ground and air transportation technology. Prior to initiating such efforts a careful review of existing technical data sources including the collation of open literature must be made.


Allan Joseph MacEachen: I am sorry, I did not hear the last phrase.


Henry Perrin Beatty: The critical sentence reads:
Prior to initiating such efforts a careful review of existing technical data sources including the collation of open literature must be made.
In other words, they were to look at unclassified information first and, following that, further information was to be gained. That is what I infer from it.


Allan Joseph MacEachen: The reference to Canada, as I understand it, while this study really has to do with the state of the transportation art throughout the world, is a reference to the technologically advanced industrial country which would be of some interest in that study. I may put my hon. friend's concern at rest by saying that in 1970 an agreement was reached between the then minister of transport, the present Minister of Regional Economic Expansion, and his counterpart in the United States, Mr. Volpe, which provided for considerable exchange of transportation technology between the two countries. I am led to believe, in fact I am reliably informed, that we know everything we want to know about their technology and they know everything they want to know about ours. So any kind of study is quite unnecessary.


George Harris Hees: They did not have much to learn.


Henry Perrin Beatty: May I ask the minister two more questions? The first is: Where did the minister get his information? Did he simply accept the blandishments of the American embassy that they were not in fact spying on Canadian industry, or did he attempt to confirm that from his own sources? I also ask the minister: When the Americans informed the Canadians that they were not interested in Canadian technological developments, did he ask them to explain the specific reference to Canada which appears on page 4 of the contract solicitation, or the reference on page 5 stating that information was to be obtained about "each country identified as representing potential technological

and/or economic threats to the U.S. position", or how Canada was excluded from the references on pages 3 and 4 to the obtaining of information on free world transportation technology?


Allan Joseph MacEachen: I think the hon. gentleman should be made aware that this study is being carried out by the research and analytical side of the CIA, which is an entirely different operation. The references to Canada, as I have said, are in the context of a worldwide study examining the state of the transportation art, in which art Canada is regarded as having some technological advantages.


FINANCE
Mr. Sinclair Stevens (York-Simcoe):: Mr. Speaker, my question is for the Minister of Finance. Today the minister again stated that he anticipates the cash needs of the government to be greater than the $3 billion he forecast in his budget for the fiscal year 1976. Does he believe the $1 billion deficit forecast for budgetary transactions at that time will also be exceeded and, if so, by how much?


John Napier Turner: Mr. Speaker, that will depend on the drawdown in the final two months of this year.


Sinclair McKnight Stevens: In view of the minister's concessions yesterday and today that in fact the economy is performing more poorly than he anticipated when he brought in his November 18 budget, in particular with regard to unemployment, and in view of the fact that at the time the minister brought in his budget he stated that the situation might change and if it did he would not hesitate to recommend a change in direction, would the minister indicate why he still hesitates to do this in spite of his agreeing that changes are significant in our economy. Also, will he tell the House whether, while he hesitates, he has set up any special monitoring system to ensure that he knows first-hand the extent of the deterioration in the economy.


John Napier Turner: The hon. gentleman has overstated the case. The reason I am looking at the situation closely without determining whether or not at the moment we should change course was stated by me in my reply to his leader yesterday. It is that, first, we want to examine the state of the stimulus introduced by the United States administration, now before the American Congress, and how that evolves and, second, that stimulus has already been injected into the Canadian economy effectively since January 1 in the form of reduced tax rates. After looking at both those factors we will decide at the earliest possible opportunity whether or not additional stimulus is needed.


Sinclair McKnight Stevens: I have a final supplementary question for the Minister of Finance. Could he indicate specifically whether he has set up any special monitoring device to give him an early indication of the state of the economy, or is he relying simply on the advice of the group of seven?
February 12, 1975


John Napier Turner: The Department of Finance has a continual monitoring device.


Robert Lorne Stanfield: Yes, taxation.



GOVERNMENT ORDERS


[Stage Direction]
The House resumed from Tuesday, February 11, consideration in committee of Bill C-49, to amend the statute law relating to income tax-Mr. Turner (Ottawa-Carleton)-Mr. Penner in the chair.
The Deputy Chairman:: Order, please. House again in committee of the whole on Bill C-49, to amend the statute law relating to income tax. The hon. member for York-Simcoe.
On clause 1.


B. Keith Penner: Order, please. The business of the committee of the whole has been called and the hon. member for York-Simcoe has been recognized. The Chair would appreciate the co-operation of the committee so that the hon. member can be heard.


Sinclair McKnight Stevens: Mr. Chairman, as a preliminary matter before we go into the extensive consideration of this bill clause by clause, I wonder if the minister could indicate if he has received any briefs from tax consultants in the legal, accounting or other appropriate fields, touching on Bill C-49, or on the ways and means motion that was previously tabled with respect to this bill and, if so, could we have the benefit of those briefs?


John Napier Turner: Mr. Chairman, we have received a good many briefs from individual citizens and businesses across the country, as well as from lawyers and accountants, given to us on a privileged basis, giving their analyses of the statute. It has never been the practice to table those in the House because of confidential aspects regarding individual taxpayers.


Sinclair McKnight Stevens: Mr. Chairman, while I am not particularly interested in the names of those who have submitted briefs, or in any of the confidential aspects of what they might have said, is there no way that at least a summary could be tabled in order to give all hon. members of this House an opportunity to review the criticisms, or otherwise, which may have been triggered as a result of this bill?


John Napier Turner: Mr. Chairman, it is always open to anyone-and certainly some associations have-to approach the minister or the department to have those briefs released publicly. There is no way of providing a summary such as the hon. gentleman suggests. A good deal of the submissions were verbal.
Income Tax


Sinclair McKnight Stevens: Mr. Chairman, throughout this bill there is going to be a great deal of consideration as to the revenue consequences of the various amendments to the Income Tax Act, and I feel it would be helpful if the Minister of Finance could give us an estimate or, better still, an actual figure with respect to tax deductions due to indexing in fiscal years 1974, 1975, and 1976, and the same figures for the calendar years 1974, 1975 and 1976.


John Napier Turner: We will read that submission carefully and see if we can provide those estimates.


Sinclair McKnight Stevens: When the minister and his officials are reading that request I would like them to note that I believe it would also be helpful if we could have a similar estimate, or the actual figures, for the gross tax reductions as a result of the provisions in this bill in the fiscal years and in the calendar years 1974, 1975 and 1976. I think it would be helpful if the figures could be shown, not only in a gross but also in an individual item by item fashion, presumably showing some miscellaneous item rather than having too much detail. I say this because I believe that, if the minister would oblige the committee with this type of information, it will save raising this type of question clause by clause.
As we know, there has been a certain amount of ambiguity concerning the minister's statements, with particular reference to his speech on Monday in this House, in which he took issue with respect to certain figures put by myself previously to him in the House, and I would like to direct a specific question to the minister and refer him to page 3066 in Monday's Hansard. At that page the minister stated:
.. . This afternoon the hon. gentleman ...
Referring to myself.
... said that I had projected a cash deficit of $1.6 billion for 1974-75 and $3 billion for 1975-76.
I would like the minister to show me where I said that in my remarks.


John Napier Turner: Mr. Chairman, the hon. gentleman is getting a little picayune. It might be an error in Hansard. I recall those cash deficit figures of $1 billion and $3 billion. $1.6 billion would be an error.


Sinclair McKnight Stevens: I hope in statements I make in this House that I am responsible, and I take great issue with the minister's offhand comment, having made this statement which was totally inaccurate. I made no such reference, and I would like the minister to tell me if it is not true that on May 6, 1974-and I am referring to budgetary transaction-he indicated that the forecast budgetary transaction deficit in fiscal year 1975 would be $450 million, and yet in his November 18, 1974, budgetary speech the same deficit with respect to budgetary transactions was shown as being at a $250 million surplus.


John Napier Turner: That is correct, and I explained that in the November 18 budget as being due to increased revenues and some control on the expenditure side.

February 12, 1975
Income Tax


Sinclair McKnight Stevens: If the minister checks my remarks he will find that that is exactly the turn around I referred to in my Monday statement, and I would ask that he correct the misinformation which he put in his speech, as it is now recorded at page 3066 of Hansard.


John Napier Turner: No, Mr. Chairman, I will not because I was addressing myself to the argument which the hon. gentleman was introducing-cash deficit figures against budgetary figures-and commenting that they were apples and oranges.


Sinclair McKnight Stevens: Perhaps the minister misses the point. In no way had I made the reference which he has alleged I made. He has agreed today that there was a deficit in his original May forecast, which changed to a surplus. In my remarks I referred specifically to that point, and yet today the minister will not stand up and admit his mistake and withdraw the comment which he made in his remarks on Monday. I will give him another opportunity.


An hon. Member:: You're all heart.


Sinclair McKnight Stevens: Mr. Chairman, I hope the record notes that the minister has made a misstatement on the record and that he refuses to change his words. I am sorry that the minister or his officials are not in a position to give us the figures with respect to indexing, but I will suggest that when those figures are tabled in this House they will show that he again was totally erroneous in his reference to my comments when he dealt with the question of the reduction to income tax payers as a result of indexing in this country.
If I may deal specifically with clause 1, I would like to ask the minister if he could give us a brief explanation, beyond the explanatory notes with respect to clause 1.


John Napier Turner: The purpose of this relieving amendment in clause 1(1) is to add paragraph 6(l)(b)(ix) to the act and to help the taxpayer who, because of his job, has to live in an area where he cannot have his children educated in the official language of Canada which is his first language. This amendment provides that if a taxpayer must send his children away from home to enable them to receive their education in his first language, any reasonable amounts received by the taxpayer from his employer in respect of the children's education do not have to be included by that taxpayer in his income.
Subclause (2) of that same clause is again a relieving amendment to paragraph 6(4)(c) of the Income Tax Act. It cures a defect in the act caused by an anomaly in its wording whereby an employer who pays the premiums on that portion of his employee's group term life insurance exceeding $25,000 is deemed to have conferred a taxable benefit on his employee whether or not the employee reimburses him. This amendment provides that no taxable benefit is conferred by the employer to the extent that his employee does reimburse him.


Sinclair McKnight Stevens: If I may deal with the minister's comment on subclause (1)(B), it states that "the school that the child attends is the school closest to that place in which that language is the language primarily used for instruction." As I read that, I would contemplate that the section,

for example, in respect of a Canadian employee who is working in Brazil, means he would be entitled to the benefit of this clause, assuming that he is an English speaking person working in Brazil, only if he sent his child to the school closest to where he is working in Brazil. First, I would like to ask the minister to clarify whether I am correct in that assumption; and second, would he indicate why there would not be more encouragement given to allow that employee to have his child educated in Canada, notwithstanding the fact that it may not be the closest school, as worded in the subclause?


John Napier Turner: The tax act does not pay for private schooling abroad nor for private schooling of those employees who may be abroad. That would be up to the company and the employee. To place some limit on this and protect the tax system, the word closest is used.


Sinclair McKnight Stevens: Mr. Chairman, in case there is a misunderstanding of this wording am I correct in assuming that the clause would only allow the benefit contemplated if the child of the employee were educated, literally, in a school of the country the man is working in, or in the adjoining country? Is that technically correct?


John Napier Turner: Mr. Chairman, this clause, of course, applies primarily to children educated in Canada. It might be that the employee of a Canadian company working in another country would not be subject to Canadian income tax, depending on what the treaty arrangement was. The hon. gentleman ought to look to the force of this section as applying to Canadian school children.


Sinclair McKnight Stevens: Mr. Chairman, I am looking for clarification on the question of whether the force of the amendment will benefit an employee working in another country if his child, at his choice, is educated in Canada while there may be, technically, a closer school that does teach English that he could send the child to instead?


John Napier Turner: The section says it must be the closest school, Mr. Chairman.


Sinclair McKnight Stevens: I think that is an unfortunate aspect of this clause, Mr. Chairman. Surely if a Canadian is working abroad the government should be inclined to facilitate the education of his children at his choice, and preferably in Canada. I was wondering if the minister could give an explanation of why he thinks it so essential to force the child to attend some school that might be totally inadequate, simply because it happens to be closest to where the employee is working.


John Napier Turner: Mr. Chairman, the place where the employee wants to educate his children might well depend on his arrangement with the employer. We are talking about a tax system here and having some general control over deductions for education. I suggest to the hon. gentleman that this is a reasonable way of looking at it. This is not subsidization of private schooling; this is subsidization of education at the closest school for the child.
February 12, 1975


Sinclair McKnight Stevens: Mr. Chairman, I am not satisfied with the explanation. I am trying to make the point that I think it would be preferable, be it subsidization of private schools or not, that the bill allow this type of accommodation for expenditure on education of the child of an employee in Canada as opposed to deliberately wording it to force the child, if the parent wants to get the benefit of this section, to be educated in some perhaps inadequate school simply because it happens to be the closest to where he is working.
In subclause (2), Mr. Chairman, I am not familiar with the $25,000 level referred to there. Could we have an explanation of this?


John Napier Turner: It is because the benefit is not conferred if the employee reimburses.


Mr. Nystrom:: Mr. Chairman, the hon. member for York-Simcoe covered quite a bit of the ground that I was concerned about, but I wonder if the minister could give the revenue implications of the different measures, clause by clause, and the numbers of people who may be affected and so on.


John Napier Turner: Mr. Chairman, the hon. member for York-Simcoe put that question to me as well, but it is impossible to do it on every clause. It is impossible to know how many people are going to take advantage of the provisions. We are dealing with an equitable tax system. The total revenues and total expenditures affected by the budget, and against which this bill operates, are contained in the budgetary papers in a good deal of detail.


Lorne Edmund Nystrom: What is meant by child in clause 1? There is no reference to age. Can that mean someone who is 18 years old attending university?


John Napier Turner: That is defined in the statute itself.


Lorne Edmund Nystrom: Then a person going to university could qualify as long as he was a child?


John Napier Turner: The answer is yes, but I would refer the hon. member to the definition in the statute itself. This is amendment, and most of the definitions are already contained in the statute.


Mr. Jones:: Mr. Chairman, the minister says this is a reasonable clause, but I should like to know how he proposes to administer and police it. How do we determine primary language? It is not defined anywhere. How do we determine what is the closest school? This is not defined either. I have a feeling we will be sending the RCMP and members of the Department of National Revenue all over the country and, if it extends outside the country, then to the rest of the world in order to determine where is the closest school. There are serious implications as far as policing and administration are concerned.


John Napier Turner: Mr. Chairman, we operate under a voluntary self-assessment system which is checked on a spot check basis by auditors of the Department of National Revenue. Our whole system is based on
Income Tax
that voluntary self-assessment, and we take it for granted that the ordinary taxpayer will do his best to assess himself in accordance with the tax forms reflecting the law. How is the definition of language satisfied here? The clause says:
... the language primarily used for instruction is the official language of Canada ...
That is either French or English.
... primarily used by the employee ...
The employee declares which is the language he primarily uses, and the Department of National Revenue would accept that. This was primarily introduced for those sections of Canada where an employee of one language works in an area where the other language is predominant-perhaps in some areas of Quebec where French is predominant and there is an English employee working in a company, or an area in the north of Canada where there are French speaking Canadians working and not many schools of French instruction. We felt it was proper to allow the revenue to carry that particular situation.


Mr. Ritchie:: I presume this refers to a contract between employer and employee. The employer is not going to give any money unless it is necessary, so why the restriction? It would seem to me that it is only when an employer finds it difficult to get an employee to work for him that he feels it necessary to make this arrangement. If it is part of the contract, then why should it be allowed?


John Napier Turner: If this is part of the contract and an employer feels it is just, or the employee makes it a term of the contract that he be paid a sufficient amount of money to educate his child at the closest school in his own language and the employer pays that, then if this amendment were not introduced that allowance would be taxable in the hands of the employee. This amendment renders it a non-taxable benefit.


Robert Lloyd Wenman: Mr. Chairman, in view of the increasing cost of education and the serious impact of this on families, is the minister considering increasing the exemption for dependent children, and more specifically for child care? Since the minister has apparently been talking in terms of the cost of living, has he also considered increasing this exemption?


John Napier Turner: Some of the exemptions are already indexed, Mr. Chairman. Any extension of that system would be a budgetary matter on which I would not like to comment.
Dealing with the question of the hon. member for York-ton-Melville, the relevant sections for the definition are 252 and 70 of the Income Tax Act.


Mr. Johnston:: Mr. Chairman, on reading this clause of the bill, I was struck by what I consider a serious omission. The matter I am about to raise was brought to my attention by a constituent whose wife and two sons were killed in an automobile accident, and who gave up his job in order to raise and educate his remaining daughter. He can do this because he saved money earlier in his life. Owing to inflationary pressures he finds it increasingly
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difficult not to work and to devote himself entirely to the upbringing and education of his daughter. He finds that if he were to work, he could claim $750 as a deduction; now he cannot claim that money because he does not work. I thought, after reading his letter, that the officials of the minister's department might be sufficiently ingenious to draft an amendment which would allow him that tax deduction.
When this man learns that an additional tax credit has been made available for those who want to send their children away to school, to be educated in the language of their choice, he will be more frustrated than he is now. Would the minister change the law, to allow the parent who is not working but is using his savings and devoting himself entirely to the education and care of his child, to claim that $750 deduction, an amount he could claim if he were to work and hire somebody to take care of his child?


John Napier Turner: Mr. Chairman, I sympathize with the person about whom the hon. gentleman has talked. He describes a father who, rather than work, stays home to look after his daughter. The tax system as of 1975 will give him some advantage. He is now allowed to claim $1,644 in respect of the child under the married equivalent exemption, rather than the $352 which he would normally be able to claim for the child under the age of 16. We have gone some way to meeting the hon. gentleman's point. My difficulty is that the change he proposes would create a major loophole which would benefit upper income families in which the wife has investment income but does not work and has help for the child.
The hon. gentleman's suggestion would mean that the total deduction for working mothers and working families should be extended, and should apply not only against working income but also against investment income. That would cause some problems.
The Income Tax Act must be general in application. It is, by its nature, global. It cannot take cognizance of every difficult situation, although we try to meet as many as we can. We have gone some distance to meeting the problem described by the hon. member. I do not know how we can meet the situation in its entirety without leaving the act open to some abuse in cases where investment income could be reduced by child care expenses.


Howard Earl Johnston: Mr. Chairman, I wonder if the clause could be so amended that it would apply to, say, a widow, parent, or widower, and not apply to the married couple which could use this provision as a tax dodge.


John Napier Turner: Mr. Chairman, we have already met the point by moving from $352 to $1,644 in our exemptions. We have thrown in an extra $1,300 as a deduction to meet that particular situation.


Mr. Hamilton (Qu'Appelle-Moose Mountain):: Mr. Chairman, I am taking advantage of the present opportunity for open discussion to talk about clause 4 and related clauses, in the hope I can persuade the minister to accept a suggestion. I am referring to the proposal I made to the minister on January 30 about the quarrel between the federal and ten provincial governments over resource taxation. That quarrel troubles industry. The arguments used on both sides of the quarrel no doubt are interesting, but

our three major industries, mining, petroleum and forestry, are caught in the middle.
The provinces levy taxes, and the federal government is saying they are non-deductible. To use round figures, if a provincial government levies a 40 per cent tax rate in the mining field, and the federal government says that the tax paid is not deductible and applies another 50 per cent, the industry becomes liable for a 90 per cent tax rate. Many mining communities in British Columbia, Manitoba and Saskatchewan, and several in Ontario and Quebec, are desperately frustrated and concerned about this quarrel.
As Canadians, we all believe the quarrel will be resolved. Therefore, let me ask the Minister of Finance this question: will he consider following the precedent laid down in the foreign investment review bill and introduce an amendment saying that clause 4, and other relevant clauses relating to non-deductibility, shall be proclaimed only by order in council? The various parts of the bill are cross-indexed, and the minister's officials know better than anybody which are the relevant parts of the bill so affected.
The effect of the amendment would be that clause 4 and other related clauses would not be proclaimed until after federal and provincial ministers have held a conference and decided on what is mutually agreeable and acceptable for the common interest of all people in Canada.
I remind the minister that the conference held yesterday, as reported in this morning's edition of the Globe and Mail, represents the beginnings of a mutual accord between various levels of government. The newspaper report is so important that I shall read part of it into the record. One paragraph reads:
Mr. Lougheed said afterward that "we have agreed to attend" the April 9-10 meeting, "we have agreed to discuss oil and (natural) gas prices" and, therefore, "we are not going to take any unilateral action on this matter prior to the conference."
Clearly, that was a compromise type of statement.
Another paragraph reads:
The Prime Minister would say only that his talks with Mr. Lougheed had helped to pave the way to the first ministers' meeting and that it will not be held under crisis conditions, because of Alberta's decision not to force the oil pricing issue in the interim.
I suggest that at times when the interest of the nation is so much at stake it would be greatly to our advantage if the Minister of Finance could help this feeling of goodwill along when the Prime Minister goes to that conference on April 9 and 10. He could do this by bringing in an amendment to clause 4 and related clauses giving an assurance to industry that this matter had not been irrevocably decided, by offering the chance of a compromise which would allow the industries in the various provinces to operate without this continual threat to the viability of their undertakings. The minister would be serving the country well, in my opinion, if he were to take such a position.
As I put it the other day, Mr. Chairman, does the Prime Minister want to go into this conference with his hands bloody? Does he want to go in carrying a big club which he would be bound to use if this clause were passed?
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I do not intend to discuss now the argument as to the constitutional rights of the people of Saskatchewan to decide what they want to do with their own resources. That is clear enough according to the constitution. Nor shall I address myself to an economic argument at this stage. I am simply saying that everything has to be done to go into that conference on April 9 and 10 with the ability to negotiate and compromise. Alberta has agreed not to take steps to set the price unilaterally. It would be a good response on our part to say we do not intend to enact certain provisions in a bill such as this which, as I can point out, is unchangeable unless it is changed by parliament, before sending the Prime Minister into the forthcoming conference.
In the period between now and April 9 the minister should consider going one step further, that is, putting on the table the parameters of a deal around which he thinks a settlement can be reached. To send the Prime Minister into that conference without setting such parameters, without doing any preparatory work in advance, can only guarantee failure. Perhaps the minister would consider the proposal I made in the House in January as a means by which the Minister of Finance might extricate himself from this impasse which is so dangerous, not just to the oil companies but to all the resource industries. He might well find there is some merit in it.
I shall be speaking on this subject again when we come to clause 4. My question to the Minister of Finance is this: will he consider asking his officials to bring in this simple amendment which states it is not the intention of the government to proclaim clause 4 and the related clauses except by order in council? The executive would lose no effective power if this were done, but it would mean the Prime Minister could attend this conference in a negotiating mood rather than in a mood of confrontation.


John Napier Turner: I was, of course, here in the House when the hon. member for Qu'Appelle-Moose Mountain made his suggestion. I studied his observations very carefully; I put them through the computer, held them up to the light, and so on. However, I do feel that there is enough uncertainty already in the resource field without adopting a new tax, a new approach. I am somewhat concerned about a mechanism whereby a tax bill will contain a discretionary element enabling a government to proclaim when a tax will become operative. I feel this might be derogatory of the right of parliament to decide here and now that a tax is to be imposed. I can recall instances in the past when discretion of that kind was quite properly withheld from a government or from a minister of finance.
I say again that I believe it would inject too much uncertainty into the situation. The hon. gentleman talked about a club. Well, the power to proclaim would constitute just as much of a threat, except that it would be an uncertain threat; neither industry nor the provinces would know when or whether it was to be used.
Another reason for my reluctance to accept the hon. member's suggestion is that I feel it would be a dangerous precedent to use a budget as a negotiating element through the agency of a "proclamation clause". Federal ministers would go to the meeting with the same type of club but one which was held, as it were, in a velvet glove.
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We take the position that the federal government deserves a fair share of resource revenue. I believe the hon. member is overstating the situation when he describes it as a constitutional impasse. Some progress has been made. I drew back considerably from my earlier position-I restored the 100 per cent write-off, and so on; Alberta has made significant adjustments; British Columbia has showed some flexibility; there has been co-operation in connection with the Syncrude project. All in all, I hope that when the first ministers meet in April they will do so under the umbrella of a good tone-that there will be room to manoeuvre, on markets' price and I hope these limits will be sufficiently flexible to enable agreement to be reached, particularly in view of the welcome announcement by the premier of Alberta, to which the hon. member has referred, that he will not unilaterally raise prices.
I assure the hon. member that I treat everything he says seriously. He knows what he is talking about. However, for the reasons I have put forward I am reluctant to accept his suggestion.


Francis Alvin George Hamilton: Perhaps I might continue this dialogue a little further. It seems to me that, in effect, the minister has accepted the argument I was putting forward. The fact is, despite acceptance of the principle that royalties charged by the provinces were non-deductible, the government went right on, the other day, to announce an exception in the case of the Syncrude project. I put it to the minister, as was surely obvious to him, that when he loses his virginity, as he has in this case, by undermining the rigidity of the budget proposals at the very time the budget was under discussion in the House, he cannot expect others to refrain from calling for further modifications.
What I am suggesting here is that if parliament passes a law making all provincial tax and royalties on resources non-deductible, then under my conception of carrying out the executive function it will be impossible for any member of the executive to say that the government will make them deductible unless we come back to the House in order to amend the legislation. Instead of putting the Minister of Finance in such a terrible position that he has no arguments on which to stand, what he should do is to keep his options open.
Parliament will pass this legislation because it has the votes here to do so. My suggestion is that the minister should say he does not intend to have an absolute direction from the parliament of Canada that all provincial taxes and royalties on resource industries should be nondeductible. If my reasoning is correct and they go to the conference on this basis, it is possible to negotiate.
This immediately brings to mind something that most of us fear the most in the federal system, namely, that you unite all provinces against the federal government. When union of the provinces takes place, history has shown that every time it is the federal government that loses. I happen to be a strong federalist. I support a strong federal government. But at the same time the only way we can make the system work is to have consultation rather than confrontation.
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I would hope the minister has not closed the door entirely, so I will repeat my question. I would ask him to consider it before we get to clause 4. If the minister has this right to proclaim, then there is still uncertainty. Under my suggestion there will be no uncertainty for the next two months. Without my suggestion, businesses in the throes of trying to decide whether they should go on taking these losses every month will quit right away. But if they know that there is a chance, then they will hang on.
I speak on this matter with some personal interest since I have several small Canadian companies in my riding which are seriously affected by this situation. Even though only some 200 to 300 families are affected, it is a pretty serious matter for them. I think we could keep their management hanging on for another couple of months if they thought that, out of the discussions being held on April 9 and 10, some relief for them would flow.
My personal feelings would be multiplied many times in all these mining towns in B.C. where mines have quit operating and others are considering doing so because they are unable to continue with their projected cash flow for this year. It is silly for these mines to continue using up their ore when all their money goes in government taxes.
Under the suggestion that I am putting forward I do not think the government will lose one iota of power. If the bill is passed, clause 4 and its related clauses should not be proclaimed until after the conference. That is all I ask. I would ask the minister to consider that proposition between now and the time we reach clause 4, and if he thinks there is some merit in my argument, then I hope his staff will produce an amendment, one that is practical and realistic, which the House can accept. I think this could be done on an all party basis. We will not take away any of the minister's or the government's rights.
I simply ask that before parliament passes the edict that no provincial taxes or royalties are deductible, let there be one more opportunity for consultation to see whether there can be agreement. Perhaps during the course of negotiations we can set some limit that will satisfy the federal government that the provinces have reduced their royalty taxation level to a point with which they can live. This would mean the federal government could come down a little bit too. I do not think this proposal destroys the minister's options, and I ask him to think about it.


Mr. McCain:: Mr. Chairman, it has been suggested that the proposal in clause 1 of the bill to attend the nearest school may not serve the purpose intended. Sometimes there are transfers of personnel across Canada. For example, a family from Victoria might very well be transferred to Sherbrooke, or a family from St. John's might well be transferred to Quebec City. In this kind of situation it might be very inconvenient for a family to attempt to educate its children at the nearest school. A family might be transferred from Lac St. Jean to Calgary, and perhaps the handiest school in which the family can educate its children in French might be at St. Boniface. This places the family in a sort of no man's land where it has no connection or familiarity with its surroundings, and imposes a hardship that I do not think the bill intends to impose.

It could not be described as less than charitable if one were to ask the minister to use a word other than nearest. If the family cannot be educated in the community in which the husband is employed, then surely he should have the option of educating his family in the community from which he came, or in the community which he might ordinarily call home, where the surroundings would be familiar.
If the minister does not want to do this on behalf of the father, then I plead with him to do it on behalf of the children. He should give children the most convenient possible opportunity to be educated. I ask him not to limit the school to the nearest school, because this could impose a very serious hardship on some people. While the act is intended to be generous to some people, this generosity may be defeated by the restrictive words "school closest to".
I should also like to say a few words on the subject that has been under discussion, namely, that of royalties, and the tax exemption clause applying to them. There is a very distinct philosophical change being imposed upon Canadians by the government. It has come with little, if any, notice and has been precipitated, I agree, by some unusual approaches on the part of provincial governments to tax structures.
What is the consequence of this? About a month ago I was discussing the impact of this bill with a citizen of a community in Canada that is totally dependent upon a mine located within that community. The ore body consists of a varied concentration of metals which are being removed. The direct line royalties imposed by the province, and the lack of exemption of royalties as a tax, have forced the company to move into a high grading proposition, and has certainly reduced the life span of that mine by one, two or three decades, depending upon the value of the minerals, the metals, as they are extracted.
This is a direct result of a rigid position imposed by provincial and federal governments without consideration for labour or capital opportunity-either one-required in mines where metal in a particular ore may be pretty scarce.
While it may look good to extract from our natural resources the maximum amount of income at both the provincial and federal level, it is pretty nearly time that both provincial and federal governments took a humanistic approach to determining how much employment is involved, and how much wasted metal is left behind which might otherwise have been extracted.
It is not too long ago that the provinces of Canada found it necessary in some instances to deal with developing mining corporations on the basis of a royalty collected by the provinces according to percentage of profit. In some instances the government of Canada has agreed to this concept, in spite of prior agreements that development in some areas of Canada was important, and the resulting employment of those people was also important.
There is one community in Canada where some 2,000 or 3,000 people are now directly employed as a result of federal-provincial negotiations on a friendly basis. This was the result of a mining company being allowed to go in
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with a type of conglomerate and carry out development. I am sure the minister is familiar with the area I have in mind. These several thousand people would not be working today had it not been for the flexibility of policy on both the provincial and federal levels in respect of royalties.
It seems to me that the minister does not really care very much about what anybody says in this regard, or perhaps it is extremely humorous to him that 10 years from now such a community might be evacuated because of the rigid federal and provincial decisions now being taken. I think that is an extremely serious situation, one which Canada is galloping toward by confrontation, lack of consideration, and negotiation on the basis of powers both federal and provincial.
This does not only apply to the west, that is, Alberta or British Columbia; it applies to the Atlantic region as well. In the forestry industry, for instance, there has been no definite statement by the government that would indicate a stumpage, or any other charge by the Crown in a province against industry, will be a deductible expense. There has been no direct statement to clarify that situation. This situation has an effect in the provinces of Quebec, New Brunswick, Nova Scotia, Ontario and others, and it is extremely important. There has been no definition as to what might be allowed as a stumpage charge by a provincial government. Is this a royalty, a tax, or what is the position?
We are not dealing just with the province of Alberta or the province of British Columbia; we are dealing with something that affects all provinces as a result of this distinct change in the philosophy of the government of Canada. This change further subjugates the provinces to the authority of the federal government, and this is a deplorable situation.
I believe in a strong federal state within the scope intended when our Confederation was formed. I do not believe that the government of Canada should impose itself in fields which were never intended as its own. This philosophy subjugates the provinces to the whims of the government in Ottawa, and that never was intended at any time when a province became a part of Confederation.
The provinces have seen their fields of authority, including health, education and others, virtually emasculated by the imposition from above of the policies of the federal government. Now the last area in which the provinces had an element of independence is being taken away by the imposition of an income tax structure that further subjugates the provinces to the whims of the government of Canada. This is an unfortunate position in which the provinces find themselves.
I sincerely believe there is a limit to this and that the limit should be clearly delineated in this act, beyond which royalties cannot be charged by the provinces and still be tax exempt. If an extremist province imposes too much royalty in respect of a natural resource, that is the fault of the province. But as the situation exists at this moment in time the government of Canada is imposing a tax structure which punishes all 10 provinces without mercy.
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I wish there were a reasonable standard established within which the provinces might work. In this way perhaps the mining corporations could continue to mine all the ore, and not just carry out the high grading which is taking place at this time. A lot more ore that was formerly saleable is now being left in the ground, and many mining communities will be abandoned decades earlier than necessary because of an act which fails to take into consideration the actual costs of operation and the humanitarian results of employment for the people.
This is a social problem which indicates the need for a change in federal philosophy under which this government imposes strictures on the provinces that they do not deserve. I would plead with the minister to get himself out of the straitjacket in which he was placed himself, and relieve the provinces from the straitjacket this government has laced on them by the inconsiderate legislation contained in this bill.


Mr. Andre:: Mr. Chairman, I do not intend to take a great deal of the committee's time, but I do want to talk about one aspect of the minister's budget which relates to this matter of the deductibility of exploration expenses.
In the budget of May 6 the minister indicated that exploration expenses would not be deductible. I guess the computer said that would be O.K. and would do no harm to Canada's future supplies. After the representations the minister received and, I presume, a reprogramming of the computer, the minister realized in fact that this was not the situation and that it would not be in the best interests of Canada to change the law, disallowing the deductibility of exploration expenses from income tax.
There is one other provision I wish the minister would consider, and that is the matter involving the principal business test inherent in the legislation. The Canadian income tax law justifiably provides that when filing an income tax return one is required to consolidate one's income. A professional who owns a pizza parlour, for example, in submitting his income tax forms must consolidate the income from his profession with the income from his pizza parlour business. If the pizza parlour loses money, then the individual has a negative income which he combines with his professional income.
This situation is true under our income tax laws, with three exceptions, or perhaps with only two after the passage of this bill. Those three exceptions relate to real estate income, or income from rental property, income from farming when that is not the principal income, and income in respect of the oil and gas industry.
There was a change in the law which disallowed the consolidation of professional and real estate income when the real estate income was in a loss position. That, I understand, is being changed, and hopefully will result in more rental property for Canadians.
The second exception is in respect of gentlemen farmers. The loss provisions under the Income Tax Act are only available to farmers when farming provides the principal income.
The third area of discrimination exists in respect of the oil and gas industry. In other words, if a professional or a man in some other business not related to oil and gas went into the oil and gas industry by drilling a well in the hopes

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of discovering oil or gas, and had a dry well, the loss incurred could not be consolidated with his principal income.
That feature of our income tax law, more than any other single aspect, is responsible for the oil and gas industry in Canada being 99 per cent foreign owned today. Because that provision does not apply to non Canadians, to Americans in particular, American professionals, people with a discriminatory income, could in fact drill a well in Canada on pre-tax dollars, whereas a Canadian could not.
There are scores and scores of examples of geologists, or people knowledgeable in the oil industry, having developed what is called in the industry an "attractive play", looking for investors to join in putting up a drilling fund to drill for oil. When they approach a Canadian, the Canadian must invest after-tax dollars, while an American can invest pre-tax dollars. The net result is that on a competitive basis the Canadian has no chance. It is absolutely absurd that we have had this law on our books all these years, a law which says that Canadians are at a competitive disadvantage in making investments in Canada in comparison with Americans.
This should not be news to the minister. I am aware of at least six major representations brought to the Department of Finance, to the predecessors of this minister, in the last 20 or 30 years, showing what is happening in the oil and gas industry and showing the discriminatory aspects of the legislation and the damage being done to Canada in the long run. One such delegation indicated that the reply they received from the then deputy minister was "We do not care who owns the oil and gas industry so long as we can tax them". I wonder if that is not still the attitude of the government. If it is, then it is appalling.
I bring this up at this time because I think it is a particularly appropriate time for the minister to reconsider this matter. I am sure that he is aware that there has been a significant decrease in the exploration and development of the conventional oil industry in Canada, especially in the Great Plains area. Personnel and equipment are leaving, and the long-term projections should be of some concern if we are trying to achieve or maintain self-sufficiency in oil and gas in Canada. A stimulus is needed in that industry.
The minister has expressed great reluctance to back off on the question of nondeductibility of royalties which affects the cash flow position of the major companies, and therefore affects their ability to pursue active exploration and development. But in terms of the Canadian independents who have been doing the bulk of exploration and development in the Great Plains area in the past, the problem has been to find drilling funds. Their problem is finding investors who are willing to put money into this high risk venture to find oil and gas.
If that provision in the Income Tax Act were removed, if discrimination against Canadians were removed, if discrimination against western Canada in particular were removed, it would have a tremendous impact on the amount of exploration and development carried out in this country. It would increase the Canadian content in terms of future development, which is supposedly a desirable

goal of this government, it would save jobs, the expertise and the equipment which are leaving the country at an alarming rate, and it would help the Canadian independents, that portion of the oil and gas industry which is still Canadian owned. Small though they may be, at least they deserve our compassion, and if given the proper climate in which to operate, and the opportunity to raise investments in Canada, they could go a long way toward providing future oil and gas that we in Canada will need. The removal of this provision would remove the discriminatory aspect of this legislation.
If people on the other side have wondered out loud or privately what the reason for western alienation may be, why westerners feel they are being discriminated against, they may find transportation to be one of the root causes, but this provision in this legislation is one of the main causes. I am referring to this feature in the Income Tax Act applying to the oil and gas industry.
The fact is that governments for some time now have not been really concerned about the discriminatory aspects of this act. They did not care that Americans could drill an oil well in Alberta cheaper than could Canadians. That did not matter to all the previous governments. In the interest of trying to improve Liberal fortunes in western Canada, to save the expense of repeated WEOP conferences, every time you think you need a better public relations boost, you might look at this little provision. If you try to work out the cost in the computers I think you will find that it will not cost the treasury that much money, and it will do a lot to get the industry revitalized and to attract increased Canadian participation to this vital industry. It is an important move that could be made at this time, and I heartily recommended it to the minister in the hope that he will give it serious consideration.


John Napier Turner: Mr. Chairman, I will certainly do that. Of course this brings into sharp relief the conundrum in every aspect of the income tax legislation. One has to balance equity against incentive. The hon. member for Calgary Centre is talking in terms of incentive, of getting more Canadian money into the Canadian owned oil business. Against that is the equity side of the argument as to how much we should allow people in one business, with a good income from that business, to have deductible expenses against that principal business invested in other sorts of enterprises. That is an argument that one has to balance, and this is a good illustration of it. The hon. member is stressing the incentive.
Under the tax reform affecting this particular aspect of the act, equity won over incentive. In other words, it was decided that a man or a woman could only deduct from his or her income those expenses legitimately incurred for the purpose of earning his or her income in his or her principal business. So at the time of the tax reform affecting the real estate business, those who were not principally in that business were no longer able to deduct against other principal income expenditures incurred in building apartment houses and so on. It is really a policy decision.
Of the two current exceptions to it that the hon. member recited, one was reintroduced in this budget to allow those not in the principal business of real estate to invest in multi-unit tenant housing up to the end of 1975. It was introduced in the budget speech because of the housing
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problem. To that extent we felt that that incentive was more important than equity. We even had the support of the premier of British Columbia on that.
The other exception is the gentleman or hobby-farmer provision whereby a person not in the business of farming can still deduct up to $5,000 a year for farming expenses. I suppose one could weigh incentive against equity in saying it is useful to have agricultural land under production.
In any event, the hon. gentleman's colleague, the hon. member for Calgary South, has made his point to me both publicly and privately, as have the hon. members for Edmonton Centre and Edmonton West. They will be able to tell their constituents about it next time they are home. In any event what the hon. member is saying is that the incentive now is so important that we ought to take another look at it. We will.


Harvie Andre: Just one moment; that is only partial. I am saying that there is need for an incentive now, because of the decreased activity. The fact is that the minister has not answered my question, and I do not know that I blame the minister, but this feature of the Income Tax Act is the No. 1 reason why the Canadian oil and gas industry is foreign owned.
If one wishes to argue now that it is done and we would be closing the barn door after the horses have left, there may be a case to be made, but most reasonable people feel that there is 50 per cent to 60 per cent of the oil and gas still to be found just in the Great Plains area. So my argument is that rather than looking at foreign takeover review boards, et cetera, to implement a policy of Canadian ownership, let us for goodness sake at this time remove this feature of the Income Tax Act.
The minister agreed about real estate, but there is a multiplicity of businesses in Canada to which this does not apply. In fact this is a discrimination against one particular industry rather than a consistent policy of balancing equity against incentive, I think those were the minister's words. In addition I think that the reason for encouraging Canadians and improving the Canadian content of this industry is in itself sufficient cause to change the law in that regard.
At this point in time we have a little frosting on the cake. This is the need for increasing exploration and development so that Canada will remain self-sufficient, but the fact is that we are losing equipment, personnel and jobs at this time, and we want to keep that expertise in Canada because we are going to need it. The minister commented on the frosting, but the central cake remains. Let us do something to encourage Canadians to participate in this Canadian industry which is so important to the country.


Mr. Brisco:: Mr. Chairman, I think under clause 1 I have some latitude, and I would like to address some remarks through you, to the minister, with references to mining taxation. I am sure that the minister is aware that being the member for Kootenay West I have a tremendous responsibility to my constituents and to the mining community, not just to Rossland, but also to some 3,000 workers
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in Trail, to the upper Slocum Valley, to Salmo, and if I may speak for the hon. member for Okanagan Kootenay, there is a responsibility to the mines in Kimberley, the economy of Cranbook, Elkford, Sparwood and Fernie. We are talking about many people and much mining industry.
There is a great depth of concern as you can readily appreciate, particularly in British Columbia, with the mining situation and with the provision of the mining tax, the royalties and super royalties which apply. I would like to reverse the argument, or reverse my approach, and endorse wholeheartedly the argument and the persuasion which have been presented by the hon. member for Qu'Ap-pelle-Moose Mountain. I feel that the order in council which he proposed only becomes a threat if it is employed as a threat, and I am sure that not just the government but parliament will accept the fact that, for very good and valid reasons, the minister might withdraw this portion of the bill and employ it in the fashion of an order in council. I just cannot see that parliament would accept this as a threat in the manner in which the minister feels it will be seen.
I wonder if the minister has reflected on Canada's reserves of ore. I wonder if he has looked at Canada's nickel resources. Do the people of Canada, including hon. members of this House, realize that 20 per cent of the metal, nickel, lies in Canada, and 80 per cent lies outside Canada? We Canadians are rather peculiar people when it comes to thinking about our mineral resources. We seem to feel that we have the whole bundle and that it is all right here. British Columbia believes that it does not have to develop it, that it can be left in the ground, and that it will become more valuable as time goes on.


An hon. Member:: That's right.


Robert Hylton Brisco: That is just not so. You just don't know your facts and figures if that is what you believe. Other countries have 80 percent of the nickel, and those countries are developing it to the detriment of the employment of Canada's miners. You had better not forget that.


Some hon. Members:: Hear, hear!


Robert Hylton Brisco: It is not just nickel; it is all the other ores. Look at the ores which are available. I am concerned about the fact that we have removed the three year tax free period for new mines and the depletion allowance of 33'A per cent, and now we have the imposition of this federal tax. The mining companies are going to be paying 70 per cent, 80 per cent, or more than 100 per cent in taxation on their taxable income, and that of course will depend on their profitability.
My rip-off artist friend over here says that of course these mining companies are busy ripping off the people. Is 72 l/i per cent taxation considered to be a rip-off? And that does not include sales tax, or tax on shareholders' dividends. I am speaking of the year 1973 when Cominco paid $21,200,000 in dividends, and that did not include the tax on the wages of Cominco employees. The mines handbook for 1973 shows the taxes for Cominco were $44,700,000. That is 72 V4 per cent taxation.
It is the belief of the mining industry that the federal tax, particularly as it applies in British Columbia, but

February 12, 1975
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which must also be considered in relation to Ontario, Quebec, and Manitoba, is something it simply will not be able to withstand. In this time of recession, whether it is pending or upon us, we cannot have the mining community going into that recessive, regressive state. The country just simply cannot afford it. My community cannot afford it. The 3,000 smelter workers in Trail cannot afford it, and we must avoid that type of confrontation.
What do the investment firms say? They say to stay out of B.C. mining. Look at exploration in British Columbia now. What exploration? There is no exploration in British Columbia, and what little there may be is surely going to go down the tube with the imposition of the proposed federal tax.
I do not wish to belabor the point. I am sure the minister has heard some very valid arguments on behalf of the mining communities. I think the hon. member for Qu'Ap-pelle-Moose Mountain has offered some very sound alternatives, but I would make reference to two or three printed remarks which I would like to see on the record.
The combined tax and royalty rate imposed on mining companies in British Columbia in particular cases may approach, and possibly exceed, 100 per cent mining income. Not even the government of Canada operates on that type of financial structure. It is clear that the increase in taxes on royalties from 1971 to 1975 for a company operating in British Columbia or Ontario was staggering.
In British Columbia the total effective royalty mining and income tax rate increased by 30 percentage points from a little over 41 per cent in 1971 to almost 71 per cent in 1975. In Ontario the corresponding effective rate increased from 43 per cent in 1971 to 63 per cent in 1975, a jump of 20 percentage points. In the same period total federal and provincial taxes on manufacturing income decreased significantly. The total effective rate of approximately 50 per cent in 1971 dropped to 42 per cent in 1975, primarily as a result of the decreasing general federal tax rate, and the federal manufacturing and processing profits reduction. If we can do this for the manufacturing industry, why can we not do it for the mining industry? In 1971, directly or indirectly, mining provided employment for 10 per cent of Canada's total employed labour force.
Let us suppose that the taxation that is proposed only affects 1 per cent of Canada's labour force in the beginning. We have an unemployment rate now of 6.7 per cent, so we would be looking at an unemployment rate of 7.7 per cent. What does this parliament and the government feel the response of the country would be to that level of unemployment?
Over 153,000 people in 1973 were directly employed in exploration and development activities. In that year average weekly wages and salaries in the mining industry were the second highest of any industrial group in Canada. The total wages for 1973 were $1.7 billion. Are prospects for the future better or worse? A quarter of a million Canadians participate as shareholders in mining companies, receive dividends, and pay taxes on those dividends. Mining companies spend millions of dollars annually in capital and repair projects, thus creating employment.

The arguments I present may not be as knowledgeable or persuasive as those of other experienced members of parliament, but I have a deep responsibility to my constituency, to the mining community and the mining companies. I ask the minister to consider very seriously the proposal made by the hon. member for Qu'Appelle-Moose Mountain. I am sure that this parliament and the government would endorse such a proposal, and I think it should be accepted with the same measure of sincerity as with which it was presented.


Mr. Orlikow:: Madam Chairman, I did not intend to enter the debate at this time nor do I intend to debate in detail the alleged plight of the resource companies, particularly the mining companies. There has been a great deal of evidence over the years of the deliberate policy of federal governments, both Liberal and Conservative, to encourage the growth and development of the resource industries. A whole variety of tax inducements were offered-fast write-offs, three years of production before being required to pay taxes, special concessions for oil and gas exploration-a whole series of things, which we have itemized on other occasions and which I shall not repeat now.
I could not let the remarks of the last speaker go by, however, without putting the real facts on the record. One would think that the provincial governments were rapacious-and not just the NDP governments of Manitoba, Saskatchewan and British Columbia. The Alberta government has increased the taxes and royalties that it collects from the mining and oil companies very sharply, as has the Conservative government of Ontario.
A very serious argument has developed between the federal government and the provinces which have taken the view, first of all on constitutional grounds, that natural resources belong to the provinces under the provisions of the BNA Act and, secondly, that until now successive federal governments have not taxed the resource industries to any extent. There is a real conflict about what the provinces consider to be the sudden and unwarranted intrusion of the federal government into a tax field it has not been involved in previously.
I want to put on the record the fact that the claims made by the previous speaker that mining companies are being taxed so heavily they cannot exist, simply is not true. It is not true according to the evidence which they themselves have presented.
I have here-and I guess I will have to keep it in my desk for some time because I am sure the type of speech we have just heard will be repeated again and again by members on both sides of the House, weeping that mining companies are being driven out of business-the Financial Times for January 27, 1975. No one could accuse that journal of being very radical, revolutionary or anti-business. Under the heading "Times' Top Hundred" it gives a list of companies, and shows how they have performed in the last four or five years. I went through it very quickly, but I should like to put on the record the cases of five mining companies, beginning with one the hon. member spoke of so feelingly, Cominco. They report the net profits of Cominco-
February 12, 1975


Robert Hylton Brisco: Madam Chairman, would the hon. member permit a question?


B. Keith Penner: Will the hon. member for Winnipeg North permit a question?


David Orlikow: Yes.


Robert Hylton Brisco: I should like to ask the hon. member for Winnipeg North if, prior to giving the figures he proposes to give with reference to Cominco, he is first prepared to reveal the extent of the international development they have been forced into by virtue of Canadian circumstances? I hope he is prepared to reveal to the House how much international involvement they are into, and all those countries to which they have had to go. Where do they make their money? I hope he will tell us that.


David Orlikow: Madam Chairman, I have not got that information now, nor do I think it is very germane.


An hon. Member:: They are spending their money somewhere else.


David Orlikow: They are spending their money somewhere else, that is true. It is possible for a company to make much more money in an underdeveloped country than it could make in Canada. But companies which do this know they are taking a big chance. They know that holdings in underdeveloped countries are likely to be nationalized, and that compensation levels will be set by the countries in which company properties are located. For example, consider what happened in Saudi Arabia. That country's conservative government, headed by King Feisal, took over the entire oil resources of that country.


Fred Alward McCain: Madam Chairman, I rise on a point of order. The hon. member is suggesting that I, and the speaker who preceded the hon. member, spoke totally in support of corporations. Speaking for myself, nothing could be further from the truth. I ask him to read what was said, instead of drawing inferences from what he apparently did not hear. I pleaded on behalf of the work force in New Brunswick, British Columbia and Alberta. I spoke of mining towns which will become ghost towns in the near future unless something is done. I did not ask for corporations to be protected. Our system must be protected. I did not single out a company; I spoke mainly on behalf of labour.


B. Keith Penner: Order, please. The hon. member must be aware that he has raised a point of debate, not a point of order.


David Orlikow: Madam Chairman, I was not referring to the speech of the hon. member who raised a spurious point of order. I was referring to the comments of the hon. member for Kootenay West, who preceded me.


Fred Alward McCain: You didn't hear what he said, either.


David Orlikow: Madam Chairman, hon. members have the right to disagree with me. At committee stage, members may make two or three speeches, if they so wish. I have a right to my point of view, and to make it known. I intend
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to do that. I am not perturbed when hon. members interject and raise spurious points of order.
I was suggesting that companies extracting and processing minerals in Canada have done extremely well. Federal and provincial taxes have not reduced their profits; actually their profits have increased substantially. I want to put on record evidence which substantiates my claim. It is evidence which the companies provide to a reputable newspaper, the Financial Times. Before I was so rudely interrupted I was about to put on record the reported profits of several companies, beginning with Cominco Ltd., the corporation which, according to the member who spoke before me, has been seriously hurt by federal and provincial governments.


An hon. Member:: It is poverty stricken.


David Orlikow: It is poverty stricken! According to the Financial Times of January 27, 1975, Cominco net profits, which I presume are profits after federal and provincial taxes have been paid, were as follows, in round figures: in
1969,	$30 million; in 1970, $24 million; in 1971, $16.6 million. Speaking from memory, in 1971 an NDP government took over in B.C. In 1972 the company's net profits increased to $20 million; in 1973 they again increased to almost $43 million.


An hon. Member:: They increased after the NDP government took over.


David Orlikow: Yes. I am not saying they increased because the NDP government took over; I am merely stating facts.
Let us look at International Nickel, the company which is supposed to be starving. According to the Financial Times of January 27, 1975, company net profits were as follows: in 1969, $116 million; in 1970, $208 million; in 1971, $94 million; in 1972, $109 million; and in 1973, $226 million.


An hon. Member:: They are really starving.


David Orlikow: I have shown what has happened to companies working under an NDP government in Manitoba and a Conservative government in Ontario.
Next, let us look at Noranda, another mining giant. Company profits were as follows: in 1969, $54 million; in
1970,	$59 million; in 1971, $61 million; in 1972, $69 million; and in 1973, $121 million. To my knowledge the company does not operate in any NDP provincial jurisdiction.
Next, consider Sherritt Gordon Mines Ltd. They made the following profits: in 1969, $10.9 million; in 1970, $17.5 million; in 1971, $8 million-this is round figures; in 1972, $5 million; and in 1973, $21 million.
Let me refer to one more company, Rio Algoma Mines Ltd. Its profits were as follows: in 1969, $15 million; in 1970, $15 million; in 1971, $9.7 million; in 1972, $16 million; and in 1973, $52 million.
These figures show our mining companies are doing well, that profits go up and down, partly because of taxes, but mainly because of market price. In 1972 and 1973 mineral and commodity prices rose; the companies I referred to charged world prices and made a lot of money. We do not have figures for 1974, but I know that metal
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prices are down substantially. So, company profits will be down, not because of taxes, but because prices are down.
No NDP member, either in this House or in a provincial legislature, has said that mining companies have no right to exist. No one says they are not entitled to a fair profit. We merely say that mining companies should pay the same kinds of taxes other companies in this country pay.
We must keep in mind the point made so well by a former Liberal cabinet minister, Mr. Kierans. He said that what we do-


John Napier Turner: This sounds like the beginning of his leadership campaign.


David Orlikow: I can tell the Minister of Finance that I had occasion by accident to run into the former Liberal cabinet minister, Mr. Kierans, and he told me he is not a candidate for the leadership of any party-that he has no interest in going back into politics.


An hon. Member:: Don't believe all you hear.


David Orlikow: What the committee should be considering is this: all our tax policies since the end of World War II have been devised to encourage the development of the resource industry, mining, oil and gas. Those industries have consistently paid taxes in the neighbourhood of 10 per cent on their profits, as compared with three or three and a half times as much by manufacturing industries. Yet it is the manufacturing industries which are job intensive.
This country has one of the fastest growing labour forces in the world, yet we have continued over the years to discourage labour intensive manufacturing industry while encouraging resource industries which are capital intensive. This is the matter to which we ought to address ourselves instead of lecturing the government, as do members on the Conservative side, for collecting too much by way of taxes.
The hon. member who preceded me said we cannot afford to leave these resources in the ground. I would remind him that the population of the world is increasing at a tremendous rate and there is no question that all the resources, not only of Canada but of the entire planet, will be needed in the next 100 years. We are not saying we ought not to develop our resources. We say: let us develop the resources of this country when it benefits the people of this country, not just the corporations. If Cominco, International Nickel, or any other corporation wants to go to New Caledonia, or Indonesia, by all means let them go. They know the facts of political life in the world as well as any other member of parliament here. They know that whatever government is in power in Canada, federal or provincial, it will not expropriate their properties in the same way as oil company property has been expropriated elsewhere.


The Acting Chairman (Mrs. Morin):: I am sorry to interrupt the hon. member but his time has expired.


Mr. Bawden:: Madam Chairman, I do not see anything wrong about an hon. member pointing out the truth when we have heard so many untruths in the last little while

from members to my left. I represent well over 100,000 people in the constituency of Calgary South and they, as well as the rest of the people in Canada who have an interest in this subject, deserve to hear some of the facts and some of the truth rather than the untruths we have been hearing in the last few months.
I was rather surprised that in his remarks on January 28 the minister should have devoted so much attention to the meeting of the premiers. He devoted a large part of his speech to this subject, and I am sure the reason he did so was the strong feeling of guilt over what happened at that meeting on March 28. The minister protested very strongly and I should like to hear his comments later, on what I have to say. .
It is clear that when the premiers and the Prime Minister met last March they intended to reach an agreement which would last for 15 months. It was understood that the meeting this year would review the oil prices in the light of current world conditions, it being felt that those prices would, in all probability, again be escalated. I say that since the revenue sharing arrangement agreed to was only a temporary arrangement and it would be assumed by anyone that any change in tax laws would come only when the first ministers sat down to restructure all these sharing arrangements.
Each set of rules-tax rules, royalty rules, price rules- is interrelated; each factor depends on the other. I am surprised that the minister should have stated on January 28 that the provinces took unilateral steps to alter radically their royalty structures without first consulting with the federal government. While this may be the case as far as British Columbia and Saskatchewan are concerned, it is clear from the correspondence now published between the premier of Alberta and the Prime Minister that the Alberta royalty rates were known to the Prime Minister well in advance of the March agreement. I believe the Prime Minister should acknowledge this fact publicly.
The minister refers to royalty charges as "thinly disguised income taxes," stating that income taxes have customarily not been deductible since Confederation. Is he not aware that income taxes paid by Canadian companies to foreign governments are, in fact, fully deductible when computing Canadian income tax? The minister proudly stated in the House on January 28 that measures to disallow provincial royalties when calculating federal income tax did not in themselves reduce the return to the provinces but serve only to prevent the provincial levies from undermining the federal treasury.
Unfortunately, he did not recognize in the course of his speech that those measures did, nevertheless, go a long way toward smothering a vibrant and viable industry- mining, as well as oil and gas. He should be ashamed of himself for saying that the changes proposed in the November budget did not violate the letter or the spirit of the agreement arrived at by the first ministers. He stated that the question of the relationship between federal and provincial resource taxes never formed any part of that agreement, and that consequently the budget proposals could not in any way be construed as a breach of that agreement.
I can only say that when a short-term arrangement was arrived at, to be re-negotiated within 15 months, bearing
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in mind that all parties to that meeting claimed that provincial, federal and resource industry needs would be well served by the conclusions of that meeting, a violation of the agreement did in fact take place when the minister presented his budgets of May 8 and November 28. No matter what arguments may be put forward it was clearly an underhanded deception when the federal government failed to advise the provinces on March 27 specifically on the changes to be made in the tax rates.
If the Minister of Finance intended to make these changes to alter the revenue sharing from resources, did he not recognize that a vital ingredient in the economy and private sector was threatened by the action he was taking? I suggest to the committee that notwithstanding what has been said by the members on my left, the mining industry and the oil and gas industry of Canada over a long number of years have done a very good job of finding reserves of minerals, oil and gas, under the most arduous and difficult of conditions. Indeed, I think the important thing to remember is that Canada today is the only developed country in the world which can claim self-sufficiency in most vital commodities, including oil and gas.
The minister explained in his remarks to the House that the federal government is not a beneficiary of the export charge which is applied to western oil moving to the United States. I am surprised, in light of the difficulty that has developed between the provinces and Ottawa, that very little recognition is given to what western Canada is doing for the rest of the country. In fact most of the words we hear about the western provinces are words of criticism.
I think it important to emphasize, however, that western Canada at the present time is subsidizing eastern Canada by an amount of something over $4 million per day. I think it is also important to recognize that something in the order of 40 per cent of our crude oil which is refined goes into gasoline. In other words, to a very large extent western Canada is subsidizing the oil that the eastern provinces use for automobiles, sports cars, or any other type of use that requires gasoline. I recognize that public transport is also a user of gasoline, but a very large percentage of gas used in automobiles is subsidized.
A few years ago, but after the present Prime Minister had come to power, and during a period in which the Minister of Finance was part of the government, approaches were made to the federal government by the western provinces that could not sell their oil at that time, to construct a pipe line to Montreal. There were a great many security implications in constructing a line at that time. After various meetings it was pointed out by the Prime Minister and his cabinet that the pipe line would not be constructed from western Canada since it would cost consumers in the Montreal market something in the order of one cent per gallon extra. On this basis they were not prepared to build a pipe line.
What they preferred to do, Madam Chairman, was to save one cent a gallon and to import oil from Venezuela. This is just one illustration of the complete ignorance of the facts and the lack of policy which the Trudeau govern-
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ment has demonstrated over the years in this very important area.
As reported at page 2693 of Hansard, the minister quoted percentages of petroleum production revenue to illustrate the fact that the federal government's share would have decreased while that of the provinces would have soared if it were not for the minister's November budget. The minister then projected these percentage petroleum revenues to the end of the decade. In all fairness, the petroleum industry is changing very, very rapidly. I am sure that when the first ministers meet this coming April there will be further escalations in the price of oil, probably in the order of $2.50 a barrel. It would seem that at that time all of these sharing agreements will again come up for discussion. Surely this would have been the time to advise the provinces just what level of royalty collection would be acceptable to the federal government.
I should like the minister to tell the committee what the percentage of revenues would be, if in fact the export tax were included in the revenue of the federal government, because my calculations indicate that the federal government is receiving something like twice as much as are the provincial governments as a result of this export tax.
The minister complained that this is not revenue received by the federal government; it is paid out by way of subsidy. But surely it must be recognized that when the premiers met with the Prime Minister last spring they agreed to give up the export tax in view of concessions that were made to them. So I think it is essential that the minister at long last come to grips with the question. He has conveniently or accidently ignored the question of the export tax and total dollar amount on every occasion when he has stood up to speak on this subject.
I have a couple of questions I should like to ask the minister. Will he tell the committee what is the cost to the federal government of full deductibility of royalties in total dollars? I should also like the minister to tell the committee what is the dollar cost of permitting deductibility of royalties up to 25 per cent, presuming that this can be translated back to the provinces of British Columbia and Saskatchewan.
I should also like to ask the minister about his long-term projections. He holds a special position as chairman of the committee of the International Monetary Fund which considers loans to countries that are suffering from serious oil deficiencies. Would the minister let the committee know whether he has made any projections for Canada borrowing from this fund as we reach the end of this decade and in the early 1980s? Any reasonable projection based on National Energy Board figures indicates that we are going to be in the position of having to call upon this fund of which the minister is chairman.
My next question has to do with tar sands plants. The minister had a good deal to say last week, as did other members of the government, about the Syncrude project. The factors that have made Syncrude viable-that is, world price and deductibility of provincial payments- were undoubtedly very critical factors in enabling that project to go ahead, quite aside from government expenditures which were also part of the mixture. In view of the fact that these essential fiscal matters were ingredients in this project going ahead, I should like to ask the minister
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how he can possibly exclude these same advantages when he is projecting policy for future tar sands plants.
According to National Energy Board forecasts, a plant is to be built approximately every two years. Even then we will be very, very short of resources. Would the minister tell the committee why he has not made this policy available, and made clear that it will be available, to constructors of tar sands plants in the future. Many years of lead time are required. The absence of clear rules now could easily set back future plants which the government has brought into its energy projections.
My last question to the minister is about oil shortfalls in 1980 and 1985. Having included production from the oil sands in Alberta, the National Energy Board still projects a shortfall of 560,000 barrels a day by 1980, which will require the importation of some $2 billion of crude oil if we use a figure of $11 per barrel. In 1985 our shortfall will be 1.5 million barrels, and we are going to need something in the order of $5 billion to cover our energy deficiencies. If the minister is going to deal with this I would like him not only to deal with the balance of payments question resulting from our energy shortfall, but also to deal with it in the context of our invisibles and our trade. Could he tell us whether in fact we are truly facing a shortfall which I envisage in the area of $6 billion in 1980 in our international accounts, and something in the order of $10 billion in 1985? Would the minister comment as to whether he agrees with those figures and considers them serious in the context of Canada's economic future?


John Napier Turner: Madam Chairman, we will try to get the figures on revenue for the hon. gentleman later on during the debate. I have them around here somewhere. Having regard to the other two questions, one of them related to our balance of payments problems as we move from a balanced oil export-import position to an import oriented picture, on the hon. member's assumptions. The figures will depend, of course, on how quickly we will be able to bring on new sources of oil, and that is hard to predict. I cannot give the hon. member's figures any more credence, one way or the other.
His second question was whether I anticipate we will have to borrow against international monetary fund facilities available at the moment for short-term balance of payments difficulties. It may be that, at the time the hon. gentleman envisages, our exports will be stronger in other domains so that in the ordinary course of capital investment we will have sufficient funds to relieve us of these balance of payments difficulties. I really cannot foresee the situation he anticipates which would force us to borrow against that facility, but that might be the case in terms of short-term imbalances or crises from time to time. A number of nations have had to use the facilities of the International Monetary Fund, but at the moment I do not see this happening.
In respect of Syncrude, the hon. gentleman's question was: having recognized the tax regime as it affected royalties before the two budgets of May 6 and November 18, why have we not recognized that the same regime ought to be accorded future Syncrude developments or tar sands operations? The Prime Minister as reinforced by the Min-

ister of Energy, Mines and Ressources, said we would look at each project on its merits. That is not to say we do not consider the development of the tar sands as important, but we will want to look at cost factors at the time, at the value of market potential at the time, and at pricing factors, to see whether any additional tax incentives will be required.


Peter Colwell Bawden: Madam Chairman, the minister did not fully answer a couple of my questions. On the matter of the tar sands, is the minister saying that the government will entertain favourably approaches in respect of prospective structures and plants? Is he saying that the government will in fact be prepared to negotiate conclusions to permit these plants to go ahead without federal funds being invested? Does he envisage the government making the incentives clear enough and sufficient enough that these plants can be built by the private sector without the injection of government funds?
The other question the minister did not answer was whether the government considered the deficiencies of $6 billion to $10 billion in our international accounts as being serious to this country. While he mentioned frontier oil and reserves, the calculations I have given him were taken from a report of the National Energy Board released within the last few months. That board has allowed for future discoveries and growth in production of oil that is not yet found.
It is pretty clear that we may very likely be facing this problem in the near term, that is, by 1980. If a discovery were made off the east coast of Canada in the course of the next six months, for example, that oil could not be delivered to Canadian markets by 1980. I would appreciate a few more explanations and comments as to why the minister rather optimistically looked at much better figures than these, and whether in fact the magnitude of this is considered serious.


John Napier Turner: There is just no way I can forecast the balance of payments figures over that period because so many forces are at play, particularly in volatile international world monetary and trading terms.
As for his question about the Syncrude type of operation, the government's decision in terms of tax incentives together with, or as an alternative to, equity participation will again have to await the examination of each proposition on its merits at that time.


William Gordon Ritchie: Madam Chairman, I should like to say a few words about these economic rents or royalties. To put it mildly, I think the government has gone about the situation of taxation on oil and royalties in a most unusual manner. This also applies to the government's taxation in respect of the mining industry, although we do not hear so much about that. This is the situation at a time when we need more oil, yet we apparently have a decrease in the number of drilling rigs from 240 to 140. This is at a time, as we have all read, when we are slowly dipping, and have been since 1966, into our reserves.
In the "Policy Review and Outlook, 1975", the volume headed "Restructuring the Incentive System," Judith Maxwell of the C. D. Howe Research Institute had some very interesting things to say. At page 124 she states:
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The key element in designing an efficient system of collecting economic rent, as mentioned earlier, is to assure the producer that he can earn a normal profit on new investment, even if that new investment will involve higher unit production costs. Thus we must take a careful look at the impact of the new rent collection system installed by Ottawa and the provinces in the past year or so.
She also states:
-that despite the two-price system and higher provincial royalties, oil company revenues were significantly higher in June, 1974, than they were in September, 1973. However, the federal government seems to be determined to tax away a substantial portion of this revenue increase. On May 6, 1974, in what was clearly the opening move in a political battle with the provincial governments, Ottawa introduced measures that would have reduced deductions allowed in calculating the income of oil and mining companies and raise the effective tax rate. The measures were clearly incompatible with the existing provincial tax system but were never put to the test because they were defeated in parliament, along with the rest of the budget. The two levels of government are now negotiating a change in the taxation system for the oil industry. Nevertheless, it is interesting to examine what the impact of the May 6 proposals would have been, because they offer some interesting insights into the problems of designing a tax system that is effective in collecting economic rent.
The federal taxes as proposed would have created a small loss on each barrel of oil produced if the domestic price for oil were increased.
She goes on to state that this would certainly have had a perverse effect on the incentive to invest because no investor would put money into a new production facility if he expected to earn less profit per barrel as prices rise. She suggests that this would have an especially damaging effect because new production capacity will be badly needed within a few years.
This really means that the government on May 6 was trying to extract far too much in economic rent from our Canadian resources. It will be difficult for a period of time to decide what that economic rent should be, particularly as oil prices go up and down, and probably will be artificially high. But they will probably remain essentially high. Canada will have to have a pretty flexible rent system to encourage new investment.
At present we seem to be experiencing a significant cut back in oil which, in fact, is more plentiful here than anywhere in the world because Europe is cutting back on imports and the United States is threatening to do likewise. So there is lots of oil around. The Arabs have seen what is happening here and in Europe. They are concerned because they see that there is too much oil. Nevertheless, I think that it is an important factor in discussing what the price of oil in Canada will be, and I think it is significant to discuss what some people think that oil should cost and how it should relate to the national interest.
According to the Globe and Mail of November 27 the Economic Council of Canada is reported to have addressed itself to this very problem. The Council said that whether the price of oil is $6.50 a barrel or even $8.50 a barrel, we cannot delay too long raising the price to somewhere near the world level.
It has been the government's position that the price can be kept below the world level, but I doubt if that is possible for an extended period of time. The council suggests that, by and large, the domestic price of crude oil should rise in the next few years to the world level. I think the important words in that sentence are "the next few
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years". Certainly we are in a position to cushion Canadians against great price changes or great reductions in fuel. The council went on to point out what would happen if the price rise were delayed. It said this will certainly delay energy conserving technological change, and hasten the depletion of existing reserves.
We read last week that since 1966 the supply of fuel oil has been smaller than the amount that was bought. The council said that if the price rise were delayed, this would delay the provision of supplements and alternatives, lower the potential volume of savings, and perhaps foster abortive development of energy-intensive industries dependent upon cheap oil and gas. This is significant in our decision on where to locate our ethylene plants, a debate that is now going on between Alberta and southern Ontario.
The council went on to say that it is true that a higher oil price in Canada will lead to an increase in the cost of living in the short run but, in the immediate and long term, oil prices will have to rise to restrain consumption of our resources that are costly to replace, to stimulate production of additional supplies, and to generate the necessary savings.
Furthermore, the Economic Council of Canada went on to say that the government should emphasize long term planning of urban development designed to economise on the use of energy. I might add that there is not much point in designing buildings with huge windows if the cost of heating them will be excessive, or if another design would make them better energy users. The council also warned the government not to try to extract too much economic rent through royalties, export taxes and other forms of corporate taxation, because this would tend to discourage exploration and development.
The council went on to say that the amount of rent collected by governments must not be such as to discourage the adequate development of higher cost energy sources which will gradually replace conventional reserves, unless governments are prepared either to accept exceptionally steep price increases at a later date or to rely on imported supplies.
This budget has made us realize that Canada will become a net importer of oil, perhaps by 1980, unless unexpected reserves are found in areas that are fairly adjacent to our settled population. We have heard about recent discoveries in the Mackenzie Valley, but as the president of one of the oil companies has said, it will be an expensive operation. It is quite likely that even if we have to do the exploration and development ourselves, or even together with the Americans, it will probably be oil at the world price in any case.
The most serious threat to our oil sufficiency has been the struggle between the federal and provincial governments over royalties. This will cost Canadians in future a great deal in energy supplies. There is no doubt that had the oil been found in the central provinces of Canada, namely, Ontario and Quebec, we would have had a much more amicable settlement of this vexing problem.
The amount of money that the minister will collect in his revenues is not all that great, and even if he gave it all back, he would not be giving back anything like what he is

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giving in personal income tax. So this is more a matter of principle rather than a matter of the amount of money involved. Perhaps not all the fault for this struggle lies with the federal government, but I believe that a good part of it can be credited to the intransigent attitude of the Prime Minister. In his desire to create an enormous, powerful Canadian axis in the Ottawa-Montreal fulcrum, he is determined to prevent the development of an industrial-political and population base that would be a threat to central Canada.
I think that the government should be aware of the powerful forces that will inevitably create a political unit which would, of necessity, perhaps have to look south and not west. So I think that Ottawa should be much more careful in dealing with the provinces on this matter of resource taxation because suddenly oil and gas have become expensive and are worth much on world markets. The federal government and the provinces have rushed in madly to secure all the spoils. I think it can be said that as the cost of minerals falls on the world market, the government will adopt a new attitude with regard to these industries.
I should like to speak for a few moments about the Syncrude project. It is obvious that the problem with Syncrude has arisen largely as a result of the government's intervention in the free market. Atlantic Richfield withdrew from Syncrude, and Shell Explorers withdrew its partnership with Shell Canada in another plant, for a very practical reason. When the federal government indicated that it could not allow the export of oil from Canada, obviously the American companies had no other choice but to take their investment money elsewhere. This may be either a good or a bad thing, but it had to be a practical decision.
Even the promise of exempting Syncrude's production from export rationing is no more than a hope. It is not clear whether the government has exempted Syncrude from export rationing, but even if it has, it is quite obvious that this will not be allowed. Atlantic Richfield is a company with refineries and distribution outlets, and it is short of crude oil. It invested in the Syncrude project in the hope of getting some of that crude. If the government will prevent it from exporting the Canadian crude, obviously this will not help its American position. It has therefore, invested heavily in Alaska oil, and also has recently given up its interest in Colorado Shales.
The premier of B.C. a week ago told the NDP convention in Calgary that Canadians should do tar sands development themselves, but will they be willing to put up $10 billion over a period of years to bring on stream another four plants like Syncrude? In effect what happened to Syncrude was the principal's waning ability to meet the cost of $1 million per day out of cash flow which is being progressively taxed away. Certainly this indicates that we could well have looked at excess profits tax if we wished to tax companies making excessive profits, rather than imposing restrictions. The federal government did not recognize this when imposing its pre-emptive taxes on the industry in the last federal budget.

The concession by the government to allow the oil from the sands to be sold at world prices represents the first breach of the unrealistic price limit imposed last year. We suspect that the price of world oil will drop in this coming year to some extent. Indeed the Shah of Iran suggested that the present price of oil is the same in buying power as it was in 1948.
Over this problem the government has entered into a war with the provinces. The minister withdrew slightly, but not enough yet to indicate what effect it will have on the industry. I think there should be much more consultation with the provincial governments as to what will be the relative share of each of the governments. I believe it is important that the provinces be assured of a substantial share in their resources because this is one of the few tax areas open to them.
The federal government has progressively encroached in the last 30 years on the taxing power of the provinces, and unless this is restored, the provinces cannot discharge their duties under the constitution. I believe that a much more loose arrangement of economic affairs, to provinces to run their own businesses, will make for a better confederation in this country.


Leonard C. Jones: Madam Chairman, I thought we were talking about the Income Tax Act. I have a question that I would like to bring to the attention of the minister. A few weeks ago in my apartment in Ottawa I received a yellow and black pamphlet-Hallowe'en colours-which indicates that there are special provisions for certain members of this House and their political organizations, and I begain to realize that I have been discriminated against. I want to bring this to the attention of the minister and this committee.
I have just one question to ask as a result of this: would the minister be kind enough to let me know what amendments have been made to the various statutes to permit an independent member, unassociated with any political party, to have the same advantage as political parties and other members of this House of giving receipts for income tax purposes as a result of amendments made by virtue of the Election Expenses Act? I am not going to come to this House begging for fairness, but I am sure amongst hon. members there must be sufficient numbers who are fair, equitable and reasonable enough to make the necessary amendments to the necessary acts.
One of the NDP members mentions candidates. You are not a candidate until an election is called, and I do not expect that, with the present government's majority, an election will be called for three or four years. I would just like to know if the minister could answer that question for me, or if he would let me have the necessary information.


John Napier Turner: I sympathize with the hon. member's predicament, but the House voted on the Election Expenses Act and, in its wisdom, said that these provisions were open only to candidates of a registered party. The hon. gentleman has two alternatives: he can either join a party or start his own.


Leonard C. Jones: I do not have an alternative. I cannot start a party because I am not recognized until the next election. I just ask if the minister would tell me what amendments
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are necessary to which statute so that presentations can be made?


Mr. Paproski:: Tell him to join the Liberal Party.


An hon. Member:: You can have him, John.


John Napier Turner: I think the hon. member showed a lot of good sense last night.


Steve Eugene Paproski: There's your chance, Jonesy.


John Napier Turner: My difficulty is that I doubt whether the rules of relevancy would allow an amendment of the kind envisaged by the hon. member to be moved to this particular bill. The rules of relevancy affecting amendments to statutes are that it is not the statute itself to which the amendment should be relevant but the amending bill, and since there is nothing in this bill relating to election expenses I think the Chair, with the greatest respect, might have great difficulty in receiving the type of amendment the hon. gentleman has in mind, or in my trying to accommodate him even if I could determine a way to do so.


Leonard C. Jones: Is the minister suggesting that I should figure a way myself? Perhaps I can.


Mr. Huntington:: I just have a few problems in my mind concerning the approach that the minister and his government are taking on the subject of non deductibility of royalties haid to provincial treasuries, and particularly to provincial crown corporations. I ask the minister if he has considered his next move once he forces the provinces to take over into the provincial crowns the rights to the natural resources, and then the provincial crowns would contract out the services aspects of developing those resources. I would like to know if the minister has it in his hip pocket that he is then going to tax the provincial treasuries when he forces them to take such action, and whether that has been part of his consideration to date.


Mr. Cullen:: We didn't catch the last part of your question.


Arthur Ronald Huntington: I will ask it again, Madam Chairman.
One of the problems I foresee in the approach that the minister and his government are taking toward the provinces, particularly with the non deductibility aspects of it as it applies to provincial crown corporations, is that the provinces now are perhaps going to remove their resources from their crown corporations, hold them within the provincial crown, and then contract out the various service aspects such as exploration, transportation, development, and refining to industries. The federal government will then have the normal taxation rights upon those service industries, and will have had removed from them any right of taxation to the value of the resource, as that resource will remain within the provincial crown. I am asking the minister whether he has thought this aspect out, this alternative that he is forcing the provinces to take and, if such an action were taken by the provinces, would the federal government then try to move in with legislation whereby it would tax the provincial treasuries?
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John Napier Turner: I will have to treat that question as hypothetical, and I really prefer not to deal with it unless and until the events described by the hon. gentleman occur.
I want to say that I inadvertently misled the hon. member for Moncton on one feature of the rules of relevancy. He may be a little better off than I said at the start, on clauses 84 and 85. I apologize to him. As to the amendment he might want to put, I do not want to put myself in a position to help him draft it, but he will be able to put his question before the committee.


An hon. Member:: Mr. Stanfield will help him.


Leonard C. Jones: Madam Chairman, on a question of privilege, I do not like the remark from that hon. member.


Marcel Joseph Aimé Lambert: Madam Chairman, I want to get into the technicalities of clause 1 of the bill. The minister is purporting here to amend paragraph 6 of the act which deals with benefits as inclusions in income. Strangely enough this is amending an amendment that was made in 1973-74, and I am wondering what is the purpose. Why was the language of the section as it now stands found unsuitable? Were there unfortunate cases of rigidity?


John Napier Turner: Which clause is this- clause 1 (1) or 1 (2)?


Marcel Joseph Aimé Lambert: It is 1 (1) dealing with allowances that are payable.


John Napier Turner: It is a new one.


Marcel Joseph Aimé Lambert: No, this is a replacement. It seems to me it has a reference to the ways and means motion. First of all it says "not in excess of reasonable amounts," and I want to know what is the determinant of a reasonable amount. I think this section has rather wide application. Unless I am wrong it could apply to a public servant on service abroad for Canada where there is no school in the language of the family.
Say someone were on service in the Middle East and wanted to have a child educated in France or Switzerland, for instance, and this were one of the conditions of service. Is it a case that there will be an average tuition allowance, or is it to be the most expensive school university? I think the minister can explain that. Or what about Canadians serving in Canada? It seems to me this is motivated more toward service in Canada. I should like an explanation. Obviously there was some reason for it, and hopefully it will provide more flexibility for proper education of children in either official language.
I find a certain rigidity in subparagraph (B) line 27 which says:
the school that the child attends Is the school closest to that place in which that language is the language primarily used for instruction;
This puts a geographic limitation on the choice of school. It might only be a matter of 15 miles in direction but this says "closest". How are we to give flexibility to this?

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The other one deals with premiums for group life insurance in excess of $25,000 which is subject to some adjustment. Perhaps we could have some explanation on the technicalities of these two provisions.


John Napier Turner: Madam Chairman, I did deal with these points in some detail for the hon. member for York-Simcoe, but the hon. member for Edmonton West brought up one point that I did not deal with and that is "reasonable amount". Because of the variety of circumstances one encounters, even within Canada, the amendment is primarily directed to help those families-for instance English-speaking Canadians in a predominantly French-speaking environment, or vice-versa-to accept from their employers, within their contract of employment, payment to cover the schooling of children in the principal language of the family and not have that as a taxable benefit. Because of the variety of circumstances envisaged, one has to leave it to that traditional administrative discretionary term called "reasonable amount".


Marcel Joseph Aimé Lambert: The minister will also appreciate the limitations of (A) and (B) which may introduce a little difficulty. Say someone from the province of Quebec were transferred to Calgary and wanted his children to remain in school in Quebec, what would happen if there happened to be a school which taught French alone in the city of Edmonton? There are certainly some here in Ottawa. The geographical limitation in (B) creates a problem. I would hope that the Department of National Revenue would be as flexible as possible in its interpretation, because otherwise the purpose of the amendment might be defeated.


John Napier Turner: Madam Chairman, what the hon. member says here, or I say, does not bind the court, but I would hope that the Department of National Revenue would take note of his remarks, which I support.
Progress reported.


The Acting Speaker (Mrs. Morin):: It being six o'clock, this House stands adjourned until tomorrow at 2 p.m.
At 6.01 p.m. the House adjourned, without question put, pursuant to Standing Order.

Thursday, February 13, 1975