1975-12-18

ROUTINE PROCEEDINGS


Mr. Dan McKenzie (Winnipeg South Centre):: Mr. Speaker, I rise on a matter of urgent and pressing necessity pursuant to the provisions of Standing Order 43. My motion relates to the CNR locating a piggyback terminal in southwest Winnipeg adjacent to a residential area and as the Department of the Environment study completed earlier this year is now obsolete due to the Minister of Urban Affairs granting a loan to the Manitoba government to build housing west of the terminal and in light of the fact the city of Winnipeg has sent a telegram to the federal government protesting the terminal being located on Wilkes Boulevard, I move, seconded by the hon. member for Dauphin (Mr. Ritchie):
That this House instruct the President of the Privy Council to rescind the Order in Council granting CNR the funds to build and that the Ministry of Transport direct CNR to halt all proceedings and calling for tenders until the Department of the Environment completes a new environmental study and that alternate sites be explored.


Mr. Speaker:: Order, please. Standing Order 43 requires unanimous consent of the House. Is there unanimous consent?


Some hon. Members:: Agreed.


Some hon. Members:: No.


TRANSPORT
Mr. Les Benjamin (Regina-Lake Centre):: Mr. Speaker, I, too, rise under the provisions of Standing Order 43 on a problem that you and I and many farmers in western Canada have. In view of the fact that the Canadian National and Canadian Pacific Railways have decided not to run trains on certain branch lines in western Canada for weeks or months this winter and that this arrangement is agreed to by the Minister of Transport who also happens to be in charge of the Canadian Wheat Board, would you believe, and since farmers are being told they must deliver
carload lots of malting barley to another rail line, resulting in 30 to 40 miles of extra hauling, and hundreds of Canadian Wheat Board shipping orders being unfilled, if I may have uanimous consent from both sides of the House I would move, seconded by the hon. member for Winnipeg South Centre (Mr. McKenzie):
That this House calls upon the Minister of Transport, in charge of the Canadian Wheat Board, to require the railways to operate trains throughout the winter until all outstanding wheat board shipping orders on any given subdivisions have been filled.


Mr. Speaker:: The motion pursuant to Standing Order 43 cannot be put without the unanimous consent of the House.


Some hon. Members:: Agreed.


Some hon. Members:: No.


AGRICULTURE
Mr. Leonel Beaudoin (Richmond):: Mr. Speaker, under the provisions of Standing Order 43, I ask the unanimous consent of the House to move a motion dealing with an important matter of pressing necessity.
In view of the alarming content of the federal government's new dairy policy which seeks to reduce production of industrial milk by at least 10 per cent while increasing the import of dairy products, primarily cheese, and since this will inevitably result in a substantial reduction of the producers' revenues and automatically raise consumer prices, I move, seconded by the hon. member for Belle-chasse (Mr. Lambert):
That this House consider immediately this new dairy policy which affects very unfavourably all Canadian producers and consumers in an economy which is already stifling them, and that it require the government to change immediately its agricultural policy and take such measures as controls over imports which protect Canadians rather than weaken them in several ways.


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


Some hon. Members:: Agreed.


Some hon. Members:: No.


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

December 18, 1975
Transport


PRIME MINISTER'S OFFICE
Mr. Tom Cossitt (Leeds):: Mr. Speaker, I rise under the provisions of Standing Order 43 to move a motion which is self-explanatory, seconded by the hon. member for Dauphin (Mr. Ritchie):
In view of the fact that the Prime Minister will be addressing the nation on television and radio this evening for purposes of outlining to the Canadian people the nature of the cuts in government spending in keeping with the government's declared policy of restraint, the House requests the Prime Minister to include in his remarks the setting of a personal example to the Canadian people by declaring a new year's resolution to curtail and cut the staff size and the expenses of the Prime Minister's and Privy Council offices to a reasonable level, to further demonstrate personal restraint by announcing reductions in the heavy expenditure from public funds at his official residence of 24 Sussex Drive and, finally, a statement that personal holidays in 1976 would be paid for by himself rather than continue poaching from the taxpayer's pocket.


Some hon. Members:: Agreed.


Some hon. Members:: No.


TRANSPORT
Mr. Stuart Leggatt (New Westminster):: Mr. Speaker, I also rise on a matter of urgent and pressing necessity. In view of the sensitive and prompt response to the request for a grant to build an underpass at the St. Clair Avenue level crossing in Scarborough following the accident which caused nine fatalities, and in view of the fact that several other communities in this country are also in desperate need of approval of existing plans for similar construction, especially the city of New Westminster, where plans and applications have been on file since 1967, where continued injury and damage occur and where the greatest bottleneck in the lower mainland of British Columbia continues to foul up traffic to an incredible degree, I move, seconded by the hon. member for Sault Ste. Marie (Mr. Symes):
That the Minister of Transport immediately formalize existing agreements where the need has already been demonstrated, and further that the whole subject of rail crossings be forthwith referred to the Standing Committee on Transport for examination and reassessment of priorities and criteria presently employed by the government in making decisions on these matters.


Mr. Speaker:: Order, please. Pursuant to Standing Order 43, the motion requires the unanimous consent of the House. Is there unanimous consent?


Some hon. Members:: Agreed.


Some hon. Members:: No.



ORAL QUESTION PERIOD


Mr. Elmer M. MacKay (Central Nova):: Mr. Speaker, my question is directed to the minister without portfolio. Would the minister welcome the opportunity to clarify his position with respect to co-operation with the RCMP in the production of records and documents and the giving of evidence and, if so, can he state briefly the situation at the present time with respect to his dealings with the force since I believe another officer and a commissioner had a meeting with the minister yesterday afternoon?


Hon. Jean Marchand (Minister without Portfolio):: Mr. Speaker, the situation is crystal clear at this moment. We co-operate with the police. I think that now we only have to wait until they bring some results.


Elmer MacIntosh MacKay: Is it the minister's position that if the RCMP will specify the areas in which they are interested, he will let them have all the documents which they request relating to these areas and if the minister is unwilling to permit voluntarily the RCMP to remove large numbers of files, as they have done with respect to other persons, he would permit them to sort through any files they wish in his office?


Some hon. Members:: Oh, oh!


Mr. Speaker:: Order, please. I am sure the hon. member realizes that his question is hypothetical.


SKY SHOPS INVESTIGATION-REQUEST FOR ASSURANCE INVESTIGATION WILL PROCEED EXPEDITIOUSLY
Elmer MacIntosh MacKay: My final supplementary is for the Solicitor General. Having heard the position of the Minister without Portfolio with regard to his willingness to co-operate with the RCMP, I should like to ask the Solicitor General if he can tell the House that as the responsible minister he is now satisfied that this investigation is able to proceed as fully and expeditiously as necessary?


Hon. Warren Allmand (Solicitor General):: Yes, Mr. Speaker.


SKY SHOPS INVESTIGATION-ALLEGED USE OF WARRANTS RELATING TO COLLECTION OF FUNDS FOR LIBERAL PARTY
Mr. Ray Hnatyshyn (Saskatoon-Biggar):: Mr. Speaker, my supplementary question is directed to the Solicitor General. On December 1, as recorded at page 9573 of Hansard, the Solicitor General said flatly, and I quote: "There is no investigation of Liberal party fund raising practices." I wonder how the Solicitor General squares that statement with the fact that certain of the warrants obtained by the RCMP in the course of their investigation refer very specifically to material-and again I am quoting-relating to the collection of moneys for the Liberal party.
December 18, 1975


William Warren Allmand: Mr. Speaker, search warrants often ask for evidence in the hands of people who could be witnesses but not suspects, and that is what I was pointing out to the hon. member.


Ramon John Hnatyshyn: I wonder if I could then ask the Minister without Portfolio whether, in view of the negotiations which are now taking place with the RCMP, he believes that he is not obliged to make full disclosure of documents to the RCMP on a principle akin to the apparently discredited doctrine of executive privilege in the United States.


Mr. Speaker:: Order, please. The hon. member for New Westminster.


ENVIRONMENTAL AFFAIRS
Stuart Malcolm Leggatt: Mr. Speaker, my question is directed to the Minister of State (Fisheries) in his capacity as Acting Minister of the Environment. In view of the announcement he made recently of national levels under the Clean Air Act for two fibres-asbestos being one, for which we congratulate the minister-and in view of the conflict which arises throughout the various provinces in terms of fibre levels-for example, in British Columbia the level is five, and there are various other levels-can the minister advise what instructions he is giving industry as to which of the levels it should comply with? Secondly, is there yet any federal-provincial agreement in terms of the enforcement of the national level in provincial areas?


Hon. Romeo LeBlanc (Acting Minister of the Environment):: Mr. Speaker, I thank the hon. member for giving me credit which belongs to my predecessor, the present Minister of Communications.


Some hon. Members:: Hear, hear!


Roméo LeBlanc: I merely came in and signed the press release. I will study the question of the hon. member, ascertain the details of the consultations with the provinces and try to give him a substantial answer tomorrow.


DATE OF APPOINTMENT OF FULL-TIME MINISTER
Stuart Malcolm Leggatt: At the present time we have a problem in Port Hope with regard to the closure of the school and a house as a result of radiation poisoning. Mercury poisoning is occurring throughout the country, with some cases being confirmed, and at Syncrude there is a problem with SO2 emissions. Will the minister continue to take this portfolio as his second responsibility, or will there be a full-time minister of the environment to deal with these very serious problems which are arising?
Oral Questions


Roméo LeBlanc: I suggest to the hon. member that this question would be better asked of the Prime Minister.


An hon. Member:: Why don't you ask him?


POSSIBILITY OF SETTING NATIONAL STANDARDS FOR SO2 EMISSIONS
Stuart Malcolm Leggatt: In view of the belated actions of the previous minister in declaring national standards for asbestos under the Clean Air Act, does the minister intend to set a national standard with regard to SO2 emissions, because the emissions out of the tar sands will be well above federal studies? Will the minister now take action to declare national standards with regard to S02, which he has the clear power to do under the Clean Air Act?


Roméo LeBlanc: I will, of course, take the suggestion of the hon. member very seriously.


AGRICULTURE
Mr. Adrien Lambert (Bellechasse):: Mr. Speaker, I wish to address my question to the Minister of Agriculture.
Considering that the industrial milk producers in Quebec are now experiencing a drop in their revenues with reference to the grants they received in October on 75 per cent only of their production, and considering that an economist named Barry Proud has said that the dairy farmers' revenues will greatly drop in 1976, can the Minister tell the House whether he will introduce amendments to the dairy policy which will take into account the actual production costs in order to prevent a drop in the revenues of those producers who make up an essential sector of this country?


Hon. E. F. Whelan (Minister of Agriculture):: Mr. Speaker, the dairy policy we have sets production goals for dairy farmers and it is one of the most fair policies in the world. I wish hon. members would realize that our dairy producers are amongst the highest paid in the world. We are paying exactly what we said we would pay on the production we requested. In April this year we told them how much money we had and we told them we wanted 100 million cwts. of milk. That comes to about $278 million. If they produce above that they will have to produce it for less money.


ACCEPTANCE OF DAIRY POLICY BY QUEBEC PRODUCERS- GOVERNMENT POSITION
Joseph Adrien Henri Lambert: I understand perfectly well the Minister's answer and explanations, but in
10128

December 18, 1975
Oral Questions
view of the general concern, justified or not, about the decrease in the dairy farmers' revenues that is expected in 1976, I would like to ask the Minister whether the president and the membership of the Union of Quebec industrial milk producers agree with the Minister's decision and the dairy policy, and if so, could the Minister recommend that the membership be kept informed as to their union leaders' stand.


Eugene Whelan: Mr. Speaker, we met with the provincial ministers of agriculture yesterday. One issue we discussed was the dairy policy for the coming dairy fiscal year, 1976-77. They know that new quotas will be set for the dairy year which begins in April of 1976 and they will have to produce according to those quotas. They know the programs that were suggested last year. There is an escalator clause and the CPI indexing formula in the contract which is still to be used. We can only use so much milk in Canada and only so much for industrial milk products for the world market. It does not make any economic sense to produce more than we can market. That is the problem we face. At the present time farmers are producing more than the market requires. They have increased productivity about 6 per cent over what it should be.


POSSIBLE MEETING WITH DAIRY REPRESENTATIVES TO EXPLAIN POLICY
Mr. Roch La Salle (Joliette):: Mr. Speaker, I would like to ask the Minister of Agriculture a supplementary question.
In view of the answers he gave to the hon. member for Bellechasse, given the fact that Mr. Pigeon, former President of the Milk Producers Federation, has branded the present government's attitude towards the dairy industry as a blatant sabotage of this industry, and considering also the risk of the disappearance of the cheese industry in Canada, can the minister assure the House that he will meet with the officials and try to work out a solution with them in order to dispel these concerns and this obvious danger?


Eugene Whelan: Mr. Speaker, I met with the dairy farmers concerning the skim milk powder problem. Through consultation we were able to work out a revolving fund. We have already had meetings with them concerning the importation of speciality cheeses. I was asked publicly by Mr. Pigeon what I said to the dairy farmers, and I challenged him to a public debate any time on the question of what we are doing about the dairy industry in Canada. We have done more than any other government in the history of this country.


ALLEGED CONTAMINATION OF TURKEYS BY SALMONELLA-ADEQUACY OF INSPECTION-IDENTIFICATION OF AREAS BY CONSUMERS' ASSOCIATION
Mr. James A. McGrath (St. John's East):: Mr. Speaker, my question for the Minister of National Health and Welfare is prompted by the statement made today by the Consumers' Association of Canada, to this effect: that the Consumers' Association of Canada has conducted microbiological tests on major brands of turkeys purchased in three major Canadian centres and a large number of samples were found to be contaminated with salmonella bacteria. In view of that statement issued by the Consumers' Association of Canada, is the minister in the position today to assure the House and country that there is adequate inspection capability in the department and that the confidence of Canadians will not be undermined by-may I say-this irresponsible kind of statement? It is irresponsible inasmuch as the association refused to identify the sources of contamination.


Hon. Marc Lalonde (Minister of National Health and Welfare):: Mr. Speaker, I thank the hon. member for advising me of his question. On November 20, this year, I published a press release entitled "The Salmonella Problem" in which I indicated that foodborne salmonella infection is a serious matter, and outlined what steps are being taken by the government and what steps should be taken by consumers, to reduce the incidence of this infection, particularly in the consumption of poultry products. In addition-but for the postal strike-I had intended to distribute with family allowance cheques this month an insert entitled "Bird Watching", to advise consumers about this very situation.
Salmonella contamination from poultry has been with us for many years. The problem is of serious concern to the government and people of the country, but the matter must be handled responsibly. I hope this issue will not be treated sensationally, but handled responsibly. The resolution of this matter will take years and I repeat, the problem has been with us for many years. The issue must be handled responsibly by consumers and also by those concerned about this particular subject. I refer the hon. member to the press release I issued on November 20 on this subject.


James Aloysius McGrath: A supplementary question, Mr. Speaker. In the interests of responsibility, and as the Consumers' Association, by making that sweeping statement which fails to identify the three major centres, has put the whole country under the suspicion of contamination, if I may put it this way, may undermine the turkey industry when sales will be at their peak and undermine the confidence of Canadians who buy this traditional meat, will the minister press the Consumers' Association immediately to identify the three major centres referred to in their press release of today?


Marc Lalonde: Mr. Speaker, I understand that the Consumers' Association of Canada plans to hold a press conference on Monday, when they will probably identify the individual centres. I will be pleased to get in touch with them about this. But I would remind the hon. member that salmonella contamination is widespread and not limited to
December 18, 1975

the particular centres yet to be identified. It would be most unfair and irresponsible at this time to induce panic in the consumer market dealing with this particular product. Poultry and other foods as well must be handled properly, as most consumers have been doing for years. So far, the incidence of disease resulting from contamination has not been unduly serious in this country, but as I said, it is of concern to us.


AGRICULTURE
Mr. Bert Hargrave (Medicine Hat):: Mr. Speaker, my question is for the Minister of Agriculture. In view of the extremely important and urgent meeting which is to take place tomorrow between the minister and United States Secretary of Agriculture Butz relating to the egg issue and beef and veal quotas, and in view of the present somewhat strained relations between our two countries concerning the trans-shipment, or at least, substitution of Australian carcass beef sent to the United States by way of Canada, will the minister consider supporting the Canadian Cattlemen's view that unless some form of voluntary restraint against foreign imports is instituted, or a Canadian import law enacted, we may not have access to the United States market for our Canadian beef and veal?


Eugene Whelan: Mr. Speaker, I want to make sure I do nothing to offend the Canadian Cattlemen's Association, because they do not want government interference. I will study their brief. They are continually saying that. Yet, judging by what the hon. member said, it sounds as if they want more government interference. We shall discuss with the secretary of agriculture of the United States tomorrow all aspects of the beef trading program.


Herbert Thomas (Bert) Hargrave: Will the Minister of Agriculture also give consideration to urging Secretary Butz that their import quotas against Canadian beef, which will end December 31 next, should be renegotiated at or near historical trade levels similar to Canada's five year average pattern instead of a 12 month August to August quota?


Eugene Whelan: Mr. Speaker, I met with the United States secretary of agriculture at the FAO conference in Rome where we had a frank discussion. He sent a letter to me around November 15 which I received the other day. We had already made arrangements for a meeting in Washington. He suggested that when we meet in Washington we have a frank discussion on all agricultural problems facing the two nations. We will talk about our trade problems, their tariffs and our tariffs to see whether we can come to a proper trade arrangement that does not hurt one nation or the other.
Oral Questions


REGIONAL ECONOMIC EXPANSION
Hon. Robert L. Stanfield (Leader of the Opposition):: Mr. Speaker, I should like to address my question to the Minister of Regional Economic Expansion.
Further to the question put yesterday to the acting minister by the hon. member for York-Sunbury, Mr. Nicholson, the minister who was and is speaking for the Liberal government of Nova Scotia recently expressed great disappointment with the inaction of the minister in Nova Scotia. I realize this lack of action could easily be seen as the responsibility of the predecessor of the present minister, but what is the minister's response to the very important statement made by the Nova Scotia government?


Hon. Marcel Lessard (Minister of Regional Economic Expansion):: Mr. Speaker, in reply to the question asked by the Leader of the Opposition, I should like to say that we are no happier than need be ourselves about the delays in the negotiations and the fact that we have been unable to sign a greater number of secondary agreements with the Nova Scotia government. Three agreements are now being implemented; they are very important, one especially, and the amounts of money involved are also quite considerable.
We are still negotiating with the Nova Scotia government with a view to coming up with concrete proposals. We trust we will be in a position to announce concrete proposals within the next few weeks, or months. Still, I should in no way want to blame the provincial government for the delays. One thing is sure, however: before reaching decisions, we should be satisfied with the information requested from the provincial governments, and should make sure that our files are complete and that we are in a position to arrive at a decision which, in the final analysis, will respect the provincial authority while also taking into account the priorities of my department, which is willing to intervene in matters concerning economic and industrial expansion.


Robert Lorne Stanfield: Mr. Speaker, I would like to be sure that I clearly understand the minister. Is it his contention that the problem is due to a lack of effective co-operation by the government of Nova Scotia?


Marcel Lessard: I would not say, Mr. Speaker, that there is a lack of co-operation but we must recognize that some situations have changed, that the questions under study contained elements which have evolved in the last few months so that the provincial government had to review some of its own priorities. We have been informed of this necessity and the necessary steps are now being taken so that the new priorities of the government of Nova Scotia will be taken into consideration.
2 1 I 30 - 2014

December 18, 1975
Oral Questions BILINGUALISM


RECLASSIFICATION OF CERTAIN POSITIONS AS BILINGUAL-MINISTER'S POSITION
Mr. Serge Joyal (Maisonneuve-Rosemont):: Mr. Speaker, I wish to put a question to the President of the Treasury Board. I noticed he left the House a few moments ago; I wonder if he can come back immediately. In his absence, I will put my question to his parliamentary secretary.
In view of the fact that French-speaking civil servants in the Montreal area are showing legitimate impatience six years after the adoption of the Official Languages Act, can the Parliamentary Secretary to the President of the Treasury Board report progress to the House on the reclassification of the positions that may be reclassified as bilingual in Quebec, tell us if he is prepared to recognize the principle of a bonus based on the degree of bilingualism required for the exercise of the functions, and whether he has been invited by the regional section of Quebec to meet them in order that, while negotiations are under way, the same climate of co-operation and the same quality of service be maintained in both official languages?


Mr. Lloyd Francis (Parliamentary Secretary to President of the Treasury Board):: Mr. Speaker, I will take up a number of the points raised by the hon. member with the minister. However, I would like to go on record as pointing out there have been a series of consultations involving staff associations and Treasury Board through the advisory committee of the National Joint Council. No fewer than ten of these have taken place since the month of August of this year. These consultations are still necessary. No doubt the minister will have further observations to make.


AIR CANADA
Mr. Stanley Knowles (Winnipeg North Centre):: Mr. Speaker, my question is for the Minister of Transport, but may I say that the issue might also be of concern to the Minister of Labour. In view of the unsatisfactory state of labour negotiations between the employees and management of Air Canada's finance branch, will the Minister of Transport discuss with Air Canada the desirability of negotiating directly with the certified bargaining agent, namely the Canadian Airline Employees Association?


Hon. Otto E. Lang (Minister of Transport):: Mr. Speaker, I consider the matter of proceeding on this question to be very much a matter for the internal management of Air Canada. I recognize, however, that there are some questions which have been brought to the attention of my colleague, the Minister of Labour, and he has a role to play in this regard.


Stanley Howard Knowles: Mr. Speaker, may I then ask the Minister of Labour whether he is using his good offices to get the two sides to this dispute to

negotiate in accordance with the established principles of collective bargaining.


Hon. John C. Munro (Minister of Labour):: Yes, Mr. Speaker. As the hon. member knows, the mediators or industrial consultants in my department are familiar with this matter about which the hon. member is concerned. They are prepared to be of assistance of any time.


CANADA-UNITED STATES AUTO PACT-PROPOSED ESTABLISHMENT OF COMMISSION
Hon. George Hees (Prince Edward-Hastings):: Mr. Speaker, my question is for the Minister of Industry, Trade and Commerce. Is the government giving consideration to the establishment of a Canada-United States economic commission to deal with swings in the balance of automotive trade between Canada and the United States as brought about by the auto pact, such a commission having been recommended by the Auto Parts Manufacturers Association of Canada and the United States Senate Committee on Finance?


Hon. Donald C. Jamieson (Minister of Industry, Trade and Commerce):: Mr. Speaker, this may well turn out to be the next step in the process which is already underway. The hon. member will recall that the President and the Prime Minister agreed some months ago to set up a study of the automotive industry for his information and for that of the House. My officials met with the American officials about a month ago and agreed to initiate studies in parallel. In other words, there is a study going on in the automotive industry in the United States and a similar one going on with regard to the automotive industry in Canada. Once these studies have been completed, and we have a fairly tight timetable to get them completed in a hurry, we will decide on the next step, as to whether some kind of further joint step is necessary. I can assure the hon. member it is being examined at the present time.


ADMINISTRATION OF JUSTICE
Mr. Eldon M. Woolliams (Calgary North):: My question is to the Minister of Justice. I raised this matter before. In the case of PPG Industries Limited and Pilkington Brothers versus the Attorney General of Canada, the Chief Justice of Canada criticized the use of confidential income tax information and documents, contrary to the Combines Investigation Act. He said that was unjustified, sordid and sloppy. Has the minister investigated this criticism of his department and can he assure the House and the country that confidential information will not be used again?


Hon. Ron Basford (Minister of Justice):: I have, Mr. Speaker. I am under constraints as to what I can say, both
December 18, 1975

because of the judgment of the court and because of the further action which Mr. Buchanan may be taking. But as far as I and my officials can control the matter, I can certainly give the assurance that the provisions of the Combines Investigation Act and of the Income Tax Act will be observed by members of the public service of Canada. Because of the nature of the case, I am in the course of preparing a directive to my officials that where there is an investigation which calls for the use of auditors they should be outside auditors and not tax auditors so that there can be no confusion in the mind of the person being audited as to whether it is a tax audit or some other sort of audit, and because Mr. Buchanan may be taking further action, it is the view both of my officials and of myself that I should be advised by outside counsel on the matter, bearing in mind the nature of the case, and I am retaining outside counsel for that purpose.


Eldon Mattison Woolliams: Could the minister tell us why the documents were used in that particular case? Is he aware of the concern which will be felt by the average Canadian citizen in filing his income tax returns if they are to be used against him in litigation brought on by the Government of Canada, particularly by the Department of Justice? Why were these documents used and what made the Chief Justice so critical in that regard?


Stanley Ronald Basford: Because of the judgment of the Supreme Court and because of further contemplated action, I am under constraint in giving the hon. member the explanations he would like.
 * *


AIR TRANSPORT
Mr. Erik Nielsen (Yukon):: A supplementary to the Minister of Transport based on a recent occurrence. Will he assure the House that medical and other information obtained by his department with respect to examinations conducted of Canadian citizens who apply under the licensing requirements for pilots and others in Canada will not be made available to the United States or to any other foreign country in connection with application by Canadian citizens for licensing in those countries?


Otto Emil Lang: I would be glad if the hon. member would give me details about the matter so that I could better understand his question.


EXPOSURE OF EMPLOYEES OF ELDORADO NUCLEAR TO RADIATION-INQUIRY AS TO TESTS
Mr. Allan Lawrence (Northumberland-Durham):: Mr. Speaker, my question is directed to the Minister of National Health and Welfare. It relates to the continuing problem of waste residue emanating from the federal Crown corporation, Eldorado Nuclear, Port Hope. Can the minister tell us whether there has been any collation of personal medi-
Oral Questions
cal data or any collection of medical case histories from employees both past and present of Eldorado Nuclear?


Marc Lalonde: I should like to point out, first of all, that the problems in Port Hope and to which the hon. member referred relates to waste being disposed of by Eldorado around 1955. Investigations are being carried out both by the Ontario health authorities and by Eldorado Mining at the present time. The health protection branch of my department has offered to assist in carrying out analyses and assessing the health implications if required. It appears that medical tests are not expected to detect any adverse health effect on the school children involved in the area. As far as the mine workers are concerned, I will inquire from Eldorado Mining or from the Ontario health authorities and I will be pleased to inform the hon. member of any information I obtain.


Allan Frederick Lawrence: Do I understand the minister as saying there is some federal agency doing surveillance work or continuing testing of both adults and children in the area who may have been subjected to radioactivity or radon gas?


Marc Lalonde: There is no federal authority carrying out these medical checks at the present time. Any medical checks carried out are being undertaken by the Ontario health authorities. However, I am advised that the Atomic Energy Control Board is proposing to investigate, with the assistance of my department, areas of Port Hope which may possibly be contaminated as a result of the disposal of waste about 20 years ago. As far as individual medical tests are concerned, I do not know of any being carried on at the present time by federal authorities or by provincial authorities.


INDUSTRY
Mr. J. M. Forrestall (Dartmouth-Halifax East):: Mr. Speaker, I have a question I would like to put to the Minister of Industry, Trade and Commerce. Could we be brought up to date with regard to a matter I have raised once or twice in the past week or ten days, that is, the fair allocation of industrial benefit arising out of the LRPA program, particularly with respect to the aerospace industry in Dartmouth affecting 400 jobs in Nova Scotia.


Donald Campbell Jamieson: Yes, Mr. Speaker. I am grateful for the opportunity of a private conversation with the hon. member. I have asked my officals to be in touch with the company concerned to determine precisely the basic nature of their interest and concern. I have not as yet received a report. As I understand the hon. member, he is interested in getting some activity into the plant now in the construction phase so that they will be geared to do something on the repair and overhaul. I have conveyed that representation to my officials and when I have an answer I will pass it on.

December 18, 1975
Oral Questions PUBLIC SERVICE


SUGGESTION THAT BILINGUAL BONUS PROGRAM BE SCRUTINIZED BY ANTI-INFLATION BOARD
Mr. Walter Baker (Grenville-Carleton):: Mr. Speaker, may I address a question to the President of the Treasury Board? It is supplementary to that directed to him a few moments ago by the hon. member for Maisonneuve and it has to do with the government's program, presently before cabinet, with respect to bonuses for bilingual public servants. Can the President of the Treasury Board assure the House that any bilingual bonus program for public servants, whether by way of direct pay increases or indirectly through job classification, will be subject to scrutiny by the Anti-Inflation Board?


Hon. Jean Chretien (President of the Treasury Board):: Mr. Speaker, the commission determines for itself whether or not it has to intervene. At this moment, I do not know if we will request the opinion of the commission or proceed after agreement with the union. What is important now is to devise a system that would be satisfactory to the government and to the unions representing all employees in the public service.


AIR TRANSPORT
Mr. Benno Friesen (Surrey-White Rock):: Mr. Speaker, my question is to the Minister of Transport. Since the introduction of bilingualism for air traffic controllers is based on constitutional grounds, can the minister inform the House as to his schedule for introducing bilingual services into airports in other provinces of Canada?


Otto Emil Lang: The studies which have been carried out relate essentially to the Province of Quebec, although there was an examination of the question in relation to the National Capital Region. The question of any possible extension is a very difficult one indeed because of the nature of the bilingual quality of the controllers who would be required and there is therefore no plan in this regard. Our first and obvious step is to examine the use of both languages in air traffic control in the Province of Quebec, as the statement I made the other day indicates.


Benno Friesen: Since many of the pilots in the association in Quebec are naturally bilingual and many others are unilingual French, is it not reasonable to suppose it is only a matter of time before these pilots will request bilingual services in other provinces?


Otto Emil Lang: That is obviously a hypothetical question. The use of English is very desirable, if not essential, for pilots because of the use of English in international flights as a second or alternate language generally; that will still have a bearing on the question.


TRANSPORT
Leslie Gordon Benjamin: Mr. Speaker,
I do not know whether the Minister of Transport heard my motion under Standing Order 43 or not, but I should like to ask him this. In view of the fact that the railways propose in the coming months to suspend operations on a number of branch lines in Western Canada, has the minister in charge of the Canadian Wheat Board agreed to this, even though many hundreds of Canadian Wheat Board shipping orders will not be filled as a result.


Otto Emil Lang: Mr. Speaker, the procedures put into effect by the railways to discontinue the movement on certain lines in the wintertime is not a matter which is brought to the attention of the minister for his approval, but is action that is taken by the railways themselves. Of course, this is not new action this winter; it is a thing which has happened for many, many years.


Leslie Gordon Benjamin: That is a lot of crap, that answer.


Some hon. Members:: Oh, oh!


An hon. Member:: Withdraw.


Some hon. Members:: Shame, shame.


An hon. Member:: What do you say to that, Otto?


AGRICULTURE
Léonel Beaudoin: Mr. Speaker, I have a question I would like to ask the Minister of Agriculture who has already received notice of it.
During the recent Canadian Agricultural Outlook Conference, the minister asked the Canadian people to stop wasting food. He also said that with world supplies enabling to survive only 35 days, the situation would be catastrophic if we were to have the same problem with our next North American crops as the Russians had with theirs last year. Given the gravity of these possibilities, could the minister tell this House to what extent, according to him, Canadians will agree to be more reasonable in this respect and can he also say what measures are considered by the government if the wastage goes on?


Eugene Whelan: Yes, Mr. Speaker, we do have plans. The government has put out publications through different departments on how people can make sure food does not go to waste; by proper storing, proper cooking and by proper buying. I think we can do this by better diets, by eating better and by loving more.


Some hon. Members:: Hear, hear!
December 18, 1975


An hon. Member:: Are you going to diet or love more, Gene?


INQUIRY AS TO DAIRY POLICY FOR 1976
Léonel Beaudoin: Mr. Speaker, with your leave, I would like to ask a question which is supplementary to the question of the hon. member for Bellechasse.
Considering the present dissatisfaction among industrial milk producers, particularly in the province of Quebec, could the minister tell this House whether, be it the case or not, the leaders of the Federation of Industrial Milk Producers told him that they were satisfied with the new federal milk policies for 1976.


Eugene Whelan: Mr. Speaker, I would not go as far as to say that they were satisfied with the effort in respect of the dairy problems we have today. They have done a remarkable job in Quebec as far as selling their own products within their province for consumption is concerned, because the consumption of fluid milk in Quebec is actually up this year over what it was last year. If most other provinces could do as good a job as they have done in Quebec, we would not have the problems we have today.


PUBLISHING
Mr. Douglas Roche (Edmonton-Strathcona):: Mr. Speaker, in view of the public confusion over the final fate of Time Canada and Reader's Digest in Canada caused by the government's delay in respect of third reading of Bill C-58, could the Secretary of State confirm that the increased representations made to him and the government over the Christmas recess may possibly lead to an accommodation in which the 80 per cent content ruling may be reduced, which would enable Time Canada and Reader's Digest to survive?


Hon. James Hugh Faulkner (Secretary of State):: No, Mr. Speaker, I think the indication offered by the President of the Privy Council yesterday was quite clear, and it had to do with the fact that this House has not been able do deal with the legislative program laid before it, so some items have had to be delayed. Because this bill is a tax bill and has an effective date of January 1, it obviously could be delayed.


Douglas Roche: Mr. Speaker, I would ask the same minister whether the government intends to ignore the representations made by 49 Reader's Digest suppliers who will lose $14 million a year in business due to the closing of Reader's Digest, thereby forcing some of them into bankruptcy?
Oral Questions


James Hugh Faulkner: Mr. Speaker, I have studied all those representations with a great deal of care and I have not been persuaded.


An hon. Member:: Scrooge.


Some hon. Members:: Oh, oh!


HIGHWAY SAFETY
Mr. P. B. Rynard (Simcoe North):: Mr. Speaker, in view of a question I asked the Prime Minister and his answer, which appear at page 9411 of Hansard, I would now ask the Minister of Transport whether he has been in touch with his provincial counterparts concerning the appalling killing of 6,000 people on Canadian highways and the maiming and crippling for life of 160,000 more and, if so, what can we expect in the way of additional legislation covering the use of alcohol and accident prone drivers on our highway killer strips?


Otto Emil Lang: First of all, Mr. Speaker, I thank the hon. member for the courtesy of giving me notice of his question. The Ministries of Transport of the ten provincial and federal governments have been concerned about this subject in an organized fashion since early 1974, and following a meeting of the ministers there have been a number of meetings of senior officials to deal with the matter. Of course, this has led to the promotion of such things as the greater use of seatbelts and more attention to drinking and driving laws.
Some of these things are, of course, dealt with in the present legislation before the House in Bill C-71. It is primarily the responsibility of the province to identify particularly difficult strips of highway, but the federal government does work with the provinces in connection with the standards. We work also with international bodies to develop standards. I am happy to say that results seem to be coming in from this in view of the drop from something in the order of 6,700 to 6,200 deaths in 1974 from 1973, and a further drop seems to be indicated in 1975. The 11 ministers together have set a target for specific reduction in fatalities of at least 15 per cent by 1975. All this work will go forward in this way.


AGRICULTURE
Mr. G. H. Whittaker (Okanagan Boundary):: Mr. Speaker, because the Canadian apple producers from Nova Scotia, New Brunswick, Quebec, Ontario and British Columbia are meeting today in the railway conference room, I should like to direct a question to the Minister of Agriculture. One of the major problems these producers are discussing relates to rail transportation rates and, more especially, to the competitive advantage the United States

December 18, 1975
Business of the House
producer has over the Canadian shipper, of up to 43 cents a box or one cent a pound shipped into Canada. In view of the fact the Minister of Transport has said he can or will do nothing about this and is hiding behind the CTC, will the Minister of Agriculture use his heavy weight in Cabinet to convince the Minister of Transport, the CTC and the railways of the need to do something about this outrageous situation?


Eugene Whelan: Mr. Speaker, I am sure the hon. member knows that if there is anything that can possibly be done we will do it. We have met with the B.C. apple producers and have said that if at the end of their market year they can show actual figures of the loss we are prepared to use the provisions of our agricultural stabilization bill to assist.



ROUTINE PROCEEDINGS


Mr. Speaker:: Order, please. I have the honour to inform the House that the Clerk of the House has laid upon the table the twenty-first report of the Clerk of Petitions stating that he has examined the petition presented by the hon. member for New Westminster (Mr. Leggatt) and finds that it meets the requirements of the Standing Orders as to form.


BUSINESS OF THE HOUSE
Walter David Baker: Mr. Speaker, I rise on a point of order. Yesterday we rather got into the Thursday question about the business of the House, but I wonder if I might now ask the government House leader if there have been any changes in respect of the list presented to us yesterday of the bills requiring consideration, namely, C-69, C-77 and C-52. Are there any others that require to be dealt with before the Christmas adjournment?


Mr. Sharp:: Mr. Speaker, it is possible there will be another bill, but it is contingent upon an agreement among the parties and, perhaps, an order of the House that there would be extremely limited debate. If I do not get that undertaking, I will not introduce the legislation.


PUBLIC ACCOUNTS
[Stage Direction]
Fourth report of Standing Committee on Public Accounts-Mr. Crouse.
[Editor's Note: For text of above report, see today's Votes and Proceedings.]

Hon. Donald S. Macdonald (Minister of Finance):: Mr. Speaker, I should like to lay on the table of the House notice of ways and means to amend the Income Tax Act to impose a surtax on personal incomes. I should like to explain it briefly. The motion tabled proposes the establishment, effective January 1, 1976, of a 10 per cent federal surtax for one year on the portion of taxable personal incomes in excess of $30,000 as a means of further reinforcing the national program for attacking inflation that has been launched by the federal government.
As the House is well aware, it has been our concern from the beginning that the anti-inflation program should be fair, and should be seen to be fair, to all groups in our economy. That is critical to the credibility of the program and crucial to its success. In response to a strong expression of opinion in the Commons and in the country, I indicated some weeks ago our intention of modifying the original guideline proposals as they applied to those in lower income brackets so as to provide for an exemption from restraints for those earning up to around $7,000 annually. Similar considerations have also led to a review by a number of provincial governments and the federal government of the adequacy of existing minimum wage levels.
Those at the lower end of the income scale are already heavily burdened by the sharply rising cost of living, which makes it difficult for them just to provide their basic needs. As the House is aware, my colleague, the President of the Treasury Board (Mr. Chretien), tonight will announce a number of spending cutbacks planned by the government in order to restrain the rise of total government expenditures. Those cutbacks, unavoidably, will affect a great many Canadians but particularly those of moderate incomes.
In terms of fairness and equity it is, we believe, only fair that those at the upper end of the income scale, who are able to absorb the impact of rising living costs without undue hardship, should be asked to shoulder some share of the burden. As members are aware, some provinces have suggested that a surtax should be applied against the earnings of self-employed professionals. In our view, however, it would not be equitable to single out the professional group alone for such treatment. We have come to the conclusion that a surtax should be levied on all those in the upper income bracket whether they be professionals, independent businessmen, corporate executives, well-to-do farmers, or senior public servants. While the guidelines do provide for a maximum increase of $2,400, it is fair to ask those who already enjoy ample means to make a proportionately greater sacrifice in the national interest.
As I indicated at the outset of my remarks, the 10 per cent surtax would apply only to the portion of the federal levy payable on taxable income in excess of $30,000. To illustrate, let me take the case of a married taxpayer with

December 18, 1975

two children under 16 who next year has an earned income of $45,000. Under the existing system, he or she would be liable to pay federal tax of approximately $8,000 on the first $30,000 of taxable income and $3,957 on the balance of his taxable income over this amount. The 10 per cent surtax, which would apply against the regular federal tax of $3,957 on the income above $30,000, would come to $396. For a similar taxpayer earning $60,000, the surtax would amount to $998, and for a taxpayer in the $100,000 bracket it would amount to $2,786. It is estimated that the surtax would apply to approximately 170,000 taxpayers and yield around $115 million in additional revenue to the federal treasury. Our decision to propose imposition of a surtax was not motivated by revenue considerations. The amount of revenue generated by the surtax is not insignificant, however, and will help to reduce our future cash requirements and our resulting demand for funds from the capital market, which in turn will contribute indirectly to easing of the inflationary pressures.
Mr. Speaker, in concluding let me acknowledge that I propose this measure with mixed feelings. I am concerned that our tax system should not bear so heavily on those earning higher incomes as to stifle the individual initiative and enterprise that provides such a powerful driving force behind our economy. At the same time, I am very conscious of the necessity of subordinating many considerations to achievement of our overriding objective as a nation of bringing inflation under control.
I believe that the surtax will not prove unduly onerous in its impact during the limited period it is in effect. I think most members of the House will agree that it is fair and reasonable to expect that those enjoying an abundant share of the wealth of our economy should make a proportionate contribution to the successful outcome of the fight against inflation, a fight in which they have an important stake.


Robert Lorne Stanfield: Mr. Speaker, the minister was good enough to make a copy of his remarks available to me about half an hour ago. Even so, he will appreciate that I have not had an opportunity to give this matter the very profound reflection that he has. It has occurred to me, however, that there might be one unanticipated side-effect of this proposal which has not occurred to him: this might turn out to be a disincentive to the number of people looking for my job.


Some hon. Members:: Hear, hear!


Robert Lorne Stanfield: It is also, Mr. Speaker, a disincentive for me to meet the wishes of my Liberal friends opposite by staying on. Of course, a tax measure which touches a relatively small proportion of the population that is generally considered to be rather well off will not bring about widespread protests through the country. There may be some touch of sorrow for the top civil servants who will have to return more of the $6,000 salary increase which they received recently. I should like to say that generally it is my belief that Canadians who will have to pay this extra taxation which is being imposed would do so very willingly if they were satisfied that the government would administer the affairs of the country efficiently.


Some hon. Members:: Hear, hear!
Income Tax Act


Robert Lorne Stanfield: I believe those Canadians, like other Canadians, would consider a little extra taxation a small price to pay for a really effective fight against inflation and against waste in governmental institutions.
Mr. Speaker, we will hear more about this aspect this evening in connection with the delightful program the minister has arranged for us at eight o'clock. I would point out to the Minister of Finance (Mr. Macdonald), however, that this measure is not a substitute for the control of professional fees.


Mr. Broadbent:: Right on.


Robert Lorne Stanfield: Indeed, those Canadians and those Canadian governments who have been concerned that some professional people may put up their fees will be even more concerned following the presentation of this resolution to the House today. I believe that a very large proportion of professional men and women in this country will voluntarily comply with the guidelines of the government, but a number of provincial administrations are apparently concerned that some will not, and the very fact that the Minister of Finance is proposing to reduce the income of anybody who is considering increasing his or her professional fees will be an additional incentive to such people to put up their fees. In that sense, this resolution will have an inflationary tendency rather than a deflationary one.


Some hon. Members:: Hear, hear!


Robert Lorne Stanfield: So I must say that as a control mechanism, a restraint mechanism, the minister's proposal is a bust. On the other hand, whether or not it has any beneficial psychological effect will depend upon whether the government is able to get a grip on its inflationary program and make it seem somewhat effective. In short, the acceptance of this tax will depend upon the performance of the Minister of Finance and of the President of the Treasury Board (Mr. Chretien), and we will be watching him tonight with a very sharp eye indeed.


Mr. Lome Nystrom (Yorkton-Melville):: Mr. Speaker, I must say at the outset that this is a shock to me. It is an absolutely cheap way for the Minister of Finance (Mr. Macdonald) to make a headline. This is a hoax; it is a joke; it is a move by the Minister of Finance that is not serious, because working people know their salaries will be rigidly controlled within the guidelines. The minister wants to appear to do something to control professional income, but that is just not the case in the announcement he made. The new surtax does not apply unless your taxable income is at least $30,000 a year. It does not apply to members of parliament in this chamber, it does not apply to senators in the other place, and it does not apply to the great majority of people who make big incomes in this country. It merely applies to any professional people who can get more than an increase of $2,400 a year.
The minister wants us to believe that this will be a 10 per cent tax on professional people who are increasing their income by more than $2,400 a year. I want to quote from the minister's own paper. He gives an example of how this tax will work with respect to a family consisting of a

December 18, 1975
Income Tax Act
husband, wife and two children, earning $45,000 who has a taxable income of $40,320. His federal tax, before the surtax, is $11,957. He did have an exemption which is called "surtax threshold" of $8,000, which is exempt as a deduction to begin with. That is how you get to the $30,000 taxable income in the first place. That excludes me, as a member of parliament, and other members of the House. The amount subject to the surtax by the tnan making $45,000 is $3,957. His surtax is $396. I have had half an hour to make this calculation, and I find that in many cases people paying the additional surtax will be saving more in the increased indexing of income tax this year than they will be paying in the increased surtax.


Some hon. Members:: Hear, hear!


Lorne Edmund Nystrom: The person making $50,000, with two children, in 1976 over 1975, because of the indexing of income tax will save $700 this year, and the additional tax put on by this government is less than that. That is not what is happening to working people in this country. The person who made $50,000 last year, because of indexing saves $796, and in 1974 over 1973 would have saved $500. In the last two years a person making $50,000 has a saving of $1,996 because of indexing. Here he will have to pay a few more peanuts because of what the government has brought before the House today. It is an absolute farce, an absolute joke and an absolute shame.
This is not a 10 per cent tax. For example, if a lawyer is increasing his income from $40,000 to $45,000-lawyers will increase their salaries from $40,000 to $45,000 this year by dealing with more wealthy clients-and he is in the 40 per cent tax bracket, he pays a 10 per cent surtax on the portion of his income from $30,000 to $45,000, or on his taxable income, which is around 2 per cent or 3 per cent of the actual increase. This is a farce. That lawyer will pay around $150 on his $5,000 increase this year. It is a cheap hoax that the Minister of Finance is perpetrating on the Canadian people.


Some hon. Members:: Hear, hear!


Lorne Edmund Nystrom: Our party has said that any person who has an increase of more than $2,400 this year over last year should have that amount taxed back at the rate of 100 per cent. Working people cannot rig those guidelines, so why should wealthy people have this loophole and be allowed to have an increase away in excess of $2,400?
I have one final point to make on the minister's statement. He said the announcement that is coming tonight will unavoidably affect a great number of Canadians, but particularly those with a moderate income. He is saying that he will hurt those people. He is also saying that the decision he has made this afternoon will not really hurt the professional people. He said in his statement:
Our decision to propose imposition of a surtax was not motivated by revenue considerations. The amount of revenue generated by the surtax is not significant-
The announcement today is a farce by the government and should be treated as such.


Mr. Gilbert Rondeau (Shefford):: Mr. Speaker, we understand very well that this measure does not satisfy

socialists because it is not hard enough on the well-to-do, while Social Crediters would have preferred a measure presented today by the Minister of Finance (Mr. Macdonald) which would have helped the have-nots without depriving the haves.
Mr. Speaker, unfortunately, this measure is only the prelude to another measure which will be announced very shortly, probably tonight, and which will also enable the Minister of Finance to strangle small-earners. The measure announced by the Minister of Finance is a small blow striken at the rich in order to strike a bigger one at the poor tonight.
I regret, Mr. Speaker, that this measure does not, on the other hand, apply to the financial institutions of the country, that it applies only to private individuals, because if I refer to the figures provided to us recently, banking institutions made the largest profits in Canada in 1974-75, and yet the legislation just announced by the Minister of Finance will not affect these mandarins.
Mr. Speaker, this legislation will further undermine the initiative of those who, I admit, have the largest revenues in Canada; it will further undermine their initiative, which will subsequently affect and impoverish the poor. The best way to affect the poor is to destroy the initiative of the rich. I am referring here, Mr. Speaker, to a very well known saying by a former President of the United States: We cannot have prosperity if we discourage initiative. We cannot strengthen the weak by weakening the strong.
That is what this legislation is trying to do today: weaken the strong or try to make us believe that we are going to help the weak, when it is impossible to do so, because until now, all the taxes or surtaxes which have been voted in this House in the last 20 or 30 years have always weakened the strong without ever helping the weak. He said that it is impossible to help the poor by destroying the rich. A man cannot avoid troubles by spending more than he earns.
The federal government should be the first to implement what Lincoln used to say: It is impossible to base a durable security on borrowed money. That is what the federal government is always doing. It seems they want us to believe that it is possible to base a durable security in Canada on unceasingly borrowed money. Lincoln also used to say that it is impossible for a man to have character and courage if you deprive him of his initiative and independence.
Mr. Speaker, I do not have time enough to go on quoting other memorable words, but it is deplorable to see that all our legislation tends to undermine the very initiative of those who possess something. And I am not ashamed to challenge what the socialists want us to believe, that it is possible to help the poor by destroying the rich. We Social Crediters do not believe in that; we want to upgrade the poor's standard of living without taking anything away from those who possess something. And when the Minister of Finance is bringing in such a measure, he is fully agreeing with the socialists who want to destroy the well-to-do in order to enrich the bankers whose profits of billions every year are never affected, as we can see in any government's bulletin or in any press release by the newly established Anti-Inflation Board. All our legislation adversely affects the low-wage earners as well as the

affluent people, but never those who control the haves as well as the have-nots, the very ones who control the country's finances. And I regret that such a bright Minister of Finance serving such a beautiful country as Canada might be inclined towards socialism rather than individual and free initiative.


John Edward Broadbent: Mr. Speaker, I have a question for the Minister of Finance, if I could get his attention.


Mr. Speaker:: Order, please. It has been our practice since last Easter that any statement made by a minister is followed by a question period of short duration in which half a dozen hon. members are able to pose questions to the minister. I therefore recognize the hon. member for Oshawa-Whitby (Mr. Broadbent).


John Edward Broadbent: My colleague, the hon. member for Yorkton-Melville (Mr. Nystrom), has pointed out that this measure will have virtually zero effect on professional incomes as they relate to the guidelines program. I should like to ask the minister if this is all the government proposes to do, and whether this is the only instrument it will introduce to deal with professional incomes in this country within the framework of its guidelines program.


Donald Stovel Macdonald: Of course not, Mr. Speaker. The proposals have been very extensively indicated in the guidelines and in responses to questions, and there will be further details when the regulations are tabled this evening.


John Edward Broadbent: In terms of information provided by his department, could the minister inform us of, on the average, the level of income at which this proposal would become operative? We know that it is at $30,000 taxable income, but would it be accurate to say that no Canadian earning less than $40,000 per year would be affected?


Donald Stovel Macdonald: That will depend directly on the circumstances of the individual. For example, an unmarried person with neither the benefit of the married exemption nor an exemption for children, obviously will pay the surtax on a lower level of gross income than would be the case of a person who had these various exemptions available.


John Edward Broadbent: Could the minister inform the House how he arrived at the $8,000 threshold figure?


Donald Stovel Macdonald: This represented a relatively substantial income level above which we felt the people at that level could, as I said, without undue hardship pay the additional taxation.


Mr. Orlikow:: Mr. Speaker, as I recall, the minister said that this surtax would bring in revenue of approximately $150 million in the coming year. Could the minister indicate what estimate the government has made as to the loss to the federal treasury as a result of a continuation of indexing of income tax in 1976?
Income Tax Act


Donald Stovel Macdonald: I should correct the hon. gentleman. The level indicated in my statement was $115 million. I cannot give precise figures with regard to the indexing.


Mr. Saltsman:: Could the minister remove some of the confusion about how he arrives at his decisions? A few weeks ago he was saying that he is not interested in surtaxes. We have heard various statements from the other side of the House against surtaxes. What has happened that changed the mind of the government about bringing in the surtax?


Donald Stovel Macdonald: I can understand why the hon. gentleman may have had difficulty hearing my statement, but I pointed out that there will be some announcements made affecting a great many other people in the economy, including those with moderate incomes. It seems to us that in respect of that latter group, since they will have a shortfall in income because of decisions the government will be making, so particularly those at the higher income level who are less dependent upon revenues from the government for their incomes should make some contribution to the over-all national revenue.


Joseph Adrien Henri Lambert: Mr. Speaker, could the minister advise the House whether personal income taxes are a greater source of revenue for the government than corporate income taxes? If so, will the minister include in his forthcoming budget measures to increase, if necessary, corporate income taxes on multinationals and reduce personal income taxes, so as to set some sort of balance?


Donald Stovel Macdonald: Mr. Speaker, I must emphasize that corporate income taxes for instance are the equivalent of taxes paid on services, to the extent that the cost of such taxes are reflected in the increased cost for goods and services consumers must pay. The proposed income tax would affect only individuals in the higher income braket. An individual must pay it himself and not pass it on other Canadian consumers.


Joseph Adrien Henri Lambert: Mr. Speaker, I have a supplementary question. In view of the fact that financial institutions are allowed to deduct IV2 per cent as contingency reserve, and that the former minister of finance had already included in his May 1974 budget, I think a measure to reduce this rate to one half of 1 per cent, could the minister tell the House whether or not he intends, in his forthcoming budget, to raise this rate granted to financial institutions back to IV2 per cent?


Donald Stovel Macdonald: Mr. Speaker, if I understand correctly, the hon. member is referring to the reserves for instance the banks are allowed to keep to cover their losses. This is a suggestion which 1 feel will be worth considering when the time comes in 1976 for the government to introduce a bill to amend the Bank Act.


Mr. Speaker:: For the last question I recognize the hon. member for Dauphin (Mr. Ritchie).

December 18, 1975
Income Tax Act


Mr. Ritchie:: Mr. Speaker, does this surtax supersede or in any way change the $2,400 maximum guideline already set for professionals only?


Donald Stovel Macdonald: No, the $2,400 guideline is not set for professionals only; it is a restriction on all recipients of earned income whatever that might be, whether corporate executives, members of the various professions or independent businessmen. That restriction will continue. What this particular measure applies to is all incomes of individuals whether or not they have enjoyed an increase in revenue during the year 1976. Someone who has not gone up from $35,000 to $40,000, who remained at the $35,000 income level, will still have to pay the surtax.


Stanley Howard Knowles: A point of order, Mr. Speaker. The minister was good enough to send copies of his statement to the various parties and I notice that two pages were attached to it, one entitled "Summary of the Surtax Proposal" and the other entitled "Surtax Payable at Various Gross Income Levels". I think I am correct in saying the minister did not read those two pages. It seems to me that the information in them is important and is really part of the statement and ought to appear in Hansard in some way, either as having been read by the minister or as an appendix. I refer to the table that shows that a person with a $35,000 income will pay an extra tax of $10 a year.


Donald Stovel Macdonald: Mr. Speaker, I would be quite happy to table that, but unfortunately I do not have copies here. But I would be quite happy to table it and have it appended to Hansard.


Mr. Speaker:: Is it agreed?


Some hon. Members:: Agreed.


Mr. Speaker:: Agreed, and so ordered.
[Editor's Note: For table referred to, see Appendix "A".]


Walter David Baker: Mr. Speaker, I rise on a similar point of order. I spoke yesterday to the government House leader, and unfortunately he could not give me consent at that time. The question concerned the documents tabled by the Minister of Transport (Mr. Lang) which purportedly was correspondence from the Commissioner of Official Languages who is an officer of this parliament. I wonder if he is in a position today to advise whether those documents could be appended to Hansard, or shown in today's Hansard in some form? Appending them would be acceptable.


Otto Emil Lang: Mr. Speaker, I would be happy to append the two letters, if that is what the hon. member refers to. I would not think it necessary to append the excerpt from a newspaper report which was included.


Mr. Speaker:: Is it agreed?


Some hon. Members:: Agreed.


Mr. Speaker:: Agreed, and so ordered.
[Editor's Note: For letters referred to, see Appendix "B".]


Mitchell William Sharp: Mr. Speaker, yesterday I indicated that today I would seek an order of the House to return to routine proceedings at 8 p.m. for the purpose of a statement by the President of the Treasury Board and for the tabling of certain documents by the Minister of Finance. I would ask whether an order of this kind could be approved now.


Walter David Baker: Mr. Speaker, there have been consultations, and we are prepared to approve.


Stanley Howard Knowles: We agree.


Léonel Beaudoin: Agreed.


Mr. Speaker:: It is agreed, and so ordered. At eight o'clock tonight this House will revert to routine proceedings for the prupose of receiving a statement by the President of Treasury Board and the tabling of certain documents by the Minister of Finance. I think the House ought to be clear that this is an interruption of the regular procedure and ought to be done without prejudice to the position of whatever might be the order of the day at that time in respect to its continuing presence on the order paper. Is it agreed?


Some hon. Members:: Agreed.


Stanley Howard Knowles: Mr. Speaker, I take it that the usual rule about statements will apply.


Mr. Speaker:: Other circumstances this afternoon notwithstanding, there certainly would be no indication to the contrary.


QUESTIONS ON THE ORDER PAPER
[Stage Direction]
(Questions answered orally are indicated by an asterisk.)
Mr.   J.-J. Blais@Parliamentary Secretary to President of the Privy Council: Mr. Speaker, the following questions will be answered today: 3,117, 3,142, 3,190, 3,231, 3,344, 3,473, 3,474, 3,475, 3,476, 3,487, 3,550, 3,560, 3,564, 3,575, 3,613, 3,635 and 3,646.


Mr. Schumacher: 1.	On what date was the Customs and Excise office of the Department of National Revenue (a) opened (b) closed in Drumheller, Alberta?
2.	For each of the years it was in operation, what were the costs for (a) rental space and utilities (b) salaries (c) how many individuals were employed?
3.	On what date was the Zenith toll-free telephone number substituted for the manned office in Drumheller?
4.	By year since instigated, what was the cost for service on the Zenith number and when was it discontinued?
5.	What alternate service is now offered to residents in and around Drumheller?

December 18, 1975


Mitchell William Sharp: am informed by the Departments of National Revenue and Public Works as follows: 1. (a) May 1, 1925. (b) May 15, 1969.
2.	(a) There were no lease costs as the space occupied was in a Crown-owned Building. The estimated cost of utilities for the 714 sq. ft. of space occupied between the period May 1, 1925, to May 15, 1969, is as follows: 1925 to 1935, $150 per year; 1936 to 1946, $200 per year, 1947 to 1957, $225 per year; 1958 to 1968, $250 per year; 1969, $40 per year, (b) Records of salaries from 1925 to 1945 inclusive are not available. Salaries paid from 1946 to 1969 were as follows: 1946, $1,280; 1947, $2,580; 1948, $2,760; 1949, $2,760; 1950, $3,108; 1951, $3,108; 1952, $3,340; 1953, $3,600; 1954, $3,600; 1955, $3,600; 1956, $3,900; 1957, $4,170; 1958, $4,170; 1959, $4,170; 1960, $4,720; 1961, $4,770; 1962, $4,950; 1963, $5,100; 1964, $5,100; 1965, $5,370; 1966, $5,624; 1967, $6,024; 1968, $6,446; 1969, $2,646. (c) Four individuals were employed during that period: R. E. Hanson, May 1, 1925-May 31, 1931; Alexander McAskill, June 1, 1931-August 31, 1950; A. D. Foster, September 1, 1950-March 29, 1953; A. Scollick, March 30, 1953-May 15, 1969.
3.	May 6, 1974.
4.	The cost for service on the Zenith number was $2,221.13 for the whole Province of Alberta. No figures are available to show the cost for service for Drumheller, Alberta. The Zenith number was discontinued February 28, 1975.
5.	Residents in and around Drumheller can obtain alternate service from the Customs and Excise office in Calgary.


Mr. Landers: 1.	How many inmates have been incarcerated in Dorchester Penitentiary since January 1, 1970?
2.	(a) Of what crime or crimes were they convicted (b) what length of sentence was imposed in each case?
3.	How many incarcerated in Dorchester since January 1, 1970 (a) were convicted in Saint John, New Brunswick (b) were not convicted in the Atlantic Provinces (c) had previous records (d) had previously been sentenced to penitentiary terms?
4.	(a) Of what crime or crimes were those from outside Atlantic Canada convicted (b) what sentences were imposed?
5.	In what location were those convicted outside Atlantic Canada paroled upon release since January 1, 1970?
6.	What correlation is there between an increase in crime generally and drug related and violent crime specifically in Moncton, New Brunswick, and parolees from Dorchester Penitentiary who had been convicted outside (a) Moncton (b) Atlantic Canada?
7.	How many inmates of Dorchester have escaped since January 1, 1970 and, of these, how many have been convicted of crimes during their escape?
8.	How many have been convicted of offences (criminal or drug related) subsequent to their release from this maximum security penitentiary since January 1, 1970?
9.	How many parolees have been convicted of offences (criminal or drug related) subsequent to their release from this maximum security penitentiary since January 1, 1970?
10.	How many have been paroled against the wishes of the staff of Dorchester since January 1, 1970?
11.	Since January 1, 1965, what has been the annual (a) capital cost (b) repair cost in relation to Dorchester Penitentiary?
Order Paper Questions
12.	Of the total inmates incarcerated in Dorchester since January 1, 1970, what percentage of each of their total sentences had been served prior to them being paroled or transferred elsewhere?
13.	Since January 1, 1970, how many (a) inmates (b) staff of Dorchester Penitentiary have been treated medically for injuries (c) how many of these injuries resulted in charges being laid?


Mitchell William Sharp: am informed by the Department of the Solicitor General and Statistics Canada as follows: 1 to 5 and 7 to 13. The information requested is not readily available to provide an answer to these questions. A response to these questions would require a file search of approximately 5,000 files and would involve the employment of one person for approximately 44 weeks or the equivalent of approximately $12,000 in salary. In view of the above, the government does not feel justified in undertaking such a search.
6.	The information required to answer this question is not readily available as relationships would have to be made between police reports on crime occurrences, court returns on persons convicted and correctional data on parolees. Statistics Canada does not currently possess the facility to relate these series.


Mr. Reynolds: 1.	How much revenue has been derived from the capital gains tax since its inception?
2.	What are the estimates in revenue from the capital gains tax for the year 1975?


Mr.   Jacques-L. Trudel@Parliamentary Secretary to Minister of Finance: 1 and 2. On the basis of published data concerning 1972 and 1973 personal income tax returns, it is estimated that revenues from taxation of capital gains were approximately $40 million and $75 million for the 1972 and 1973 taxation years respectively. Data are not yet available for the 1974 and 1975 taxation years. It is not government policy to provide forecasts fo government revenues from a subcomponent, (e.g. capital gains) of a tax.


Mr. Coates: 1.	Was the contract for office plants, flowers, decorative plants, etc., and their maintenance on behalf of the National Museums subject to tendering and (a) if not, for what reason (b) if so, who was asked to submit a bid and what was the amount in each case?
2.	How much was spent on the original purchase of plants and flowers?
3.	How much additional money is spent annually on the (a) purchase (b) maintenance of all plants and flowers?


Miss Coline Campbell (Parliamentary Secretary to Secretary of State):: I am informed by the National Museums of Canada as follows: There were four contracts placed for plant maintenance during the fiscal year 197576. The first one was subject to tendering. 1. (a) Only one firm was asked to quote on the second, third and fourth contracts because it is apparent that this service is only available from limited sources and past experience has indicated that it is in the best interests of the Corporation to renew previous contracts which have proven satisfacto-

December 18, 1975
Order Paper Questions
ry. (b) The first was awarded to Fines Flowers Ltd., the low bidder @ $40 per month against Vlaming Tree Nursery (Bid $285 per month). Imperial Nursery (no bid) and Artistic Landscape (no bid). The second contract was for $28 per month and Fines Flowers Ltd. quote was accepted. The third contract was for $24 per month and Fines Flowers Ltd. quote was accepted. The fourth contract was for $190 per month and Fines Flowers Ltd. quote was accepted.
2.	It would require an inordinate amount of research to obtain the information requested as until recent years records were not maintained in such a way as to allow easy retrieval of the data in question.
3.	(a) In the current fiscal year to date, April 1, 1975 to November 1, 1975-$2,366. (b) Nil.


Mr. Coates: 1.	How many persons employed in the Public Service are (a) unilingual English (b) unilingual French (c) bilingual?
2.	What is the breakdown for each year 1970-71 to date?


Joseph Jacques Jean Chrétien: Available information is provided for persons employed in the Public Service under the Public Service Staff Relations Act, Section 2, Part 1 of Schedule 1 and is recorded in the Official Language Information System. (1) As of October 20, 1975 the number of persons employed in the Public Service who are: (a) Unilingual English, 169,419. (b) Unilingual French, 42,754. (c) Bilingual (see note 1), 28,822. Total persons recorded, 240,995. Per cent of encumbered bilingual positions occupied by bilingual incumbents, 66.31 per cent.
(2) A breakdown for each year 1970-71 to date cannot be provided as statistics are only available for 1974. The December 31st 1974 situation was as follows: (a) Unilingual English, 165,009. (b) Unilingual French, 40,904. (c) Bilingual (see note 1), 22,831. Total persons recorded, 228,744. Per cent of encumbered bilingual positions occupied by bilingual incumbents, 55.92 per cent.
Notes: The number of Bilingual Persons is defined as those who meet the language requirements of a bilingual position.
No data is available on the number of bilingual Public Servants who are occupying unilingual positions.


Mr. Stevens: 1.	Who holds the position of (a) Musical Director (b) Conductor of the Orchestra of the National Arts Centre?
2.	Is the position of (a) Musical Director (b) Conductor a (i) salaried position and, if so, what was or will be the classification and salary range of the position for each of the fiscal years 1972, 1973, 1974, 1975 and 1976 (ii) contract position and, if so, for what period within each fiscal year was the contract in force and what amount was or will be paid under the contract in each of the fiscal years 1972, 1973, 1974, 1975 and 1976?
3.	Were any payments additional to their salaries made to them by the National Arts Centre Corporation or any other government emanation
from public funds, for each of the fiscal years 1972, 1973, 1974 and 1975 and are any planned for 1976 and, if so (a) for what purpose was the payment made (b) was the payment in the form of a salary or contract, and in what range or dollar amount (c) what were the periods of service for which remuneration was made?


Coline M. Campbell: I am informed by the National Arts Centre as follows: 1. Mr. Marie Bernardi is both (a) Director of Music and (b) Conductor of the Orchestra of the National Arts Centre.
2.	(i) No. (ii) Yes. Twenty weeks a year. The Centre does not disclose artists' fees.
3.	Yes. Additional payments were made each year listed and are planned for 1976. The Centre has no knowledge of any other fees paid to Mr. Bernardi. (a) Conducting operas, (b) Contract. The Centre does not disclose artists' fees, (c) Preparation and planning all year, rehearsals and performances in June and July.


Mr. Stevens: 1.	With respect to the answer to Question No. 3,079 with which "theatrical/musical" producers in Canada or the United States does the National Arts Centre Corporation regard itself as being in competition?
2.	Do any of the "theatrical/musical" producers within Canada with whom the NAC regards itself as being in competition, receive government financial assistance in any form and, if so (a) what are their names (b) in what form was the financial assistance given for each fiscal year (i) 1974 (ii) 1975 (iii) 1976?
3.	With respect to the production of the three operas specified in Question No. 3,079 with what "unions, professional associations and artists' agents" did the NAC deal in making expenditures on each of (a) salaries, wages or ex gratia payments to (i) cast members (ii) musicians (iii) technicians (iv) supporting personnel (b) materials and labour relating to (i) costume fabrication (ii) set construction (iii) properties fabrication?
4.	Would it be disadvantageous for the NAC to reveal the total costs of preparation and production of each of the operas specified in Question No. 3,079 and, if so, in what way?


Coline M. Campbell: I am informed by the National Arts Centre as follows: 1. With none in Canada. With the following opera companies in the United States: Aspen Music Festival, Boston, Caramoor Festival, Central City (Denver), Chautaugua, Chicago Lyric, Cincinnati, Colorado, Fresno, Grant Park (Chigago), Houston, Lake George, Long Island, Los Angeles, Metropolitan (New York), Newport, North Virginia, Pennsylvania, St. Paul, San Francisco, Santa Fe, Santa Monica, Saratoga, Seattle, West Hartford, Wolf Trap (Washington).
2.	Not applicable.
3.	(a) (i) Actors' Equity Association, Ars Musicalis Society, Artists International Management, Association of Canadian Television and Radio Artists, Columbia Artists Management, Cone/Susman Artists Representative, Hart/ Murdock Artists Management, Hurok Concerts Inc., Jim Sardos Management, John Goodwin, L'Union des Artistes, Mabel H. Laine. (ii) American Federation of Musicians, (iii) International Alliance of Theatrical Stage Employees (IATSE) Locals 471, 890 and 257. (iv) IATSE, United Scenic Artists, Artists International Management, (b) (i) Nil. (ii) IATSE, United Scenic Artists, (iii) IATSE.

December 18, 1975

4.	Yes. Revealing total preparation and production costs of specific operas would stimulate the constant pressure of artists' agents and others to increase the amount of fees paid by the Centre (and so by other Canadian producers).


Mr. Stevens: 1.	What productions or programmes were funded by the estimated $775,000 spent during the Festival Canada 1975 programme, and how many performances were given of each?
2.	Does this figure include expenditures on (a) salaries for the National Arts Centre Orchestra (b) salaries for (i) cast members (ii) light and sound technical personnel (iii) set constructors (iv) costumes (v) property persons (vi) stage managers (vii) house manager (viii) ushers (ix) ticket takers (c) promotion (d) accommodation for visiting cast and crew (e) rehearsal time?
3.	If any of the items specified in Part 2 were not included in the cost estimate for the Festival Canada 1975 programme, what was the cost of each expenditure on the programme?


Coline M. Campbell: I am informed by the National Arts Centre as follows: 1. La Belle Helene (3), Magic Flute (4), La Traviata (5), Italian Opening Concert (NACO) (1), Operetta Concert (NACO) (1), Montreal Symphony Orchestra (1), Orford Quartet (2), Cabaret Bel Canto (40), Magic Tom (26, Little Red Riding Hood (5), Huggett Family (9).
2.	(a) Yes. (b) Yes, except for (vii) house manager.
3.	Yes. Salary for house manager. It is not the practice of NAC to allocate the salary of house manager to any specific programme.


Mr. Stevens: 1.	For each opera identified in Question No. 3,079, what was the expenditure budget figure prepared in the planning by the National Arts Centre Corporation?
2.	Were any of the budgets exceeded by actual expenditures and, if so, by what amount?
3.	What is the policy of the NAC regarding the advance costing of production and are any corrective alterations in production planning procedures made as a result of budget overruns?


Coline M. Campbell: I am informed by the National Arts Centre as follows: 1. See answer to part 4 of Question 3,474.
2.	Yes, by $54,183 as of October 31, 1974.
3.	The Centre employs a 3-stage procedure in estimating opera production costs. Stage 1 is based on research and analysis and takes into account every item which will affect the eventual cost of production, e.g. the number and required quality of principal singers, chorus, dancers and extras, musicians, artistic and support staff, stage-crew and technicians; number of sets, costumes and properties; hours of cast, technical and orchestral rehearsal; royalties, freight, fringe benefits etc. These costs are projected some 18 months to 2 years ahead. Stage 2 follows selection of artists and artistic staff and determination of artistic concept. These decisions require some adjustments to each opera's budget. Stage 3 occurs when final designs have been received and costed. Adjustments are made both to
Order Paper Questions
designs and to budgets at this point and the final line-items set. During the production period all costs are recorded daily and weekly and are constantly monitored in order to keep budgets. The following corrective steps have been taken. The supervision of the work and expenditures of all departments providing services to the Festival Department has been placed with a senior officer; departmental responsibilities have been clarified; a production coordinator, responsible for monitoring costs, has been added to the staff of the Festival Department.


Mr. Jones: 1.	What department or agency is responsible for occupational and industrial medicine in Canada?
2.	If no federal department assumes any responsibility in this field, what does each province contribute?
3.	What regulations, if any, have been adopted federally and provincially with respect to the general field of occupational and industrial medicine?
4.	Have any regulations been adopted which cover the manufacture of vinyl chloride?
5.	Has there been any research to discover whether vinyl chloride is a possible cause of angiosarcoma and, if not, is any contemplated and on what date?


Marc Lalonde: In so far as the Department of National Health and Welfare is concerned: 1. Several federal departments and agencies administer legislation relating to occupational and industrial medicine in Canada. The Department of National Health and Welfare acts as health advisor to these departments and agencies on occupational health matters.
2.	Not applicable. See reply to question 1.
3.	Federal: (a) Canada Labour (Safety) Code; (b) Canada Dangerous Substances Regulations; (c) Atomic Energy Control Act and Regulations (d) Radiation Emitting Devices Act and Regulations; (e) Order in Council P.C. 3686 relating to Occupational Health in the Public Service. Provincial: Each province has legislation concerning occupational and industrial medicine.
4.	Regulations have been adopted in the Province of Ontario and proposed in the Province of Quebec. (Note: Regulations respecting the manufacture of industrial chemicals are not the responsibility of the Federal Department of National Health and Welfare.)
5.	Yes.


Mr. Lefebvre: 1.	Since July 1, 1975, what was the total amount claimed in repayment for damages caused by flooding in (a) the Province of Quebec (b) the Constituency of Pontiac (c) each municipality in the Constituency of Pontiac?
2.	Of the total amount claimed in the Constituency of Pontiac, what was the amount of money and the number of claims accepted for reimbursement under the federal-provincial agreement for (a) individuals (b) provincial government (c) provincial government agencies (d) municipal governments (e) school boards (f) business and manufacturing establishments (g) any other group?

December 18, 1975
Order Paper Questions
3.	Of the total amount accepted for payment in the Province of Quebec under the federal-provincial agreement, what amount will be provided by the (a) government (b) provincial government?


Mr.   Jacques-L. Trudel@Parliamentary. Secretary to Minister of Finance: 1. The federal government has agreed to share costs incurred by Quebec as a result of the 1974 floods. The costs are to be shared in accordance with the established federal policy under which the amount of the federal financial contribution is determined by the application of a graduated population-based formula to the actual eligible costs incurred by the province. Accordingly, the amount of the federal financial contribution cannot be accurately calculated until a claim is received from the province and the provincial figures audited. A claim from the province has not yet been received, but the province has recently indicated that it will soon be submitting its claim for payment of the amount due, and that it is now ready for a federal audit. It is expected that the audit will be completed by the end of the 1975 calendar year.
2 and 3. See above.


Mr. Fairweather: 1.	Did CBC destroy one hour special documentaries covering seven years of the Dominion Drama Festival now Theatre Canada and, if so, what is the explanation for such a policy and were Theatre Canada officials asked for their advice?
2.	What is CBC's policy regarding preservation of archival material?
3.	Does CBC maintain archives?
4.	Will the Public Archives be contacted before decisions are made about destruction of tapes?


Coline M. Campbell: I am informed by the Canadian Broadcasting Corporation as follows: 1. Videotapes of CBC's coverage of Dominion Drama Festival finals have been erased to allow re-use of the tapes. Black and white television recordings on film exist for most of the final events over the past eight years. In three cases, where there is no record of the total production, color film segments of the dramatic portions exist. Theatre Canada has not been consulted.
2.	CBC has developed a comprehensive policy governing preservation of archival material. In general, programs are selected for retention in accordance with a number of criteria. These relate to such matters as the history and culture of Canada, and broadcasting as a means of entertaining and informing people. The selection of programs for permanent retention is limited by the funds and space available for this purpose.
3.	CBC maintains film and tape archives for radio and television at its production centers.
4.	CBC and Public Archives of Canada signed an agreement in February 1975 providing for close consultation between the two organizations about retention of programs.


Mr. Lambert (Bellechasse): Is there a financial assistance agreement between the government and the Government of the Province of Quebec concerning the construction and equipment of schools and, if so (a) what is its nature (b) on what date was it signed (c) for what school level?


Mitchell William Sharp: In so far as the Department of Regional Economic Expansion is concerned: There is no financial assistance agreement between the Department of Regional Economic Expansion and the Government of the Province of Quebec for the construction and equipment of schools. However, under the Special Areas Agreements for Quebec City, Trois-Rivieres and Sept-Iles/Port Cartier signed June 8, 1970, the Department of Regional Economic Expansion has provided loans for the construction and installation of equipment in composite schools (i.e. secondary school level) in order to improve urban living conditions. In so far as the Department of the Secretary of State is concerned: Yes. (a) Under the federal-provincial programme for the development of bilingualism in education, the province of Quebec can be reimbursed, as can all other provinces, up to $100,000 annually for expenses related to the construction or improvement of language training centres. These centres can be used for activities and purposes connected with language training and research, (b) On April 1, 1974. (c) All levels.


Mr. Whiteway: 1.	How many (a) Chilean (b) Vietnamese refugees are registered with the Department of Manpower and Immigration in Winnipeg and what are their names and addresses?
2.	In each case, what specific goods and services were (a) promised to them prior to their arrival in Canada (b) in fact, provided to those registered with the Department of Manpower and Immigration in Winnipeg?
3.	Is it government policy or the policy of the Minister of Manpower and Immigration to classify all information pertaining to refugees as privileged information?
4.	Did the Minister issue a directive to the Department of Manpower and Immigration Office in Winnipeg that would have the effect of preventing scrutiny of information by the public or by a Member of Parliament?


Hon. Robert K. Andras (Minister of Manpower and Immigration):: 1. On October 31, 1975, there were (a) 159 Chilean and (b) 95 Vietnamese refugees registered with the Canada Manpower Centre in Winnipeg. It is not departmental policy to publish the names of our clients as this information is considered to be confidential.
2. (a) It is not the policy of the Department to make specific promises to individual prospective immigrants. Prior to their arrival in Canada, Chilean and Vietnamese refugees were informed that Canada Manpower Centres would assist them in finding suitable employment and in establishing themselves in Canada; (b) Services were provided in accordance with existing departmental policies and include placement services, interpreters and language training as appropriate, and funds for such items as food, shelter, clothing, furniture, household equipment and dental care.

December 18, 1975

3.	It is the policy of the Department of Manpower and Immigration to consider information pertaining to all clients including refugees as confidential and it will not be disclosed except where necessary in the discharge of the Department's responsibilities.
4.	No.


Mr. McKinnon: 1.	What were the names and addresses of all lawyers and law firms in the Constituency of Victoria, British Columbia who performed services for the Canadian Broadcasting Corporation during 1973 and 1974?
2.	By year, what was the total amount paid to each?


Coline M. Campbell: I am informed by the Canadian Broadcasting Corporation as follows: 1. Nil.
2. Not applicable.


Mr. McKinnon: 1.	What were the names and addresses of all lawyers and law firms in the Constituency of Victoria, British Columbia who performed services for the Ministry of State for Science and Technology during 1973 and 1974?
2.	By year, what was the total amount paid to each?


Hon. C. M. Drury (Minister of State for Science and Technology):: In so far as the Ministry of State for Science and Technology is concerned: 1. Nil.
2. Nil.


Mr. Cossitt: Has the RCMP ever conducted patrols or inspections on a regular basis or otherwise of property owned personally by the Prime Minister located approximately twenty-five miles from Mirabel Airport and, if so (a) for what reason (b) how often (c) what factors justify expenditure of public funds for such inspections in connection with property owned but not occupied by the Prime Minister?


William Warren Allmand: No.


Mr.   J.-J. Blais@Parliamentary Secretary to President of the Privy Council: Mr. Speaker, if question No. 3,073 could be made an order for return, this return would be tabled immediately.
I ask, Mr. Speaker, that the remaining questions be allowed to stand.
Unemployment Insurance Act


Mr. Rodriguez: 1.	For each transaction or contract of $1 million or more in the Post Office National Facilities Programme (a) what is the value of the contract or transaction (b) what are the principal features of the transaction (e.g., size and description of land, size of building, quantity of equipment, etc.) (c) what is the name of the company involved (d) who are the principal owners and officers of the company (e) in what manner was the contract let (f) was the contract tendered and, if not, for what reason (g) did the contract go to the lowest bidder and, if not, what are the names of the bidders and the amount of their bid (h) what is the location of the post office involved?
2.	What is the basic cost of (a) LSMs (b) CFCs (c) OCRs and, for what reason is there such a wide variation in planned costs of LSMs (e.g., 3 in Winnipeg for $4.7 million, 3 in Scarborough for $4.0 million, 7 in Vancouver for $6.6 million, etc.)?
3.	Are land costs excluded for major projects in Toronto and Montreal and, if so, for what reason?
4.	What is the (a) maximum (b) minimum number of (i) LSMs (ii) CFCs (iii) OCRs that might be expected to be operating by 1980 and what centres are affected in each case?
5.	What are the CUPW staffing estimates associated with each estimate in Part 4 compared to current staffing?
6.	What is the breakdown by classification and major job function for each large centre?
7.	How many transfers requiring the moving of families of employees are likely to be required to make full job security for present CUPW employees consistent with the estimates in Part 4?
Return tabled.



GOVERNMENT ORDERS


[Stage Direction]
The House resumed, from Wednesday, December 17, 1975, consideration of Bill C-69, to amend the Unemployment Insurance Act, 1971, as reported (with amendments) from the Standing Committee on Labour, Manpower and Immigration, and of motion No. 16 of the hon. member for Timiskaming (Mr. Peters).
Mr. Charles Eugene Dionne (Kamouraska):: Mr. Speaker, when we adjourned yesterday, we were discussing the hardships experienced by the unemployed because of complexities in the act regarding unavailability as well as periods of disqualification and nonpayment.
And on that occasion, I recall that I mentioned there were three classes of civil servants: one that works well, another that works at delayed action and the third that does not work at all.
Yesterday evening, while looking over my heavy mail dealing with unemployment problems, I found a fourth class, the one that works backwards. And I shall prove to you how this can happen.


Léonel Beaudoin: Those who work backwards are always the highest paid!

December 18, 1975
Unemployment Insurance Act


Charles-Eugène Dionne: I have on hand the text of various decisions given by an umpire. Please note that this means that the claimant has been subjected to a number of annoyances, and that he has tried to meet the requirements of civil servants who administer a legislation far too complicated. He has waited a long time, several months before his case was put to the umpire, and very often, and I have proof of that, the decisions taken by the UIC officials are being amended by the umpire. All this proves beyond any doubt that complications deriving from a badly drafted legislation are bound to bring about wrong decisions. The term "available" as defined in dictionaries does not imply the responsibility to look for work, it implies that one is willing to work.
For instance, the fireman is available for work, his main job is to help fight fires. But he is not expected to look for fires to extinguish and much less to cause some. Therefore, the fireman is available, is waiting, according to the definitions found in dictionaries.
The power granted to the Unemployment Insurance Commission to make certain regulations concerning the proof required is derived from section 58 of the act.
Proof that he meets the requirements entitling him to receive benefit or continue to receive benefits ...
It is a well known principle in law that a regulation cannot exceed the scope of the act. What is complicating things in the unemployment insurance is the fact that once the act has been passed, regulations have also been established at irregular intervals that amend the act or give a different scope to the text of the act.
In section 25 three conditions are set: capability of work, availability for and incapability of work. Regulation 145(9) by associating availability and incapability of obtaining employment and by requiring as evidence of those two conditions usual and reasonable inquiries to find employment extends the scope of section 25a), because the word "availability" by its own definition does not include the idea of proceedings or inquiry, it is rather for incapability obtaining employment that evidence of proceedings to obtain employment must be given.
There is quite a difference in the interpretation of the definition. Another important restriction is made in section 25 of the bill by deleting in regulation 145(9) the word "suitable" before "employment". To obtain employment or to obtain suitable employment are two different things. Suitable employment is that which can be reasonably expected as a result of one's own qualifications. The word employment, without qualifier, does not take into account the qualifications of the claimant.
In my opinion, it is not necessary to consider the incapability of obtaining employment and the capability of work.
Section 145 of the regulations extends the meaning of the word "available" as used in section 25 of the bill. It is defined as follows in Webster:
Available: that is accessible or may obtained
Used momentarily without effective service. According to that definition "available" means that is accessible or may be obtained. It does not infer reasonable proceedings unless they are taken by the commission and that the claimant is ready to accept employment proposals. In my opinion, such a condition only applies to prove the incapability of obtaining suitable employment. I feel that the evidence required in section 145(9) of the regulations is outside the scope of section 58 of the legislation for the word "available" appearing in section 25. "Available" according to the Webster definition implies an expectancy, a state of passivity. This is, in my opinion, contrary to reasonable and usual efforts.


The Acting Speaker (Mr. Turner (London East)):: Order, please. I regret to interrupt the hon. member, but his time has expired. The hon. member may continue if he has the unanimous consent of the House. Is there unanimous consent?


Some hon. Members:: Agreed.


Charles-Eugène Dionne: I thank my colleagues for giving me the opportunity to continue my explanations about the difficulties that result from this complicated legislation for the unemployed. The proof required under section 145 of the regulations does not apply to availability because otherwise the regulations would be stricter than the act under clause 25. So they wanted to complicate everything and the legislation is drafted in a style that is not understandable to workers. I mentioned this on more than one occasion and the very clear proof I bring today is likely to clarify the problem.
If unemployed workers are disqualified by officers when they submit their claims and then manage to meet the required formalities and wait out the delay set out to go before the board or referees, then the decision of the officer is maintained. If he is lucky to be supported by a member of the union or a member of Parliament who is rather well disposed towards the unemployed that guy will go up to the umpire. In many cases, the umpire decides to amend the decision of the members of the board of referees and the decision of the officer who let the unemployed suffer during six or seven months. So that is the kind of legislation we do not want to pass; that is the kind of legislation we want to see amended because it results in too many hardships for unemployed workers.
As I said yesterday, the unemployed are not responsible for the unemployment that exists now. So, since they are not responsible for it the administration, the government in the final analysis supports the cause of the difficulties generated by unemployment; it must at least try to find a formula to help, through understanding legislation, workers who are faced with this problem. Why does that exist? Hundreds of officers in all unemployment insurance offices are there to accept claims for benefits, check and then send letters and all sorts of reports-there are 20 to 25 forms prepared in advance, and it is only a matter of adding the name of the claimant. Those forms include restrictions most of the time.
I have the opportunity to discuss those problems when I am actively involved in them rather regularly; I would not want by the facts that I am mentioning people to have the impression that the officers at offices in my area-Riviere-du-Loup and Levis-are worse than others. I get along rather well, my relationship with those employees of the

December 18, 1975

Unemployment Insurance Commission is good. However, it is the law that is too complicated, and that is what we would want to have changed, and if most citizens, members of parliament better understood the situation of the unemployed, the hardships he goes through because of the complications resulting from a situation that he did not contribute to create, I am convinced that legislation could not be accepted without amendments. I would amend it anyway.
I still have much to say on that subject and I expect to continue. I shall not exaggerate as this House was kind enough to give me a few minutes more but to conclude I shall quote from the decision of the umpire.
We must establish if the claimant was available for work according to section 25(a) of the legislation.
And this was not in my area, but in the Montreal area.
Lets us note what the umpire said:
In its majority decision, the arbitration board noted that in most places where an application was made, experience was required.
She had looked for employment but the employers had asked if she had some experience related to the job. As she did not have enough experience, she was disqualified. That's all. But the umpire realized the absurdity of the situation and tried to find a solution. He added and I quote:
I am convinced that it is absurd to ask a claimant to look for employment and then to hold against her the fact that she was refused employment because of her lack of experience. This line of argument on the part of the board reveals a more serious lack: the lack of basic justice.
And we should note that the words of the umpire applied to all those who studied the file of the claimant. It was studied by civil servants and then by members of the arbitration board. As I could see myself, many decisions of the arbitration board are made in advance. It might be audacious to say this, but I think it is true. The matter is studied before the claimant appears before the board and their decision is already made. He did not make enough efforts, he did not take the necessary steps and then they make a decision that cause the unemployed to suffer and they sow the seeds of discontentment and revolution in Canada. You cannot keep people in poverty that long. This government will have to find some other solution.


An hon. Member:: That is true!


Charles-Eugène Dionne: I will end my statement on that particular item by quoting, since that has become as widespread as the difficulties of the Unemployment Insurance Commission, an editorial of November 4 1974 on CJRC entitled, quote:
"UlC-no bargain! ..."
We have already on some occasions underlined the almost overall lack of efficiency in the UIC throughout Canada.
When I deal with another item, I will quote certain situations which occured in Chandler, in the Montreal area, in the Northwest Territories, and I will have positive proof to give. The quotation goes on:
Unemployment Insurance Act
In a previous editorial, we dealt with the lack of understanding and irresponsibility of a number of officers in the UIC as well as the arbitrary rulings they make more often than other, thus crushing the rights of unemployed workers who become the actual slaves of that plan... which in fact is theirs! You will remember a few weeks ago we mentioned a confidential, internal document of the Unemployment Insurance Commission which said that it was none of civil servants' business to tell people concerned when it was time to file a benefit claim or urge them to do so... or to inform them of their possible entitlement to benefit.
Good! That may be clever, but unfortunately this situation has been going on for too long. In that respect, a guideline will have to be sent out to all employees of the UIC.


An hon. Member:: It is still going on.


Charles-Eugène Dionne: The document also says that the claimant who pleads ignorance of the provisions of the act and the ensuing duties and obligations cannot have good excuse for his negligence. We are treating people as society's garbage when unfortunately they happen to be unemployed. They also think that the hundreds of thousands of unemployed in Canada should be experienced parliamentarians fully conversant with the intricacies of such legislation as the Unemployment Insurance Act.
But here is something else. A document prepared by the CNTU indicates that almost $36 million have been overpaid by the commission during 1973, due to mistakes on its part. And that because very few claimants know the duration of their benefit period and generally they are left unaware of their rights and obligations. As a result of its bad administration, the commission requires all claimants to return overpayments. It is a harassment policy for which they are not responsible at all, but for which they suffer the consequences.
Certainly, there is something wrong in the Unemployment Insurance Commission and we must clean the place to put an end to such situations. The faster the better!
And today, they try to proceed quickly. They would like this bill to be passed as quickly as possible. Indeed a number of members are as much in a hurry to leave on holidays as I am. But the Unemployment Insurance Act is not suitable for Canadians because it is too complicated and we must amend it. And I hope that those who have some responsibilities and who take to heart the well-being of our workers who are facing problems because the administration does not give them the opportunity to work, will be prepared to stay here as long as the act will not be amended.


The Acting Speaker (Mr. Turner (London East)):: Is the
House ready for the question?


Some hon. Members:: Question.


The Acting Speaker (Mr. Turner (London East)):: Is it
the pleasure of the House to adopt the said motion?


Some hon. Members:: Agreed.


Some hon. Members:: No.


The Acting Speaker (Mr. Turner (London East)):: those in favour of the said motion will please say yea.


Some hon. Members:: Yea.


The Acting Speaker (Mr. Turner (London East)):: those opposed will please say nay.


Some hon. Members:: Nay.

December 18, 1975
Unemployment Insurance Act


The Acting Speaker (Mr. Turner (London East)):: In my opinion the nays have it.
And more than five members having risen:


The Acting Speaker (Mr. Turner (London East)):: Pursuant to section 11 of Standing Order 75, the recorded division on the proposed motion stands deferred. The House will now proceed to motion No. 17.


Stanley Howard Knowles: Mr. Speaker, I rise on a point of order. Was it not the decision of Mr. Speaker that at this point four motions would be put for debate? Should not all four motions be put now?


Mr. Alexander:: That is correct, Mr. Speaker; motions Nos. 17, 18, 19 and 20.


The Acting Speaker (Mr. Turner (London East)):: The hon. member for Hamilton West (Mr. Alexander) moves: Motion No. 17.
That Bill C-69, an Act to amend the Unemployment Insurance Act, 1971, be amended by deleting clause 22.
The hon. member for Winnipeg North (Mr. Orlikow) moves:
Motion No. 18.
That Bill C-69, an Act to amend the Unemployment Insurance Act, 1971, be amended by deleting clause 22.
The hon. member for Hamilton West moves:
Motion No. 19.
That Bill C-69, an Act to amend the Unemployment Insurance Act, 1971, be amended by deleting clause 36.
The hon. member for Winnipeg North moves:
Motion No. 20.
That Bill C-69, an Act to amend the Unemployment Insurance Act, 1971, be amended by deleting clause 36.


Lincoln MacCauley Alexander: Mr. Speaker, I do not intend to be too long with respect to the motions placed on the order paper on behalf of my party. Similar motions in support of my motions have been moved by the NDP.


Mr. Rodriguez:: Come on!


Lincoln MacCauley Alexander: They are the same motions. What we are talking about is the benchmark. If the hon. member would only realize what is happening on the order paper in terms of what his party is doing, he would not be saying, "Come on!"
When the white paper on unemployment insurance was brought into effect by way of legislation in 1971, the then minister responsible for the implementation of the new Unemployment Insurance Act was most concerned about government participation in the scheme. He indicated that we had a tripartite arrangement. After considerable research and input from several departments, by the academics and others all over this country, the government, in its wisdom, felt that the period at which time it should be involved with unemployment insurance, in terms of additional expense, administration of benefits and what-not, would be when unemployment insurance reached 4 per cent. There is no question about that.
At that time the Economic Council of Canada indicated that full employment was, in the round, 3.6 per cent to 3.8 per cent. At that time we questioned the then minister in terms of the effectiveness of the 4 per cent unemployment insurance benchmark which he was bringing in showing whether in fact there was concern by government about the need to create full employment. We set it at 4 per cent. It appears to me that at that time the government did not recognize that the Economic Council was saying 3.8 per cent. Well, we harangued and we fought and we carried on, and in the long run the 4 per cent figure was reached.
All hon. members who were members of the committee at that time thought the government could be taken as telling the truth and that it would stand behind this particular benchmark. We had thought, as a result of this 4 per cent that the government had indicated, that 4 per cent was an ideal figure for the government to have in mind in terms of unemployment. As a matter of fact, the then minister, and I am quoting him, when commenting on the self-financing aspect of the white paper said:
The government is not only willing to help the unemployed and the less advantaged by providing a system of income support during an adjustment process; it is also ready to assume the cost of extra unemployment insurance benefits when the national unemployment rate exceeds 4 per cent... This policy is perhaps one of the most interesting in the entire proposal. It clearly establishes the government's responsibility for the financial support of a national unemployment insurance program over and above the self-financing aspect.
In other words, below 4 per cent it was up to the employer and the employees under the tripartite arrangement to be responsible for the cost of unemployment insurance, and at 4 per cent and up the government would come in both in the initial benefit period and the extended benefit period. Now, in their usual manner of a 180-degree turn, or flipflop, taking the phrase which is more appealing, they have said, "The economic factors and the worldwide implications have led us to the conclusion that the old benchmark is no good any more. We must have another one on an eight-year average." This means that rather than having the benchmark at 4 per cent, it has moved up to something like 5 or 6 per cent this year-and the way the government treats employment and unemployment, we can expect that figure, based on an eight-year average, to move up.
It seems to me the government has done two things. First, it has opted out of its responsibility in terms of fighting unemployment. That is obvious because the benchmark has gone up. Second, it has indicated that it is not really concerned about fighting the abuses. This has been pointed out on several occasions, particularly by two or three of those who appeared before the committee in terms of giving us their expertise. I would quote from the first paper presented by the Canadian Council on Social Development dated November 20. I read from page 4 where we find: "Some Comments on Specific Proposed Amendments Contained in Bill C-69."
The most significant change in financial terms is the provision whereby the 4 per cent threshold for determining at what point the government should assume the additional cost of insurance benefits would be altered. The current focus and rate of unemployment would still apply in the case of extended benefits but in the case of additional
[The Acting Speaker (Mr. Turner (London East)).]
December 18, 1975

benefits an eight-year moving average is proposed which would lift the "trigger point" to approximately 5.6 per cent in 1976.
In addition to making an already complex piece of legislation even more complicated, this formula has all the appearance of a shell game. There are a number of elements of shiftiness in the proposal. First, the government is attempting to show its good faith to the general public in reducing expenditures when all it is doing is shifting its committed expenditures unilaterally to the other two so-called partners, the employees and employers, in financing unemployment insurance.
Then they say:
Second, we are concerned particularly about the increase in cost passed on to the employees. Although we recognize that employer contributions will also rise, we doubt whether many are under great illusions as to who will ultimately pay for those contributions. We would agree with David Dodge when he wrote in the March edition of The Review of Income and Wealth: "Both economic theory and the weight of empirical evidence indicate that 100 per cent of these employer contributions . . . are shifted back to the employee and not borne by the employer". The employee bears the cost either through his wages or as a consumer through higher prices for the employers' products.
I would also like to bring home another point with respect to this increased premium. It is registered in the same brief on page 5. Mr. Reuben Baetz, speaking on behalf of the Canadian Council on Social Development, states:
It is a moot point whether the 14 to 21 per cent increase in premiums for employees can even fall within the federal government's proposed guidelines on wages and prices.
I hope the minister will be answering that point, because it seems to me we are heading for something like a 55 per cent increase in premiums. I want to put on record another statement coming from the Canadian Labour Congress. I am reading from its brief of November 20. Mr. Chafe of the CLC gave of his time to attend the committee and tell us what he thought about the amendments. Speaking about the benchmark, he said-and these are really my main points with respect to this iniquitous portion of the bill:
This proposed change has two effects. First, it reduces the government's expenditures, giving an image of restraint. In fact, of course, the government is merely shifting the costs, via the hidden tax of premium payments, on to the private sector. Second, the government is redefining full employment from the former already too high level of 4 per cent to whatever unemployment has in fact been.
These are further criticisms expressed by a responsible organization. I should like to go back to another important point in the brief of the Canadian Council on Social Development. It indicated that the first instance of shiftiness was related to premiums and spoke of "an element of shiftiness". Then Mr. Baetz indicated there was another element of shiftiness when he said:
The other element of shiftiness in the change in financing the unemployment insurance fund is that it implies a continuing abrogation of the responsibility of the federal government for establishing full employment conditions. The minister has alluded somewhat vaguely to changes in the structure of the Canadian labour market as justifying a new and presumably a higher benchmark for normal rates of employment. I have grave suspicions that the Economic Council of Canada's current study of the labour market will support this rationale and lead to a second adjustment in their original 3 per cent target. One can only interpret this as an accommodation to past failure-
What is wrong here is that the government's archaic approach, in terms of fiscal and monetary policy in attempting to defeat high unemployment, has in effect resulted in some evidence of its ineptness and inability to deal with the problem of unemployment. Therefore, because they cannot do it, because they do not have the brains or the policy to do it, they want to move that
Unemployment Insurance Act
benchmark up in order to save face in terms of their own involvement. This is wrong, because they indicated to us at one time that the benchmark was 4 per cent. But what does it do? It does not only move the government, within the scheme, to another level but it imposes a regressive tax on the employer and the employee.
We have just heard the Minister of Finance (Mr. Macdonald) indicate that there will be 10 per cent surtax on those who are fortunate enough to be making $30,000 a year. Thank goodness they are working. Thank goodness that the way the government is operating, they do not all quit and go on unemployment insurance. In any event, here is a tax which came in just today. Wait until the people hear about that. Wait until they really understand what has happened to the Unemployment Insurance Act in terms of this amendment.
So at this time we have another regressive tax. Back in 1971 the premium for the employee was only 9 cents per week for $100. In 1974, within three years, this had gone up to $1.40 per week per $100. By July of this year it had gone up to $2.59 per $100 per week, and now according to the announcement by the minister the other day, on January 1, 1976, it will go up to $3.30 per $100. The minister says that is only pennies because he has a formula whereby it is added and subtracted and subject to a lot of computation by the experts in his department. He says the people do not mind because on ratio it only amounts to a few pennies. But we are not talking about pennies; we are talking about dollars.


Robert Knight Andras: I rise on a point of order, Mr. Speaker. If I understood the hon. member correctly, I think he would want to correct the figure. I believe he said it was to be $3.30 per $100. That is incorrect. Assuming the passage of this bill, it is likely to be $1.65 per $100 per week of earnings from the employee, and possibly $2.31 from the employer per $100 per week.


Lincoln MacCauley Alexander: I am pleased to have the minister correct me in this regard. However, it doesn't matter very much what you do with my figure-in any event, it is too high and that is my point. I do not want these silly interventions in an attempt to check me up on 50 cents. I would welcome serious interjections. My point is that as a result of the ineptness of this government, these people will have to pay more in taxes. What this government should really be doing, if it is concerned about high costs and high expenses-


An hon. Member:: Refer to the bill.


Lincoln MacCauley Alexander: Why don't you go back to sleep? You haven't made any contribution to this debate yet, and I resent interjections from an hon. member of that sort.


The Acting Speaker (Mr. Turner (London East)):: Order, please. Would the hon. member for Hamilton West (Mr. Alexander) please direct his remarks to the Chair.


Lincoln MacCauley Alexander: I was speaking to the hon. member through you, Mr. Speaker. Let me try to move forward in my remarks, because we all know we are pressed for time. I should like to make some salient points for the edifica-

December 18, 1975
Unemployment Insurance Act
tion of not only the minister but the people of Canada. What this government should be doing is looking at the rules of the game. It is in this respect the government has gone wrong. This government came out with a cosmetic approach to a very serious problem which resulted in shafting our senior citizens and the poor. We have gone through that exercise, but we have not directed the government's attention to the eight-week eligibility period and the number of weeks an individual can obtain unemployment insurance benefits after being involved in the work force for that eight-week period.
The minister says the government is looking at the benefit structure. He says he is going to bring in something-I do not want to misquote him, but I think he said he intended to bring in some "serious amendment or a "very significant" amendment. Either one will do. The fact of the matter is that this bill does not do a doggone thing in facing the problems which exists in the unemployment insurance scheme today. We are aware of this, and for that and other reasons we will vote against the bill on third reading.
There is one other thing the minister should be directing his attention to that is of extreme importance. There has been no recognition of the total family as an income unit. Has the minister thought about this, or is this part of the benefit structure to which he has referred? Is this another matter he is thinking about, or should think about? I hope he will give this matter consideration in his benefit structure review. What is the situation in respect of seasonal workers, many of whom earn up to $30,000 a year during a very limited time in the work force, perhaps seven or eight months? I am not suggesting it is wrong for them to be involved, but I want the minister and his officials to advise me and the people of Canada about what is going on.
In summing up, I have really just two or three points. It has been agreed upon, understood and generally accepted, that the benchmark for unemployment accepted by the government is 4 per cent of the labour force. Over and above this figure the government has to step in and make contributions. We reject any new formula which the minister envisages over and above this amount, and in this regard I say the government has been less than honest with the Canadian people. We resent this proposal for another reason. We resent any regressive tax being placed on employers and employees. I wonder how long employers can put up with intervention by this government. Such intervention creates a great deal of paperwork for these people. Think of the situation, now, with the government wage and price controls. I do not know how employers will survive with this added burden.
Perhaps I should not say this is all right for the Steel Company of Canada, but at least that and similar companies can afford to hire accountants and lawyers to fill out the forms required by this legislation and other legislation under the restraint program. This filling-out of forms costs money in terms of real dollars and time. What about the small businessman? He has to fill out these forms and already has an added tax in respect of unemployment insurance, all because this minister and this government have not been able to attack the high rate of unemployment. This is a shameful scenario.


Some hon. Members:: Oh, oh!


Lincoln MacCauley Alexander: We hear from another hon. member over on the other side, that very beautiful friend of mine. I do not want to start any problems with her.


An hon. Member:: You should.


Lincoln MacCauley Alexander: No way! I know when I can win and I know when I am likely to lose. I will just let it stop there before we get another interjection. I hope hon. members realize what is going on. When this bill is passed-and it will be, with this government and its strength over there- and the Canadian people are catching up now, slowly but surely, I hope those members will go back and tell their constituents just what is happening. I hope they will tell their constituents just how honest this government has been in setting that benchmark of 4 per cent and now making their usual 180-degree turn.
I hope they will also tell their constituents how this government has shafted the people by asking for more money to put into the unemployment insurance scheme. This government believes that more money will provide a panacea, but the proposed amendments will do nothing to solve the problems that exist. These are problems of magnitude-and if the hon. member does not understand that now, he has no business being here.


David Orlikow: Mr. Speaker-


Some hon. Members:: Oh, oh!


David Orlikow: Before I have said even a word I hear some rude interjection by the same voice that was interrupting the hon. member for Hamilton West (Mr. Alexander). I warned hon. members days ago that such interjections will only lengthen the time I take to discuss this matter.


Lincoln MacCauley Alexander: They don't understand that.


David Orlikow: I invite the hon. member to continue his abuse, because sometimes it helps in making a better speech. The hon. member for Hamilton West and I have suggested the amendment should be left out of the present act. This is perhaps the most important amendment suggested to the 1971 Unemployment Insurance Act because it so drastically affects the method of financing the whole insurance plan. In 1971, the Liberals told us that keeping unemployment low was of major importance. The then minister of manpower said that our system was really on trial, if we could not operate on the basis of lower rates of unemployment than were traditional. When he said that, we had been having a rate of unemployment of between 4 per cent and 5 per cent.
What has happened since we passed that bill in June of 1971? Since that time, the rate of unemployment has fallen below 5 per cent in only one month. In 1971, the average rate of unemployment was 6.4 per cent; in 1972, it was 6.3 per cent; in 1973, it was 5.6 per cent; in 1974 it was 5.4 per cent; and in the first 11 months of this year it averaged over 7 per cent. The monthly rate has been above 7 per cent for the last nine months. It was only slightly below 7 per cent in the two preceding months. For the past six months we have experienced the highest rate of unemployment since the spring of 1961.
December 18, 1975

If, according to the former minister of manpower when he introduced the major revision of 1971, the whole system was on trial, and if the rate of 4 per cent to 5 per cent in the period before 1971 was on trial, then obviously the rates we have had since then, and this year's rate of 7 per cent, have settled the trial. The system has been judged, and found guilty.
What about the future? What is likely to happen in the coming year? I know the minister would consider any prediction I might use as partisan, so I shall refer the minister and hon. members to a very good analysis which appeared in the business section of the Globe and Mail for November 25,	1975, entitled, "Unemployment Could
Become Canada's No. 1 Problem". This article is written by Arthur Donner and Fred Lazar who write regularly for the Globe and Mail. Let me put on the record some of the things these two, quite well-known economists have to say about the coming year:
During the third quarter of this year, Canada's seasonally adjusted unemployment rate averaged 7.2 per cent, the highest rate of unemployment since the second quarter of 1961. The sharp rise in the rate from the 4.9 per cent level in June, 1974 to the 7.2 per cent level in October of this year has been the direct result of the North American economic slowdown.
I hope hon. members will note "North American economic slowdown". They go on to say:
During the past year, jobs have not been created fast enough to keep pace with the growth of the labor force. Despite the popular rhetoric, the unemployment insurance scheme and the various provincial and federal social assistance programs have played no role in contributing to the dramatic increase in the rate.
To digress for a moment, what they are saying is that the minister's Manpower training program, the flexibility in the Manpower offices, all the assistance programs under the Canada Assistance Plan, the programs under the Department of Indian Affairs and Northern Development and under the Department of the Secretary of State, do not have any real effect in combating this serious increase in the rate of unemployment. They say, further:
Though it is quite clear that inflation is at present Canada's No. 1 political and economic problem, it is also clear to us that the combined effects of income controls, deliberately tighter monetary and fiscal policies, and the extremely low utilization rates in U.S. industry, provide little optimism for expecting any improvement in our unemployment picture. Indeed, if the labor force growth rate does not moderate significantly during the next two years, Canada's unemployment rate may rise to its highest level since the depression.
They go on to make estimates, some of which I should like to put on the record. They say later in the same article: -it is quite likely that the unemployment rate will rise further as the industrial recovery gains momentum in 1976. This tendency for unemployment to lag behind the industrial recovery is common during the early stages of an economic recovery. Moreover, as a result of the new uncertainties, the private sector will prove more cautious in expanding its work force than during similar cyclical periods in the past. In addition, the recently announced slowdowns in new jobs in the federal public service will exacerbate the pressures on unemployment.
Let us keep that in mind tonight when we get the statement on how government expenditures are to be cut. The cut in government expenditures will probably add another 1 per cent to the unemployment rate in Canada. Then they go on to give three possible forecasts. I will put only one on the record. They say:
The most likely scenario envisages a moderation in the growth rate of the labour force to 2.5 per cent, and an acceleration in productivity
Unemployment Insurance Act
growth to 3.2 per cent, and a further rise in the unemployment rate to an average of 7.7 per cent in 1976. In the absence of controls and the accompanying fiscal measures, the real growth of the economy would have been high enough to prevent the unemployment rate from rising above the 1975 level in this scenario.
In other words, what these two, quite well-known economists are saying is that we will have an increase of at least another half per cent in our unemployment. What does that mean in terms of this bill? Faced with an insoluble dilemma created by their mishandling of the economy in recent years, the Liberals have decided to let the ordinary working people of this country pay for the government's mistakes. The government has been incapable of keeping unemployment down to a reasonable level: indeed, it has gone up. This means big pay-outs from the unemployment insurance fund. Total UIC benefits paid jumped from just under $700 million in 1970 to just under $900 million in 1971, to in the neighbourhood of $2 billion in each of the last three years. In 1975 it is expected to be about $3.75 billion.
With an expected rate of unemployment, for 1976, of in the neighbourhood of 7.6 per cent, the pay-outs will easily go over $4 billion and could approach $5 billion. Under the existing legislation, using the 4 per cent benchmark which the former minister of manpower used and which he was so proud would not go any higher-indeed, he said the objective of the Liberal government would be to reduce that 4 per cent-$2 billion of the 1975 pay-out comes from employer and employee contributions and $1.75 billion comes from the government. If the 1976 pay-out approaches $5 billion, the government's contribution will just about double since it has committed itself to absorb all the extra costs of unemployment beyond the 4 per cent level.
At the same time, the government is faced with the problem of inflation. The Prime Minister (Mr. Trudeau) stated that we must deal with this problem. It is the same problem the government supposedly wrestled to the ground in 1969-70, which had the effect of creating a much larger number of unemployed people. Now we are promised more of the same. What will happen? The Prime Minister's friends in the business world have told him that inflation is the most important problem facing this country and that the only way to cure it is to have large lay-offs of workers so that they will not be tempted to ask for raises. "Put the fear of the Lord into the workers," says the business community.
Of course, the government, remembering what happened in 1972, is afraid to do that. Therefore, it figured out another solution: to put a heavy tax on reduced consumer demand-not to do it directly, but to do it in the form of a disguised tax by shifting some of the cost of unemployment insurance on to the backs of working people. That is precisely what changing the 4 per cent threshold in the way in which the minister is proposing will do. As usual, it is the ordinary working man, particularly the working man and working woman in the lower income bracket, who will have to pay for the government's mistake.
Under the act, the government has agreed to pay all the extra costs of unemployment insurance when the unemployment rate goes over 4 per cent. This means that the combined employer-employee contributions must pay for

December 18, 1975
Unemployment Insurance Act
the first 4 per cent of unemployment. The government now says that normal unemployment, if you look at the last few years, is higher than 4 per cent. In fact, the government says that the average rate of unemployment over the past eight years has been 5.3 per cent, and in 1976 over the preceding year it will be about 5.6 per cent. So, says the government, this is where our payments will begin.
Employer-employee contributions will have to pay for the first 5.6 per cent unemployment, rather than just the 4 per cent. In 1977 it will be raised to somewhere around the first 6 per cent. The government claims that this would raise the rate of premiums of workers from $1.40 per $100 to around $1.60 to $1.70, and the government, if they said what they really mean, will shift on to the workers' backs about $500 million in 1976 through increased premiums. Other groups are likely to be closer to $2 per $100, and the government will be shifting about $800 million in 1976 to the people who are paying premiums.
As the unemployment rate goes up, moreover, the amount of the potential pay-out which the government saves will go up as well. In other words, as unemployment increases, as ordinary people do worse, the government will do better. Was there ever a greater perversion of the way in which a government, which supposedly believes in equity, should operate than that? As more people are unemployed, as the rate of inflation goes up, as the cost of living goes up, as people find it more difficult to meet the ordinary basic need for food, heat and shelter, they get rocked by a very sharp increase in a hidden tax, an increase in the unemployment insurance premium.
It is important to note that not only is this hidden tax pernicious, but it is regressive. The UIC contributions come off all incomes at the same rate, and there is a fairly low ceiling on contributions, so the UIC premiums present a larger proportion of the income of lower paid workers than of higher paid workers, and the increase will come primarily out of the pockets of lower paid workers of whom there are many more than higher paid workers.
Compare this increase, which has been estimated to run at between 30 per cent and 40 per cent a year-if unemployment continues at the present rate of increase, as I indicated it probably will-with the way in which the government has dealt with taxpayers in the upper level. We heard today, during the period allotted to statements, the statement of the Minister of Finance (Mr. Macdonald) supposedly proposing a surtax. I say "supposedly" because I am convinced that the only thing the minister wants out of his proposal today is a headline in tomorrow's newspapers and the lead story on tonight's television news on both CBC and CTV which will read something like "Surtax Imposed to Soak the Rich".
Let us compare this 30 per cent to 40 per cent increase which the minister is proposing in premiums, not just for this coming year but for the next two or three years, with what the Minister of Finance proposed this afternoon. If somebody has a taxable income of $40,000, as compared to a taxable income this last year of $30,000-in other words, if he has an increase in his income of $10,000-the surtax will not apply on the first $8,000. What is the surtax? The surtax is 10 per cent, so he will pay an extra $200 on the $10,000 which he made over and above the tax he will have paid. But keep in mind that one of the bad ideas the

government has adopted in the last couple of years, an idea which was first proposed by the official opposition, was that income taxes should be indexed. As inflation goes up, income tax is reduced by the amount of the increase in the cost of living.


An hon. Member:: That was a great idea.


David Orlikow: It sounds great, but let us look at what it does. The ordinary citizen at the bottom of the scale, who pays income tax, gets a tax deduction, as a result of indexing, of between $10 and $35. But for the taxpayer in the upper income bracket with a taxable income of, say, $18,000 and more, we are talking about tax reductions which run literally into hundreds, if not thousands, of dollars-keeping in mind the 10 per cent cost of living increase this year. So when the surtax which the minister proposes today is imposed on 1976 incomes, and when the taxpayer makes the deduction for indexing which was first proposed by the Leader of the official opposition and adopted by the former minister of finance in one of his recent budgets, the taxpayer in the high income bracket with a $40,000 taxable income, about whom the Minister of Finance spoke earlier today, will be paying less money in income tax than he paid in 1975. Those are the facts.
What did the indexing do? Keep in mind that the indexing mostly benefited people in the upper income bracket. Indexing cost the federal treasury $1.3 billion. This is the figure of the people in the finance department in the province of Manitoba. It cost the provinces another $300 million; so we are talking about $1.6 billion. Tonight we will get a statement showing how the government proposes to cut $1.5 billion from next year's expenditures-not $1.5 billion less than we spent last year, but $1.5 billion less than they proposed to spend in the coming year.
I am all for cutting government expenditures which are unnecessary-we will be talking about the kinds of expenditures which should be cut-and I am all for cutting programs which have outlived their usefulness. But what we will get tonight is mainly cuts in major programs which will affect ordinary people. While the government is doing that, it will have lost, through indexing, $1.5 billion in 1975 and probably substantially more in 1976. However, let us consider what some of the other government measures have done. Let us keep in mind that in the so-called tax reform of 1971 the maximum tax on personal income was reduced from 60 per cent to the neighbourhood of 40 per cent, 42 per cent or 43 per cent. That was a very substantial saving in taxes for people in upper income brackets. However, that was not the only thing the government did. The government extended the two-year fast write-off for manufacturers in a recent budget, despite the fact that there was no substantive evidence of its impact as a job creating measure, and despite the fact that even before the extension was announced, capital expenditures in manufacturing, which the measure was designed to stimulate, were expected to increase by 38 per cent. The manufacturing and processing industries continue to pay tax at only a 40 per cent corporate income tax rate, a rate lower than that applied to individuals with taxable incomes of $12,000.
December 18, 1975

Mining and petroleum corporations have their tax rates increased to 50 per cent under the budget proposals, and then effectively cut to 35 per cent if the provinces do not take up the additional federal abatements. Yet according to the latest available data of a year ago, those industries paid corporation income tax on under 50 per cent of their book profits, that is, profits determined in accordance with sound accounting principles. Although these figures predate the 1972 tax measures, there has been no evidence to suggest any major change has taken place since that time.
Until this year the tax policy of the government has led to increased corporate profits. For example, corporate profits increased by over 21 per cent in 1972, by 35.7 per cent in 1973, and by 33 per cent in the first three-quarters of 1974 over the same period in 1973. There has been a reduction in corporate profits this year, not because of anything the government has done and not because the government overtaxed or undertaxed, but because, as I indicated earlier, there was a dramatic slowdown in the world economy, particularly in those sectors of the world economy in which Canada was involved. There was a sharp reduction in the demand for Canadian lumber, Canadian minerals such as copper, nickel, zinc and iron ore-I could go down the list. As a result of that, corporate profits are down. But if the economy turns up-and the government has been banking for the last year on an upturn in the economy of the United States-the Canadian worker will be faced with a 10 per cent ceiling on increases in wages which he can receive. He will be faced with an increased cost of living which is continuing at the same rate as last year, that is, at about 10 per cent. Canadian corporations will be right back into business, making bigger profits than ever.
Let me return to the clause of the bill to which I, members of our party and, I am happy to see, members of the official opposition take exception because it is a rejection of what has been, at least in words, government policy since the end of World War II, or 30 years. I refer to acceptance of the idea that we in this country, because of our tremendous natural wealth, our well-educated work force and the times and conditions which exist in this country, can aim for and come close to full employment. What is full employment? The Economic Council used to say that it is 3 per cent. Then it said it was 4 per cent. But we can see, from the attitude of the government in this bill and from this particular clause, that if the government talks about full employment-which it does very seldom- it is talking about something around 6 per cent. We completely regret that kind of idea. We say that this country is big enough, wealthy enough and educated enough to have an unemployment rate of not more than 4 per cent. We say that when the government introduces the kind of proposal which is embodied in this clause, it has rejected its commitment to full employment.
Before I conclude, let me put on the record something I did in the case of an earlier clause of this bill, the views of the Canadian Council on Social Development. The Canadian Council on Social Development is a national agency which includes in its membership virtually all the private and public agencies interested in welfare problems and manpower problems in this country. This agency is funded by federal and provincial governments, so I assume by that funding the federal government considers it to be a responsible and knowledgeable organization. Let me quote a few
Unemployment Insurance Act
paragraphs from its submission on this bill with particular reference to this clause. It says in part:
In addition to making an already complex piece of legislation even more complicated, this formula has all the appearances to us of a shell game. There are a number of elements of shiftiness in this proposal.
First, the government is attempting to show its good faith to the general public in reducing expenditures when, indeed, all it is doing is shifting its committed expenditures unilaterally to the other so-called two partners, the employees and the employers, in financing unemployment insurance.
Later the submission reads:
-we are concerned particularly about the increase in cost passed on to the employees. Although we recognize that the employer contributions will also rise, we doubt if many are under great delusions as to who will ultimately pay for the employers' contributions. We would agree with David Dodge when he stated in the edition of the Review of Income and Wealth
. .. The low income earner is particularly hard hit and will feel the
pinch both in absolute and relative terms more because the maximum
insurable income is limited just short of $10,000.
Mr. Dodge also said the following:
It has occurred to me that it is a moot point whether the 14 to 21 per cent increase in premiums for employees can even fall within the federal government's proposed guidelines on wages and prices because that is an increase in his costs.
That is an increase in his costs, and the increase in the cost of heating oil and gas is in the neighbourhood of 30 per cent, and more coming. We were told by the CBC last night that there will be an increase, announced tonight, of another $2 per barrel in the price of oil and an increase in the price of food which has been estimated for next year to be in the neighbourhood of 15 per cent to 18 per cent. The Minister of Agriculture (Mr. Whelan) has told us again and again that, compared with other countries, we are getting cheap food. I have always held the view that the interests of the farmer and the urban dweller are not diametrically opposed and that it is dishonest of people to argue that point. With the exception of grain, the farmer sells virtually all his produce on the Canadian market and he needs the urban dweller who can afford to pay a decent price for it.
I have no complaint with the Canadian farmer. I know that for years he has been receiving far less than his cost of production, but I have been told every day this week by constituents that they cannot afford to pay the increased cost of food. On the CBC national news last night we were told that the support price of wheat for the domestic market will be cut by 25 cents per bushel, and that will mean another cent on the price of a loaf of bread. At the same time it is increasing the unemployment insurance premiums, this government is permitting the cost of food to go up, is encouraging the cost of heating and everything else to go up and is letting people in the upper income brackets off with respect to a tax. I say this is a disgrace. It would have been better if the government had not brought forward its so-called surtax on the wealthy.
I think Abraham Lincoln said that you can fool some of the people some of the time, but you can't all of the people all the time. This government will find that the people of this country are not prepared to accept as truth the nonsense put out by the Prime Minister, the Minister of Finance, and the Minister of Manpower and Immigration
10152

December 18, 1975
Unemployment Insurance Act
(Mr. Andras) in the last six months. I can think of no proposal more insulting to the ordinary people, no tax so pernicious, unfair and regressive as that which the minister is proposing. He will get it, of course, because of the support of the backbench members of the Liberal party, but that does not mean that he is doing the right thing. It does not mean that this is a fair tax or that the proposal meets the needs of the Canadian people. Because it does not meet the needs of the Canadian people, it is unfair- and because it is regressive it is our intention to oppose this clause and, indeed, to vote against the bill.


William Gordon Ritchie: Mr. Speaker, in speaking on this amendment regarding the benchmark clause, I find that this is a very interesting change for the government. The Postmaster General (Mr. Mackasey), when he was in charge of putting this revised bill through the House in 1971, was adamant that 4 per cent was the level above which unemployment should not rise and above which it was considered to be a national disaster. But in effect the 4 per cent seems to have been highly visionary. Although, reputedly, there are many hundreds of thousands of unemployed in various parts of the country, it certainly is true that there are many job vacancies. This poses considerable problems for the economy. Canada, of necessity, is a far northern country. We have, in our seasonal work, periods when substantial numbers are unemployed due to the weather, and so on. We rely heavily on export markets, and certain industries such as the grain industry, pulp and paper, lumber and mining which are peculiarly sensitive to the wide swings in prosperity of these industries. I think any discussion of this question is significant when speaking of the benchmark clause.
In effect, the government is going to charge, within a year or two, enough premiums to the employees and employers to take care of the benefit payments exclusive of the extended benefits portion. This would mean that for the year 1974 the initial benefit cost of approximately $16 million would have been covered by premiums. With the rapid rise in unemployment, it is obvious that the government wishes to decrease the burden on the treasury and shift the cost to the employer-employee. It certainly is an indication that this year there is a massive pay out in unemployment insurance, somewhere near the $3.5 billion mark including the cost of administration. On a rule of thumb, approximately 25 per cent of the cost of unemployment insurance is an extended benefit. This means that for the year 1975 the employee-employer contribution, to meet the total initial benefit pay outs, would have to approach $24 million or perhaps $28 million, and $24 million is a 50 per cent increase over what was collected in 1974.
Nevertheless, there is considerable merit in increasing the benchmark so that at least the initial benefit payments are met by deductions; it makes it a better insurance benefit. Increasing the benchmark is not, in itself, necessarily a good thing unless other considerations are met. At the present time, 50 per cent of this year's cost of the benefit pay-out and administration will have to come from the public treasury.
There are large numbers of people who do not qualify to draw unemployment insurance because they are selfemployed, retired people or on fixed incomes. They are the ones who, in effect, must contribute through the tax

system for the payment of unemployment insurance. I do not believe this is correct, because most of the people are not better off than the beneficiaries of unemployment insurance themselves. Extended benefits, particularly in a time of high unemployment, are still to be carried by the federal treasury and will amount to a substantial sum. This money is raised from the taxpayers at large.


Mr. Deputy Speaker:: Order, please. I regret to interrupt the hon. member, but the time for private members' hour has arrived.



PROCEEDINGS ON ADJOURNMENT MOTION


Mr. Deputy Speaker:: It is my duty, pursuant to Standing Order 40, to inform the House that the questions to be raised at the time of adjournment are as follows: the hon. member for Victoria-Haliburton (Mr. Scott)-Finance- Small business loans-Request for changes in regulations to alleviate difficulty in obtaining loans; the hon. member for Sault Ste. Marie (Mr. Symes)-Labour Conditions- Strike of pulp and paper workers-Request for report on negotiations; the hon. member for Frontenac-Lennox and Addington (Mr. Alkenbrack)-Publishing-Possibility of action to protect Canadian shareholders in Reader's Digest.
It being five o'clock, the House will now proceed to the consideration of private members' business as listed on today's order paper, namely, public bills, private bills and notices of motions.


PRIVATE BILLS
Mr. Herb Breau (Gloucester) moved: that Bill S-29, to enable the Eastern Canada Savings and Loan Company and Central and Nova Scotia Trust Company to amalgamate, as reported (without amendment) from the Standing Committee on Finance, Trade and Economic Affairs, be concurred in.


[Stage Direction]
Motion agreed to.
Mr. Deputy Speaker:: When shall the bill be read the third time?


Mr. Peters:: Mr. Speaker, by leave, now.


Herb Breau: that the bill be read the third time and do pass.
December 18, 1975


William Arnold Peters: Mr. Speaker, I rise on a point of order. I am willing to allow the bill to pass, but I would like the hon. member sponsoring this bill, who attended committee meetings and is aware of the facts, to indicate briefly what took place in the committee in relation to some questions asked previously.


Herb Breau: Mr. Speaker, I rise on a point of order and to seek clarification. Will I have the right to speak later, or will I end the debate if I speak now?


Mr. Deputy Speaker:: That, of course, is the prerogative of the House. The hon. member, having moved the motion, is deemed to have spoken, and can speak a second time only with the unanimous consent of the House. He can speak now, as requested, but may speak a second time, according to our procedures, only with unanimous consent.


Herb Breau: Mr. Speaker, I intended to participate in the debate and ceded the floor to the hon. member for Timis-kaming (Mr. Peters), thinking he wanted to speak. I shall be happy to speak now, with the unanimous consent of the House.


Some hon. Members:: Agreed.


Herb Breau: Mr. Speaker, I thank the House for its courtesy. Bill S-29 is permissive legislation, not mandatory. It permits two companies to amalgamate. Officials of the companies appeared before the committee of the other place and the Standing Committee on Finance, Trade and Economic Affairs of the House of Commons and answered questions asked by honourable members. Eastern Canada Savings and Loan Company is a loan company subject to the Loan Companies Act. Central and Nova Scotia Trust Company was formed under the Trust Companies Act, by the amalgamation of the Central Trust Company of Canada and the Nova Scotia Trust Company, on January 1, 1974.
The Loan Companies Act permits the amalgamation of two loan companies. The Trust Companies Act permits the amalgamation of two trust companies. Neither act permits the amalgamation of a loan company and trust company. If Eastern and Central and Nova Scotia Trust Company are to amalgamate, a private act of parliament is required. These circumstances are set out in the preamble to the bill. The provisions of the bill may be summarized as follows. It permits the amalgamation of the two companies but does not require them to amalgamate. If the two companies are to amalgamate, they shall enter into an amalgamation agreement. For the purposes of the agreement, Eastern is to be considered a trust company. The agreement must set out all those matters which the Trust Companies Act requires two trust companies to agree on if they enter into an amalgamation agreement.
The only major technical difficulty in amalgamating a trust company and loan company is that a trust company is not permitted to issue debentures; instead, it issues guaranteed investment certificates. A loan company may issue debentures; it may not issue guaranteed investment certificates. At the time of amalgamation, Eastern will have debentures outstanding and Central and Nova Scotia Trust will have guaranteed investment certificates outstanding. Section 3 of the act provides for that difficulty. Officials of
Amalgamation of Loan and Trust Companies the companies explained to the Senate committee and House of Commons committee the reasons for amalgamation. In the second reading debate honourable members asked questions relating to the activities of the two companies. I agree that the matter is important, but am not competent to answer questions at the present time. I suggest that honourable members should have asked their questions in committee when officials attended.
I agreed to sponsor the bill, but not because I thought the amalgamation would be better for the Atlantic provinces, for the companies, or for Canada. Obviously, if the legislation created an entirely new corporation, substantiation would be necessary. I agreed to sponsor the bill because if both companies were loan companies existing legislation would allow them to amalgamate; if both were trust companies, existing legislation would allow them to amalgamate; but there is no provision allowing for the amalgamation of a loan and trust company. This, I think, is an anomaly in our statutes. I am, therefore, sponsoring this bill which will allow those two companies to amalgamate, if they so decide. I want to make it clear that I am not making a judgment as to whether it is better for the companies, for the region or for the country if they amalgamate. I suggest that if the shareholders of the two companies want the companies to amalgamate, they ought to be allowed to do so. At present, this is only possible if both companies are either trust companies or loan companies, as I said previously. If two trust companies, or two loan companies in Canada, can amalgamate, I see no reason why a trust company and a loan company should not do the same.
In conclusion, both companies are well known in the four Atlantic provinces and both operate many branches. Central and Nova Scotia Trust operate branch offices in many small communities. There is an office in my constituency, and the company tries-I do not know with what degree of success-to serve all my constituency; indeed, all of northern New Brunswick. The president of Central and Nova Scotia Trust Company told the committee where all the branches are located. I do not have the list with me. I suggest that if the two companies are allowed to amalgamate and so decide, Eastern Canada Savings and Loan Company will provide an expanded service to the clients of the companies who now do business with them. At present, Central and Nova Scotia Trust Company operate a larger network of branch offices.
I hope I have answered the honourable member's question. I thank the House for its courtesy in allowing me, technically, to speak a second time.


William Arnold Peters: Mr. Speaker, I appreciate the comments of the hon. member for Gloucester (Mr. Breau), and because he is so gentlemanly a member I will not move to have the subject matter of the bill referred back to committee for further study. The hon. member is stretching a point when he says that the companies should be allowed to amalgamate because they want to amalgamate and he sees no reason to stop them. We cannot let our financial institutions always do as they like.
10154

December 18, 1975
Amalgamation of Loan and Trust Companies Because they want to do something, that does not mean it is right.
Unfortunately, because of the workings of our committee system, members cannot always attend certain committee meetings and know what is said in relation to questions one may have asked. I have been interested in the proliferation of our financial institutions, but not so much in terms of the services they render. I believe that every small community should have a financial institution that can be used for the needs and services in their area.
Every time we look at it, we get another bank. We will soon have banks coming out of our ears. Over the years we allowed the number of banks to decrease to the point where there were only five major ones. There are now 11, and there are requests for two more banks or pseudo-banks to be instituted. It is important that we consider whether this is, or is not, in the national interest.
In the case of this institution, a trust company-which in many ways is pseudo-bank-is amalgamating with a loan company. Our legislation is such that that kind of merger cannot take place without special permission by way of a bill. We are extending the method that this institution will have to raise money that was not available to them to the same degree when they were two separate parts. My interest, and I am sure this is the interest of the sponsor of the bill, is that the moneys raised in the maritimes by this new institution be available to the people of that area. During second reading the mover of the motion stated that this would allow this new financial institution to go into the money markets of Toronto, Montreal-


An hon. Member:: And New York.


William Arnold Peters: I am not sure whether the New York market was involved. It was, however, to be allowed to move into some of the other Canadian financial markets. If this institution is allowed to operate in those markets it may have the tendency to drain off the savings in a limited area. The banks do this in other areas. Rather than make expenditures where the loans are made, they invest the money in shopping centres, high-rise apartments and other forms of adventure capitalization. This does not help those in the area where the loans were accumulated.
Members representing constituencies such as that represented by the hon. member for Gloucester or my constituency in northern Ontario must be concerned about facilities to invest in the institution through deposits or otherwise for the people of that area. Top priority should be given to the benefits being available in the area in which the funds are accumulated. That was the justification for the Western Bank, the British Columbia Bank, the ethnic bank-


An hon. Member:: The left bank.


William Arnold Peters: I am interested in the interjections being made by the Conservatives. I presume that in the near future they will have specific desires to proliferate this field. I think even they would agree that when the rich have a bank of their own, they will want to invest for the rich rather than giving their money to the poor. This has

been the wish of those starting new financial institutions. I would have been pleased if the sponsor had indicated whether those discussions took place in committee and whether they received a favourable response from the loan company and the trust company being amalgamated under this bill.
I wish this institution every success. I hope it does make its investments in the maritimes and will continue to show favouritism in the area where the money is deposited, as there is a great need there for capital expenditures.


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


Some hon. Members:: Question.


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


Some hon. Members:: Agreed.
Motion agreed to and bill read the third time and passed.


Mr. Guay (St. Boniface):: With your permission, Mr. Speaker, may I call it six o'clock?


Stanley Howard Knowles: Mr. Speaker, we agree to calling it six o'clock unless there is any possibility that the House will agree to give third reading to Bill C-208 which is on the order paper in the name of the hon. member for Windsor-Walkerville (Mr. MacGuigan). Believe it or not, he has given me authority to move it on his behalf. This is the bill having to do with Heritage Day.


Some hon. Members:: No.


Mr. Deputy Speaker:: There does not seem to be unanimous consent that we proceed with Bill C-208. Is there unanimous consent to call it six o'clock?


William Arnold Peters: Mr. Speaker, under normal procedure we would be proceeding to that item for discussion.


Walter David Baker: On that same point of order, Mr. Speaker, I wonder if there would be unanimous consent to carry on with the public business and continue with Bill C-69. There would certainly be no objection to that.


Joseph-Phillippe Guay: We would agree to that, Mr. Speaker.


William Arnold Peters: Mr. Speaker, under the rules of the House the next item of business should be called.


Mr. Deputy Speaker:: If I follow the suggestion made by the hon. member for Timiskaming (Mr. Peters), because there are no other private bills we must proceed to the second item which is notices of motions, papers, page 64 of last Monday's order paper.
December 18, 1975


PRIVATE MEMBERS' MOTIONS FOR PAPERS
Mr. Deputy Speaker:: Item 34, in the name of the hon. member for Vegreville (Mr. Mazankowski). Shall the item stand?


Some hon. Members:: Stand.


Mr. Deputy Speaker:: Item 37, in the name of the hon. member for Edmonton Centre (Mr. Paproski). Shall the item stand?
Some hon. Members Stand.


Mr. Deputy Speaker:: Item 39, in the name of the hon. member for Humber-St. George's-St. Barbe (Mr. Marshall). Shall the item stand?


Some hon. Members:: Stand.


Mr. Deputy Speaker:: Item 35, in the name of the hon. member for Vegreville?


William Arnold Peters: To aid you, Mr. Speaker, I suggest that all the motions stand.


Mr. Deputy Speaker:: Is it agreed that all these motions stand?


Joseph-Phillippe Guay: Speaking on behalf of members on this side of the House, may I say we are completely in agreement. We think it is very important that we continue to discuss Bill C-69, provided there is unanimous support. I agree with the suggestion made by the hon. member for Grenville-Carleton (Mr. Baker).


Walter David Baker: I thank the government whip. I believe it is an important piece of public business. From time to time private members' hour is sacrificed in appropriate circumstances in favour of public business. In this case there is no sacrifice involved because private members' business has been dealt with. It would not be unreasonable for us to agree, on this occasion at least, that the discussion of public business ought to proceed. I hope the NDP House leader will agree.


Stanley Howard Knowles: We also thought that Bill C-208 was an important measure. It was dealt with by a committee of the House and reported back, and if the House is not prepared to deal with that business I suggest we should call it six o'clock.


Herb Breau: Mr. Speaker, I do not think it is fair to those members who were here before five o'clock and who might be interested in the debate on Bill C-69, and did not know it was to be resumed, if we were to follow the course which has been suggested and continue the debate.


Some hon. Members:: Hear, hear!


Stanley Howard Knowles: Six o'clock.
Anti-In flat ion Program


Mr. Deputy Speaker:: It being six o'clock, the hour appointed for consideration of private members' business has expired. I do now leave the chair until eight o'clock p.m.
At 5.24 p.m. the House took recess.


[Stage Direction]
AFTER RECESS

The House resumed at 8 p.m.
Mr. Speaker:: Pursuant to order made earlier this day the House will now revert to routine proceedings for the tabling of documents and statements by ministers.



ROUTINE PROCEEDINGS


Donald Stovel Macdonald: Mr. Speaker, I should like to lay on the Table of the House a notice of ways and means motion to provide for an antiinflation levy, and also the regulations made under the Anti-Inflation Act.


THE CANADIAN ECONOMY
Joseph Jacques Jean Chrétien: Mr. Speaker, tonight, I wish to make a statement on the steps the government is taking to limit its expenditures during the 1976-77 fiscal year.
The reductions I shall announce can be considered part of our anti-inflation program. We asked all sectors of society to show restraint; the government recognizes that it also must show moderation in its expenditures. There is real public concern about government expenditures at all levels. Canadians are asking us to slow down and pave the way for continued social progress without trying to do everything at the same time.
We have therefore carefully examined all our projected expenditures for next year and reduced them by more than $1.5 billion. We must recognize however that slowing the growth rate of government programs involves painful decisions.
There is very little, almost nothing, that can be cut without hurting someone or without restricting some worthwhile endeavour. I can be stronger than that. With inflation eating up anything there might be in the way of surplus funds in departmental programs, and with the

Anti-Inflation Program
unyielding attitude of the Treasury Board to new requests, there seems to be nothing that we can do which will not mean a reduction in a transfer payment to a province or to a citizen; or which will not cut grants or contributions to some cultural or social or industrial development activity; or which will not cause a decline in some government service; or which will not restrict the funds available for employment creation.

Despite these difficulties, we have embarked on a serious program of restraint. It is as follows:
In the white paper on inflation, we pledged ourselves to hold down the growth of the Public Service in a statement that read:
".. . the federal government has decided that the growth in the authorized level for the federal public service in 1976-77 will be held to 1.5 per cent of the level authorized in the 1975-76 main estimates."
Since we said as well we would meet new priority and essential service requirements within that limit, the Treasury Board had then to cut several thousand man-years from the 1976-77 levels already approved so that many departments will find themselves with smaller manpower resources in 1976-77 than they had in 1974-75.
We are now taking further measures with respect to what I might call the government proper-parliament and the Public Service.
We are introducing a bill to freeze the pay of members of the House of Commons and the Senate for one year- including the salaries of ministers. That is, the increase in pay they would have received in January under existing legislation they will not receive when this bill is enacted into law.
We are doing the same thing to salaries of public servants in the higher pay categories. From now until April, 1977, the pay of deputy ministers, assistant deputy ministers and all those in the senior executive and equivalent category of the Public Service-that is all those whose minimum salaries are $27,500 or more-will be frozen, except for those whose salary is determined by collective bargaining.
The freeze is extended to equivalent order-in-council appointments and to the senior officers of Crown corporations whose salaries the government controls. The Prime Minister (Mr. Trudeau) will write to the heads of Crown corporations to inform them of the desire of the government that the freeze apply to higher salary levels that the corporations themselves have responsibility for setting. He will also seek the co-operation of the Speakers of both Houses in extending the freeze to senior officers who serve the House and Senate.

I am sorry, Mr. Speaker, if I make your task more difficult, but I am sure you will want to co-operate with members of the House. The salaries of all judges of the Supreme Court, the Federal Court and the provincial superior courts will not be allowed to rise in 1976-77. We have decided to freeze the level of 1976-77 man-years available for higher-salaried positions-those that command a salary maximum of $30,000 and over-at the level of 1975-76.
To ensure that the freeze will be feasible we will draw from departments a portion of the man-years they have for

such positions to establish a pool, to be administered by the Treasury Board, upon which we can draw to provide resources for unavoidable new demands. The freedom of departments in administrative and operating expenditures will be reduced. A series of directives will be issued designed to reduce outlays for advertising by 15 per cent, and for travel, motor vehicles, furniture and conferences. I mean, Mr. Speaker, that first-class travel for officials will be eliminated, motor vehicles will not be changed for new ones, there will not be any purchase of furniture and, of course, the amount of money available for the salaries of those who are hired to replace employees sent on language training will be cut by 20 per cent.
The agency known as Information Canada will be terminated. The book stores and the division which handles expositions for the government will continue to exist as parts of other departments.
Planned accommodation expenditures for the public service have been cut-particularly as a consequence of the greatly restricted growth in numbers. The 1976-77 main estimates provision for the construction of public buildings will be $30 million less than in 1975-76 main estimates.
We are requiring that the Department of External Affairs, which must open some new posts abroad, will do so out of available funds by cutting expenditures for other posts.
Next, government services and subsidies. The Post Office is being held to a growth in manpower very much smaller than in other years and therefore it will not be able to expand its services in the usual way in new communities; and some services will have to be curtailed.
In the field of transport, a number of subsidies will be lowered or removed. Increased charges to the users of airports, such as higher landing charges, will be made to reduce what amounts to a subsidization of those users.
The subsidy on the transcontinental rail passenger service is to be reduced along with the subsidies on the movement of certain commodities under the Maritime Freight Rates Act and the Atlantic Region Freight Assistance Act.
Reductions are being made in a number of programs through which Industry, Trade and Commerce has given aid to industrial development and research. The reductions will be made in the program for the advancement of industrial technology, PAIT, in the defence industry productivity program, in shipbuilding subsidies, in tourist industry development and in other smaller grant items. The industrial Research and Development Incentives Act which provides for contributions of $20 million to $30 million a year for industrial research will be repealed.
The dollar and manpower resources of the Department of the Environment will be less than expected. There will be reductions in the capital budget of the fisheries and marine program, in fishing vessel subsidies, and in funds to deal with pollution caused by federal facilities. The government also intends to introduce legislation to produce savings in its contribution to crop insurance schemes.
December 18, 1975

Savings of $20 million will be made in the Canada Manpower training program by cancelling the indexing of allowances and changing the selection criteria for trainees. The federal government makes extensive grants to aid research by non-governmental organizations. Funds for grants by the Medical Research Council for medical research, by the National Research Council for physical science research, and by the Canada Council for research in the humanities and social sciences will be frozen in 1976-77 at 1975-76 levels rather than increased as in the past to at least compensate for inflation and usually to increase scope. Thus the councils will have to give fewer, or effectively smaller, grants.
While still recognizing the importance of encouraging development in slow-growth regions, the government is freezing the budget for regional economic expansion at the level of 1975-76.

The Department of National Defence will reduce its headquarters staff by 10 per cent, thus releasing military personnel for duties outside the National Capital Area. There will be some consolidation of military bases in the interests of greater efficiency and some bases will be closed. The government provides large amounts to finance the deficits of some Crown corporations or by way of loans for their capital expenditures. Various actions are being taken to reduce the amount that would otherwise be disbursed in this way.
The CBC obtains about 80 per cent of its funds from appropriations, the rest from revenues. Appropriations for the CBC next year will be increased only to the extent necessary to cover the inflation in operating and capital costs and the costs of covering the Olympics; previously planned growth will not be financed; the allocation to the Farm Credit Corporation is to be reduced below the allocation for 1975-76.
The Canadian National Railways and the Export Development Corporation will be directed to seek much more of their loan requirements from the same commercial sectors as private corporations so as to reduce the drain on the public purse.
Loans through the Ministry of Energy, Mines and Resources for energy projects will be deliberately held to substantially lower levels in 1976-77 main estimates, about $40 million less than those that appeared in the main estimates of the previous year.
Social Expenditures. We are inevitably led in an exercise such as this to social programs since they account for so very much of the total. The programs of the Department of National Health and Welfare make up more than one-quarter of all federal budgetary expenditures. There are social programs in other departments as well.

I therefore must announce that there will be no Opportunities for Youth Program next summer, and that in the winter of 1976-77 the LIP program will be reduced in cost and confined to high unemployment areas. This winter's LIP program, since it is now under way, will be allowed to continue. The government will stop providing financial support to the Company of Young Canadians at the end of
Anti-Inflation Program
this fiscal year. The travel and exchange program of the Secretary of State Department will be discontinued.
Every year, for many years, Canada has increased its aid to the less well developed countries of the world, so as to donate a greater and greater percentage of the gross national product. In 1976-77 that progress will be halted- only temporarily, I would hope, as the progress should be resumed when our fortunes improve. Next year foreign aid will still grow in dollar terms though it will decline in terms of the GNP.
We will also suspend for one year the indexing of family allowance payments, which would otherwise have increased by $200 million in 1976-77 over 1975-76.
Decisions about these last two items-foreign aid and family allowances-were taken with the greatest reluctance. But the fields of foreign aid, costing $1 billion, and of transfer payments to persons, costing several times that much, could not be overlooked in any serious effort to hold down expenditures.

I have mentioned the amendment to the Senate and House of Commons Act. Several other pieces of legislation will require amendment early in the new year to give effect to these reductions, including: the National Transportation Act, the Railway Act, the Maritime Freight Rate Act, the Atlantic Region Freight Assistance Act, the Adult Occupational Training Act, the Company of Young Canadians Act, the Crop Insurance Act, the Industrial Research and Development Incentives Act, the Family Allowances Act, Appropriation Act Number 2, June 26, 1970, Vote 25 (Department of Supply and Services-as it pertains to Information Canada).

Several of the expenditure reductions entail as well a reduction in manpower. I want to say a word to quieten as much as possible the concern of those public servants whose jobs will disappear.


Some hon. Members:: Oh, oh!


Joseph Jacques Jean Chrétien: I take it very seriously.


Some hon. Members:: Hear, hear!


Joseph Jacques Jean Chrétien: Employees whose jobs are no longer required will, as far as possible, be reassigned to jobs which are or will become vacant in other parts of the public service. Employees will be retrained or moved to another location if this is necessary to facilitate the reassignment.
Only when reassignment efforts fail will employees be laid off or retired, and then they will receive the normal severance pay and retirement benefits.
These procedures were developed in co-operation with employee union representatives who have already been informed of areas where lay-offs could occur, and they will be further consulted in this regard.
After all the reductions are made, totalling more than $1.5 billion from the levels we envisaged in November-


Some hon. Members:: Mismanagement!

Anti-Inflation Program


Mr. Grafftey:: Bungling!


Joseph Jacques Jean Chrétien: I think that someone who cannot look after his own luggage should not be commenting.


Some hon. Members:: Hear, hear!


Joseph Jacques Jean Chrétien: After all the reductions are made, totalling more than $1.5 billion from the levels we envisaged in November, expenditures for 1976-77 will still grow by several billion dollars over those of 1975-76. The giant expenditure programs that we have not touched-old age security and the guaranteed income supplement; interest charges on the public debt; fiscal transfers to the provinces; other transfers to the provinces for hospital care, medicare, and welfare; payments to the Unemployment Insurance Commission-all have their own dynamics of growth that add billions of dollars to the total. The hundreds of services that remain have to be financed at higher prices and higher salary levels.
The process of controlling and cutting government expenditures is a continuous one and no single set of actions such as these we have taken is sufficient. All of us, the public, the members of parliament, ministers, and public servants, must reduce our demands on the public treasury. Good programs will have to be deferred, reduced or eliminated. Things that need doing will not be done. We must accept that fact if expenditures are to be controlled. The reductions I have announced tonight are not the end of a process; they are merely part of a continuing process of restraint.
In February I will be tabling the main estimates, and at that time I will tell you the growth in total expenditures for 1976-77 which we will be expecting. I cannot say what it will be at this time but I can assure you that it will reflect the government's strong commitment to restraint.
In conclusion I would like to thank all the ministers and the officials in every department who have spent many hours and much time trying to make their points.


Some hon. Members:: Hear, hear!


Joseph Jacques Jean Chrétien: For six years, one month and three days I have been in departments where I was serving a public which needed some service, and I tell you, as I stand in my place, that I am not a very happy man now but I know that I am doing what I have to do to make sure that this country will grow more prosperous. Many of the programs which we have to stop at this time will be reintroduced in the future-


Some hon. Members:: Hear, hear!


Joseph Jacques Jean Chrétien: -because we believe on both sides that a responsible government will be able to make this country grow and flourish, not only for ourselves but also for the generations to come.


Some hon. Members:: Hear, hear!


Robert Lorne Stanfield: Mr. Speaker, I want to thank the hon. gentlemen opposite, as well as my own colleagues, for the very warm reception they have accorded me here this evening.


Some hon. Members:: Hear, hear!


Robert Lorne Stanfield: But I have to say to you, Sir, that Canadians are now witnessing the price that has to be paid for a government which has been slow to learn, slow to act, but quick to spend, particularly on its own trappings and its own aggrandizement.


Some hon. Members:: Hear, hear!


Robert Lorne Stanfield: The same Prime Minister (Mr. Trudeau) who sits across the aisle here this evening went around this country making $4 billion to $5 billion worth of campaign promises last year while he sold this country a bill of goods on leadership.


An hon. Member:: Smile away, Pierre.


Some hon. Members:: Oh, oh!


Robert Lorne Stanfield: I do not want my hon. friends opposite to tire themselves out this early in the evening because we are just getting started. I think it might be good for them to listen to the truth for a few minutes.


Joseph-Phillippe Guay: You wouldn't know the difference.


An hon. Member:: Who is the Leader of the Opposition?


Robert Lorne Stanfield: I do not blame my hon. friends opposite for trying to distract attention from the performance of the President of the Treasury Board (Mr. Chretien), but if they want to make it difficult for me to speak tonight, I am sure Mr. Speaker will co-operate with me.


Some hon. Members:: Oh, oh!


Robert Lorne Stanfield: After all, I have lived with my hon. friends for a good many years in this House.


Some hon. Members:: Oh, oh!


Mr. Speaker:: Order, please. Perhaps some of the hon. members behind the Leader of the Opposition (Mr. Stanfield) who are shouting most vigorously at the moment should realize that they also can mar an attempt to make a contribution-


Some hon. Members:: Oh, oh!


Some hon. Members:: Hear, hear!


Mr. Speaker:: The fact of the matter is, however, that the President of the Treasury Board (Mr. Chretien), despite one or two incidents of intervention, did have a good, respectful attention, and I think the same ought to be given to all members of the opposition who have the opportunity to speak.


Some hon. Members:: Hear, hear!


Robert Lorne Stanfield: It has to be said that it is becoming more apparent each day that the government is not a government of leadership in terms of the Canadian economy. It has been alternately dragging of foot and heavy of hand. It has not led, it has only reacted, and we have a reaction here this evening of some sorts. It has certainly not led by
December 18, 1975

example in any effective way; on the contrary its own examples of extravagance and high living have had a detrimental effect in contributing to inflationary psychology and inflationary actions throughout our economy.
Where our country is today, where the government is today, and what it says it has to do today-these facts are in themselves a most eloquent condemnation of the government since it came to office.
As far as the repertoire of the Prime Minister is concerned, I suppose he has gone full circle. Early in the day we saw him with a hair shirt doing a hair shirt routine in his first so-called war against inflation. Next we saw him over the years in the arrogant routine, the complacent routine, that rather brief humble routine, then the fighting routine, the invisible routine, and now we are back again to the hair shirt routine.


Some hon. Members:: Hear, hear!


Robert Lorne Stanfield: However, this time around the rate of unemployment in the country is about double what it was when the first war against inflation got under way. The forecast budget deficit this fiscal year is over one quarter what total expenditures were at that time. Our forecast balance of payments deficit this year is over a third of what total government expenditures were then. The government's forecast of its cash deficit or requirements this fiscal year is roughly one half of what total government expenditures were when that first war against inflation was declared. Government expenditures have tripled since the Prime Minister took office. Despite all the histrionics we have seen in recent days, expenditures are still up by an undisclosed percentage. It is no wonder that that hair shirt is hairier in 1975 than it was in 1969. It is hairier and scarier.


Some hon. Members:: Hear, hear!


Robert Lorne Stanfield: That is the essence of the message we received tonight from the President of the Treasury Board. This minister has not had these responsibilities for a long period of time. I believe he is sincere, and I believe he is prepared to be tough about his job in this House and in the country. I think he is carrying the can for the Prime Minister, just as the country at large will be carrying the burden created by the awful economic incompetence of the government over the years.
It must be painful for the minister to stand in his place tonight and talk about restraint in terms of the examples he has given the House. If effective restraint had begun, say, three years ago when the previous minister of finance first started preaching, we in this country would be undergoing a much less traumatic experience today.
As is so often the case with the government, there is nothing restrained about the panoply with which it has wrapped and packaged this evening's statement. We have the President of the Treasury Board here in the House telling us how difficult and painful this whole affair has been for him. To hear him tell it, there would seem to be grave doubts whether some of his colleagues over there would ever speak to him again.
Shortly, of course, we will see the Prime Minister on television telling the people of Canada how it really hurts
Anti-Inflation Program
him more than it will hurt them, but reassuring one and all that, after all, this government knows best. I dare say that if you did not know the players, if you had not seen this comedy before, you would be tempted to believe it was pretty powerful stuff which was being placed before us. Unfortunately for the government, and even more unfortunately for those who have had to suffer through it, we have, to put it mildly, heard this song before, and not only once before.
The House may recall, for example, hearing the then minister of finance tell us back in 1973 that he was putting a tight rein on government spending to avoid aggravating inflation. That was the year you will recall, Sir, that government expenditures on a national basis increased by 24 per cent. Undaunted as he always was, that same minister of finance was before us in May of 1974, proclaiming a budget which, to use his own words, "reflects my determination to deal with inflation", by restricting spending. As things turned out, that was indeed a vintage year for restraint, as practised by the government. Expenditures increased during that fiscal year by 30 per cent.
Whatever else we granted him, Mr. Speaker, we on this side of the House will admit that the former minister of finance did not let failure stand in his way.


Some hon. Members:: Hear, hear!


Robert Lorne Stanfield: He was back at it again last June. This was the year, as he so eloquently put it, of the "tough line," when the declared goal was "to ensure that outlays grow no faster than the economy as a whole". Well, the outlays are going to increase by at last 16 per cent; even the Jean who has succeeded the John concedes that. Oh, Sir, that we had that kind of economic growth!
Given that kind of historical background, Mr. Speaker, you will forgive me if my initial reaction this evening- and I venture to say the initial reaction of many Canadians-is one of profound scepticism.


Some hon. Members:: Hear, hear!


Robert Lorne Stanfield: For the unfortunate truth of the matter is that it is the government's sad and sorry record of any semblance of self-restraint in recent years which has brought us to where we are this evening, and which now promises to inflict new hardship on those Canadians least able to bear it.


Some hon. Members:: Hear, hear!


Robert Lorne Stanfield: It makes me very angry, Sir, to think of the price these Canadians now must pay for the government's failure even to approach the kind of restraint in its own activities it has so constantly promised.
Take the cuts the minister talked about tonight-he is cutting $ll/2 billion in expenditures. That has to be described as a con game.


Some hon. Members:: Hear, hear!


Robert Lorne Stanfield: He says he is cutting back on the estimates as they stood in November of this year. Mr. Speaker,
10160

December 18, 1975
Anti-Inflation Program
every government in Canada goes through this exercise once a year. The requests for expenditures come in from the departments, they are cut down, gone over, and cut down again. Every government goes through this. To talk about cutting $l'/2 billion from estimates that the government has been working on is an indication of the mentality of the government.


Some hon. Members:: Hear, hear!


Robert Lorne Stanfield: Notice that the President of the Treasury Board will not disclose the total from which he is cutting that $1 'A billion.


Some hon. Members:: Hear, hear!


Robert Lorne Stanfield: He says he had estimates of November last. Well, he must have added them up. If he cannot add them up 1 am sure there are some people in the public service who must have added them up. Mr. Speaker, he must know what the total of those estimates was last year.
When you claim that you are cutting a billion and a half dollars, if you are acting in good faith you would tell what you were cutting from; you would tell the House what the total was before you cut, and you would tell the House what the total is after you cut.


Some hon. Members:: Hear, hear!


Robert Lorne Stanfield: There is a very good reason why the minister has not told the House-because a lot of this is very phony.


Some hon. Members:: Hear, hear!


Robert Lorne Stanfield: It is a public relations job. He says he is cutting a billion and a half dollars from the estimates, Mr. Speaker. About half of those alleged cuts are non-budgetary. About half of them are outside the budget. Let us forget for a moment how hon. gentlemen opposite applauded the government when it drowned its own children, like Information Canada and CYC.


Some hon. Members:: Hear, hear!


Robert Lorne Stanfield: The biggest single cut is outside the budget-some $330 million in direct financing to the CNR. What a cut! The CNR is being invited to go out and raise that money publicly rather than borrowing it from the government. That is the biggest single cut that the government has made.


Mr. Trudeau:: What of the hardship?


Robert Lorne Stanfield: Real hardship!


Pierre Elliott Trudeau: What are you complaining about?


Robert Lorne Stanfield: Mr. Speaker, I do not want to take the time of the House to go over what the Auditor General said.


Joseph-Phillippe Guay: You don't dare!


Robert Lorne Stanfield: Well, I will. If you want it read I will read it out. The Auditor General said:

The study leads to one clear conclusion: the present state of the financial management and control systems of the departments and agencies of the Government of Canada is significantly below acceptable standards of quality and effectiveness.


Some hon. Members:: Hear, hear!


Mr. Mazankowski:: And that is not Maxwell Henderson.


Robert Lorne Stanfield: Yet the President of the Treasury Board stands in this House tonight and says:
... there seems to be nothing that we can do which will not mean a reduction ... which will not cut grants or contributions to some cultural or social or industrial development activity; or which will not cause a decline in some government service; or which will not restrict the funds available for employment creation.
The minister will not admit the validity of the Auditor General's comment upon the operation of the Treasury Board and the government. The minister comes before the House trying to pretend to the Canadian people that there are not vast sums of money being wasted. I put it this way, Mr. Speaker-those fellows spill more than a billion and a half dollars each year.


Some hon. Members:: Hear, hear!


Robert Lorne Stanfield: What is so painfully obvious tonight is that the government has no philosophy-no continuity of rationale in its economic approaches.


Donald Campbell Jamieson: Like the Tories.


Robert Lorne Stanfield: Mr. Speaker, if the minister wants to take the time I will be happy to take him through elections in recent years.


Some hon. Members:: Hear, hear!


Robert Lorne Stanfield: Here is what the minister said about the government's approach to inflation. It had three main purposes; first, to reinforce its attack on inflation through encouraging increased supplies of goods and services. Well, that has taken rather a sad blow from the sloppy introduction of the controls program. The second purpose was to act directly against high prices where this was practical. And the third one-listen to this carefully-was to alleviate the adverse impact of rising prices on all Canadians, particularly those with lower incomes.


Some hon. Members:: Oh, oh!


Robert Lorne Stanfield: As far as the third aim is concerned-to alleviate the difficulties of Canadians on low incomes in the face of inflation-it is abundantly clear from tonight's announcement that the government is quite prepared to fight inflation on the backs of millions of Canadians who cannot afford the burden.


Some hon. Members:: Hear, hear!


Robert Lorne Stanfield: I say that removing the indexing of family allowances for this year is contrary to anything the government has stood for, if it ever stood for anything. Certainly it is contrary to what other parties in the House have advocated, namely, the protection of low income Canadians against inflation. Indeed, Sir, the mere exist-
December 18, 1975

ence of this kind of indexation gives the government some real motive to fight inflation. This is better than the sort of public relations exercises in which it keeps indulging. We want the government to eliminate inflation and have asked it to reduce inflation, rather than horse around, as it has for years, and then hit those least able to bear it. We need much more evidence of economy and efficiency in government operations before we will agree that there are not substantial expenditures of a much lower priority than family allowances.


Some hon. Members:: Hear, hear!


Robert Lorne Stanfield: Indeed, far from giving us that evidence this evening, the President of the Treasury Board has appeared before the House and pretended that there is no possibility of waste. Indeed he indicated that the Auditor General is somewhere away out in left field. Who can believe that?
I view the government's announcement equally in sorrow and anger, and view the government's record equally with incredulity and disgust. It is hard to believe that, given the resources of this country and the resourcefulness of its people, any government could have made so large a mess in so short a time. I say to the President of the Treasury Board and the Prime Minister through you, Sir, that it will be something for Canadians never to forget when the bill is paid.


John Edward Broadbent: Mr. Speaker, in the election campaign of 1974 the Liberal party based its claim to economic leadership on two pillars. One of those was the Prime Minister's (Mr. Trudeau) campaign against the issue of wage and price controls raised by the Leader of the Opposition (Mr. Stanfield). That was the first pillar of their campaign. The Liberals then said they would have nothing to do with it. Yet on Thanksgiving Eve that first pillar came down. The Liberals said they were wrong in the campaign. We did not think they were right, but they did a 180 degree about-face and agreed with the Leader of the Opposition.
Their second pillar in the 1974 campaign consisted of all the spending they were to do. For instance, they were to spend money for housing, and make sure, through public financing if necessary, that money was spent to ensure that Canadians owned Canadian resources. They were to spend money on the east coast on the fisheries; you name it, as the Leader of the Opposition said earlier, they would spend money on it. They were to spend money all over the place, to improve, presumably, the well being of all Canadians.
This evening that second pillar came down. I suggest that never before in recent political history, at least since the depression, has any political party abandoned its central claims to political and economic leadership as completely as has the present Liberal party.


Some hon. Members:: Hear, hear!


John Edward Broadbent: And all the time it has acted with what one may call arrogant Liberal condescension. When the opposition, my party, or Creditiste members criticize the government, we see those on the other side smiling.


An hon. Member:: It is more a smirk.
Anti-Inflation Program


John Edward Broadbent: It is a smile of condescension which seems to say, "You fellows really don't know what this is all about." Of course we know what lies behind that smile, and I say this seriously. It is simply political cynicism. It simply means that the party knows how to manipulate public opinion, as it has demonstrated in elections. The party has a capacity, unrivalled by any other party of any country in the western world, to gauge the sense or the mood of the people at any given time. Abandoning moral commitments or serious political judgment, it will lay it on thick and tell the electorate everything it seems to want to hear, at any given time.


Some hon. Members:: Hear, hear!


John Edward Broadbent: Just as this criticism applies, in my judgment, to their 1974 election campaign, so it applies to the program they announced tonight. They sense that there is a mood in the field of federal as well as provincial politics favouring a cut in government spending, and they are going to cut back. This will be a complete about face on their 1974 campaign promises.
We, of the New Democratic Party, agree that wasteful spending is bad and that bad programs should be scrapped. We agree that the salaries of over-paid members of parliament and civil servants should be curtailed.


Some hon. Members:: Hear, hear!


John Edward Broadbent: These are all laudable objectives with which all reasonable people, I suggest, are in accord. I do not think any political party or particular section of the population will disagree with me. I suggest this is beyond dispute.
We agree with certain changes announced this evening. For years we have talked about foolish spending on programs like PAIT, PIP, IRDIA and others which have been defended by various ministers of finance and ministers of industry, trade and commerce. Finally, the government will do something it ought to have done years ago. Information Canada is to go. It ought to have gone some time ago.
We agree to cutbacks in the salaries of over-paid civil servants in the federal bureaucracy, of members of this House and the other place, and of judges of high court. These are acceptable. But the New Democratic Party does not accept the view that Canada requires a holus-bolus, across-the-board cut by the federal government in virtually every department. We categorically reject that view. Such an indiscriminate cutback affects not only bad spending and unnecessary programs, but also good spending and necessary programs. In short, indiscriminate cutbacks in federal or provincial spending are unacceptable and, I argue, have no place in the policy of any who believe in a civilized society.
Unlike the Leader of the Opposition, I believe that real cutbacks are involved in the government announcement. This is not a spurious, superficial game. Unfortunately there are to be serious cutbacks in programs right across the spectrum of federal responsibility. What does this mean? It means that the poor regions of Canada, I am tempted to include all parts east of the Ottawa River, will be adversely affected by the cutback in the spending of the
21 l30-22'/2

December 18, 1975
Anti-Inflation Program
Department of Regional Economic Expansion. Second, farmers in Canada, whether they reside on the prairies, in the north, or on the east or west coast, will be affected by the cutbacks concerning the Farm Credit Corporation and the crop insurance program.


An hon. Member:: Shame!


John Edward Broadbent: Third, families on the east and west coasts will be affected by cutbacks in the fisheries program. This will create real hardship for Canadians engaged in the fisheries particularly on our eastern coasts who already are suffering.
Fourth, those dependent on railways in Canada, on our transportation system, will be hurt. Here I am particularly thinking of Atlantic Canada, the prairies, and northern Ontario. The people in those areas are going to be seriously hurt by the government's cutback aimed at the CNR.
Fifth, every Canadian family, particularly the poor, will suffer as a result of the family allowance cutback. Some five million or six million Canadians, including over 50 per cent of the pensioners in Canada, live at the poverty level. The poor families in particular, that is, men and women with children, will suffer by the cutback in family allowances.
The change that was announced by the government to curtail the indexing of family allowances means approximately a $27 cut per child. I hope the government is happy. I hope it is pleased with that measure that has such profound effects on the millions of Canadian families who exist at the poverty level.
As a party we would not and do not favour the cutbacks in good programs. In fact, instead of cutting back in a number of good programs there should have been some increases, particularly in those programs that effect low income people so that they would be better able to cope with inflation.
The fundamental point is that the government does not recognize that inflation in Canada is not due simply to all kinds of spending in the public sector. The New Democratic Party asserts that there is unnecessary spending in the private sector, whether it is on hotels being built in Montreal, Toronto, or Vancouver, on shopping centres being built in virtually every town in the country or, as my colleague said, on the Olympics. Spending in the private sector is every bit as inflationary in terms of its impact on the economy as is spending in the public sector.


Some hon. Members:: Hear, hear!


John Edward Broadbent: In accepting the view that all federal government spending is inflationary, I say with care and seriousness that what the Liberal party has done is to accept a mode of thinking that I thought had disappeared from serious economic thought back in the 1930's. However, the Liberal party has resurrected it in 1975. I would dare to think that even McKenzie King would be surprised at the kind of announcements we have heard here tonight.


William Arnold Peters: That is probably where they got them from.


John Edward Broadbent: Apart from the fact that an NDP government at this time would be cutting out the bad programs, leaving in the good ones, and indeed increasing spending in those that are necessary for low income people, I would like to say there are two particular items that have come before the House this afternoon and this evening on which I cannot forgo comment.
The first is the announcement made with a great deal of pride that the government is going to curtail any increase in the salaries of MP's and senior civil servants. Well, Mr. Speaker, it is a little late to act in that regard. Last year the government made us the highest paid elected members of any parliamentary system in the world.


Mr. Dick:: That's bullshit.


John Edward Broadbent: I have obviously touched a sensitive chord.


Some hon. Members:: Oh, oh!


Mr. Speaker:: Order, please. There seems to be an element of disagreement with the statement made by the hon. member.


Some hon. Members:: Hear, hear!


Mr. Speaker:: Perhaps that debate might be reserved for some other time. It would be preferable if the hon. member for Oshawa-Whitby (Mr. Broadbent) would finish his remarks at this time.


John Edward Broadbent: It is obvious where the sense of priorities of certain people lie. They were distinctly quiet when I was talking about the poor in Canada. When I get on to the matter of their salaries, they get a little upset.
The point I was making is that the government is acting a little late with regard to MPs' salaries. It is a bit late in terms of the serious increases that came last year. However, we welcome the announcement that they are going to be curtailed. It would have been nice to see this done last year rather than bring in the increase they did.
In terms of senior civil servants, it is almost laughable. The Liberals really outdid themselves. They spent at least a half hour listening to the opposition. Now they are back to their traditional role of yapping incoherent comments from the backbenches.
During the time the Prime Minister has been in office there have been increases in senior civil servants. In 1968, there were 381 in the SX category, the top category which begins at $27,000. After 1973 that figure had increased to 895, an increase of more than 100 per cent.
The President of the Treasury Board (Mr. Chretien) announced with a sense of self satisfaction that these upper income civil servants are not going to get another increase. I hope not. It was just four weeks ago that they received an additional $6,000, one of the highest increases ever. I do not see it as a supreme act of self denial on their part, when they just got $6,000 a few weeks ago, not to get another increase next year. My colleagues and I are not exactly impressed with that announcement.
I took a great deal of interest in the concern of the Minister of Finance (Mr. Macdonald) this afternoon that
December 18, 1975

the wealthiest people in Canada will bear their burden of the restraint program. I was almost moved to tears when he brought forward the tax measure and suggested that the wealthy in Canada were really going to do their bit in the restraint program. Hon. members will recall that the ceiling for low income Canadians is now almost up to $750. Ninety per cent of them have no unions, so there is no hope they will get it.
What has the Minister of Finance done to place the burden on the rich? He has brought in a 10 per cent surtax for upper income Canadians. It will really be hard to bear! A lawyer or a doctor struggling to get by on $35,000 a year will really be badly off. Suppose he has two children. The government's proposal will really place him in a difficult position. It plans to increase his taxes by $10 a year! That is the full force of the great burden of restraint the government has decided to place on wealthy Canadians.
A $35,000 a year man with two children will have to pay $10. Mr. Speaker, that comes as close to hypocrisy as I have seen in this House the fact of this change in family allowance announced today. The family allowance change means that an average family with three children will lose $27 on each of those children. This is because the Liberal government has decided to cut out the escalation in family allowances this year. Compare this loss of $74 to a low income family with three children, with the heavy burden the government is putting on upper income Canadians, an increase of $10 to a family earning $35,000. We do not have many tears in our party for all those rich people who will be so affected by that measure which was brought in today.
I want to conclude-


Some hon. Members:: Hear, hear!


John Edward Broadbent: I am being so loudly cheered, Mr. Speaker, I am tempted to go on for at least as long as it took the President of Treasury Board to bring in the bad news. I want to make five specific suggestions which in our view should be seen in the context of creative government action involving some cutbacks and some increases, all of which in our view would contribute positively to dealing with inflation in a much more sensible and equitable way than the program announced by the President of the Treasury Board.
First, we think the government should increase its spending on housing. This would benefit both homeowners and renters by increasing the supply.


Some hon. Members:: We have done that.


John Edward Broadbent: They say they have done it. Peanuts! By increasing the supply of housing they will drive down the price for homeowners and renters. The second benefit is that such a program would provide many new jobs from one coast of Canada to the other, bearing in mind that there are more than 700,000 people presently unemployed.
Second, we think an end should be put to the $1.8 billion which, it is estimated, is being spent on tax incentives to corporations, which have not proved effective in creating jobs. I would remind the government of the study which it
Anti-Inflation Program
commissioned and which was presented in the House last June by the former minister of finance. Remember, we are talking about $1.8 billion in fast write-offs and special tax concessions during the last two years. In the study presented last June it was stated that the majority of businessmen interviewed said the concessions were not needed and that the course of action they took in expanding their operations was not influenced by the give-aways provided by the government. We say this $1.8 billion should no longer go out to the private sector in the form of a giveway but flow to the treasury via tax revenues.
Third, we would make the corporations pay their fair share of taxes in general by ending the tax deferral system. Over $7 billion is now owed by corporations in Canada to the federal government, and we think it time that a good part of that sum was paid to the treasury.
Fourth, we think the most equitable way of dealing with not only professional people in higher income brackets but other upper income people who have a variety of means of getting round the control system, is the introduction of a 100 per cent tax on all increases of income beyond the $2,400 level. Only by imposing such a tax do we think this program could be made at all equitable.
Finally, in connection with the price of Canadian produced oil, we think it is time Canadians ceased to be charged world prices for one of our own national resources. We reject the commitment of the government to allow the price of domestically produced oil to rise to the world price. The abandoning of this commitment would not only bring benefit to Canadians as consumers, as drivers of automobiles, but it would also be of great benefit to Canadian industry in helping to keep costs of production down, thus allowing more jobs to be created.
I wish to conclude by saying that not only is the government wrong in cutting back good programs as well as bad; it is also wrong because it has totally ignored the fact that more than 700,000 Canadians are unemployed.


Stanley Howard Knowles: Hear, hear!


John Edward Broadbent: By refusing to introduce even one program or one item intended to create more jobs, it is simply adding to the miseries which come inevitably to families experiencing unemployment to those other miseries experienced by those suffering from inflation. In short, the program announced tonight is not one which the NDP can support.


Gilbert F. Rondeau: Mr. Speaker, after the statement made tonight by the President of the Treasury Board (Mr. Chretien) I better understand the reasons for the resignation of former Minister of Finance (Mr. Turner). I find it strange that each time the Minister of Finance, here in Canada, whether Progressive Conservative a few years ago or Liberal this year or in the past, each time a Minister of Finance had to resign, it was because financial or fiscal matters were so serious that he could not afford to be inconsistent in the legislation that the government made him bring following statements he had made.
The hon. member for Ottawa-Carleton (Mr. Turner) less than one year ago, here in this House, was always telling us that the financial and fiscal situation in our country

December 18, 1975
Anti-Inflation Program
was very satisfying, that there was no problem and surely the world was unfolding as it should. And suddenly, only a few months after his resignation, we see the President of the Treasury Board, we see the Minister of Finance (Mr. Macdonald) and the right hon. Prime Minister (Mr. Trudeau) almost sounding the alarm in front of inflation and our financial situation in Canada.
Mr. Speaker, I always said in the House that this government was directed by "economist charlatans" who led us in the present situation. As long as this government will follow the advice of these economists, we shall go nowhere, we shall only go from debt to debt and deficit to deficit.
Tonight, Mr. Speaker, the President of the Treasury Board announced cuts in government spending of about $1.5 billion and as the speakers before me suggested or explained, those cuts will apply primarily to hon. members when we had a legislation for those who deserved a salary increase according to the cost of living index, we had a legislation that would have given a gross income of $600,000 to hon. members and a net income of about $400,000. This government has just done away with any indexation for members-a net amount of $400,000-in order to facilitate the acceptance of the cuts just announced for small earners. Mr. Speaker, children are the first hit by these cuts. The government just removed the indexation of family allowances. This will save them $221 million, which means that the bulk of the savings made under the program announced tonight by the President of the Treasury Board will be obtained at the expense of our Canadian children. The unemployed will have their LIP projects cut, the indexation of Manpower training will be slashed by $20 million. Our farmers, the number of which is steadily declining, will also be affected by a reduction on the Farm Credit Corporation budget. Subsidies to the OFY program will be cut by $36 million, crop insurance by $10 million.
Mr. Speaker, the group most affected by the announcement made this evening by the President of the Treasury Board are the children. They are not responsible for the current inflation rate or the government heavy spending. Alos hardest hit will be the unemployed, the young and the farmers.
And when I look for instance at the expenditures the government undertook to maintain at their current level, while slashes are made elsewhere, I see that over $4 billion will continue to be paid to the financial nabobs, those who were empowered to extend credit to the government instead of the government doing it itself through its own bank, the Bank of Canada. In 1976, we will be giving more than $4 billion in dividends for gratuities to the Canadian chartered banks.

And yet, we have just read in the December 15, 1975 issue of Maclean's the following heading:

The Bittersweet Smell of Success

We thus learned that the profits of the four largest banks in Canada exceeded $225 million in the period ending October 31, with profits averaging 55 per cent during their last fiscal year.
Mr. Speaker, the banking system made the highest profits in Canada last Year.

-the banks, profits are unreasonably high at a time when the federal government is applying profit controls to other industries. Because of their large volume of foreign business, the banks are specifically exempted from federal profit controls.)

Since banks are national and international institutions, they will not be affected by the profit control system to be implemented by the federal government. Yet, Mr. Speaker, according to our national estimates, we shall be paying out the tidy sum of $4,350 million, and we shall have to keep on as good boys, good Canadians, helping foreigners before we help our Canadian children. We shall still be paying out $1 billion to foreign or developing countries; $1 billion, Mr. Speaker.
When I think that all members of this House are aware of the shameful waste in that area, Mr. Speaker, I cannot believe my eyes or my ears. One billion dollars will be spent under the item of external aid. Another $1,507 million will go to National Defence which, in my opinion, is not worth a hang in Canada. Indeed, should a group of boy scouts decide tomorrow morning to take over Canada with makeshift means, our armed forces, with a budget of $1,507 million, would be taken unaware.
Mr. Speaker, Air Canada will also be gratified with a tidy sum of $302 million-no cutbacks-and the public service will again swindle some $4,824,820,000. Mr. Speaker, I should like to quote again from the December 15 issue of Maclean's, on page 37, under the following heading:

The money-wasters
. .. the unveiling of Montreal's new $600-million Mirabel International Airport...
All in all, the little weekend celebration racked up a price tag of more than $500,000-including $12,179 in hotel bills for 10 foreign ministers, $48,840 worth of food and $20,000 worth of booze ...
In the current fiscal year, federal spending will add up to $31.3 billion-more than the combined budgets of all three levels of government in 1967,-Out of every $100 spent on goods and services this year in Canada. .. governments will spend $40. Government has now become one of the country's biggest and fastest growing industries.
This year more than 1.2 million Canadians-or one out of every eight in the work force-will collect their pay cheques from a federal, provincial or local level of government, at a staggering cost of more than $10 billion in salaries. Of these, 332,230 are in the federal civil service, which will chalk up a payroll this year of $4,824,880,000.
December 18, 1975



Let me go on, Mr. Speaker, this article is too much. [English]
Like Topsy, the Ottawa work force has just sprouted. And no wonder. While the top civil service regulars in Washington earn no more than $43,000, the highest paid Ottawa mandarins rake in as much as $62,500 a year . .. the senior executive categories in Ottawa had grown by an astounding 474 persons-or 82 per cent-in the past five years. The biggest single leap may well be in Trudeau's own personal staff which has now multiplied to an amazing 95 persons, with a budget of more than two million dollars ...
Bank of Canada governor Gerald Bouey was calling for-

-he is so nice, he is so thrifty this man with $75,000 a year-

-was calling for "a sober appreciation by Canadians of the seriousness of our economic problems which will call forth sufficient will to co-operate in their solution." Lo, as he spoke, the Bank of Canada's new $40-million headquarters rose loftily behind him-12 storeys of exquisite reflecting glass that mirror the sky and surrounding panorama- the most expensive office building of its size in Canada The castle of glass and steel just down the street from the Parliament Buildings will include a 12-storey-high, year-round enclosed garden and a two-ton round stone imported from Yap Island in the Pacific that was once used as South Seas currency-
-the wife of the governor of the Bank of Canada-who makes $75,000 a year-along with hundreds of other wives of Ottawa's senior civil servants and MP's have been sent to French school, free. More than 170 wives are expected to enroll in the 1976 sessions beginning January which feature two three-hour lessons each week at Ottawa's Alliance Franqaise.

Mr. Speaker, I am saddened by the statement made tonight by the President of the Treasury Board. On page 9, he talk for instance about old age security. He has put senior citizens in the same category as banks. He talks about old age security and the interest on the public debt and says: "All have their own dynamics of growth." Mr. Speaker, these people have a $2.35 monthly cost of living increase compared with the banks, which made $445 million of profits last year, and this includes only the seven largest chartered banks in Canada. "All have their own dynamics of growth". Poor President of the Treasury Board!
The process of controlling and cutting government expenditures is a continuous one and no single set of actions such as these we have taken is sufficient.
Mr. Speaker, this means that the President of the Treasury Board admits that the expenditures of the government have grown like a cancer.
I would like to quote a few more figures before closing my comments on agriculture, which is such an appropriate field for Canada. In 1960, there was one public servant for 87 farmers, in 1966, there was one public servant for 59 farmers, and in 1975, there is one public servant for 44 farmers. As the number of farmers goes down, the number of public servants increases. This is called planning and administration knowledge by economists.
Mr. Speaker, I would like to quote a few other figures that have impressed me. In 1974-75, the federal deficit is
Anti-Inflation Program
$3.3 billion, while the surplus of the Royal Bank alone for 1974 is $3.5 billion. This means that the deficit of the government is equivalent to the surplus of a single chartered bank in Canada. Then, they will try to tell us that the government controls Parliament and governs something. I must say to my hon. colleagues opposite that they are in power, but govern nothing at all. The decisions are made by the nabobs of finance whom they blindly obey, Mr. Speaker, the public debt in 1967 was $21.8 billion, and in 1974 it reached $55 billion, a yearly increase of 14 per cent. In 1967, the national debt represented 32.9 per cent of the gross national product, and 39.1 per cent in 1974.
In conclusion, Mr. Speaker, I will say that since Confederation our national debt has increased by 60,000 per cent. So one should not be surprised to hear ministers of finance make at times political statements for their parties saying that all is well in Canada, that everything is fine, that it is fantastic, that all is well in the best of worlds, that we live in the most beautiful, the greatest country in the world, and that everything is great.
A few months later, in face of the obvious figures that do not lie, we see the Minister of Finance get up one morning and submit his resignation so as not to be caught lying because of his rosy statements, in opposition to the black cloud that was just announced today in this House.


Stanley Howard Knowles: Mr. Speaker, may I direct a question to the President of the Treasury Board. In the bill to which he referred in his statement which is to freeze the pay of members of parliament for a year, may I ask whether that applies only to the indemnity or does it also apply to the tax-free allowance?


Joseph Jacques Jean Chrétien: Mr. Speaker, that applies to the members' salaries.


Mr. MacDonald (Egmont):: Mr. Speaker, in respect of the comments the Leader of the Opposition (Mr. Stanfield) made concerning the reduction from the 1966-77 level as planned in November I think it is important, in terms of the credibility of this program, that the information which is available be either placed on the Table, appended to Hansard, or presented by the President of the Treasury Board (Mr. Chretien) tomorrow inasmuch as it really takes away from any credibility to say that we are taking X number of dollars away from Y figure, when no one has any idea in the world what that Y figure might be.


Joseph Jacques Jean Chrétien: Mr. Speaker, with the permission of members I would like to present these papers later because the only copies I have are these in my hands. I have the communique which gave all the expenditures in respect of all the eliminated programs and those reduced below the figures for 1975-76, and the others which are reductions from the approved level of November in the budget. I have divided these as best I could into two categories. The total of these two account for a little more than $1,500,000,000, and so members will be able to judge, in the reduction from the accepted level of November, where we have cut.
In every department we have given the area where we have reduced from the approved level. Of course there is

December 18, 1975
Anti-Inflation Program
an increase above the level of this year, but by that much less. So, at the end of the proceedings at ten o'clock I will table in both languages this information.


David Samuel Horne MacDonald: Just to be clear, Mr. Speaker,
I wonder whether it would be agreeable when the President of the Treasury Board presents this if it could be printed as an appendix to Hansard. Also, just to be clear, does this mean that what will be presented to us will be the original figures minus the amount that is being reduced, the further figure, and the relationship in the case of 1976-77 to the previous figure so that there will be that three-fold comparison.


Joseph Jacques Jean Chrétien: Unfortunately, no. One of the difficulties in which I find myself is that I am not legally in a position to table the Blue Book at this time because there is a procedure of the House whereby the tabling of what we call the Blue Book will be done in February. It is not printed.
These decisions were taken only this week and the week before, so I am not at liberty to give the total figures. I have tried to inform members as best as I could under the limitations I have. I have prepared a list of all the actual cuts from the 1975-76 level, and in the second category the areas where some cuts were made. But I am not at liberty to table what would amount to the Blue Book because it is a huge book and is not in the proper form. It will not be ready before February.


David Samuel Horne MacDonald: Mr. Speaker, does this mean that the figures the minister has presented to us with regard to 1976-77 really will make no sense to us at all until sometime late in January or early in February, when we have next year's estimates presented to us? In the meantime we have no idea whether or not these figures reflect any substantial reductions.


Joseph Jacques Jean Chrétien: Mr. Speaker, there is a difficulty there. I do not know exactly how I can cope with this problem. I think these are the kinds of problems we tried to explain earlier to the press, and I am prepared to give the same explanation. I would like to reply to the hon. member that when we are lending money to the CNR or to other Crown corporations of the same nature it is all in our expenditures list. When members of the opposition speak, they do not make that distinction. They accuse us, as the hon. member for York-Simcoe (Mr. Stevens) used to do, of spending, for example, $35 billion. That gave them an example of the kind of expenditures, of transfer payments, that we were making. Hon. members opposite do not make that distinction when they attack us. If the CNR can borrow money from the private sector, it will be that much money from the taxpayers' pockets that we will not be accused by the opposition of spending.


Mr. Fairweather:: It is still a shell game. However it is much better than the ones I used to see at fairs and exhibitions when I was young.
I suppose each of us has our own areas of concern. Mine happens to be about the shipbuilding subsidy amounting to some $15 million. I would like to have an interpretation from the President of the Treasury Board regarding con-

tractw shich are now in place. In other words the St. John's Shipbuilding and Dry Dock Company has some eight ships in line between now and 1978 which will provide about 1,600 jobs on the basis of the subsidy program. Is it the intention of the government to interrupt this program and thereby throw out a labour force that is in place?


Joseph Jacques Jean Chrétien: I believe, Mr. Speaker, there will be a gradual reduction in that program, but I doubt that it will affect the orders the shipyards have on their books at this time. Some subsidies may be reduced, but we hope that will not affect the level of employment in the shipyards.
Mr. Beaudoin When the President of the Treasury Board said to the House that there would be drastic cuts with regard to adult training schools, did he mean the manpower centre schools or those that deal with the training of those who are learning the second language?


Joseph Jacques Jean Chrétien: Well, I believe that with regard to the Department of Manpower and Immigration the cutbacks will be very minor compared with its total expenditures. If I am not mistaken, the budget of the department provides some $500 million for adult training, and the proposals I put before the House this evening would reduce that budget by $20 million. That, however, applies to the people in charge of adult education under the programs of my colleague, the Minister of Manpower and Immigration.


Walter David Baker: Mr. Speaker, on page 9 of the minister's statement there is a reference to a reduction in manpower in the Public Service, but the statement does not indicate what that reduction will be. Has there been any decision or finding by the Treasury Board as to the number of public servants who will not be placed under the reassignment and placement program, which is also set forth on that page?


Joseph Jacques Jean Chrétien: Mr. Speaker, my officials assure me that very few full-time civil servants will be affected by the suppression of some government agencies or by the important cuts in some programs. As well, very few will not be accommodated within the 1.5 per cent staff increase in the public service or in positions which are now open or will be in the next few months.


Walter David Baker: Mr. Speaker, I thought my question was quite precise and I hoped the minister might be able to give me a figure, give or take a hundred or so. His statement does not contain it now.
While I am on my feet may I ask the minister if it is the intention, as part of the program of restraint, to abandon, for at least a time, the decentralization program which he and I have discussed on the floor of the House?


Joseph Jacques Jean Chrétien: In answer to the first part of the question, I think the number of employees who will be affected by the reduction of some of the programs will be about 1,000. I am not in a position to say at this time whether, of that number, all will be relocated elsewhere into other departments. My officials assure me there will be very few who
December 18, 1975

will be dismissed, but there might be some who, because of their very specialized skills, because of their age, or because of their unwillingness to move, will be forced to take an early retirement or try to find a job elsewhere.
With regard to the second part of the question, I think the program of decentralization so far is taking place in areas which we have announced. We have just announced two parts of this program lately: an organization from the Department of National Revenue of the taxation branch located in Winnipeg, and the pay system in the Department of Supply and Services which has been located in Matane. There will be other announcements of that nature, all in areas in the public service where there is either a shortage of labour in Ottawa or a problem of space. This will not affect the level of employment in the national capital region.


Walter David Baker: I am referring to page 5 where the minister referred to a cutback in the amounts of money available for the salaries of those who are hired to replace employees sent on language training, a cut of some 20 per cent. What is the intent of that statement, aside from the cutting of funds? Is it the intention not to hire people to replace members of the Public Service who have gone on language training, or is it the intention to reduce the number of public servants who are sent on language training?


Joseph Jacques Jean Chrétien: Mr. Speaker, I think that the program we have announced as well as the reduction in the number of new positions will enable us to have this cut of $10 million without substantially affecting the program enabling civil servants to learn the other official language when they get a bilingual position by way of competition. We also believe that through closer control over the system we can reduce the amount of expenditures, but the majority of these $10 million will come from the reduction in the growth rate of staff in the public service. In the year 1975-76, the growth rate was 3.1 per cent and it will be only 1.5 per cent next year. All these measures will make us save money.


William Gordon Ritchie: Mr. Speaker, first can the President of the Treasury Board tell us approximately how much Crown corporations can borrow from the Treasury Board and privately, and second, during these times of restraint will these corporations borrowing in the private market be under the control or supervision of the Treasury Board?


Joseph Jacques Jean Chrétien: Mr. Speaker, I cannot give the hon. member the figure off the top of my head. It is many millions of dollars, perhaps $4 million of $5 million, I am not sure. He can make the calculation; I do not have the exact figure. These Crown corporations will remain under the financial supervision of the Treasury Board and the Department of Finance because we still control their budgets.


John R. Rodriguez: Mr. Speaker, I would like to direct a question to the President of the Treasury Board. I noticed that in his presentation tonight he mentioned that there will be a 10 per cent reduction at the defence staff headquarters. Can the minister tell me why he did not consider eliminating the $200 million which he intends to spend on
Anti-Inflation Program
tanks and armoured cars from Brazil? I do not think we are in imminent danger of being invaded by enemy forces. Is that not something that could be put off? I am referring to the $200 million expenditure.


Joseph Jacques Jean Chrétien: These expenditures will not be occurring right away. Of course one of the problems with regard to national defence with which we had to cope is that for the last five or six years the government has not spent any money on buying new equipment. Because of our commitments in NATO and NORAD we have some obligations, and after so many years of not spending on capital expenditures we have decided this year that we must proceed with some buying of capital equipment. However, most of those payments will be made in the future and not in this year so I think that is why, if the suggestion of the hon. member were to be accepted, it would not be reflected in the budget of next year, or perhaps just partly.


John R. Rodriguez: With regard to family allowances, we are presently discussing a bill which would amend the Unemployment Insurance Act. One of the things that bill will do is remove the dependency rate. The minister in charge of that department argued that family allowances have been indexed, and that was the rational for eliminating the dependency rate. Can the minister who made the statement tonight, the President of the Treasury Board, tell us what is the rationale for this decision to remove indexing of family allowances? Does he not think that is contrary to what is being done in another department?


Joseph Jacques Jean Chrétien: That is one of the difficult decisions we had to make, but hon. members should remember that we tripled family allowances in the last few years.


John R. Rodriguez: And taxed them.


Some hon. Members:: Be quiet.


Joseph Jacques Jean Chrétien: People at the lower end of the wage scale have exemptions. This was not an easy thing to do, but we did triple family allowances over the past few years. They were increased last year because of the increase in the cost of living. We had to find the money. The money was not hanging in the air. One of the reasons for this decision is that 60 per cent or 70 per cent of families receiving family allowances earn above $12,000, and for those who are at the bottom of the scale there will be some hardship. However, they can always go to the provincial governments and receive some compensation if they really need it, and of course under such a program we pay 50 per cent of the cost.


Mr. Stevens:: Mr. Speaker, on October 30 as reported at page 8704 of Hansard, referring to the current spending estimates of the government, the minister stated that in the current year there would be less than a 16 per cent increase compared with last year. He said, and I quote: "It will be less than 15 per cent next year," meaning the fiscal year 1977. Would the minister indicate if he still sticks by the commitment that the spending increases will not be more than 15 per cent in fiscal year 1977?


Joseph Jacques Jean Chrétien: I am very glad that my speech brought the hon. member back into the House. We have not seen him
COMMONS DEBATES	December 18, 1975
Anti-Inflation Program
for a long time. We all wish him well. If he can win, we will be safe.


Some hon. Members:: Hear, hear!


Some hon. Members:: Oh, oh!


Joseph Jacques Jean Chrétien: I said when I tabled the Blue Book at the beginning of last year that it was the first time it was done. I stuck my neck out and said that the Blue Book plus the supplementaries next year will be an increase of not more than 16 per cent, as the hon. member said, and I am still within that. Perhaps at the end of the year it will be around 15 per cent, and for next year I am not in a position to say it will be more than 15 per cent or 16 per cent because there are still other decisions to be made before I come into the House with the next Blue Book. I hope it will be in that range, but I cannot be precise at this time.
Next year I will try to give the complete picture and to be as accurate as possible, just as I have done this year. However, at the same time I should like to say that when expenditures were rising 24 per cent and 26 per cent before this year, the hon. member and some of his colleagues did not believe me when I said at the beginning of the year that we would keep the increase under 16 per cent. I am very happy to report to the hon. member that that will be the case this year.


Sinclair McKnight Stevens: Following upon what the minister has said, would the minister agree then that he has really told us nothing new tonight concerning future spending, and that if we consider the budgetary spending this year of $30 billion, what the minister is saying is that next year it will be $34.5 billion, whereas if the $1.5 billion had not been eliminated from the requests the minister was faced with, it could have been $36 billion? If the minister wants it on a national account basis, if we stay within 15 per cent we will go from $36 billion to approximately $41 billion; is that correct?


Joseph Jacques Jean Chrétien: I am sorry I have to repeat myself, but it is very difficult to make things stick in the mind of the hon. member.


Some hon. Members:: Hear, hear!


Some hon. Members:: Oh, oh!


Joseph Jacques Jean Chrétien: However, I think those figures will speak for themselves when I table the Blue Book at the end of February.


Sinclair McKnight Stevens: The minister referred in his speech to holding the increase in the public service to, I believe, a 1.5 cer cent increase. Would the minister indicate how many extra public servants that represents?
Secondly, why is it necessary to have an increase when the minister says in the same speech that there are people who may not have their jobs any longer and that the government will try to see that they are replaced in some other department?


Joseph Jacques Jean Chrétien: There are 1,000 people involved in the exercise of cutting some programs and institutions. Those people will be kept in the civil service. I cannot be very

precise at this time about the figure. I can get it for the hon. member. There will be an increase in the total of about 4,500 new civil servants. The hon. member asks why, and I must reply that we need 300 to 500 people for the anti-inflation program.


Sinclair McKnight Stevens: It was 200 originally. '


Joseph Jacques Jean Chrétien: We must hire more RCMP to provide security, and we need a few more guards to keep prisoners in jail. We have some programs of that nature for which we still need people, and I think most hon. members on the other side will agree that we should have a few more good policemen. Of course, they are not included in the 1.5 per cent, but that is not a very large increase, and for the majority of departments there will not be more, but many less, people working in them than there are this year.


Stuart Malcolm Leggatt: I wish to take the minister back to the problem of deciding to eliminate indexing with regard to family allowances, thereby hurting people on low incomes, yet rejecting the possibility of eliminating indexing with regard to income tax, which could have yielded millions of dollars of additional revenue to the government. Would the minister advise the House why the government rejected eliminating indexing on income tax and yet eliminated indexing of family allowances, which will deprive low income families of their family allowances?


Joseph Jacques Jean Chrétien: The question of indexing the exemption on taxes is a problem the Minister of Finance (Mr. Macdonald) could deal with in his budget. That is not my jurisdiction, but I wish to point out to the hon. member that this method was chosen for the reason I explained earlier. It will be suspended for one year. However, if we had stayed at the level we were at in 1972 and increased by indexing every year, it would be much lower now than it is, but we had the foresight to triple family allowances. However, at the same time we cannot afford everything, and that was one of the difficult choices we had to make. Of all the social programs, we felt that to suspend this one for one year would be less painful because 60 per cent of the families receiving family allowances earn about $12,000 a year, and those people at the bottom of the scale can go to the provincial governments, and whatever they receive will be paid 50 per cent by the federal government.


Stuart Malcolm Leggatt: Some of the rather agonizing problems the minister obviously had were with regard to the environment, cutting back subsidies to passengers on railways, cutting back anti-pollution equipment in federal facilities, and cutting back other environmental services. Would the minister tell us how big that latter cut is? Will the minister admit to this House that he is now trading off the environment for the economy, and that that is now the policy of his government?


Joseph Jacques Jean Chrétien: I think the hon. member likes making sweeping statements like that. I do not know the exact amount of the cut referred to, but it is perhaps $20 million out of a program of about $500 million. I think it is a minor cut. To make a sweeping statement that we are cutting environment-what we are doing is reducing the rate of growth because we cannot afford to go as fast as we were going in the previous year.
December 18, 1975


Walter David Baker: On a point of order, Mr. Speaker-


Mr. Speaker:: Order, please. It now being ten o'clock the hon. President of the Treasury Board (Mr. Chretien) had indicated that at ten o'clock he would be tabling certain documents. Perhaps he would be prepared to do that.


Joseph Jacques Jean Chrétien: Mr. Speaker, I should like to table a copy in English and French of the figures requested by the hon. member for Egmont (Mr. MacDonald), and request that they be appended to today's Hansard.


Mr. Speaker:: Is this agreed?


Some hon. Members:: Agreed.
[Editor's Note: For text of documents referred to above see Appendix "C".]



PROCEEDINGS ON ADJOURNMENT MOTION

[Stage Direction]
A motion to adjourn the House under Standing Order 40 deemed to have been moved.

Mr. Speaker:: The hon. member for Victoria-Haliburton (Mr. Scott).


Walter David Baker: On a point of order, Mr. Speaker-


Mr. Speaker:: Order, please. There is no provision in the Standing Orders to take a point of order on the adjournment debate.


Walter David Baker: On a question of privilege-


Mr. Speaker:: The hon. member for Victoria-Haliburton (Mr. Scott).


Walter David Baker: Mr. Speaker, I was on my feet as you were, and began a point of order before the adjournment debate.


Mr. Speaker:: Order, please. The hon. member for Grenville-Carleton (Mr. Baker) is on his feet. I rose, having allowed a question which took the clock beyond ten o'clock, a supplementary question-I rose to begin proceedings pursuant to Standing Order 40, and there is no provision to interrupt the adjournment debate or the very strict proceedings that surround the adjournment debate which begins at ten o'clock.


Walter David Baker: I was on my feet.
Adjournment Debate


An hon. Member:: They have gone mad, the whole damn bunch of them.


Mr. W. C. Scott (Victoria-Haliburton):: Mr. Speaker, on November 28 I asked the Minister of Finance (Mr. Macdonald) if he would consider changes in the legislation under which the government guarantees loans to small businesses at an interest rate of 8 per cent. My main concern was directed at the difficulty experienced by many small businessmen and women in rural Ontario in obtaining these loans, and I was encouraged by the minister's answer that he would take my question as notice.
I would like to say at the outset, Mr. Speaker, that I was not and am not finding fault with the guaranteed loans program itself, but rather with just one aspect of what is proving to be an excellent source of low interest financial aid for small businesses. Considering that the interest rate on conventional loans is in the neighbourhood of 13 per cent, then the interest rate of 8 per cent for these guaranteed loans is attractive to small business people.
In 1974, Mr. Speaker, the increase in approvals of loans under this program was approximately 150 per cent, and in Ontario the increase was about 100 per cent, which is the best possible proof that the program is providing a service.
I should point out, that this high rate of increase in loan approvals under this program creates the impression that every business person who qualifies should get approval of a loan, but that is not the case.
This program was brought to my attention recently by businessmen in my riding who had applied for loans under this legislation, had them approved at the local bank level, and then had their applications rejected by a regional office of the bank. Understandably they were at a loss as to how this could happen. After checking into the matter I found that it can happen very easily, but I also found that it would be difficult to find anyone at fault.
Banks in small towns have to borrow money to lend from their area or regional offices. They are expected to pay about 9lA per cent for the money, and under the guaranteed loans program they cannot charge more than 8 per cent. And so, Mr. Speaker, the simple fact is that banks have been lending money under this program at a loss for a long time. Many banks are prepared to do this, though, in the hope of gaining it back in the long term from other types of loans.
When this is coupled with the fact that banks are not compelled to grant loans under the guaranteed loans administration, then I would suggest that the banks that do grant such loans are acting responsibly. I think that this is borne out by the increase in loan approvals under the program that I mentioned earlier.
In the case of loans that are disapproved at regional levels, Mr. Speaker, I can only assume that the banks in question have examined the situation closely and decided that there would not be any advantage, in the long or short term, in granting the loan. I think that is understandable, since they must weigh the loss of one and a half percentage points on the face of the loan, in addition to the cost of processing and handling the loan, against the volume of business a particular community will generate over that period.

December 18, 1975
Adjournment Debate
Having said that, I will get to the point of my question. It is obvious that the guaranteed loans program for small businesses is working, and working well. But it is also obvious from what I have said, that a great many small businesses are being shut out of the program, for one reason or another, and I would like to see something done to ensure that qualified and deserving businessmen and women in the smaller communities will have access to these low-interest loans.
I consider it a hopeful sign that the minister said he would take my question as notice, and I would suggest that it should not be too difficult to make some adjustment to the legislation that would allow businesses in rural communities to take advantage of this program.


Mr.   Jacques-L. Trudel@Parliamentary Secretary to Minister of Finance: Mr. Speaker, under the Small Businesses Loans Act, the government guarantees against any loss all loans made to small businesses through chartered banks and other lenders named by the Minister of Finance (Mr. Macdonald) in view of helping to finance a large array of improvement projects. The maximum unpaid balance should not exceed $50,000 and the current maximum interest rate allowed is 83A per cent a year.
In 1974, credit operations in terms of the plan were in the vicinity of $35 million, that is the highest amount ever registered in any one year since the setting up of the program in 1961. During the first nine months of 1975, the number of loans approved exceeded by 42 per cent those for the same period in 1974 and by almost 95 per cent, as far as dollar value is concerned. Those figures indicate that the chartered banks continue to cooperate by granting loans to small businesses within the framework of the program. About 20 per cent of the loans which were granted were as in the past granted to Ontario businessmen.
The policy governing loans varies, of course, from one bank to another and, although all banks still participate in the system, those that feature their own plan particularly for small businesses tend to grant fewer loans under the Small Businesses Loans Act.
In such cases, the borrower has an alternative that may be to his advantage, for the categories of loans that are not eligible under the terms of the federal system-for example, working capital-usually are under the terms of those bank plans. It is to be expected that, when a lender considers that a business is sufficiently solvent, he may offer direct financing at commercial loan interest rates rather than depend on the government guarantee under the Small Businesses Loans Act. Let me add that most of the special bank plans offer an interest rate somewhat lower than the usual rate for commercial loans.
To summarize, the figures show that the loans granted under this system set a record in 1975 and that Ontario still get its "normal" share. It seems that the figures I just mentioned do not justify the concern of the hon. member for Victoria-Haliburton (Mr. Scott) about the negative effect of the interest rate applicable in that case on loans and that, therefore, it does not seem to warrant changes in the regulations concerning that credit facility.


LABOUR CONDITIONS-STRIKE OF PULP AND PAPER WORKERS-REQUEST FOR REPORT ON NEGOTIATIONS
Mr. Cyril Symes (Sault Ste. Marie):: Mr. Speaker, on a couple of occasions I have put questions to the Minister of Labour (Mr. Munro) concerning the important and prolonged national strike in the paper industry of this country. I asked the minister what he has done or intends to do to bring the two sides together. We, of the New Democratic Party, have been appalled at the government's inaction in settling this national strike, especially since a good many of the 25,400 members of the Canadian Paper Workers' Union on strike have been on strike since mid-July of this year.
The paper companies have, on many occasions, refused to sit at the bargaining table. When they have sat at the table they have presented ridiculous wage offers to the union. It is evident that pulp and paper companies bargained in bad faith, refused to negotiate, and now hide behind the federal anti-inflation wage guidelines so conveniently set up by the Liberal government.
The pulp and paper industry in Canada is a cartel; that is to say, a few companies control land and timber rights and leave no room for new companies to enter the field and promote competition. Indeed I would suggest that the companies in their pricing and labour practices should be investigated under the anti-combines act.
We have seen collusion on the part of the companies in the past. They have kept the price of newsprint and paper artificially high. They have deliberately worked their mills seven days a week to build up newsprint inventory in anticipation of a strike, not really being serious about bargaining in good faith.
The pulp and paper industry is not a poor industry. It can afford to make decent wage offers, which it has refused to do to this day.
In the past two years we have seen unprecedented profitability. In 1973 the pulp and paper companies tripled their profits over 1972 for an increase of some $320 million. In 1974 they doubled their profits again to some $685 million. In the years 1973 to 1975 the same companies increased the price of a ton of newsprint by some 52 per cent and of bleached kraft pulp by 118 per cent. However, in the same period, 1973 to 1975, pulp and paper workers lost $1.25 an hour in real wages due to inflation.
When bargaining started last spring the union asked for $2 per hour wage increase plus a cost of living allowance. Of that $2 wage demand, $1.25 was to make up for money lost due to inflation and 75 cents for their share of increased productivity and profitability of these companies during those bonanza years.
The CPU has reached settlement with Irving Pulp and Paper Company in New Brunswick without a strike. They settled for $1.04 increase in the first year of a two year contract plus a cost of living allowance clause. It is interesting to note that woodlands workers previously got an increase of $1.10 in the first year.
I have just learned that tonight the Anti-Inflation Board turned down the Irving settlement with the CPU. In other
December 18, 1975

words, the federal government has played right into the hands of the companies.
Canadian workers in the pulp and paper industry were led to believe that the 10 per cent wage increase limit would be flexible to take into account historical relationships and this, of course, exists with the paper workers and the woodlands workers. They were also led to believe that under the guidelines they would be liable to special consideration for contracts which expired before 1974 and for which negotiations were under way.
The CPU, the paper workers, fall under those exemptions. However, the Anti-Inflation Board's decisions in turning down tentative wage agreements of the Toronto secondary school teachers, inside postal workers, and now paper workers prove that special exemptions and consideration clauses are a sham. We have an unfair wage control program in effect in this country.
The cabinet exempted postal workers in their settlement. How can it not now exempt the paper workers? However, I fear that it will not, knowing the anti-labour bias of the government. It will in effect destroy collective bargaining in Canada and promote labour strife in the months ahead.
How can the government expect paper workers to work for less than woodworkers with whom they have have had a traditional wage relationship? How can the government expect the CPU to accept now a limit of a 10 per cent wage increase, which is less than what the companies would have been prepared to offer all along? How can the union bargain effectively when companies are regulated by provincial law, and now the provinces are passing the buck to the federal Anti-Inflation Board?
The companies are hiding behind the Anti-Inflation Board, waiting for a decision and not bothering to bargain in good faith. The Minister of Labour says he cannot get involved because of provincial jurisdiction, but in the past we have seen appeals on the part of the postal workers to the federal cabinet. I wonder whether the federal Minister of Labour will now argue in support of the union with regard to the exemption of wage guidelines.
The Liberal government, as a result of the wage guidelines and the decision of the Anti-Inflation Board, has certainly shown itself to be on the side of the companies. It is now controlling wages, after letting the companies' prices and profits rise unhindered over the past two years. I ask the Minister of Labour again tonight: will he intercede in the cabinet when the unions appeal for an exemption from the effects of these anti-inflation guidelines to settle this long and unnecessary strike?


Mr. Fernand E. Leblanc (Parliamentary Secretary to Minister of Labour):: Mr. Speaker, as the hon. member for Sault-Sainte-Marie (Mr. Symes) has said, the pulp and paper industry falls within the provincial jurisdiction as regards industrial relations.

However, the federal government, and in particular the Minister of Labour (Mr. Munro), have expressed great concern on a number of occasions over the large number of workers who are out of work. The Minister has urged the parties to return to the bargaining table and complete their collective agreements as soon as possible.
Adjournment Debate
Where monetary settlements are reached at levels above the eight plus two formula of the anti-inflation program, the parties realize that their settlements would be subject to review by the Anti-Inflation Board. Both union and industry representatives appear to have been hesitating about returning to the bargaining table until the AntiInflation Board was in a position to give an opinion on the recent settlement between the Canadian Paper Workers Union and Irving Pulp and Paper at Saint John, New Brunswick.
The opinion of the Board has been released today, and it says, contrary to what the hon. member was telling us, that the Board had concluded that it can accept a first year increase up to 14 per cent in the total compensation of the employees at Irving Pulp and Paper Limited. This is about four percentage points above the arithmetical formula applicable to them. Accordingly, the Anti-Inflation Board has requested the parties to modify their agreement so as to give effect to this decision. The Anti-Inflation Board has also informed the parties that it will wish to review the second year of the settlement when agreements in other mills have been concluded.
Meanwhile a settlement between Domtar and the Chemical Workers has been completed in the corrugated container plant dispute in Montreal, and negotiations resumed between the paper workers and Ontario Paper at St. Catharines. Negotiations between Domtar and the Canadian Paper Workers at Cornwall have also resumed but no progress has been reported.

The position of our department is very clear and very positive, Mr. Speaker.
The parties must return to the negotiation table as soon as possible and negotiate in good faith to allow work to resume in that vital industry.

Industry representatives are concerned about the economic situation of the industry and the fact that a major settlement has been completed in the industry in the United States calling for a 10 per cent increase in wages. The industry in Canada claims that the Canadian industry must close the gap in wages between Canada and the United States in the current round of negotiations. At present, according to the industry, Canadian wage rates are about 15 per cent higher than comparable wage rates in the United States paper industry.


PUBLISHING-POSSIBILITY OF ACTION TO PROTECT CANADIAN SHAREHOLDERS IN &quot;READER'S DIGEST&quot;
Mr. A. D. Alkenbrack (Frontenac-Lennox and Addington):: Mr. Speaker, it was an ominous sight this evening to see the Prime Minister of Canada (Mr. Trudeau) eating crow on television, and to find the government reversing its policies in this House when only 18 months ago he was saying during the election campaign, "Don't be obsessed with inflation, we are rich."
I thank you, Sir, for the privilege of being granted tonight the right to speak on behalf of a group of forgotten

December 18, 1975
Adjournment Debate
people, namely, the approximately 600 shareholders, Canadian citizens, who own 32 per cent of Reader's Digest (Canada) Limited. Let me quote the question I directed to the right hon. Prime Minister last Friday, December 5, pertaining to the adverse effects of his government's policies in Bill C-58 upon the economic interests of these Canadian citizens:
Mr. Speaker, my question is for the Prime Minister. In view of the serious adverse effect present legislation, Bill C-58, will have on the value of stocks held by 600 Canadian citizens in Reader's Digest (Canada), will the government take action to protect their equity which amounts to about 32 per cent of the ownership of the company?
The Prime Minister said in reply:
Mr. Speaker, I apologize; the import of the question has escaped me. I will take notice of it and try to answer, unless the hon. member wants to ask the question again.
I repeated the question and added this:
Three years ago, this stock was worth $32.50 on the market. This morning it is worth $7.00.
The Canadian people know that the main stock in trade of the government under the Trudeau brand of Liberalism is a form of anachronistic and petty nationalism where their control of the country and its government has reached such a stage that they must continually have a whipping boy to divert the attention of the electors and taxpayers in Canada from the appalling financial mess the government is in. There has been a long line-up of these whipping boys, and the Prime Minister brings them on stage whenever needed, just as Lester Pearson did before him.
The latest is a narrow form of petty nationalism levelled at the United States and all things emanating from that country. I will not use the form word "American" because we Canadians are just as American as the citizens of the United States of America. We are all Americans on these two continents.
I will not go into detail about Bill C-58, which is narrow, nationalistic legislation levelled principally at the publications Time magazine and Reader's Digest. I take you back nine years ago when the then form of Liberalism under Lester Pearson granted certain taxation privileges and exemptions to Canadian advertisers in these two magazines. Liberalism of the day strongly recommended even that they incorporate here in Canada and that Canadians participate in ownership to the recommended extent of at least 25 per cent. Although I do not believe Time magazine's management availed itself of taking this course, nevertheless Reader's Digest (Canada) did so. They incorporated in the city of Montreal, where they are an established Canadian entity in every way, with a modern plant, approximately a thousand employees, with a yearly payroll of $5.5 million, and have exceeded by quite a bit the extent of Canadian ownership recommended years ago by the Pearson government.
There are 585 shareholders, 569 of whom are Canadian, and most of them live in the province of Quebec. Some four years ago Reader's Digest (Canada) stock was selling at $32.50 per share. As a result of the Trudeau government's discriminatory meddling with the affairs of this company through its narrow nationalism, permitted by the Prime Minister and the hon. member for Peterborough (Mr. Faulkner), this stock has now fallen to an all-time low of

$7. I would remind the minister that there are some Reader's Digest (Canada) shareholders in the constituency of Peterborough, and likewise remind the Prime Minister that there are many shareholders in his constituency of Mount Royal.
As witnessed by the Prime Minister's appalling and awesome statement on austerity tonight, I say to the Prime Minister and to the Secretary of State, who is the member for Peterborough, you have put the country within the past four years in the appalling state in which it is, and the decline of Reader's Digest (Canada) stock is certainly one of the barometers recording your dismal record. Yes, Canada and Reader's Digest (Canada) is at an all-time low, and despite the Prime Minister's expressions of surprise, Mr. Porter, the departing American ambassador, has legitimately tried to tell you that our inter-American relations are likewise at an all-time low.
More than that, there is a half-page ad in today's Journal, a message to the Government of Canada from 50 business firms of the graphic arts and printing trades suppliers of the Canadian Reader's Digest. They are not American firms. I quote from the Journal of December 17 as follows:
Has the Government, for example, taken into consideration the effect that Bill C-58 in its present form would have on companies which have purchased and committed themselves to specialized equipment to produce the Reader's Digest Magazines and other products? If this business is lost, it could seriously jeopardize many of these companies and, in some cases, cause bankruptcy.
We urge the Government of Canada, therefore, to find a solution that will enable the Digest to continue in Canada-as a responsible publisher and as a customer for our goods and services.
I say to the Prime Minister and to the Secretary of State, as is suggested in the article, that if they put the Reader's Digest out of business as a result of Bill C-58, they also put 50 other businesses and/or their suppliers out of business, or at least they diminish their trade and prosperity all because of a silly Canadian content provision. Reader's Digest is a responsible publisher and there are at least 50 other firms, all reputable, who are suppliers to Reader's Digest.
I have shown, Mr. Speaker, that most of the shareholders in Reader's Digest (Canada) live in Quebec, and I am indeed surprised at the lack of vocal support in this House from the Quebec members of parliament who certainly have constituents who are shareholders in this great publishing house, Reader's Digest (Canada). I say to you, Mr. Speaker, I am not a shareholder, but I am one who has always respected legitimate, productive industry and the investments required to operate legitimate industry, and I will not stand idly by and see these things that are necessary for the social and economic good of our country sacrificed on a phony and fiery altar of Trudeaucratic nationalism.
I call upon the Prime Minister, the Secretary of State the hon. member for Peterborough, and what is left of the right-thinking members of the Liberal Party, to sober up from this phony, nationalistic binge and either amend Bill C-58 in a democratic manner or throw it out of this House to the oblivion where it belongs, so that Reader's Digest (Canada) can continue to operate legitimately in Montreal, Province of Quebec, where its approximately 1,000 employees can continue to earn salaries and wages, and in order that, last but not least, the Canadian citizen share-

holders can retain some confidence in the stock in which, at the behest of Liberalism, they so willingly invested, and from which, sometime in the future, under a more stable government they might expect a reasonable financial return.


Coline M. Campbell: Mr. Speaker, I thank the hon. member for allowing me also to refer tonight to the Prime Minister's (Mr. Trudeau) appearance on television. I am sure his prelude to his question will allow me to get in my few words. I think the Prime Minister showed a continuing leadership here tonight and on television in his search for co-operation from all Canadians in following the government's guidelines on restraint and in accepting the cutbacks which were announced here tonight, and which will be followed by members on this side of the House and I am sure by the Canadian people. I think we must admit that guidelines should be followed during this period.
Adjournment Debate
However, to answer the hon. member, Mr. Speaker, the government does not intend to compensate the minority shareholders of Reader's Digest Association (Canada) Ltd. for losses in the value of their stock holdings. Investors who purchase shares do so in the expectation of capital gains, and also at the risk of possible depreciation in the value of their investment.
According to current Toronto market quotations, Reader's Digest shares never exceeded $10.25 per share during 1975, and were trading at approximately $8.25 per share prior to the introduction of Bill C-58 in January. The present market price is $7.25 per share. Thus there has been no serious adverse effect on the value of the stock that can be attributed to this legislation. Moreover, a review of the trading in Reader's Digest stock during 1973 and 1974 indicates an almost uninterrupted decline in value from a high of $30.50 in 1973 to a low of $8 on January 4, 1975. It will be recalled that the government's intention to bring in this legislation was not announced until January 23, 1975.
Motion agreed to and the House adjourned at 10.30 p.m.
December 18, 1975

December 18, 1975
Surtax payable at various gross income levels Married taxpayer with two children under 16
Gross Income	Surtax

30.000	0
35.000	10
40.000	201
45.000	396
50.000	591
60.000	998
70,000	1,428
100,000	2,786
Taxpayer is assumed to be under age 65 and to receive wage and salary income. Family allowances, calculated at 1975 rates, are added to income in computing tax. Taxpayer is assumed to take the standard deduction of $100 in respect of medical expenses and charitable contributions. In addition to personal exemptions, the employment expense allowance of 3% of wage and salary income to a maximum of $150 and UIC and Canada Pension Plan contributions, calculated at current rates, are deducted from income in computing tax.
December 18, 1975

December 18, 1975
now, as a working hypothesis, a three-point analysis, the essential goal of which is to bring the whole question back to a level where reason will prevail over all other considerations:
1)	Given the circumstances existing for several weeks at the Dorval Control Centre, the two suspensions seemed inevitable. Even though, in ground-to-ground communications, certain interested parties assess in varying degrees the importance of the purely linguistic factor in air safety, our investigation reveals that the general climate of indiscipline at the Control Centre at the time of the suspension was a very clear threat to air safety.
2)	The suspended employees (Messrs. S. Cormier and R. Buisson), and their superiors (Messrs. M. Pitre and L. Desmarais), were all to a certain extent victims of a situation which had been allowed to deteriorate for too long; indeed, the suspended persons were working in an atmosphere were insults and provocations between certain anglophones and certain francophones were commonplace: consequently, one can reasonably believe that the thoughtless behaviour of the suspended persons may have been the result of exasperation, tension, as well as perplexity about the often uneven application of sometimes ambiguous directives in the past. These same circumstances obliged the two supervisors to enforce regulations in conditions which, no doubt, were very distressing to them personally and which led them to carry the blame, in a certain part of the press, unjustly in my opinion, for having taken an unpopular decision.
3)	Since the department will announce today that it will be in a position, at the beginning of January, to evaluate a study now in progress which seems to offer serious hope that French may be used in certain ground-to-ground communication it might find it useful to consider softening the financial effects of the two sanctions as a freely decided gesture to lower tensions. In my view, such a gesture would constitute neither a defeat nor a victory for anyone, nor would it give other employees a licence to commit acts of indiscipline affecting air safety while a solution is being worked out in short order.
Indeed, even though my mandate is to defend linguistic equality, I consider that the safety of passengers and aircrew must not in the slightest way be jeopardized by any political consideration. The problem now is simply to find a realistic procedure allowing us, if only briefly, to take the politics out of an issue that in the final analysis is technical in nature and, in my opinion, must be settled on technical grounds. At bottom, all the interested parties, be they anglophones or francophones, controllers, pilots or departmental specialists, state that their attitudes on language use are based solely on concern for air safety. I believe that Canadians expect all these professionals to explain the soundness of their respective positions through objective arguments. Plainly, this will be possible only if the Ministry manages to establish the climate of serenity which is one of the principal goals of the steps we have taken and of the present letter.
I would appreciate receiving any comments you may have at your earliest convenience.
Yours sincerely, Keith Spicer

December 12, 1975
Mr. Sylvain Cloutier Deputy Minister of Transports Transports Canada Building Place de Ville Ottawa, Ontario K1A 0N5
Dear Mr. Cloutier,
You will find enclosed an article which appeared in The Montreal Gazette of December 10, 1975, describing the suspension of two French-speaking air traffic controllers in Montreal and of an English-speaking air traffic controller working in Quebec City.
In the course of discussions I had with English and French-speaking controllers at the Dorval Air Traffic Control Centre during the night of December 10 to 11, I learned that the English-speaking controller was actually working in Montreal. I was unable to get in touch with him at that time.
In conjunction with our investigation already in progress concerning language procedures in ground-to-ground communications at the Dorval Air Traffic Control Centre, I would like to specify that the suggestion I made in my letter of December 11, 1975, concerning the softening of the financial effects of the two suspensions also applies to the English-speaking controller who had to take a day's leave without pay.
Yours sincerely,
Keith Spicer
December 18, 1975



TREASURY BOARD


[Stage Direction]
The government's expenditure planning cycle for the fiscal year 1976-77 began early in 1975. Departmental expenditure proposals were received in March and following analysis, the Treasury Board developed their first recommendations on expenditures which were approved by Cabinet in July. By November because of revisions in forecasts to statutory or other highly committed programs, the total requirement was considered to be too great by about $1.5 billion. A review was begun culminating in the reductions listed below.

[Stage Direction]
(Asterisk indicates non-budgetary item that is to be financed by loan or guarantee from the private sector. Man-year reductions are in brackets.)
Programs eliminated or reduced below 1975-76 levels.
Non
Budgetary Budgetary (Millions of Dollars)
Agriculture
Crop insurance, reduce federal share	10.1
Consumer and Corporate Affairs
Administration	(20)	0.3Consumer Program	(19)	0.6Other	(13)	0.1
Energy, Mines and Resources
Operating Expenditures	3.5
Capital	1.0
Atomic Energy of Canada Limited	8.0
Eldorado Nuclear Limited - eliminate support for uranium explorations	3.5
[Stage Direction]
December 18, 1975
Non
Budgetary Budgetary (Millions of Dollars)
Environment
Reduction in support for development
of pollution abatement technology	2.0
Reduction in provision for correcting
pollution caused by federal facilities	5.0
Defer replacement of a vessel	2.0
Reduce fishing vessel subsidies	1.0
Other items
Administration	(31)	0.6Fisheries and Marine	(31)	0.6Environmental Services	(31)	0.6
Industry Trade and Commerce
Program for Advancement of Industrial Technology and Defence Industry Productivity
Program	5.0
Miscellaneous grants	2.0
Tourism (28)	3.5
Industrial research and development incentives	3^0
Labour
Information Canada - terminate agency but retain bookstores and Exhibition
Commission (320)	6.0
Manpower and Immigration
Cancel Opportunities for Youth for
summer of 1976	36.0
Cancel indexing of training allowances
and change selection criteria	20.0
National Health and Welfare
Cancel the January indexing of family allowances	221.3
Other - administration and	operations	2.5
(37)
Public Works
Reduce capital vote	30.0
Secretary of State
Company of Young Canadians - terminate agency	6.1
Travel and Exchange	3.0
Citizenship promotion	0.5
December 18, 1975
[Stage Direction]
Non
Budgetary Budgetary (Millions of Dollars)
Transport
Increase tariffs for East Coast Gulf and coastal services
5.0
Canadian Transport Commission
-	reduce level of subsidies on the movement of certain commodities now provided under the Maritime Freight Rate Assistance Act and the Atlantic
Region Freight Assistance Act	5.0
-	reduce level of transcontinental and
other rail passenger service	10.0
-	eliminate subsidy on movement of flour and grain for export through
East Coast ports	11.0
Canadian National Railways - reduce
direct government financing	332.3*
Treasury Board
Bilingualism development, salary funds for
staff hired to replace trainees	10.0
Federal Labour Intensive Program	12.5
Urban Affairs
Ministry - Reduce grants and contributions	2.5
Savings through freeze on salaries of
an estimated 5,500 senior officers	13.5	______
Sub-total
446.7
332.3
Reductions from 1976-77 levels as planned in November
Agriculture
Farm Credit Corporation
Contribution to Saskatchewan Veterinary College
2.0
20.0
Energy, Mines and Resources
Atomic Energy of Canada Limited -reductions in cash flow for La Prade Heavy Water Plant by stretching out construction
60.0
Environment
Absorption of price increases
8.7
10184
[Stage Direction]
Non
Budgetary Budgetary (Millions of Dollars)
External Affairs
New posts abroad to be financed and manned within available resources (12)	0.8	
Reduce capital programs Canadian International Development	1.0	
Agency - reduction in aid level to $1,000 million in 1976-77	75.0	8.0
Indian Affairs
Parks - capital (20)
Northern Program - capital Northern exploration assistance Indian Program - schools and other capital (10)
Operating costs (60)
Industry, Trade and Commerce Shipbuilding subsidies DHC-7, finance through bank loan Federal Business Development Bank -reduce allocation Export Development Corporation
-	reduce allocation
-	require greater recourse to outside borrowing
Manpower and Immigration
Reshape Local Initiatives Program for 1976-77 (20)	35.0
National Health and Welfare
Medical Research Council - freeze
grants at 1975-76	level	6.6
National Revenue
Customs and Excise (30)
Taxation
Parliament
Members' salaries	0.6
1.0
0.3
15.0
50.7*
40.0
25.0 50.0*
13.5
3.7
0.4
11.0
6.4
December 18, 1975
[Stage Direction]
	Non Budgetary Budgetary (Millions of Dollars)
Post Office Limitation on the introduction and extension of postal service and facilities (305)	10.0
Regional Economic Expansion Freeze at 1975-76 level	11.6
Science and Technology National Research Council - freeze grants at 1975-76 level	8.2
Secretary of State Canada Council - freeze humanities research grants at 1975-76 level Canadian Broadcasting Corporation -	2.3
general reductions Administration Festival Canada activities Bilingualism Massey Hall Grant	15.0 1.2 0.2 2.6 2.5
Solicitor General Correctional Services - capital	7.0
Transport Additional charges to air carriers for Ministry of Transport facilities and services	7.2 1A.8
Reduce the level of funding to be made available under Part II of the Railway Relocation and Crossing Act National Harbours Board - reduce	5.0
capital expenditures	6.0
Treasury Board Contingencies Vote, on the assumption of the effect of wage guidelines	20.0
Urban Affairs Ministry - reduce operating expenditures (13) CMHC - reduce cash flow Federal Mortgage Exchange Corporation - require that $50 million of $75 million made available be used to	0.6 65.0
purchase CMHC mortgages so as to reduce CMHC cash requirements NCC - reduce capital and operating	50.0
expenditures	3.5 5.0
21130-23%
[Stage Direction]
December 18, 1975
Non
Budgetary Budgetary (Millions of Dollars)
Veterans Affairs
Reduce capital expenditures on hospitals	2.0
Reductions made during program review of Main Estimates submissions
-	Travel	4.9	
-	Professional and Special		
	Services	18.7	
-	Price increases not allowed	21.7	
-	Other items (furniture and		
	equipment, materials and		
	supplies, repairs and rentals)	56.6	
Sub-total	381.8	394.5GRAND TOTAL	828.5	726.8
December 18, 1975


[Stage Direction]
Crop Insurance - The federal government contributes 50 percent of the
premium costs of crop insurance in all provinces except the Atlantic Provinces (except PEI) and Quebec where it contributes 25 percent of premium costs and 25 percent of administration costs.
Development and Demonstration of Pollution Abatement Technology - The federal government provides support to industry in developing technology on air and water pollution problems.
PAIT - Assistance to firms in manufacturing and processing industries,
normally in the form of a non-repayable contribution for 50 percent of project costs.
DIP - There are two parts to this program:
(a)	assistance to product development in defence industries in
the form of grants to cover 50 percent of the cost of projects; and
(b)	industrial modernization for defence exports. Crants are paid on 50 percent of the project cost supplemented by loans for the other 50 percent.
Opportunities for Youth - Part of the Student Summer Employment and Activities Program (SSEAP) was initiated for the summer of 1971-72. The budget for 1975-76 for SSEAP was about $60 million with OFY the largest component at about $35 million.
Training Allowances, Canadian Manpower Training Program - The legislation calls for changing the level of allowances for changes in the cost of living.
Transcontinental Service - Passenger train subsidies for the transcontinental service under the Railway Act are estimated at $72 million for 1976-77. Reduced service will decrease the subsidy.
Treasury Board Bilingualism Development Vote - An amount of $50 million was contained in a TB vote in 1975-76 to cover salaries of those hired to replace public servants sent on language training and a few other relatively much less significant costs under the bilingualism program.
The amount will be reduced to $40 million in 1,976-77.
[Stage Direction]
December 18, 1975
Federal Labour Intensive Program - Additional labour intensive expenditures by the federal government to ease winter unemployment. Announced in the June 23 budget.
CIDA - Aid program for 1975-76 at $903 million is expected to equal .565 of 1 percent of GNP. The 1976-77 level of $1,000 million is expected to equal only .541 of 1 percent of GNP.
Shipbuilding Subsidies - The Shipbuilding Assistance Program provides a subsidy of 14 percent on ships constructed in Canada. The percentage will decline gradually to 8 percent in six years.
"Railway Relocation and Crossing Act, Part 2 - Special assistance provided where the costs of railway grade separation projects (under Part 3) exceed statutory limits*
Treasury Board Contingencies Vote - Departments carry a prescribed partial allowance for general salary increases in their votes. The Treasury Board carries another amount to make up the difference from the expected total. With the introduction of wage guidelines with the 8+2+2 formula, it was thought safe to reduce the contingency fund.
[Stage Direction]
Friday, December 19, 197S