1975-10-17

ROUTINE PROCEEDINGS


Mr. Eudore Allard (Rimouski):: Mr. Speaker, under the provisions of Standing Order 43, I ask the unanimous consent of the House to discuss an urgent and important question.
Since the main objective of the Bank of Canada is to control credit in the interests of our economic life, since also it is an institution whose policy is dictated by the government, I move, seconded by the hon. member for Abitibi (Mr. Laprise):
That this House take every possible action to enable the Bank of Canada to play adequately its role by directing its credit policy to promote the development of the national economy and by allowing the issue of loans at cost in public and semipublic areas.


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


Some hon. Members:: Yes.


Some hon. Members:: No.


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



ORAL QUESTION PERIOD


Hon. Robert L. Stanfield (Leader of the Opposition):: Mr. Speaker, I have a question for the right hon. Prime Minister relating to the restraint program. Has the government decided who will be on the anti-inflation review board in addition to the two distinguished individuals already appointed and who will be the administrator? If these decisions have not yet been taken, when may we expect to be informed?


Right Hon. P. E. Trudeau (Prime Minister):: Mr. Speaker, we have added a few more members to the board by order in council, but I believe it would be preferable if we could get the full contingent before making the announcement.


ANTI-INFLATION PROGRAM-REACTION OF PROVINCES
Robert Lorne Stanfield: supplementary question. Perhaps the Prime Minister might indicate when we might expect that information and, since we are beginning discussion of the legislation arising out of the white paper today, could the Prime Minister give us any more precise information about the response of the provinces in general who presumably will have a vital part to play in this program? In particular, has he had any direct reaction from Premier Barrett of British Columbia who is reported at least to have said some things antagonistic to the program? Is the Prime Minister in a position to give us any decisive information about the reaction of the provinces now that we are about to begin the discussion of the bill?
[DOT] <mo)


Pierre Elliott Trudeau: No, Mr. Speaker, on the last point I cannot. I have written to the premiers since last Monday's meeting, I believe, suggesting a date next week for meetings of the ministers of finance of the various provinces, and other ministers, with the federal Minister of Finance and other federal ministers. I expect that at that time they will ask detailed questions about the implementation of the plan and how it will work to improve the economic situation. We will know more then about their position. In the meantime I have not anything further to communicate beyond what I indicated to the House yesterday. The only premier who has discussed this with me since Monday is Premier Bou-rassa. He phoned and indicated his willingness to go along and under the law, establish institutions in his province to apply certain parts of the guidelines.


Robert Lorne Stanfield: Mr. Speaker, may I direct a further supplementary question to the Prime Minister? Can he be more precise as to the position taken by Premier Bourassa, and particularly with regard to the extent of the program which the government of Quebec wishes itself to administer? Has the premier of Quebec indicated a desire to establish a board in Quebec which will administer, within that province, perhaps some of the responsibilities which are to be administered by the federal board elsewhere in the country?


Pierre Elliott Trudeau: Mr. Speaker, I have been as precise with the House as Premier Bourassa has been with me. He was courteous enough to tell me his general intentions. I repeat, they will be worked out in detail at the meeting of

October 17, 1975
Oral Questions
federal-provincial ministers to which I just referred. What is clear in the minds of the premiers, from our meeting last Monday is that the government is determined to make the guidelines stick, and they will stick.


ANTI-INFLATION PROGRAM-APPLICATION TO MARKETING BOARDS
Mr. James A. McGrath (St. John's East):: Mr. Speaker, may I direct a supplementary question to the Prime Minister concerning consultations with the provinces? My question arises from references in the white paper to the effect that marketing boards will be discussed with provincial governments, to ensure that their operations are consistent with the guidelines. As the chairman and vicechairman of the proposed anti-inflation review board indicated that they intend to investigate marketing boards, has the government held these discussions with the provinces and, if so, is there agreement to put marketing boards within the general price guidelines outlined by the white paper?


Pierre Elliott Trudeau: Mr. Speaker, the answer is yes. It is clear that marketing boards, in their pricing practices, are expected to follow our general guidelines. On the question of whether this was discussed in detail with the provinces, the answer is no. That, again, will be discussed at the meeting next week.


ANTI-INFLATION PROGRAM-APPLICATION OF PRICE GUIDELINES TO FARMERS
James Aloysius McGrath: Mr. Speaker, in view of the Prime Minister's reply, may I ask the Minister of Finance the following question: Will the profit margins of farmers selling to marketing boards be allowed to increase, or will farmers have to prove per unit cost increases before being allowed to raise their prices?


Hon. Donald S. Macdonald (Minister of Finance):: Mr. Speaker, as the white paper says, the price of farm produce at the farm gate will not be subject to the guidelines.


ANTI-INFLATION PROGRAM-SUGGESTED MANDATORY PROVISION FOR COMPANIES TO GIVE PRIOR NOTICE OF PRICE INCREASES
Mr. Edward Broadbent (Oshawa-Whitby):: Mr. Speaker, may I direct my question to the Minister of Finance? Since the new chairman of the proposed anti-inflation review board indicated that the board will not systematically monitor all price increases but will monitor them selectively, and since the bill introduced yesterday contains no provision calling on the 1,500 companies selected for special control action to inform the board of price increases before prices are increased, is the government considering introducing such an amendment to the legislation at the appropriate stage, in order to make it mandatory at least for those 1,500 companies to give the board advance notice of and justification for proposed price increases?


Donald Stovel Macdonald: Mr. Speaker, there would be the practical consideration as to whether we want to deluge the anti-inflation review board with literally thousands of price changes, as this would occur.


John Edward Broadbent: Would it occur with everything?


Donald Stovel Macdonald: It would occur over a period of time. I put it to the hon. member that we import many thousands of different items into Canada, and I do not think the hon. gentleman, the NDP or anybody else has ever pretended that, through any magic formula, you can stop all prices from increasing.


Mr. Orlikow:: You think you can, and that is the problem.


Donald Stovel Macdonald: The hon. gentleman has so much to say; perhaps he should open his ears a little, instead of his mouth.


An hon. Member:: Touchy, touchy.


Donald Stovel Macdonald: However, I would point out to the hon. member that there is a power under the statute to make regulations in this regard. I think we will want to give some attention to whether this will be a useful proposal, and if an amendment will be required.


ANTI-INFLATION PROGRAM-REASON FOR FAILURE TO APPLY PRICE FREEZE
John Edward Broadbent: Where I come from, Mr. Speaker, that is known as having it both ways. I wish to ask the minister if the idea to put a freeze on these 1,500 corporations, most of which are non-competitive, was considered by the government. This idea was proposed by an expatriate Canadian, Professor Galbraith. When dealing with monopolies, you put the freeze on and make them justify price increases. Can the minister briefly explain to the House why that approach was rejected, quite apart from the problem of imported goods with which I agree entirely.


Mr. Speaker:: Order, please. In anticipation of the measure that will be before the House today, I have permitted questions on the general guidelines, particularly with regard to the reaction of the provinces and considerations of a general nature. However, I do not think we should go so far as to anticipate individual sections of the bill or questions that really are more germane to the debate on the actual measure itself. This debate will begin in about an hour's time. I do not want to cut down the area of questioning unduly, but I ask the hon. member to remind himself that we will be embarking on a debate on the actual measure. Perhaps that kind of question about that particular area might be more germane to that kind of provision.


ANTI-INFLATION PROGRAM-METHOD OF ENFORCING PRICE REDUCTIONS AS PRODUCTION COSTS REDUCED
John Edward Broadbent: Mr. Speaker, I have one final question. It is not with reference to the
October 17, 1975

bill, but with reference to the white paper in which the guidelines are proposed. It is suggested that reductions in production costs are expected to be passed on to the consumer. If the board has no intention of monitoring general price increases, how does the government propose to enforce this requirement that reductions in costs be passed on to the consumer?


Donald Stovel Macdonald: Mr. Speaker, while the board will obviously have to make some selections as to key sectors in which price increases will be of the greatest concern, it will be carrying on very extensive monitoring. It seems whether one is monitoring price increases or the absence of a price decrease, it is the same function. The board will indeed be carrying this out.


SOCIAL SECURITY
Mr. Gerard Laprise (Abitibi):: Mr. Speaker, may I direct a question to the Minister of National Health and Welfare.
The minister had indicated that a study had been undertaken with his provincial counterparts concerning a new federal-provincial agreement to secure an adequate income for the invalids who have not reached retirement age. Could the minister tell us now if the results of this study can be expected soon and whether he intends to make an early statement in the House on this matter?


Hon. Marc Lalonde (Minister of National Health and Welfare):: Mr. Speaker, at the end of the last federal-provincial conference on this subject, I tabled-if my memory serves me well-the press release which covers in part the point raised by the hon. member. Another federal-provincial conference will be held in late November or early December and I shall be happy to report to the House the result of the discussions that will have then taken place.
=1= * *


SALE OF TAINTED MEAT TO QUEBEC CONSUMERS- GOVERNMENT ACTION TO IMPROVE INSPECTION SERVICE
Mr. Paul Yewchuk (Athabasca):: Mr. Speaker, my question is to the Minister of National Health and Welfare as well. It deals with the distribution of tainted meat in the province of Quebec. In view of the charge made by the Quebec crime inquiry commission that the federal government has shown a lack of vigilance in protecting the consumer, has any action now been taken to increase the inspection services in order that the consumer will be properly protected?


Marc Lalonde: Mr. Speaker, the report referred to was made public only yesterday. I have not seen it. I did not get a copy, but I shall try to study it as soon as possible, and then answer the hon. member's questions.

Oral Questions


SALE OF TAINTED MEAT TO QUEBEC CONSUMERS- SUGGESTED AMENDMENT TO FOOD AND DRUGS ACT TO PUT BURDEN OF PROOF ON SELLER
Paul Yewchuk: For the edification of the minister, the report recommends that there be an amendment to the Food and Drugs Act to place the burden of proof on anyone charged with dealing in tainted meat, which is a departure from the present law. Has the minister given consideration to making such an amendment to the Food and Drugs Act?


Marc Lalonde: Mr. Speaker, as I have just said, I have not read the report and I should like to do so before answering. However, I am convinced that all members will have to do some serious thinking before changing the burden of proof, even in a case such as this, because it is a very serious matter in criminal law.


SALE OF TAINTED MEAT TO QUEBEC CONSUMERS-PROPOSED INQUIRY INTO CONDUCT OF INSPECTORS
Paul Yewchuk: In view of the suggestion in the report that the federal government had known about the distribution of tainted meat in the Province of Quebec for the past seven years, since 1968, would the minister agree to initiate a ministerial inquiry into the conduct of officers of his department, namely, the inspectors who had known about this situation, in order to determine why no action was taken until the Quebec inquiry made its revelations?


Marc Lalonde: Mr. Speaker, I cannot accept any of the premises stated by the hon. member. If he has his own copy of the report, I should be very happy to read it, but I am not willing to accept his allegations.


POST OFFICE
Mr. R. E. McKinley (Huron-Middlesex):: Mr. Speaker, I have a question for the Postmaster General. Since, according to the news, government departments have made arrangements for the delivery of their mail and are ready in the event of a long strike by postal employees, I should like to ask the hon. gentleman what arrangements he has made for small business people to send and receive mail, for example, accounts, bills and cheques? What arrangements have been made to enable weekly newspapers to be despatched as well as mail by private individuals?


Hon. Bryce Mackasey (Postmaster General):: It is
normal that the government would set up contingency plans but I am not prepared to reveal them, particularly
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since negotiations resumed at about 9.30 this morning and are proceeding at a fairly satisfactory pace.


INTERPRETATION OF STRIKE VOTE
Hon. W. G. Dinsdale (Brandon-Souris):: My supplementary arises from news reports interpreting the vote which has just been completed by the postal workers as a strike vote. Can the minister confirm that the vote actually calls for endorsation of the national executive's formal written request to the government calling for further negotiations on the basis of the Moisan report and emphasizes vital issues such as fringe benefits, job security, automation and the employment of casual workers rather than the monetary issue as such?


Bryce Stuart Mackasey: Yes, Mr. Speaker. The vote just taken is subject to interpretation by whomever wants to interpret it in their own way. To suggest it is an overwhelming vote by the membership for strike action would be unfair to the members. For instance, no fewer than 15 locals in the maritimes, which usually show some intelligence-


Some hon. Members:: Hear, hear!


Bryce Stuart Mackasey: -there are just pockets of them-have said they want to know just what they are voting on. What is more important is that we are back to the bargaining table. Workers, with the exception of those in only one little area in Canada, are working. Of course, if workers in too many areas stop working, as is their right, we would have to break off negotiations in order to permit the national executive and the negotiating team to talk reason to these people for jeopardizing what could be a fair settlement as an alternative to a prolonged strike.


EXISTENCE OF CONTINGENCY PLAN FOR MAIL DELIVERY IN EVENT OF STRIKE
Mr. John A. Fraser (Vancouver South):: Are we to take it from the remarks of the hon. gentleman that there is, in fact, a contingency plan in existence to assist small businesses and private individuals to move mail in the event that the postal workers do not carry on their duties, or is he simply telling the House that this is something which would be looked into at a later date?


Bryce Stuart Mackasey: I am not
telling the hon. gentleman, either. I am simply saying that the news last night stated that the government has a contingency plan for its own mail, as I mentioned earlier, for the distribution of essential cheques and social benefit payments. In a democracy such as ours some segments of the economy must be severely, sometimes unjustifiably, inconvenienced; but that is the price of our particular system.


POSSIBLE EXEMPTION OF EMPLOYEES FROM WAGE GUIDELINES-GOVERNMENT POSITION
Mr. Lincoln M. Alexander (Hamilton West):: Mr. Speaker, may I direct my question to the Prime Minister. In light of the fact that the Postmaster General has

indicated that postal workers are exempt under the escape provisions per se, while at the same time the Minister of Finance says no, that is not so, that any decision in this regard must go before the anti-inflation board so we have a conflict here-would the Prime Minister clear up the matter?


Pierre Elliott Trudeau: Mr. Speaker, there is no conflict unless it is in the hon. member's understanding. The white paper applies to everyone. The white paper itself contains the statement that special consideration will be given to certain cases, which are defined. Special consideration will indeed be given by the Anti-Inflation Board; it will judge whether any actions which have been taken by the federal government are within the guidelines, and we will respect the board s judgment.


THE CANADIAN ECONOMY
Mr. Maurice Dupras (Labelle):: Mr. Speaker, I wish to direct a question to the right hon. Prime Minister. It is supplementary to those which the Leader of the Opposition directed to him concerning the provincial board Premier Bourassa intends to establish.
Will the Canadian government be invited to share the cost of such a commission or board, or will the province of Quebec fully assume the cost of such a board?


Pierre Elliott Trudeau: Mr. Speaker, this aspect was not discussed with the provinces. I am grateful to the hon. member for bringing it to my attention. My first reply would be that if a province wished to establish its own board instead of using ours, it would have to assume all costs, as it is indeed the case when a province-Quebec for instance and Ontario sometimes-has its own tax-collecting agency. It must then assume the whole cost.


ANTI-INFLATION PROGRAM-EFFECT ON FARM INCOME AND RETAIL FOOD PRICES
Mr. John Rodriguez (Nickel Belt):: Mr. Speaker, my question is to the Prime Minister. WAs the Minister of Agriculture expressing government opinion with respect to the new wage and price controls policy of the government when he said recently in St. Jacob's, Ontario that Ottawa's wage and price controls will have no effect on farm incomes and little impact on retail food prices?


Pierre Elliott Trudeau: Mr. Speaker, I will take notice of that question. I did not understand it, but I will take notice of it and answer on Monday.


John R. Rodriguez: Mr. Speaker, in view of the fact that the Prime Minister did not hear the question I will repeat it because I think the answer is very important. Was the Minister of Agriculture expressing government opinion with respect to the new wage and price controls policy of the government when he said recently in St. Jacob's,
October 17, 1975

Ontario that Ottawa's wage and price controls will have no effect on farm incomes and little impact on retail food prices?


Pierre Elliott Trudeau: Well, Mr. Speaker, he was not reflecting government opinion because that would be a matter of foresight.


Some hon. Members:: Oh, oh!


Pierre Elliott Trudeau: As the Minister of Finance indicated, and as the white paper makes clear, farmers' prices are not frozen. They are not subject to the guidelines. What effect this will have at the retail level will depend very much, (a), on what the marketing boards do and, (b), whether or not some of the costs that the retailers are allowed to pass on are absorbed. We are confident that they will and that costs will be kept down, but to what degree, I repeat, will be a matter of prophecy and I do not want to engage in that.


ANTI-INFLATION PROGRAM-SUGGESTED APPLICATION TO RETAILERS OF PROVISION RESTRICTING PRICE ADJUSTMENTS TO ONCE IN THREE MONTHS
John R. Rodriguez: Mr. Speaker, I have a final supplementary question which I will address to the Minister of Finance. In view of the fact that the government's wage and price freeze in this anti-inflation fight indicates that manufacturers will not be allowed to increase their prices more frequently than once every three months but that retailers and wholesalers are exempt from this injunction, can the minister assure the House that such an injunction will also be applicable to retailers and wholesalers?


Donald Stovel Macdonald: Well, Mr. Speaker, I should just like to correct the hon. member's terminology; it is not a "freeze". As I mentioned a moment ago, it is recognized that costs will be incurred, for example, with regard to imported fruits and vegetables which are so much a part of the marketing scene in Canada in the wintertime. With regard to the suggestion of the hon. member that any variations in import costs during the winter should not be passed on, this does not seem to be practical.


DATE OF SIGNING PIPELINE TREATY WITH UNITED STATES- PROVISION FOR COLLECTION OF STATE AND PROVINCIAL TAXES
Mr. Gordon Ritchie (Dauphin):: Mr. Speaker, would the Minister of Energy, Mines and Resources tell the House when the pipeline treaty with the United States may be signed and whether it will particularly include provisions to prevent undue harassments in the form of taxation by provincial or state jurisdictions as has been suggested as a possibility by the proponents of the Alaska pipeline?
Oral Questions


Hon. Alastair Gillespie (Minister of Energy, Mines and Resources):: Mr. Speaker, I cannot give the hon. member the precise date when it will be signed but I can indicate to the House that we have been making substantial progress with the United States on this treaty. The one issue that remains to be settled at the moment involves the question of fiscal regimes and protection in respect of state and provincial taxes.


HOUSING
Mr. F. Oberle (Prince George-Peace River):: Mr. Speaker, my question is directed to the Prime Minister and refers to his announcement on Wednesday of the appointment of Mr. William Teron, President of CMHC, to the post of acting secretary of the Ministry of Urban Affairs. Since this appointment places Mr. Teron in the position of making policy as well as the execution of such policy through another agency, would the Prime Minister tell us whether the government has now recognized that the Ministry of Urban Affairs and Central Mortgage and Housing Corporation were not synchronized in their approach to dealing with the Canadian housing prices, and whether it is the government's intention to combine the two agencies at this time under the chairmanship of Mr. Teron?


Pierre Elliott Trudeau: Mr. Speaker, this is a matter of internal organization with which we are proceeding. There is a temporary solution which has been made public, and if any further actions are taken I will inform the House about them.


DATE OF ESTABLISHMENT OF MORTGAGE CORPORATION-ROLE OF MR. TERON
Frank Oberle: Mr. Speaker, would the Prime Minister tell the House whether the government is now prepared to implement the act passed by parliament to establish a Federal Mortgage Corporation as a follow up to this latest move, and whether Mr. Teron through his many, varied and sizeable holdings will be asked by the government to facilitate such implementation?


Pierre Elliott Trudeau: Mr. Speaker, I am not sure what the insinuation was about private holdings, but I can assure the hon. member that the conflict of interest guidelines have been followed strictly by Mr. Teron.


DATE OF MEETING WITH PROVINCIAL MINISTERS AND SUBJECTS ON AGENDA
Miss Flora MacDonald (Kingston and the Islands):: Mr. Speaker, my question is for the Minister of State for Urban Affairs. In view of the fact that the mess in the government housing policy is now becoming apparent even to Liberal MP's, as so succinctly put by the hon.
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October 17, 1975
Oral Questions
member for Ontario who said that his government has been notably stupid in its housing policies-


Some hon. Members:: Oh, oh!


An hon. Member:: She is after your job, Barney.


Flora Isabel MacDonald: This is something which we on this side of the House have been stating for many months. Will the minister say when the proposed meeting with the provincial housing ministers will take place and whether the agenda will include proposals to increase the supply of serviced land, as promised in the white paper, as well as methods by which the abnormally high interest rate will be reduced?


Hon. Barney Danson (Minister of State for Urban Affairs):: Mr. Speaker, without accepting the preamble to the question at this time when we are making quite incredible progress, which a couple of months ago we would not have thought possible, when the percentage of low and modestly priced housing has increased by some 50 per cent this year and when our housing starts are close to double the rate of our neighbour to the south, let me answer the question by stating that I am not quite certain about the proposed meeting of the housing ministers to which the hon. member has referred. We are in continuous contact, and I am always pleased to meet with the housing ministers when it is felt that is necessary. Quite frankly, I am in touch with their offices at the present time to see if a meeting is necessary at this time, as suggested by the new housing minister for Ontario. It is possible that such a meeting will take place, but the idea does not appear to have unanimous acceptance. If it is necessary, we will meet at any time with the provincial housing ministers.


AGRICULTURE
Hon. Alvin Hamilton (Qu'Appelle-Moose Mountain):: Mr. Speaker, in the absence of the Minister of Agriculture I would address my question to the acting minister. Will he please inform the minister that the official opposition to Her Majesty's government in this House is in favour of the Agricultural Stabilization Act terms being carried out in connection with the cow-calf floor price. The government promised this in the middle of September, and I am simply responding to the minister's challenge in his reply to the hon. member for Vegreville yesterday, by stating that the official opposition wants to see the terms of the act carried out, including the cost of production formula added in.


LABOUR CONDITIONS
Mr. Ray Hnatyshyn (Saskatoon-Biggar):: Mr. Speaker, over a year ago Mr. Justice Bayda was appointed as com-

missioner to examine all aspects of grain handling through the port of Vancouver and to make recommendations to alleviate and improve the situation. As the government has now had Mr. Justice Bayda's report for some considerable time, can the Minister of Labour advise the House when this report will be tabled and when the government will bring forward measures to deal with this most serious and important matter?


Hon. John C. Munro (Minister of Labour):: Mr. Speaker, I would anticipate that the report will be tabled in the House within the next week. During this time we have been looking for certain people to assume certain responsibilities under the report and I hope to name those people at the same time I table it.


MANPOWER
Mr. T. Lefebvre (Pontiac):: Mr. Speaker, I would like to direct a question to the Minister of Manpower and Immigration relating to Local Initiatives Programs.
Is the minister aware that for the Pontiac riding the budget is about $716,000 whereas the requests are for $4,340,000, since 122 acceptable projects are under study? I am told that the available funds cover only 34 of those projects, leaving aside 88 others. Since the large number of project proposals shows not only the interest of the people from Pontiac in that program but above all the great needs of my riding, could the minister give-


Mr. Speaker:: Order, please. This is an excellent and very important representation, but not a question.


Thomas Lefebvre: Here is my question, Mr. Speaker. Could the minister tell the House if another study will be made to allocate extra funds to those areas where great need exists?


Hon. Robert K. Andras (Minister of Manpower and Immigration):: Mr. Speaker, I think I would lead the House astray if I indicated any likelihood of additional funds in this area for this year. I am sympathetic toward the representations and concerns of this hon. member and others. Let me give an indication of the magnitude of this by saying that we now have on hand 16,405 applications amounting to $526 million against which we have an allocation available out of $150 million of about $135 million. This is a substantial program but there is no way, I think, that we can look forward to meeting all the demands upon it at this time.
October 17, 1975


FINANCE
Eudore Allard: Mr. Speaker, I should like to put a question to the Minister of Finance.
As the Canadian housing industry is faring very poorly and, to my mind, as the problem lies above all in prohibitively high interest rates, would the minister tell the House whether he would be willing to recommend rolling back interest rates to stimulate that industry, while at the same time helping solve the unemployment problem?


Donald Stovel Macdonald: Mr. Speaker, as I said, the monetary policy of the government is determined with the governor of the Bank of Canada. But we have accepted that, because of the high level of international interest rates, it is not possible, for the time being, to lower interest rates in Canada. My colleague, the Minister of State for Urban Affairs, for instance, will be introducing programs intended to reduce interest rates in specific cases, but I cannot say that, generally, rates will be lowered in the industry mentioned by the hon. member.


Eudore Allard: Mr. Speaker, on a supplementary. Will the minister tell us whether he is speaking of housing or industrial construction?


Donald Stovel Macdonald: Mr. Speaker, I can refer the hon. member to my colleague. There are a few programs through which interest rates are subsidized in the housing industry.


EXTERNAL AFFAIRS
Mr. Andrew Brewin (Greenwood):: Mr. Speaker, my question is addressed to the Secretary of State for External Affairs. On a recent visit to Japan the Minister's colleague, the Minister of State for Science, is reported as saying that he expected the agreement with South Korea for safeguards on the sale of a Canadian nuclear reactor would be signed soon and that it was a matter of getting the right kind of words rather than getting an agreement. Assuming this to be the situation, would the minister say whether the safeguards negotiated are adequate to prevent the possible diversion to nuclear weapons and is the minister prepared to table the proposed agreement so that Parliament and the people of Canada can judge for themselves whether the safeguards proposed are adequate or whether we are indeed embarking on a grave and possibly tragic course of nuclear proliferation?


Hon. Allan J. MacEachen (Secretary of State for External Affairs):: Mr. Speaker, the negotiations with the Republic of Korea are in their final stages and we hope the agreement will be concluded shortly. I intend to table the agreement in the House of Commons when it is concluded.
Oral Questions


THE CANADIAN ECONOMY
Mr. Robert Muir (Cape Breton-The Sydneys):: Mr. Speaker, my question is for the Minister of Finance. Observing the niceties of the House may I say: "Congratulations Don; you have lots of headaches". In light of the fact that the school teachers of Nova Scotia, as a result of the crushing burden of inflation, have been working for almost near-starvation wages for three years, and in view of the fact that they are presently negotiating for a new wage agreement, will they be subjected to the freeze as laid down by the Prime Minister and the minister himself or will the teachers and stevedores of the International Longshoremens Association in Nova Scotia receive the same treatment as the Postmaster General has indicated the postal workers will receive.


Donald Stovel Macdonald: Well, Mr. Speaker, may I express my appreciation to the hon. member from Eastern Nova Scotia, as one who ancestrally comes from Nova Scotia, for the kind words. With regard to his question, there are several answers that will have to be given by the provincial government before I could respond to it. Insofar as the public sector is concerned, we look forward to the answer from Nova Scotia concerning whether it would cover the public sector as proposed by the bill under the federal tribunal or whether it would do as Quebec is doing and set up its own. With regard to the private sector, the guidelines would apply and in that sense the anti-inflation tribunal would have to consider the situation. It would have to consider that with other groups in the transitional situation to which the hon. member referred. I say that in light of the sense of justice that where groups work side by side or in other ways are closely comparable, we should so far as possible try to analogize their basic compensation.


SOCIAL SECURITY
Hon. Marcel Lambert (Edmonton West):: Mr. Speaker, my question is directed to the Minister of National Health and Welfare. I wonder whether the minister could tell us if he has received the report from the Canada Pension Plan Advisory Council or whether he has taken particular cognizance of the criticism of the Chairman of that council with regard to the borrowing formula under the plan whereby the provinces borrow from the fund. Since there is no government contribution into the Canada Pension Plan, any deficiency or any lack of proper funding is strictly at the expense of the beneficiaries of the Canada Pension Plan which so far in ten years amounts to well over hundreds of millions of dollars.


Marc Lalonde: Mr. Speaker, I have not only read the report, but

October 17, 1975
Oral Questions
I have tabled it in this House yesterday afternoon. I therefore hope that the hon. member has had the opportunity to read it since then. The president of the advisory committee gave a news conference yesterday for the media on that subject. I am well aware of the main criticism made about that report, namely that in recent years the provinces other than Quebec have been given a preferential rate on the money they needed to borrow. It is a matter which I have raised previously in many speeches. Of course, any amendment in that regard would have to be discussed with the provinces since any such amendment will have a substantial impact on them and since it is impossible to amend the Canada Pension Plan without the consent of at least two thirds of the provinces making up two thirds of the population.


AIR CANADA
Mr. Don Mazankowski (Vegreville):: Mr. Speaker, I should like to direct a question to the Minister of Transport. Is the minister in a position to report on the status of the Estey inquiry into the operations of Air Canada. Can he say whether the report is complete, whether he has seen it and can he advise when the report might be made public.


Hon. Otto E. Lang (Minister of Transport):: Mr. Speaker, I do not have the report as yet and do not yet know on what date it will be received or when it will be possible to make it public. I understand that it is a fairly large report and that some further time is required for its final completion.


POSSIBLE REFERENCE OF 1974 ANNUAL REPORT TO COMMITTEE
Donald Frank Mazankowski: May I ask the minister a supplementary question. In view of the fact that the annual report of Air Canada has not been considered by the Standing Committee on Transportation for a number of years, would the minister indicate to the House whether it is his intention to refer the 1974 annual report to the standing committee as soon as possible so that the matter might be followed up by the committee.


Otto Emil Lang: Mr. Speaker, I am certainly prepared to note the wishes of the committee in regard to the work they are doing. They were undertaking a fairly large piece of work in respect of the over-all transportation policy and a discussion with regard to the next steps in that would be useful.


MANPOWER
Mr. Bill Clarke (Vancouver Quadra):: Mr. Speaker, I have a question for the Minister of Manpower and Immi-

gration which concerns the Local Initiatives Program and the Habitat Conference. In view of the fact that the government has neglected to provide funds for the association in Canada serving organizations on human settlements, ACSOH, the agency responsible for providing facilities for the non-governmental organizations participating in the Habitat 75 Conference in Vancouver next year, with the result that 60 per cent of the LIP budget for Vancouver Quadra was recommended for these projects, will the minister consult immediately with his cabinet colleagues with a view to obtaining alternate federal funds for this international conference so that the residents of Vancouver Quadra will not be penalized by the effective removal of 60 per cent of their LIP allocation.


Robert Knight Andras: Mr. Speaker, I will note the recommendation of the hon. member, but I would add that the primary objective of the Local Initiatives Program is to provide employment to people who would not otherwise be able to obtain it. Certainly, the validity of the project itself is very important; it is of prime importance. However, I will look into the situation.


SUGGESTED DEFERRAL FOR INCOME TAX PURPOSES OF INTERIM PAYMENTS
Mr. Bert Hargrave (Medicine Hat):: Mr. Speaker, I should like to direct a question to the minister responsible for the Canadian Wheat Board. The question is in respect of the recent announcement made by the Canadian Wheat Board. In view of the very excellent co-operation of prairie grain growers in responding to the call of the Canadian Wheat Board for stepped up deliveries of the new grain crop, would the minister respond by considering the suggestion that farmers be given the option of deferrment of these adjustment payments, since current regulations do not permit deferrment for tax purposes?


Otto Emil Lang: Mr. Speaker, the question has been put to me by many hon. members and by many farmers, however, not incorrectly as was the case yesterday in connection with the need to get deliveries of grain, which obviously is not in issue because it should be clear that the increase in initial price can in fact be deferred in relation to grain delivered after October 9 when the increase took place. The issue is therefore in regard to the adjustment payments on grain delivered prior to October 9. In the ordinary course, those payments would be received and would be a part of the income tax position of farmers. I think it may be difficult to think in terms of any kind of change in the law in relation to that, and the only possibility is whether the way in which the cheques are in fact delivered can alleviate the situation, and I am looking into that question.


Herbert Thomas (Bert) Hargrave: I want to point out to the minister that my question did relate to the adjustment figures payment, of course, but does he not feel that the excellent delivery
October 17, 1975

was due in a good measure to the understanding of prairie grain growers that they would have at least this option of deferring that adjustment payment?


Otto Emil Lang: No, I do not think that would be the case 'because they knew in the last year that when the adjustment took place in November, it was possible for us to have the adjustment cheques go out only after January 1, but that was a mechanical situation which produced the deferrment result. Those farmers, organizations and hon. members opposite who were encouraging an immediate increase in the initial price should have realized that that carried with it in fact a tax consequence adverse to those who did not want to show additional income in the current year.
I should say that I was not correcting the hon. member when I referred to the lack of impact on deliveries, but rather the remarks of his colleague, the hon. member for Saskatoon-Biggar, who yesterday seemed to think that there was some connection.


THE CANADIAN ECONOMY
Mr. Sinclair Stevens (York-Simcoe):: Mr. Speaker, my question is for the Minister of Finance. On Tuesday the minister, referring to his anti-inflation program, stated that the statutory provisions will apply to somewhat more than 1,500 firms, roughly 5 per cent of the total number of firms in Canada, and covering approximately 2,300,000 employees of those firms. Would the minister indicate if it is proposed to publish a list of the 1,500 firms, and if so, when?


Donald Stovel Macdonald: Mr. Speaker, the chairman of the Anti-Inflation Board has already been in touch by correspondence with a substantial number of firms. I think it would be useful to have this kind of information available, and I will seek it from him at the earliest possible date.


BROADCASTING
Mr. John Reynolds (Burnaby-Richmond-Delta):: Mr. Speaker, I have a question for the Acting Minister of Communications. It is a follow up to the question I asked the other day. Has the minister yet been able to find out why the CBC French network began to install its antenna on Mount Seymour for channel 26?


Otto Emil Lang: Mr. Speaker, I was in the process of writing a note to the hon. member to the effect that I can confirm that construction has indeed started in order to avoid any extra long delay in terms of providing service, assuming that a
Oral Questions
licence is issued, but of course there could be no possibility of beginning broadcasting without actual approval by way of licence.


Some hon. Members:: Oh, oh!


John Douglas Reynolds: In view of the restraint program which the federal government has announced, and in view of the fact that channel 26 has already been approved for a private UHF channel, would the minister ask the CBC to sell that installation to the private company which is going to be on channel 26 instead of having to ask them to move to another channel, thereby avoiding installing the CBC French network for a year or two until it is needed?


Otto Emil Lang: The restraint program is not designed to stop construction and investment in the private sector in Canada.


AIR TRANSPORT
Mr. Jack Murta (Lisgar):: Mr. Speaker, I should like to direct a question to the Minister of Transport. Before I ask my question I think I can say for all or most members of the House that we are certainly happy that the threatened strike of aeroplane pilots has been averted, at least for tomorrow.
I would like to ask the minister what the government is going to do now that the strike has been averted with regard to getting the committee together to discuss the English-French problem which has arisen in the province of Quebec in relation to the five airports, and further to discuss the grievances which the airline people have.


Otto Emil Lang: Mr. Speaker, I am not at all sure that that particular committee would be the best mechanism for making progress in regard to the problem the airline pilots have raised. We have been having, and will continue to have, discussions with all interested parties to demonstrate that, while where convenient and possible, we would want to make French language facilities available to pilots, the uppermost consideration must be conditions of safety in flight. We will continue discussions with all interested groups involved in the air industry to demonstrate that that is what we are trying to accomplish. We will thereby hope to encourage a certain amount of goodwill on the part of all the groups, some of which have perhaps been fighting with one another rather more strenuously than is desirable.


BILINGUAL AIR TRAFFIC CONTROL COMMUNICATIONS- POSSIBLE ENLARGEMENT OF PLAN
Jack Burnett Murta: I gather that the existing policy for English and French communication at the five airports in the province of Quebec will stand. Is there any thought being given to the policy being enlarged to include all the airports in the province of Quebec?

October 17, 1975
Oral Questions
Hen. Otto E. Lang (Minister of Transport): As I
indicated, any such enlargement would only occur once we were quite satisfied that the safety requirements were in fact being met. There is therefore no immediate plan for such enlargement. In a case such as the Quebec city airport we are working on improved procedures to allow for even more effective handling of the kind of traffic which has been attracted to that airport after the change in policy which allowed pilots to use the French language when that was the most appropriate language for them on landing, and we will continue to work on the various recommendations, but always with safety very much in mind.


MANPOWER
Mr. Albert Bechard (Bonaventure-Iles de la Madeleine):: Mr. Speaker, my question is directed to the very sympathetic President of the Treasury Board.
In answer to a question put to him yesterday by the hon. member for Bellechasse on the possibility of increasing funds for the LIP programs, the President of the Treasury Board alluded to the budget introduced last June by the hon. member for Ottawa-Carleton, who was Minister of Finance at the time, and he said this, and I quote:
-if the hon. member wants to know if we are going to add more money to the budget brought down by the hon. member for Ottawa-Carleton last June, the answer is no.
If I am not mistaken, as the amount in the budget of the former Minister of Finance was more than $300 million, does not the President of the Treasury Board, in the circumstances and given the numerous demands from all parts of Canada, including the Gaspe Peninsula and the Magdalen Islands, intend to give an additional amount over the $350 million to meet the needs of the Canadian people?


Hon. Jean Chretien (President of the Treasury Board):: Mr. Speaker, I must answer with as much sympathy as possible that it is now impossible to change the estimates as regards LIP programs for the present year.


Bryce Stuart Mackasey: Mr. Speaker, I have made this point rather forcibly on a number of occasions. Contrary to any propaganda that may have gone out, our representative on the conciliation board, Mr. Boncause accepted the basic premise of the chairman, Judge Moisan that there was a catchup needed comparable to that of the letter carriers and he recommended an identical sum of money and the identical length of term. I accepted that on behalf of treasury and Post Office and reiterated, on half a dozen occasions that until the union came to its senses on the 71 per cent for a 30 hour week it was obvious there was no progress to be made at the bargaining table. Now that their vote is in-I am not sure what its purpose was-we have at least come to the point that we are now negotiating. I hope progress will be made which with endorse again that particular report and settle it according to the guidelines and according to the restraint program, particularly in light of the fact this settlement has been recommended not only by Judge Moisan in this case but by an equally competent authority, Mr. Martin of the letter carriers.



ROUTINE PROCEEDINGS


[Stage Direction]
Sixth report of Standing Committee on Privileges and Elections-Mr. Blaker.
[Editor's Note: For text of above report, see today's Votes and Proceedings.]
Mr. Speaker:: Introduction of bills: the hon. member for New Westminster (Mr. Leggatt). Stand.
Mrs. Appolloni, seconded by Mr. Douglas (Bruce-Grey), moves for leave to introduce a bill entitled an act respecting National Employment of the Handicapped Week.


Mr. Leggatt:: I rise on a point of order, Mr. Speaker. Perhaps you missed my nod indicating that I was intending to introduce the bill you referred to standing in my name.
* *
*


POST OFFICE
David Orlikow: Mr. Speaker, I would like to direct a question to the Postmaster General. He indicated earlier that negotiations were taking place between the government and the postal workers' union. I would like to ask the minister whether he or the government has indicated either verbally or in writing to the union that the government is prepared to accept the recommendations made by the chairman of the conciliation board.


Mr. Speaker:: Order, please. I inadvertently took the movement to indicate that the hon. member for New Westminster was prepared to have the bill stand. The hon. member moves for leave to introduce a bill entitled "An act for the parole of Dr. Henry Morgentaler", which I might say has given the Chair considerable concern in respect of its procedural regularity.
I am sure the hon. member is familiar with the difficulty in that the bill, rather than being an amendment to the general law, appears to be a specific application of law to only one person, or an exemption from the general law for the benefit of one person. It therefore would appear to the Chair to be the subject matter, not of a private member's public bill as it is drawn, but of a private member's private bill, which is different in procedure.
October 17, 1975

If the hon. member proposes to argue that point, I think he ought to have the opportunity. However, I think that opportunity ought not to arise at this hour of the day but, rather, during private members' hour. I do not think we should engage in that kind of procedural argument now and hold up the kind of measure that is to be debated by the House today.
I wonder if we might not stand the bill for the moment, not in an indefinite way but simply for today or Monday, and come to an agreement that soon in one of the private members' hours this matter should be raised and argued at five o'clock. If we cannot come to that resolution, perhaps the hon. member can be permitted to go ahead and argue his point on Monday at three o'clock. Is that agreed?


Stuart Malcolm Leggatt: Thank you, Mr. Speaker, that is agreed. Apparently I was not aware of the procedure; I thought we could introduce the bill for first reading and hold the argument regarding the procedural question. But I defer to Your Honour's ruling, of course, and that is quite satisfactory.


NATIONAL EMPLOYMENT OF THE HANDICAPPED WEEK ACT
Mrs. Ursula Appolloni (York South) moved: for leave to introduce Bill C-412, respecting National Employment of the Handicapped Week.


Some hon. Members:: Explain.


Ursula Appolloni: Mr. Speaker, the purpose of this bill is to create a climate of public awareness of the value and fairness of employing handicapped men and women, and to encourage all employers throughout Canada to review and broaden their policies toward the employment of the handicapped.


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

[Stage Direction]
(Questions answered orally are indicated by an asterisk.)
Mr.   J.-J. Blais@Parliamentary Secretary to President of the Privy Council: Mr. Speaker, the following questions will be answered today: 1,176, 2,920, 2,921 and 2,972.
Order Paper Questions


Mr. Cossitt: 1.	With reference to the statement by the Prime Minister on page 2135 of Hansard on May 8, 1974 to the effect he assured the Member for Leeds that the Liberal Party was paying for the use of the National Conference Centre by an international gathering of Liberals and with reference to the answer to Question No. 67 to the effect that no rental was paid by the Liberal Party for use of the National Conference Centre on the occasion in question (a) how does the Prime Minister explain this discrepancy (b) did the Prime Minister misinform or mislead the House in his statement of May 8, 1974?
2.	(a) What is the total cost of all aspects of the operation of the National Conference Centre for any period of 24 hours (b) what was the total cost of all aspects of the operation of the Centre for the period of approximately five days that it was in use by the Liberal Party from April 29, 1974 to May 3, 1974 (c) will the government be billing the Liberal Party for this sum paid for by taxpayers money?


Hon. Mitchell Sharp (President of the Privy Council):: 1. (a) and (b) It is suggested that the hon. member for Leeds review the statement and answer referred to. Catering and similar expenses were not charged to public funds. Therefore no discrepancy exists. The House was not misinformed or mislead.
2. (a) and (b) The work and man-hours involved in arriving at a 24-hour cost of operation is not warranted. In the period April 29, 1974 to May 3, 1974, 1,860 persons attended 26 conferences and meetings in the Conference Centre, (c) See answer to Part 1.


Mr. Reynolds: Is information made available as to those who receive PAIT grants and, if not, for what reason?


Mr. Marcel Roy (Parliamentary Secretary to Minister of Industry, Trade and Commerce):: The name of PAIT grant recipients and the amount paid is annually listed in the Public Accounts of Canada. Such information is therefore made available on request.


Mr. Hnatyshyn: Have various Canadian companies made proposals to the government for the purchase of De Havilland Aircraft of Canada Limited, Toronto and Canadair Limited of Montreal and, if so, which companies submitted bids and what was the amount in each case?


Marcel-Claude Roy: Two Canadian companies, Spar Aerospace Products of Toronto and Cornat Industries of Vancouver submitted a joint proposal to acquire Canadair and de Havilland. The purchase price was subject to negotiation. To date negotiations have not been undertaken.

October 17, 1975
Anti-Inflation Act ELECTRIC ROAD VEHICLES


Mr. Robinson: 1.	Are any Canadian companies developing electrical road vehicles and, if so, what are their possibilities of success?
2.	Does the government intend to encourage such developments with financial assistance in the interest of alleviating pollution and energy problems?


Marcel-Claude Roy: 1. There are several Canadian companies in various stages of developing electric road vehicles. However, as yet none have reached the production stage and it is not possible to determine their commercial acceptability.
2. Yes, the Government is encouraging such developments under the existing incentive programs.


Mr.   J.-J. Blais@Parliamentary Secretary to President of the Privy Council: I ask, Mr. Speaker, that the other questions be allowed to stand.


Mr. Speaker:: Are the other questions allowed to stand?


Some hon. Members:: Agreed.



GOVERNMENT ORDERS


Donald Stovel Macdonald: that Bill C-73, to provide for the restraint of profit margins, prices, dividends and compensation in Canada, be read the second time and referred to the Standing Committee on Finance, Trade and Economic Affairs.
He said: Mr. Speaker, we had an extensive survey of this question earlier in the week on the day devoted to the economy. Much of what would have been said on second reading was said at that time, so I will not repeat it; rather, I will deal with a number of questions raised by opposition members in that debate and since then in the question period, and a number of questions that have arisen in the community. I will also address myself to some of the specific terms of the bill which I think have relevance in its consideration.
I would start off by reminding the House that, while we are dealing with a specific part of the program, the government's request for support for the anti-inflation program is directed not just to any single group but to the whole community. It is founded on the expectation that there is, amongst Canadians, a sense of fairness with regard to the sharing of the resources of our community and everyone, whatever his income level, whatever his occupation, should recognize that we have a responsibility for restraining our demands on the community.
Having said that, however, I would recognize at once that particularly those at the lower end of the income

scale are in the least position to pose demands of that kind and are in the most difficult position from the standpoint of protecting their incomes, in light of the inflation that we have experienced in recent years. Therefore, what we have proposed in this particular bill is to get after the big guys, to get after those with clout, landlords and owners of property, to get after the big corporations, to get after big labour in the event that any one of those groups should, contrary to that sense of fairness, seek to draw from the economy more than would be reasonable in relation to the demands of the whole.
The purpose of this bill is to make provision that if there are demands of this kind, the Anti-inflation Board can seek to persuade those who are making the demands to moderate them, and seek to persuade them that if they do not do so, the course of law will have to be followed and in the extreme case, if there is still a refusal, then there would be resort to the law. The fact of the matter is-and this is the basic fact which has to be recognized by all of us who speak on it; it is basic for the person for whom we have responsibility, the little fellow at the low end of the income scale-that if the kind of people with clout, in order to get more, always seek high wage settlements and price increases, the less there will be available for the Canadian of modest income. For this reason, we feel we have to seek this power to protect that particular group.
Retired persons and those on fixed incomes, those in jobs but not organized-those, in other words, at the lower end of the income scale-are not, contrary to what has been said in some circles, the victims of this particular bill. They are the principal beneficiaries of this program and this bill.
The bill recognizes that there are groups with major clout in the community. We seek the support of the groups with major clout in the community in order to achieve our objective. As I have said, the enforcement provisions recognize that if those who have power refuse that kind of support, refuse that co-operation-and I hope it will not be refused-we can resort to the provisions of this particular legislative proposal.
Reference was made in the previous debate to the excellent statement made by the Governor of the Bank of Canada several weeks ago on the important question of inflation, and to the position taken by leaders of the Canadian Labour Congress and other individual labour leaders. Their basic position, as they have said several times, is that the inflationary problem from which we suffer in Canada was not created by the workingman.
I say that the proposals the government has put forward for curbing the present situation in this country, a situation which has not arisen merely in the present but has existed for the past 18 to 25 months, recognize the truth of the statements made by the Governor of the Bank of Canada and labour leaders. We have recognized that the causes of inflation in Canada, as in many other countries, have been increases in real costs. They have occurred in Canada because we have an open economy and because we import so many things.
The problem has arisen in particular because of the increased cost of food, not only here but throughout the world, which has arisen because of shortages of supply.
October 17, 1975

Costs have also increased most significantly in the past 12 to 18 months as a result of the dramatic increase in the costs of energy in the world, costs resulting from political decisions taken by governments which are under the closest control of those engaged in the petroleum industry. Clearly, we have witnessed real, increased costs which inevitably have affected this community.
As I had occasion to remind hon. members on the other side of the House during today's question period, certain inevitable cost increases arose in the past and certain costs will come forward in future, increases about which we in Canada can do nothing. If we seek to import foreign commodities, if we seek to obtain a supply of energy for the future, we must pay those costs. We must pay increased costs for production in our own country; for example, in agriculture. So we will have to pay more for the things we get. In other words, we will need to allocate our resources to pay for these additional costs.
For these reasons, we think it reasonable-and we thought this at the time of the 1974 election-to give the workingman an opportunity, in salary and wage arrangements, to catch up with those real costs which have emerged in our community. We take that position now, and that is why we are coming forward, not with a freeze, as has been suggested on the other side of the House, but with a flexible system which recognizes that we must make adjustments in costs in our community.
On the income side there will need to be adjustments as time goes on. Those adjustments in income are recognized in the basic protection factor and other elements put forward in detail in the guidelines. We are not complaining, Mr. Speaker, because it is too late to complain about past increases. They were involuntary and, as I said, unavoidable. They are a thing of the past. Those increases in costs and catch-up attempts in salary are now behind us.
Some people may say that Canada's price performance as compared with that of OECD countries, on average, is not out of line. Personally, I do not agree. I feel that our cost increases have been greater than our people can bear. But can anyone suggest that in the future we can tolerate increases of 20 per cent, 30 per cent, 40 per cent and more demanded by different groups in the community? For example, in my constituency I found, from a door-to-door survey, that people had those kinds of rent increases pushed on them with the renewal of their leases.
When we have this kind of thing put forward by the people with big clout in the community, can there be any answer when we say that we have to restrain these increases in costs wherever they may occur, and from whatever group they may come in Canada? There can be no doubt about it: if those kinds of increases in our economy become general, they will affect not only incomes and the rate of increase of inflation but in the long run they will affect employment, the general prosperity of Canada and our ability to compete in our own and foreign markets. That is what the program of restraint is all about.
The program is not punishing anybody for the past. It is trying to look forward, to reach into the future and to head off those anticipatory price, salary and income increases which, in our belief, some people are seeking and which are out of line with what is going to happen in the economy. We believe that these should be restrained so
Anti-Inflation Act
that they do not get out of line in future, because we must bear in mind the economic costs.
Therefore, to reinforce the program and to ensure that the public interest, to which I just alluded, prevails, the bill provides for administrative machinery and for the necessary authority to ensure that the guidelines are complied with by the larger economic forces in our community which are predominant in establishing cost and price patterns.
As we emphasized previously, provincial governments will play a vital role in complementing and supplementing actions proposed by the federal government. I confirm, again, that the Prime Minister (Mr. Trudeau) has proposed to the provincial premiers the holding of a federal-provincial meeting in Ottawa next Wednesday and Thursday in order to discuss the prices and incomes program generally and, in particular, the role the provinces may play in the public sector and in restraining rents and professional fees. The meeting will be attended by ministers of finance, ministers of labour and other provincial ministers responsible for public service compensation.


An hon. Member:: What about housing?


Donald Stovel Macdonald: If I may refer in detail to the bill in order to bring attention to some of the measures we feel essential and important, I ought to point out that under clause 3 the governor in council, by order in council, will have responsibility to translate the provisions of the guidelines as set out in the white paper and as modified as may seem advisable by the kind of reaction and advice we are now getting from all sectors of the economy. In other words, it will have responsibility to translate those guidelines and concepts into regulations under the act. For this purpose I draw attention to my remarks of Tuesday last in which I gave notice to parliament, and therefore to the community, that under clause 3(3), as of Tuesday, October 14, those guidelines would be applicable for the purposes of the law.
As I have said, it is obvious that the reactions of provincial governments, the labour movement, business and the professions will give us cause to reflect on the guidelines as set out, and we shall seek to mould the provisions of the guidelines and the regulations to the actual experience of Canadians.
Another problem which has been discussed in the last several days is the treatment of those who were in the process of negotiation before the guidelines came into effect. The policy paper states that special consideration will be given to those cases where contracts have expired and negotiations are under way, where the expired contract was signed prior to the beginning of 1974. Employees and employers in this position who are subject to enforcement should first attempt to reach a settlement, after which they should refer it to the Anti-Inflation Board for its assessment. The board will be expected to give special consideration to the settlement in these circumstances, taking account also of any of the special modifying provisions in the guidelines which may be applicable in deciding whether the settlement is acceptable.
Perhaps I may supplement an answer I gave earlier to the hon. member for Cape Breton-The Sydneys (Mr. Muir) in response to one specific part of his question. The long-

October 17, 1975
Anti-Inflation Act
shoremen and stevedoring operations aspects of Cape Breton, being under the jurisdiction of the CNR, will, of course, be covered by the actions of the Anti-Inflation Board.
I would now turn to the bill which defines the areas of application and enforcement of the guidelines, establishes the Anti-Inflation Board, the administrator and the AntiInflation Appeal Board, provides enforcement powers and gives authority to enter into agreements with provinces which provide for application of restraint in the provincial public sectors. As I have said, the act will empower the governor in council to promulgate the guidelines in the form of regulations for the restraint of prices, profit margins, compensation and dividends.
As hon. members are aware, the Anti-Inflation Board has now been established under an order in council pursuant to the Inquiries Act. The board so constituted will be succeeded in its existing form, but with the same personnel, by the board once this statute has received royal assent. The two senior members of that board are well known to the House. Already appointed is the Hon. Jean-Luc Pepin as the chairman, and Mrs. Beryl Plumptre as the vice-chairman. It is intended that a third full-time member should be appointed to the board to sit in Ottawa, and five full-time members to sit in each of the major regions of Canada, assisted by additional part-time members. It may be that further members will be added later, depending on the form of participation decided by the provinces.
Commenting on a question raised by the Leader of the Opposition (Mr. Stanfield), there have, of course, been contacts made with prominent individuals in the community whom we feel would be very apt to assume this responsibility. I hope we will be able very shortly to announce both the personnel here in Ottawa and on the local boards.
I believe that the responsibilities to be exercised by the Anti-Inflation Board are reasonably clear. What is perhaps less clear is our reason for proposing the establishment of the separate office of the administrator to oversee enforcement procedures that may be required under the act. Undoubtedly, this function could have been performed by the board, but it was our feeling it would be preferable to divide it.
The role of the Anti-Inflation Board goes considerably beyond that of ensuring compliance with the guidelines by those sectors of the economy subject to enforcement. It has, as I remarked elsewhere, the responsibility to go out-we hope with missionary zeal-and persuade all sectors of the economy to keep their demands within the guidelines. It was our view that to better fulfil this role we should not call on one person to act at the same time as both conciliator and enforcer.
If the board is called on to persuade a party to modify trices and incomes which it considers in violation of the ;uidelines and subject to the provisions of the law, it rauld be empowered to refer the case to the administrator or his consideration. If the administrator concludes the uidelines have been breached, he can issue an order njoining their contravention and requiring reimburse-lent where appropriate. Orders of the administrator may

be appealed to the Anti-Inflation Appeal Tribunal which is already established under the bill. The decisions of that tribunal will, of course, be subject to the general provisions of the Federal Court Act with provision for appeal to the Federal Court. The administrator's orders may from time to time be changed or rescinded by the governor in council.
With regard to the so-called teeth of the bill, it provides penalties for failure to comply with an order of the administrator, for failure to keep appropriate records, and for misrepresentation. It enables the administrator to levy a penalty of up to 25 per cent of the amount by which revenues received or compensation or dividends paid contravened the guidelines where the person knowingly contravened or conspired knowingly to contravene the guidelines without having reasonable grounds for believing that the contravention could be justified.
I would like to refer to the period during which the legislation will be in effect. This question was raised in the earlier debate. As members are aware, the bill provides for a termination date of December 31, 1978, although it may be terminated earlier than that by proclamation, or extended beyond that period with the concurrence of parliament. Because inflation is so deeply entrenched, it cannot be expected that it will be possible to wind it down quickly or easily. Certainly, no dramatic results can be expected in the early stages. For my own part, I am very anxious that this intervention by the government in the operation of the economy should end at the earliest possible date. When that will be, however, will depend very much on the extent to which we are successful in achieving our objective.
Now, Mr. Speaker, I would like to take the opportunity to respond to some of the concerns, questions and criticisms that have been raised in connection with the program announced by the government to launch a concerted attack on the major underlying problems confronting our economy. I very much welcome the generally strong support for the program that has been expressed across the country during the past few days. I recognize that the hosannas were, of course, not universal-that was to be expected-but I appreciate the sense of responsibility displayed by those who differ with our judgment, and I respect their points of view.
A few days ago I read with some bemusement an editorial in a newspaper which has long urged adoption of controls upon us. It was berating the government with all its usual acerbity because of the complexity of the measures put forward. It is rather simple-minded, it seems to me, to believe that in an economy as large and complex as our own it is possible to devise a simple prices and incomes program which is at the same time reasonably tair and effective.
As I indicated when I spoke in the special debate on Tuesday, and would like to emphasize again, we are well aware that the program proposed in the legislation before the House is bound to create difficulties and uncertainties. They are inherent in the nature of our economy. We will be working very hard in the days ahead to do everything possible to minimize those difficulties and uncertainties in consultation with the provinces, labour, business and other groups. But there is certainly no such thing as a perfect system that will be fully acceptable to all the
October 17, 1975

people all the time. No doubt there will be conflicts and contradictions, particularly in trying to deal with the tough problems that will arise during the transition period. As the Leader of the Opposition has suggested, perhaps the best that one can hope for is some form of rough justice. That, however, is surely far more preferable than the rough injustice created by inflation itself.


Some hon. Members:: Hear, hear!


Some hon. Members:: Oh, oh!


Donald Stovel Macdonald: I must say that I am obliged to the members of the official opposition for referring to the past. I want, with the same kind of gentleness and restraint for which I am always known-


Some hon. Members:: Oh, oh!


Donald Stovel Macdonald: -and which the Leader of the Opposition demonstrated the other day, to refer to the question raised about the policies followed by his party at the time of the 1974 election campaign and before. I would probably be less than human if I did not comment on the remarks that he made, perhaps out of context, about energy conservation. There was a lot of talk by the Leader of the Opposition last Tuesday about changes of mind, changes of direction and suggestions about problems of immorality. I invite the House to go back several months to the evening when the conservation program was announced here. The most fundamental observation the Leader of the Opposition could make at that time about that program was to trot out his rather tired old joke about underwear. Indeed, those who were present at that time will recall the statement had to be made over the hollering and yelling of his supporters who at that time were not deeply interested in energy conservation.


Some hon. Members:: Oh, oh!


Donald Stovel Macdonald: There is a learning factor in these things. If several months later the Leader of the Opposition is prepared to take a positive viewpoint toward energy conservation, I welcome him to the fold and promise not to berate him again for his change of heart.
As I anticipated, the Leader of the Opposition could not resist the temptation to characterize the program now being put forward by the government as a vindication of the mandatory, comprehensive prices and incomes control program he advocated during the last election campaign and for 15 months before that. It is, of course, nothing of the kind.
I referred the other day to an important and valuable witness in this context whom I should like to summon- and I will call only one witness in this regard-with respect to the assertion made by the Leader of the Opposition and the wisdom of the policy he put forward during the 1974 election. I refer, of course, to the hon. member for Don Valley (Mr. Gillies), a professional economist, a former dean of the school of business at York University, a former chairman, on behalf of the big blue machine, of the Ontario Economic Council, a former Conservative financial critic, and the architect of the wage and price control
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program which he first proposed in this House on behalf of his party on February 22, 1973.


Lincoln MacCauley Alexander: This is what you call co-operation? I get the point.


Donald Stovel Macdonald: That is an interesting notion implied by the hon. member for Hamilton West (Mr. Alexander). This is the kind of parliamentary give-and-take that he likes: he gives, but he cannot take. Speaking to the Kiwanis Club of Toronto on September 3, 1975, the hon. member for Don Valley contended that a case could be made for the position adopted by the Conservative Party when it was first put forward in the Spring of 1973. But, he added-and this is a direct quotation from his text:
As you will recall, in the fall of 1973 the OPEC countries raised the price of oil and started their embargo and the economic situation throughout the world changed. Obviously, new economic policies were required but the response of the Progressive Conservative Party was that the public expected national parties to stay with their position.
The hon. member continued:
On the face of it, such a stand is absurd because policies must change with prevailing conditions. The party lost credibility and, as usual, the Canadian people were not willing to elect a party that seemed so incompetent.
I will say no more about the Conservative view in this connection. It would seem to me that in all probability the more meaningful debate which could take place on this subject would be inside the official opposition caucus room rather than in this chamber.
As for the New Democratic Party, to adapt an immortal phrase of the right hon. member for Prince Albert (Mr. Diefenbaker), it seems to me the leader of that party tipped over a few ashcans himself when putting his policy forward the other day. During the course of the debate, the hon. gentleman agreed that inflation presented a very serious problem, but his proposals for dealing with that problem were notable for their absence. He by no means stands alone in his contention that, while the prices and incomes measures proposed by the government may well be effective in restraining wages and salaries, they will be quite ineffective in restraining prices and profits.
He gave two reasons-two contradictory reasons-to support this contention. He said there was no way of preventing an army of company accountants circumventing the guidelines by padding costs and manipulating profits. I have to confess that this is an arguable case. At the same time, I know of no one with less credibility to advance that argument than the leader of the New Democratic Party. How many speeches have we heard inside and outside the House by a succession of NDP leaders and their followers demanding the establishment of some kind of federal agency to restrain excessive profits and prices? During the last election campaign, David Lewis stomped back and forth across the country calling for the creation of a national price control board to investigate and roll back prices which it found to be unjustifiably high. Speaking in Vancouver two weeks ago, Mr. Lewis' successor, the hon. member for Oshawa-Whitby (Mr. Broadbent), is reported by the Canadian Press to have told a news conference that Canada should meet inflation head on by establishing a prices review board with teeth in it. He keeps referring to the teeth. While he was out in Vancouver he must have gone to see "Jaws".

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An hon. Member:: We can see the jaws working now.


Donald Stovel Macdonald: The teeth should operate over many sectors of the economy, he said, and the board should have power to roll back inflationary price hikes. I am not surprised that the NDP leader should not have repeated that particular statement here in the House the other day. It must have been transparently obvious, even to him, that he could not at one and the same time call for the establishment of a prices review board with teeth in it and then argue that such a board would be rendered toothless by an army of big business accountants. That, after all, would have made a sham and a mockery of his own proposal put forward just two weeks ago and of the position taken by his party 15 months before. What he was doing, apparently, when he referred to jaws, was enlisting the aid of the shark and then saying it was going to be a rubber shark.
When he spoke in the debate, the leader of the New Democratic Party contended that some measure of control could be established over prices and profits only by creating "an army of bureaucrats". I have never heard it suggested by the hon. member for Oshawa-Whitby or by any of his supporters that a similar army of bureaucrats would be needed to man the prices review board which his party has repeatedly advocated. It is easy to conjure a vision of a phalanx of furtive accountants labouring long into the night to work their deceptions. I might remind the hon. member, though, that over the years a comprehensive and well established system of accounting practices has been developed, particularly in connection with corporate income tax, in order to prevent just such deceptions.
I would remind him, also, that when he suggests it is impracticable to deal with price increases after they have occurred by regulating profits, he further contradicts the position taken by his own party. Mr. Lewis, it may be recalled, proposed to regulate prices by reference to returns of profit on capital.


An hon. Member:: Let us talk about the bill.


Donald Stovel Macdonald: It is true it is our intention that the staff of the Anti-Inflation Board should, at least at the outset, be reasonably small and compact. We have no wish to create another army of bureaucrats if it can possibly be avoided; and I think it can. But the board will have power to engage outside services as may be required from time to time to augment its own facilities. In addition, I anticipate that the administrator will also be able to call on existing government services, for example, those of Revenue Canada, to assist him in carrying out his responsibilities under the act.
In this connection, I might advise the House that I have been informed by the chairman of the board, Mr. Pepin, that he is sending letters to all of the larger companies covered by the compliance provisions requesting their assistance and co-operation. The letter indicates the records they will be required to keep in order to comply with the terms of the policy statement and the bill, copies of which are also being sent. The companies are further advised that in some cases they will be required, under the authority of this legislation, to give the board prior notification of proposed price increases once the act comes into

force, a power the board does not now possess under the Inquiries Act. We are calling for at least some prior notification of major price increases. While I cannot pretend that the administrative machinery we are proposing will ensure total effectiveness in the area of prices and profits, I am confident it will play an extremely important role in discouraging price and profit violations.
During the course of his remarks, the hon. member for Oshawa-Whitby referred to certain figures related to price and wage levels in Canada over recent years. I think it is important to reflect on this, because enforcement is the backbone of the whole program. The contention made at that time was that restraint over wages and salaries was unnecessary. I might say this was notwithstanding his suggestion, which I understand the hon. member for Oshawa-Whitby made at a press conference in Vancouver, that a prices review board-the one he referred to-should have authority to investigate sharp wage hikes.
It is, of course, a matter of judgment whether there is reason for concern over the fact that for a period of several months the rate of wages and salary increases in Canada, and more particularly claimed increases, has been rising at twice the pace of that achieved in the United States. I find that his position contrasts rather strongly, however, with that of the three NDP premiers, all of whom expressed concern, in their responsibilities of office, about the impact in their communities of very substantial increases.
On a number of occasions the leader of the New Democratic Party has noted, as he did last Tuesday, that over a three-year period to mid-1975 the consumer price index rose by 33 per cent, while the average industrial wage rose by 36 per cent, which meant that the real increase in the standard of living for working Canadians was at about the level of 1 per cent annually during that period. Therefore, he concluded, Canadian workers had received less than their fair share of the increase in national wealth.
I think it is fair to remind the hon. member that in most of the major industrial countries, the real standard of living of the industrial worker has not increased but in fact has declined significantly. Also during this period the real GNP per worker in Canada declined by 3.2 per cent, notwithstanding the relatively strong expansion of our economy by comparison with other countries, because of lagging productivity growth and the exceptionally large increase which has been taking place in the size of the work force. But the real, personal disposable income that is available per worker-that is to say, what he has in his hands when he takes home his pay-after payment of direct taxes increased by 3.8 per cent in Canada; and one of the major factors accounting for this development is the personal income tax reductions and higher income support programs which this government has espoused.
I should like, Mr. Speaker, to respond to suggestions by the leader of the NDP that the program we have proposed is unfair because the minimum increase provided for under the guidelines of up to $600 a year for those of moderate income is unreasonably low and, perhaps more importantly, that there is no mandatory requirement that an increase of that amount be provided. There is nothing magical about the $600 figure that we have proposed as a
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minimum. What figure should be selected is obviously a matter of judgment, and I noted with interest that while the hon. member for Oshawa-Whitby was critical of that figure, he expressly avoided indicating what figure he thought would be reasonable under the circumstances.
We have attempted, for our part, Mr. Speaker, to strike a balance that would make room for some greater increase in income for those in the lower brackets than would be permitted under the guidelines, and which at the same time would be reasonably consistent with moderating the pace of inflation in Canada.
Were we to have taken no action to attempt to dampen the present spiral of costs and prices, there would be equally no assurance that those of lower incomes would receive increases that matched or exceeded this minimum. In fact, the prospect is that those on the lower rungs of the income ladder would be significantly worse off, in real terms. That is the point I made at the start of my remarks, that in this period of rapid escalation of demands it is those with the least power, those at the lower end of the income scale, who suffer most at the expense of those with the real clout. If the more powerful groups in our society are able to continue successfully in carving out an increasingly larger real share of the economic pie, there will be that much less available for those who are less powerful; and it is for that reason that we recommend this program on behalf of that particular income group.
It is often suggested, and we do not disagree, that greater equity must be achieved in the distribution of the nation's income. It is one thing, however, to acknowledge this goal in principle; it is another to observe it in practice. In practice, there is no way in which those on the lower rungs can secure a greater share of real income if those on the upper rungs continue to be successful not only in maintaining traditional differentials in income but in widening those differentials as circumstances and economic power permit.
It is sometimes contended that some form of social assistance, either by way of a tax credit or other means, should be adopted to bring about greater equity in the distribution of national income. Indeed, we in this country have adopted over the years one of the most advanced systems of social assistance to be found anywhere in the world. I think it should be remembered, however, that the means to achieve this objective has to come from somewhere. The goal of narrowing the gap in income distribution can be thwarted if those in higher brackets are successful in maintaining or increasing their own real, after tax share of take-home pay by pushing up their income levels. Hence the program that has been put forward.
In any case, Mr. Speaker, I suggest that this is not the time to embark upon major new social assistance programs which one way or another would add substantially to government costs. As I have said, the greatest contribution that we can make now to improving the well-being of those in lower income groups is to focus our energies on breaking the spiral of inflation which threatens to leave them farther and farther behind.
Before I conclude, may I underline the fact that the prices and incomes program which is embodied in the legislation before the House does not, and of course cannot, stand alone but must be seen as part of other
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interrelated policies and programs. It cannot be expected, for example, that the measures to bring about price and income restraint will be successful in moderating inflation and facilitating the restoration of sustainable economic growth unless we also pursue appropriate fiscal and monetary policies. Special additional measures will undoubtedly be required to deal with special problems, such as housing. But it is essential to recognize that there are very real and severe limitations on what governments can do in terms of their over-all fiscal position.
If we were to increase substantially the total cash requirements of governments by sharply increasing spending, by sharply cutting taxes, or by both, we would add further to the already high demands that governments are making on capital markets. This would push interest rates to still higher levels and, in turn, further impede economic recovery, particularly of housing construction. Some might suggest that in order to accommodate increased government borrowing we should expand the growth of the money supply. Any brief effect that that would have-


An hon. Member:: Who said that?


Donald Stovel Macdonald: Hon. members opposite ask who it was. It seems to me that we had a general chorus of dissent against the Governor of the Bank of Canada when he increased interest rates as a means of moderating growth of the money supply. You cannot have it both ways. So there has been support for increases in the growth of the money supply on the other side of the House, I think it is fair to say, by their objection to that particular decision.
As I was saying, any brief effect that such a move would have-namely, increasing the money supply-in reducing short-term interest rates would be quickly engulfed by the substantial increase in longer term interest rates that would also follow because of the impact that excessive monetary growth would have in generating expectations of still higher inflation.
In the operation of our economic system, therefore, I think hon. members have to remember that everything connects. I think that the prices and incomes policy established in this bill can make an important contribution to restoring the stability of Canada's economy so long as our other programs and policies are carefully directed toward achieving the same objectives. That, Mr. Speaker, will be the objective of this government within the over-all context of the prices and incomes policy, as well as to concert policy-making generally, so that we may be able to reduce the spiral of inflation in Canada and, in particular, bring about a better comparative position for those at the lower end of the income scale, people who, whatever the side of the House and whatever the party, should be the prime concern of all of us.


Mr. G. W. Baldwin (Peace River):: Mr. Speaker, I would begin-


Pierre Elliott Trudeau: Is this a point of order, or is the hon. member making a speech?

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Robert Lorne Stanfield: I hope so, because you need to be brought to order in some way.


Gerald William Baldwin: Mr. Speaker, I am sorry the Prime Minister (Mr. Trudeau) objects to my making a speech, but I am going to go ahead anyway.


An hon. Member:: When is he going to make a speech?


Pierre Elliott Trudeau: On Monday.


Gerald William Baldwin: Mr. Speaker, I will deal with the Prime Minister after I have demolished the Minister of Finance (Mr. Macdonald). During the course of this debate I intend to make some comments about the Minister of Finance in his capacity as a lawyer and in relation to some of the provisions of this bill. I say this to him to begin with, that he has at least learned something. If one has a weak case, one concentrates on irrelevant issues, and that is exactly what the Minister of Finance has done.
Mr. Speaker, we have before us one of the most important bills of all those that have been placed before parliament for a great many years, probably since the last war. I intend to say something about its values later on. At the same time, we have a Minister of Finance who has failed miserably, abjectly and utterly to defend the bill or to explain those provisions about which some of us are deeply concerned. He spent most of his time engaged in a scurrilous attack on the Leader of the Opposition (Mr. Stanfield), the leader of the NDP and other members.


Some hon. Members:: Oh, oh!


An hon. Member:: You know that is true.


Gerald William Baldwin: This minister has failed to meet the test by dealing in plain and honest terms with this extremely important measure. I am sure his predecessor would not have failed to do that. There is every indication that this minister has not done that because he cannot, and perhaps he cannot because his heart is not in it.


An hon. Member:: He just doesn't understand it.


Gerald William Baldwin: It is rather interesting to note that in his preface the minister went into the matter of the constituents in his own riding having to pay tremendous increases in rentals for housing accommodation. I suggest to the minister that this is a responsibility which he and his colleagues must bear. During the time that this difficult situation has been developing-I refer to the difficulties in respect of inflation which have now occurred-members of this party and others in this House have put forward suggestions and propositions. Many were put forward during the last election campaign and even before that time; but the trouble was that a group of bloodless zombies masquerading as a cabinet did not have the guts to do anything about the situation.


Some hon. Members:: Hear, hear!


An hon. Member:: Is that a scurrilous attack?


Some hon. Members:: Oh, oh!


Gerald William Baldwin: That is a fair description, in a political sense, of that group of people sitting opposite me; and I am speaking in a political sense. It pains me to have to say this, Mr. Speaker, but I think it is rather interesting to note that what we have heard from the Minister of Finance today is a preview of his next budget. He has talked about government objectives, and I think we have an indication of what is likely to be in his next budget, if this minister should survive that long.


An hon. Member:: He will resign before then.


Gerald William Baldwin: What else can we take from this minister's statement? We are faced with an exceedingly complicated and difficult problem, with its pressures upon so many sectors of our economy. This is a problem which will require co-operation from all segments of our society, particularly the provinces and the municipalities. Is this proposed government co-operation to be achieved by the kind of comments made by the minister today? Will that kind of comment result in the kind of conciliation, understanding and co-operation that is required? Is this the kind of thing we are going to hear throughout this land from the Minister of Finance, the Prime Minister and others in the government? If that is the case, then with all the good will in the world I doubt that the government will be successful.
While we have most grave reservations about this legislation in its present form, we want a program to be put in place by this parliament which will work to do something about the inflation that has plagued the people of Canada for altogether too long.


Some hon. Members:: Hear, hear!


Gerald William Baldwin: I admonish the minister and suggest to him that he find a more conciliatory and reasonable approach in dealing with the people of Canada, starting with the members of this House and carrying on to include provincial governments and those segments of the labour and business communities with which he will be dealing. I suggest to the Prime Minister that otherwise he should buy a muzzle and make it available to the Minister of Finance.
Mr. Speaker, I wonder if I might call it one o'clock, as this seems to be an appropriate time?


Mr. Deputy Speaker:: Order, please. It being one o'clock, I do now leave the chair until two o'clock p.m.
At one o'clock the House took recess.


[Stage Direction]
AFTER RECESS

The House resumed at 2 p.m.
Gerald William Baldwin: Mr. Speaker, having had time to reflect during the lunch hour, I feel I dealt a little too harshly with the Minister of Finance, particularly in one instance. The Minister of Finance has lightened the labours of myself and other members of our party by making it crystal clear that the program envisaged in the legislation and the guidelines which have been presented to this House in the form of a white paper are completely distinct
October 17, 1975

ahd different from what was advanced by this party during the election campaign of 1974 and before.
I refer to the proposals advanced by my leader and supported by members of this party which constituted, in fact, a workable package and lacked the monstrous qualities contained in the program the government has brought forward. The minister's admission is now on the record, and it is quite clear that what, in fact, is contained within the four corners of the bill and of the guidelines is not the package which was proposed by our party.
Before leaving the speech made by the minister, I want to say, again, how genuinely sorry I am that he made no real effort to deal with the bill and to explain its provisions. It is an exceedingly difficult set of proposals which the government is bringing forward. The proposals are full of enigmas, confusion, ambiguities, puzzles, doubts and uncertainties.
At times we in this House become too introspective, but outside the four walls of this chamber there are thousands of people who have important decisions to make involving the economy of this country and the well-being and social and economic future of millions of Canadians who are anxious to know what is involved. I did not expect the minister to have at his fingertips at this time all the answers not only to the questions which have been asked by hon. members in this House but those which are being asked by people all over this country. However, in his second reading speech in which he set out to seek approval in principle of this type of measure, I think it was reasonable to believe he would come before this House prepared and equipped with knowledge and information to provide at least some of the answers. This he has not done. I do not know whether the minister has not done this because there is not complete agreement among members of the government. If so, that is a tragedy. It may be because the minister himself is not too certain of the facts, the law and the economics involved. I do not know.
When I look at the number of clauses and the draftsmanship in respect of the clauses, I have every reason to believe this bill has been around the Privy Council for some time. If that were the case, and if the minister and the Prime Minister believed in the bill and the program, the minister would have come here with a speech of some length-and I would have been prepared to listen to it-in which he would have dealt in depth and in detail with the problems which face this country in respect of our inflationary condition, the problems which this bill poses and the problems to which the bill supposedly offers solutions. I am particularly sorry this has not been done. I hope the minister, when he closes the debate, will rectify this mistake. I hope he will do something to answer the questions which are being asked by people all over this land.
I propose to deal in a brief way with some of the issues consistent with this being a proposal for approval at second reading and reference to a committee. I shall raise, from time to time, various issues dealing with parts of the bill. First, I should like to emphasize what I suggest is an absolutely imperative and essential condition if this enterprise is to have any success. I refer to the need for the wholehearted, enthusiastic and highly visible involvement of the Prime Minister. We did not get that feeling from his appearance on television the other night and have not
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been encouraged by the reticence of the Prime Minister to this point, although I was glad to hear him suggest today that he might be speaking on Monday. The impression I have is derived not only from what he has left unsaid but from the manner in which he said what he did say.
If I were a show critic and had only one sentence by which to describe the performance of the Prime Minister on Monday night, it would be, "Leading man mumbles lines he doesn't believe in a play he finds unreal". I suggest that this is not the way in which to fashion and secure the confidence and co-operation of the great mass of Canadians. Even with such confidence and co-operation, which are conditions precedent to any realistic and reasonable effort to solve the crisis of inflation which has overwhelmed us, it will be difficult-without them it will be impossible. One gets the sinking feeling very early in the proceedings that the Prime Minister is heading for the bunker. This is totally unacceptable, in the circumstances, in view of the fact that the Prime Minister was the country's leading salesman against mandatory controls until Monday night. He alone can undo what he has done. There is no other way. Parliament and the country cannot tolerate another "death of a salesman."
The Prime Minister is not renowned for listening to advice, but perhaps he might take some of his own which he put forward on February 28, 1974, as recorded at page 36 of Hansard, for that date. This is what he said:
-income controls risk hurting the small and the poor more than they do the big and the rich; and while that might be of minor concern to the more conservative governments and political parties, it is of great and fundamental concern to this government-
We do not believe that the workingman should be expected to bear an unfair share of the cost of solving the problems of inflation, and that is why we will ask him to treat with great skepticism any argument for general controls which does not set out all the facts, the pleasant as well as the unpleasant, those with political appeal and those without.
In all honesty, I say to the government and to the Prime Minister that if he really believes that a program of restraint can be made to work-and I am one who not only hopes but feels that it is essential-so that inflation can be contained, then he was to assume real leadership. Not only must he be sincere but he must also be perceived to be sincere. He is required to convince this parliament and the nation that this is his immediate and major task. I have to suggest that this has not happened so far, and what the Prime Minister said on Monday night could not in any way be construed as dealing with my remarks.
I have already set forth what the Prime Minister said in 1974. He may well think that he covered that up by his words etched in stone on television the other night. If this is what he thinks, he is not only wrong but he is, more importantly, doing a disservice to the program of the government and to Canadians. A one-shot commandeering of the television networks is just not good enough. His taciturnity in parliament is counterproductive in its effect. The working man, who was of so much rhetorical concern to the Prime Minister in February of 1974, does not have videotape equipment on which to replay the Prime Minister to bolster his spirits.
How is it helpful to this program if the workingman feels that to a muffler installer he may be a somebody, but

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to the Prime Minister it seems that he is just another neglected nobody on society's back benches?


Some hon. Members:: Hear, hear!


Gerald William Baldwin: I confess that there is a certain enjoyable element in reminding the Prime Minister of his earlier statements, but let me hasten to assure the House that we are very serious about the point being made. We have a bill before us of unprecedented dimensions in peacetime. I agree with the Minister of Finance that it will be generally perceived to be frightening. If there is also a general perception that the Prime Minister has pressed the button and then gone off to languish by the pool, we are all headed for a morass of confrontation through our society. I would like to raise what I consider to be some fairly important and contentious aspects of the legislation which in our view will have to be taken into account and corrective measures applied before the bill is finally passed through all stages by this House.
To begin with, I am simply appalled at the effrontery of the Prime Minister, the Minister of Finance and the government in asking this House to grant to it the unique, extraordinary and terrifying powers, to use the minister's words, which are asked for for an open-ended period of time. I would protest if my own party asked for those powers. Despite the respect and admiration I have for my leader, I would oppose him if he introduced legislation of this kind, although I could never see him seeking to do so in these terms. Let me put it simply in this way: the legislation as it presently stands would permit this government, some time in the late fall of 1978, to put forward and ram through motions which could extend for another two, three or four years the kind of legislation which we are considering. I am not prepared to entrust this power to any group of people, and certainly not to this government.


Some hon. Members:: Hear, hear!


Gerald William Baldwin: I repeat, that as far as we are concerned, this aspect is totally unacceptable and simple will not wash. We will be proposing an amendment at the appropriate stages of committee and later to deal with this, and in our view failure to provide something to cover this problem, so that we will not be in a position where we sit here until 1978 waiting for the government to decide whether to extend the legislation, is unacceptable. We will propose an amendment which will provide that at an earlier date during the life of this legislation, this House will have, as it must, the right to decide whether under the circumstances which then exist the extension of the legislation is warranted.
Then there is the idiotic procedure outlined governing the lines of communication and appeal between the antiinflation tribunal, the administrator, the deputy administrators, the appeal tribunal, the Federal Court and the cabinet. This is a sort of hydra-headed monster, a form of legislative Rube Goldberg caricature which is going to cause great trouble for the people in labour unions, business and all elements of our society affected by this legislation.


Mr. Baker (Grenville-Carleton):: Even the marketing boards.


Gerald William Baldwin: There is the question of the extent and nature of the penalties, the way they are imposed and the judicial power given to the administrator to act as investigator, Crown prosecutor, judge, jury and executioner in connection with the administration of the legislation. There will be the question of detailing the special circumstances which will permit decisions to be made in order to provide complete equity. However, I will leave these for others to deal with. I would say, however, that it should come as no surprise to members of this House when I express my anxiety as to the extraordinary extent to which the House is being asked to place in the hands of this government unique and tremendous authority to deal, in the most intimate detail, with the property and the social and economic well-being of the people of Canada.
The whole course of the history of this government, of the Trudeau administration and its immediate predecessor, has been marked by the extent to which they have reached out year by year, session by session, act by act, and stolen from the people the right to order their own affairs, and vested that right in the bureaucrats of Ottawa; and in doing so then have refused to provide adequate safeguards to prevent the abuse of that power.
I will not take the time of the House at this stage to go through the bill clause by clause and to point out the extent of and the places where vast, authoritarian fiats have been granted to the various tribunals, the administrators and the cabinet. It is complete, unrestricted and unabridged authoritarianism granted to a government composed mainly of bureaucrats blooded by experience in high positions of one kind or another before coming into politics, and whose appetites have been whetted by their period in office as members of the cabinet.
Mr. Speaker, this party and this House would be delinquent in its duty if it failed to provide, by way of affirmation or negative resolution, that parliament should retain some measure of control and supervision. It ought not to be asked, nor must it agree, to yield on behalf of the people its duty to examine from time to time the salient aspects of what is being done under authority granted by the legislation. It is our intention to press to see that apt words to this effect are included in the bill.
I see my friend, the hon. member for Winnipeg North Centre (Mr. Knowles), is in the House. I think only he and the right hon. member for Prince Albert (Mr. Diefen-baker) were in the House at the time it was found necessary to wrench from another Liberal administration the powers it had taken during the last world war and retained year after year, long after the crisis had evaporated. I think that is a lesson we cannot forget.


Mr. Knowles (Winnipeg North Centre):: Same old gang.


Gerald William Baldwin: I would not say it is the same old gang; I would say they are a lot worse, Mr. Speaker.


Mr. LeBlanc (Westmorland-Kent):: Same old jokes.


Gerald William Baldwin: It would have been the intention of this party, if it had been placed in that position following the last election, to have dealt with the problems of inflation
October 17, 1975

to provide, in any legislation passed, the most salutary means of supervision by parliament. This is one aspect of public life which distinguishes our party from the governing Liberal party: our unreserved belief in the supremacy of parliament and the right to supervise, on behalf of our constituents, the actions of the government, particularly a government which shows itself to be power-struck and imbued with the belief that there is a divinity in the Liberal hierarchy which gives them the right not just to govern but to rule.
Under these circumstances, I would be most unhappy to see this legislation passed in its present form without there being some capacity left in parliament to exercise its ultimate supervision.


Some hon. Members:: Hear, hear!


Gerald William Baldwin: Let me say that I utter these words with complete sincerity and deep earnestness: the end product of the weakening of the legislative system and the power grab of the executive system is dictatorship. There is no doubt about that. Whether it is done in one bite, or by gradualism and the whittling away process, is immaterial. There are countries today in the world, in Europe, which have gone so far along this road, often under the feeble disguise of socialism or democratic socialism, they cannot turn back. The tragedy is that as they float along on their easy ride, they do not even know their boat has been caught in a destructive whirlpool.
I turn to the question of information, knowledge, facts. As to this, also, there is no argument as to my position, the position of my leader and of our party. We have stood for a number of years for a program of freedom of information so that the people of this country will know what are the facts, what is the truth, and the basis upon which the governments are operating. I say we have no confidence in this government or in its good faith on this issue. We insist that it must be answerable to this House, on behalf of those who will be so deeply affected. We will want to know what discretion it is exercising under the bill, how it is exercising it, and why.
Here we have a Prime Minister and a cabinet which, almost up to the final moment when it produced the program out of which this bill was formulated, continued to assert in budgets, in speeches, in debates, in and out of the House, that things were improving, that there was no need for controls; which has, in general, engaged in a measure of calculated deception through secrecy, misinformation, half truths and outright lies. I say, Mr. Speaker, that we will expect, before this bill is passed, that some of its very rigid provisions at the present time with regard to confidentiality-


Donald Stovel Macdonald: Surely the hon. member will withdraw that last remark.


Gerald William Baldwin: -will have to be amended and provide for freedom of information. Because of our experience in the past-


Donald Stovel Macdonald: Mr. Speaker, I rise on a question of privilege. The hon. member referred to this government as having engaged in "outright lies". Surely
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that is not a parliamentary expression. I think he should withdraw it.


Gerald William Baldwin: Mr. Speaker, I think what we are talking about is privilege of members of the House. If the minister wants to indicate that I was talking about him, of course I will be glad to withdraw the remark. But I was not talking about him, Mr. Speaker, I was talking about the government; and the government, of course, includes ministers, deputy ministers, stooges, parliamentary assistants-so I would defy the thin-skinned and sensitive minister to find anything in the precedents which provides that I am not entitled to say that. However, if the minister is really worried about it, I will be-


Donald Stovel Macdonald: It is parliamentary practice that you should withdraw.


Gerald William Baldwin: As it applies to members. If the minister is that thin-skinned about it, so sensitive and worried about it, I am perfectly prepared to say I might have stretched my imagination just a little bit.


Donald Stovel Macdonald: That is scurrilous.


Gerald William Baldwin: Before this bill is passed there are some other things that we think the government should do. Because of our experience in the past, and because of the waffling in the speeches during this debate with regard to the question of government restraint, we should require and should obtain, before the bill is passed, a commitment of the firmest kind that the government will exercise fiscal restraint-not just the airy-fairy, vague statements of the past, always made with tongue in cheek, never meant and never carried out, always left in the realm of fantasy. If the government is to be credible, it is essential that before the debate is concluded a responsible minister stands in this House and by verse, chapter and number, gives this commitment. If they do not, then I suggest it will sadly impair their credibility in the country for the purpose of the program which they have proposed in this legislation.
Let me return to the point I made at the beginning. If any form of incomes policy is going to work, there must be the utmost trust and confidence between the governed and the governors, and that confidence cannot be maintained unless the governors are prepared to take the governed into their confidence, to tell the facts truthfully, honestly, accompanying the decisions which are being made. I am convinced that the people of this country have the capacity, endurance and willingness to assume the responsibilities which they must to help solve this inflation, but only if they have respect for those at the top who are making the rules and can expect to be told the truth. I repeat, before the bill is passed it should contain a statutory right of access to information.
I could talk about the constitutional issues, Mr. Speaker, but this is not the place to do so. The minister and I have been over this ground before on his energy bills, where we have tangled over the constitutionality question. I am not going to waste the time of the House by engaging in another argument with him. I left those other debates, however, wondering who the professor was who passed him in constitutional law. I often wonder if he was at the

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University of Montreal in 1961 when the Prime Minister was a professor of constitutional law.
This matter has been raised by my leader and by the right hon. member for Prince Albert. In reading the provisions of the bill, I note there is a very careful distinction between the basis on which it proceeds the preamble, and the preamble in the legislation passed during the course of the last world war. I do not know whether this is because the government has doubts about its own legislative capacity. That doubt may be maintained because they have not seen fit to exempt the provinces. I do not object; I merely say that a fair survey of the provisions of the bill indicates that the government doubts its own legislative capacity.
When the minister replies to end the debate, I hope he will tell the House if it is intended that this legislation shall abrogate the Bill of Rights. One provision of this bill is that the provisions of the act shall apply notwithstanding any other legislative proposals existing in any other acts of this country. Does the government intend the Bill of Rights to be subordinate to this legislation? I ask this because on the order paper there is a bill dealing with human rights, a bill which will be far reaching in its effect. Does the government intend this bill to override the human rights legislation? Perhaps the minister will answer these questions when he closes the debate.
I hope that any defects which may exist with respect to powers the government seeks will be met by the pursuit of a vigilant course of communication between the federal government and the provinces, to ensure that if a bill is finally produced it is acceptable to this House. That cannot be said of the bill we are looking at now. We hope that the bill will be not constitutionally unsound or susceptible to challenge by provinces which are unwilling to submit to the federal jurisdiction.
It appears that this bill will go to a standing committee. Let me make it quite clear that it is not the intention of my party to hold up the legislation unnecessarily. That is far from our purpose. But we should be failing in our duty to our party, our constituents and our country if, on a measure as important as this, we do not take every reasonable opportunity to cross-examine officials as to the meaning of certain clauses-unless the minister can demonstrate a knowledge, later, which he has not indicated so far-to secure explanations, to move amendments, some of which I have indicated, and to some extent at least to allow for the calling of witnesses and the presentation of briefs.
I want to make it clear that in our opinion this does not mean that the committee should be thrown open for the whole world to appear. This would cause difficulties. To some extent, time is of the essence. But having in mind what I observe to be the approach of the chairman and vice-chairman of the proposed Anti-Inflation Review Board, I suggest that there is obviously some lack of understanding and comprehension of what is involved on their part and they might well appear before the committee to obtain some on-the-job training and experience which they have not had so far. It is absolutely essential to give representatives of labour, business and of consumers the opportunity to appear before the committee and give

their views, so that they can discover what is involved in the legislation, ask questions and present their points of view.
I suggest to the minister and to the government that if government supporters on the committee are determined not to allow this kind of committee investigation, they will be doing a disservice to the committee, to parliament and to the general opportunity to introduce a program which will work. It will be far better to seek some indication at the committee stage of the problems and difficulties which are liable to occur, so that administrators and tribunals may plan accordingly, rather than wait until the actual foul-up takes place, a foul-up which would necessitate their doing these things after the event. For this reason, I make it plain that when the bill goes to the committee we will hold the government to be completely in the wrong if it should attempt to railroad the measure through without the kind of careful study it deserves.
I want to conclude on a note of caution. I think we all realize the problems which exist for any government at this time in connection with the administration of the affairs of the people they are governing. To govern today is often to have to make a choice between a number of alternatives, usually unpalatable, difficult and sometimes even dangerous. The decision this government is making has become infinitely more dangerous, more difficult and more unpalatable because it has refused obstinately until now to do anything to curb inflation in this country in a realistic manner. Consequently, the medicine they are proposing will be far harder to swallow.
I do not like government intervention. I do not like controls. I do not like being part of a legislature, nor would I like to be part of a government, which faces the duty of having to legislate for and establish guidelines and restraints on prices and compensation in order to deal with a highly inflammable situation. It is not in my nature, not in the nature of my leader, not in the nature of my party nor, I think, in the nature of the people of this country to indulge in this kind of exercise. But we are now, and have been for some considerable time, faced with the hard choice of either allowing the inflammable situation to continue until there is an explosion or taking the route our party proposed some time ago. We have always made it plain that the lesser of the two evils was action. If the sort of action we wanted many months ago to take had been taken, these problems would not have assumed their present proportions.
It now appears that reluctantly and, so far, half-heartedly on the part of the Prime Minister, the government has swung around to the same view. I note that Mr. Geoffrey Stevens, in an article published in this morning's newspaper, suggested that the Prime Minister is taking off on a countrywide educational tour. Significantly, that information came from some official, not from the Prime Minister. Many on my side of the House and many in the country feel that the Prime Minister's heart is not really in this legislation. Here is his chance to show that that impression is not right. The government's willingness to accept proposals for improving and modifying the bill will go a long way to disposing of the impression that the Prime Minister is being pushed into enacting this measure and that his mind is not on it.
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The methods the government is using are not the methods we would have used. The overcomplicated, overstructured mechanism, with the grotesque assertion of powers which the government has brought forward without safeguards and provision for parliamentary supervision, do not satisfy us; nor will they do the job. Clearly, the bill will need substantial alteration and improvement. These improvements cannot be made at the present stage. In my view, the bill ought to go to committee within a reasonable time in order that these improvements can be inserted. Then we in parliament, and the people of the country, can get on with the job.
If the government is not prepared to bring this measure into line with what is reasonable, and to accept amendments which my party will indicate ought to be part of the bill, then I say that we reserve our right to vote against the bill when it comes back at the final stage.


Mr. Lome Nystrom (Yorkton-Melville):: Mr. Speaker, I was pleased to hear the last statement of the hon. member for Peace River (Mr. Baldwin), to the effect that his party reserves its right to vote against the bill. I think they may finally be on the right track with regard to price and income controls. When the white paper was first tabled in the House, a number of members of parliament were saying that a lot of questions were left unanswered and that we had to wait until we saw the bill. We now have the bill and there are even more questions left unanswered.
I do not think we have seen since the war and the invocation of the War Measures Act-and I have checked this with the hon. member for Winnipeg North Centre (Mr. Knowles) and others-so much power, so much authority delegated to a private board, commission or group of individuals outside the Government of Canada.
I have questioned senior people in the Department of Finance and talked to various members of the government, and I find that there are many, many questions they themselves cannot answer. What happens to contracts now being negotiated? What is a fair price? How are they really going to determine the profit of many of the commodities referred to? In many cases, they say they do not know. They say that these regulations will be left to the board, to Jean-Luc Pepin, his side-kick Beryl Plumptre and a few others to draft, with their own biases and their own interpretations. They will interpret whether the guidelines will be broken. They will interpret whether certain negotiations can continue and, indeed, whether collective bargaining can continue in this country. Those determinations will not be made in a bill we are going to be debating and voting on, but by a couple of highly paid bureaucrats. That is not the kind of thing that people in this country or people in this House want, approve of or should vote for at this time.


Some hon. Members:: Hear, hear!


Lorne Edmund Nystrom: If I am wrong anywhere throughout this debate, I would like the minister to challenge me. We in this party believe that what we have seen in the white paper, the legislation before us, the comments of the Prime Minister (Mr. Trudeau) and the bureaucrats is unfair, unworkable, politically wrong and misleading. We believe it is a contravention and a contradiction of what the former minister of finance, the hon. member for Ottawa-
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Carleton (Mr. Turner), said in the budget last June. I could give quote after quote of what he said when he brought down that budget which was approved by this parliament. The economic direction authorized by this parliament has now been changed. We do not think that is right.
We believe the measures before us are very unfair. Basically, they are effective wage controls on working people with limitations that are very inequitable. We do not have any effective price controls. That is a matter I will deal with later. We have exemptions for many people who are collecting money from interest rates, stocks and bonds, mortgages, and so on. If we are to have a program that is going to work, I do not believe those sectors of the economy should be exempted. We believe that this is unworkable. When talking about wage and price controls of this nature, we should look back at a statement made by the Prime Minister. We should look at this week's issue of Maclean's regarding an interview carried out a few weeks ago with the Prime Minister.
We should also look at statements he made a few months ago to the press and the electronic media. I wish to read a quotation from a speech by the former minister of finance, a man who has had a lot of experience in the Department of Finance. He said eight months ago:
The experience of many other countries, most particularly the United States and the United Kingdom, suggest that broad and comprehensive wage and price controls not only tend to disrupt economic growth but over time do little to curb inflation and may, in fact, even aggravate it.-It is an expanding economy that in time will enable us to grow out of inflation by providing the increase in real purchasing power Canadian families need to meet the increased cost of food and energy.
That was the former minister of finance, the hon. member for Ottawa-Carleton. Suddenly the government changed its mind. What changed in the economy to make the government change its mind so suddenly? Another point is that the economic package concentrates on inflation. It seems to ignore the slump in the economy, unemployment and the housing crisis in this country. It is also deceiving. One reason it was brought in was that the government wanted to do a good PR job across the country to convince the people it is doing something.
There are indications from around the world that the rate of inflation may drop two or three points in the next few months. That will not be as a result of anything that is happening in this country, but because of external pressures from around the world. If that does happen, the government will try to claim credit for it because of this measure being brought into the House.
Unless amendments are moved, or the minister can clarify this, it is in essence nothing but a wage control package for workers. It will fall squarely on the shoulders of the little people and pensioners. All I can say is that, as a member of this House, I will do what I can not to co-operate with the government unless major amendments are made. I urge Canadians not to co-operate with the government in this measure. It is unfair. It is unequal. It will fall squarely on the shoulders of the ordinary, little people of this country.
Let us look at the proposals step by step. Wages can be easily controlled because they are bargained for. The negotiations are open to the press and the electronic

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media. The guidelines laid down by the government state that wages can increase 8 per cent this year, 6 per cent next year and 4 per cent the third year. In addition, there can be a productivity increase of 2 per cent per year. Meanwhile, professionals, corporations and companies can have unlimited increases in productivity. One clause of the bill states that fees will be controlled for lawyers, for example. However, if a lawyer expands his business and increases his productivity, his income will not be controlled. For the worker there is only a 2 per cent increase in productivity, regardless of the increase in productivity in the country.


An hon. Member:: Oh, oh!


Lorne Edmund Nystrom: If the hon. member in the back row will look at the bill, he will see that certain exemptions are made in productivity for corporations and companies, but there is no limitation. Why is there no limitation there? A limitation is placed on the wage of a working person, a teacher or anyone else in this country who has to negotiate for his income.


Mr. Peters:: His productivity is only 2 per cent, regardless.


Lorne Edmund Nystrom: As the hon. member for Timiskaming (Mr. Peters) says, his productivity is only 2 per cent, regardless of the productivity of that industry or the nation as a whole. Wages are easily controlled. They are negotiated out in the open. We then have the limitations on wages. The Minister of Finance (Mr. Macdonald) said the $600 figure was just taken out of the air, perhaps some other figure should be used. I suggest that having the maximum for people earning the lowest salaries in this country at $600 is very unfair, when the salaries of those earning $25,000 or more can increase by $2,400 and still be within the terms of the guidelines. If there are contracts existing where there are automatic escalation clauses, that $2,400 limit can even be exceeded. That is very unfair.
[DOT] (M50)
If the minister wants a suggestion, I would say to him that instead of using a percentage increase, which really widens the gap between the rich and the poor, he should be looking at the increase in the cost of living and at the productivity of the nation and coming out with an across-the-board dollar figure for everybody in the country, regardless of whether it is for the charwomen in this building, or the workers upstairs, or the lawyers, or the doctors or E. P. Taylor.
Perhaps, Mr. Speaker, instead of using the figures we see in the guidelines everyone should get an increase of $1,000 or $1,200 a year. Or, if you wish to be really equitable and try to narrow the gap between the rich and the poor-and I am sure this is something Liberals do not want to do-why should not the maximum for the low-income people be $2,400 a year and the maximum for high-income people $600? Of course, that would penalize the rich friends of the Minister of Finance, the Minister of Energy, Mines and Resources (Mr. Gillespie) and other people across the way. But it certainly would not penalize the old age pensioners or the people out there in small towns in Saskatchewan, or the person cooking in a restaurant in Regina. It would certainly help those people.

It would put purchasing power back into their pockets, and they would purchase goods and commodities. It would help expand the economy and increase employment in Canada, and in the long run it would also help the Minister of Finance-as the former minister of finance said a few months ago-to cure inflation in Canada.
The other thing that strikes me as being very unfair about wages is that a few weeks before this bill was brought before the House the senior civil servants in this country had been given authorization by the cabinet for very large increases in salaries. Many of these senior bureaucrats are the people who drafted the very legislation we are considering today. I think that is very unfair.
I have before me a copy of the report of the Advisory Group on Executive Compensation, a report which was, I understand, given to the cabinet in April, authorized in July, the final authorization to grant the increase being signed only a few days ago for some of these people. For example, Mr. Speaker, there is an increase in salary for deputy ministers II-this is the maximum category-from $54,000 to $60,500, an increase of $6,500. For DM III, an increase of $6,000 per year was granted, from $60,000 to $66,000. These are wage increases approved by the government only weeks before the very same bureaucrats drafted the white paper and the legislation we are now being asked to approve in the interest of little Canadians, of the workers, the pensioners and the ordinary citizens of this country.
What about the poor? What about the unorganized? Even if a benevolent corporation wanted to increase the salaries of the poorer workers in its textile factory, it could not do so if that increase were to exceed the guidelines. Any increase in salary above the guidelines would not be exempt from the profit margin a corporation is making, at least that is the understanding I have of the bill from questions I have put to senior civil servants.
What about contracts which are about to expire or are in the process of being negotiated? How does one determine if one industry is related to another industry in this country? How does one determine if there is an historical relationship? These are questions we are asking. They are the questions that no one is prepared to answer except Jean-Luc Pepin and Beryl Plumptre, and I do not think this is very fair. These things should be outlined and stipulated in the bill. We should be able to vote on these particular matters, as parliamentarians, and make specific decisions on them.
I turn now to prices. We have a proposal to control prices here, as the Prime Minister says, by controlling profits-the per unit profit or the over-all profit of the corporation which is involved. Let us consider the loopholes. What kind of loopholes are there going to be if you control prices in that way? First of all, any lawyer or any accountant worth his salary or his salt is going to figure out some way of padding the books or arranging the accounts so that corporations do not suffer the penalties being advocated in the bill for exceeding the guidelines. If that lawyer or accountant does not do so, then he should be fired. I am sure he would be fired if we were directors of such a corporation or the presidents of companies so involved.
There are many ways to do it. A corporation could claim its expenses had increased-and there are "maybes" and
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"buts" for increasing expenses in the bill as well as in the white paper. A corporation could say: Well, the interactions or the sales within the corporation have gone up, or the fees have gone up, as Bell Telephone purchases some commodity from one of its subsidiaries or sells other commodities to a subsidiary. If corporations like IT and T or the Weston Company carry on transactions between companies, how do you police that? Again, I have heard no explanation of how such transactions will be policed. I am sure no mechanism can be devised which will accurately police that type of operation. Yet our questions remain unanswered. If a corporation is going to make larger profits, then perhaps rather than being penalized it will prefer to put them into retainer or expand its plant.
What about the question of foreign ownership? Canadians drive cars in this country which are made by companies which are foreign-owned. What kind of an arrangement do we have to police the fees which a Canadian subsidiary, say in Oshawa, is paying to its parent company in the United States for certain parts, commodities, licences, and so on? There are just so many possible loopholes and questions which no one has answered. The only people who will be able to answer these questions are those on the board which is to be established by this legislation.
Then, to top it off, in the bill there is a clause which says that companies may be exempt from the guidelines if they have unusual productivity gains. What is meant by unusual productivity gains? The 2 per cent imposed on working people? I am sure that is not what the government has in mind. They can also be exempt if cost development is greater than was anticipated. What cost development is not anticipated by a large corporation?
I also suggest-and I think this is a major point-that while the wages of workers will be going down by 2 per cent each year in terms of increases, from eight to six to four, the profits which will be allowed to corporations will be going up for the next two or three years. The reason is that corporate profits in Canada for the last three years have been high, and in the two years before that they were considerably lower. The profit guidelines are based on the last five-year average. So if you move into the next two years, the average is bound to increase and therefore the allowable profit of the corporations is also going to increase. The ceiling will be higher. But the ceiling for the working person is going to decline, instead of keeping up with prices in this country or the possibility of price increases.
Turning again to price increases, I would refer to the appointment of Mr. Pepin and Mrs. Beryl Plumptre as chairman and vice-chairman of the Anti-inflation Board. As the member for Regina-Lake Centre (Mr. Benjamin) said in the House yesterday, Mr. Pepin describes himself and his colleague as two distinguished fools. If that is their own description of themselves, I wonder what kind of job they will do. But let us look at it in a serious way. Who is Jean-Luc Pepin? What are his biases? What are the biases of these people who are going to be placed in a position of so much power and so much authority?
Mr. Pepin comes from the boardrooms of many corporations in this country and has experience with Power Corporation. When he was minister of industry, trade and commerce he was famous for handing out grants and
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concessions to large corporations across this country. If you look back on the speeches he made as minister, as well as to those made by him when he was not a minister in this House, you find time and time again a defence of the corporations and the free enterprise system, the profit-motivated system, wherein one should take a large profit to keep on expanding. Certainly it is his right to have those ideas, and I do not denounce him because of it. But why should the chairmanship of this board go to someone who has a clear bias of that nature, someone who is not concerned about the person who is unemployed, the person on welfare, one who is an old age pensioner or one who may be working for a minimum wage?
Then there is Beryl Plumptre. Here I come to the little girl from Rockcliffe who is the expert for the consumers of this country. I have watched her very closely, as has the Minister of Agriculture (Mr. Whelan) during the last couple of years. What has she found in terms of excessive prices of food which is going to help the consumer? She has had two villains, that's all. She blames the farmer for increasing his prices too rapidly at the farm gate, and she blames the marketing boards for contributing to the high price of food. But what does she say about the Safeway stores and the Loblaws stores or the Dominion stores, or the profiteering which may be done by the meat packing plants or processors or wholesalers, the transportation industry or the advertising industry? She, too, has a bias, the same bias that is held by the chairman of the board, Jean-Luc Pepin-and I say that is very unfair. Why do they not have a balance of view from people who will administer one of the most drastic laws and set of regulations that this country has seen since the second world war, with the exception of the invocation of the War Measures Act five years ago this week?
Another thing that weakens the bill in terms of its being fair and equitable for the consumer is that probably there will not be any real price control. The minister said today, and he is right, that there is power in the bill to force a company to notify the board before any increase in price is made. But will this power be used? The minister said he did not know to what commodities the bill would apply. Prior notification of a price increase may be required; it is not mandatory.
I suggest that if we are to have these controls the anti-inflation board must authorize any increase in prices beforehand, and that it must be a just price increase by reason of increased cost. But with this government things do not happen in this way. They say this may occur. Knowing Mrs. Plumptre and Mr. Pepin, the chances are that it will not occur. If a corporation wants to increase its prices, they are clearly biased on that side.
Let us suppose, for example, that the hon. member for Sault St. Marie (Mr. Symes) has an Aunt Fanny out in the Sault, an old age pensioner who wants to buy a can of beans for lunch. That can of beans costs her 19 cents. Then all of a sudden she finds that the price has gone up to $1. What can she do about that? I know I am exaggerating, but this is because I want to prove my point. She can notify one of the offices of Revenue Canada, or her MP, and the matter can be taken up with the board. But there is no guarantee whatever in this legislation that the board

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will do anything about increase in price, which may be as much as 400 or 500 per cent. They may or may not take a look at the situation. What they are likely to do is look at the profit of the store, and if a can of beans has gone up by 80 cents in a Safeway's store in Sault Ste. Marie, eight or nine months later the board will look at the profits of Safeway or of the people running the store.
One thing the board will not do is look at the unit price of the cost of production of a can of beans. The profit it makes on a can of beans might make up for the loss sustained on a bad investment or because the store has not increased the price of some other commodity by the same rate. These situations can occur when price control legislation is based on profit control at the end of the year. The price of any commodity can skyrocket without the antiinflation board even taking a look at it.


Mr. Sym.es:: How would they compensate people
anyway?


Lorne Edmund Nystrom: As the hon. member for Sault Ste. Marie says, even if they did take a look at the price of a can of beans, how would they compensate the consumer? Do they give old Aunt Fanny the difference between the price of a can of beans this week compared with the price last week? These are questions that remain unanswered which the government is not prepared to examine in a serious way.
Another thing about the bill that concerns me is the general feeling on the part of the government that there should be a cutback or restraint in government expenditure. I agree with all hon. members that there is government waste, that there are extensive expenditures. But when you cut back on government expenditures, Mr. Speaker, you must be very careful to cut back on programs or eliminate programs that will not hurt the ordinary people of this country. We must make sure that the federal contribution to health in Canada is not decreased but increased, so that there are uniform health services and distribution of costs in all parts of the country, regardless of the economic wealth of the province concerned.
We must also make sure that, instead of cutting back on old age pensions and unemployment insurance, these programs have adequate money so that Canadians who are out of work or retired have an adequate income on which to live. Transfer payments to the poorer provinces must be adequate so that their programs keep stride with those of the wealthier provinces such as British Columbia, Ontario and Alberta. Educational programs must not be cut back. All of these are programs regarding which the government should contemplate no restraint.
There is needless expenditure-for example, the opening of Mirabel airport, the champagne, the caviar. There was a lot of wasted money there. Talk of restraint a few days after that extravaganza cannot be taken seriously by Canadians. We can cut out waste by eliminating such organizations as Information Canada. We should eliminate the other place. I see no reason in the world why we should have a Senate. It is not elected, it is undemocratic. It is made up in many cases of barons from the corporate boardrooms who lobby the various government depart ments and officials on behalf of their corporations, and who are living on a large guaranteed annual income that increases each and every year.

These are steps that could be taken to eliminate waste in this country, but no action from the government is forthcoming. I suggest that instead of being concerned only with inflation, which we all realize is a big problem, the minister must at the same time be concerned with unemployment, housing, and the recession in the economy. I would also remind him of the statement made by the Governor of the Bank of Canada, and by many trade union people, that wage demands always follow large price increases.
If we are to bring down inflation levels we must first stop price increases. Our party has suggested many times that the way to do this is to have a prices control board to which companies must apply before any price increase can be authorized. There should be selective controls over basic commodities which are produced in Canada. We control oil prices, but this control should be extended to commodities like iron, lead, zinc, and others that we produce.
I also suggest that we should have controls on interest rates and on the financial community. If we do not control interest rates and the financial community, how in the world can we be serious about controlling inflation? We should be bringing down mortgage rates and pouring hundreds of millions more dollars into housing in all parts of Canada. This would not only expand the economy but would tend to bring down the price of housing because of increased supply. These are steps that should be taken. No reference to them is made in the bill, or in the white paper, or in the speech that the Prime Minister made on television last Monday evening.
Government must also concern itself about the high rate of unemployment in Canada. The rate is now 7.2 per cent. Having regard to the statements made by the former minister of finance and by the Prime Minister a few months ago, one of the consequences of this particular program might be an increase in the unemployment rate. If we are going to lessen and limit the spending power of ordinary citizens, the little people, then naturally they will be unable to purchase as much as they did previously, and this could lead to an increase in unemployment.
These are matters that concern me, as a member of the House, about this anti-inflation package that is before us today. I want to tell the government that I believe that Canadians are skeptical about it. I believe that many politicians have over-emphasized or misjudged what we think is a cry for comprehensive price and wage controls in Canada. A few days ago the CBC released the results of a poll which showed that only 38.4 per cent of the Canadian public really favour price and wage controls at the present time, and I suspect that that is true.
In conclusion, unless major changes are made in the bill that will increase its equity and fairness in respect of low income people, unless amendments are moved and accepted, and unless many of the questions that have been raised by members of our party and the Conservative party are answered within the next few days, then the best advice the Canadian people can take is that they should not co-operate with this effort because it is going to be unfair and unworkable, and will penalize them and put the full burden squarely on the shoulders of the working people.
October 17, 1975


Gérard Laprise: Mr. Speaker, I do not think this anti-inflation legislation now being considered will be of any use in solving the problem of inflation since first this is a legislation which was tried out elsewhere without success; second, this legislation will create problems for everyone, businessmen, employers and employees. The Anti-Inflation Board as well as the administrator appointed to implement the proposed measures as well as the appeal tribunal will have lots to do to ensure the observation of the requirements contained in the white paper tabled in this House on October 14 last and the legislation now being considered. Through this legislation and the methods of implementation proposed therein the government will have the right of life and death over any Canadian corporation or business. It will have the same power vis-a-vis any group of employees united under a labour union because the great inquisitor will put his nose in all private business in Canada. We saw a similar system, Mr. Speaker, in Stalin's Russia and Mao's China. We are now preparing to impose upon the Canadian people a dictatorship that some people have the gull to call voluntary but that, in fact, is mandatory.
I was pleasantly surprised to see that despite the election campaign that the Tory party made in 1974 calling forcefully for a wage and price freeze, that party fears overcontrol by the government or administrators in the implementation of that legislation.
I was also surprised to see that the Canadian socialist party, the New Democratic Party itself admits to be apprehensive as concerns that clearly leftist legislation.
Yet, Mr. Speaker, if we really wish not only to control but reduce prices durably let us turn aside from the beaten track, let us seek for other alternatives.
This government has been in power since 1963 and had every opportunity to fight inflation, but through its action, through all kinds of measures in all departments, advised by the most famous economists, it got into the situation where it is now. It put our country on the verge of bankruptcy and each time we asked the government, last year, two years ago or even before, to take action to stop the spiral of inflation, the government always answered that it was the same situation in Europe, in the United States or in Japan.
Yet, today, it decides to do something and resorts to the same measures that were implemented in England and in the United States without any results or at least not the results anticipated.
There is no use, Mr. Speaker, to discuss at length about inflation, its causes and its effects but yet, on page 695 of the Encyclopedia Britannica it says:
The value of money reflects the value of goods and services that you can obtain for your money when you decide to exchange it. The value does not depend directly on the substance of money nor on the will of governments.
When we talk about price increases it means the loss of value of the dollar. This is what we also call inflation. Inflation is legal theft and fraud. The reduction of the dollar value means that the pay cheque buys fewer and fewer products. Savings, in spite of higher interest rates,
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allow to buy fewer and fewer products today than it would have been possible some time ago.
Labour unions, seeing the loss of value of their money, put pressure upon industry to obtain higher wages, not only because of the lower actual value of their salaries but also because of the expected decrease in their purchasing power. Hence the escalation of claims for higher salaries. But higher salaries are inexorably reflected in costs and also possibly in prices.
Only one remedy is open to political parties and officials of the finance department. They curb the amount of cash available by restricting bank loans, cutting down government expenses and limiting or preventing salary increases.
That is called a deflationist policy.
But such a policy leads to industrial stagnation, rising unemployment and hectic industrial relationships. The years between the two world wars are a classic example of that situation, when deflation was successful in cutting down prices, but caused millions to go unemployed and thousands bankrupt and resulted in general strikes and the destruction of real and concrete riches. Factories and shipbuilding yards were dismantled and sold for scrap, fields lay fallow and goods needed by consumers were dumped into the sea.
We must find a new course of action. During the past 100 years we have experienced booms and crises with increasing frequency mainly because of fluctuations in the value of currencies. Issuing more money would mean lowering the value of currencies, in other words inflation, whereas a reduction of the amount of cash available means an increase in the value of currencies, that is deflation. But what we need is equation, equality, an amount of cash which would match the amount of prices exactly.
There is no need to explain here how banks generate credit. It can be read in the pamphlet Only Banks Create Money, in the MacMillan report, where banking mechanisms are explained, or in the report entitled Comment les banques creent Vargent, which was published in the February 1971 issue of Regards. The justification of banks for claiming that exclusive right comes from the fact that long ago, banks kept gold reserves which depositors could claim at any time.
That theory collapsed at the beginning of World War I, when the banks, unable to meet their commitments, had to ask the government to print paper money to save them from bankruptcy. Today, gold plays absolutely no role in our domestic monetary system. Therefore, the banks are not justified today to claim exclusive monopoly on credit formation.
The real basis for the overall money supply is the goods and services that may be bought for money, and the banks do not own that basis. The monopoly on credit formation must be broken, because it has no more justification and because bank credit, to all practical purposes, is supplied exclusively to agents in the economy. The production of goods and services is scattered among a multitude of people. Our industrial system rests on work already done by a number of generations. We, as inheritors of that
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complex system of production, can view it as our real credit.
Unfortunately, we cannot produce at full capacity because of the credit formation monopoly held by the banks. The real credit must be "monetized", so the people can reap now the benefits of their inheritance. It must achieve the growth needed to produce the maximum amount of goods and services required.
The instrument capable of monetizing our real credit is the people's bank, that is, the Bank of Canada.
Money worth reflects the amount of goods and services that can be obtained in exchange for it. To restore its worth, we must increase the amount of goods and services to be obtained for each monetary unit. To be fair, we must at this stage establish a system that we call social credit, the compensated discount system or national discount. Its implementation requires:
(1)	That the government first require all retailers of consumer goods, including publicly owned corporations supplying retail goods to the public, to register with the retailer registry agency.
(2)	To register, the main condition for retailers would be to commit themselves to limiting their profits, say to 15 per cent of their business turnover, whatever the capital invested.
(3)	All registered retailers would have to make up bills, at least in duplicate, for any sales over $1.
(4)	The total shown on the bill would be submitted to a discount, say of 20 per cent, which would be clearly indicated on the bill.
(5)	A copy of these bills would be given to the retailer's bank which would credit him with an amount equal to the discount given and shown on the bills.
(6)	The banks would be periodically reimbursed by the Bank of Canada which would issue the credits required. I should add here that this would create new credits which would not come from taxes. It is important to emphasize this, Mr. Speaker.
It will have been noted, Mr. Speaker, that this way to fight against inflation is the opposite of what has been described and what we have seen in the white paper given on Monday night on television by the Prime Minister (Mr. Trudeau) and tabled in the House on the next day, Tuesday, October 14. Of course, the figures that I have quoted are only illustrations. The discount rate could be reviewed every three or six months and a new discount could be announced for the following period. In several provinces, sales taxes are administered as the national discount would be. Instead of adding a tax on the bill, we would rather grant a discount. The commercial banks would be refunded for the work burdening them. What would be the outcome?
With a discount of say 20 per cent, each $1 item would cost only 80 cents, which would increase the value of money. More retail sales would be felt by wholesalers and subsequently by manufacturers.
The latter would be led to boost their production, expand their plants and hire more workers. The national discount would add to the purchasing power of consumers without inflating wages and consequently prices.

Except at the level of the retailer where the discount would be applied, nothing would be altered in the present system and thus no confusion would be created in the production system.
Even if the registration of retailers would remain voluntary, a real penalty could be imposed on those who refuse to take part in the program because of their prices higher than the registered prices, they would have more difficulty to support competition.
Some penalties for fraud or offences could be imposed, such as suspension from the list of registered businesses. Monopolies as well as nationalized retail sale enterprises will have to be incorporated into this plan.
Credits created in the name of the people by the Bank of Canada will constitute only bookkeeping entries. There will no longer be any need to print more bank notes than at present, the only difference will be in increased value of each monetary unit, which will permit the purchase of more goods.
We, the public, would stand to gain a higher purchasing power, retailers would also profit through increased sales while wholesalers and manufacturers would see their volume of orders grow. The whole country would benefit from an adjusted currency that would maintain a stable value and a constant purchasing power.
Strikes started to get nominal wage increases would be less defensible than today. Men and women engaged in production would soon realize that by improving their output and eliminating waste, they would be allowed greater discounts. Employers and employees would work with the same end in view.
Savings would retain their value and money saved for future purchases would buy goods and services of the same value. Credit sales with their high interest rates would gradually disappear. Sales taxes would finally be abolished.
As I said the figures given are only examples. The allowed profit and the discount rate could be higher. It would be up to the government to decide whether any such imported finished product could be subject to the discount. The problem of dumping from countries where wages are lower could be solved in this way.
Mr. Speaker, with a prosperous industry, an export trade profitable to our plants could operate at full capacity. That is a program which is completely in opposition with what the government is offering us. The government has been falling back in the same ditch for a number of decades. We always end up with the same results. That is why, as members of the Social Credit Party, we urge the government to take other steps, to try something new. The action it is taking now has already failed elsewhere.
Then, why not try a different approach, a different way to operate? Why try to aggravate everybody with all sorts of controls? The compensated or national discount plan I talked about a while ago would not require any supervision. People would understand and accept it. But the so-called "voluntary" restraint program which the government is trying to impose will necessitate the hiring of an army of additional bureaucrats to visit the 1,500 corpora-
October 17, 1975

tions concerned, to go wherever people are employed, and to search through books of workers' unions to see if they are not trying to hide something or cheat.
Mr. Speaker, this program is already enticing businessmen and labour unions to cheat the government. That is what we do not want to happen. That is what the government should seek to avoid. So, instead of imposing on Canadians a control policy, a socialist policy, let us apply a policy worthy of the democratic government label, a free enterprise policy, allowing every one to develop according to his free will and to achieve his desires, and thus we will permit the production of useful goods, products desired by the population, and let us at the same time provide the population with enough purchasing power to get the goods producers can supply, the goods the population needs. That is the program I recommend to the government as we have before us this legislation which will be sent to the committee for study and will come back before the House. We will try to get that program adopted.


Mr. Claude-Andre Lachance (Lafontaine-Rosemont):: Mr. Speaker, when the Prime Minister publicly announced last Monday night the measures proposed by his government to fight inflation, I was glad to see that Bill C-73 would be sharp-edged and that the review board would have real power.
There is no doubt that during the last months considerable public pressure among Canadians demanded firm and, I dare say, authoritative action to oppose what it is now common practice to call a collective psychosis created by the present and future galloping inflation.
Many thought and feared that once more the anti-inflation plan would at best be a persuasive measure. Unfortunately, past experience has shown that mere incitement to moderation was not sufficient and that in times of anticipated crisis each of the powerful groups of our society tries to protect itself as well as possible by catching up with the purchasing power of the dollar that has been lost and by protecting this purchasing power for the future in case the economic situation would deteriorate even further. That is what is meant by the collective psychosis of inflation and everybody has understood its psychological causes and felt its economic effects, the unions, the large companies, the professionals and the civil servants.
So, last spring's stimulants having proved inefficient, new solutions had to be found and formulated to exercise greater, closer control over the laws of the market. Fortunately for us Canadians, we have been able to gain some insight from the experience acquired in that field by our neighbour to the south. Through a series of controls, the latter managed, from 1971 to 1973, to lower by several points its rate of inflation. But at what cost! An acute economic recession, chronically high unemployment, social unrest, state bankruptcies and black market activities.
Conclusions had to be drawn and efforts made to avoid the errors and pitfalls from which those evils stemmed. The result of that cogitation is Bill C-73, to provide for the restraint of profit margins, prices, dividends and compensation in Canada. What is it, essentially? First of all, two economic techniques intended to use present mechanisms to better guide the market have been used, namely fiscal and monetary policies aimed at increasing total demand
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and production at a pace compatible with lessening inflation and, secondly, structural policies aimed at dealing with the particular problems of energy, food and housing, to make the economy more dynamic and more competitive and to improve labour relations.
Another mechanism has been advocated by the government in these anti-inflation measures; although not new since it was already featured in last June budget, it is nonetheless a serious indication of the new trend toward restraining government expenses. I refer to a policy of public outlays geared to stifle the growth in expenditures as well as the pace of growth in employment in the public service.
But the item which is really new-and it is the one we should examine in the debate on Bill C-73-is the new price and income policy, which reads as follows, on page 3 of the white paper:
establishes guidelines for responsible social behaviour in determining prices and incomes of groups, together with machinery for administering these guidelines and ensuring compliance where necessary.
I will not dwell in detail on the whole Bill C-73, which is of an incredible complexity and the importance of which- as indicated by the hon. member for Peace River (Mr. Baldwin)-is minimized by nobody. I will not discuss in particular the price control issue, leaving to somebody else the task of bringing out its main characteristics, its advantages and disadvantages, its eventual means to face it and the legal procedures applicable. Let us simply say that the control board will have a big responsibility to bring certain industry majors under discipline and that it should not hesitate to enforce to the letter the penal provisions now that we have, for once, legislation with teeth in it.
I would rather speak at some length on the second facet of this act, namely the guidelines on incomes. First of all, it is important to emphasize that these guidelines are flexible and allow the newly set-up Anti-Inflation Board a lot of room for interpretation and discretionary power. By the way, I would like to take this opportunity to greet its president, Hon. Jean-Luc Pepin, and its vice-president, Mrs. Plumptre, to whom I wish good luck and good cheers. The guidelines regarding wages and salaries and other types of remuneration consist of four elements: (1) The basic protection factor. (2) A share in increased national productivity. (3) The improvement of past salary policies; and (4) the minimum and maximum increments in dollars.
I shall briefly deal with the third point and in more detail with the fourth, which makes up the core of my argument. I contend it is very important that this new policy provide for a so-called "catching-up" factor.
Indeed, the aggravation of some unbalances has been the first consequence of inflation and the tendency in the last few months to provide for considerable increases in collective agreements, and I have in mind those of policemen and MUCTC drivers or even mailmen. It would have been socially unacceptable not to provide this stabilization factor particularly in the case of different bargaining units within the same company or service, when collective agreements unfortunately, do not expire at the same time and one unit obtained what others, on account of a date arbitrarily set, cannot get.
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Having said that, I shall take a look at the aspect of wages proper and especially the imposition of minimum and maximum increases of $600 and $2,400 respectively.
Let us start with the easiest part, which is paradoxically the ceilling of $2,400. At first sight, the figure would seem to be reasonable, in the circumstances, particularly in the light of the table on page 25 of the white paper, and giving the permissible increase for each income level and past wage practices. I would even go as far as saying that after analysis and despite the inevitable arbitrary nature of the figure very few wage earners directly affected by that ceiling will want to complain. And that is where you find a hitch. They will not complain because most often they will know how to go around it. And they will not be short of means.
First there will be a brilliant junior executive of an agressive business in full expansion who will be promoted by an elegant lateral arabesque to a practically equivalent position but with a big title that will allow him to go around the 12 per cent annual increase. There will be senior executives who, as usual, will find tax artifices to put to even better use an expense account that is yet already well built up. There will be those dear professionals-of which I am, God forgive me-who will be the least affected of all because in most cases try and check the number of hours a lawyer spent writing a factum, an architect spent on his drawing board, a physician-and that is calculated in minutes-spent with each patient, and so on. In any case, the official rates set out by professional corporations are generally flexible enough to allow nice and clean twists.
And they also have an expense account, I had forgotten. But let us be serious; I think it is utopia to think that any form of control can be applied effectively to professionals, and basically that is not more important than necessary I think as they only represent a relatively insignificant percentage of the inflationary factor.
So, to control properly the effectiveness of that ceiling of $2,400 tight steps will have to be considered for employers, for example by monitoring the wage package and making sure that the average overall increase for employees does not exceed the standards, and by urging the employees themselves to submit to the law in good faith, for example, by taking penal steps against them. Clause 44(1)(d) could be used for that.
So let us take for granted that the upper ceiling of $2,400 is realistic and enforceable. There remains to see what is happening in the less privileged classes of workers. For them the ceiling is $600, in the sense that authorized increase percentages apply only above $600; $600 mean a 10 per cent increase for a worker with a yearly $6,000 income. Below that figure, the percentage increases accordingly. It should first be fully realized that a worker at that level has very little freedom of action. His scope of initiative is limited and he probably can expect no promotion. He is taxed at source and can therefore find no fiscal loophole to better his position. For him, the ceiling is a reality. Here again, discretion has its part to play. There had to be a ceiling somewhere, and it was decided that it would be $600.
Allow me to quote some statistics which will substantiate my argument. The average salary of a Canadian

worker is close to $9,000. According to Statistics Canada, the poverty line for a family of four amounted to $5,295 in 1973, which means, with an 18 per cent factor of inflation, approximately $6,295 at the end of 1975.
Now, the poverty line as determined in the Senate report on poverty, the Croll report, was at $6,990 in 1973; which would mean, with the same 18 per cent factor, approximately $8,000 in 1975. I will not elaborate on the reasons which lead me to pick up the index of the Senate report on poverty instead of the Statistics Canada index. Let me just explain the reasons for the noticeable difference between the figures of Statistics Canada and those of the report on poverty.
Poverty line as defined by Statistics Canada is the amount of money needed by a family which has to spend 70 per cent or more of its total income on current necessities: food, housing and clothing. Poverty line in the Senate report is set at 50 per cent of the average family income in Canada, considering inflation and gross national product. The difference between both approaches is quite important and explains the gap between figures. A simple logical operation would in my opinion provide a more liberal, if still arbitrary, way of assessing the minimum amount below which there are no percentages. Because 10 per cent being the recommended increase percentage, if we use the $8,000 figure referred to in the poverty report, we get an $800 amount of annual increase.
This is once more an arbitrary way. But if we increase by $200 the minimum amount, we would help small wage earners to close the revenue gap between haves and have nots. This is a desirable objective. And although controls of any kind inevitably entail inequities, we must minimize this legislation's impact on that segment of our population that is least capable of defending itself and the first to suffer, at least on a short term basis.
I will have an opportunity to explain my views more fully when the bill is referred to committee. But I feel it is my duty to indicate to the government, through the Minister of Finance (Mr. Macdonald), that they should seriously consider increasing from $600 to $800 the threshold for the application of controls.
To conclude, I thank the Minister of Finance for the anti-inflationary measures he introduced today. He himself said they would hurt, but in these troubled times of very unsettled world economies, they were required. I therefore urge all Canadians to accept the scheme for what it is, an invitation to restraint and an articulated effort to put the Canadian economy back on its rightful orbit, which is balanced growth and distribution of wealth.


Marcel Joseph Aimé Lambert: Madam Speaker, on this Friday afternoon we have before us a rather fascinating scenario. It reminds me of the man who watched his barn smoking for an hour, and when the roof was falling in he suddenly decided to call the firemen. In the interval he had been hosing down his house in order to protect it and not the barn.
For seven years the government has been conscious of inflation. In July, 1969, when there was not quite the same need for a dramatic gesture, I was in Sydney on Cape Breton Island and saw the self-same right hon. gentleman,
October 17, 1975

the Prime Minister (Mr. Trudeau), on television speaking to Canadians on inflation. There was inflation about in the country. We had inflation in 1968, and there are some here who might remember the steps that the government had to take-there had been a dollar crisis and there had been an election in 1968. There have been elections in 1962, 1963, 1965, 1968, 1972, and 1974, and I might say to the hon. Minister of State for Fisheries (Mr. LeBlanc) that I participated in every one of them.


Miss Campbell:: They were blessed!


Marcel Joseph Aimé Lambert: I can go back to 1957, if hon. members opposite want me to, but the point is that in 1968 there was very serious inflation, and in 1969 there was very serious inflation. I might say to members of the Standing Committee on Finance, Trade and Economic Affairs of today that at that time there was a special committee on banking and finance which sat for months considering the problem of inflation. It was under the chairmanship, I believe, of the hon. member for Windsor West (Mr. Gray), the former minister of consumer and corporate affairs and, if I may say so, since I was a member of the committee, it brought in a very able report on the problems of inflation which gave the government an idea what it should do to deal with inflation at that time.
What happened to the 1969 program? There was to be a limitation on the public service, with certain departments exempted. One of them was the precursor to the Department of Regional Economic Expansion. It was the "Mar-chand Expansion Bureau". That was not to be limited. There were a couple of other such departments as well. You know, the expansion of those departments more than outweighed reductions elsewhere. So on that score the government's program of restrictions went down the drain. I recall the same right hon. gentleman, who had said in 1969 that inflation was so serious, saying in 1971 that we had licked inflation. Oh, yes, inflation was beaten, mastered.
Then the government had the misguided sense to introduce a new income tax act. Ah, with that gesture they negated the principal recommendation of the finance committee of 1969 about increasing productivity because that income tax act, with its steeply progressive rates of personal income tax, has stunted and blunted the elements of productivity in this country. We have seen, ever since, a steady decline in average productivity. Any economist will tell you that as productivity declines, unit costs go up and we have the strongest push toward inflation. That income tax act has been one of the elements leading to inflation.
Secondly, in the act there is a built-in incentive to inflation. As hon. members and all others in this country were taxed more and more, so those with economic crunch sought more and more. The more they got, the more yield there was by way of tax. But this government's answer was not to deal with the root cause. As I said a little while ago, it put the fire hose on the hose itself alongside the burning barn. It did not want the firemen to put out the fire; it wanted them to hose down the house beside the barn. We have seen a fantastic increase in moneys transferred from one source in Canada to others-in other
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words, a redistribution of personal income. We have seen increases in UIC benefits, in old age pensions, in war pensions, in-you name it-welfare-


An hon. Member:: Do you call veterans' pensions welfare?


Marcel Joseph Aimé Lambert: Madam Speaker, if the deputy whip had recovered from his appointment and kept his ears open he would have heard me say that these payments are all in the category of transfer payments to persons. Of course the government had plenty of funds, because of the yield of the personal income tax, to transfer to these groups, groups which were very much affected by inflation. They were the ones that had not, shall we say, power to increase their own revenues. The protection was there for them. But the whole process was feeding on itself in a vicious circle.
As the government obtained more money through taxes, the people with economic power wound up getting more and more on each cycle of wage settlements. We have seen the percentages go up and up. Cast your minds back to about 1968 and consider the changes in wage settlements that have taken place and how the percentages have increased. We can see how inflation has eaten like a cancer into the Canadian economic body. It has grown and fed on itself. Of course now at the third or fourth cycle even this government, with its myopia, has suddenly discovered that inflation has reached such a stage that it has asked the people of Canada to accept, as the hon. member for Peace River (Mr. Baldwin), the Minister of Finance (Mr. Macdonald (Rosedale)), and the Prime Minister said, one of the most serious steps that the Government of Canada has had to take in 30 years.
But why has the situation changed to the extent that the government wants to take this action, wants to eat its own words, reverse entirely its stand of 1974, reverse the stand the former minister of finance took in February, and reverse the stand of his budget of June 23? Why has this happened? I will try to offer an explanation. It is not that the government has suddenly become conscious of the perils of inflation and become concerned. What has happened since June to cause it to be more severe? We have seen much higher individual monthly increases in the CPI, since the budget, than the latest increase. Oh, yes, the unemployment figures have varied somewhat; there have been minor adjustments, plus and minus, owing to seasonal changes. But what jolted the Ministry of Finance and the Prime Minister into the sudden consciousness of the economic plight of Canada? There are two theories.
The first theory is that the Prime Minister wanted to divert the attention of the country from the effects of the resignation of the former minister of finance. That is one theory. He wanted to do something dramatic. Certainly, the hon. member for Ottawa-Carleton (Mr. Turner) has almost sunk into obscurity, because the media and the mind of the public are suddenly seized with the idea of economic controls. That is all they are talking about. You know, this is a standard ploy of the right hon. gentleman. If a real problem faces him, a situation is created on the side and attention is diverted to it.
There is a further theory regarding the reason which would lead the Prime Minister to adopt this idea. Ever

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since the last election the right hon. gentleman has been constantly criticized for not providing the necessary leadership. Editorial after editorial, commentator after commentator, both in the written and spoken media, castigated the Prime Minister and his administration for lacking guts, lacking leadership, and for failing to take action. Well, the right hon. gentleman is very conscious of his political image; so, what did he do? Even at the price of swallowing himself, he decided, suddenly, to try to show leadership by saying, "All right, we are going to impose price and wage controls." He appeared on television posing as the valiant knight-yes, Madam Speaker-as the valiant knight defending the Canadian economy. May I call it four o'clock?


The Acting Speaker (Mrs. Morin):: Order, please. It being four o'clock, this House will now proceed to consider private members' business as listed on today's order paper, namely, public bills, notices of motions and private bills. Is it agreed that order No. 8 under public bills shall stand?


Some hon. Members:: Agreed.


The Acting Speaker (Mrs. Morin):: With the consent of the House, shall all orders under this item stand until we reach No. 51?


Mr. Blais:: Madam Speaker, I believe there is agreement to consider item No. 51.


Some hon. Members:: Agreed.


PRIVATE MEMBERS' PUBLIC BILLS
James Aloysius McGrath: that Bill C-251, to amend the Department of the Environment Act (fisheries) be read the second time and referred to the Standing Committee on Fisheries and Forestry.
He said: Madam Speaker, the purpose of this bill would to a certain extent offset some of the serious harm that was done to the fishing industry as a result of the government re-organization bill of 1971 whereby the Department of Fisheries, as it was then known, ceased to exist. It was merged into a new Department of the Environment. I say serious damage because the Department of Fisheries was dis-established at a time when the industry in Canada was beginning to face very serious problems, the most serious in the history of this ancient industry. I say they would offset the damage that move caused to a certain extent, because the purpose of the bill is to create a deputy minister of fisheries. There is no such person in the organization of the Government of Canada at the present time.
I might say that as a result of my amendment to the Government Organization Act of 1971, there is now a Minister of Fisheries. According to the law, the Minister of

the Environment (Mrs. Sauve) is also the Minister of Fisheries. Of course we now also have a Minister of State (Fisheries) (Mr. LeBlanc). This gives me an opportunity to digress for a moment to congratulate the hon. member for Gander-Twillingate (Mr. Baker) who has just been elevated to the post of parliamentary secretary.


Some hon. Members:: Hear, hear!


James Aloysius McGrath: This debate will give him an opportunity to make his debut as the Parliamentary Secretary to the Minister of the Environment, the Minister of Fisheries, and the Minister of State (Fisheries). He indeed has three ministries to which he is assigned.
I also wanted to make some very complimentary comments about the Minister of State (Fisheries) who was in the House until a short time ago. However, since he elected not to dignify this debate with his presence, I will withhold the comments I intended to make about the minister and his role in the recent ICNAF conference in Montreal.
Also may I take this opportunity to extend my congratulations to my colleague, the hon. member for Humber-St. George's-St. Barbe (Mr. Marshall), who has been elected by our caucus to be our official spokesman on fisheries.


Some hon. Members:: Hear, hear!


James Aloysius McGrath: I offer my congratulations as well to his predecessor, the former member for St. John's West, who is now the minister of fisheries in the government of Newfoundland.
This is a very important bill because it would create within the Department of the Environment a deputy minister of fisheries. In other words, the public servant within the Department of the Environment who now presides over that division known as Fisheries Service would be elevated to the rank of deputy minister. That would have certain obvious advantages, not the least of which would be to re-emphasize, underline, and restate the importance of fisheries in the over-all budgetary considerations of the Department of the Environment.
It is fair to say that the major weakness of the present setup that we now have for the organization of the government whereby we have a Minister of State (Fisheries) is that the minister is virtually powerless because he does not preside over or control the budget of the Department of the Environment. The Minister of State (Fisheries) is dedicated to his job. However, let him explain to the House and the country why among the first items to be eliminated from the budget of the Government of Canada as a result of the budget brought down last June was the vote of $10 million for small craft harbours. That $10 million was about a third of what we had for the current fiscal year to spend on wharves, breakwaters, and facilities for our fishermen. That was eliminated much to the surprise, chagrin, and consternation of all members, certainly those who represent constituencies in the Atlantic provinces, British Columbia and indeed the fresh water fishing areas of this country.
The appointment of a Minister of State (Fisheries) and the elimination of the small craft budget for fisheries is contrary to the expressed wish of the Liberal Party of Canada. A resolution was passed by the 1973 Liberal
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convention in Ottawa. I would like to hear the new parliamentary secretary address himself to this, but he must be careful that he is not swallowed by it. The resolution was as follows:
That in view of the increasing importance of the fisheries to the people of Canada, particularly to the people of the coastal provinces, that there be re-established immediately a department to take charge of this area to be known as the Department of Fisheries and Marine Resources.
That is an exact quotation of the resolution passed at the 1973 Liberal party convention. I suspect the parliamentary secretary was not at that convention. However, he certainly attended the meeting of the Atlantic provinces' Liberal candidates in Halifax during the 1974 federal election campaign. They passed a similar resolution calling for a separate Department of Fisheries, claiming that the 1972 government re-organization bill had submerged the department and created the Department of the Environment.
Following the meeting of Atlantic provinces' Liberal candidates, the Prime Minister (Mr. Trudeau) was quoted by the press as saying he supported that resolution. He made a solemn pledge to the people of the Atlantic provinces that he would in fact re-institute the Department of Fisheries. I would like the parliamentary secretary, who represents probably one of the most important fishing constituencies in Canada, to explain how he can reconcile his present role in the Liberal party with the fact that this resolution of the Liberal candidates of the Atlantic provinces has been virtually ignored by the Government of Canada.
The industry is going through a crisis. The very survival of the industry is at stake, as is the very survival of the economy of the Province of Newfoundland which is so heavily dependent upon the industry.
While I would be the first to congratulate the Minister of State for Fisheries and the government on their success at the ICNAF conference in Montreal in getting through that resolution which would provide for a 40 per cent reduction in the total catch of ICNAF members, as well as a corresponding increase in our own portion of the catch, I would at the same time caution the government that this is not enough. This in no way diminishes the critical need for Canada to extend its jurisdiction for the purposes of managing the control over the 200 miles economic zone as the Republic of Iceland has already done, and as the Congress of the United States has already voted to do.
I hope the minister will lead the Canadian delegation to the Law of the Sea Conference when it resumes in New York in March, and that he will carry with him the desire of the Parliament of Canada, and the desire of the people of Canada as expressed by all the premiers meeting in St. John's a few months ago, in order to preserve this vital industry, for Canada to extend its limit up to 200 miles for the purpose of conservation. Anything less than that will not succeed because we know from past experience the weakness of ICNAF.
The inherent weakness of the ICNAF treaty is, basically, the inability of member countries to live up to the commitments they have made. We have no reason to sus-
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pect that this situation will be changed in the future. We do not possess at this time the surveillance capacity to put into practice the authority we have under the ICNAF agreement to board vessels fishing off our coasts to determine whether they are living up to their quota commitment.
Canada must have the right to exclusive management. I do not mean to imply for a moment that Canada would exert its right to the exclusive harvesting of the resources. But somebody must be responsible for the management of the resource and, obviously, that somebody should be the coastal state adjoining the resource. Canada should exercise its right to management of the resource not only for ourselves, vital as the industry is for us, but for the other nations of the world, and certainly for the nations signatory to the ICNAF agreement whose vessels fish off our shores.
I know the minister will carry with him when he goes to this conference the good will of the House and of the people of Canada. I hope he will see fit to include among the Canadian delegation members of the opposition parties who could go along as observers. This would be a tangible indication to other countries at the conference that Canada stands united in this effort.
I do not intend this afternoon to outline the problems of the industry because I think they are well known to the House. I merely wish to conclude by saying that in the midst of this tremendous crisis, this life and death struggle of the industry to survive, it is a matter of considerable regret to me that we should be without the support of a separate department of fisheries in Canada. I give credit to the Minister of State for Fisheries. He is doing the best he can when one takes into consideration the handicap under which he is obliged to operate. Specifically, he does not preside over the department; he has little or no input into the management of the department's budget, and hence he is virtually powerless to discharge his responsibilities in the department toward the fishermen of Canada.
I hope the House will agree to allow this bill to be referred to the committee so that we may have a chance to call witnesses and study the impact of the proposals I have made. All the measure calls for is the creation of a position for an officer within the present Department of the Environment who would be known as the Deputy Minister of Fisheries, and whose function would obviously be to look after the operation of the fisheries and assist the Minister of State for Fisheries in this regard. I hope this bill will commend itself to the support of the House.


Some hon. Members:: Hear, hear!


Mr. William Rompkey (Grand Falls-White Bay-Labrador):: May I first of all thank the hon. member for St. John's East (Mr. McGrath) for raising this matter and giving us the chance to take part in this debate, one which is so important to us on the Atlantic coast and, indeed, to people all over the country because fisheries have become a national issue, and rightly so.
I should like to join the hon. member in congratulating my hon. friend from Gander-Twillingate (Mr. Baker) on his appointment as parliamentary secretary. I take it this is not only an indication of the ability of my hon. friend and the esteem in which he is held, but that it is a recognition of a particular province, that is to say, the

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Province of Newfoundland and Labrador. He follows a number of members of this House, including myself, in that position, and I am sure he will live up to his responsibilities most capably.
I should also like to extend congratulations to the hon. member for Humber-St. George's St. Barbe (Mr. Marshall) on his appointment as spokesman on fisheries for the opposition. I hope this does not mean he will not speak on behalf of the veterans; I doubt very much whether he will discontinue his representations on their behalf. I might add that it is going to be interesting having two Newfoundlanders talking about fisheries across the aisle, and that we are likely to hear a lot about fisheries in the coming year.
The bill before us appears to contain two main points. One is that there should be a deputy minister, and the other is that fisheries should be given priority. With regard to the first point, I understand that in law the Deputy Minister of the Environment is, in fact, legally the Deputy Minister of Fisheries. As the hon. member knows, within the structure of the department there is a deputy minister and two senior assistant deputy ministers, one for fisheries and one for the environment.
I am sure the hon. member knows enough about organization and structure to realize it is a good idea to have one man at the top. Structurally, I do not think this arrangement can be faulted. However, I should like to make it clear that, within this departmental structure, fisheries and environment are treated as co-equals. Each has a senior assistant deputy minister at its head and, if I may say so with respect to fisheries, a very capable senior assistant deputy minister supported by a most capable staff.
As I am sure the hon. member knows, many of the staff both in Ottawa and in the regions do in fact come from Newfoundland, and the people of Newfoundland have no cause to feel that their interests are not being served by the people who work in the public service in the fisheries branch of the Department of the Environment and Fisheries. I could name names but I shall not do so in the House this afternoon.
I would simply point out, for example, that the chairman of the Canadian Saltfish Corporation, an organization created by the Government of Canada, a Liberal government, and one which has been a Godsend to the fishermen in my area, is a Newfoundlander. We also had advisers at the Law of the Sea Conference like Dr. Arthur May who has now returned to Ottawa and will be advising us on quotas and stocks-a most capable man, an outstanding Newfoundlander and an outstanding Canadian-who will be playing an active role, I am sure, when the Law of the Sea Conference reconvenes next spring.
I am merely calling attention to the fact that within the departmental structure, within the Ministry of Fisheries, there are capable people, dedicated people, who know their jobs and who are working on behalf of the people not only of western Canada but all across the nation. If the hon. member is seeking an organizational structure for fisheries, it is already there. It is separate, distinct, unique. It is working.

One point we should consider is that Environment and Fisheries have to work very closely together. The main point is preservation of stocks. Fishery stocks live in an environment. Obviously if you are to protect the stocks that you have, you must protect the environment. There is a good and adequate, sound basic reason why environment and fisheries should work very closely together, should be intregrated in the best way possible, and I think this is happening at the present time.
It is also true to say that the fisheries should be given a priority. I notice in the bill the phrase that the fisheries should be given a priority. One indication of the fact that this government does give priority to the fisheries- indeed Liberal governments in the past have given priority to the fisheries-is the appointment of the present Minister of State (Fisheries) (Mr. LeBlanc). Earlier the hon. member gave credit to the minister and in fact was prepared to give praise to him for his efforts on behalf of the fisheries up to the present time, and I echo that praise. He has been a good minister and I am sure he will continue to do a good job. But the appointment of the minister must surely be more important than the appointment of the deputy minister.
There are people who say that the bureaucracy is strong and that it is growing stronger every day, but I for one would like to believe that the minister is still the important figure. He is the creator of policy and sees that that policy is carried out. I think the fact that the minister was appointed by a Liberal government on the recommendation of the same Atlantic caucus, the same meeting of Atlantic candidates to which the hon. member referred earlier, is an indication of the priority given to the fisheries.
With regard to his control over budget, if the minister was able to get $50 million from the federal treasury to subsidize price support in Canada, I think this is an indication that he has certainly the ear of cabinet and that he will not fall short when it comes to obtaining funds to carry out the particular programs that he has in mind. I can point to other programs as well where the fisheries have been given the necessary sums to do what is required to be done at any given point in time in the industry's history. The minister has shown that he can get these funds, and I believe he will continue to do so.
With regard to small craft harbours, it is true that the budget this year has been cut. But it was a Liberal government that tripled the budget for small craft harbours two years ago. The fact that the budget was cut this year shows that we cannot have restraint on the one hand and not on the other. If we are to have a policy of restraint and budget cuts where necessary, then this policy should be applied across the board.
Where does one make cuts? The answer is in areas that are capital intensive, in areas that are not labour intensive. This does not affect fishermen in small communities who want to work in the off season. This is where the minister chose to make his cuts and I think he has probably made a wise decision.
The building of wharves, breakwaters and what have you, is done more and more by equipment and machinery rather than men. But let me also tell the House what
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direction the minister is heading in with regard to the building of marine facilities in small harbours. For example, this year the minister's small craft harbours branch is operating in conjunction with the Department of Manpower and Immigration and in some cases providing funds through LIP to meet the labour portion of the cost, and in this way wharves and breakwaters are being built. Even when the minister was a private member he was talking about this kind of approach whereby the building of such facilities is put in the hands of the people who will be using them later. That is a sensible approach, one that is making the building of marine facilities in small harbours more labour intensive. It is putting money into the pockets of our fishermen, at the same time giving them the required facilities. That sort of thing has been happening this year and is an approach that I personally endorse.
Another example of the way in which the government has given fisheries a priority is in the attempt to obtain a 200 mile limit. Let us not forget in all this talk of a 200 mile limit that it was a Liberal government that raised the idea in the first place. While others were talking of a 50 mile limit the Liberal government was talking about 200 miles. It was the people in the Department of Fisheries and in the fisheries branch of the Department of the Environment who drew up the mechanics of our argument, in conjunction with the external affairs department, which was presented at the Law of the Sea Conference. So let us not forget that this was a Liberal initiative.
The question is not so much whether we should have a limit; the question, of course, is how to get it. There we differ. Members on the other side of the House are saying that we should get it unilaterally, that we should go out with the gunboats and start shooting and running people down. I think events lately have shown a possible course, that what we have advocated is a wise course. We showed we meant business, in closing the east coast ports and, following that closure, in the later discussions which brought about a 40 per cent reduction in the catch. That is effective action, action, that is meaningful. It is action that people in my riding see and appreciate.
A 200 mile limit is not going to solve all our problems, and I do not think we should think that it will. I should like to list some of the problems that I became aware of as a result of recently travelling around my riding. For example, a 200 mile limit is not going to solve marketing problems, a real source of concern at the present time. There are fishermen in my riding who are throwing away herring and mackerel because they cannot get people to buy them. I do not know whether the hon. member for Humber-St. George's-St. Barbe (Mr. Marshall) has found the same problem in his riding; he has the same geographic area I have, but certainly it is a problem in my constituency. I hope that he will talk to his colleague in Newfoundland and impress upon him the necessity of having a good, sound marketing organization in the province, particularly along the northeast coast, to look after fishermen in small communities who are now throwing away part of their catch.
As I say, the problem is a marketing one, and if individual businesses cannot improve their marketing policy so that the situation is taken care of, the government will have to step in and create some sort of market-
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ing board, or extend the jurisdiction of the Salt Fish Marketing Corporation so as to include other species.
Experiments along this line have been tried. The Salt Fish Marketing Corporation this year is buying species other than salt fish, but I should like to see it focus on that portion of the province, the northeast coast of Newfoundland, and the coast of Labrador, where some sort of marketing organization is needed to dispose of those species with which the fishermen find difficulty.
A 200 mile limit is not going to solve the income support problems of the fishermen. There are fishermen in my riding this year who made as much as $400 to $600 a month as a result of the $50 million subsidy program that I alluded to earlier which the minister provided. The federal Liberal government this year for the first time put money directly into the pockets of the fishermen. Heretofore we subsidized the companies; this year we subsidized the fishermen directly. The fishermen see the value of that money, and it is a program that we should continue.
I have already talked of the small craft harbours program. A 200 mile limit is not going to solve the lack of holding facilities. The federal government now has a program that puts up 50 per cent of the cost of such facilities. Again this is sorely needed by many fishermen. A 200 mile limit will not supply marine service centres, as DREE has in many parts of the Atlantic provinces and on the west coast. Once again more of these centres are sorely needed.
I have been referring to the kind of policies that we have and that we need. Changing the structure of the department, talking about various organizations and the Department of the Environment I do not think will solve the problems of the fishermen on the east and west coasts. What these fishermen are saying is that we should get on with the job, that we should produce the policies required. Evidence that this is being done can be seen today, but the point is that changing the structures is not, to my mind, as important as the policies themselves. We have done a lot as the federal Liberal government for fisheries in Canada, but we are going to do more.


Some hon. Members:: Hear, hear!


Mr. Jack Marshall (Humber-St. George's-St. Barbe):: Thank you, Madam Speaker.


Stanley Howard Knowles: This is a Newfoundland afternoon.


Jack Marshall: Madam Speaker, I want to commend my colleague, the hon. member for St. John's East (Mr. McGrath), for again focusing attention on fisheries. I guess the hon. member for Gander-Twillingate (Mr. Baker) is getting a little embarrassed by the commendations that are being offered, but I too want to offer my congratulations on his appointment.
If I recall correctly what the hon. member for Grand f'alls-White Bay-Labrador (Mr. Rompkey) mentioned about marketing, I fully agree that marketing is particularly important to Newfoundland. Is this not all the more reason for having a deputy minister directly concerned with fisheries in order that he might get into that part of the job and also do something about the income support
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program which we have been awaiting for so long? Such a deputy minister could then do something about the other problems the Minister of State (Mr. LeBlanc) cannot find time for except on an over-all basis.
The Minister of State for Fisheries has been doing an excellent job since taking over this portfolio, and I suggest he deserves to have a deputy minister of that department in order to make sure that all the programs referred to by the hon. member for Grand Falls-White Bay-Labrador are being carried out. In the Department of National Health and Welfare there is a deputy minister for health and a deputy minister for welfare.


James Aloysius McGrath: And they are not assistant deputy ministers.


Jack Marshall: They are not assistant deputy ministers, as my colleague reminds me. Would it not be just as important to have a deputy minister of fisheries in order to focus attention on the importance of fisheries? We should have a deputy minister with the title and everything that goes with it.
While speaking of marketing, it is difficult for me to reconcile that our catches of fish have been decreasing and our exports have been dropping with the increase in our imports. In 1973 we exported $499 million in fish from Canada and in 1974 this value dropped to $437 million. The fish marketing board has reported that we are building up fish inventories, but we still imported $120 million worth of fish last year. I suggest that we are buying our own fish back.
The foreign draggers are coming in and taking our fish back for processing and then selling it back to us. In 1973 we imported $111 million worth of fish, in 1974 this increased to $120 million, and this has taken place at a time when our exports dropped from $499 million worth to $437 million. So it is very important that the issue of marketing be attached as one of the duties of a deputy minister of fisheries.
The other serious problem I should like to refer to today relates to this massive income support program for fishermen that was promised back in 1974. On July 26, 1974, the minister of fisheries for Newfoundland wrote a letter to the then Minister of Fisheries, Mr. Jack Davis, pointing out his feelings about the income support program for fishermen that was to be established. We have heard periodically that it will be forthcoming in a few weeks, but here we are in 1975 without this program. Fishermen are giving up the fishing industry because they cannot afford to replace their gear, yet we still do not have a support program.
Let me remind those hon. members opposite who were saying during the last election campaign that, were it not for the Conservative party forcing an election, we in Canada would have an income support program for fishermen, that it is now 1975 and we still do not have such a program. I am now wondering with the proposed restraints that are to take place whether we will see an income support program for fishermen in the near future.
This is an important matter and is an element in the proposal for a unilateral 200 mile limit. Even though the hon. member for Grand Falls-White Bay-Labrador and I represent sister ridings, I am sure he knows that the

stories he hears from his fishermen are different than the stories I am getting from mine.
It is worth while to point out that while Canada is moving toward negotiating a 200 mile limit, or perhaps a continental shelf limit, four countries which have been distressed, disturbed, and discouraged by the slow progress made at the international Law of the Sea Conference have already moved toward their own 200 mile limits. Those countries are Norway, Mexico, little Iceland, and recently the United States.
The hon. member for Laprairie (Mr. Watson) was with me in Washington when we discussed with a fisheries committee there a bill they proposed for submission to the House of Representatives proclaiming a unilateral 200 mile limit. If I may, I would like to quote one or two of the reasons they give in respect of this bill. They are first:
That international negotiations have so far proved incapable of obtaining timely agreement on the protection and conservation of threatened species of fish and marine life;
That there is further danger of irreversible depletion before efforts to achieve an international agreement on jurisdiction over coastal and anadromous fisheries result in an operative agreement; and
That it is therefore necessary for the United States to take interim action to protect and conserve overfished stocks and to protect our domestic fishing industry.
If the United States can see fit to declare unilaterally a 200 mile limit for the reasons outlined here, surely Canada should focus the attention of all nations at the Law of the Sea Conference on the fact that we mean to take action. We can bring attention to the fact that we are not going to hurt anybody by such a declaration in respect of fisheries alone, and following that we can negotiate in respect of the other resources.
In order to give some of my other colleagues a chance to speak on this very important bill I just want to refer to one other matter, and that is the elimination of the $10 million allocated for small craft harbours. This will be of great harm to the fishermen who need those bases to take advantage of the fish stocks off our shores that are not being taken by foreign draggers. It is extremely important that the government immediately reallocate this $10 million in order to provide those bases for the fishermen so that they can at least get the fish the hon. member for Grand Falls-White Bay-Labrador says they are now throwing back.
I want to commend my colleague again for presenting this bill. I am sure the hon. member for Gander-Twillin-gate will be speaking on it, so I want to leave enough time for a vote in order that we might get agreement from everybody in the House.


Mrs. Iona Campagnolo (Parliamentary Secretary to Minister of Indian Affairs and Northern Development):: I appreciate being recognized, Madam Speaker, because otherwise this might have turned into an international Newfoundland day.
The hon. member for St. John's East (Mr. McGrath) has, in my opinion, today served two purposes. First, by bringing forward this bill he has proved that action has indeed been taken by the government on the issue of giving greater prominence to the role of fisheries in our country. The string of successes already attributed to the Minister of State for Fisheries (Mr. LeBlanc) is really quite impressive, and I was pleased to hear the hon. gentleman oppo-
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site acknowledge at least some of these attainments. In addition, the hon. member has my gratitude for providing this opportunity for discussion of elements of fisheries which are close to the hearts of many of the people I have the honour to represent.
There is an inequity between the east and west having to do with the continental shelf. I must bring forth for consideration this natural inequity, because when one considers the extent of the continental shelf and slope there is really quite a difference in the east and west.
The continental shelf is defined as the seaward extension of land mass. Canada has a very large continental shelf on the Atlantic coast, sometimes extending far beyond 200 miles, as in the instance of Flemish Cape. However, on the Pacific coast we have only a 50 mile extension south of Vancouver Island.
In the early spring of 1974 the former minister released a map showing British Columbia's seaward extension as being a line drawn along 48 degrees, 29 minutes west which cut off part of the La Perouse bank and an area of Canada's natural extension of the land mass of approximately 500 square miles. This median line principle would be applied because of the situation on the Atlantic coast. I refer to the 1,800 square miles at Georges Bank. Therefore, the proposal for 500 square miles on the Pacific Coast is not unreasonable. In April and May of 1974 herring schools in the area of Juan de Fuca Canyon to the proposed median line were estimated to be in the neighbourhood of
300,000	tons. This is herring of Canadian origin, an anadro-mous species.
Surely when management, fish processors, the UFAWU, the trollers and native brotherhood agree on this potential food fishery, there should be a means to harvest these resources for a hungry world. There are international inequities which our fishermen must face. I offer this single example but there are many others which could be given. At present Canadians are taking a large amount of scallops from Georges Bank, but Canada has a size limit of 50 scallops per pound while the United States has a limit of 40 and is talking now of going to 30. Some Canadian companies are starting to do the same. What will Canada's catch be then? Assessment has yet to be made of ocean perch, halibut, grey cod, ling cod and herring in the 500 square miles of Pacific territory on which I address my remarks today.
The most lucrative of B.C. fisheries, again an anadro-mous species, is the salmon. As long as salmon at sea have no national status the salmon resources of this country are in jeopardy.
In my opinion examination of the canyon principle would prove an equity of access for fishermen east and west in this country. I have been warned, however, that adoption of the canyon principal on the coast comes into conflict with the interests of mining and oil industries. There are, we know, untapped oil resources in the area of Georges Bank, even within present boundaries. There are oil shales existing in Hecate Straits, between the mainland and the Queen Charlotte Islands in British Columbia, but in my view it is shortsighted to give away a self-sustaining food resource for a non-renewable resource for which
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our technology is charged with developing an alternative. I submit we can, we have in fact, developed other forms of energy, but I ask are we able to develop other forms of protein as readily?
I suggest that the canyon line approach to dividing a continental shelf between nations is not new, and is an easily recognizable line for management and conduct of fishing operations of each nation. In the ongoing negotiations of the Law of the Sea Conference, Canada has been instrumental in getting into the future convention a special regime relating to anadromous species, those species such as the salmon coming to life within our coastal state's fresh waters, then spending the greater part of their adult life migrating to the high seas, and finally returning to the waters of the state of origin to spawn and die. The problem arising out of the present legal situation is that these stocks may, in accordance with the traditional freedom of fishing the high seas, be harvested on the basis of unsound management principles and in a way likely to jeopardize the investment made by the state of origin toward keeping the spawning waters in a state so as to retain the returning species.
The position that Canada has adopted is that salmon should be caught in accordance with the exclusive management powers of the state of origin; further, that there should be a ban on high seas fishing of anadromous species.
There are countries which cannot envisage a coastal state exercising any rights beyond the 200-mile limit. This strict interpretation of the 200-mile economic zone would deprive states of origin such as Canada of any management rights over salmon stocks as they follow their migratory course in the high seas beyond the carefully defined economic zone.
To tell the truth I am really quite confused by the hot demands of members opposite for precipitous unilateralism. There is far more at stake here than a simplistic extension of our fishing zones to 200 miles from our coastline. I find it hard to believe for instance that an able and affable diplomat such as the hon. member for Esquimalt-Saanich (Mr. Munro) could accept a unilateral declaration now at the cost of control over salmon and other anadromous species in the future.
Salmon are really rather like anadromous Tories in fact; they are independent, range far and wide, and acknowledge none of their members as leader.


Stanley Howard Knowles: They do not spawn very much though.


Iona Campagnolo: We have a corner on that.
The intent of the bill before us today is to ensure fisheries continue as a priority. The appointment of the Minister of State for Fisheries has more then accomplished this beyond any dispute. He has a high level of accomplishment in extending markets, rehabilitating and strengthening certain sections of fishing such as the groundfish industry, embarking on massive salmon development in British Columbia, which is still proceeding in spite of economic restraints, extending reciprocal fishing privileges, providing deficiency payments where needed, revising vessel subsidy programs, encouraging
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very real progress in international negotiations-which I was happy to note was acknowledged by the hon. member for St. John's East-and developing small craft harbours in the amount of $35 million this fiscal year, as well as a host of other outstanding moves of benefit to Canada's fishermen.
The serious intent of the government to maintain a constant level of civil servants at this stage of our economic fortunes should not be taken lightly. Members opposite frequently criticize added senior appointments but in this case we have a request for more. It reminds me of those who demand cuts in government spending and then say "but not in my constituency". The Department of Fisheries has a Minister of State, and the Deputy Minister of Environment and Fisheries is the Deputy Minister of Fisheries, and therefore the provisos of this bill are unnecessary given the excellent job being done by senior personnel in fisheries administration at this point in time.
I too should like to offer my congratulations to my colleagues and neighbour.


Mr. Elmer M. MacKay (Central Nova):: Madam Speaker, I understand that the hon. member for Gander-Twillin-gate (Mr. Baker) is anxious to make a few remarks so I will be fair with him and keep my speech short so that he may have an opportunity to participate in this debate. I should also like to tender my congratulations to him on his new appointment.
I merely want to say that in my constituency which has many concerns relating to the fishing industry there is a great deal of dissatisfaction, and I think justly so. This applies not only to Nova Scotia but all over the Atlantic region. The fishing industry is in trouble. There is no question about it.
Although the present Minister of State (Fisheries) (Mr. LeBlanc) is doing his best to remedy these troubles-and I must say he is off to a good start; his public image is excellent and he is certainly well accepted-I think it is only fair to do two things this afternoon so far as I am concerned. The first is to support the principle put forward in Bill C-251 by my colleague, the hon. member for St. John's East (Mr. McGrath), and to suggest that while I am doing so I ought to bring to the attention of the House once more some of the long-standing difficulties that plague this industry.
Everyone who has followed the fishing industry knows that it is in great difficulty. The quota system as it is being applied in the Atlantic region is ridiculous, as the hon. member for South Shore (Mr. Crouse) has pointed out so many times, when valuable species of fish are being dumped and wasted simply because the quota system is unrealistic. Everyone knows that even in the field of unemployment insurance fishermen do not get the same break as their counterparts in other industries.
The curtailment of the small craft and harbours program is just another example of the fact that the Minister of State for Fisheries does not have the clout or the influence he ought to have at a time when, as the last member said, there are great international implications involved implicitly in what the fishing industry and the Department of the Environment are trying to do. It is pretty obvious that the Department of the Environment is not working out as one would hope it should. It is a vast,

sprawling department in which the fishing industry, or what used to be a separate ministry of fisheries, and what used to be a separate ministry of forestry are merged, or rather submerged.
There were studies and talks about applied biological principles, but they did not appear to do very much. One of the things the present Department of Fisheries needs is an influx of some people who have a modicum of practical experience in fisheries. I have been informed, and I believe it to be true, that of the hundreds of federal employees or civil servants who are involved in some way with peripheral or direct activities of the federal fisheries jurisdiction less than two dozen of them have any practical common sense, knowledge, or background based on actual experience in the fishing industry. If that is true, it is an appalling situation.
At some time when the Minister of State (Fisheries) has an opportunity, I would like to see him give us a breakdown of how many of his associates and employees or civil servants do have any hard, practical background in the fishing industry similar, for example, to that of the hon. member for South Shore (Mr. Crouse), who was a successful fishing captain in his earlier days.
I will conclude now by simply giving one example of the ridiculous state to which the fishermen in my area are reduced as a result of the present situation. In a small area called Pictou Landing in my constituency there is a yacht club called the Royal William Yacht Club, which at the present time is the only place fishermen in that area can moor their boats or use facilities which they otherwise would have had, since construction of a wharf which was scheduled to be built was curtailed because of the particular cancellation implicit in the small boats and harbours program reduction.
This is a yacht club used by people for recreational purposes. Out of a spirit of neighbourliness and a desire to help, the club turned over its facilities to fishermen simply because a badly needed wharf, one which has been demonstrably needed for many years, the original having been demolished by the department in anticipation of building another one, cannot now be built. Some people wrote to me recently stating that they were glad to help, but asked whether something could be done to give the yacht club some compensation for allowing the fishermen to use its facilities.
The previous speaker spoke about Tories being like salmon. I think salmon are referred to in many quarters as the noblest of all fish, and I would like to say to the hon. member that, on the basis of my experience so far, I should like to draw another simile by saying that the present government, and the department in many cases, have exhibited the tendencies of another marine creature, and that is the octopus. An octopus has many tentacles, a great talent for obscuring issues by issuing great clouds of what is known as ink, and can change colours when desired. I think we have seen a great deal of that recently from this government in its administration.


Some hon. Members:: Hear, hear!
October 17, 1975


Mr. George Baker (Parliamentary Secretary to Minister of the Environment and Minister of Fisheries):: Madam Speaker-


Some hon. Members:: Hear, hear!


George Baker: By the time the applause subsides I will be finished. I would like to thank everyone who congratulated me on finally getting into a position of great power in the federal government. It reminds me of how fishermen look upon ministers of fisheries. The minister of fisheries and the premier of our famous province of Newfoundland rode out to Conception Bay to do some fishing. They finally got to the place where they were catching some fish, and the minister of fisheries said, "We don't know where we are, but we shall have to mark this spot somehow." The premier said, "How about putting an X on the bottom of the boat." The minister of fisheries said, "Yes, but we may not have the same boat tomorrow."


Some hon. Members:: Hear, hear!


George Baker: The House leader for the New Democratic Party will appreciate what I will be saying in the next two minutes. Who decides where government money is spent in Newfoundland, Nova Scotia, New Brunswick, Prince Edward Island, Quebec or any province but provincial governments? The kind of money I am talking about is the money which is used for industrial development and industrial incentive, and I would love to be in the position of the hon. gentleman who introduced this motion because he could simply pick up the telephone and telephone his friend who was elected with him in 1968
Fisheries Ministry
to this chamber, who is now the minister of fisheries in Newfoundland. If the minister of fisheries of Newfoundland says that his government does not have enough money, then the hon. member can phone another friend of his who was elected in 1968 to this House and who is now the minister of industrial development in Newfoundland. If this is not successful, he can telephone another of his friends who was also elected in 1968 to this chamber, and who is now the premier. Certainly he can get somewhere then. That is where the action is.


Some hon. Members:: Oh, oh!


George Baker: We must realize that the actual production facilities in a province receive their great incentive from within the province. Consider the government of British Columbia. I wonder why certain sections of its industry are progressive. It is because help has been obtained. B.C. does not have a budget for its department of fisheries which is less than its budget for the department of social services, as is the case in some provinces in this country. May I call it five o'clock, Madam Speaker?


An hon. Member:: A minute to go.


An hon. Member:: Wrong clock.


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

Monday, October 20, 1975