1975-05-28

Mr. Walter C. Carter (St. John's West):: Mr. Speaker, pursuant to Standing Order 43, I rise to ask leave of the House to present a motion of urgent and pressing necessity.
Having regard to the fact that the fishing industry of this country is in danger of being totally destroyed as a result of overfishing off our coast by foreign fishing fleets; and, in light of the failure of the Geneva Law of the Sea Conference and all other such conferences dating back to 1959 to agree on a solution to the problem, I move, seconded by the hon. member for South Shore (Mr. Crouse):
That this government establish a date within the present year, 1975, on which this country will, in the absence of a satisfactory agreement by the other fishing nations of the world to reduce their fishing efforts over our continental shelf, unilaterally assert its control over the marine resources to the edge of the continental shelf and the slopes thereto, thereby enabling Canada to properly manage, harvest and rehabilitate our fishery resources and, further, that this country's delegates to the forthcoming ICNAF meetings be instructed to convey this ultimatum to all other member nations at the June 6 meeting of that body.


Mr. Speaker:: The motion is proposed pursuant to Standing Order 43 and cannot be presented without the unanimous consent of the House. Is there unanimous consent?


Some hon. Members:: Agreed.


Some hon. Members:: No.


CANADIAN NATIONAL RAILWAYS
Mr. Stanley Knowles (Winnipeg North Centre):: Mr. Speaker, I ask leave to present a motion under Standing Order 43 on a matter of urgent and pressing necessity. It arises from yesterday's announcement concerning the escalation of the pensions of Canadian National retired employees. It is a motion which I hope the House will see fit to accept.
Sir, in December several deputy ministers retired on sizeable pensions and received cost of living increases of more than 10 per cent in January, the very next month. Canadian National proposes to escalate the pensions of those who retired more than two years ago by a formula involving increases from 6 per cent down; for those who retired in 1973 and 1974 there is to be no escalation at all. Therefore I move, seconded by the hon. member for Nanai-mo-Cowichan-The Islands (Mr. Douglas):
That this House hereby declares that the recently announced minimal cost of living increases in Canadian National pensions in the case of those who retired prior to January 1, 1973, and the refusal of the CNR to grant any cost of living increases at all in the case of those who retired in 1973 and in 1974, are totally unacceptable, and this House calls on the Canadian National Railways to review this matter forthwith, it being the view of this House that all pensions should be escalated at least by the percentage of the rise in the cost of living.


Mr. Speaker:: Order, please. The motion proposed pursuant to Standing Order 43 requires the unanimous consent of the House before presentation. Is there unanimous consent?


Some hon. Members:: Agreed.


Some hon. Members:: No.


SUGGESTED INCREASED PENALTIES FOR THOSE WHO SELL MEAT UNFIT FOR HUMAN CONSUMPTION-MOTION UNDER S.O.
Mr. Armand Caouette (Villeneuve):: Mr. Speaker, under Standing Order 43, I request the unanimous consent of the House to bring forward an extremely urgent motion requiring immediate attention.
Given the fact that the revelations heard before the Quebec organized crime inquiry have shown unquestionably that Canadians, and particularly Quebecers, have eaten tainted meat sold by unscrupulous individuals, and that the repressive measures provided in the statutes are far too weak to dissuade tainted meat dealers from poisoning the population, since the fines are under $100, I move, seconded by the hon. member for Rimouski (Mr. Allard):
That this House consider the measures to be taken in order that the tainted meat dealers upon conviction for a first office, be liable to imprisonment for a term of at least two years without any respite nor parole and, for a second offence, to imprisonment for a term of five years without any respite nor parole, in order to protect Canadian citizens from the disgusting doings of those who sell tainted meat for human consumption.


Mr. Speaker:: Order, please. Under Standing Order 43, such a motion requires unanimous consent of the House. Is such consent granted?

May 28, 1975
Oral Questions


Some hon. Members:: Agreed.


Some hon. Members:: No.


Mr. Speaker:: There is no unanimous consent, so the motion cannot be put.


PRIME MINISTER'S OFFICE
Mr. Tom Cossitt (Leeds):: Mr. Speaker, I rise under the provisions of Standing Order 43 to move a motion that is self-explanatory. I move, seconded by the hon. member for Winnipeg South Centre (Mr. McKenzie):
In view of serious allegations yesterday by Southam News Services that the principal secretary to the Prime Minister, Mr. Jack Austin, has been using the Prime Minister's office as an information gathering centre to fight a $70,000 personal tax case with the Department of National Revenue, including specific use of the Prime Minister's telephone number and an office address in the East Block of the parliament buildings on letters dated January 30, 1975, the House request a full and complete investigation of this matter and that the said Mr. Austin should remain absent from his duties or otherwise be suspended until such time as the allegations are disproved or otherwise.


Mr. Speaker:: The motion is proposed pursuant to Standing Order 43 and demands the unanimous consent of the House. Is there unanimous consent?


Some hon. Members:: Agreed.


Some hon. Members:: No.



ORAL QUESTION PERIOD


Hon. Robert L. Stanfield (Leader of the Opposition):: Mr. Speaker, I have a question for the Acting Prime Minister. I would like him to tell the House who was expressing the position of the government, the Minister of Labour yesterday when he described as a prevailing myth that excessive wage settlements threatened our competitive advantage over the United States or the Minister of Finance who said in Sarnia on May 9, and I quote:
The very fact that for a considerable period of time Canadian wages and salaries have been rising at a very much faster rate than those in the U.S. should make it obvious that our competitive position is being seriously jeopardized.


Hon. Mitchell Sharp (Acting Prime Minister):: Mr. Speaker, I have been looking at the remarks made yesterday by the Minister of Labour.


Robert Lorne Stanfield: I bet you have.


Mitchell William Sharp: He did not quite say what the Leader of the Opposition has said. He quoted Mr. McGillivray, a journalist, who had pointed out that average wage gains had been running at less than one per cent more than those of the United States in collective agreements. At the end, he said:
I think this myth about Canadian wage settlements being double those in the United States should be laid to rest right now.
One can have a difference of view as to whether wage increases have been doubled. The Minister of Labour was expressing some doubt about that. He did not say that our position had not deteriorated. Indeed, our position has deteriorated. Both the Minister of Finance and I would affirm that.


Robert Lorne Stanfield: Mr. Speaker, may I quote word for word what the minister said, as reported in Hansard.


Mr. Drury:: The whole, not part.


Robert Lorne Stanfield: I will quote the whole for the Minister of Public Works. I quote:
Time does not permit my dealing as extensively as I would like with the prevailing myth that excessive wage settlements are the main cause of inflation, that they are running at double the average rise of wages in the United States, and that they threaten our competitive advantage over the Americans.
That is to be found at page 6163. May I ask the Acting Prime Minister whether the Minister of Labour was stating the position of the government yesterday or whether the Prime Minister was stating the position of the government at the first ministers meeting in April of this year when he said: "Meanwhile, our industries are facing increases in their wage settlements that are twice the size of those being made in the United States".


Mitchell William Sharp: Quite clearly, the Prime Minister speaks for the government.


Some hon. Members:: Oh!


Robert Lorne Stanfield: I don't know what that does to the Minister of Labour, but I should like to know what it does to the government's consensus program. I should like to ask the Acting Prime Minister whether his government can properly present a consensus program to the people of Canada before it has achieved consensus within its own ranks.


Mitchell William Sharp: The government is fully behind the Minister of Finance and the Minister of Labour-


Some hon. Members:: Oh, oh!


Mr. Hees:: And all other points of view expressed by the cabinet.


Mitchell William Sharp: -both of whom have been urging upon business, labour and the community in general the need for restraint.


SUGGESTION EXCESSIVE WAGE SETTLEMENTS RESULT NOT CAUSE OF INFLATION
Mr. John A. Fraser (Vancouver South):: Yesterday, the Minister of Labour said:
Time does not permit my dealing as extensively as I would like with the prevailing myth that excessive wage settlements are the main cause of inflation.
If these remarks are accepted, does the government now concede that wage demands are only the result of continuing inflation and not the cause of it?


Hon. John C. Munro (Minister of Labour):: No, Mr. Speaker.


John Allen Fraser: Could I then ask the minister just what he did mean by those words?


Some hon. Members:: Oh, oh!


CANADA'S STRIKE RECORD-POSSIBLE JUSTIFICATION OF HIGH WAGE SETTLEMENTS IN VIEW OF INCREASED PRODUCTIVITY
Mr. Max Saltsman (Waterloo-Cambridge):: I should like to direct my question to the Minister of Finance, Mr. Speaker. In the light of the new information which has been placed before the House by the Minister of Labour, does the Minister of Finance now share the Minister of Labour's view that our strike record is not nearly as bad in terms of international comparison as he is making it out to be?


Hon. John N. Turner (Minister of Finance):: I shall be dealing with that matter on budget night. I shall be glad to produce the figures for the House.


Some hon. Members:: Oh!


Max Saltsman: I imagine the Minister of Finance needs some time in which to consult with his colleague, the Minister of Labour, in order to work out a new consensus on this matter. It is a subject of considerable interest since these two opinions are floating around the country, and I think it is the minister's responsibility to let the country know what position he is taking. Does the Minister of Finance share the view of the Minister of Labour that Canadian wages have risen faster than wages in the United States because our productivity has been rising faster-


George Harris Hees: Our productivity has been going down and you know it, John.


Max Saltsman: -and that higher Canadian increases are therefore warranted?


John Napier Turner: Generally speaking, the Minister of Labour and I have been continuing to hold discussions with representatives of the labour movement. We both recognize that wage demands have reflected a legitimate catch-up because of inflation in terms of higher prices for food, clothing, oil and various other commodities in 1974. The thrust toward catch-up is a legitimate effort on the part of the labour movement. What we are most concerned about is that in attempting to catch up labour,
Oral Questions
business, the professions and indeed governments will attempt to over-reach in anticipation of further and future inflation rates. On that subject, the Minister of Labour and I are not in disagreement.


PRINCIPLE OF CABINET SOLIDARITY ON ECONOMIC POLICY-POSSIBILITY OF FREE VOTE ON BUDGET
Max Saltsman: Mr. Speaker, may I direct my final supplementary question to the Acting Prime Minister because I do not think the House has been reassured by the information that has been given to us today on what is the position of the government. I wonder whether the Acting Prime Minister can deal with the question and inform the House whether the cabinet has decided to abandon the principle and tradition of solidarity in respect of economic policy, and whether the budget, when it comes, will be subject, as far as the government side of the House is concerned, to a free vote?


Mitchell William Sharp: No, Mr. Speaker, it will be a question of confidence, as it was the last time when we had a resounding victory.


INCOME TAX
Armand Caouette: Mr. Speaker, I should like to put a question to the Minister of National Revenue.
Is it true that under the provisions of the Income Tax Act, a Canadian student attending university in Canada can deduct his travelling expenses both ways, while the Canadian student attending university abroad can only deduct his expenses to get there?


Hon. Ron Basford (Minister of National Revenue):: Mr. Speaker, this question is a somewhat detailed one regarding allowances under the Income Tax Act. I would be happy to write to the hon. member and explain the full provisions applicable.


CANADIAN NATIONAL RAILWAYS
Mr. G. W. Baldwin (Peace River):: Mr. Speaker, my question is for the Minister of Transport. Would the minister advise the House whether Canadian National Railways has sold one of its trucking subsidiaries, Chapman Transport Limited of Kelowna, B.C. to Direct Winters Transport of Toronto, which is controlled by Fuqua Industries Inc. of Atlanta, Georgia, an American corporation?


Hon. Jean Marchand (Minister of Transport):: This I will have to investigate, Mr. Speaker.

Oral Questions


Some hon. Members:: Oh, oh!


Jean Marchand: Well, Mr. Speaker, I do not think any member of the House believes that Air Canada or the CNR make daily reports on all the transactions they are conducting in Canada. If hon. members want this to be so, we would have to modify the law.


Gerald William Baldwin: I expected the minister to take notice of it, Mr. Speaker, and would he also take notice of this question. As Crown corporations are excluded from the provisions of the foreign investment review legislation, would the minister, when he is making inquiries, find out from the CNR what particular benefit there is to Canada in a transaction of this nature?


Jean Marchand: Mr. Speaker, I think the way the question is put is very civilized and I am going to do that.


SUGGESTED TESTS OF VIETNAMESE REFUGEES FOR TROPICAL DISEASES-GOVERNMENT POSITION
Mr. P. B. Rynard (Simcoe North):: Mr. Speaker, I should like to direct a question to the Minister of National Health and Welfare. In view of admissions of South Vietnamese children, orphans and others, from this war torn area, since many of them come from areas where tropical diseases, intestinal parasites and so on, are common, can the minister assure the House that proper tests have been carried out to detect any such diseases and whether preventative innoculations have been carried out according to accepted principles?


Hon. Marc Lalonde (Minister of National Health and Welfare):: Mr. Speaker, the hon. member is aware that Canada has one of the most comprehensive tests for immigrants, especially with regard to tropical disease. As for the Vietnamese, I am advised that this type of procedure has been followed in all cases and that tests and examinations have been carried out before entry. There have been a few cases where it has been impossible to carry out the tests before entry, but they were carried out immediately after entry and any indication of something abnormal was reported to the provincial health authorities for further action.


UNEMPLOYMENT INSURANCE
Mr. Lincoln M. Alexander (Hamilton West):: Mr. Speaker, now that the net unemployment insurance benefit payments have increased by over $200 million in the first quarter of this year as compared with the first quarter of 1974, will the Minister of Manpower and Immigration now tell the House whether his department's

anticipated transfer of $890 million to the total unemployment insurance account will have to be increased by supplementary funding, and could the minister venture a projection as to what amount of supplementary funding will be required, given that the number of unemployed is hardly likely to decrease this year?


Hon. Robert K. Andras (Minister of Manpower and Immigration):: Mr. Speaker, the amount of $890 million is actually an estimate, and of course refers to what was required to supplement the government's cost of unemployment insurance benefits paid last year, not this year. Consequently it is an accurate figure. In fact, the amount required might be a few million dollars less than that, but it relates to unemployment for last year, not this year. In so far as a projection for this year is concerned, I indicated in another place that with variations in the levels of unemployment there would be variations in the levels of the benefits that will be required.


Lincoln MacCauley Alexander: Mr. Speaker, I would direct a supplementary question to the Minister of Finance. In light of the fact that the Minister of Manpower and Immigration revealed last night that Canada can expect an even higher unemployment rate this year, the highest in some 14 years, and as it is clear that vastly increased government funding will be required to maintain the flow of benefits to an expected record number of unemployed claimants, will the minister inform hon. members as to whether he has received notice from his colleague, the Minister of Manpower and Immigration, that heavy additional government expenditures will be required in this area?


John Napier Turner: That is one of the matters in respect of which we are consulting, Mr. Speaker.


REQUEST FOR LEGISLATION TO EXCLUDE CRIMINALS FROM FOOD PROCESSING AND PHARMACEUTICAL INDUSTRIES
Mr. Claude Wagner (Saint-Hyacinthe):: Mr. Speaker, I wish to put a question to the Minister of National Health and Welfare.
Can he assure us and the Canadian public that, considering the recent revelations made before the Dutil Commission in Quebec and the previous findings of his investigators, he gave official and specific instructions to the services cc. cerned within his department with a view to countering any eventual infiltration by organized crime in the field of food or pharmaceutical products, and can he tell the House whether there exists a standing interdepartmental committee working to subdue organized crime which, as is obvious, seeks to exercise activities beyond the control of citizens and of governments?


Marc Lalonde: Mr. Speaker, with regard to the hon. member's question, I would first like to take this opportunity to correct mistaken information that he submitted to the Canadian public last Friday, mistaken information that he
May 28, 1975

could not have known to be so since he informed the Canadian public that no meat seizures had taken place. In fact, the hon. member knew full well, in light of the press release that had been issued for at least a week that more than 210 tons of meat had been seized in Quebec.
As to the question raised by the hon. member, I must reiterate that my officials were the instigators of the investigation conducted by the police. I have no reason to doubt their honesty, integrity and devotion, and I feel that the facts clearly indicate that they carried out their duties within their mandate. As for the latter part of the hon. member's question, I have no knowledge of such a special standing committee. As everyone knows, we have a police force called the RCMP that enjoys the trust of Canadians and surely that of the government. The force is under the official authority of the Solicitor General and is more than capable of carrying out its duties required for the application of Canadian legislation.


CONSUMER AFFAIRS
Claude Wagner: Mr. Speaker, I should like to put a supplementary.
In addressing my supplementary to another minister, I should also like to say that I did not mislead the people when I advised them that the minister had behaved stupidly by refusing to prevent the sale of tainted meat, of which he is now aware, and by claiming that he had to wait for the end of the inquiry before acting.
I therefore put my question to a minister who is more responsible, the Minister of Consumer and Corporate Affairs. At some time or other in the last two months has the Minister of National Health and Welfare or the food advisory division of the Department of National Health advised, as it should, the department to pay special attention to the sale and advertising of certain food products of which the raw material seemed of doubtful quality some time ago according to the Minister of National Health and Welfare, some federal inspectors and, if so, what has been done?


Hon. Andre Ouellet (Minister of Consumer and Corporate Affairs):: Mr. Speaker, I must remind the hon. member that this matter does not fall within my responsibilities; still, I have discussed several times, with my colleague the Minister of National Health and Welfare, this matter which seems to concern the hon. member to the highest degree.


Claude Wagner: Mr. Speaker, I have another supplementary for the learned minister.
In addition to his talks with the Minister of National Health and Welfare, has the minister done anything to help the people?


André Ouellet: Mr. Speaker, I think the hon. member should not confuse the responsibilities of each minister. He seems to be doing his best not to understand or to
Oral Questions
pretend not to understand the answers given to him by the Minister of National Health and Welfare which are quite clear.


ADEQUACY OF MINISTER'S AUTHORITY TO INSPECT MEAT SOLD FOR HUMAN CONSUMPTION
Mr. Paul Yewchuk (Athabasca):: Mr. Speaker, my question is directed to the Minister of National Health and Welfare. In view of the fact that section 4 of the Food and Drugs Act prohibits the sale of meat unfit for human consumption, and section 22 authorizes inspections by the minister's officials of any abattoir or place food is stored, can the minister indicate whether he has consulted with his legal advisors to determine whether these two sections of the act indeed give him all the authority he needs to inspect any place handling or storing food or whether there are any situations in respect of meat where he feels he does not have authority to gain access?


Marc Lalonde: Mr. Speaker, again, this is a matter of legal interpretation which is out of order.


Paul Yewchuk: Mr. Speaker, I should like to rephrase the question in another way and make it much more simple. Can the minister indicate whether he feels there is any place in Quebec where meat unfit for human consumption is being sold or that there is any abattoir or place where meat is stored in respect of which he does not have authority under the Food and Drugs Act to enforce the law.


Marc Lalonde: Still the same question, Mr. Speaker.


LACK OF REGULATIONS TO PROTECT QUEBEC CONSUMERS FROM MEAT UNFIT FOR HUMAN CONSUMPTION-GOVERNMENT ACTION
Mr. James A. McGrath (St. John's East):: Mr. Speaker, I should like to direct a supplementary question to the Minister of National Health and Welfare. Yesterday the minister mislead the Committee on Health, Welfare and Social Affairs in connection with his estimates when he said there was protection afforded to Quebec consumers by a provincial act known as the Dead Meat Act. In checking with the Quebec government today I find there is no such legislation. The Quebec officials confirmed the fact that there are no regulations protecting consumers in the province of Quebec. In light of the fact that there is no consumer protection to Quebec consumers what is the minister doing to carry out the law in respect of the statute which is his responsibility and send additional

May 28, 1975
Oral Questions
inspectors into the province of Quebec under the Food and Drugs Act.


Marc Lalonde: Mr. Speaker, once again, the hon. member is still vague in the information he is referring to. The legislation I referred to is the Public Health Act, Quebec R.S., Chap. 21, and the regulations under the act, and the hon. member only has to refer to them; they are quite clear.



IMMIGRATION


Mr. Derek Blackburn (Brant):: Mr. Speaker, my question is directed to the Minister of Manpower and Immigration. Since the minister did not understand my question yesterday concerning why the normal investigation into the background of General Van Quang was not undertaken prior to his entry into Canada, I will try again with a related question. A recent press report alleged that a self-confessed torturer, bomber and accessory to murder who was also a CIA-trained Uruguayan police officer, Nelson Bardecio, has been granted landed immigrant status under somewhat strange circumstances. Can the minister assure the House that his present method of relying on foreign-based intelligence agencies such as the CIA for information concerning potential immigrants to Canada is being seriously looked into at this time?


Robert Knight Andras: Mr. Speaker, the people responsible for advising on the security or criminality of applicants for admission to Canada do not concentrate on the use of one or another agency. They use various sources of information, so the CIA was not the only source of information used.


Derek Nigel Ernest Blackburn: Mr. Speaker, as the RCMP normally relies upon outside agencies for information about potential immigrants, and since cases such as those of Quang and Bardecio make it clear that agencies such as the CIA are not going to provide information about the criminal activities of their former paid agents, is the minister, along with his colleague the Solicitor General, considering measures to guard against the use of Canada for cooling off former CIA employees and keeping them out of the eye of United States Congressional committees?


Robert Knight Andras: Mr. Speaker, I will note the hon. member's representations.



AIR TRANSPORT


Mr. Lloyd R. Crouse (South Shore):: Mr. Speaker, I wish to direct my question to the Minister of Transport. In light

of the BILCOM report put forth by the minister's task force investigating bilingualism in respect of air traffic control communications which did not receive the support of the Canadian Air Traffic Controllers Association, will the minister, in the interest of public safety, agree to the recommendations of the Canadian Air Traffic Controllers Association and either place geographical restrictions on unilingual pilots or provide them with English language training so that they can communicate with ground stations in controlled air space?


Jean Marchand: Mr. Speaker, I think I made public both reports, the majority report and the minority report. I have received representations from the Pilots Association which I think is a good thing. When I have received all the representations, which are of any value, I will see what kind of policy we will design in that field.



FISHERIES


Walter C. Carter: Mr. Speaker, my question is directed to the Acting Prime Minister. In view of the very serious problems facing our Canadian fishermen and the fact that they are facing perhaps total destruction of their means of earning a livelihood because of the over-fishing efforts of the foreign fishing fleets off our coast, and in light of the fact that the Geneva Law of the Sea Conference and all other such conferences have failed to find a solution to that very serious problem, is the Acting Prime Minister prepared to say if the government will establish a date, preferably sometime in 1975, beyond which Canada will not tolerate any further plundering on the part of foreign fishing fleets and will unilaterally declare its right and its intention to manage and control our marine resources to the slope of the continental shelf.


Mitchell William Sharp: Mr. Speaker, the alternative the hon. member has put up is one that is under consideration by the government. If the Law of the Sea Conference lamentably fails to achieve a general agreement, then it is certainly one that we would consider. I cannot, of course, give any dates because it is still our objective that there should be an international agreement.


Walter C. Carter: Mr. Speaker, the Acting Prime Minister referred to the Law of the Sea Conference. I presume he was talking about the ICNAF meetings in Stockholm. Will he tell the House whether it is the intention of the government to make such a declaration if our delegation fails to reach the agreement being sought at the ICNAF conference whereby we are requesting that the fishing efforts of foreign nationals be reduced by 40 per cent.


Mitchell William Sharp: Mr. Speaker, we could only get the authority the hon. member seeks over our off-shore either through international agreement at the Law of the Sea Conference, or an international convention or by unilateral declara-

tion. So, these two matters are closely related. I assure the hon. gentleman that we are quite well aware of the problems he has outlined and the possibility of unilateral action is not ruled out.



NATIONAL DEFENCE


Mr. Bob Wenman (Fraser Valley West):: Mr. Speaker, my question is for the Minister of National Defence. In view of world concerns regarding the potential escalation of a conventional limited war into a nuclear war through the use of limited tactical nuclear weapons, has Canada entered into any formal or informal agreements with its allies in either NORAD or NATO agreeing to the use of limited tactical nuclear weapons?


Hon. James Richardson (Minister of National Defence):: No, Mr. Speaker.


Robert Lloyd Wenman: Does the minister consider limited tactical nuclear weapons as military hardware within the currently accepted limits of a limited war?


James Armstrong Richardson: If I understand the question correctly, Mr. Speaker, nuclear weapons can be used in a tactical sense and they would be very much a part of our deterrent, particularly on the central front in Europe.



REGIONAL ECONOMIC EXPANSION


Mr. J. M. Forrestall (Dartmouth-Halifax East):: Mr. Speaker, my question is for the Minister of Regional Economic Expansion, if I could get his attention. Inasmuch as 1023 days have gone by since his department announced the establishment of the Area Growth Investments Corporation in the city of Halifax area, can the minister now give some indication to the House as to when his department and the province of Nova Scotia will arrive at an agreement on the question of a chairman for that group so that the metropolitan area can have some benefit from the many billions of dollars that have been lying idle in the bank?


Hon. Donald C. Jamieson (Minister of Regional Economic Expansion):: Mr. Speaker, it has been 1023 days, or whatever the hon. member said, since the corporation was formed, but it is only one day since I answered the same question posed by his colleague, the hon. member for Central Nova.


Mr. Robert McCleave (Halifax-East Hants):: Mr. Speaker, may I suggest to the Minister of Regional Economic Expansion that instead of engaging in foolishness his department could spend the money on something worthwhile, such as a tunnel under the Northwest Arm, and be done with this charade.
Oral Questions AIR TRANSPORT



FARE INCREASES-POSSIBILITY OF INTERVENTION BY MINISTER

Mr. Don Mazankowski (Vegreville):: Mr. Speaker, my question is for the Minister of Transport and it arises out of the increase in domestic air fares which went into effect yesterday. Is the minister satisfied that the amount of the increase awarded to the airlines by the Canadian Transport Commission is justified and, if not, does he plan to intervene under the provisions of the act?


Jean Marchand: Mr. Speaker, I already said in the House that I asked Air Canada first to try to reduce some of the proposed increases. I think they did reduce those increases in the Maritime region. Apart from that, I am not the one who is supposed to be the judge of that. It is the responsibility of the CTC.



SUGGESTED CONSIDERATION OF INEFFICIENCY OF AIR


Donald Frank Mazankowski: In view of the fact that the hearings revealed that the operations of Air Canada show significant inefficiencies and the fact that Air Canada happens to be the price pacesetter in the airline industry, is the minister looking into this, and also is the minister looking into the mass cross-subsidization which is taking place in the operations of Air Canada at the expense of the western air traveller and if that practice is consistent with the national air transportation policy?


Jean Marchand: I think the hon. gentleman knows that right now there is an inquiry into certain financial aspects of Air Canada. I think it is unjust to refer only to the loss or deficits of Air Canada and to say that it is not as efficient as other airlines because we ask Air Canada to do things that we do not ask private companies to do.


An hon. Member:: Such as what?


Jean Marchand: I think it might be a good opportunity when we receive Mr. Justice Estey's report to review the whole thing and see whether the financial administration is good.


Donald Frank Mazankowski: The question I posed has nothing to do whatsoever with the inquiry. I asked a simple question as to whether the minister approves, as part of the over-all national transportation policy, of the mass cross-subsidization which is taking place in Air Canada and whether in fact the revelations that were brought forth at the hearings concerning the gross inefficiencies in Air Canada are being looked into as part of the minister's review and the over-all approach of the national transportation policy. It is a simple question which has nothing to do with the inquiry. Perhaps the minister might also advise the House whether any consideration is being given to a review of the domestic transcontinental air policy.


Jean Marchand: Yes, there will be a review. As to the subsidization of certain areas in Canada, it takes

May 28, 1975
Oral Questions
place not only with regard to the airlines but even with the railways. This is something we are looking into.



REQUEST FOR REDUCTION OF FARES ON SHORT FLIGHTS

[Stage Direction]
Mir. Donald W. Munro (Esquimalt-Saanich): Mr. Speaker, I also have a question for the Minister of Transport.
Since the increase in air rate for a very short flight, actually a flight of twenty minutes between Victoria and Vancouver, represents a 50 per cent increase, while the one between Ottawa and Montreal amounts to 27 per cent only, would the minister be prepared to set aside that confiscatory increase on this short flight in British Columbia, in order to reestablish a more equitable rate for western passengers?
Jean Marchand: I think, Mr. Speaker, this is a highly appropriate question. It is true not only between Victoria and Vancouver, but throughout Canada in general, that short distances, short flights indeed are subsidized by long ones and that, of course, is often not justifiable. The case of Victoria is one of those, and it is precisely one of the things that we try to correct. However, this will require a very deep change of attitude, not only on the part of the department, but also on that of the CTC, which has that responsibility. I am sorry.


Mr. Munro (Esquimalt-Saanich):: Mr. Speaker, I want to ask a supplementary question. I would like to remind the minister that subsidies are paid by the passengers but would he be willing at least to suspend the federal tax on tickets for flights lasting less than one hour, for instance, between Victoria and Vancouver and between Ottawa and Montreal?


Jean Marchand: Mr. Speaker, I think I already mentioned that this is true, generally, not only for Victoria and Vancouver, but also for other regions of the country. What I want is a global policy which applies throughout the country.

*  * FINANCE



SUGGESTED REVIEW OF REDUCTION OF TARIFF ON TIRES

Mr. Cyril Symes (Sault Ste. Marie):: Mr. Speaker, I have a question for the Minister of Finance and it relates to questions asked of him last week by the hon. member for Winnipeg North regarding the rubber industry in Canada. In view of the lay-offs in the Canadian tire industry, and in view of the trade deficit in tires jumping from $25 million to $155 million last year, is the minister prepared to review his government's decision which reduced the tariff on tires from 17 Vi per cent to 12 Vi per cent?


John Napier Turner: Mr. Speaker, we are examining the matter in the light of the representations last week of the hon. gentleman's colleague.


Reginald Cyril Symes: In view of the fact that sales of tires are about the same as in former years but that a smaller proportion of sales is made up of Canadian manufactured tires and that the import of U.S. tires is increasing, will the minister meet with representatives of the rubber industry to resolve our worsening trade balance with the United States?


John Napier Turner: I will take note of that argument, Mr. Speaker.



LABOUR CONDITIONS


Hon. W. G. Dinsdale (Brandon-Souris):: Mr. Speaker, my question is for the Minister of Labour. In view of the minister's threat to clean up corruption in unions if this is not done internally, a threat supported by similar statements by the Prime Minister, is this crackdown on labour indicative of a new government policy moving toward the prohibition of strikes in essential services? Further, does this new law and order posture reflect the recent Canadian Institute of Public Opinion poll showing that Canadians strongly support the prohibition of strikes in essential services?


John Carr Munro: No, Mr. Speaker, my statement in that connection did not reflect any of the conclusions that are very widespread that the hon. member is talking about. What I was saying was that I believe the CLC should set up the criteria necessary to enforce its own code of ethics so that the government does not have to intervene in the way we have experienced recently.


Walter Gilbert Dinsdale: A supplementary question. Could the Minister of Labour explain how this new strong stance against labour fits into the government's new, broader consensus policy as promoted by the Minister of Finance?


John Carr Munro: Mr. Speaker, the allegations of corruption against certain union officials has no direct relationship to the consensus exercise. What I was talking about in this particular case was the necessity for labour itself to take a very vigilant posture toward wrongdoing within its constituent membership and affiliates. The reason I say that is that I believe in that way the good name of labour can be protected. We are all prepared to acknowledge that there is a great amount of integrity within the rank and file of the membership of the unions and their leadership in Canada, but a variety of examples have come to our attention lately which indicate that some people will use certain methods in order to dirty the name of labour generally throughout Canada. I believe the best defence against that is for the labour movement itself to set up the machinery necessary to enforce a code of ethics within the movement.
May 28, 1975



ADMINISTRATION OF JUSTICE


Mr. Ross Milne (Peel-Dufferin-Simcoe):: Mr. Speaker, it is with a great deal of grief and shock that I rise to advise the House that about an hour ago there was a major shooting in the town of Brampton, as a result of which a high school teacher and a student were murdered and probably as many as 16 other students injured by the same gun fire. I should like to ask the Solicitor General if he would pledge his efforts to have the Royal Canadian Mounted Police co-operate in any way they can with the local police relative to the gun issue and perhaps even question whether the government will seriously review the gun legislation in Canada?


Mr. Horner:: Was it a stolen gun?


Hon. Warren Allmand (Solicitor General):: Mr. Speaker, I just heard about this terrible crime during the question period. I understand there was a labour problem in that school and this young boy entered the classroom and shot the teacher and some of the students. I intend to get a full report on the situation that led to the crime-the background of the boy and how he came into possession of the guns.



CRIMINAL CODE


Mr. Eudore Allard (Rimouski):: Mr. Speaker, I should like to put a question to the Solicitor General.
In the light of statistics which indicate an increase in murders in the country, could the minister tell the House whether he is prepared to let the Canadian people decide whether they are in favour of the restoration of the death penalty through a referendum?


William Warren Allmand: Mr. Speaker, that is a question that will be decided by parliament. The government does not intend to have a referendum on the issue. I think if we are seriously concerned with the problem of murder we should direct our resources and attention to the causes of crime and not to penalties that will have no effect whatsoever.



AGRICULTURE


Mr. A. D. Alkenbrack (Frontenac-Lennox and Addington):: Mr. Speaker, my question is for the Minister of Agriculture and in his absence I presume his parliamentary secretary will deal with it. It arises from complaints I have received from constituents as a result of the govern-
Oral Questions
ment's present program of aerial spraying with the dangerous insecticide Sevin to kill gypsy moths attacking trees in Frontenac county. Since this spray also kills wild and tame bees and beneficial predator insects as well as the birds that eat them, may I ask what the government is doing to assure the safety of the latter and to avoid disruption and damage to the basic balance of nature by this dangerous insecticide?


André Ouellet: Mr. Speaker, I will take notice of the question directed to the minister who will be pleased to answer on his return.



FINANCE


Robert Lorne Stanfield: Mr. Speaker, I should like to direct a question to the Minister of Finance who has-made it a very central concern to express a position against the erosion of Canada's competitive position, and has frequently expressed the view that our competitive position is being seriously jeopardized by the rate of increase in wages and salaries in Canada. In view of the fact that the Minister of Labour has expressed the view that this is a prevailing myth, may I ask the Minister of Finance whether he intends to continue to serve in that portfolio in a government in which the Minister of Labour expresses a completely contrary view?


John Napier Turner: Mr. Speaker, I intend to serve in the government as long as the Prime Minister asks me to serve.


Robert Lorne Stanfield: A supplementary question. May I ask the Minister of Finance how he proposes to restore the credibility of the policy position he has taken in view of the fact that the Minister of Labour has directly challenged the validity of that position?


John Napier Turner: Mr. Speaker, I should not like to think that my credibility depended entirely on the view of the Leader of the Opposition.



INFLATION-PROPOSED LIMITATION ON GROWTH OF MONEY SUPPLY

John (Jack) Henry Horner: Mr. Speaker, my supplementary question is directed to the Minister of Finance in regard to his concern about inflation. Has he noticed a recent reduction in credit purchases in Canada which corresponds to a reduction in credit purchases in the United States?


John Napier Turner: Mr. Speaker, because that is a very carefully posed question,

May 28, 1975
Privilege-Mr. McGrath
before I give the hon. gentleman an answer I shall look it up.


John (Jack) Henry Horner: A further supplementary, Mr. Speaker, so that I may clarify the point for the minister. Is Canada's central bank prepared to go as far as the central bank of the United States and suggest that the growth of Canada's money supply for next year will be limited to 5 per cent or 7 per cent to control inflation?


John Napier Turner: Mr. Speaker, there are some risks in suggesting a target like that. Arthur Burns admitted that before Congress.


John (Jack) Henry Horner: Are you prepared to risk it?



GOVERNMENT ADMINISTRATION


Mr. F. Oberle (Prince George-Peace River):: Mr. Speaker, my question is for the Acting Prime Minister in his capacity as President of the Privy Council. On May 6 during a meeting in which officials of Central Mortgage and Housing, the Department of Indian Affairs and Northern Development and the National Indian Brotherhood were participants, a document identified as a secret cabinet discussion paper was circulated and debated. The document left the room and found its way to the press. This occurrence bears a striking resemblance to a similar situation-


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


Frank Oberle: My question is to the President of the Privy Council. Has the government changed its position in regard to secret cabinet documents from that which resulted in the firing of a senior official last year or will the leak result in the firing of similar officials this time?


Mitchell William Sharp: Mr. Speaker, if the government should find that there had been a deliberate leak of a document by a senior civil servant I think that would be grounds for dismissal.


Frank Oberle: A supplementary question. Has the occurrence of May 6 been the subject of discussion in cabinet and is any action contemplated at this time? If not, does the government intend to reinstate Mr. Rudniki or offer him a settlement out of court, since his situation is identical to that which just occurred?


Mitchell William Sharp: Mr. Speaker, I do not accept the statement of the hon. gentleman. If any senior civil servant deliberately leaks a document then that is good ground for dismissal.


Mr. Speaker:: The hon. member for St. John's East on a question of privilege.


James Aloysius McGrath: Mr. Speaker, my question of privilege has to do with a reply given to me in the House today by the Minister of National Health and

Welfare (Mr. Lalonde). The minister has left the House; whether he did so deliberately or by inadvertence is not for me to say.
Yesterday in the Standing Committee on Health, Welfare and Social Affairs I was pursuing a question with the minister regarding his responsibilities in face of the fact that there are no regulations or statutes in the province of Quebec to protect Quebec consumers from having to buy tainted and contaminated meat placed on the market for human consumption. Let me quote the minister's reply. According to the transcript in my possession he said:
There is provincial legislation ... I refer you to the Dead Meat Act of Quebec. I do not know whether you are aware of it and the regulations under the Dead Meat Act in Quebec. Are you aware of this particular legislation?
The minister, of course, today denied saying that, or implied he had not said it. I will deal with that in a moment.
I checked with the provincial department of agriculture of the province of Quebec and was told that there is no Dead Meat Act in Quebec. That is my first point. Further, today the minister when replying referred, I think, to the health regulations in Quebec. I was told by the same source in Quebec that there are no such regulations, or that those regulations are not in effect, and cannot prevent anyone in Quebec from placing tainted or contaminated meat on the market.


Some hon. Members:: Shame!


James Aloysius McGrath: I submit that the minister has great responsibility in this field, as the regulations under Bill 31, the only legislation which affords any degree of protection to consumers under the jurisdiction of the province of Quebec, have not been proclaimed. In other words, there are not any regulations for protecting Quebec consumers. This makes it all the more necessary for the Minister of National Health and Welfare to discharge his obligations to the people of Quebec, obligations spelled out in the Food and Drugs Act, and give those people the protection they deserve as citizens of this country. I submit, without debating the point-


Some hon. Members:: Oh, oh!


James Aloysius McGrath: -that the minister, as I have shown, misled the committee yesterday, and today stood in his place and, in replying to my question, misled the House.


Marc Lalonde: Mr. Speaker, I do not have the advantage of having before me a transcript of the committee discussions of yesterday, but I submit that if the hon. member were to read a little further on, and not stop where he stopped, he would see that I corrected that answer later in my testimony. I noticed that I should not have referred to the Dead Meat Act, but to the regulations regarding dead meat, which come under the Public Health Act of the province of Quebec. This is in the record; I remember having said that. I will check carefully, and if it is not there I apologize to the hon. member. There is a Public Health Act in force in Quebec which is chapter 21 of the
May 28, 1975

Revised Statutes of Quebec, and the matter of dead meat comes under the regulations under that act. I will be glad to send a copy of them to the hon. member for his information.
To answer the hon. member's second point, we have the Food and Drugs Act available to us and certain dispositions have been made under the Food and Drugs Act. As I was saying last week, my officials have been active in this respect. It was they who initiated the investigation and the inquiries which are going on at present; I have nothing but praise and commendation for them and for the job they have done with such integrity. I hope hon. members opposite will consider this matter with a little more justice, towards those officials who are doing their best to protect consumers.


Lincoln MacCauley Alexander: Mr. Speaker, I rise on a point of order. As a response of the Minister of Transport (Mr. Mar-chand) involved some misunderstanding, I am not raising a question of privilege.
Answering the hon. member for Kootenay West (Mr. Brisco), the Minister of Transport replied, as recorded on page 6055 of Hansard for May 23:
Mr. Speaker, I think it is a general practice of all airlines to give names to travel agencies. I know that some passes have been given. I regret that the hon. member for Hamilton West is not here, because I think he was one of the officials of Heritage Canada and he might tell us how he travelled.
I do not know what the minister was driving at. Knowing how sensitive we all are in this House to innuendoes, I hope the minister will clarify this matter now, for my edification. If he has not facts to substantiate that I travelled with Heritage Canada, I respectfully ask him to withdraw his statement.


Jean Marchand: Mr. Speaker, I think the hon. member for Hamilton West (Mr. Alexander) is right; there was some confusion in the way I answered. I did not intend to imply that he was travelling free, with Air Canada, because he was a member of the society named. I always thought he was a member of that society. It is a respectable society; there is no doubt about that.


An hon. Member:: Oh!


Jean Marchand: Do you think it is a respectable society?


An hon. Member:: Ask the Secretary of State (Mr. Faulkner).


Jean Marchand: I believe it is respectable, and I did not intend to imply that the hon. member abused any privilege. I think Heritage Canada charter aircraft for journeys abroad; I do not know if the hon. gentleman went abroad. Certainly, in these circumstances, the society has to pay the rate for charter aircraft.
There were two elements to the question asked of me by the hon. member for Kootenay West. One had to do about any possible relationship between Heritage Canada, the CTC and Air Canada. I think one vice president of Air Canada was on the advisory board of Heritage Canada, but I do not know anything about passes. I just said that it has been the custom for airlines to give passes to travel
Indian Affairs and Northern Development
agencies. That was the question asked of me. I did not intend to imply that the hon. member benefited one way or another from that privilege.


Lincoln MacCauley Alexander: Mr. Speaker, if I may pursue further the point of order-


Mr. Speaker:: Order, please. The hon. member has recited his point of order; the minister has made his reply. It seems to me perfectly clear. I think that ought to dispose of the matter.



ROUTINE PROCEEDINGS


[Stage Direction]
Twelfth and thirteenth reports of Standing Committee of Justice and Legal Affairs-Mr. Poulin.

[Stage Direction]
AUTHORITY FOR STANDING COMMITTEE TO TRAVEL On the order: Government notices of motions:
That the Standing Committee on Indian Affairs and Northern Development be empowered to adjourn from place to place in Quebec and Ontario on two separate occasions on June 8th to 10th, 1975 and on June 15th to 17th, 1975, or during the summer adjournment of the House, to study economic development on reserves and to inspect some historic sites and parks, and that the necessary supporting staff do accompany the Committee.
Mr. Speaker:: Pursuant to section 2 of Standing Order 21, this government notice of motion is transferred to and ordered for consideration under government orders at the next sitting of the House.


QUESTIONS ON THE ORDER PAPER
[Stage Direction]
(Questions answered orally are indicated by an asterisk.)
Mr. John M. Reid (Parliamentary Secretary to President of the Privy Council):: Mr. Speaker, the following questions will be answered today: 2,099, 2,160, 2,180, 2,445 and 2,452.
Mr. Speaker, if questions No. 1,053, 1,524 and 2,423 could be made orders for return, these returns would be tabled immediately.
I ask, Mr. Speaker, that the remaining questions be allowed to stand.

May 28, 1975
Order Paper Questions


Mr. Laprise: For the fiscal year 1973-74, how many cases were heard by the UIC arbitration boards and how many were decided in favour of the beneficiary for the (a) Montreal area (b) Province of Quebec?


Robert Knight Andras: Insofar as the Unemployment Insurance Commission is concerned: For the fiscal year 1973-74, 56 cases were heard by the Umpire of the Unemployment Insurance Commission in the Province of Quebec, (a) 7 were decided in favour of the claimant in the Montreal area; (b) 23 were decided in favour of the claimant in the province of Quebec.


Mr. Gauthier (Roberval): 1.	What must be the average duration of an applicant's medical certificate to be entitled to the maximum sick pay benefits under UIC?
2.	Is the medical certificate to be obtained by the applicant or the Commission?
3.	What fees do independent doctors receive for such service?
4.	Are independent doctors paid by the Commission and, if so (a) how are they chosen (b) by whom?


Robert Knight Andras: 1. Seventeen weeks.
2.	By the applicant.
3.	The customary fee is that which prevails in the particular province.
4.	Yes. (a) and (b) They are recruited by the district offices of the commission subject to acceptance by the senior medical advisor of the commission.


Mr. Herbert: 1.	Are maternity benefits under unemployment insurance payable for a maximum eight weeks before the expected week of confinement?
2.	Must a woman file ten weeks prior to the expected date of confinement in order that the mandatory waiting period be served before the specific maternity schedule commences?
3.	For a woman living in Ontario earning $185 per week, submitting an individual tax return with standard deductions and entitled to maximum maternity benefits, what is her net after tax gain per week should she voluntarily choose to continue working during the eight week pre-confinement benefit period rather than draw unemployment insurance benefits?


Robert Knight Andras: 1. Maternity benefits per se are payable from the eighth week prior to the expected week of confinement so long as the waiting period has been served and the claimant is entitled. However, where an incapacity originating from complications of a pregnancy is supported by a medical certificate and occurs prior to this eight week period, the claimant may qualify for sickness benefits up until that eight prior week, at which time, maternity benefits prevail. In any case the maximum payment for maternity or sickness benefit or a combination of the two is 15 weeks.
2.	The waiting period cannot be served until a claim for benefit is established, and benefits are paid only after the waiting period has been served. A woman who files a claim in the tenth week prior to the expected week of confinement may serve the waiting period prior to the commencement of the specific maternity schedule.
3.	The working woman would receive $185 less $31 income tax for a net of $154. The claimant would receive $123 less $16 income tax for a net of $107. The difference between the two is $47. (This information was obtained from DNRT-Source Deduction).


Mr. Herbert: 1.	Has the Department of External Affairs received any representations from United States concerning the projected Hydro-Quebec high tension power lines which are to carry exported electricity to northeastern United States?
2.	Is the location and size of the line subject to formal agreement between the two countries?


Hon. Allan J. MacEachen (Secretary of State for External Affairs):: 1. The department has not received representations from the United States on this subject.
2. The location and size of a line for the export of electricity would not normally be the subject of a formal agreement between Canada and the United States. These matters are, however, subject to the authority of regulatory bodies in both countries.


Mr. Brisco: Are aircraft type engines currently being used by the government or private industry for pumping natural gas in pipelines and (a) if not, is it proposed that aircraft type jet engines be used for such purpose (b) if so, what is the fuel consumption rate per (i) hour (ii) day (iii) week (iv) month of each such engine?


Mr. Maurice Foster (Parliamentary Secretary to Minister of Energy, Mines and Resources):: The Department of Energy, Mines and Resources reports as follows: Yes, the aircraft type gas turbine engine has been developed for industrial service. It is currently being used for natural gas transmission in the pipeline industry, (a) Not applicable, (b) The gas turbine engine fuel consumption will depend on several factors, such as the size of the unit, station location, altitude, calorific value of the fuel, operating efficiency, ambient temperature, volume of gas transmitted, etc. However, a typical 30,000 H.P. large aircraft type gas turbine unit will consume natural gas at the rate of about (i) 250,000 cubic feet per hour; (ii) 6,000,000 cubic feet per day; (iii) 45,600,000 cubic feet per week; (iv) 182,400,000 cubic feet per month.

May 28, 1975



QUESTIONS PASSED AS ORDERS FOR RETURNS


Mr. Firth: 1.	(a) What is the budget allocated to alcohol education in Canada (b) how much of this is spent on alcohol education in the NWT?
2.	(a) What is the overall budget for alcohol rehabilitation in Canada (b) how much of this is allocated to the NWT?
3.	(a) How many people are employed by both the federal and territorial governments for alcohol rehabilitation programmes in the NWT (b) what are their qualifications (c) how many of these employees are native?
Return tabled.



EXPENDITURES ON MEDICAL RESEARCH, 1971-74

Mr. Reynolds: 1.	How much money was spent by the government on medical research during 1971, 1972, 1973 and 1974?
2.	What organizations received the money and how much did each receive?
Return tabled.



LIP-GRANTS IN CONSTITUENCY OF MONCTON

Mr. Jones: 1.	For each year 1970 to 1975, what was the total amount granted under the Local Initiatives Programme in the Constituency of Moncton?
2.	For the same years, how many project applications were (a) submitted (b) rejected (c) accepted?
3.	What are the names of the projects that were (a) accepted (b) rejected?
4.	What amount was granted by the government for each such project accepted?
5.	How many jobs were created by each such project?
Return tabled.



MOTIONS FOR PAPERS

John Mercer Reid: Mr. Speaker, notice of motion for the production of papers No. 47 is acceptable to the government. Mr. Speaker, I ask that all other motions be allowed to stand.


Some hon. Members:: Agreed.



COPIES OF CORRESPONDENCE RELATING TO ALLEGATIONS MADE AGAINST SEAFARERS' INTERNATIONAL UNION

[Stage Direction]
Motion No. 47-Mr. Lawrence:
That an Order of the House do issue for a copy of the letter or memorandum containing the terms of reference, or other originating documents, directed by the Solicitor General to the Commissioner of RCMP relating to an investigation by RCMP into allegations made against the Seafarers' International Union of Canada.
CNR Pension
Gerald William Baldwin: Mr. Speaker, I move the motion on behalf of the hon. member.


[Stage Direction]
Motion agreed to.

Stanley Howard Knowles: Mr. Speaker, I rise under the provisions of Standing Order 26. My reasons for asking leave to present a motion under that Standing Order are those which I gave when I sought earlier today to move a motion under Standing Order 43, so I will not endeavour to repeat them. Had that motion been accepted by the House, it would not have been necessary to offer a motion at this time.
Accordingly, I ask leave, seconded by the hon. member for Nanaimo-Cowichan-The Islands (Mr. Douglas), to move the adjournment of the House under Standing Order 26, for the purpose^ of discussing a specific and important matter requiring urgent consideration, namely, the announcement made recently by the Canadian National Railways to the effect that cost-of-living increases in the pensions of employees who retired prior to January 1, 1973, are to be minimal, and that there are to be no cost-of-living increases at all for those who retired in 1973 and in 1974, in order that this House may make it known to the Canadian National Railways that this announcement is totally unacceptable and should be reviewed forthwith, it being the view of this House that all pensions should be escalated at least by the percentage of the rise in the cost of living.


Mr. Speaker:: Pursuant to the terms of Standing Order 26, the hon. member for Winnipeg North Centre (Mr. Knowles) gave notice to the Chair of his intention to move this motion.
While this is a matter of great concern not only to the hon. member for Winnipeg North Centre but to all other members of the House, I have insisted in the past that motions put forward pursuant to Standing Order 26 which seek the setting aside of special hours outside the regular hours of sitting of the House for debate of a subject must concern a subject which has inherent in it some crisis or emergency proportions by which action may be taken as a result of the discussion in the House, that would somehow remedy or improve the situation which has taken on emergency or crisis proportions.
The situation referred to in the hon. member's motion is a matter of great concern. However, I am sure the hon. member is aware it has been a matter of great concern for some time. Perhaps he more ably than other hon. members has taken advantage of a number of the procedures of this House to bring to the attention of the House the problem

May 28, 1975
Business of Supply
of the pensioners involved. Those occasions have presented themselves to the hon. member in the past, and they will equally in their infinite variety present themselves to the hon. member during the course of this and future sessions.
Therefore, on both grounds, first that the matter is one of continuing concern as opposed to emergency proportions and, second, that the hon. member will, I am sure, in common with some of his colleagues take advantage of other opportunities to bring this very serious problem to the attention of the House, I respectfully decline the setting aside of special hours for debate of the motion.



GOVERNMENT ORDERS


[Stage Direction]
House in committee of supply to consider a certain item for the year ending March 31, 1976, pursuant to the provisions of Standing Order 58(9)-Mr. Laniel in the chair. Industry, Trade and Commerce
Vote 1-Trade-Industrial-Operating expenditures-$67,157,000.
Mitchell William Sharp: Mr. Chairman, I rise on a point of order. I would like to suggest, and I think I have the agreement of the representatives of the other parties, that in our proceedings in committee today we might follow the precedent that was established when my colleague, the Minister of Transport, was before this committee on his estimates, namely, that the discussion should be divided into 15 minute intervals during which a member can either use the whole of the time for speaking, or part for speaking and part for questioning, and that the minister at the conclusion would have an interval of approximately that time to conclude the discussion. I think these are the general principles that we found quite useful during the previous discussions when the Minister of Transport's estimates were before the committee.


Gerald William Baldwin: Mr. Chairman, what the government House leader said at first is quite agreeable, but because of the shortness of the time I raise the question of summing up, unless there is an insistence on it, and even then I would not be too happy about it, because we will want to get in as many members as possible. I imagine the minister will be answering all the questions of those who are speaking. He will have every opportunity to do that. In order that all members may have a chance to participate, including members on the government side, I suggest that we eliminate both the closing statement of the minister and the closing statement of the first speaker who moved the motion.


Mitchell William Sharp: Mr. Chairman, I think it really depends on how the discussion goes in committee. If there are a series of speeches without an opportunity for the minister to reply to them, I think we should be prepared to allow some flexibility. I know my colleague is more anxious to get his estimates approved than he is to speak.


The Chairman:: Order, please. Hon. members of the committee have heard the suggestion made by the President of the Privy Council which seems to be approved with the explanation made by the hon. member for Peace River. Is it agreed that we proceed in this way?


Some hon. Members:: Agreed.


George Harris Hees: Mr. Chairman, with unemployment holding at well above 7 per cent of the work force, and giving clear indications of rising considerably above that figure as the year goes on, it is the responsibility of those of us who sit in parliament to examine the causes of the economic stagnation we are experiencing, and make positive suggestions for correcting it.
The basic reason for the slowing down of the economy has been the steady decrease in the volume of exports and the increase in the volume of imports that have been taking place during the past 18 months. The prices of our products have steadily become less competitive with those quoted by other countries, and the quality and design of our products have not been good enough to overcome this disadvantage.
During the month of April this deteriorating situation was temporarily halted by the erosion of the value of the Canadian dollar, which has, during this short period, made our exports more attractive in price, and imports from other countries less attractive in the Canadian market. However, this temporary help cannot be counted on to last for very long, and the dollar has already risen well above the level to which it dropped a couple of weeks ago. Therefore we must look for other remedies to correct our sick economy, and I suggest we examine three main approaches: first, increasing productivity; second, increasing industrial research and development; and third, lowering unit labour costs.
Taking a look at productivity we find that during the 28 years since 1947, when the government first started to measure it on an annual basis, industrial productivity in Canada has increased at an average annual rate of 3.2 per cent a year. Examining our performance since 1970, we find that in 1971 productivity increased by 3 per cent over 1970, or slightly below the average rate; in 1972 the increase was reduced to 2.6 per cent, in 1973 to 1.5 per cent, and in 1974 there was an actual loss of one half of one per cent. The present indication is that the slide will continue at about the same pace during the present year.
What can be done to increase productivity and thereby help make our products more competitive? To do so we must offer incentives which will persuade producers that they will be able to pay for the new plant, machinery, and production systems they will have to buy, in a reasonably short space of time, and in this way make it as easy as possible for them to meet the high expenditures usually

May 28, 1975

involved. The kind of incentive I have in mind would be one whereby (1) all capital expenditures may be written off in the period decided upon by the plant owner; (2) a plant would be rewarded in the form of a generous cash bonus at the end of the year in proportion to its increase in productivity during the year, compared to the base year- the last full year before the plan goes into operation.
This form of incentive has been very effective in increasing productivity in such countries as Japan and West Germany where spectacular results have been achieved since the end of the second world war. There is no reason why such an incentive would be any less successful in this country.
In addition to price, we know very well that quality and design are also very important in making our products competitive. It is obvious that we must spend at least as high a proportion of our GNP on research and development as our chief competitors do, if we are to hold our own in this important field. To see how we have been doing in this regard as compared to our major industrial competitors, we should look at the latest figures published by the OECD. These show what percentage of its GNP each of these countries spends on research and development. The figures are as follows: United States 2.8 per cent; United Kingdom 2.4 per cent; France 1.9 per cent; West Germany 1.7 per cent; Japan 1.5 per cent; Canada 1.3 per cent. It is obvious that we have been doing badly in comparison to our major competitors in this regard.
To capture new markets which are looking for new and better designed products, and to reduce costs and become more competitive, it is obvious that we must carry out a great deal more research and development in this country. To bring this about we should allow industry to write off 200 per cent of the cost of current and capital expenditures on research and development in excess of those made in the base year-the last full year before the program is introduced. In addition to writing off the full cost in one year, it will put a considerable cash reward in the pocket of a company undertaking the research.
The kind of program I have outlined has been successful in significantly increasing the volume of industrial research in countries where it has been introduced, and will prove equally effective in Canada.
Finally, what can we do, in addition to increasing productivity, to reduce the labour cost of the products we must sell? There is a great deal of business which Canadian companies are unable to compete for because of low labour costs in the foreign countries where the products are made. If Canadian companies are to be able to compete for a good proportion of this business, and thereby obtain additional employment for Canadians, they must have an incentive which will enable them to reduce their labour costs on this potential new business to a level where they are within striking distance of these low foreign rates. Then, by accepting a lower than normal margin of profit on this extra business in order to get started, they can compete for these orders and stand a good chance of obtaining a reasonable proportion of them. What kind of incentive will do the job?
The government should say to all business-not just manufacturers and processors-that it will reward overall
Business of Supply
increases in employment during the year by way of an employment incentive which will be paid in direct proportion to the increases that are made. It is simply a matter of comparing the total number of man-years of employment by a company in the tax year under consideration with the last full year before the plan is put into operation-which will be the base year. The employment incentive would be paid in proportion to the increase in employment and the general wage level of the plant concerned, and the company will thus be able to calculate well in advance just what amounts of money it would receive for various increases in employment. This will enable Canadian businessmen to calculate in advance how much their labour costs would be reduced on additional business which the employment incentive would make it possible for them to go after. All such business obtained in this way will be a net gain for Canadian employment.
The three incentives which I have outlined will pay for themselves many times over in the years ahead, in the following ways: (1) We can drastically cut the present far too high expenditure on unemployment insurance by stimulating the economy and enabling people to find work. The potential in this regard is at least $1.5 billion of the $3 billion a year which we are at present paying out in unemployment insurance payments. (2) We can greatly increase tax revenues, because (a) more people will be working and paying income taxes; (b) more commodities will be sold, and will be paying additional commodity taxes, and (c) the increased volume of business will lower unit costs of production, and make available more profits to tax.
I think it is obvious that the government has shown great negligence in allowing our export trade to deteriorate seriously during the past 18 months without introducing the measures which were available to it for re-establishing the competitiveness of our products. It is equally obvious that the minister must take the primary responsibility for this sorry state of affairs, and has in no way justified the salary he is being paid as a minister.
I therefore move:
That Vote 1 of the Department of Industry, Trade and Commerce be reduced from $67,157,000 to $67,137,000.


Mr. Gillespie:: Mr. Chairman, I rise on a point of order. I wonder whether you would explain the rules of this debate in terms of the minister's time to ask questions or to respond to each speaker within the 15 minutes arrangement that has already been made.


Gérald Laniel: My understanding is that each member is entitled to 15 minutes and has the right to take his whole 15 minutes without allowing time for the minister to reply. This is why there might be 10 or 15 minutes at the end, so that if the minister feels he needs that time to reply to some of the questions raised, or arguments put forward by members which he did not have the chance to reply to within the 15 minutes allowed all hon. members, he can do so.


Alastair William Gillespie: You recognize, Mr. Chairman, that if every member takes his full 15 minutes it will be impossible for the minister to reply during his 15 minutes at the end to all the points raised. It is my impression, based on

May 28, 1975
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previous practice, that the minister has an opportunity following each statement either to make a very brief statement himself-and I mean brief-or to put a question for clarification purposes. In the case of the hon. member for Prince Edward-Hastings, he has referred to a number of interesting ideas and, quite frankly, I should like him to give the House an elaboration, particularly regarding one idea he put forward.


George Harris Hees: Mr. Chairman, on the point of order raised by the minister, the rules provide that each member may speak for 15 minutes. He can use this time to make a speech or to ask questions and receive answers. I have taken my 15 minutes to make a speech because I had some very valuable ideas to put before the minister. I suggest, Mr. Chairman, that the logical procedure would be that if the minister, as in any other debate, wants to say something about the ideas that are put forward by members on this side, then he should take one of the 15 minute slots provided to the government side, at whatever time he likes to do so, and use it as the 15 minutes allotted to him. As I understand it, the official opposition, on the proportion of time available, will get about four time slots, the Liberal party four time slots, and the other parties one or perhaps two. If the minister wants to take 15 minutes away from one of his own members, that is fine.


Alastair William Gillespie: Let us be clear on this point, Mr. Chairman. These are my estimates. I have been asked by the House to defend these estimates and to answer the various points raised by hon. members. The hon. member from Prince Edward-Hastings has moved an amendment. It would be quite impossible for me to answer all of the various points that will be raised during this afternoon's debate if I am limited to 15 minutes at the end of the day. I ask for the indulgence of the committee that I at least be permitted to respond very briefly to each statement. I would think that is the practice of the House, and I should be recognized for that purpose when I stand following a speech such as the one made by the hon. member for Prince Edward-Hastings.


George Harris Hees: On the point of order, the rules we are following were established-


Gérald Laniel: Order, please. Perhaps we should hear the hon. member for Winnipeg North Centre at this point; I will return to the hon. member for Prince Edward-Hastings.


Stanley Howard Knowles: Mr. Chairman, instead of spending a large chunk of the afternoon arguing over a point of order, why don't we follow the procedure laid down on the suggestion of the President of the Privy Council, on which you received the sense of the House, and that is that each member has 15 minutes to use as he wishes? The minister may say that these are his estimates, but this is an opposition day.


Mr. Fortin:: Mr. Chairman, I rise on a point of order.


Gérald Laniel: The hon. member for Lotbiniere on a point of order.


André-Gilles Fortin: Mr. Chairman, I fully agree with the hon. member for Winnipeg North Centre (Mr. Knowles), and I do not see why today we should adopt a procedure different from that which was adopted under the procedures themselves.


Gérald Laniel: There has been an agreement made. If the minister wishes to seek the floor at this time, he will be using his 15 minutes. If he wishes to seek the floor a second time, it will be after other members from the government side who wish to speak. That is in accordance with the agreement made for the debate on the transport estimates. In any case I feel that the minister should give it a try, and perhaps he can raise his point of order later since we are losing valuable time at this point. The minister cannot speak now without using up his 15 minutes. He could do so by unanimous consent, but there is no unanimous consent.


Mr. Olivier:: Mr. Chairman, I rise on a point of order.


Gérald Laniel: Order. Before I recognize the hon. member on a point of order, I would like to read the proposal put forward by the hon. member for Prince Edward-Hastings (Mr. Hees).

It is moved by the hon. member for Prince Edward-Hastings:
That Vote 1 of the Department of Industry, Trade and Commerce be reduced from $67,157,000 to $67,137,000.


Alastair William Gillespie: Mr. Chairman, I do not intend to prolong this procedural question. I just want to say that it was not my understanding that the minister would not be permitted to ask a question or to make a very brief reply. The second point I want to make on the point of order is that the hon. member for Prince Edward-Hastings knows that I have a senior and strong delegation from the U.S.S.R. in the city at the present time, and that I am in the middle of a mixed commission meeting with them. I have had to leave that mixed commission meeting. I shall have to leave the debate this afternoon at about four o'clock, but I shall return at very close to five o'clock. All I am saying is that this was known to the hon. member for Prince Edward-Hastings-


George Harris Hees: That is right.


Alastair William Gillespie: -and that it does seem to me that my rights as minister to defend my department have been seriously circumscribed.


Gérald Laniel: Order. The minister can only blame himself because he was party to the agreement that was made.


Joseph Mario Jacques Olivier: Mr. Chairman, I rise on a point of order.


Gérald Laniel: The hon. member for Longueuil on a point of order.


Joseph Mario Jacques Olivier: Mr. Chairman, I do not accept at all the principle that the 15 minutes can be transferred to govern-
May 28, 1975

ment or other members. Nobody in this House has the authority to transfer time accruing to each member, and I do not accept at all that procedure.


Gérald Laniel: In any case, the hon. member for Lon-gueuil was also present when the agreement was reached, and it was unanimously agreed that each member would be entitled to 15 minutes to use as he wishes, either to make a speech or put questions to the minister. Then, the minister may be recognized at any time, if he wishes to use his 15 minutes-he is in his right-whether he uses his time at the end of the debate is his decision.


Max Saltsman: Mr. Chairman, I am prepared to grant the minister the indulgence he wants so as to give him the opportunity of speaking, providing it is understood that he replies to the questions I am going to raise rather than to those of the hon. member for Prince Edward-Hastings.
I would tend to support the motion moved by the hon. member for Prince Edward-Hastings if it were made retroactive, because I think that just about every minister of industry, trade and commerce that we have had in this country has been derelict in his duty. I do not know whether this is the fault of the minister we have had at any particular time or whether it is because of the advice the minister gets from his departmental officials, but I rather suspect that it is because of the advice he gets from his department. In any event, it is not our job to question that or know about it. After all, it is the minister who is held responsible in this House.
Wherever ministers have been getting their advice on economic and industrial policy in Canada it has been terrible, and almost invariably policy has been based on continentalism all the way through. Whenever we talk about productivity or the rationalization of industry, it is always rationalization with the United States.
The chickens are now coming home to roost. Up until recently, when the United States was fighting a war, there were tremendous demands by the United States for all kinds of products Americans could not produce themselves, so the problems in respect of foreign ownership and their consequence on our productivity were obscured. Now the United States is in a recession, and fortunately for humanity's sake the war is over. We are now beginning to see the consequences of foreign ownership in this country.
I should like to point to one industry, although I could point to many, to show that the effect of foreign ownership has not been a Machiavellian scheme to brainwash us or change our culture, but has been one of giving us an incredibly inefficient industrial structure. We see this everywhere we look; whether it is in respect of chemicals, rubber or electronics, the intrusion of foreign ownership in this country has prevented Canada from living up to its potential.
There seems to have been some kind of reverse alchemy at work which, in this country with all its advantages, natural resources, people and energy, has turned our gold into dust. They have reversed the process. We would have been better off without a Department of Industry, Trade and Commerce than having one that has led us into conti
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nentalism, whether in respect of the Canada-U.S. auto agreement or the rubber industry. We are now beginning to see what happens.
Most of us have received a petition from the Canadian rubber workers asking us to support increases in tariffs. This industry is in danger of going under. It is not as though the minister was not warned about the consequences of the situation. For years it has been pointed out that this kind of attitude on the part of the Department of Industry, Trade and Commerce, with lack of coordination of regional development policy, foreign ownership legislation, and combines legislation, would lead to an incredibly inefficient rubber industry, almost totally foreign owned and inefficient compared to that of the United States.
The argument has always been that we have overcome this kind of inefficiency by low wage rates in Canada. Traditionally this is what we have done; we have overcome the inefficient structure of certain industries by paying our workers less than those in the United States. This cannot go on forever. The wages of our workers are now approaching those of workers in the United States, but our industrial productivity is not approaching that of the United States, and that is why the cry goes up that our workers are getting too much and are asking for too much. The fact is that they are not getting too much and they are not asking for more than their U.S. counterparts who are doing less work. But our industry is certainly not as effective as industry in the United States.
At the time we brought Michelin into Canada there was a warning that the rubber makers in this country would ask for tariff concessions. They got those tariff concessions to rationalize continentalism. The result is that production is being shifted to the United States. That is the consequence of branch plant economies. The minute problems develop in one country where the corporation originates the branch plant, that part of the world suffers, and we are paying the price of being a branch plant economy with this production shift to the United States. In spite of every give-away the Minister of Finance has been able to put forward, including concessions in the way of corporate taxes and write-offs to offset the DISC program in the United States, this production is being shifted out of the country.
There are many things that could be said and that I would like to say, but 15 minutes is not enough time in which to vent my anger about the insane policies pursued by the government. I do not think 15 minutes will be enough time for the minister to reply or to explain away generations of incompetence in the Department of Industry, Trade and Commerce in directing industrial forces in this country. He is not going to have 15 minutes, but whatever time he has will not be long enough to accomplish that.
Since the minister has asked us to pose specific questions, perhaps he will have the courtesy to listen to those I wish to ask. The minister has said on many occasions that there is no such thing as industrial strategy. He laughs at the idea of an over-all industrial strategy. Instead of that he says we have sectoral strategy-we have specific strategies for specific industries. In view of the enormous layoffs in the rubber industry and the demands by workers in that industry for some tariff protection, will the minister

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tell the House today what is the strategy of his department regarding the rubber industry, and what he intends to do about providing jobs in that industry?


Alastair William Gillespie: Mr. Chairman, the hon. member for Waterloo-Cambridge is perfectly correct when he says I do not believe it is possible to devise and tailor a great big blueprint which might be called an industrial strategy for Canada. Indeed, I believe, as the government does, that the right way is to deal with each industry on a case by case basis. Each industry has particular requirements, particular constraints, particular opportunities, particular weaknesses and particular strengths.
In respect of the tire industry, my department has already entered into discussions with Canadian tire manufacturers, which the hon. member was quite accurate in describing as being largely if not completely foreign controlled. These companies have in the past seen their strategy in terms of North American strategy. What we are anxious to do is work with them to develop a rationalization and a more modern industry that will operate in terms of an optimum scale rather than with some rather small plants as at the present time.
The present situation is the result of a number of factors, partly related to the automobile industry itself. That is to say, the industry is suffering a very significant depression at the present time. The present situation is partly related to the fact that the Canadian tire manufacturers have not moved as rapidly as their parent companies toward radial tires. At the present time I think some 75 per cent of all tires going on new commercial or passenger vehicles are radial. There is not a capacity for radial tires here at the present time. I am told that a number of manufacturers have already started quite significant investment plans to modernize or convert their plants to radial tires.
The other reason for unemployment is that there is a heavy inventory of non-radial tires, which has to be seen in conjunction with the condition of the automobile industry at the present time. I would hope that by putting this particular industry on an industrialized and rational basis we will be able to work out with them a more efficient industry which will have a Canadian perspective rather than the kind of perspective it has had in the past, which is part of the North American strategy and has a "made in U.S." label on it.


Max Saltsman: I hope the minister realizes the damning nature of some of the things he has said. He has said that, given the recession which is taking place and the change in demand now for radial tires, the bulk of the investment and the first production has been in the United States while Canadians are being asked to work off the inventories of non-radial tires. We are supposed to take the brunt of this technological change. I suggest this is the result of branch plant economy. I am not suggesting it is unnatural for the United States to behave in this way. Their first interest is in the United States just as our first interest is in Canada. They are naturally going to look after their problems in the United States before they look after our problems in Canada.
I am encouraged to some extent by what the minister has said in that it would indicate he is at least aware of

the problem. Up until now there has been a tendency to laugh -and suggest that we are always talking about foreign ownership, blowing its consequences out of all proportion. There has been a tendency to say this has nothing to do with our problems, and that the best solution is to rationalize on the basis of continentalism. Apparently now there is at least some awareness of the situation.
How is the minister going to enforce on foreign corporations his suggested program for rationalization in Canada? What specifically is the minister proposing to these companies, and what kind of assurances and protections are being looked into in order to see that this kind of thing does not happen again where, when there is a problem, the United States looks after itself first, and then we are used as the overflow to catch up if there is any kind of a shortfall in their production?


Alastair William Gillespie: I think the first point which should be made is that nothing will happen in the industry unless the industry itself sees there is a problem; that is, unless the Canadian industry sees that it is losing out relative to the tire industry of other countries. That is the first point with which we must deal. The second point is that it must be in their interest to invest in Canada because there is no way I know that the government can force them to invest. Clearly it must be in their interest. They have to decide that the market is growing and that there is an opportunity for them.
I think the third point is to make them aware of the problems that are likely to be realized if the industry continues to have as many separate plants as it presently has. I think that with the degree of scale that is now required, for every tire manufactured we will probably require fewer rather than more tire manufacturing companies in Canada. I think very likely there may be incentive programs already within my department which could assist them in this rationalization. The fourth lever I would suggest to the hon. member is the moral suasion lever. I think sometimes this probably is underestimated. I think most of the individuals managing these companies in Canada want to see their industry developed in tune with Canada's needs.


Max Saltsman: Mr. Chairman, the minister is not a naive person. I do not accuse him of being one, but what he is saying is absolutely incredible. He is saying that the government is not directly interested in this matter beyond moral suasion, and will depend on the companies and on the instinct of this industry to do it.
I am not questioning the good instincts of businessmen or their desire to be good Canadians. I am sure that is true. What I am questioning is their ability. They are locked into an archaic system from which they cannot break out.
Unless the Canadian government is prepared to move in and do something, then nothing will be done. How do you expect people who are competing with each other internationally in the rubber and tire industry, suddently to get together in Canada and work out a system which is in the national interest? Surely this is a time when, much as we may be concerned about the particular interest of a company, we must be far more concerned about the national
May 28, 1975

interest, and the only one who is in a position to determine that, and act on behalf of the people and make it stick, is the minister himself, and not some well intentioned president of a rubber company.


Alastair William Gillespie: I can only take it that the hon. member is suggesting that the Canadian government nationalize this industry-


Max Saltsman: I just say "do something".


Alastair William Gillespie: -that it acquire all the existing companies, nationalize them, and then tell its own industry where it should go. This is not the philosophy or approach of this government. Our approach is to work with private industry and show it that it is in its interest that what it does will be in the national interest, and therefore it will be in our interest. I think we have been successful in this and in other areas in this regard.


André-Gilles Fortin: Mr. Chairman, since the minister seems to be in such high spirits this afternoon, I should like to give him the opportunity to show his mettle and ask him a few questions dealing with the textile and clothing as well as the furniture industry.
As the minister knows, both are major industries in our country, and especially in eastern Canada. The companies involved employ a large number of workers and they are faced with problems because of foreign competition. It is basically not a matter of dumping, but a matter of competition which companies find extremely difficult to face.
Moreover, if you talk with union leaders not of strike but of production, of satisfaction with working conditions, of the future of that industry, they will complain that they have no say when discussions are held. When I meet with the owners of furniture or textile plants, and there are several in my riding, they complain of not knowing exactly what is the overall policy of Canada with respect to textile or furniture.
On the other hand, the Prime Minister (Mr. Trudeau), as I told the minister in the House this week, sent a letter recently to a mayor from the St. Maurice Valley stating that the federal government was about to introduce an overall textile and clothing policy for Canada. To complete my question, the minister is aware of imports of some polyester and cotton fibres and other kinds of fibres from the Republics of Korea and Taiwan and a number of other countries, and the Textile Board was ordered to inquire into those imports. The results of those inquiries are in fact strictly provisional, but then again are not meant to pave the way for only an employment protection policy which has already been implemented in Canada, but also an overall policy designed to give the economy of those industries a new impetus.
I would therefore like the minister to tell me first of all if his department now has the required data to implement an overall policy on textile as well as clothing and furniture. Is his department aware of the situation in those plants? Is it aware of the fact that almost 50 per cent of the Quebec market is under the control of foreign markets in those areas of industry and trade. Finally, I ask the minister when he intends to announce an overall policy in this
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respect. As I said at the outset, those industries are the backbone of our economy, especially our Quebec economy. If they were to disappear, I believe we would have two or three times the current unemployment rate.
I am very much concerned about the future of these industries, remembering what happened with the shoemaking industry. The government acted there, but when that industry had disappeared. Therefore, my question is quite clear. Although it deals with complex and elaborate problems, I would give the minister the time to bring forward am answer hopefully encouraging not only to the owners of these industries, but also to the workers who, although intent on staying on the job, are extremely concerned about the future.


Alastair William Gillespie: Mr. Chairman, a great deal of work was done by my predecessor in respect of the textile policy for Canada. That work was done with the representatives of the unions and with the representatives of the companies in the textile industry. It took place over a period of probably two years. The background to that policy at that time was the fact that there was a real threat from the low wage countries of the world.
The textile industry, if we go back to about 1970 when the present textile policy had its beginning, was an industry which was characterized with all the typical features of a declining industry. Employment had been going down, wages were very low, and imports were increasing as a percentage of the domestic market. Many of the plants were rather old fashioned, many had not received any new equipment because of the declining situation. In many cases, managements were out of touch. They had not introduced new measures. Very little had been done with respect to design and fashion, and no real effort had been made to look at the export markets of the world because of the considerable defensive position of the industry toward imports.
The textile policy was announced in 1970 with the legislation which provided for the Textile and Clothing Board. The basic elements of the textile policy, which is now in place, are to provide an incentive to companies to modernize and make themselves internationally competitive. The instrument for that was the Textile and Clothing Board. The employers and producers have the option of going to the board and seeking support for various kinds of restraints which would be negotiated with the low cost countries-voluntary quotas, if you like-and the assistance of the Export and Import Permits Act supports this policy.
A considerable amount of investment took place as a result of that policy, and for the first time employment started to rise, not decline, and wage levels came up a little. I will not argue that wage levels in this industry approach the national average in manufacturing; I think they are still significantly lower, but they improved and the outlook improved.
Various other steps were taken to assist those who might be laid off as a result of the rationalization of

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smaller units into larger units. The background to all that was the low cost import.
Today the situation is quite different. It is still a situation where the low cost import can provide a considerable downward pressure on the Canadian market in terms of price, to some extent in terms of pre-empting part of the Canadian market, but it is not nearly the problem it was, relatively speaking, back in the early 1970's.
The real problem today is that industrial activity in the textile industry in Canada is down because the market is down. It is down because the distributing trades, the retailers and wholesalers, have been cutting their inventories, and so they have not been placing their orders with their regular Canadian suppliers. That situation has been aggravated by imports from abroad, not just from the low cost countries but as well from the industrial countries, such as the United States. That is a significant change in the situation.
We have introduced a large number of measures. We have put many of these products, in fact most, on the import control list to ensure that we have precise and up to date information on imports wherever those imports may come from. I have had a number of discussions with the industry's representatives, both labour and management, with respect to the state of their industry and their outlook for it. We have negotiated restraints, voluntary quotas if you like, with the countries of origin of many of these products.
So far as the textile industry is concerned, the situation in the short term at present reflects market conditions in the world and in Canada. I think the long term outlook for the industry is still strong and I expect the industry to pick up and to continue to grow. Indeed a number of textile manufacturers are making significant investments to the tune of $40 million and $50 million.


André-Gilles Fortin: Mr. Chairman, before my time is expired, I would like to tell the minister about one disappointment. I hope it will not be ignored, but will produce positive results. One of the departments where communications and information are most important, as far as business is concerned, is Industry, Trade and Commerce. It has a particularly high number of complex branches and programs. Industry owners I know in Victoriaville, Prince-ville, Daveluyville, Warwick, Sainte-Croix are unanimous.
In other parts of Quebec also, I hear the same questions. Everytime I speak with those people, I am asked whether Industry, Trade and Commerce would not do such and such a thing, whether it could not help them know foreign markets so they can export. Can they be told what products are made in other countries?
Of course, this extremely important and worthwhile information comes from the Department of Industry, Trade and Commerce. I believe, Mr. Chairman, and I submit very humbly and very respectfully to the minister that there is certainly a gap in the information on the various programs available. This valuable and essential information which our constituent and especially the owners of these plants, need to develop their business has to be made available in our constituencies.

Mr. Chairman, I would like the minister to tell me whether he his aware of this root problem? I know that his departmental officials have this information, but if we put ouselves in the shoes of the businessman who can hardly manage to run his business, we find that he does not have the time to learn all about these various programs which are sometimes good and sometimes not so good, but which are always extremely important.
I am also well aware that by writing to the minister, we can obtain material such as the hon. member is now showing to me, but sending this material to the constituents involved does not necessarily solve the problem.
I should like to know not only what efforts the minister intends to make to publish information on those various programs, since this material already exists, but whether he intends to increase his staff or to improve his communication system so that the businessman may obtain everything he needs either to diversify his products or to promote the export of his production to other countries or to improve his own production in his own plant? I believe, Mr. Chairman, that I represent a highly industrialized constituency and that all my constituents have some grievances have some grievances or requests to make in this connection.
My question is very simple: Is the minister aware of this problem? Does he want the people to benefit as much as possible from the various programs of his department, and what efforts does he intend to make in this regard?


Alastair William Gillespie: Yes, Mr. Chairman, we certainly do. I agree with the hon. member when he says that it is sometimes difficult to sort out which particular program might be of assistance to a manufacturer or exporter.
We have a large variety of programs. For example, on the design side we have the Industrial Design Assistance Program on a cost sharing basis which assists, for example, furniture manufacturers to build or design new units. We have Fashion Canada which helps textile manufacturers on the design side. We have the GAAB Board which helps industries to restructure themselves. We have the Productivity Improvement Program, again on a cost sharing basis, which is aimed at assisting the management of these firms to improve their productivity and to make them more competitive. We have a program for the export market development which is aimed at assisting the selfstarter manufacturer to find new markets abroad. Again it is on a 50-50 cost sharing basis. I would be very pleased to provide the hon. member with this information. Perhaps that would be the easiest way of satisfying him on this point.


André-Gilles Fortin: I think that the minister has not fully grasped my question. I am well aware of these different programs. However, I am not in a position to inform each and everyone of these industrialists, because I am not an expert in each of the fields concerned. What I am asking the minister, is what means he uses to ensure that such information be truly and well used by the industrialists. Can the minister dispatch a few of his officials to visit on location one of these furniture manufacturing plants, either Victoriaville Furniture, or Fonderie Sainte-Croix,
May 28, 1975

which is one of the most important Canadian foundries and which is precisely in need of advice to diversify its production, in Canada as well as abroad?
Has the minister such services at his disposal to vulgarize and explain to the common folk the multitude of documents with which I am well acquainted? But not being an industrialist, I cannot explain all the aspects of each of these programs to the industrialists in my constituency. Can the minister, within his own department, intensify or even increase the number of experts to visit industrialists and encourage them not only to expand but also diversify and improve their production?


Alastair William Gillespie: It is very intensive-


The Deputy Chairman:: Order, please. I regret to interrupt the minister but the time allotted to the hon. member has now expired.	.


Mr. Herbert:: Mr. Chairman, in my remarks pertaining to the estimates of the Department of Industry, Trade and Commerce, and as the minister has to leave temporarily on important business, I should like to review the responsibilities of this department with particular reference to the federal government and export trade.
The Canadian economy continues to be vitally dependent on international trade. Canadian exports of goods and services now account for about 25 per cent of gross national expenditure at market prices. The share of export trade in total national income has increased steadily since 1959 when it represented about 18 per cent of all goods and services produced in Canada. The Canadian economy, therefore, is becoming increasingly dependent, and therefore vulnerable, to fluctuations in external demand.
With the current economic slowdown in most major industrialized countries, international competition is intense, and increased exports are not easily achieved. A successful Canadian export trade can be assured by combining good products, efficient production, and aggressive, intelligent marketing, with government support.
Federal government support is provided mainly through the Department of Industry, Trade and Commerce and the Export Development Corporation. ITC assists Canadian industry from research, design and development through the production and marketing of the finished product. The EDC provides insurance, guarantees, loans and other financial facilities to assist Canadian exporters. The EDC is a Crown agency which reports to parliament through the Minister of Industry, Trade and Commerce.
In addition to ITC and EDC, there are numerous other federal government organizations that are involved in Canadian export trade. Many of these other organizations are responsible to different ministries, and I want to make reference to this again before I close.
The Department of Industry, Trade and Commerce was established in 1969 as a result of the merger of the departments of trade and commerce and of industry. The department has the responsibility for stimulating the establishment, growth and efficiency of the manufacturing, processing and tourist industries in Canada and the de-
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velopment of export trade and external trade policies. With respect to export trade specifically, responsibility lies with the senior assistant deputy minister of international trade.
Under the ADM of international are the ADM Export Development, Trade Commissioner Services, and the ADM International Trade Relations. Departmental units involved in international trade within ITC are the office of general relations, office of special import policy, export and import permits branch, the international bureaux, trade commissioner service, office of international special projects, financing and aid branch, grain marketing office, transportation services branch, fairs and missions branch, and the program office (export market development) which handles the administration of the program for export market development.
The Department of Industry, Trade and Commerce's functions include: improving access of Canadian goods and services into external markets through trade negotiations; contributing to the improvement of world trading conditions; providing support services for industrial and trade development, including information, import analysis and tariff services; analysing the implications for Canadian industry, trade and commerce and for tourism of government policies related thereto in order to contribute to the formulation and review of those policies; and compiling and updating detailed information on trends and developments in Canada and abroad related to the manufacturing and processing and tourist industries.
The department operates eight regional offices located across Canada, and the trade commissioner service which has 82 trade offices in 57 countries. The minister also reports to parliament on behalf of Statistics Canada and the Export Development Corporation.
Boards and other organizations reporting to the minister are the General Adjustment Assistance Board, the Machinery and Equipment Advisory Board, the Pharmaceutical Industry Development Advisory Committee, the National Design Council, the Standards Council of Canada, the Textile and Clothing Board, the Preparatory Commission for Metric Conversion, and the minister's advisory council.
The Export Development Corporation, a Crown corporation, reports to parliament through the Minister of Industry, Trade and Commerce and is empowered by federal statute to encourage, facilitate, and develop Canadian export trade by providing credit insurance, guarantees, loans and other financial assistance to enable Canadian exporters to meet international competition. The EDC, which succeeded the Export Credits Insurance Corporation in 1969, has its head office in Ottawa and district offices in Montreal, Toronto and Vancouver. Direction of the affairs of the corporation is vested in a 12 member board.
The main functions of EDC are to insure the Canadian exporter against non-payment due to credit or political risks beyond the control of either the exporter or the buyer when export sales are made on normal credit terms. Almost all export transactions are insurable, not only those involving goods or technical services but also those involving invisible exports such as managerial services, advertising programs, the licensing or sale of patents,
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trademarks, copyrights, etc. Its functions are also to issue appropriate guarantees to chartered banks or to any person providing non-recourse supplier financing in respect of an export sale. Guarantees may also be issued in connection with a loan made to a foreign buyer for the pruchase of Canadian goods and services.
It also finances foreign buyers of Canadian capital goods and related services when extended credit terms are necessary and are not available from commercial lenders. Major engineering and other technical services-but not feasibility studies-may be financed, even when such sales are not related to the export of goods. It also has a function to insure Canadian investments abroad against non-commercial risks such as loss through confiscation, expropriation, war or revolution, or the inability to repatriate capital or earnings.
The General Adjustment Assistance Board administers the general adjustment assistance program. The program helps manufacturers take advantage of export opportunities arising from the Kennedy Round; assists manufacturers of textiles, clothing goods or footwear to improve their competitive position in domestic or export markets; and aids those who have been injured, or threatened with injury, as a result of Kennedy Round reductions of Canadian tariffs. Financial assistance is also made available in the form of government insurance on loans, direct loans and grants to manufacturers for restructuring projects necessitated by tariff changes. The board has members representing both private industry and government, and reports to the Minister of Industry, Trade and Commerce.


Stanley Howard Knowles: Tell us about the metric commission too.


Harold Thomas Herbert: The objectives of the Standards Council of Canada are to foster and promote voluntary standardization in fields relating to the construction, manufacture, production, quality, performance and safety of buildings, structures, manufactured articles and products and other goods, including components thereof, not expressely provided for by law, as a means of advancing the national economy, benefiting the health, safety and welfare of the public, assisting and protecting consumers, facilitating domestic and international trade and furthering international co-operation in the field of standards.
A comprehensive statistical service on Canada's external trade is available from Statistics Canada, formerly the Dominion Bureau of Statistics. In addition to broad quantitative data published in monthly, quarterly, and annual reports covering import and export trade by commodities and countries, Statistics Canada offers a service of special tabulations of unpublished data in a variety of combinations to meet almost any specific need for export or import figures. The administrative head of the bureau is the Chief Statistician of Canada, who has the rank of a deputy head of a department and reports to parliament through the Minister of Industry, Trade and Commerce.
Other federal government organizations and related agencies with involvement in Canadian export trade include the Agricultural Products Board, the Bank of
[Mr. Herbert.)
Canada, Canadian Development Corporation, Canadian Grain Commission, Canadian International Development Agency, Canadian International Development Board, Canadian Transport Commission, Canadian Wheat Board, Crown Assets Disposal Corporation, Department of Communications, Department of External Affairs, Department of Finance, Department of National Revenue, Freshwater Fish Marketing Corporation, National Energy Board and National Farm Products Marketing Council.
In addition to the foregoing, other federal government organizations and related agencies with indirect or peripheral involvement in Canadian export trade include Air Canada, Atomic Energy of Canada Limited, Canadian Film Development Corporation, Canadian Government Specifications Board, Canadian Overseas Telecommunication Corporation, Canadian Patents and Development Ltd., Defence Construction Ltd., Industrial Development Bank, Inter-American Development Bank (Canadian Section), International Development Research Centre, Machinery and Equipment Advisory Board, Ministry of State for Science and Technology, (Bilateral Co-operation Division), National Design Council, Post Office Department, Preparatory Commission for Metric Conversion, Metric Commission, Tariff Board, Telesat Canada, Textile and Clothing Board, Uranium Canada Ltd., and the Interdepartmental Committee on External Relations.


Mr. Baker (Grenville-Carleton):: I think the parliamentary secretary is asleep.


Harold Thomas Herbert: The Canadian economy is extremely sensitive to fluctuations in international demand for Canadian exports. A successful Canadian export trade can only be assured by combining efficient production and marketing together with government support.


Mr. Clermont:: I rise on a question of privilege, Mr. Chairman.


B. Keith Penner: I recognize the hon. Parliamentary Secretary to the Minister of Industry, Trade and Commerce.


Gaston Clermont: Mr. Chairman, an hon. member said that I was taking a nap. I strongly protest against such an insinuation. I know the member represents Grenville Carleton and he is Mr. Baker.


Walter David Baker: Mr. Chairman, I apologize to the hon. member. I accept that he was not asleep. It was just that from the position of his downcast eyes it looked as if he was asleep. I do apologize.


Gaston Clermont: Mr. Chairman, I have yet to see a member of the House read a document with his eyes on the ceiling. It so happens that reading one was exactly what I was doing.


Harold Thomas Herbert: Mr. Chairman, may I say, after that little pleasantry, that I intended in my remarks to identify some 20 federal organizations and related agencies with direct
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involvement in Canadian export trade. It is clear that the focal point of federal government activity in export trade centres on the Ministry of Industry, Trade and Commerce. However, there has been an increasing tendency for other government departments to become involved in Canadian export trade. I will be interested to hear the minister's comments on the part played by his department in coordinating the activities of the groups that I have enumerated.


Mr. Kempling:: Mr. Chairman, it is great to follow a penalty killer. It gives one a chance to review what one intends to say. I should like to add a few remarks to what my colleagues have said, during consideration of the estimates of the Department of Industry, Trade and Commerce which are now before the committee. The minister is meeting a Russian trade delegation and was kind enough to let us know in advance that he could not be present for all of today's debate. We wish him well in his deliberations.
Today the Standing Committee on Industry, Trade and Commerce lunched at the Bank of Canada. When I came out, after the meeting, I was accosted in front of the Bank of Canada by a panhandler who asked for a handout of 25 cents.


An hon. Member:: I bet you turned him down.


William James Kempling: This shocked me. That people are panhandling openly in front of the Bank of Canada may be a sign of the times.
Like many Canadians, I am deeply disappointed with the Minister of Industry, Trade and Commerce. I am disappointed at his lack of energy, imagination, and leadership in the many fields of trade and industry. His efforts could be best described as a holding action-holding on for dear life, holding on and hoping for some economic miracle that will reverse the dangerous course we are now travelling.
We are paying today for the patched up programs, the ill-conceived plans and decisions taken in the past few years. We are paying the price for poorly thought out programs which were put into effect with much fanfare and publicity. The minister gives the impression that he is dealing only with shadows; he never seems to come to grips with the substance. The minister has a standard, stock answer to any question regarding industrial initiatives: "My officials are studying the matter." This usually leads to the hiring of a private consultant who recommends the establishment of yet another alphabet program under the Department of Industry, Trade and Commerce.
Then again if you ask the minister a question about industry or trade, he reels off programs called PAIT, DIP, FLIP, FLOP or SLUSH, or other programs which have been put in place. I do not intend to make light of these programs-SLUSH is the name that amuses me. Many of these programs existed for many years, and they still exist. Many of them are ineffective, or not properly oriented. At best they are marshmallow programs. They have all the impact and impression on our industry of a marshmallow. We need industry programs which go further than the handing out of grants. All that program directors do consistently is publish a multi-coloured booklet.
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I submit that what we really need are basic decisions as to where our industry and trade are to head in the years to come. We need some short-term immediate action which will be part and parcel of a long-term plan. We need a minister who will fight like hell for industry.


An hon. Member:: That is precisely what we now have.


William James Kempling: We do not have such a minister now. We need a minister who will pound the table for a capital cost allowance which will compensate for inflation, and who will work with his colleague who is responsible for the finance portfolio for the establishment of an allowance or adjustment which will apply to inventories in place, as present allowances or adjustments do not allow for replacement cost of those inventories.
In short, we need a minister who will bite the bullet, and face the facts of foreign investment legislation in Canada. The fog created by the Foreign Investment Review Board has effectively frightened away investment. The minister is encouraging joint ventures in Canada, but waffling on phase two of the foreign investment legislation. He has failed miserably to put into effect a long-term program to develop a secondary industrial base in Canada. We continue to trade off resources for finished goods.
The minister has made many confusing statements about an industrial strategy, that range from his view that he does not think it possible to develop an industrial strategy in Canada to his statement that he may have 18 or 19 different sectoral strategies. I hope the coming months will show us a little bit about what these strategies are.
The minister is urging Canadian businessmen to go outside Canada, open joint ventures in developing countries, and export back into Canada. His colleague, the Minister of Finance, upon returning from the Middle East, announced recently that Canadians should seek out joint ventures in the Middle East countries.
The Minister of Industry, Trade and Commerce when cornered always falls back on that old chestnut that Canadian businessmen are not venturesome, that they are not innovative, and that they are not willing to go out and seek business. Well, let me say that people in industry are sick to death of hearing that story.
The plain truth is that we have a minister who, as the press noted recently, is barely keepling afloat. He is a very average minister, or should I say a barely average minister, a nice guy who likes to philosophize and pontificate about industry and trade, and who loves to use a lot of commercial buzz words.
He is the sort of front-of-the-bus, middle-of-the-road, back-of-the-church fellow who lives in the hope that some miracle will rescue him from his dilemma.


Some hon. Members:: Hear, hear!


William James Kempling: Let us take a look at a few industries that clearly illustrate what I am talking about. The automotive parts industry has had a trade deficit with the United States for ten consecutive years. Last year the deficit was in excess of $2 billion. The minister says this is because the U.S. auto industry is down. Well, it certainly
29 561 -49Vi

May 28, 1975
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has not been down for the last ten years. The minister has done next to nothing since assuming his portfolio to change this picture.
For years the Americans have endeavoured to make the auto pact a true bilateral agreement. The pact is bilateral from their side and multilateral from our side. As a result of failing to come to grips with this problem, over one and a half billion dollars has been invested in an automotive industry in Brazil, with another billion slated for that country by 1977. Mexico, Argentina, and Venezuela are all building automotive industries. In fact by 1980, automotive production in Brazil will outstrip ours in units produced. We are importing more and more automotive components into Canada from other than North American sources. We are becoming a pass-through assembly operation, and that is tragic. The North American automotive market is being diluted more each year, and our automotive parts industry is dying on the vine.
Take a look at the rubber industry. The hon. member for Waterloo-Cambridge made some remarks and asked some questions about that. I heard the minister's answers. I was not particularly impressed by them. This industry employs 18,000 people. More than 2,000 have been laid off with little chance of being rehired. We see this industry, which serves a market that consumes 20 million tires a year, being strangled by on-again-off-again tariff policies, and by imported tires. In the past three years we have imported 33 per cent, then 45 per cent, and in 1974, over 60 per cent of the tires we consumed. I will back off on the 60 per cent to this point. We know there were a couple of disastrous strikes in that year, but the fact is that the trend is there. We are importing more and more of the tires we consume in this country.
We only produce half the radial tires required for original equipment production on automobiles and trucks. The tire industry is waiting for some assurance from the minister that he won't give it all away at the GATT meetings in Geneva.
If you were the president of a tire manufacturing company and wanted to get the approval of your board of directors to expand your plant capacity or increase production, what chance do you think you would have if they have a gut feeling that the government is going to pull the rug out from under them at the GATT negotiations? How long can this industry wait for something positive from the Minister of Industry, Trade and Commerce? We know that this industry employs 18,000 people and produces a sales volume of half a billion dollars. We know that they are producing under capacity today and that they can expand their capacity. We know that they have the labour skills, and we know that the market is there.
We also know that we have government in power that does not want to come to grips with inflation or inflationary expectations. We know we have a government in power that is directly responsible for the labour unrest in this country; a government that is overstocked with unimaginative, do-nothing ministers who refuse to face reality. What does the Minister of Industry, Trade and Commerce propose to do? He suggests we form joint ventures in third world developing countries so we can produce in a cheaper labour market. What the hell is that
going to do for unemployment in Canada? How the hell is that going to improve Canadian export trade?


An hon. Member:: Shame!


William James Kempling: The hon. member says shame. He should be ashamed of his performance.
What the minister should be doing is pounding the cabinet table for a full revision of our tax laws. He should be demanding action on capital cost allowances to reflect inflation. He should be insisting that we maintain the integrity of our currency. He should be setting forth in clear terms our foreign investment policy, and either state the government's clear position on phase two of that policy, or scrap it.
Joint ventures will not flow into Canada in enough volume to affect our unemployment, trade, exports, or balance of payments unless taxation, regulations regarding foreign investments, and capital cost allowances are re-examined, changed, and communicated in precise language. Without this kind of action we will languish in trade imbalances, continued high unemployment, balance of payments deficits, and our recovery from this current recession will lag behind our trading partners some of whom, I might add, have had the courage to take action. We are at a turning point, and what we do in the balance of 1975 and in 1976 will determine our economic activity for the next several years.
We have in our Department of Industry, Trade and Commerce the greatest expertise and talent of any country in the western world. Our GATT negotiators are the most knowledgeable and expert of the group assembled in Geneva, but what are they negotiating toward? Toward what plan are they negotiating? We have no long-range plan for industry in Canada. We have only short-term, ad hoc, patch-work programs; no real incentives to put our resources and labour skills to work on a long-term basis. This comes as no surprise to anyone who looks beyond the facade of glib answers and ghost-written speeches that tumble from the minister's mouth.
As the press acknowledged recently, the minister is treading water. I hope to God that someone will have enough compassion to toss him a rope before he goes under and drags the industry of Canada down with him.
Let us take a brief look at a few of our industries that are in varying degrees of trouble. Many of them are covered by programs. This is why I ask why they are not working. There is the rubber industry, textile industry, automotive production industry, automotive parts industry, feedstock for our chemical industry, the electronics industry, television production, shipbuilding which cannot operate without massive government subsidies, furniture, and footwear. I could list another half dozen or more. This is a pretty sad picture.
When I was in Europe recently I talked to some of the trade people there. The department some months ago sponsored a show for the furniture people in Europe. What do you think they brought over? Canadian designed Scandinavian furniture, chromeplated garbage. Those people are not interested in that. They wanted to see some really good Canadian wood furniture, but they did not get to see that. Somebody along the line muffed on that one.

May 28, 1975

All these industries are in trouble because the government lacks the basic guts to deal with the problems facing industry. The government refuses to deal with inflation, yet is hot on bilingual labelling. It puts in place foreign investment guidelines in clouded terms, then urges Canadians to seek out joint ventures. It has allowed our currency to float, which is inflationary, and has done nothing to improve the integrity of that currency. It pays out billions of dollars in unemployment benefits but has no meaningful retraining program and no industrial strategy through which retrained labour could be channelled.
There is a need for capital investment in Canada, but the government urges Canadian businessmen to form joint ventures in developing third world countries. It is obvious the government is adrift in an uncertain sea with no maps, no rudder and, worst of all, no captain.


B. Keith Penner: Order.


William James Kempling: I see I have run out of time. Gee, I had a real good remark here, but you cut me off.


Mr. Cullen:: On a point of order, the hon. member mentioned the furniture trade show outside this country and that particular operation. I know he did not do it deliberately but he failed to tell the committee that an outstanding success came out of this initiative. Sales were phenomenal and the furniture industry was very pleased with it.


Robert Lorne Stanfield: May I say with all respect that that was clearly not a point of order. A man holding the high office of parliamentary secretary should not abuse the rules of the House.


Jack Sydney George (Bud) Cullen: The reason for my point of order was that I knew the hon. member would want to correct his statement.


B. Keith Penner: Order. The hon. parliamentary secretary knows he is entering into debate.


Mr. Guay (Levis):: Mr. Chairman, I would like to speak today about a few matters which are now creating new economic and political situations and on which I would like to draw the attention of hon. members because, for my part, I believe that these matters are extremely important, particularly now when we are trying, by all available means, to fight inflation, unemployment and recession and are attempting to find the most stable economic balance possible.
My first subject concerns Canadian industries and foreign capital. To protect Canadian industry, the government has asked the Minister of Industry, Trade and Commerce (Mr. Gillespie) mainly to control the investments of foreign capital in Canada to prevent this economic sector from being invaded by foreign interests and thus to prevent an uncontrolled take-over of our industries by foreigners. This position of our domestic policy is normal and commendable. Certainly, no one here will dispute the value of this policy.
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However, we must realize that this type of decision also has certain drawbacks and often places certain industries which would need mixed capital to survive in serious situations. Unfortunately, Canadian capital is not sufficient to develop adequately our industries. Consequently, businessmen are tempted to seek foreign capital. But now, they cannot do so.
I can quote the recent example of a businessman in my constituency who was just refused such a privilege. Yet, had he been allowed to associate with English interests, his business would have developed to such a point that he could soon have doubled his staff. On the other hand, the government is doing nothing to stop Canadian industries from closing their plants in Canada and from moving to other countries where administration and production costs give them a greater margin of profits. Recently, two Vic-toriaville textile manufacturers announced that they would soon leave Canada for another country.
What is going to happen therefore, Mr. Chairman, if on the one part we prevent industries from developing with foreign capital and on the other part, we allow industries to leave this country? Unless we take rapidly the necessary steps, we shall inevitably witness the slow and last agony of our Canadian industry, which nobody here desires I am sure.
That is why I say: Let us promptly take care of this situation. Shall we broaden our regulations concerning foreign investment? Are we going to resort to incentives to persuade our businessmen to stay here and especially in Quebec? That problem should be dealt with in committees and suggestions from individuals, officials and groups should be studied so as to bring about a quick and efficient solution.
Mr. Chairman, the second question I should like to raise deals with the Industrial Development Bank. This bank, created about 30 years ago, has been of great assistance to the Canadian industry, there is no doubt about that. It was established to encourage Canada's economic prosperity by increasing the efficiency of monetary action through provisions of credit availability for industrial undertakings, by completing the activities on the part of other lenders and by providing help to the small enterprises encountering financing problems.
It is not my intention here to criticize the Industrial Development Bank as to what it was and what it was not, because I prefer dealing with its future. The possibility of making it a Crown corporation is being considered. As for me, I would like to suggest something else. It would seem logical to me and probably more efficient to link it to the Department of Industry, Trade and Commerce and I will give explanations.
Up to now, the part played by the Industrial Development Bank, by reason of its working, was economic. It had to lend money, guarantee loans, acquire shares and put them back into circulation. And because it paid out of its revenue the interest on its bonds, its staff emoluments and all its administration costs, its financial constraints surely obliged it to show wisdom, looked upon as exaggerated by some people, at any rate to temper its spirit of enterprise and avoid risks as far as possible.

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I personally know something about this for having helped on various occasions some of my fellow citizens who were trying to get its cooperation. The bank is quite willing to lend to expand a business, for example, but the borrower must prove that he cannot obtain funds elsewhere, that there is already enough capital in the business, and that others like it have invested or are about to invest in it.
I must naturally be convinced of the viability of the business because it bases the amount it may lend on the profit outlook. It is also quite willing to lend to straighten out a financial situation, but it must not be due to incompetence or mismanagement.
Mr. Chairman, it will easily be understood that all those requirements and limitations have affected the efficiency that this financial instrument could have had and they also led to help industries located in the richest provinces, especially those which needed it less, because the risk was smaller. That is why in 1974 the number of loans reached 34 per cent in Ontario, 33 per cent in British Columbia and 19 per cent only in Quebec, and 14 per cent in the Atlantic region. In other words, the provinces where industrial development leaves much to be desired were forgotten. If that development corporation were attached to the Department of Industry, Trade and Commerce, it could be given a political as well as an economic dimension; like the Department of Regional Economic Expansion which gives more grants to underprivileged areas it could thus both benefit and have underprivileged areas benefit from it.
Furthermore, the Department of Industry, Trade and Commerce already has all sorts of mechanisms to help industry. So the different sectors could combine their efforts. For example, an owner faced with financial difficulties because of a lack of competence in management could first avail himself of the management program, that is the CASE program, which has the advantage of making available at minimum cost a service provided by retired businessmen selected for their experience in management. The owner could thus become eligible for loans from the bank.
Mr. Chairman, surely it will have been noted that my views and my suggestions were directed mainly to the Minister of Industry, Trade and Commerce (Mr. Gillespie), and that is not by mere coincidence. Having served as Parliamentary Secretary to that department, I was able to fully appreciate its outstanding organization, the competence of those civil servants, the understanding and the communication among departments. I am therefore quite convinced that through that department we could answer both questions I raised today.
In conclusion, Mr. Chairman, may I challenge some of the statements of the opposition member who spoke before me. He said that the government and the Minister of Industry, Trade and Commerce lacked imagination and ability; that is how far they went. But I shall ask that and other opposition members what they have to offer.
I listened to every speech this afternoon. We are about to complete consideration of the estimates of the Department of Industry, Trade and Commerce, and we heard nothing but criticism from opposition members. Mr. 
Chairman, I also had some criticism about the Department of Industry, Trade and Commerce, but I did dig into the problem, I studied it to make efficient and positive suggestions. They have no program, no alternative. They say ministers cling to power but, Mr. Chairman, do they believe that they will come into office without any program or any alternative, and just tell Canadians: Now, we shall take the place of the Liberal party. We are Progressive Conservative members and we have no program. We do not have anything to say, we just utter criticism.
I ask the hon. member for Prince Edward-Hastings (Mr. Hees) especially, since he was the first critic of his party, to listen to me. I was extremely patient in listening to him moments ago, but he actually did not play the role which the opposition should play in this House.
What is aimed at, in this House, is playing partisan politics to have Canadians believe everything is wrong in Canada. Repeating this does no good, because the press gallery is much more receptive to criticisms, as is evidenced by the press reports we read at night before going to bed. We have trouble going to sleep because we read only bad news about Canada, nothing ever would go right.
In effect there are lots of good news. No reference was made to Statistics Canada's last figures on our balance of payments. According to the last figures, our balance is in a surplus position this year. There was no mention of that. Not a word. I submit to hon. members on the other side that although I can criticize within the Liberal party, I am also capable of introducing efficient solutions. If the opposition were to fulfill its true role, it should tell the people: "There is such and such a program. Make use of it, even if it is not perfect. If we gain power, we will change it in such and such a way." This is what the opposition should do, but it does not.
I believe, not as a government member but as a member of parliament, that every hon. gentleman here should double up as information officer to the Canadian public. We have programs. The Minister of Industry, Trade and Commerce (Mr. Gillespie) announced recently the new shipbuilding industrial assistance program. This program became permanent,-you said earlier we have nothing but temporary measures-the STAP, after an experimental stage, is now the SAP. It became a permanent assistance program to the Canadian shipbuilding industry. Small manufacturers, who are most in need of assistance, are not told about the program that can help small enterprises, as in Quebec for instance, to obtain the expertise they need to rationalize their management, to rationalize their marketing, so that these industries become viable. That is what it is to be a member of this House, period, not a member of the opposition or a member on the government side. That is what I reproach particularly the members of the Progressive Conservative Party with. I believe that the real role of the opposition must be one of cooperation. I readily admit that we should criticize, but it should not be the only thing we do. I have been in this House for many years, almost 13 years, Mr. Chairman, in many occasions I have had the opportunity . .. The member over there who shouts behind the curtain, Mr. Chairman, probably regrets having failed to make suggestions earlier when he was speaking!
May 28, 1975

The Assistant Deputy-Chairman: I regret to interrupt the hon. member, but the time allotted to him has expired.


Mr. Ritchie:: Madam Chairman, in the short time allocated to me it is impossible to give anything more than some small facts about selected areas of our over-all trade problem. Everyone knows that Canada is now faced with the highest imbalance of payments in its history, or at least within the last 25 years, both in actual dollars and real dollars. The obvious reason that the budget has been delayed until June 23, when the government side is so anxious to get out and get home, is that it does not know how to deal with the present combination of rising costs, inflation, and high unemployment.
Furthermore, the Department of Finance is obviously having difficulty forecasting the way in which events will unfold during the summer months. The Minister of Finance and the Minister of Industry, Trade and Commerce seem to be taking refuge in the hope that there will be an upturn in the economy, and particularly in the world economy. But most business forecasts from the United States are bleak. For example it is said that from the business statistics through early May it is not possible to forecast an early upturn in the economy.
The Japanese government is considering changing its two-year policy of tight money "in view of an acute slump in industrial activity in recent months". The West German government is expecting a delayed economic recovery as a result of the world trade recession. It seems probable that the government will stand aside and let the market system operate. This is an expensive answer in terms of unemployment, lost production, and a squeeze on profit.
Much of our troubles, which are certain to get worse before they get better, can be traced to the government's action, or I should say lack of action, in the export field. Our troubles can largely be traced to the government's reaction to our greatest trading partner, the United States.
The history of our trade with the United States is a long and involved one, but I think to some extent the present situation between our two countries can be likened considerably to the trade wars that developed in the thirties. It brings sharply into focus the exchange of views between Mr. Porter, the Unites State Ambassador, and our Secretary of State for External Affairs. Mr. Porter maintains that whatever the relationship between our two countries, it would have to be something special in this world. In other words, because of our close proximity we must have an unusual relationship. But the Secretary of State for External Affairs has said that there is no special relationship, and he is also quoted as saying that special relationships no longer serve either of our best interests.
I now wish to talk about this special relationship in the matter of trade and energy. The government told us it was going to conserve oil, first by raising its price to the Americans and thus discouraging them from buying it, and then by phasing out exports to the United States altogether.
Earlier this month the government reversed itself and cut the price of light and heavy crude oil exports by 80
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cents a barrel in order to make Canadian oil more competitive and, incidentally, improve our balance of payments situation. It is obvious that the government is contradicting itself because it has not acted to develop a comprehensive new policy in trade and energy. It is not going to be too long before we reap the whirlwind, and it is going to lead to more unemployment and more inflation.
The decision of the Canadian government to introduce the two-price oil system in 1973 has become more and more a problem. The addition of the export tax of $5 a barrel to the Americans, and the use of this money to finance a subsidy to eastern consumers to offset imported oil at $11 a barrel, has resulted in Canadian oil becoming the highest cost source of oil imports to the United States.
When the government served notice last November that it would phase out exports from a million barrels a day to 650,000 by July, 1975, and to none in 1984, the Americans began looking elsewhere for supplies. Even oil seems to be capable of being priced out of the market. For April, instead of the 800,000 barrels a day authorized, only 600,000 were exported. Canadians thus became a net importer of oil as eastern Canada is importing at a rate of 820,000 barrels a day. Canada is not now making enough on the oil export tax to cover the subsidy to eastern consumers so dependent on imported oil.
Canada has a capacity to produce two million barrels of oil a day with the possibility of exporting approximately one million barrels, but because Ottawa has been so single-minded about curtailing exports to the United States the industry has been forced to shut in 400,000 barrels a day. Investment money is locked in, earning no returns, and thus reducing money available for exploration and development.
This is one area in which the Department of Industry, Trade and Commerce must exert itself, and decide what it is going to do about exports in order to earn badly needed foreign exchange. This is the only country in the world to show a decrease in 1974, with a further decrease forecast for 1975. The fact that Ottawa has cut the price of export crude is the first indication that the government is slightly aware of the mess it has spawned. We are losing exports, income and jobs very quickly.
We need a real conservation policy within the country, and this is where the Department of Industry, Trade and Commerce should be active. We have to consider an increase in the price of domestic oil whether we like it or not, because this will give conservation a real thrust. We must once more consider our industry and our economy in terms of the rest of the world so far as energy prices are concerned. There should be some tax relief for the oil industry so it will have more money and incentive for exploration and development.
Having regard to its balance of payments difficulties, the President of the United States has ordered another $1 tax per barrel on imported oil, and Mr. Ford's energy program is based on the rather practical and simple theory that higher costs will reduce consumption and price control on domestic oil will encourage more production.
This price increase is aimed directly at Canada, designed to shut out our exports as well as those of other exporting nations. Surely the United States would agree to

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a supply of oil at a maximum amount per year well into the future. We should aim for this. This should not be so high as to endanger Canadian production. Indeed, it makes sense to export to the United States if we continue to import offshore oil.
The abrupt cessation of oil exports is one of the major causes of our dollar weakness versus the U.S. dollar. The government miscalculated when it felt that the amount of U.S. dollars available for capital inflow did not occur because of the overloading of the U.S. bond market.
In order to facilitate an over-all trading climate with the United States, government policy should be directed toward maintaining the Canadian dollar at close parity with the U.S. dollar. The strong trading linkages between Canada and the United States are what lie behind the two currencies being close to parity. When the economic performances of the two countries differ, as they do now, the danger of a fairly severe exchange rate fluctuation arises. The U.S. economy may not be performing as well at the moment, but it is bringing inflation more quickly under control.
The threat of wage-price inflation is a particularly severe one in respect of our trade imbalance. Devaluation, although supporting trade, could ultimately provide continued support for unrealistic rates of wage, salary and price growth. If devaluation were combined with an attempt at wage and price controls, the outlook would be very serious. Canada will need to attract large*amounts of capital for our huge energy needs in respect of the Mackenzie Valley pipeline. Therefore, the Department of Industry, Trade and Commerce should decide whether it wants to proclaim the second part of the Foreign Investment Review Board measure or forget about it, as has been suggested.
Furthermore, a reasonable accommodation with the United States should reduce the influence which the application by El Paso Gas to transport natural gas from Prudhoe Bay to the continental U.S. A. instead of using the Mackenzie Valley pipeline will have. In this way that influence will be blunted. At the present time the main argument of El Paso is that the Canadian administration cannot be trusted. I suggest it is most important that a decision be made in respect of this matter. The Department of Industry, Trade and Commerce has not grappled with this problem of exports, and the problem in respect of exports of oil to the U.S. is most serious, and one of the most important ways, properly handled, to improve our balance of payments position, and in the long run provide a more acceptable solution.


Alastair William Gillespie: Under the rules of this debate, Madam Chairman, it is going to be very difficult for me to respond to all the points that have been made this afternoon. I will do my best to cover at least some of them.
In the opening statement of the hon. member for Prince Edward-Hastings he referred to R and D, and productivity, and seemed to imply that my department was not interested in sponsoring research and development, or productivity. I would remind him that the program for the Advancement of Industrial Technology, PAIT, and IRDIA are both fundamental to the support of research and development in Canada. I would remind him that the Program for
Industrial Design Assistance is directed toward another aspect of innovation, that is to say, better designs which will sell in Canada and better designs which will sell abroad. I would refer to Fashion Canada, which is a specific program aimed at the clothing and textile industry.
There are other programs which have research and development content. The Program for Defence Industry Productivity has a very important research and development element. Under that program a very significant and new technology has been developed in Canada. I am referring to the D.T.6 and the jet version of that engine produced at U.A.C.L., which has given Canada world leadership in this particular family of motors. I would also refer to the 50-passenger Dash-7, the prototype STOL aircraft which has every promise of being a world leader in its particular category.
I should like to refer the hon. member to a number of other programs because the suggestion was made by the hon. member for Halton-Wentworth that we were not interested in producing new programs, and that our programs were all old. I should like to remind him that this is indeed far from the fact. He should be referred to the new changes in the GAAP program, the General Adjustment and Assistance Program, aimed at widening benefits for Canadian manufacturers and those in the service industries who service those manufacturers.
I would like to draw to his attention the new program for the footwear and tanning industry that was introduced about a year ago, and CASE, the counselling assistance for small enterprises that was introduced about a year ago in the House. After a period of development more than 1,000 field workers are now operating across the country and in every province.
I would remind the hon. member that the old shipbuilding program has been replaced with a new program tailored to new needs. The shipbuilding industrial assistance program is aimed at ensuring that that industry will be internationally competitive. It has a built-in incentive for modernization. There are many other programs aimed at assisting Canadian industry to increase its productivity. I referred to several of these in reply to a question by the Social Credit member in respect of the textile industry. There are programs with respect to productivity improvement in the pharmaceutical industry where there is a development assistance program. I have already referred to the Defence Productivity Program and the Industrial Design Assistance Program.
A question was raised by the hon. member for the Social Credit Party concerning what we were doing to ensure that this constellation of programs which are there for the assistance of private industry is made known to private industry. I should like to state that we have intensified our efforts in many ways. For example, we have opened regional offices of the Department of Industry, Trade and Commerce in all provinces across the country.
This government has created the Federal Business Development Bank, which bank will be in business within a very short period of time. I have indicated in the House previously that this bank is more than just a financing

May 28, 1975

institution, which is what the industrial development bank still is. It is an institution which will provide consulting services, management consulting services, to the owner-managers, and which will take over the owner-manager training programs previously undertaken by the Department of Manpower and Immigration, and the technical services which are made available to small businesses by N.R.C. It will provide information services through some 60 different branches across the country. That seems to me to be a constructive way to tell the story and make available to the small businessman the information he can use to make his particular business more competitive or more productive.
I believe it is also important to deal with some of the other questions concerning trade. I could give a long catalogue of the activities this department has initiated over the past year. They are very substantial in terms of outgoing and incoming missions. Something close to 100 incoming and outgoing missions will have been completed in the year 1974-75. In addition there were 51 international trade fairs, exhibitions and seminars abroad in which the department participated and made available to small and larger businesses across the country.
The program for export marketing development has assisted over 3,600 companies since its inception. The payoff on that program has been remarkable. The cost-benefit ratio for this program is indeed in the order of 40 to one. As a result of this program there have been new sales which otherwise would not have taken place in the order of close to a quarter of a billion dollars, at a modest cost to the Canadian taxpayers of $6 million. As I say, the ratio is 40 to one.
We have had more intense activity than ever before in terms of ministerial missions to the newly developing countries and to the potential industrial market for Canada. I am referring to Brazil, Mexico, Cuba, Venezuela, the Middle East countries, Saudi Arabia, Iran, Lebanon and Iraq. We have had missions between Canada and the EEC and between the EEC and Canada. We have had missions to Japan. The role of my department has never been greater than in the past year. In saying all this I think it is important to realize that the government cannot deliver or close a sale with regard to an export opportunity.
It is the responsibility of the government under our system to make available to the private sectors the opportunity to close a sale. We can provide the incentives and the opportunities, but we cannot close a sale. To take the line of the NDP spokesman it would seem to me he would find the solution to industrial problems in Canada by a nationalization. That is not our approach. We think the private sector in the last analysis is the sector that will have to deliver. We are prepared to support those who have shown self-help and those who are the self-starters.
There have been references to some of the industries that are in difficulty at the present time. We are concerned about those industries and are anxious to help them. I have already referred to the action in respect of the rubber and tire industry, and what we are doing in relation to the textile industry in respect of both management and labour as well as the Canadian Textile Institute. I have referred
Business of Supply
to the action we have already taken in respect of imports which are distorting the Canadian market at this time.
I should like to make the point that our approach has been to deal with specific industrial problems on an industry by industry basis rather than as a broadsweeping generalization which really would not get to the heart of the problem. That is the reason why the industrial strategies approach is important. It zeros in on specific industries for specific purposes.
The auto industry is in difficulty today. It would be in much greater difficulty had it not been for the strategy applied in respect of that industry in the mid-1960's. I refer, of course, to the auto pact. Since the auto pact was signed the percentage of Canadians working in the auto industry in North America has increased each year. Investment has increased in Canada over levels that would not otherwise have taken place had it not been for that auto pact. The price differential has narrowed. The auto industry is in difficulty, but by taking an industry approach I think we have served Canada well because we have a more internationally competitive industry which, even though it is hurting, is not hurting as much as its competitors south of the border at the present time.
We have taken the same approach with respect to the shipbuilding industry-I have referred to that already. We have taken the same approach with respect to the footwear industry, and we are presently working with the furniture industry in trying to provide for them a rationalization assistance, clearly providing the over-all perspective, the over-all climate, saying to them, "What are you prepared to do?" because in our system it seems to me that the companies themselves have to take action; we cannot legislate what each particular company will do. We can provide the incentives and the assistance, as we have done and will continue to do.
I think I am close to the end of the time allotted to me, but I would like to reiterate what I said at the beginning, that we are emphasizing research, development, and productivity, we are emphasizing export opportunities, and what we ask of the Canadian private sector is that they seize these opportunities and make use of them. We cannot do it for them, but we sure as hell will help them.


Mr. Leggatt:: Madam Chairman, I was most interested in the comments of the hon. member for Halton-Went-worth-I see him behind the curtain-who suggested that the Minister of Industry, Trade and Commerce should be ashamed of himself because he has frightened away foreign investment with, as he said, the fog of the Foreign Investment Review Act. I also believe the minister should be ashamed of himself, but that is not the reason, in my view, for which he should be ashamed of himself. He should be ashamed of sitting here and presiding over the continuing takeover of Canada by foreign corporations, and of failing to introduce to the House meaningful foreign investment review legislation which would stop the continuing erosion of Canadian sovereignty caused by the takeover by foreign investment. What has been going on in this country is nothing short of a scandal. The minister must take the responsibility for it because it is his department that is supposed to be administering that legislation.
29S61-50

May 28, 1975
Business of Supply


Mr. Guay (St. Boniface):: Tell the B.C. government to sell their products in Canada instead of selling them in the United States.


Stuart Malcolm Leggatt: I would be perfectly happy to say that to all the provincial governments in this country, all of which have copped out on the major issue of protecting Canadian sovereignty. I am much more interested in listening to the remarks of the hon. member for Windsor West who makes the same point over and over again, and who wishes the minister could come forward with what his report really meant, and give to Canada the kind of leadership that many other countries in the world have embarked upon a long time ago.
According to the latest count we have about 90 takeover bids, 80 of which have been approved. Let us look at some of these. In this country 99 per cent of the petroleum industry is foreign owned. One of the recent approvals is for Pacific Petroleum Limited of B.C., controlled by Pacific Petroleum of the United States, to take over Wizard Oil Limited of Montreal. This legislation sets forth ten separate criteria. The last of those criteria-that is one out of ten-is that the takeover be compatible with the industrial and economic policy. How in heaven's name is the Foreign Investment Review Agency to justify the taking over of the last tiny percentage of Canadian ownership in the oil industry on the basis of significant benefit for Canada?
That is why I say this legislation has become a farce, a laughing stock among those many people in the country who are finally waking up to the fact that Canadians are independent and that we have a sovereignty to protect. We have to stop selling ourselves out for every buck that comes across the border. One of the reasons why we have high real estate prices in British Columbia is that 67 per cent of the new investment has not been domestic but has come in from Hong Kong. It has driven our cost of land up to a tremendous degree.
I do not want to run through the litany of foreign ownership. Making an investment in this country right now is as hard as joining the Book of the Month Club or passing a skill testing question after you have joined a supermarket contest. There is no real review mechanism at all, otherwise we would not have these ridiculous takeovers being continually approved.
I want to ask the minister several questions before I sit down because I think they are significant in terms of where we go in administering the present legislation. First, what are the reasons for the decisions that are given by the Foreign Investment Review Agency which are published, and can those reasons for the decisions be appealed, or does the public have access to them?
The second question is one regarding good corporate citizenship, one of the criteria that the Foreign Investment Review Agency uses. I refer specifically to the Reed Group paper company takeover of the Alpha Group when the Reed Group has continually been polluting the Grassy Narrows Indian Reserve with mercury, yet this does not seem to affect the decisions that are made. I do not know whether there is interdepartmental consultation about the corporate citizenship of those who are applying for approval of takeovers.

Third, how many corporations have received the advice that they are deemed to be Canadian corporations without having to go through the review mechanism? Also, how many have received advice on how to get around the provisions by the simple expedient of changing their stock or reducing their capitalization below the reviewable amount?


Alastair William Gillespie: On the first question which the hon. member asked regarding the reasons about the decisions not being published, I should like to make two points. First of all, we are providing information on how the particular transaction meets the criteria in the act. Each time I announce the cabinet's decision with respect to allowances and disallowances, we publish a schedule which shows all the companies for which an allowance was given. I think there are something like 90 different colums, and we indicate how that particular transaction met the particular criterion. If it meets it, there is an indication.
Also, we have been trying to provide more information on some of the major transactions so that the public can understand what the benefits were that were negotiated in rather more specific terms. For example, in the Reed-Alpha transaction which the hon. member mentioned there was a considerable amount of information given. I am speaking from memory but, as I recall, the transaction will result in close to 2,700 new jobs in northwestern Ontario. That is because as a result of that transaction and what it involved, which was a vertical integration on the part of a purchaser of a distributing organization, he was prepared to go ahead and make a major investment in Northern Ontario. There is interdepartmental consultation, of course, with respect to this transaction.
To answer the last question of how many companies have been given binding rulings with respect to their eligibility or non-eligibility, I do not have the number at my fingertips but I think it is something like 20, and I can check that. I can assure the hon. member that there has not been the kind of jiggery pokery he implied in his question. We are interested in real control, not the cosmetics, the point being that if a company has, for example, a 15 per cent foreign share ownership we will look at that very closely, although it is a long way from 51 per cent, because it is possible in certain circumstances that 15 per cent could be controlling. If it were, of course, that company would be found to be a non-eligible person.
The second point in that connection is that these rulings are subject to two things-they are firm for two years only, and of course binding only if there is no material change in the circumstances of the particular corporation.


Stuart Malcolm Leggatt: Madam Chairman, I should like to point out to the minister with regard to the Reed Alpha group takeover that Reed Alpha had been fined previously approximately $25,000 under the Combines Investigation Act, as I understand it. The effect of that takeover will be to dominate the pulp and lumber market and will provide the government with a further problem of more investigation under the Combines Investigation Act to see whether the same kind of thing is taking place as a result of the
May 28, 1975

takeover. That is why I questioned the significant benefit to Canada of that kind of transaction.
The other question I want to ask is in response to the minister's-


B. Keith Penner: Order, please. I regret to interrupt the hon. member but the time allotted to him has expired. The hon. member for Prince George-Peace River.


Stuart Malcolm Leggatt: I thought I had one more minute.


Frank Oberle: Madam Chairman, the hon. member for Vaudreuil conducted a very interesting exercise this afternoon by reading aloud from some pamphlets and brochures the interesting things that the Department of Industry, Trade and Commerce is engaged in. If one more program had been enumerated under the wing of the Department of Industry, Trade and Commerce I think we could have concluded that all Canadians would be working for that bureaucracy in some way or other.
There were times in the House this afternoon when officials of the department sitting in the gallery, including the deputy minister, outnumbered the members down here in the chamber. It is also interesting to note that this minister is following the lead of the Prime Minister and not exposing his new deputy minister to the scrutiny of the House of Commons by having him down here as an adviser. He is sitting in the gallery following the debate. I hope he has followed the debate with interest-


Alastair William Gillespie: That's a cheap shot.


Frank Oberle: I am just pointing out that this might be the new approach taken by the government. I hope the deputy minister and the other officials in the gallery have listened with interest because this debate has pointed out some very positive and constructive proposals.


John Napier Turner: We are not going to get much of that right now.


Frank Oberle: It also pointed out that there is not much of an industrial strategy for the minister or any of his officials to follow. The department relies heavily on other departments and other countries to do things to bail it out of a very serious and critical situation. Our industrial strategy is based on what the Department of Regional Economic Expansion might be able to do-


Donald Campbell Jamieson: Hear, hear!


Frank Oberle: -and what the Department of Finance might be able to do to breathe some life into our industry-what the Department of Transport might be able to do to decentralize and open up areas. We know all these other departments are in a mess as well, and so we cannot expect any industrial strategy to develop in our country.
The hon. member for Prince Edward-Hastings referred to what other countries are doing in this area. Countries in the free industrial world depend heavily on their departments of industry and trade to solve such problems as inflation and unemployment. They do this by creating a climate in which industry and commerce can flourish, not by doing what we are doing here, creating a climate of
Business of Supply
disincentives which chase industry to other parts of the world. We find that our own industrial plants sometimes have to compete with those industries that leave our country because of some ridiculous tax law or some condition under which no ordinary businessman could be expected to carry on a decent business.
It seems to be the minister's strategy, out of all the industrial capacity we have, to pick those industries with the least chance of survival in our country because of climate or location. We seem to have to take these industries and stretch them on the floor. I see the minister bending over, resuscitating them, breathing life into industries that have no chance to do anything in this country because the minister has no place in the country to catch a mouthful of air. The air he is breathing into these industries is lead.
This has resulted in problems to which the hon. member for Prince Edward-Hastings has alluded, such as the bad showing in the area of productivity which in the last year arrived at a .5 negative position. This is a very serious and critical situation. The hon. member, however, advanced some positive and constructive suggestions related to the problems of productivity, industrial research, and labour costs.
I should like to add a proposal that has been developed and seriously discussed with some talented economists in our country in regard to the problems of incentives and the problem of unemployment. This is in addition to the proposal of the hon. member for Prince Edward-Hastings to subsidize industries that would take additional people from the unemployment rolls over and above their normal requirement. My proposal is to allow some incentives to those major commodity groups within our country- Madam Chairman, if I may point out to you the minds of the trained seals are not on the job, and it is very difficult to hear.


B. Keith Penner: Order, please. The Chair is having some difficulty hearing the hon. member. Perhaps we could have silence for two or three minutes.


Frank Oberle: Madam Chairman, I refer to commodity groups which through cyclical fluctuation are faced with ups and downs in world markets. I am talking about the lumber industry, and the lumber and pulp commodity groups which are presently facing all kinds of difficulties. I have asked the minister what the government is prepared to do to help this significant industry which, directly and indirectly, employs about one million Canadians, exports about $7.5 billion worth of products, and imports only about $2.5 billion worth, and thus contributes positively to our balance of payments to the tune of about $5 billion per year. At present our unemployment rate is about 7 per cent, and we are paying $3.5 billion-odd annually in unemployment insurance. Would it not be sensible to help the commodity groups about which I am speaking to trade on world market-


B. Keith Penner: Order, please. I notice that our Hansard reporters are also experiencing difficulty in hearing the debate. Perhaps we could have a little more order.
29S61-50V2

May 28, 1975
Grievance Procedure


Some hon. Members:: Hear, hear!


Frank Oberle: As these commodity groups are finding it difficult to break even and maintain employment at their plants, surely the government should respond by stepping in and helping. It can do this through the normal channels without setting up another bureaucracy. It can do it through the chartered banks. After all, it has helped other industries by establishing marketing boards. It has helped the farm community by making available to it the advantages of section 88 of the relevant legislation. The government, by helping through the chartered banks, would enable these industries to keep going. If such help had been given in the current crisis it would mean that 35,000 people now unemployed in British Columbia would not be on the unemployment insurance rolls. The government could take a position in these commodity groups and ask the chartered banks to maintain inventory control. If the market price were to improve, the federal government could see to it that these commodities are made available to the domestic market. That is the way to bring about full employment-


B. Keith Penner: Order, please.


Frank Oberle: Madam Chairman, do you mean that I cannot ask my question?


B. Keith Penner: Order, please. It being 5.45 p.m., it is my duty, pursuant to section 9(a) of Standing Order 58, to interrupt these proceedings and to put forthwith every question necessary to dispose of the proceedings.
The question is on the amendment-


Some hon. Members:: Out. Get out.


Some hon. Members:: Hear, hear!


B. Keith Penner: May I remind hon. members that when the Chairman is putting the question no member shall enter, walk out, cross the floor of the House, or make any noise or disturbance. As I said, the question is on the amendment.
Amendment (Mr. Hees) negatived: Yeas, 59; nays, 76.


B. Keith Penner: I declare the amendment lost.
Shall Industry, Trade and Commerce-Vote 1 carry?


Gerald William Baldwin: On division.
Industry, Trade and Commerce-Vote 1 agreed to.


B. Keith Penner: Shall I report the resolution?


Some hon. Members:: Agreed.
Resolution reported and concurred in.


UNANIMOUS CONSENT SOUGHT FOR GRIEVANCE PROCEDURE
Walter David Baker: Mr. Speaker, in the few minutes left I should like to take advantage-
[The Assistant Deputy Chairman.]


Mr. Deputy Speaker:: Order, please. Perhaps the hon. member will allow the Chair to seek unanimous consent of the House.


An hon. Member:: Surely that is not necessary.


Mr. Deputy Speaker:: Order, please. As hon. members are aware, the grievance procedure we have followed on the last three occasions when we considered estimates in committee of the whole is not included in the report and is not in our standing orders. At this time I would normally be seeking to adjourn the House, pursuant to the provisions of Standing Order 2(1). I think the procedure we followed the last several times might be worth pursuing. I hope that the House will at least give me the chance to ask whether there is unanimous consent for the grievance procedure which the hon. member seeks to follow.


Mitchell William Sharp: Mr. Speaker, the procedure which has been followed in the final few minutes on the last three occasions is unusual. Perhaps the opposition will agree that whoever speaks on its behalf should only take half the time.


Robert Lorne Stanfield: That's fair enough. We are not like the Prime Minister (Mr. Trudeau).


Mr. Deputy Speaker:: The remarks of the government House leader prove that it is worthwhile to ask unanimous consent. Is there unanimous consent?


Some hon. Members:: Agreed.


Some hon. Members:: No.


Gerald William Baldwin: Mr. Speaker, I just want to say with regard to the division of time that we will follow the Trudeau principle.


Some hon. Members:: Oh, oh!


Walter David Baker: Mr. Speaker, I want to rise, if I might-


Some hon. Members:: Oh, oh!


Mr. Deputy Speaker:: Order, please. The hon. member for Longueuil (Mr. Olivier) on a point of order.


Joseph Mario Jacques Olivier: I just would like to emphasize to the Chair that I have not given my consent. Therefore, there is no unanimous consent.


Walter David Baker: Mr. Speaker-


Mr. Deputy Speaker:: Order, please. I will have to call it six o'clock.


Some hon. Members:: No.


Gerald William Baldwin: Mr. Speaker, I rise on a point of order. It was never in the rules of this House that there was a grievance that could be ventilated in this way. It was always by tradition. That was done for many, many years.
May 28, 1975

We have now brought ourselves back as far as we can to the same position we were in before the new rules were brought forward in 1968. With this government, there are now many more causes for grievances.
For many, many years it has been the tradition that supply cannot be granted to a government until everybody has a chance to ventilate grievances. We have certain procedures for those grievances. When there is an additional amount of time before six o'clock, there is a long tradition-I believe there is a song about that-which permits this to be done. If there is any doubt in Your Honour's mind, I think the benefit of that doubt should be given to those members of this House who have so many grievances to raise.


Some hon. Members:: Hear, hear!


Mr. Deputy Speaker:: Order, please. Although I wish to sympathize with the point raised by the hon. member for Peace River (Mr. Baldwin), he will admit that we have changed the procedure of supply. In the days the hon. member is talking about there was always a motion before the House that the Chairman leave the chair. The procedure is not the same.
The hon. member will admit that I have tried to seek the consent of the House. I am trying to be as co-operative as I can. However, I do not make the rules of this House.
Hon. members have had the experience of the last three times. It might be worthwhile to look into the possibility within the next few days of having an order of the House by agreement for a procedure to follow, or include it in an agreement by unanimous consent on other days.


Walter David Baker: Mr. Speaker, I rise on the same point of order. I wish to remind the hon. member for Longueuil (Mr. Olivier) that the tradition transcends this parliament. It goes back to Charles the First, a king who lost his head on account of this type of behaviour.


Some hon. Members:: Hear, hear!


Walter David Baker: If this government and its trained seals-I beg your pardon, its supporters, I do not want to insult the seals-is so sensitive to the grievances from opposition backbenchers, then I say to the government House leader that he better have a chat with some of his people because that traditional right, and the matter which I wanted to raise in the course of discussion, are important. The latter deals with the whole failure of the committee system in this parliament as it deals with estimates. In terms of dealing with estimates the committee system has failed as a result of the operation of the rules of this House that were put through this House by closure long before I came here.


Some hon. Members:: Hear, hear!


Walter David Baker: We have only considered one vote in the agriculture committee, vote No. 75. None of the estimates before the broadcasting committee have been considered. We have not even dealt with Information Canada yet. The health and welfare committee has not dealt with the estimates of the Minister of Consumer and Corporate Affairs (Mr. Ouellet). The transport com-
Grievance Procedure
mittee has not had time to deal with the Post Office estimates.
Speaking to the point of order which was raised at the beginning, I think that these matters are important. Items of this nature ought not to be laid to rest because the hon. member for Longueuil is so sensitive about criticism and takes such a dreadful attitude to the rights of members of parliament who are backbenchers like himself.


Some hon. Members:: Hear, hear!


Walter David Baker: If the hon. member for Longueuil is representative of the majority of his party, then I fear for the parliament of Canada.


Some hon. Members:: Hear, hear!


Walter David Baker: Out of fairness to the government House leader, I am going to give him his 30 seconds to answer.


Mitchell William Sharp: Mr. Speaker-


Mr. Deputy Speaker:: Order, please.

Order, please. I would invite the hon. member for Longueuil (Mr. Olivier) to take his seat.

The House will deal with one thing at a time. We are dealing with a point of order. I will call upon the government House leader on the point of order.


Mitchell William Sharp: Mr. Speaker, the front benches of the government would have followed my advice. However, I say to the hon. member who has spoken that all members of this House have equal rights.


Some hon. Members:: Hear, hear!


Walter David Baker: On the same point of order-


Mr. Deputy Speaker:: Order, please. I think the hon. member for Longueuil (Mr. Olivier) has the right to be heard. I will then recognize the hon. member for Edmonton West (Mr. Lambert), and then the hon. member for Grenville-Carleton (Mr. Baker). I invite other hon. members, who I am sure want to be fair to all members, to give the Chair an opportunity to hear the points that are being raised.

The hon. member for Longueuil.


Joseph Mario Jacques Olivier: Mr. Speaker, I wonder what the opposition has to object when we ask if there is unanimous consent. The Standing Orders are there. But according to our rules, as you make your bed, so you must lie upon it. If we want laws to be accepted, let us respect them. If I decide not to give my consent, I am free, being a member of the Parliament of Canada, not to give it. If they want to take this liberty away from me, it is just too bad, but I will not agree with them. The people have judged them as retrograde. Let them stay where they are, and I shall stay where I want to.


Mr. Deputy Speaker:: Order, please.

May 28, 1975
Grievance Procedure


Mr. Lambert (Edmonton West):: Mr. Speaker, I regret very much that we should have to end the day on such an acrid tone, but I must say in all respect that I think you interpret the Standing Orders wrongly as regards the request for the approval of the House. Many sections of the Standing Orders require general agreement, unanimous consent, and it is very clear. Right now, the unanimous consent gives one member, without reason nor justice, the right of veto, and I say that in the circumstances, that right does not exist, has never existed and should not exist.


Mr. Deputy Speaker:: Order. I must tell the hon. member that I have made my decision and that I stand on my decision. If he wishes to argue the case with the House
leaders and attempt to have the rules changed and clarified, that is his privilege, but a decision has been made and unless there are further points of order or questions of privilege I shall call it six o'clock.


Walter David Baker: I wish to say something on this point of order because I think the government House leader is a little concerned about what has happened today. I believe he is genuinely concerned about the operations of the House and the rights of hon. members. He did say that all members were equal in terms of the rules and procedures of this House, but I think the demonstration today indicates that some members are more equal than others.


An hon. Member:: What a pompous statement.
At 6.04 p.m. the House adjourned, without question put, pursuant to Standing Order.

Thursday, May 29, 1975