1975-02-25

ROUTINE PROCEEDINGS


Mr. J. P. Nowlan (Annapolis Valley):: Mr. Speaker, I have a question of privilege arising out of the debate that took place yesterday on the alleged question of privilege of the Parliamentary Secretary to the President of the Privy Council (Mr. Reid). Your Honour will clearly understand from my question of privilege and my explanation that I certainly would defer my question of privilege at this time, in order that we can proceed with the regular business of the House, at least until after the question period if it is understood that I might then intercede and develop this point. It will become very clear from my point that what I am trying to do is facilitate our proceedings.
I wanted to bring this matter to Your Honour's attention at the earliest possible moment. I came in late yesterday, while the debate was on, and I was in and out of the chamber a couple of times. But on checking Hansard, today I find horrible confirmation of what I heard yesterday, and that is my reason for the question of privilege.


Mr. Speaker:: Will it be in order for the hon. member to raise his question of privilege after the question period is completed?


Some hon. Members:: Agreed.


AGRICULTURE
Mr. Adrien Lambert (Bellechasse):: Mr. Speaker, under Standing Order 43, I ask the unanimous consent of the House to introduce a motion concerning an extremely urgent matter.
Since the retail price of fluid milk will be raised to 51 cents a quart as of March 1, 1975, which represents a considerable increase in expenditures for large families; considering that between October 1973 and January 1975, the government paid $109 million in grants for the consumption of fluid milk and that this amount represents an
increase in the purchasing power of consumers amounting to $7.3 million a month; considering that inflation more particularly affects large families with low or average income; considering that this action would be beneficial to the consumers as well as to farm producers, I move, seconded by the hon. member for Rimouski (Mr. Allard):
That this House ask without debate to the Minister of Agriculture to undertake immediate negotiations with the provincial governments to come to an agreement on the re-establishment of the subsidy on fluid milk and to suggest thereafter to the federal cabinet that a 10 cents rebate or subsidy a quart be applied on the consumption of fluid milk.


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


Some hon. Members:: Agreed.


Some hon. Members:: No.


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


U410)   EXTERNAL AFFAIRS REQUEST FOR SUBSTANTIATION OF ANSWER TO ORDER PAPER QUESTION NO. 241-REQUEST FOR UNANIMOUS CONSENT TO MOVE MOTION UNDER S.O. 43
Mr. Tom Cossitt (Leeds):: Mr. Speaker, I rise under the provisions of Standing Order 43 to propose a motion of urgent and pressing necessity.


Some hon. Members:: No.


Thomas Charles Cossitt: It arises from the answer given yesterday to my order paper question No. 241 on the subject of the reported statement made last September by Ivan Head of the Prime Minister's office on the subject of a new leftwing foreign policy for Canada-


Some hon. Members:: Hear, hear!


Thomas Charles Cossitt: -and the subsequent statements by the Prime Minister and by the Secretary of State for External Affairs. I move, seconded by the hon. member for Winnipeg South Centre (Mr. McKenzie):
That the House request the Prime Minister to make full disclosure of the powers and duties of Ivan Head and further, in view of the fact that the answer to order paper question 241 in effect casts reflections on the integrity and truthfulness of the reporting of two respected members of the press corps and on the Canadian Press and the Southam News Services, the House requests those involved in answering question 241, namely Ivan Head, the Prime Minister, the Secretary


Bilingual Employees
of State for External Affairs and the President of the Privy Council, to immediately substantiate with evidence the correctness of the answer or otherwise to forthwith withdraw the answer as unfortunate and inaccurate.


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


Some hon. Members:: Agreed.


Some hon. Members:: No.


AIRPORTS
Mr. Roch La Salle (Joliette):: Mr. Speaker, I rise under Standing Order 43 to ask for the unanimous consent of the House to discuss an urgent matter.
Mr. Speaker, last week the Minister of Transport (Mr. Marchand) stated that thousands of acres of expropriated land for the purpose of Mirabel airport at Sainte-Scholas-tique would not be used and that the government was considering reselling this land.
Since there is absolute need to protect our fertile land, I move, seconded by the hon. member for Saint-Hyacinthe (Mr. Wagner):
That the responsible minister be requested to call a meeting of the transport committee or of a special committee to return this land to their original farming vocation.


Mr. Speaker:: The house has heard the hon. member's motion. Under Standing Order 43, this motion requires the unanimous consent of the House; is there unanimous consent?


Some hon. Members:: Yes.


Some hon. Members:: No.


Mr. Speaker:: Since there is not unanimous consent, the motion cannot be put at this time.


PUBLIC SERVICE
Mr. Eudore Allard (Rimouski):: Mr. Speaker, pursuant to Standing Order 43, I seek the unanimous consent of the House to discuss a matter of urgent and pressing necessity.
Since a number of civil servants who speak both English and French, but who have been classified as unilingual and who are in positions classified as unilingual, are compelled to serve Canadian taxpayers in both official languages, without having their particular ability duly

recognized, which comment applies also to others, with the exception of House of Commons employees, who are not entitled to the bilingualism bonus, in spite of their knowledge of both official languages and ability to serve Canadian taxpayers in both official languages; and since such a situation is unfair to these civil servants, I move, seconded by the hon. member for Bellechasse (Mr. Lambert);
That the House look into the possible granting of the bilingualism bonus to all civil servants who successfully complete the public service bilingualism tests, so that all civil servants who went to the trouble of learning both official languages and can serve Canadian taxpayers in both languages may be rewarded for their special ability.


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


Some hon. Members:: Agreed.


Some hon. Members:: No.


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


ADMINISTRATION OF JUSTICE
Mr. Bob Brisco (Kootenay West):: Mr. Speaker, my motion under Standing Order 43 is brief and to the point. I rise under the provisions of Standing Order 43. I do so because of the urgent and pressing necessity of investigating or controlling the advertising of hand guns as contained in an advertisement in the Trail Times of Friday, February 14th, 1975. That date was Valentine's Day, a day which is significant in the history of crime. The advertisement shows four different pistols and two different revolvers of known type and make and states that they are precision machined metal models which look, feel, weigh and even disassemble like the originals. They are perfectly legal. They cannot be fired. Even dummy cartridges are available.
Mr. Speaker, in view of the national concern about the increase in crime and violence and the concern of the government for the control of hand guns, I move, seconded by the hon. member for Hamilton West (Mr. Alexander):
That the Minister of Justice immediately investigate and act upon this form of advertising.


Mr. Speaker:: Order, please. The motion is proposed pursuant to Standing Order 43 and therefore requires the unanimous consent of the House before it can be put. Is there unanimous consent?


Some hon. Members:: Agreed.


Some hon. Members:: No.


Mr. Speaker:: Without there being unanimous consent the motion cannot be put.



ORAL QUESTION PERIOD


Hon. Robert L. Stanfield (Leader of the Opposition):: Mr. Speaker, I should like to ask a question of the Minister of Finance who will recall that he associated himself, at least, with a preferential rate on bank loans to small business substantially below the rate for larger business. I have received a complaint that this preferential rate for small business has quietly disappeared. Can the minister indicate whether this is so, and whether the disappearance or abolition of this preferential rate for small businesses carries his approval?


Hon. John N. Turner (Minister of Finance):: Mr. Speaker, when interest rates were going up I asked the banks to consider a preferential rate for small business, which they did. As the interest rates continued to go up, that differential between the prime rate and the prime rate for small business of course increased at the same time. As interest rates come down, that differential diminishes, and I see nothing abnormal in that.


Robert Lorne Stanfield: Do I take it from what the minister says that he approves of the disappearance of this preferential rate for small business at the banks? If this is the case, may I ask the minister what the difference is in the present situation compared with the time when this two tier system was introduced with the encouragement of the minister? At that time, in May of 1973, the prime rate was, I think, two full percentage points less than it is today.


John Napier Turner: Mr. Speaker, at the peak of interest rates the differential between the small business loan rate and the prime rate for other business was anywhere from 114 to 1 Vi points. As the rate comes down, that differential diminishes. The fact that that differential is diminishing in no way lessens my feeling, which I have conveyed to the banks, that they ought to continue to give preference in their credit allocation to Canadian-owned small business across the country, as well as to farmers, fishermen and to those areas of the country less reasonably favoured by economic circumstances.


INTEREST RATE ON CONSUMER CREDIT-POSSIBLE MAINTENANCE OF RATE TO CONTROL VOLUME
Robert Lorne Stanfield: One further supplementary, Mr. Speaker. The minister does not make it clear that the two tier system is, in fact, being preserved. Perhaps I might ask him a question about interest rates on consumer loans which seem to have held steady in spite of the reductions in the prime rate. I would like to ask the minister whether this is something approved as an appropriate method of containing the growth of consumer credit. Is it government policy or the policy of his department to encourage the banks to maintain the same level of interest rates on consumer credit
Oral Questions
from the point of view of containing the volume of that credit?


John Napier Turner: No, Mr. Speaker, it is not government policy or the policy of the Bank of Canada to restrict consumer credit, particularly in view of slackening demand in durables in this country. But the hon. gentleman, if he looks over the figures as they developed over 1974 and into 1975, will recall that while the prime rate went up 4 points, the consumer credit on a contractual basis went up only about 1 to 114 points. In other words, the consumer loan rate moved up far more slowly, and it will move more slowly down. The prime rate will be reflected not only in mortgage rates but in consumer rates and other rates as the reduction works its way through the system.


CONSUMER LOANS-SUGGESTED LOWERING OF INTEREST RATE AS MEANS OF LOWERING INVENTORY OF DURABLE GOODS
Mr. James A. McGrath (St. John's East):: In view of the growing inventory of durables in Canada, and since the interest rate on consumer loans has held steady in spite of reductions in the prime rate, does the minister intend to meet with the chartered banks and discuss with them the possibility of bringing consumer loan rates more into line with the new prime lending rate as a means of lowering the durable inventory and thus avoiding a recessionary trend?


John Napier Turner: If the demand does not strengthen for consumer durables the rate structure will reflect it.


CONSUMER LOANS-SUGGESTION MINISTER INSTRUCT BANKS TO LOWER INTEREST RATES
Mr. Lome Nystrom (Yorkton-Melville):: In view of the fact that prime rates have now declined to about 9 per cent and that consumer rates have not fallen correspondingly, may I ask whether the minister has been in contact with the banks instructing or asking them to lower consumer rates, and if not, whether he intends to do so?


John Napier Turner: In my
conversations on a weekly basis with the governor of the Bank of Canada I conveyed this submission to the banks but, as I told the Leader of the Opposition, the consumer rates did not move up to nearly the same extent as the bank rate and other prime rates did-when interest rates moved four points, the consumer rate moved one point up. As the interest rate structure embraces the whole of the rate structure, I think one can assume that the differential between the consumer rates and the prime rate will again readjust.


MORTGAGE INTEREST RATES-POSSIBLE LEGISLATIVE ACTION TO CONTROL
Lorne Edmund Nystrom: Has the minister spoken to the banks about mortgage rates? Can he tell us at what level he wants the banks to set mortgage rates.

Oral Questions
If the banks fail to act quickly enough to bring down mortgage rates and consumer rates, bearing in mind their important bearing on inflation and unemployment does he propose to take legislative action to control interest rates in this country?


John Napier Turner: Mortgage interest rates have softened by between one and a half and one and three-quarter points in the last month and a half, reflecting the total movement of interest rates. The specific answer to the hon. member's question is, no. We do not intend to legislate mortgage interest rates. We are interested not only in a reasonable rate for the potential home owner; we also want to ensure a reasonable rate which will attract the amount of money into the mortgage market which, of itself, will have the effect of reducing mortgage rates.


CONSUMER LOAN AND MORTGAGE INTEREST RATES- POSSIBLE REPRESENTATIONS TO BANKS TO LOWER IN VIEW OF LOWER RATE ON DEPOSITS
Lorne Edmund Nystrom: In view of the fact that the interest rate has dropped drastically on savings deposits in the last few weeks, has the Minister of Finance made any representations to the banks asking them, since they are lowering the deposit rates, to lower immediately the consumer loan rates and the mortgage rates?


John Napier Turner: What particularly concerns me is the differential between what a bank pays for the money it borrows and what a bank charges for the money it lends. Those differentials have not changed.


PUBLIC SERVICE
Mr. Real Caouette (Temiscamingue):: Mr. Speaker, I would like to direct a question to the President of the Treasury Board.
In view of the fact that there is trouble in the federal public service, in view also of the motion moved earlier by my colleague, the hon. member for Rimouski, relating to a bonus for bilingual federal public servants, and finally in view of the fact that the minister declared recently that only the employees related to Parliament, like secretaries, were entitled to the 7 per cent bonus if they were bilingual, does the minister not agree that we should extend this 7 per cent bonus to all the federal public servants throughout Canada? As it is French-speaking employees object to speaking English in federal offices, and Englishspeaking employees object to speaking French. In my opinion, this 7 per cent bonus would settle those conflicts in all the provinces of Canada. Does the minister intend to do something along these lines?


Hon. Jean Chretien (President of Treasury Board):: Mr. Speaker, I am aware of this problem. It is extremely

complex, as I told the House of Commons last week. We are now reviewing this situation. The 7 per cent bonus has been instituted because of particular circumstances, because of the fact that the supply of and demand for secretaries did not favour the government. We have been forced to add an extra bonus to find bilingual secretaries, but we do not intend to extend this principle to all public servants. Besides, in relation to the current problem in Montreal, we are reviewing it and we hope to find a solution acceptable to everybody.


David Réal Caouette: Mr. Speaker, I have a supplementary. Does the minister know whether, in Montreal, those who are against the use of the French language are asking for the 7 per cent bonus? I am wondering if the minister admitted yesterday that federal civil servants had the right to strike. Is the matter of the 7 per cent bonus now being looked into by the negotiating committee which has been meeting, after a fashion, day after day, far too long?


Joseph Jacques Jean Chrétien: Mr. Speaker, the hon. member is confusing two situations. The blue collar workers' strike has nothing to do with the bilingualism problem.
With regard to the situation at Montreal and bilingualism, the workers are not on strike but working to rule. I trust the employees concerned will realize that they are not improving the situation by so doing. They should co-operate. We will try to find an acceptable solution.


David Réal Caouette: Mr. Speaker, I should like to ask one last supplementary question.
Would the minister tell the House whether it is true that the Unemployment Insurance Commission has harassed and threatened its employees classified as Francophones who refuse to speak English in the performance of their duties, as reported in an article published in Le Jour, which is not my favorite newspaper? Is the minister aware that Unemployment Insurance Commission officials are alleged to have threatened some employees?


Joseph Jacques Jean Chrétien: I know nothing about those threats, Mr. Speaker. The Unemployment Insurance Commission tries to give the services all Canadians living in the Montreal area are entitled to. Francophones as well as Anglophones must be dealt with in the official language of their choice. I trust the employees will understand that creating such difficulties does not improve the climate.


HARBOURS
Mr. Elmer M. MacKay (Central Nova):: Mr. Speaker, may I direct a question to the Solicitor General further to my question of yesterday concerning the Hamilton harbour matter. Can the Solicitor General now say with certainty that he has acquainted himself with the transcripts of the preliminary inquiry to which I referred, and can he now assure the House and country that no members

of parliament or ministers of the Crown are implicated in such a way that there is cause for concern about their role in the matters under investigation?


Hon. Warren Allmand (Solicitor General):: Mr. Speaker, I have not examined the tapes, although I consulted the Commissioner of the RCMP about them. He assures me that the matter is still under investigation and if any action is to be taken, the RCMP will take it.


Elmer MacIntosh MacKay: A supplementary question, Mr. Speaker. I asked if the minister has access to the transcripts of the preliminary inquiry to which I referred. If he has, would he not agree that it would be a good idea if he could read the transcripts at this time, to satisfy himself along the lines I have suggested.


William Warren Allmand: Mr. Speaker, I can have access to the tapes but I rely on the advice given to me by the RCMP in this matter. I have lots of things to do, and if they suggest to me that it is important that I should consult these tapes,
I will, of course, do that.


Elmer MacIntosh MacKay: Mr. Speaker, I rise on a point of order, which is perhaps not of great consequence. I ask the Solicitor General to study my question. I was not speaking about tapes; I was referring, in my questions, to transcripts of the preliminary inquiry.


William Warren Allmand: Mr. Speaker, I meant to say "transcripts" instead of "tapes" and I am sorry. I made a mistake in that. I do have access to the transcripts, which I understand are voluminous. The RCMP have read to me some parts of them. I have not read all of them, and I would rely on their advice. I asked them to inform me if they think I should read more of them.


HAMILTON HARBOUR COMMISSION-DOCUMENT SERVED ON MINISTER OF LABOUR TO AUTHORIZE SEARCH OF OFFICE
Mr. Eldon M. WooUiams (Calgary North):: Mr. Speaker, I wish to ask the Minister of Labour whether he was served with any documentation at the time the RCMP allegedly had authority to search his office. Was the minister served with an affidavit or any other documentation which led to the authority for his office being searched sometime during the election? The minister knows the time.


Hon. John C. Munro (Minister of Labour):: Mr. Speaker, the RCMP did come to my office. They had a document, but it did not pertain to my particular office. In any event, I gave them access to what they wanted.


Eldon Mattison Woolliams: Has the minister seen any documents which gave the RCMP authority to search his office and take certain files or whatever else they did at that time? Has the minister read any documentation which the RCMP had or which was filed in the court house to give the RCMP that authority?


John Carr Munro: Mr. Speaker, I do not think anything was filed in the court house because the documentation was not applicable to my particular head-
Oral Questions
quarters. I just saw what they had. They agreed it was not applicable.


Eldon Mattison Woolliams: Do I take it that no search was made of the minister's office because the authority they had did not pertain to the office of the Minister of Labour or any material or documentation the minister may have had? Also, did the minister read what the RCMP had in their hand which gave them some authority, either in his office or that of someone else?


John Carr Munro: Mr. Speaker, they wanted permission to look at documents in my office, the contents of which I was really not aware. They were in cabinets. I gave them permission to go ahead, even though they did not have proper authority.


HAMILTON HARBOUR COMMISSION-KNOWLEDGE OF MINISTER OF LABOUR OF CONTENTS OF TRANSCRIPT OF PRELIMINARY HEARING
Mr. AUan Lawrence (Northumberland-Durham):: Mr. Speaker, I have a supplementary question for the Minister of Labour. Since the Minister has indicated publicly that he knew he was involved in some way or another with respect to this matter at least as early as last June, and therefore I know this must be of great concern to him and his friends, will he be good enough to tell us if he has read or has had read to him either the transcript of the preliminary hearing in question or parts of the transcript of the preliminary hearing.


John Carr Munro: Obviously from my answer yesterday, Mr. Speaker, I have not seen the transcript. However, I am aware of certain references therein.


HAMILTON HARBOUR COMMISSION-KNOWLEDGE OF MINISTER OF LABOUR OF POSSIBILITY OF BEING WITNESS IN COURT PROCEEDINGS
Allan Frederick Lawrence: Would the minister then be good enough to tell the House whether any indication has been given to him or, for that matter, if he believes he is going to be a witness respecting a criminal trial that will take place in respect of this matter?


Hon. Pierre Trudeau (Prime Minister):: Mr. Speaker, I rise on a point of order. The minister is being extremely helpful in answering these questions. I put it to you, Mr. Speaker, is this really proper? The minister is not being asked any questions relative to the administration of his department. In my opinion, this line of probing is not within the rules of the House. I do not find it very dignified.


Some hon. Members:: Hear, hear!


Robert Lorne Stanfield: I rise very briefly on the point of order, Mr. Speaker. The Prime Minister has a perfect right to rise and suggest how the House should be operated. I know Your Honour makes your own decisions. It was the failure of the Solicitor General to give a frank and full response to the question put to him by the hon. member for Central
3536

Oral Questions
Nova which led to the additional questions. That is my impression. Had the Solicitor General indicated an intention of examining all the evidence and giving the House some assurance with regard to that, the matter would have ended.


Allan Frederick Lawrence: Mr. Speaker, I rise on the same point of order. I am sure it need not be pointed out to you, Sir, and the House that at least in other jurisdictions this is an extremely important matter affecting the honour and integrity of people in public life. Certain allegations have already been printed in the newspapers. This is important enough that I find it almost inconceivable for the minister concerned here to not even bother to take a look at the transcripts.


Some hon. Members:: Hear, hear!


Allan Frederick Lawrence: Pending a trial or not, because the matter has been raised in the public press, and is now in the public domain through the raising of this matter in another parliament in addition to this, there should be no reason at all to be hesitant about asking the minister questions in relation to his own involvement in the matter. If the minister is not involved, and if there is nothing wrong with it, then how in the world can a question of whether this matter is relevant or in order be raised by the Prime Minister at this stage? No one is making any charge.


Some hon. Members:: Oh, oh!


Allan Frederick Lawrence: That should not prevent me or others from attempting to find out the truth of the matter. I have asked my supplementary question of the minister, and regardless of whether the Prime Minister is touchy about it or not, I have every right to ask that question and every right now to expect the minister to reply.


Some hon. Members:: Hear, hear!


William Warren Allmand: On the same point of order, Mr. Speaker, I should point out to the House that I am not the attorney general with respect to this matter. This matter is subject to prosecution by the government of Ontario. It is under the attorney general of the government of Ontario. The RCMP have been reviewing the evidence with their officials, not with mine, with regard to a prosecution.


Elmer MacIntosh MacKay: Mr. Speaker, I rise on the same point of order. I suggest that under all the circumstances, the Minister of Labour should consider tabling in the House or making available to the public the basis for the extraordinary legal procedure that justified the RCMP at a very critical time going to his office and making the types of inquiries and requests it has been indicated were made. Such a procedure would only have been justified by an affidavit-


Some hon. Members:: Order!


Mr. Speaker:: Order, please. With due respect to the hon. member, the point of order before the House at the present time is whether or not questions put by the hon. member for Northumberland-Durham are proper questions within the precedents as we understand them, not what kind of

answers or information the minister ought to or is likely to give. Are there any other hon. members who want to contribute to the point of order?
This matter was first raised yesterday. I listened carefully to the questions that were asked. The Minister of Labour first intervened in this subject matter yesterday by raising a question of privilege as to his alleged involvement on the basis of questions put to him. Questions are being asked today as to whether the Minister of Labour has an indication or information that he is likely to be subpoenaed, summonsed or called as a witness concerning certain things that took place in the Hamilton area.
It is difficult for me to conclude that these questions do not somehow relate to his ministerial capacity as the Minister of Labour. I would intervene to prevent questions that go beyond the bounds of his capacity and administrative responsibility because that is the areas within which questions should be directed. Since he is Minister of Labour, and is being asked in that capacity whether or not he has any information to indicate that he will be called as a witness, it seems to me the question relates to his capacity as minister rather than to his personal capacity as a member of the House. I have no basis upon which I can disallow the questions that have been asked of him.


Allan Frederick Lawrence: Then, in case the minister has forgotten my question, Mr. Speaker, shall I repeat it, or is he going to reply?


Mr. Speaker:: Would the hon. member for Northumberland-Durham repeat his question.


Allan Frederick Lawrence: Would the Minister of Labour now care to tell the House whether or not he will be called as a witness in a criminal trial respecting some allegations that have been made?


John Napier Turner: Mr. Speaker, may I rise on a point of order concerning this question?


Mr. Horner:: Are you after the leadership over there, John?


Mr. Speaker:: Order, please. The Minister of Finance is rising on a point of order.


John Napier Turner: I think I should draw to Your Honour's attention and to the attention of the House two citations from Beauchesne's Fourth Edition.


Mr. Speaker:: Order. Is the Minister of Finance seeking the floor on a fresh point of order or on the propriety of the question that has been asked?
Mb'. Baker (Grenville-Carleton): He wants to be Speaker.


Mr. Speaker:: I have already ruled that I find no basis upon which I am able to disallow the question that has just been put by the hon. member for Northumberland-Durham. I invited the participation of other members before coming to that decision. If this is a fresh point of order, I will hear it.


John Napier Turner: That is not my point of order, Mr. Speaker, I am not submitting to Your Honour that you should disallow the question; I am simply submitting, through you to the hon. member, that he ought to take responsibility for his question. I should like to recite to Your Honour citation 178 of Beauchesne:
Questions addressed to Ministers should relate to the public affairs with which they are officially connected, to proceedings pending in Parliament, or to any matter of administration for which the Minister is responsible. Within these lines an explanation can be sought regarding the intentions of the Government, but not an expression of opinion upon matters of policy.
It is not in order to ask merely whether certain statements made in a newspaper, are true; but attention may be drawn to such statements, if the member, who puts the question, makes himself responsible for their accuracy.


Some hon. Members:: Hear, hear!


John Napier Turner: I should also like to read to Your Honour, for the benefit of the House, citation 179:
If, for instance, a member's question is based on a newspaper report to the effect that a serious offence has been committed by a certain government officer and the member vouches for the accuracy of that statement which later on is found to be untrue, he will suffer the consequences of having induced the House into error and may be censured or sentenced to a penalty which the House may deem proper to impose upon him. Should the minister concerned answer the question before the falsehood is detected the House would be justified in punishing the member with the utmost severity.


Some hon. Members:: Oh, oh!


Mr. Speaker:: Order, please. The Minister of Finance has sought the floor on a serious point of order. It is a matter of some considerable importance, so I wonder whether the minister might be allowed to make his point.


John Napier Turner: Citation 179 continues:
If the member refuses to make himself responsible for the accuracy of the facts reported by the newspaper, the minister is not bound to answer the question.
My point of order is this, Mr. Speaker. If the hon. member for Northumberland-Durham, who has tried this tactic before, wants to put this type of question to any minister, then he impliedly or explicitly must start to take responsibility for the statement he is making. If he does so and he makes a charge to back up those allegations, then he puts his seat on the line and takes the consequences.


Mr. Speaker:: Order, please. I do not want unnecessarily to cut short discussion on this particular point, but I have listened carefully to the question that has been put to the minister, which is simply whether or not the minister has any information which would indicate to him that he may be a witness in certain proceedings. Surely, there can be no insinuation regarding the character of evidence or the nature of it, or the minister's involvement, beyond the fact that he is a witness in a proceeding which might take any kind of character when he is there.
If an insinuation of any sort were contained in the question then I would disallow the question. It is because the question does not contain such insinuation that I have allowed it. Accordingly, the point the Minister of Finance has now raised, being based necessarily upon the content of some insinuation, I would equally disallow; but I assure
Oral Questions
the House that I have watched the questions carefully, and if they do reach the point where they do contain such insinuation, I will intervene at that time.


Mr. Baldwin:: Mr. Speaker, I readily agree with what you have just said, and if there were, in effect, any insinuation along the lines stated by the Minister of Finance, then I would be the first to accept it. But this is not the first time that this party has been subjected to the blackmail tactics of members on the other side. I will leave it on this basis, Mr. Speaker, that we will not be suppressed by these attempts to muzzle members on this side of the House.


Mr. Speaker:: All that having been said so eloquently, could we now return to the point where we had put the question by the hon. member for Northumberland-Durham to the Minister of Labour.


Allan Frederick Lawrence: Right on, Mr. Speaker.


John Carr Munro: No.


Mr. Speaker:: The hon. member for Humber-St.
George's-St. Barbe.


VETERANS AFFAIRS
Mr. Jack Marshall (Humber-St. George's-St. Barbe):: Mr. Speaker, returning to an area of our society that does not seem to hold too much interest, I should like to ask the Minister of Veterans Affairs a question. While he has indicated on a number of occasions that veterans' housing legislation is in the offing, in view of the fact that there is not too much time left before March 31, 1975 is upon us, I wonder whether the minister could now disclose to the House something concrete by way of veterans' legislation which is being considered; and when will the legislation be introduced so as to allay the fears of those who may have an opportunity to qualify under the Veterans' Land Act before March 31?


Hon. Daniel J. MacDonald (Minister of Veterans Affairs):: Mr. Speaker, the hon. member is referring to the authorization that I, along with the Minister of State for Urban Affairs, received to study the need for veterans' housing. I should like to inform the hon. member that things have progressed very well and the study is nearing the final stages. When we have the final report I will be glad to make an announcement in the House.


Jack Marshall: A supplementary question, Mr. Speaker. In view of the fact that many of our veterans who are receiving war veterans' allowance and disability pensions are on fixed incomes, and in view of the fact that a survey is being made by the province of Newfoundland of the status of substandard housing for veterans, would the minister indicate whether consideration is being given to rehabilitating substandard housing for veterans, and if indeed those on fixed incomes will be able to apply under
28996-19V2


Oral Questions
the new legislation so they can provide themselves with the homes they need in line with the incomes they receive?


Daniel Joseph MacDonald: Mr. Speaker, with regard to the status of that study on housing in Newfoundland, the first phase has been completed, we have received it and have looked at it, but to my knowledge the second part of the study has not as yet been received.


CANADIAN NATIONAL RAILWAYS
Mr. Les Benjamin (Regina-Lake Centre):: Mr. Speaker, I should like to direct my question to the Minister of Transport, and I hope he is feeling well. I provided notice yesterday of this matter I wish to raise. In view of recent additional increases in rates, in this case express rates by the CNR, to the ridiculous point where shipments are going to be-


Some hon. Members:: Question.


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


Leslie Gordon Benjamin: With all due respect, Mr. Speaker, I am going slowly-


Some hon. Members:: Question, question.


Mr. Paproski:: Come on Benjamin, get with it.


Leslie Gordon Benjamin: I am proceeding slowly so that the minister can hear me over this rabble, or is it babble.


Some hon. Members:: Oh, oh!


Leslie Gordon Benjamin: In view of the impending lay-offs, notice of which the CN has already given to express employees in Winnipeg, and undoubtedly at a number of other points in the country, will the Minister of Transport inform the House if the reasons for these impending lay-offs of CN express employees in Winnipeg, to take effect this Friday-


Some hon. Members:: Question, question.


Leslie Gordon Benjamin: Would the minister explain to what extent these lay-offs are the results of the CN's new express rates which have resulted in an increase of up to 600 per cent in respect of some shipments, which in turn has driven the business to competitors, including Canadian Pacific?


Hon. Jean Marchand (Minister of Transport):: Mr. Speaker, I am feeling very well, especially as the people of Calgary welcomed me warmly yesterday and I am fully

rested. I thank the hon. member very much for having sent me a letter indicating that he would ask me this question today. The only thing I can do is try to get some information from the Canadian National to know why 15 people have been dismissed and why the rates have been increased. Therefore, I shall ask the CTC and give the answers I get.


Leslie Gordon Benjamin: Mr. Speaker, will the minister undertake to meet with the senior officers of Canadian National, including the general manager of express and-


Jean Marchand: I didn't say that.


Leslie Gordon Benjamin: Mr. Speaker, I asked if the minister would undertake to meet with the officers of Canadian National, including the general manager of express and international mobile services, with a view to persuading or compelling the CN to rescind its new express rates pending the outcome of negotiations with the provinces on rate structures?


Jean Marchand: Mr. Speaker, yesterday I discussed all these increases in rates with the western ministers of transport all day. If the hon. member is interested, I can table the press release I signed with all the western ministers of transport. I think there was general agreement. As for the dismissal of 15 persons in the Canadian National, I think there is a union looking after its members and if there is some injustice, I trust as much the union to defend its members as the hon. member for Calgary.


FREIGHT RATES-AGREEMENT WITH PROVINCES PROHIBITING ACROSS THE BOARD INCREASES-REQUEST FOR IMMEDIATE IMPLEMENTATION
Leslie Gordon Benjamin: Mr. Speaker, the minister really evades the questions I put to him. I will put another question to him. In view of the fact that there was a transport ministers' conference yesterday, at which the minister met with the four western provinces, yet he failed to make any kind of statement on motions, and it was impossible to get a copy of the press statement from his office-


Some hon. Members:: Question, question!


Leslie Gordon Benjamin: In view of the agreement in principle reached yesterday at the meeting of transport ministers in Calgary, prohibiting across the board increases in freight rates, will the minister take whatever steps may be required, in terms of legislation or otherwise, to ensure immediate implementation of that agreement, and to roll back the increases already put into effect, prohibiting any further increases that will further exaggerate these inequities?


Jean Marchand: Mr. Speaker, I do not object to there being serious debate in this House. The hon. member talks about an increase

affecting only one group of commodities and refers to an agreement reached with the western ministers of transport on general increases-

-across the board, as he says, so it is not the same thing at all. If you want to have the communique that has been signed by all ministers of transport and myself, I am ready to table it anytime.


Leslie Gordon Benjamin: On a point of order, Mr. Speaker. I am sure the House would be very willing to return to motions following the question period, or later this day, so the minister could do what he should have done; that is, make a statement on motions today reporting on that conference of yesterday.


EXTERNAL AFFAIRS
Joseph Adrien Henri Lambert: Mr. Speaker, I have a question for the right hon. Prime Minister.
Since an American truck carrying live poultry from the United States has been intercepted by members of the cooperative of Saint-Damase as a sign of protest against imports, while they see their own quotas considerably lowered, can the Prime Minister tell the House whether those imports are absolutely necessary, whether that incident provoked diplomatic reactions, and whether the American consul asked for explanations from Canada on that matter?


Pierre Elliott Trudeau: Mr. Speaker, I am absolutely not aware of that matter, but on the basis of the hon. member's question, I will refer to the Department of External Affairs to see whether I can give an answer.


HARBOURS
Mr.   Sean@: Mr. Speaker, I should like to return to the Minister of Labour and deal with statements made not outside the House, but two which the minister made today. In a procedure unusual for a man learned in the law he did not look at the document presented to him by the RCMP when they asked for documents. Secondly, the minister said that he turned over to the RCMP the documents-


Some hon. Members:: Question.


Mr. Speaker:: Order, please. If the hon. member has a question, I wonder if he would put it to the minister directly.
Oral Questions


Mr. O'Sullivan:: I certainly will. The minister indicated he did not know what was in the documents.


Some hon. Members:: Question.


Sean Patrick O'Sullivan: Mr. Speaker, I do not know what hon. members opposite are afraid of, but I will ask the minister this question. If he did not know what was in the documents that he so freely handed over to the RCMP, how can this House be sure that he did not turn over secret Cabinet documents, holus-bolus, or personal records and private files relating to constituents of Hamilton East? Why did the minister turn them over if he did not know what he was turning over, and have they been returned to him or are secret Cabinet documents now floating around somewhere?


John Carr Munro: No, I do not
believe so, because I believe that all my Cabinet documents were back in Ottawa. I do not believe that was the case. I should correct this by saying that the RCMP had the document and they said it was not applicable, as I recall it.


An hon. Member:: When was that?


John Carr Munro: That was sometime ago. It was not applicable to where I was operating. While I think there was an acknowledgement that it was not applicable, I told the RCMP that I would co-operate with them in respect of what they wanted to obtain.


Sean Patrick O'Sullivan: Just for clarification, Mr. Speaker, how can the minister tell us now it was not applicable when he told us earlier he had not read the document?


Mr. Speaker:: Order please. That is not a point of order.


Sean Patrick O'Sullivan: Mr. Speaker, it is if he is misleading the House.


John Carr Munro: Mr. Speaker, I am correcting myself, then. It was some time ago and I recall glancing at it. I recall some agreement that it was not applicable.


HAMILTON HARBOUR COMMISSION-POSSIBLE CONCERN OF PRIME MINISTER ABOUT INVOLVEMENT OF MINISTERS IN POLICE REPORTS
John Patrick (Pat) Nowlan: My question is for the Prime Minister. In view of the Prime Minister's intervention on a point of order when I understood him to say, in arguing the point of order, that certain questions may not have related directly to the administration of the department of the minister who was being examined, am I to understand then that regardless of the administration of the department of one of his ministers if, in some other way that minister is under investigation or police reports have been made about him, this would not be of concern to the Prime Minister and involve discussions between the Prime Minister and the Solicitor General to see what course of action should be taken?


Oral Questions
Right. Hon. P. E. Trudeau (Prime Minister): Mr. Speaker, this is of concern to the Prime Minister and to the Solicitor General under whose jurisdiction is the RCMP. I fail to see the relevance of the rest of the question.


HAMILTON HARBOUR COMMISSION-INQUIRY AS TO WHETHER RCMP SHOWED SOLICITOR GENERAL REPORTS OF INVESTIGATION
John Patrick (Pat) Nowlan: I have a supplementary question for the Solicitor General. In view of the answers of the Solicitor General given on December 4 when certain questions were asked about the SIU and about reports of the RCMP on certain matters relating to the Minister of Labour, as recorded at page 1939 of Hansard, when the Solicitor General said that at that time he was shown a transcript of the RCMP reports and it was his duty, as he felt-and quite properly so, I think-to discuss this with the Prime Minister, would he inform us whether on this occasion he had been shown any reports on the investigation of the RCMP involving any minister of the Crown and whether he had discussed those reports with the Prime Minister?


William Warren Allmand: Mr. Speaker, It is difficult for me to remember what I said then. They did not show me a transcript of the trial at that time. They showed me an interim report on the SIU investigation and I conveyed the contents of that report to the Prime Minister. In this particular case, after the revelation on Friday that the solicitor general for Ontario had resigned, I checked with the RCMP and asked them if there was something that should be brought to my attention on this matter, and they said there was nothing of great importance to be brought to my attention. Yesterday, I called them again and they read to me certain parts of the transcript which had been discussed around the parliament buildings in recent days. I asked them if there were any other parts they should bring to my attention as well. They may bring further parts to my attention, but so far they have not.


CONFLICT OF INTEREST
Thomas Charles Cossitt: Mr. Speaker, I rise to direct a question to the Prime Minister-


Some hon. Members:: Oh, oh!


Thomas Charles Cossitt: -arising from the statement made earlier in January by a member of his staff that conflict of interest guidelines with regard to gifts received by him or by members of the cabinet or by their wives would be issued in all likelihood before he left on his trip to Europe this week. Will the Prime Minister tell the House whether these conflict of interest guidelines will be presented to this House before his departure and, if not, can he say when they will be?

Right. Hon. P. E. Trudeau (Prime Minister): No, Mr. Speaker, those guidelines have not been completed yet, and they will not be presented to the House before my trip to Europe. Perhaps I should inform the hon. member that, in the likely event that I receive some gifts from heads of government while I am abroad, I intend to follow the international custom and to bring them back without paying duty on them. I will indicate also that with regard to the gifts that I am taking abroad to offer to heads of government whom I am visiting, I do not intend to declare them at the border of the country I am entering and I do not intend to pay duty on them either.


Some hon. Members:: Hear, hear!


Pierre Elliott Trudeau: I repeat that I am following what I believe is not only an international custom but one which has been followed by heads of government in previous times. Of course, I am willing to comply if the House gives me a direct order.


Thomas Charles Cossitt: I feel that the Prime Minister is avoiding the issue. He is talking about customs duties. In my question I never referred to customs duties.
I should like to direct a supplementary question to the Prime Minister. Will the guidelines, when issued, specifically cover the possible or alleged gift of a swimming pool, which is still kept a mystery from everyone?


PRIME MINISTER'S OFFICE
Steve Eugene Paproski: I should like to direct my question to the right hon. Prime Minister. Is it really necessary for the Prime Minister at this time to take this extended excursion to Europe and, if it is, would he leave this chamber with his blueprint to fight inflation and to deal with the civil service strikes so that the House can consider his long or short-range plans during his absence?


Pierre Elliott Trudeau: I have been urged by members of the hon. member's party to travel to Europe and to-


Some hon. Members:: Stay there.


Pierre Elliott Trudeau: -and to visit some countries. I have been so urged also in a Senate report to which hon. members opposite have referred and to which they enjoined me to pay heed. I feel that this trip is important at this time. But here again, if the opposition has any policy on this, I would be interested to hear it from the Leader of the Opposition, not from a backbench member opposite.


Some hon. Members:: Oh, oh!


Robert Lorne Stanfield: Since I received this invitation from the Prime Minister, I will simply express encouragement-he has been paying some attention to some suggestions from the opposition- and express fervent hope that he pay a little attention to


some of the serious suggestions we have made with regard to some of the serious domestic problems.


PRIVILEGE
Mr. Speaker:: The hon. member previously referred to a question of privilege which he has. He has the floor now.


John Patrick (Pat) Nowlan: Mr. Speaker, I rise, as I indicated earlier, to raise a question of privilege resulting from the alleged question of privilege raised by the Parliamentary Secretary to the President of the Privy Council (Mr. Reid). I will be very brief. I am glad I waited until after the question period to raise my question of privilege which is basically directed at the rights of hon. members.
My question of privilege relates to the incredible performance, outlining in graphic form the distorted parliamentary priorities of the government, in name, but which has yet to show any purpose, direction or conviction about the basic problems of this land. If ever there was a parliamentary example of the ship of state wallowing in a sea of indecision, charting a course on a false compass and without a captain at the helm, yesterday's alleged question of privilege by the parliamentary secretary to the government House leader was it. In relation to the other pressing problems facing this country, it makes one wonder whether in fact there is a government House leader; or is he just a loss leader, discharging his duty to his philosopher king captain to make this institution completely inane and irrelevant so that members can really be nobodies and the machinery and machinations of the Prime Minister's office can have full sway?
What other explanation is there for making the floor of the House of Commons the washroom of the nation as the government, perverting privilege, attempts to muzzle one of its own members by washing its political linen in public. Surely, Your Honour, if permission of the Parliamentary Secretary to the President of the Privy Council is required before an hon. member is allowed to appear before the Senate, then an invidious precedent will be established. Not only will all forms of future privilege be relevant, but we may even have to ask his blessing for the absolutions of the day-especially if it is in a Senate washroom.
As for the hon. member for Winnipeg North Centre indulging in this parliamentary hoax to generate more wind in his assault on a sterile Senate, the best that can be said is that rarely has an individual been so blinded by the amber light at the crossroads of parliamentary rules that he fails to see that red and green lights control the flow of traffic. His time, as with other House leaders, might more usefully have been spent in raising a valid question of privilege affecting this House in the present paradox of this Parliament of Canada having television in one of its parts even though the whole has made no decision on the matter, notwithstanding the fact that reform of the rules and television coverage were high priority items in the
Privilege-Mr. Nowlan
Speech from the Throne many lost moons ago. Of course, the fact that the Standing Committee on Procedure and Organization has not even met in a substantive way to discuss the matter is not, I suspect, a matter of parliamentary privilege but just another example of the ineptitude of this government in the management of its own affairs, let alone meeting the responsibility of the mandate it received albeit by masquerade and misrepresentation.
The only privilege at issue yesterday was the insult to hon. members who convened to discharge public business and were exposed to a sideshow over which they had no control and the people of Canada had no concern. Let us get on with parliamentary business, and not the who, when, where and how this government lost its grit.
Accordingly, Mr. Speaker, I move, seconded by the hon. member for Dartmouth-Halifax East (Mr. Forrestall):
That the matter of the question period and the priority and placement of other routine proceedings be referred forthwith to the Standing Committee on Procedure and Organization with instructions to report back before Easter so that the House can maintain and develop relevant rules for this incompetent government.


Mr. Speaker:: Order, please. The hon. member earlier gave the Chair notice of his intention to move this motion pursuant to a question of privilege. I am sure the hon. member will realize that the question is very much one for debate and very much a topical subject relating to the priorities which ought to be given to daily routine business and the question period. The fact that the matter was so quickly referred, after the hon. member's intervention last week, to the standing committee will enable that committee, with a very wide reference-in effect, a blanket reference on the procedures of the House-to begin work at once, which would include the recommendation contained in the motion.
I say that not because of the redundancy and repetitiveness involved, but the fact is that there is machinery already at work which through the regular channels is empowered to do what the hon. member has in mind. For that reason, since at the present time routine proceedings take place before the question period and this is sometimes an inconvenience, this matter is certainly worthy of examination. But the fact is that it is in conformity with the rules and as long as those rules are being enforced I cannot regard it as a question of privilege.
I do, of course, accept it in the spirit in which it is intended, that is, urging that committee to see if there is consensus to experiment with other ways of ordering our priorities. I am sure that all of us are comforted by the blanket order of reference which gives the committee authority to start that work at once.


Mr. Trudel:: Mr. Speaker, I rise on a point of order. This morning, there was an electrical failure at the Vanguard building during parliamentary proceedings. These proceedings were suspended because of that trouble. We are told that this afternoon and tonight the committees of the House will not be sitting. I want to ask the Chair if it is possible, at this stage, to know when the suspended proceedings of the committees will resume.


Income Tax


Mr. Speaker:: Order, please. The hon. member makes reference to the mechanical and electrical failure of the facilities used by the standing committees in the Vanguard Building. I hope that whatever inconvenience has been caused in the scheduling of meetings will be rectified by such immediate repairs as are necessary and I certainly hope I can inform the hon. member later in the day about that.
Orders of the day.



GOVERNMENT ORDERS


[Stage Direction]
The House resumed, from Monday, February 24, consideration in committee of Bill C-49, to amend the statute law relating to income tax-Mr. Turner (Ottawa-Carle-ton)-Mr. Penner in the chair.
The Deputy Chairman:: When the committee rose last evening, clause 4 as amended was under consideration, the amendment having been proposed by the hon. member for Qu'Appelle-Moose Mountain.
On clause 4.


Mr. Andre:: When we adjourned the debate last night we were discussing the amendment by the hon. member for Qu'Appelle-Moose Mountain to clause 4 of Bill C-49.1 had commended this amendment to the minister for his serious consideration and requested that he pay special attention to the three speeches which preceded mine last evening. In his speech the hon. member for Qu'Appelle-Moose Mountain proposed his amendment. Also in the course of his remarks the hon. member identified far superior fiscal policies and legislative actions which could be followed to achieve the goal of reasonable revenue-sharing between governments and maintain a healthy and viable resource sector in our economy.
The hon. member for Don Valley indicated that it is absolutely unnecessary for the government to proceed with the kind of measures included in clause 4. The hon. member for Peace River indicated that indeed it is very dangerous to the economy of the country, to confederation and to national unity for the government to continue to pursue the line of reasoning it is now following.
I would like very briefly to review the history of the development of the energy confrontation which currently exists, not from the point of view of rubbing salt into old wounds but from the point of view of attempting to identify the lessons which are to be learned. The day this issue began to grow into national proportions can be explicitly identified as September 4, 1973, when the cabinet, after a Labour Day weekend meeting, felt that it must introduce a measure to demonstrate, primarily to the then leader of the New Democratic Party, that it was fighting inflation and it was going to do something to impose a freeze on the price of domestic crude oil produced in western Canada.

This, I might add, came after two other moves by the government that summer to control inflation: price controls on wheat and beef. Wheat, beef and oil were the three commodities on which the government attempted to impose price controls, the three major commodities of importance to western Canada. The reason is quite obvious: this allowed the government the maximum political benefit and the minimum political damage. The fact that this ploy worked is the major reason behind the suggestion by the hon. member for Peace River last evening that it is time we had a renegotiation of confederation. The fact that this so-called national party could get away with alienating that part of the country in the manner it did is evidence that it is time we looked into the whole question of renegotiating confederation, because if some attention is not paid to that matter in the near future, I and many other sincere, concerned Canadians worry about the direction in which this confederation might go.
However, as a result of that unilateral move by the government on that day the producing provinces reacted. This being the third such move, they felt they had to protect their economic interests and they reacted with legislation to protect those interests. The federal government reacted to that legislation; the provincial governments reacted again; the federal government reacted again, and the escalation grew and grew and became very heated until the agreement of March 27 at 24 Sussex Drive when it appeared as if, finally, a solution had been reached. Instead, the government showed that it had no intention of acting in good faith. It acted in a manner which my leader has described as deceitful-this was an accurate description-in introducing the budget of May 6 which merely increased the tensions within the country.
What is the situation in the oil industry? There is now substantial evidence that Canada will be a net importer of oil in the near future. There will be shortages of oil, yet there is no reason why this should be so since Canada is a petrolific country. The net result will be a slowing down of development and an increasing rate of unemployment. These losses to the economy cannot be immediately recouped.
The Minister of Energy, Mines and Resources enjoys taking occasional potshots, along with the NDP, at the multinational companies. In fact, though, the companies most affected by the government's tax policies are the Canadian independent companies which have been doing most of the drilling in the west. Much concern has been expressed by the Canadian government in the past about the need to encourage and preserve Canadian ownership, but no such concern has been shown when it comes to adopting policies which hurt the small portion of the industry where Canadian content is most in evidence. The need to rely on imports of foreign oil in the future will probably result in balance of payments problems, a serious state of affairs. I notice, Mr. Chairman, that you about to rise. I shall have to seek the floor at a later date to complete my remarks.


Mr. Roche:: Mr. Chairman, yesterday we read that the Minister of Finance is shortly going to the Middle East in his capacity as chairman of the interim committee of the

International Monetary Fund to talk about oil, oil production and the reinvestment of profits by oil producing nations. This gives me a point of entry at which to begin certain comments I wish to make. At time like this when I look around the committee-the chamber is not well filled-I feel like suggesting to the minister that he and I should repair to our old Sandy Hill haunts since we might be able to get as much accomplished in the course of a private discussion. However, since this must be done in public I intend to advance a serious argument for the minister's consideration.
I have already addressed myself to the energy situation and tried to present arguments based, not on an "Alberta first" but on a "Canada first" position. I intend to ask the minister how he reconciles his position as Minister of Finance, putting through a bill which will be so injurious to the resource producing provinces, with the other position he holds as chairman of the interim committee of the International Monetary Fund? The situation we face with respect to the use and the development of the resources of Canada was put very plainly by Mr. Maurice Strong, formerly in charge of the Canadian International Agency, in his capacity as head of the United Nations environment program. He said:
To put it in its starkest terms, Canadians must face the prospect of having to defend before the world their continued right to exclusive sovereignty over a disproportionate share of the world's territory and its resources ...
What does this mean for Canada? What should we do about it? In my view it means that Canada has a special responsibility for the way in which it manages the disproportionate share of the world's territory, its resources and the natural environment that it commands.
It must regard itself not just as a sovereign owner and possessor of these advantages but in the larger sense as their trustee. It does not mean that Canadians should be denied the benefits of these resources but they must be prepared to share these benefits. "Canada first" cannot mean "Canada only".
The great question which all of us must resolve as we try to steer our way through a world in scientific, technical and cultural explosion is how to bring together the two great themes of modern times, that is, growth, the development of resources for a suffering humanity, along with conservation. These two things must be developed into a national policy. The minister himself in his budget speech of November 18 when he addressed himself to the subject of Canada working toward international co-operation- the concept he personifies as chairman of the IMF committee-had this to say:
Our ability to co-operate will be severely tested, but we see nothing to be gained from policies of confrontation ...
I am deeply troubled by the potential disaster facing many of the poor countries of the world. A number of them can no longer pay for food, fertilizer, fuel and many other essentials. All countries, including Canada, must review their foreign aid programs in the light of these tragic developments.
I wish to recall to the minister the words he himself used, that there is nothing to be gained from policies of confrontation. That sentence was applied to the field of international relationships: surely, though, he would not deny its applicability to the domestic scene. Nevertheless, I suggest the government is determined to put through a bill taxing corporations in a way which disallows their royalty payments to the provinces for income tax purposes, and that this will place us in a situation in which
Income Tax
the regional strength of the country will be greatly hurt, as a result of which our national strength will be impaired, thus leaving Canada in a weakened position when it comes to playing the role we should be playing internationally.
Last week there was a debate on CIDA. I tried to point out that foreign aid as such was not in question; what was important was a restructuring of the world economy along lines which allowed the developing nations to plug themselves in to interprovincial mechanisms of trade, financing and distribution. I take it the hon. gentleman is going to the Middle East to try to put some pressure on the resource producing states to accept their responsibility to help work out satisfactory solutions to present difficulties. Does the minister not think that he is undermining this country's position internationally by perpetuating a policy, as reflected in legislation, which will hurt the resource producing provinces of this country and weaken their own development?
What about Alberta? We know that 85 per cent of Canada's oil is produced in Alberta. I think Canada should be in a stronger position to meet international commitments for the sake of a more just world order. Naturally, I speak as an Albertan who recognizes that much of the resource strength of this country, strength which depends on the development of oil and gas, is vested in my province. I think that a bill which will diminish Alberta's capacity to produce oil is a bill which will weaken Canada and Canada's international position. I ask the minister to take these facts into account. As he suggested in his November 18 budget speech, international confrontation will get us nowhere. I suggest that confrontation within our own country will, likewise, get us nowhere. This argument is endless.
What does the amendment proposed by the hon. member for Qu'Appelle-Moose Mountain seek to do? It asks the government not to proclaim a certain part of the bill until after the first ministers' conference. One hopes that that conference will be held in a co-operative and flexible spirit and that pricing as well as the constitutionality of the issue we are dealing with will be discussed. One hopes that debate on the constitutional issue will not have been foreclosed, if I may use that word, by action by the Parliament of Canada resulting in provincial royalties no longer being allowed as tax deductions.
I am arguing that we need more time for Ottawa and the provinces to come to an agreement in a spirit of compromise. Already certain things have been done. The November 18 budget is significantly different in certain respects from the May 6 budget in the area of resource exploitation. The Alberta government has introduced a drawback with respect to provincial royalties. Such moves on both sides reflect a spirit of flexibility, a spirit in which both sides are trying to reach out and compromise. The Syncrude partnership is another illustration of my argument. The deal which has been worked out will be in the best interests not of the people of Alberta alone but the people of all of Canada. Again, I say by so doing our governments are working in a manner which will enable Canada to meet international responsibilities.
3544

Income Tax
My argument for delaying the implementation of certain parts of this bill until after the first ministers have met, which is what the hon. member for Qu'Appelle-Moose Mountain suggested, is reinforced by what happened recently at the two hour meeting in Calgary when the Prime Minister met Premier Lougheed. I want to recap briefly what took place. The Prime Minister implied at that meeting that crude oil price increases are viewed by the federal government as another factor which will have its effect on conservation of energy supplies. On the matter of incentives to the oil industry, the Prime Minister stood firm on taxation policies now in effect. The federal government, he suggested, does not feel that changes in this policy are required and therefore no change in the deductibility of royalty payments to provinces in computing federal tax would be contemplated. The federal government's position, of course, is reflected in the bill before the committee.
For his part, Mr. Lougheed noted that the discussions had centred on energy, transportation, agriculture and petrochemicals. The premier said, again, that Alberta would not move unilaterally on crude oil price adjustments before the first ministers' conference in April. I ask the committee to note that. He suggested that Alberta maintains the opinion that crude oil prices should move closer to world prices, but just how great the first move will be was not stated. The premier expressed the viewpoint that federal government encouragement for the industry was certainly required. Another concern expressed by the premier dealt with Alberta's potential petrochemical industry. Petrosar, in the premier's opinion, could jeopardize development of a viable petrochemical industry in Alberta.


Mr. Cullen:: That is not correct.


Douglas Roche: I bring that opinion to the attention of the minister's colleague and seatmate. What is the significance of the Prime Minister's meeting with Premier Lougheed in Calgary. The significance, I suggest is this: these two leaders have obvious differences of opinion on energy matters relating both to crude oil prices and federal-provincial tax jurisdiction; that is, they have obvious differences on the two central questions, the constitutionality of the federal encroachment on provincial royalties, and prices. As well, the Prime Minister and the Premier expressed a difference of opinion on the degree of progress made thus far in resolving these matters.
Would it not be better for the Minister of Finance to tell the committee that the government is willing not to implement certain parts of this bill so that there can be discussion without prejudice at the first ministers' conference, discussion in a spirit of co-operative partnership and cooperative federalism in order to resolve the difficulties which involve not only the premiers of two provinces but all the people of the country? These words are not meant to be rhetoric. In preparing myself for this debate I studied the report of the Joint Committee of the Senate and the House of Commons on the Constitution, presented in June, 1972. The thrust of that report is this: our constitution needs to be updated and modernized. I will not argue about how that can be done; the minister knows the arguments as well as I do. The thrust of these arguments is that we must not only take into account existing relation-

ships between Ottawa and the provinces; we must also remember the conditions under which the constitution was drawn. By upholding the position which says that the central government is the dominant government vis-a-vis the provinces and that this is the modern reality, the minister is not heeding the thinking which went into the making of the joint committee's report on the constitution.
The speech made by the hon. member for Qu'Appelle-Moose Mountain, referred to yesterday by the hon. member for Don Valley when he spoke about what he called the "Hamilton proposal", or the velocity of capital concept, was one of the most exciting speeches I have ever heard in parliament. The hon. member for Qu'Appelle-Moose Mountain introduced the velocity of capital idea on January 30 and it is an idea of which private industry and governments should take cognizance. I do not say that the minister's budget speech was not exciting, but the speech of the hon. member for Qu'Appelle-Moose Mountain was very exciting. Yet the minister came to the committee yesterday and said, in reply to the hon. member, that he had not proposed the idea to the provincial governments and had not discussed it with private industry but that, yes, he recognized its importance. Perhaps too much has been happening. What I am arguing is that: it is wrong for the minister to take unilateral action and ignore the ideas brought forward by the hon. member for Qu'Appelle-Moose Mountain.
Yesterday the hon. member for Qu'Appelle-Moose Mountain reflected on his ideas for dealing with capitalintensive industry in order to give more money to the owners of the resources, the provinces, and more money to the federal government by sharing the profits of the companies, the equity. At the same time, there will be enough money going to the companies to enable them to continue. Those are some of the large issues at stake now as we consider whether we should move ahead with the implementation of clauses 4 and 7 of Bill C-49.
I want to conclude by repeating for the minister, before he goes abroad, a very interesting story which appeared in the International Economic Survey of the New York Times for January 26. The title is, "The world, as wealth shifts, is shaken by uncertainty". We know there is great uncertainty as to which way we should go to repair some of the global problems. The story concludes with a quotation by John E. Sawyer, an economic historian who has taught, if you please, at both Harvard and Yale. He said:
No society can prosper on a divergent course with reality. There can be no escaping the accelerating pace of change, the fact of interdependency or the inevitability that public processes will govern crucial sectors of activity from now on.
I bet the minister will say "amen" to that quotation. Here is the last sentence:
The challenge will be to keep these processes honest, enlightened and effective.
Does the minister really think that clauses 4 and 7 of Bill C-49 are enlightened with respect to the world conditions we face today? Are they really effective in stimulating resource development in Canada, which is the key to a strengthened Canadian economy, and diversified regional growth so that all parts of this country can plug into


making our country strong? I ask this seriously. Will the minister take a moment to answer my central, dominant question? How can he reconcile his position on clauses 4 and 7 of Bill C-49 with his international responsibilities, going into the IMF, helping to restructure the world economy with justice?


Lorne Edmund Nystrom: This afternoon, Mr. Chairman, I want to make one last appeal to the minister.


An hon. Member:: The last one?


Some hon. Members:: Hear, hear!


Lorne Edmund Nystrom: The Quebec Liberal backbenchers should be very interested in this bill. My purpose in rising is solely to address myself to them and try to persuade them to take a second look at the bill before us. We are talking about one very fundamental issue, namely, how do you divide the resources of this country between the federal government and the provincial governments? We have had a whole history of fighting on clause 4 whereby the government will disallow the deducting of royalties.


An hon. Member:: Hear, hear!


Lorne Edmund Nystrom: We have had applause from a British Columbia member and no applause from the Quebec members. I suspect that if the Quebec Liberals were to check with Premier Bourassa and his cabinet, they would find that almost every one of them is opposed to this clause in the bill. They would also find that every premier in this country is opposed to the clause which disallows the deductibility of royalties. Royalties are a bit different from other taxes in the country. Under our constitution the provinces have a right to impose royalties. This is not only with regard to gas and oil; it affects all minerals that we produce such as nickel, gold and potash. Therefore, every province in this country is affected. Disallowing the deducting of royalties as a legitimate expense is like telling a farmer in Quebec or Saskatchewan that he cannot claim municipal taxes as a legitimate expense, or telling someone who rents land from a landlord that he cannot claim the payments made as a legitimate expense.
What will happen if the federal government undercuts the provinces with regard to resource revenue? How much room will there be left for the provinces to develop? There have been a lot of moves in the province of Quebec, in particular, for economic, cultural and social nationalism and, indeed, independence of Quebec as a separate entity and a separate province. If the provincial governments are denied further revenues, the federal government will be playing into that sentiment of alienation in one part of this country against another. If hon. members do not vote for this amendment, they will be making Rene Levesque very happy. He will say that this is another example of the heavy-handedness of Ottawa. All the premiers and all the provinces are opposed to this particular clause.
The Minister of Finance and the Prime Minister will not even delay this clause for two months until after the first ministers have had a chance to meet. This is a very reasonable amendment. It says that this House will pass the clauses-and I do not agree with them all-if their proclamation is delayed until the first ministers meet.
Income Tax
That would not be a great sacrifice for this government to make. If the provinces are all opposed, why cannot we wait another two months before putting these clauses into law? They will pass the House of Commons and the Prime Minister and the Minister of Finance would have the extra clout at the conference in early April. It would be a sign, signal or symbol of good faith if they were not proclaimed until after the conference. Is that asking too much?
Why is it that the Prime Minister and the Minister of Finance are right and all the premiers are wrong? Is that a demonstration of the divine right of ruling this country which seems to have affected the minds of so many Liberals? I know as a fact that if the Liberals were allowed to stand up in this House and say and do what they believe, many of them would vote for the amendment before us. I speak to many Liberals from Quebec, as well as the hon. member for Nipissing who represents part of northern Ontario. I know they are very concerned about development in their areas. There are also members from the prairies and the maritimes who want more development in their regions. However, we cannot have that development without a spirit of co-operation, consensus and working together as a team rather than pitting one region against another.
I have always believed we should have a strong central government. However, if we are to have that it must be with the co-operation of all regions and all provinces. In order to have a strong central government, there must be a certain amount of decentralization with regard to decision-making on issues important to the various provinces and regions. That is what we need if we are to keep Canada together. For too long there has been development around the golden horseshoe, particularly the Toronto area, to the detriment of other regions. A bill such as the one before us will only escalate that type of development instead of narrowing regional disparity.
Yesterday information was provided to me and my colleagues in caucus about recent increase in freight rates. The premier of my province and the premiers of other provinces said they would be willing to give a little more in terms of oil and gas revenues if they could get a little more in terms of some of the things they want, settlement of the grievances they have in confederation.
One thing that grieve us in western Canada is a freight rates system that discriminates against people on the prairies. The same is true for the people in northern Ontario, parts of Quebec and the Atlantic provinces. The people of Saskatchewan are providing low-cost oil to people in other parts of the country, generating tremendous revenue for the federal treasury. What do we get in return, Mr. Chairman? I have here the latest figures showing the increase in freight rates and I should like to give the committee two examples of how the freight rate system discriminates against the province of Saskatchewan.
If you ship 610 pounds of meat from Prince Albert, Saskatchewan, to Hudson Bay-not a long distance, only some 200 miles-the cost under the old rates a few days ago would have been $21.80, or $3.57 per hundredweight. A couple of days ago the freight rates went up to $5.40 per hundredweight, representing an increase of 52 per cent.
3546


Income Tax
The cost of shipping 40 cartons of plants from Winnipeg to the city of Regina under the old rate was $33.55 per thousand pounds; under the new rate it will cost $65.80, an increase of 99 per cent.


Mr. Anderson:: Mr. Chairman, I rise on a point of order. I have been very patient in listening to this debate for some time, but I cannot for the life of me see how freight rates enter into Bill C-49. I should like to have this debate continue on Bill C-49; I am sure we will be able to discuss freight rates at some other time.


Lorne Edmund Nystrom: Mr. Chairman, I will tell you why freight rates are very relevant. The province of Saskatchewan produces 75 million to 80 million barrels of oil per year. We have only about ten years' supply of oil left in the province. In good faith the province of Saskatchewan agreed to sell oil to Canadians at a lower price and to export oil to the United States at a lower price, thus allowing the federal government to collect an export tax. As a result, the people of Saskatchewan are losing $5.20 per barrel of oil. They sell their oil at $5.20 below the international price. If that is multiplied by 75 million barrels, it means $400 million per year is being lost by the province of Saskatchewan which would not be lost if the oil was sold at world prices or the export tax was channelled back to the province.
The premier and the people of Saskatchewan have agreed to live with this situation. They are making a substantial contribution to confederation in order to keep down the price of oil and to preserve national unity. In return for this, we expect a trade-off, a quid pro quo. We have grievances against the present transportation structure in this country, against the present freight rate structure and the lack of an industrial strategy. If we had action on those fronts we would be much more willing to allow this clause to pass, but we see no evidence of action. Freight rates have increased over the last two days on commodities that affect the people in the small towns, villages, cities and farms of Saskatchewan. In some cases the freight rates have increased 52 per cent, in other cases 99 per cent or even more.
At the same time, the committee is expecting me to vote approval of a clause that is going to take away more money from the people I represent, and I cannot acquiesce to that. If the Minister of Transport were to tell the House that he will remove the anomalies in our freight rate and transportation systems so as to give the people of Saskatchewan a chance to process food and develop the resources of the province, then I would be willing to compromise and accommodate the government when it comes to gas and oil. Gas and oil don't grow on trees and in ten years' time there will be none left. Then where will we be in the province of Saskatchewan? The federal government and consumers of Canada have taken half our money and we have nothing to show for it.
This clause is vitally important to the province of Saskatchewan and to many other areas of the country which at the present time are underdeveloped. Members of all parties should pay attention to this fact and should ask the Minister of Finance to be reasonable and delay proclamation of these clauses until after the first ministers' meeting. That is not asking him to do very much. He still has

the club, the sanction and seal of the House that the legislation will become law whenever he or the cabinet decide to proclaim it. But this would be a gesture of good will on his part and the whole country would be the better for it, including the Minister of Finance and the government he happens to represent. This country must be built on co-operation and honest intentions. If the minister took this action it would go a long way toward improving the spirit of confederation.
There are many other items in the bill that interest me as a private member. The hon. member for Nanaimo-Cowi-chan-The Islands and the hon. member for Sault Ste. Marie yesterday raised several questions on Syncrude. We all know the Syncrude project has been exempted from many tax provisions made in the last few years. But we want the Minister of Finance to answer these questions as fully as he can and to tell us how much of a concession in terms of taxes will be given to the Syncrude consortium. This is a vital issue at this time. I think the members of the Liberal party sitting opposite should be very concerned at the great sell-out of the oil sands in Alberta to a private concern. This project is being financed by public risk money without any guarantee of profit. Canadians are going to pay the world price for this oil. Costs are skyrocketing and we have little information and very few facts to estimate what the project is going to cost the Canadian people.
I resume my seat after appealing to the Minister of Finance, and particularly to the Liberal backbenchers to show a bit of spunk, to show that they are not puppets on a string who are sitting here in case there is a vote. I ask them to show courage and to tell their minister that the opposition parties on this side of the House are making a reasonable suggestion, namely, that we will pass the bill but delay proclamation of the clauses pertaining to royalties, mineral resources and gas and oil until after the first ministers meeting. I assure hon. members that their own provincial politicians would support them. They do not have very many in Alberta, but I see the hon. member from Battleford-Kindersley is here, and he is from Saskatchewan. I ask them to vote with the opposition and to support our proposition. The Premier of Saskatchewan has been willing to accommodate the federal government, so I would ask them to compromise.
Most of us in our party would like the amendment to go even further. We would like to see these clauses delayed until after the first ministers' meeting or even brought back to the House in a separate bill, but in the spirit of national unity, co-operation and good will we are willing to compromise. We will go halfway and I hope my friends on the other side of the committee will meet us halfway. If they do, it will be better for all of us and there will be political kudos for no one but the people of Canada.


Leslie Gordon Benjamin: Mr. Chairman, I want to complete the remarks that I started the other day when these clauses were allowed to stand. I want to refer to one sentence in the minister's speech on second reading of the bill in which he said that the issue is; what constitutes a fair sharing of revenue from petroleum and mining as between the industries, the provinces and the federal government?
I do not disagree with that; that is certainly one of the issues, if not the issue. I have yet to hear a case made by


the minister or anybody else on the government side to justify or support the suggestion that the federal government is not getting a fair share. There may be some argument as to what constitutes a fair share, but that has to be sorted out between the federal government and the provinces. The federal government is now getting, and I submit will continue to get, a fair share of these revenues.
Let me refer to some figures I have regarding the federal government's share, on a per barrel basis, of crude oil from Saskatchewan. These figures indicate that the federal government is doing fine in respect of getting a fair share. Medium crude from southeastern Saskatchewan that is exported to the United States, sells at $10.62 a barrel. The federal government's share of that in royalties and federal corporation tax amounts to 58.1 per cent. That is substantially over half. Surely not even the minister would try to tell me that is not a reasonable or a fair share. In fact, I have yet to hear what he would consider to be a fair share in light of figures like that. Since half the crude oil produced in Saskatchewan goes to the United States, that is a pretty significant share, I would submit. Out of the $10.62, the province of Saskatchewan gets 31 per cent in royalties and income tax and the industry gets 5.1 per cent.
In addition, the Saskatchewan government has made available for some period of time an additional 30 cents per barrel to the industry, provided it is used for further exploration and development. Just a few days ago the government improved that position even more by increasing the figure to 50 cents a barrel. That money comes out of Saskatchewan's share of these oil revenues. That gives the producer additional funds. Surely the basic issue is a fair sharing of that revenue between those three groups, the federal government, the province and the industry. Surely that is more than fair.
In addition, the government of Saskatchewan has lived up to its side of the agreement or bargain. As others have said, it agreed to forgo in the neighbourhood of $400 million in revenue that could have been the province's in respect of oil sold at world prices. The government of Saskatchewan was willing to forgo that as a contribution toward equity for all Canadians and as a contribution toward confederation and national unity. That was evidence for the federal government that the province of Saskatchewan cares about a strong confederation and a united country. I suggest that is a good contribution by the people of Saskatchewan from the resources that are theirs under the constitution. I do not want to brag overly about the people of Saskatchewan, but they are the best in Canada and this is a very significant contribution.
The people of Alberta were also willing to forgo in the order of three or four times that amount of potential revenue for the sake of confederation, accommodation and mutual agreement. Saskatchewan and Alberta have lived up to the bargain. These additional revenues which Saskatchewan obtained from royalties were set aside in a capital fund to be used for exploration and development of resources.
I just do not understand what the minister is complaining about or why he found it necessary to put this kind of
Income Tax
measure in the budget. I could understand it if the government of Saskatchewan took that money into general revenue and started to spend it on roads, health care or even for political purposes: I could understand the minister feeling that some measure such as this was necessary because Saskatchewan would then have broken its part of the bargain. It did not do that, but lived up to its bargain to the letter. To get kicked in the face by these clauses in the budget, I submit, is no contribution on the part of the federal government toward confederation, national unity or, for that matter, toward future agreements.
The industry has been claiming it has not been getting enough of the revenue, but there is nothing new about that. It is quite true that until 1958 the industry in Saskatchewan put more into the industry than it took out, but since 1958 there have been increasing net cash outflows from Saskatchewan each year. In 1972 the industry had a net cash outflow of $96.5 million, and in 1973 a net cash outflow of $126.8 million.
From December, 1972, to December, 1973, the price of crude increased by 90 cents a barrel, or 35 per cent, and almost all of that increase went to the producers. Because of events in the Arab countries it was apparent that the price of crude was going to increase at a dramatic rate and that prospect gave rise to legislation in Saskatchewan. It also gave rise to the export tax levied by the federal government, 40 cents a barrel to begin with. I will not go over the whole history of this-I have pages of it here in chronological order-but I suggest if one looked at the whole picture one would not understand why the minister is so excited about this and feels it necessary to have this kind of clause in the income tax bill.
At the end of last March the provincial premiers left a first ministers' conference believing that the taxing agreement in respect of oil would be observed until the end of June, 1974. Certainly no one spoke about tax changes at that conference. The Premier of Saskatchewan wrote to the Prime Minister asking specifically if the federal government intended to disallow the royalties paid to the provinces by the oil producers as a deductible expense when calculating income tax. The Prime Minister did not answer the question at the conference and at no time has he answered it in writing. No wonder all of us in Saskatchewan, at least, were shocked when the budget proposals of May indeed disallowed royalty payments to the provinces as deductible expenses. The people in the industry were shocked. This move came without warning.
We also find it passing strange that the minister is not consistent in how the law will be applied. I still think he is a fair man, although at times unreasonable, but I cannot understand why he does not apply the law in the same way in all cases. If this is such a good idea and is so necessary, then why are royalties paid to private owners such as Canadian Pacific Investments and Hudson's Bay still allowed as deductible expenses when calculating income tax, yet not allowed when paid to the provinces?
Canadian Pacific Investments hold acres of mineral rights in Saskatchewan and lease some of those rights to PanCanadian Oils. PanCanadian Oils can deduct the royalties they pay Canadian Pacific Investments as an


Income Tax
expense when computing their income tax. PanCanadian Oils is a subsidiary of Canadian Pacific Investments, which is a subsidiary of CPR. The CPR can benefit from royalties being deducted as a tax and a subsidiary of CPR can also do so, but not the people of Saskatchewan or the people of Alberta. Surely this is inherently unfair. Surely it is an injustice of the first order.
My first choice, as it is of my colleagues, is that these clauses be left out of the bill now, reintroduced in a separate bill and dealt with as a separate matter after the first ministers' conference. If no agreement can be reached and the government still feels it has to use this kind of measure to get what it thinks is a fair share of the resource revenue, that would be the best way to go about it.
My second choice is to support the amendment moved by the hon. member for Qu'Appelle-Moose Mountain. I do not think it is an unreasonable request. So far as I am concerned, it is a minimal request. I hope the hon. member for Battleford-Kindersley will agree that it is not all that horrendous a problem to delay the proclamation of these clauses for a couple of months, if for no other reason than to give all the first ministers an opportunity to meet, without rancour, in an effort to reach mutual agreement and understanding, so that the government will not do something which I predict they will regret many years hence and which parliament will regret whatever party happens to be in power.
The legislation which we are considering strikes at a fundamental part of our constitution. It strikes at something that all provinces have held dear since confederation. The opportunity for additional time that this parliament must provide for the federal and provincial governments to reach agreement is one that I hope we will not pass up. I hope that the Minister of Finance will rise in his place and say, "O.K., fellows. I am an agreeable fellow". The provinces have made some concessions. They brought in some measures subsequent to last May 8 to indicate that they are willing to reach an agreement which will benefit the whole country as well as individual parts of it. There have been numerous examples of this, particularly from the premiers of Alberta and Saskatchewan.
Surely it is time the federal government responded, if only in this small way, and provided the additional time and opportunity necessary for agreement and understanding to be reached. There may even be time to throw the equalization formula back on the table. The Minister of Finance could say, "Well, fellows; how about doing some adjustment here?" Perhaps he has already done that; I don't know. But surely the couple of months' time that is being asked for is not an unreasonable request. I plead with hon. members from all parts of the country and in all parties to take into account what has been said by myself, by many members of the House and by several provincial governments and I urge them to pass this amendment. I say to my hon. friends on the government side that it will do no irreparable harm to the budget of the Minister of Finance; it will just delay a few parts of it for a couple of months. Since no harm will be done to the budget as a whole or to the government that they support, I hope that hon. members on all sides will support the amendment and bring about the delay for which we and the provinces ask.


Robert Hylton Brisco: Mr. Chairman, in speaking to the amendment proposed to clauses 4 and 7 of Bill C-49 by the hon. member for Qu'Appelle-Moose Mountain, first I would like to say that I recognize the predicament of the provinces and their responsibility for the problem that they generated, particularly my own province. I say that with candour and dismay. But there are limitations to the control which must be exercised in this matter, limitations which are of vital concern to the national interest. After all, the provinces all look to the federal government to provide leadership in developing a fair and just compromise and to re-establish a climate in which employees and employers in the mining industry can continue to contribute to the economy of this country.
The state of the economy of this country is a matter of vital importance to every one of us and certainly to the Minister of Finance. If the minister is to demonstrate his concern for that vast segment of our economy, namely, the mining industry, he will accept the amendment which has been proposed, thereby restoring the faith of the public sector in the industry. I refer to investors in the mining industry.
There is time for further eyeball to eyeball negotiation with the first ministers of the provinces, rather than the confrontation which has generated so much verbiage in the House in the last while. We have been assured by the Minister of Finance, by the NDP, hon. friends to my left, by the NDP in British Columbia, Saskatchewan and Manitoba, as well as by Conservatives in Ontario, that heavy taxation, combined federal and provincial, will not cause existing mining operations to close down prematurely. I heartily agree and so does the mining industry and the Minister of Finance. There is no argument about that. But as sure as blazes there is some argument and some concern about the future.
The Minister of Finance knows, even if some provincial ministers obviously do not, that it takes years and years, and frequently millions of dollars, to prove out a mineral possibility, to establish a mine and to staff the enterprise with miners, engineers, technicians and the necessary equipment. The recent federal and provincial taxes motivated by the higher prices of metals have brought about this greedy confrontation between the provincial and federal governments to the detriment of the entire mining industry and of the people who work in mining areas. Consider the price of copper. Surely the government and the Canadian people recognize that more than any other commodity on the market, the price of metal is subject to major fluctuations, brief high and extended low periods. With rose-coloured glasses they only look at the high prices. This is precisely what was done in the province of British Columbia, and now they are reaping the sick benefits of their political machinations in that regard.
Consider housing in the United States and what it has done to the B.C. lumber industry. Forecast what the same type of thinking and the same trend in the economy, plus federal legislation and provincial legislation, will do to thousands and thousands of men and women who work in the mining industry. This is part of a cycle which the minister proposes to inflict upon British Columbia and miners, smelter workers and all the ancillary services of

the mining and smelting industries. We have already been pilloried and damned by the National Film Board in Trail, and now we are getting this piece of cake served to us. Frankly, we are not at all impressed.
I suspect that the federal government has some sort of death wish for Kootenay West, an area of heavy mining industry, an area of smelting, an area which has provided billions of dollars in taxation for this nation, with nothing in return except this kind of federal legislation to further drive down the economy of this country in general and my riding in particular. I rather suspect that Ontario and Quebec-those two monoliths in the middle of Canada- treat the maritimes, with their coal and iron ore industries, and British Columbia as colonies. When we look at this legislation, what else can we assume?
Canadian mining cannot make an effective contribution to the economy in a climate of this nature. What we must have-and we will not have it unless this amendment is accepted-is the orderly development of the mining community and the mining economy, not cyclical change subject to the whims of provincial and federal ministers, subject to the whims of the marketplace and subject to the whims and economies of other nations with mineral resources and industries. Federal and provincial co-operation is a must. It must be held out to us. The olive branch has been extended and we urge the minister to accept it. Is there any basis in fact for what I have said? The mineral output alone-not the oil or gas output-rose from $475 million in 1946 to $3,278 million in 1969. Production and productivity were up three times the rate of the economy of Canada as a whole. And we are speaking of one industry. What a magnificent achievement and a symbol of industry both for the miners and the mining companies.
There is no evidence on which to assess the short-term and long-term effects of this proposed taxation measure; I think this is the point which disturbs me most. We have yet to hear, from the government side, concrete evidence as to the effects this taxation will have on the mining, oil and gas industries. I ask the minister what the spin-off effects of this particular proposal will be. I urge the minister to tell us what his proposal will do to the mining industry, the oil industry and the gas industry, and what it will do to their employees and to the economy generally. There has not been a word. What is the long-term effect? Has it really been pondered? Has it really been studied? Or has it been popped into a computer for an immediate answer?
Perhaps more than the oil and gas industries, the mining industry needs a long time in order to develop. Capital diverted from the mining industry in Canada is now flowing and will go on flowing to other parts of the world where the same metals are available. Tax and royalty rates in some cases, when we look at the federal and provincial structure of these taxes, reach 100 per cent; yet there is no surprise expressed by or comment from government members at this 100 per cent taxation. I wonder how hon. members opposite would feel if each of them was subject to 100 per cent taxation. There would be a bill before this House pretty damned quick to increase salaries.
I must admonish the minister with reference to the proposal in the amendment put forward by the hon. member for Qu'Appelle-Moose Mountain, because the
Income Tax
amendment was submitted with sincerity and integrity as a solution. An hon. member with years of valued experience contributed a valid proposal for the government. Did the Minister of Finance consider it as a solution? No. Did he suggest for a minute that he might invite opinions from the first ministers? Did he ask the mining companies what they thought of the proposal? He could not be bothered; therein lies the shame of the whole thing. It is a valid proposal, developed with sincerity and honesty-and no one bothered with it, least of all the Minister of Finance. The Minister of Finance has said:
-the federal government should recognize the "special position of the provinces with respect to the taxation and charges on resources within their boundaries"-
That is a strange statement in light of present events, is it not? What did the minister mean by the "special position of the provinces with respect to the taxation and charges on resources"? He meant exactly the opposite of what everyone who read those words thought he meant. He went on:
-the federal government must ensure that provincial royalties, taxes, and other arrangements do not "unreasonably erode" the federal corporate income tax base-
I agree. This has to be part of the discussion between the first ministers of Canada and the Minister of Finance. I agree that some of the mining taxation and royalty proposals of the provincial governments are not conducive to the federal government's receiving its fair share, but I also believe there must be consultation and that any imaginative minister would accept the proposed amendment and at least feed it into the machine for feedback from the provinces and the mining industry. But somewhere along the line the minister's fingers were jammed in the letterbox and the mail was never sent out. The minister also said:
-over-all Canadian tax policy must have regard for the competitive international position of the industry and the financial resources it requires to bring forward production needed in future years.
That is a motherhood statement, if ever I heard one. But what is it doing for us? It might do something if the amendment is accepted; otherwise it is a useless piece of rhetoric and we all know it. If we do not, we should. The fundamental conclusion which can be drawn from the main budget is that the federal government decided it was not prepared to leave taxation and regulation of the resource industries primarily to the provinces. We would accept that, but on the basis of the present proposals how can it possibly be accepted? I know the minister has a bit of a headache over problems in the west, but the west has always been known to generate a headache now and again. Perhaps an olive branch type of aspirin would relieve the headache.
There is little doubt that British Columbia mining royalties were designed to extract as much revenue as possible from the industry as well as to deny a measure of taxation to the federal government. The result is that the B.C. mining companies are placed in the middle of a ham sandwich, a fight between the province and the federal government. The poor mining companies and those who work for them and value their jobs are the ones who are being gobbled up.


Income Tax
What about the effect on the mining industry? What are the implications? I have mentioned the time it takes for a mine to develop, the amount of work that goes into prospecting, into development, into the raising of capital, equipment and manpower. And I would venture to say that 90 out of 100 claims go down the tube. The increase in federal taxation of the mining industry, in consequence of all the measures which have been proposed, will only become effective, really, after the mining industry exhausts its depletion arrangements. Once this concession, dating back to November, 1969, has been used up, the ball-game will be a sad one indeed for the economy of this country. I say this even in the light of major mining developments. Tax benefits under the new completion rules will not be nearly as favourable as under previous provisions.
What are the implications for resource development? We know that governments, federal and provincial, with an eye to the high prevailing prices wanted to seize on to the bonanza. Lord knows, we have heard enough about this bonanza from members of the party to our left. But under this type of taxation there is no possibility of putting funds aside for the lean years. Of course, there is no scientific way of determining what is an appropriate level of taxation, but it has been my experience that the best way in which to reach a reasonable conclusion is to sit down and talk things out. There just hasn't been enough of that.
What are the effects of taxation at this level? There are three points that could be made about the higher tax burden faced by the Canadian mining industry. The first concerns the dogfight which has been going on for some months between the federal government and the provinces for a share of the resource profits. Each level of government has imposed its new tax without regard to the position taken by the other, in some cases in an obvious effort to pre-empt the other in the tax field. The resource sector found itself in the middle of this dogfight and as a result it is really suffering. In particular, it is suffering from lack of investor confidence.
The structure of the new federal-provincial rules has had a particularly disastrous impact on new resource development, and that is saying a lot right now. Where are the new resource developments in Ontario, in British Columbia, in Alberta or, for that matter, in any of the other provinces? I will give just one example: while the average tax burden on a large, integrated Ontario mining producer could still be less than 50 per cent, additional income obtained from operating economies or the expansion of existing mines is charged at a marginal rate of 73 per cent. That is not too bad, but move a little farther west and you will hit 100 per cent-a grim batting average.
The whole structure of resource taxation is in chaotic confusion. There is complete absence of form or unanimity. There has been no dialogue, federal or provincial, and no valid considerations put forward affecting the entire topic, though this is long past due. I conclude by imploring the Minister of Finance, as I did on another occasion, to recognize the sincere manner in which this amemdment has been put forward. This is an opportunity for a lot of good mileage to be gained for the provinces, the mining industry and the government itself.

We know that the mining industry has been expressing its concern to the minister; however, I doubt that the minister has been expressing his concern to the mining industry. I suggest that since the minister will have an opportunity to discuss this matter thoroughly with the provincial premiers, it is incumbent upon him to sit down with leaders from the mining industry and talk it out with them.


Mr. Bawden:: I should like to ask the minister one or two questions regarding a number of points which arose earlier in the debate. The attitude taken by the hon. gentleman has, of course, been that the provinces were claiming an undue share of the tax base, thereby eroding receipts by the federal government. On February 5 I asked him if he could tell us what the percentages would be if they were revised to reflect the export tax as a receipt by the federal government. The minister has advanced the argument that receipts from this tax were assigned as a subsidy to the eastern provinces. The fact of the matter is that this amount was relinquished by the western premiers last March in return for certain concessions and a total package.


John Napier Turner: Perhaps I should do my best at this point to answer some of the questions that have been put to me. The hon. member for Qu'Appelle-Moose Mountain again put forward the proposition he raised on second reading, namely, that clauses affecting resource taxation should be postponed, in effect, until proclamation by the government, the governor in council, following the expiration of the 15th day of April, that date being chosen to allow the meeting of first ministers to take place.
I gave my reasons on second reading for rejecting that proposal of the hon. member. Basically, the budgetary proposals which were introduced on May 6 and were defeated in the House on May 8, along with the rest of the budget, formed the topic of the meeting of first ministers at 24 Sussex Drive before the November 18 budget. They were reintroduced to a certain extent in the November 18 budget, with two fundamental changes involving the restoration of the 100 per cent deductibility for exploration, as against the 30 per cent figure in the May 6 budget and, of course, the additional abatement for petroleum, from 25 per cent to 30 per cent; or, putting it another way, we reduced the federal tax from 30 per cent to 25 per cent.
There was a thorough discussion of resource taxation measures between all ministers of finance, provincial treasurers and the federal Minister of Finance on December 9 and 10 in Ottawa. The taxation aspects of the budget have been thoroughly discussed by those ministers since their introduction into parliament. Such discussion took place after consecutive budgets had been introduced.


Robert Lorne Stanfield: But did they all agree with you?


John Napier Turner: No, there were legitimate differences of opinion.


Robert Lorne Stanfield: Did any of them agree with you?


John Napier Turner: Yes. The provinces were divided in their approach to the budgetary provisions.


Robert Lorne Stanfield: One out of ten may have agreed.


John Napier Turner: I remind the Leader of the Opposition that members of parliament represent all parts of the country and there are bound to be differences of opinion between members representing areas of federal jurisidiction and others.


John Patrick (Pat) Nowlan: Who represents the west on the government side?


John Napier Turner: There are bound to be differences of opinion between those representing provincial and federal jurisdictions. What I am saying is that these budgetary measures were introduced to respond to unilateral taxation measures introduced by several provinces, including Ontario, Saskatchewan, Manitoba, Alberta and British Columbia. Those provisions were introduced without prior consultation with the federal jurisdiction. I am not complaining. They acted within the scope of their jurisdiction. We are acting within the scope of our jurisdiction and we are putting these meausres before parliament.
I am saying that the conference of first ministers on April 9 and 10 can deal with the two negotiable sides of the issue. They are negotiable because we are not talking about provincial taxation on one hand and federal taxation on the other. They are negotiable because they deal with the fundamental issue of price, which will be of immense revenue consequence for the federal government, the provinces and the industries concerned, and with the issue of access to markets and guarantees as to markets. These subjects are still open for negotiation.


Harvie Andre: But they were decided on March 27.


John Napier Turner: If, as a result of that first ministers' conference, other measures must be taken, each jurisdiction will govern itself accordingly. One of the issues which the hon. member for Qu'Appelle-Moose Mountain brought forward at second reading and at committee stage had to do with a problem of certainty. It is clear, and I agree with him, that we must over the next decade get our taxation, pricing and marketing mechanisms in place so that the petroleum, natural gas and resource industries know where they will be going in the next ten years. I do not think his suggestion with respect to the proclamation vehicle adds to that certainty or resolves the issue of certainty. I think his suggestion would prolong uncertainty. I said so on second reading and I say it again. As I said, we must dissipate the climate of uncertainty which has arisen in a number of quarters for a number of reasons in connection with a number of issues.
The hon. member for Calgary South asked me what the percentage of division as between provincial and federal jurisdictions is to be in relation to the export tax. I do not have the figures with me. The province of Alberta has already made them public. I said to the hon. member in the House and in committee on several occasions that we do
Income Tax
not consider the export tax to be part of a mature system of taxation for the next decade because it will be self-liquidating and a diminishing phenomenon as the domestic price more nearly approaches the international price.
If I may deal with the substance of the question dealing with front-end loading as raised by the hon. member for Qu'Appelle-Moose Mountain-


An hon. Member:: Is the minister dealing with each question raised?


John Napier Turner: Mr. Chairman, I want to finish my comments. I will not take very long. The hon. member for Qu'Appelle-Moose Mountain put a proposition to me and to the committee. He proposed that the government should levy no tax or royalty on new resource investment until the initial capital cost had been recovered, and that resource corporations should pay no dividends until all their debt had been retired. That is how I understood his proposal. In this way, so he argues, the total burden of debt charges over the life of the investment would be reduced. The fraction of the total operating income over the life of the investment which would accrue to holders of equity, and government, would be increased and the fraction which would apply to credit would be reduced. At any rate, that was his argument. He proposed in his speech that the federal government should take the lead in reducing the front-end loading, as he put it, of taxation. The argument was restated by the hon. member for Don Valley.
The government submits that the hon. member for Qu'Appelle-Moose Mountain did not take into consideration three important aspects of resource financing: first, that virtually all investment in oil and gas is financed on the basis of equity and not by debt capital. Actually, the petroleum industry resists debt capital.


Mr. Gillies:: But this has to be changed and Syncrude is the perfect place to change it.


John Napier Turner: I agree. The industry will have to consider debt capital. Debt service costs at the moment amount to less than 13 cents per barrel of oil produced in Canada, which represents less than 2 per cent of operating income. The second point is this: because exploration expenditures may be written off for tax purposes in the year in which they are incurred, because other production development costs may be written off at 30 per cent per year for tax purposes, and because exploration and development expenditures are in depletion at the rate of $1 for every $3 of expenditures, taxable corporation income is reduced by $1.33 now for every $1 of investment and most of this reduction takes place before production even begins. So the front-end loading argument is diminished considerably for these reasons. In general, no corporation income is eligible until income for tax purposes exceeds the cost of the original investment. Hence there exists, in our opinion, no front-end loading of income tax such as the hon. member suggests.
That brings to mind the argument on the other side of the coin which is that perhaps those incentives are too generous. That is what some hon. members may think. I do not want to deal with that argument. At the moment I am trying to deal with the argument raised by the hon.


Income Tax
member for Qu'Appelle-Moose Mountain. My third point is this: the holders of equity capital always have the option to use net earnings in any one year in a variety of ways. They can reduce outstanding debts, undertake new investments or pay dividends. In the past, the petroleum industry has financed its new investment almost exclusively with equity capital either in the form of new issues of shares or retained earnings. I agree with the hon. member for Don Valley. I think too little use has been made of debt markets to finance new investment. Less than 20 per cent of net earnings have been paid in the form of dividends.
It is true, however, that bonus payments, lease rentals and royalty payments to the provinces have represented in the past a type of front-end loading to which the hon. member for Qu'Appelle-Moose Mountain referred, although this burden has been somewhat reduced recently by provincial drilling incentives, particularly in Alberta. I suggest that it is to provincial governments that the hon. member ought to direct his argument about front-end loading because the biggest front-end loader of all is the royalty concept which pays no regard to general profits and considers only production. If there is any front-end loading, the royalty concept exaggerates it.
The hon. member for Nanaimo-Cowichan-The Islands asked me a number of questions with which I will attempt to deal not suavely but as frankly as I can. His first question was, are all royalties non-deductible? The answer is yes, no matter what the rate of the royalty might be. Then he asked, how does one distinguish between royalties paid to provinces and royalties paid to corporations? My answer is, as I said to Premier Blakeney, to Mr. Cowley and to Wes Robbins, that is a contractual payment freely negotiated by both sides. So there is a difference between a royalty which is contractual and a royalty which is a disguised tax.
Then he asked me this question: How do you distinguished between a royalty paid to a provincial government and a royalty paid to a foreign jurisdiction, the royalty paid to the foreign jurisdiction being deductible? My answer is this: If a royalty to a foreign government were to be escalated against price or profit instead of being a flat payment levied against production, and that is how these payments are still made, I would have to rethink that question, just as I had to rethink the question as it applied to Canadian provinces when they changed royalties from flat payments against production to escalated payments levied against profit or price.


Mr. Douglas (Nanaimo-Cowichan-The Islands):: Does the minister propose to allow a royalty which is paid on a flat rate per barrel in Canada, if any province decides to adopt that procedure, to have that deductible for income tax purposes?


John Napier Turner: We probably will be caught on that, Mr. Chairman. Because there are so many varieties of royalties and disguised taxation payments, I will have to look at it very carefully. It is hypothetical now, except in the maritimes. Most royalties of other provinces, except in timber, are escalated now against price or profit.
(Mr. Turner (Ottawa-Carleton).]
The hon. member for Nanaimo-Cowichan-The Islands also asked me whether any other deals had been made with the Syncrude operation. The only concession, to use his word, and I have not used it, or exemption from the budgetary provisions of November 18 available to the Syncrude joint venture is that the royalties are deductible because I allowed the regime applicable before May 6 to apply. This was because when Alberta and the four partners signed the joint venture agreement I undertook to them that the regime in force at that time with respect to royalties applied. In other words, what I am saying to him is that the earned depletion allowance, the 30 per cent for development costs, the 100 per cent for exploration costs and all the other aspects of the regime now before the committee, will be applied to the Syncrude operation. The only special arrangement has to do with deductibility of royalties.
The hon. member then asked me if it were possible for the partners to the Syncrude operation to write off whatever incentives they got from Syncrude against other income. My answer is that Syncrude is not an entity in itself. Syncrude itself bears no tax. This is a joint venture. The rules of partnership on a joint venture apply, so that any of the partners to the Syncrude arrangement can write off whatever incentives they have as a result of their participation in this joint venture or partnership against their other income. There is no difference in the taxation law as it affects the joint venture or partnership.
The hon. member for Dauphin asked me how royalties are calculated for the purpose of the B.C. Petroleum Corporation. The fair market value is determined quite easily. We take the gross market value or price of the natural gas or petroleum. We subtract the transmission or other charges of getting it to market. That figure becomes fair market value, which is considered to be the royalty value, against which the amount of the deductible provision is applied.
The hon. member for Sault Ste. Marie asked me five questions. The answers to those questions, in order, are yes, no, no, yes, no.


Some hon. Members:: Hear, hear!


John Napier Turner: I will be a little more explicit, to make sure I understand the questions. The first question was, what arrangement was made with respect to Syncrude? It applies only with respect to royalties. I have just given an answer to the hon. member's colleague, the hon. member for Nanaimo-Cowichan-The Islands. The second question had to do with an exemption from the earned depletion rules. The answer is they are caught by the earned depletion rules. The third question was, what about the 30 per cent depletion costs: would they be exempt from that: would it be 100 per cent? The answer is no, they would be caught by a reduction from 100 per cent to 30 per cent of development costs.
The fourth question was the same as that asked by the hon. member for Nanaimo-Cowichan-The Islands. My answer is, it is a joint venture. Of course, income is calculated on a joint venture basis. The joint venture rules apply. Syncrude in itself is not a taxpayer; it is merely a joint venture or partnership creation. It is the partners, except the province of Alberta, who are taxed. The fifth

question, what is Syncrude's tax rate? My answer is that Syncrude is not a corporation. Syncrude itself is not taxed.
It is the partners who are taxed.


Thomas Clement (Tommy) Douglas: Will the minister permit a question? From time to time the minister has mentioned the dividends which the government will get from Syncrude. I understand Syncrude will not pay dividends. It is not a corporation. The federal government and the governments of Alberta and Ontario are simply partners. They will pay their share of the operating costs. They will get their share of the oil. There will be no dividends paid. The Canadian people will get their return from the oil which the Canadian government receives as its share and which it can market.


John Napier Turner: Yes, Mr. Chairman. The hon. member is correct in the sense that if the Government of Canada is in for 15 per cent subject to a $2 billion figure more or less, to use the words of my colleague the President of the Treasury Board the federal government's obligation is for 15 per cent of the costs and its return on whatever the return is over costs is profit at the rate of 15 per cent. That 15 per cent will be satisfied either in oil or in cash, whichever is the case.


Thomas Clement (Tommy) Douglas: Syncrude is not a corporation, but a joint venture. From whom will they get the cash unless they sell the oil to one of the partners?


John Napier Turner: The oil will, of course, be sold to one of the partners, that is, the Alberta marketing board. Whatever return there is will be divided as the hon. member and I would divide it if we were in business together. Knowing the hon. member's shrewdness, I think we would more likely make a profit rather than endure a loss. I would not insist on an agreement with the hon. member; I would take his word.


Mr. Hogan:: May I ask the minister a question?


John Napier Turner: I am now answering questions put to me earlier, Mr. Chairman. The hon. member for Strathcona said here I am, going around the world trying to cushion the effects of petro-dollars. It was because of the problems in microcosm within our confederation that the policies we introduced in the past 18 months, to share the benefits and burdens of confederation, attempted to cushion within our country the same effects that some of us now, on the international scene, are having to cushion because of the movement of money and transfer of real resources.
The final question was that of the hon. member for Calgary South. I have not answered it to his satisfaction but I have answered it in the only way I can.


Andrew Hogan: I just want to get this clear. Is the minister saying Syncrude will not retain automatic depletion of up to one-third of production profits?


John Napier Turner: What I am saying is that the partners of Syncrude are obligated by the new rules of earned depletion.
Adjournment Motion


Peter Colwell Bawden: Mr. Chairman, the minister spoke about calculating the export tax amounts as non-deductible because proper long-term taxation policies demanded this, and that export taxes over a period of years would in fact be eliminated or minimized. Does the minister take the view that this must be dealt with on a long-term basis, when in fact the agreement with the first ministers was on a short-term basis? It was something like only 15 months. The minister should explain why the government saw fit to deal with this export tax as non-deductible within the 15-month period when in fact it was a long-term taxation measure.


John Napier Turner: The answer is in the bill before the committee reflecting the budget. We are looking for a mature, long-term tax arrangement as far as the federal government is concerned, although any subsequent parliament can do with it what it will. The first ministers' meeting, of course, dealt with a pricing situation which had a limited duration. On the basis of the long-term taxation arrangements now before the committee, they are proved. The Prime Minister and the premiers will deal with the short and long-term pricing and marketing arrangements. I say to the committee, let's have the taxation fabric in place; let's leave the flexibility for the revenue features attaching to price and market.


B. Keith Penner: Order, please. It being five o'clock p.m. it is my duty to rise, report progress and request leave to sit again later this day.
Progress reported.



PROCEEDINGS ON ADJOURNMENT MOTION


The Acting Speaker (Mrs. Morin):: Order, please. It is my duty, pursuant to Standing Order 40, to inform the House that the questions to be raised tonight at the time of adjournment are as follows: the hon. member for Central Nova (Mr. MacKay)-Harbours-Hamilton Harbour Commission-Request for assurance no members of parliament implicated in court proceedings; the hon. member for Calgary North (Mr. Woolliams)-Harbours-Hamilton Harbour Commission-Document served on Minister of Labour to authorize search of office; the hon. member for Pembina (Mr. Elzinga)-Request that responsibility be removed from Minister of Indian Affairs and Northern Development-Alleged conflict of interest.
It being five o'clock, the House will now proceed to the consideration of private members' business as listed on today's order paper, namely, public bills, private bills, notices of motions. Is it agreed that the bills standing before Bill C-222 be allowed to stand?


Some hon. Members:: Agreed.

Prisoners' Voting Rights



PRIVATE MEMBERS' PUBLIC BILLS


Mr. David MacDonald (Egmont) moved: that Bill C-222, to amend the Canada Elections Act (prisoners enfra-chised), be read the second time and referred to the Standing Committee on Privileges and Elections.
He said: Madam Speaker, I am grateful for the opportunity to have a matter that I have had on the order paper for some three years now discussed, if only briefly, by the House since it is a matter that touches very basically upon the whole system of incarceration as it presently exists in this country. Hon. members may be surprised to know that during the past three years a bill has stood on the order paper which would give inmates in both federal and provincial prisons the right to vote. Or, to put it negatively, perhaps members are unaware of the fact that at the present time under the Canada Elections Act those serving time in prisons or penitentiaries are disenfrachised by the act, along with children, foreigners and those who are mentally ill.
I believe the continuing and fundamental denial of political responsibility to those who are presently serving time in municipal, provincial or federal institutions to be not only a bad situation but one that consistently leads to a lack of effective rehabilitation and reincorporation back into productive society of those who, for short or long periods of time, have been removed from society to serve a sentence in one of the three institutions to which I have referred.
This whole business of depriving prisoners of certain civil rights is one that goes very far back into history. I am grateful for a brief recollection of this from a work by a professor of law, Stuart Ryan, which was published by the John Howard Society in March of 1962 under the title "The Laws of Civil and Political Rights on Conviction of a Criminal Offence". In reviewing the situation that existed in earlier times, Professor Ryan comments as follws:
Another consequence of conviction of treason or felony was attainder-
That is a new word in my lexicon.
-which was a kind of "civil death". The attainted person forfeited all his property, real and personal, and all his rights of inheritance, and his wife and descendants were deprived of all right to inherit by or through him. This loss of inheritance was supposed to be the result of "corruption of the blood". The convicted person could not sue or be sued and lost all civil and political rights. These consequences did not follow at common law on conviction of a misdemeanor or summary offence but by various statutes a number of disabilities were imposed on persons convicted of certain misdemeanors.
Professor Ryan then describes some of the medieval processes of torture that were used to extract confessions or indications of guilt on the part of an accused. I believe that conditions in the fifteenth, sixteenth, seventeenth and eighteenth centuries are in no way comparable to the world of today's inmate or to the thinking which in the present age should govern the way in which we should define the prisoner-to-society relationship. Just as there are no, or perhaps I should qualify that and say very few [The Acting Speaker (Mrs. Morin).]
people who would argue that we should banish criminal offenders to Devil's Island, or impose some form of banishment that would remove them from society, both psychologically and physically, so we have gradually adjusted our views as to what is the correct and proper treatment of those who are criminal offenders and inmates of our public institutions.
The interesting thing is that while so much has happened with respect to the civil and legal rights of the inmate in today's institutions, there has not been much opportunity in the past few years to question the fundamental right and responsibility of a person to vote. Professor Ryan goes on to quote in this publication, which is now somewhat dated since it was written about 12 or 13 years ago, the fact that even at that time-and other rights have been added since-a convicted person, whether undergoing imprisonment or not, and even a person under sentence of death, may agree to buy or sell property, give or take a deed, mortgage, lease or other transfer of property, give or receive gifts and make a will. He may also receive rent, interest, dividends or other income from property and will be liable to pay income tax on it, although his enjoyment of such income will obviously be postponed until his discharge, and it must accumulate to his credit in the meantime. He may even take out a patent for an invention and grant licences to work under it. He may assign such income to his wife or dependants or to others who may enjoy it while he is in prison.
We are all aware today that there is an increasing amount of social activity among inmates in our institutions acting on their own behalf to improve the collective good both with respect to their eventual rehabilitation in and release to society. We know of specific instances where inmates today are writing and publishing books, even contributing plots and material for the production of motion pictures. Even more interestingly, we are aware of the clearly defined right in this country of an inmate in an institution to have free access to and correspondence with members of parliament.
All of this means that there has been a substantial change regarding the actual civil liberties of inmates in institutions. But the fundamental right to vote and to select or support a candidate for public office seems not to have been considered seriously up until very recently.


Mr. Alkenbrack:: And it should not be.


David Samuel Horne MacDonald: I hear one of my colleagues say that it should not be. I suppose that is the purpose of this debate, to enable us to discuss some of the aspects of this question. Surely at the present time our laws with respect to the rights of inmates are at least inconsistent and may in some way be one of the reasons for the sorry state of recidivism in this country. The fundamental question this raises is surely to what extent are inmates to be deprived of rights that are normally accorded to every citizen, and to what extent are such rights to be infringed both in terms of the public good, which is a basic responsibility we share in this institution, and in terms of the individual good of the inmate involved?


The fundamental fact is, of course, that we have continued in respect of our laws, in a sense, to think that a person who becomes an inmate, either for a short period of time in a provincial institution, a few weeks, or for a longer period of time in a federal institution, is in effect a non-person. In other words, we are continuing to effect some kind of rejection of that person, more than just removing him from society so he will not commit any further crime or anti-social act. We are also suggesting that we do not regard that person in a sense as a citizen in the same way in which we regard any other adult 18 years and over in our society. I think much of this is based on a continued confusion about the prime purpose of imprisonment.
What is the purpose of imprisonment? There is not the opportunity today, obviously, to debate this question but I think there are a number of unspoken assessments that exist in respect of imprisonment which we have to look at very carefully. Obviously, from the very earliest times one of the fundamental assessments of imprisonment and the loss of rights was that this was a form of retribution. If a person had committed an offence against society and against one's fellows, he should in a sense pay for this by serving a term during which he would lose a considerable number of rights, not the least of which would be his own personal freedom.
More recently, the aspect of retribution has almost entirely been rejected as being one that made no sense whatsoever. But there are other aspects of imprisonment that we still believe are important. One I hear mentioned very often is that of deterrence-that imprisonment and loss of certain rights will serve as a deterrent upon one's fellows to perform similar anti-social or criminal acts. Unfortunately, the fact is that this has not really been proven conclusively by any evidence produced recently. Indeed, most of the research that has looked at this question has come increasingly to the point of view that deterrence, at least from the point of view of imprisonment and punishment, is really not effective.
There are two other aspects I will mention but briefly, to recognize that they are in the conscience of some people in respect of imprisonment. One is of general abhorrence, where criminal acts are considered to heinous or so abnormal in the generally accepted state of social behaviour that we should indicate by terms of imprisonment or punishment that they are simply not socially accepted. That, too, does not have a great body of proof to support it in this day and age.
Finally, there is the feeling-sometimes it is used to support forms of punishment all the way up to and including capital punishment-that there must be some community catharsis, where the community has the right to release its own anti-social behaviour within the individual sentence of an individual. I believe, however, that all of these, either collectively or individually, offer substantially little factual information or support to indicate we are in fact achieving a very desired result. The fact of the matter is that if we look at our present prison system in this country, it is not one that can encourage us. We know, for instance, that it is fantastically expensive, certainly at the federal level. The average cost of maintaining an
Prisoners' Voting Rights
individual in a state of imprisonment federally is more than $12,000 a year.
It was suggested to me somewhat facetiously the other day, although somewhat seriously by one person I talked some of these matters over with, that perhaps the answer to our problem in respect of the great number of people serving time in federal institutions would be to give them all a guaranteed income of $10,000 to $12,000 a year, which would certainly close down a number of institutions and even save a good deal of expense for the federal treasury. That is an idea that perhaps should not be treated too seriously at the present time. One thing we should consider very seriously is the fact that in our present penitentiary situation, in fact in our situation of imprisonment generally in this country, roughly three-quarters of the people who are or will be serving time will at the conclusion of their sentence, either through final release or parole, be faced with the likelihood of being convicted of further criminal behaviour and serve more time in institutions.
We cannot stand by and beat our breasts because our system is working wonderfully well and achieving tremendous results, particularly in light of the fact that there are other experiments and other experiences in other developed countries which would indicate they are having a much higher degree of success in respect of rehabilitation and in lowering the rate of recidivism. This is mentioned in the most recent reports and we have had numerous reports over the past 25 years regarding our prison and parole systems. In the Ouimet report of 1969, in reflecting upon the performance of the prison system it is stated:
-the clear purpose of the prison system was (1) to hold the individual inmate in custody for a period of sentence subject to remission or parole and (2) to prepare the individual for permanent return to the community as a law-abiding and contributing citizen.
I would argue that to achieve these minimal goals as set out by the Ouimet committee in 1969 we do not do so by continuing a situation in which we suggest very clearly, both explicitly and implicitly, that prisoners are non-persons. Because I have had this bill on the order paper for the last three sessions of parliament, there has been a fair bit of public response. As can be imagined, some individuals have written condemning me for the fact that I am going soft on people who are out to do society in. There are others who have offered more thoughtful comment, and I want to quote from two or three letters. Perhaps the most interesting of them comes from the Canada Junior Chamber of Commerce, which cannot be regarded as a wild-eyed radical or left-wing institution in this country. This is a letter from the chairman of the correction programs within the Canada Jaycees.
I should here like to say that the Canada Junior Chamber of Commerce has done more practical work within the penitentiaries of this country than almost any other institution I can think of, having active chapters on both the east and west coasts of this country. This individual tells me that as a result of their national meeting last summer-and he encloses a copy of the resolution put forward by the Springhill Jaycees in July, 1974, regarding the right to vote for inmates-this matter was passed by quite a large majority at the general assembly of the Canada Jaycees so that the Canada Jaycees are now officially on


Prisoners' Voting Rights
record as supporting the right to vote for inmates in penitentiaries.
I have had other expressions of support from individuals within the John Howard Society, the Canadian Corrections Association and also from the St. Leonard's Society, all of which have indicated that this is a matter of concern and study, and on an individual basis they support very much this initiative. I should like to read, however, from a letter from one of the inmates on the west coast who wrote me more than a year ago now. He stated:
I am an inmate at William Head institution, attending the University of Victoria. I hold several positions of trust at the university, yet I am unable to vote. Most of the prisoners at William Head probably would not be too certain how to vote but in all likelihood would vote for the party that enfranchised them.
Perhaps that would be a good argument for my colleagues opposite to take the initiative and make this the law immediately. This individual goes on to state, and I think this is of utmost importance:
I wish you success in your bill. One of the problems prisoners face is that they are rejected as much by society as by their immediate families. Many of the dismal failures leaving our institutions are products of the institution itself. A small thing like this bill can give a man self-confidence; a feeling that someone in society is still interested in him. I hope that other members realize that prisoners would not abuse the right to vote; it would only make us feel more human.
I think that is the real issue we are facing. We are not going to solve all the problems that exist in respect of our penal system in this country or the whole criminal justice system as it now exists. I am well aware of the fact that there are a great many problems and a great many changes that must take place with respect to the whole system of incarceration and the way in which we treat those who perform anti-social or criminal acts. But I share the view expressed recently by Mr. Chief Justice Berger of the United States Supreme Court when he said that the prison system is the most neglected, the most crucial and probably the least understood phase of the administration of justice.
I believe that if we were to recognize, through this rather modest change in the Canada Elections Act, the right and responsibility of inmates to participate in federal elections in this country, we would be taking one step forward to publicize and explain to people the extended changes that must take place if we are to achieve the two essential goals set forth by the Ouimet committee, that is, the ultimate protection of society and the rehabilitation of the inmate directly involved.


Mr. Claude-Andre Lachance (Lafontaine):: Madam Speaker, the bill introduced by the hon. member for Egmont (Mr. MacDonald), although having its place in the current reform process of our penal institutions precisely because it comes within a rehabilitation plan for common criminals, brings me to ask a number of sensitive questions originating from the very foundations of our present system and ultimately ending in a certain notion I have of the reintegration of ex-inmates in our society.
The measure proposed is clearly a liberal one in the ethymological sense of the word and I am personally very pleased to participate in this debate because the proposal

questions certain basic principles concerning the treatment of inmates. Those principles gave rise to strong polemics ever since the beginning of the world, that is the retribution-vs-rehabilitation alternative. Retribution, as the hon. member for Egmont explained earlier, is designed through chastisement only to punish a criminal and keep him from relapsing.
The first question that comes to my mind is why? Why allow individuals who admittedly rejected certain values accepted by society by transgressing ad libitum the provisions of the Criminal Code which is in fact or should be only the reflection of said values? So why allow them to avail themselves of that basic right that is the right to vote? Why allow those individuals to participe in the decision-making and election process designed to delegate to a government the power to regulate that society they often reject but that actually serves them?
Why finally punish on the one hand and offer on the other an opportunity to participate actively in social life? All the elements to the answer are found in the word rehabilitation.
Up to about fifty years ago little case was made of the plight of inmates when they reintegrated the free world following a stay in a penitenciary. The only true philosophy of the present system was to have the offender pay for his mistakes and make him pay so much he would not relapse. It is the retributive notion of sentencing, and all experts in the treatment of delinquency now agree that new avenues have to be explored for the treatment of criminals in view of the current tendency among experts in penal sciences and delinquency to consider the criminal not as a deviate but rather as a victim of a deficient psycho-social conditioning.
I used the word "treatment" because that is what we are dealing with here, in fact, since the criminal is indeed sick from a social point of view. In spite of much good will, rehabilitation in Canada has not given expected results, for various reasons it would take too long to go into; from this admission to wholesale condemnation there is but one step, we must at all cost refrain from taking it. Without going into lengthy comments on the causes of delinquency, I should still like to quote an excerpt from the book written by Richard Cobetz, The Police Role and Juvenile Delinquency. I quote:

No one element can explain delinquent behaviour. Man's nature is so complicated and his total environment so intricate that it is impossible to understand delinquent motivation by examining only one part of its totality.
Delinquent acts must be understood in terms of many variables, each influencing the individual in varying degrees of intensity in a particular situation at a certain time.

This short excerpt indicates clearly that the criminal must be looked upon not as a marked man but simply as someone who was poorly conditioned by his milieu, his environment, which eventually led him to act in reprehensible fashion, either through revolt or cynicism.
Consequently, we see that the concept of rehabilitation is still in its infancy, that we still have a long way to go before the harmful elements which condition man are eliminated. Indeed, our penal institutions, though making


praiseworthy efforts to train the prisoners, have still not explored in depth all avenues open to treat the delinquents.
I feel that the Canadian public is willing, to a certain extent, perhaps not to do away with the element of retribution in the sentence, but at least to graft on it the positive aspects of rehabilitation and all it entails: parole, day parole, probation and the hiring of former inmates. Here, our responsibility, that of the federal government, is considerable and we quickly understood our responsibilities in that field. Rehabilitation also involves community impacts on prison life, vocational training of inmates through easier visits and within the same concept of nonrejection by the community of prison people, and also voting rights for inmates.
The second question arises by inference. How? Prisoner voting must remain within the other qualification criteria set forth in the Canada Elections Act. The main objection to such a liberalization move is the residence concept. Where is an inmate's residence? His last permanent residence or the prison itself? In either case impossible problems arise. First, most prisoners have no permanent home, and second, after they have been in prison for four or five years, they no longer have community links with their original abode. And often they live away from their family. On the other hand, if they elect domicile at the penitentiary, how do multiple transfers from one institution to another fit in, and in what way can we minimize the enormous impact of massive prison voting in one constituency?
More than a simple question of procedure is implied here. It is very well to give prisoners an opportunity to have an interest in public life and actively state their preference for such or such government but this should not entail an abrupt change in our electoral habits. And then, what would we do in the case of provincial institutions? Because the administration of justice is to a large extent on provincial responsibility. There should therefore be a consensus among all levels of government. There are indeed so many obstacles in the way of granting prisoners voting rights, not on principles because I am in complete agreement there with the hon. member for Egmont (Mr. MacDonald), but as far as practical procedures are concerned, I suggest Bill C-222 in its present formulation cannot be accepted at this point.
Let me indicate I certainly anticipate the day when the Solicitor General (Mr. Allmand) will rise to announce an overall reform policy for our Canadian penitential system, as the Governor of California did recently, in order that permanent status be given to the rehabilitation principle and that at long last the effective means be taken to translate rehabilitation into action for those who have an earnest desire for it. I see a double-headed penitentiary system including on one hand, standard penitentiaries for hardened criminals who emphatically refuse any rehabilitation or treatment for effective individual revalorization and, on the other hand, a new rehabilitation system based on reconditioning for delinquents who would freely accept a complex and sophisticated program for the effective and generally final reintegration in the community. Those delinquents would be willing to follow very strict rules for a set period during which they could fulfil their vocational
Prisoners' Voting Rights
or educational yearnings and they would be treated accordingly, because they would then be given all necessary mental or physical tools for the implementation of those programs.
Our present system indeed has a serious flaw, because it is very difficult to motivate the inmates of our penitentiaries. This condition is the direct consequence of daily contacts among unworthy individuals who are interested only in getting out to relapse into crime and it is moreover useless to try to regenerate offenders who have realized their mistakes and are willing to mend their ways. Such promiscuity generates an unhealthy atmosphere which acts as a negative counterpart to the beneficial principle of rehabilitation.
Here now is the last question to be answered: Who should be granted the right to vote? With a dual type of penitentiary system in mind, I would suggest it makes no sense to allow inmates who are totally maladjusted to vote, for all they care anyway. On the other hand, with the prospect of a possible rehabilitation still in mind, that privilege should be granted inmates who enroll in the training program, and I believe the above described impact on the electoral process and the risk associated with it would then become far less significant and would also be far more welcomed by all parties.
As a conclusion, common law convicts should be granted voting rights in so far as that innovation would be part of a global reform of our penitentiary system, a reform which should be undertaken and carried out without delay.
I would however make a distinction as to the nature of the crime. To this day offenders have been deprived of their voting rights owing only to their personality since it was considered that their conviction made it obvious that they were not to enjoy the same civil rights as ordinary citizens.
With my system, the granting of voting rights would be geared to a certain extent not to the personality as such of the offender, but to his desire to resume the position he might be led to keep up after completion of his training period. And I would add a supplementary restriction based this time on the character of the offence. I consider indeed that with respect to any offence against the state, such as sedition, spying, bribery attempts on public officers, etc., convicts should be deprived of their voting and other related rights throughout their terms. For indeed no one who deliberately acted in such a way as to undermine the foundations of our democracy should be granted such a basic privilege.


Mr. Stuart Leggatt (New Westminster):: Madam Speaker, I would like to congratulate the hon. member for Egmont (Mr. MacDonald) for raising this subject at a time when it is not particularly popular to do so. I think it is to the hon. member's great credit that he raises the subject of penal institutions, and particularly the conditions of convicts within them, at a time when there is very clearly a backlash in the country against prison laxity. I must say that it does the hon. member and the House great credit that we are now debating how we treat prisoners.


Prisoners' Voting Rights
The question of granting the franchise to inmates of a federal prison has within it some inherent technical problems, which the hon. member for Lafontaine (Mr. Lachance) has raised, but which I think are not insurmountable. If prison inmates voted in the riding where a prison is situated that would mean that all of us who come from ridings containing prisons would have to spend much time there, trying to make sure our vote was solid, rather than doing other duties and this might be a problem. The absentee ballot, however, if it were incorporated into the federal elections act, would solve that problem.
The real questions we have to ask ourselves are whether we should deprive those who act in an anti social way and violate the laws of this country of the right to vote; the reason we deprive them of the right to vote; and whether giving them the right to vote will provide them with any assistance in their rehabilitation, or will give protection to society in any way. I would argue that by providing inmates of federal institutions with the right to vote we would start them on the very slow road back to a feeling of responsibility for society.
Most of those now in federal institutions have probably never bothered to vote. Very few of them cared enough about society before they were charged and convicted, and usually they have a long list of convictions. Very few of them ever bothered to exercise their ballot because they really did not care. One of the reasons they are in prison is that they do not care. Our duty, in terms of protecting society and rehabilitating these offenders, is to give them something to care about.
It is not mandatory that they vote, and they may still have that same attitude and decide not to vote. But there is no purpose, for the protection of society or to punish the prisoner, in denying a person the option of voting, whether or not he wishes to vote. To encourage an inmate to take some interest in the political process so that by the time he is released he has a chance to continue that interest, it seems to me does a great deal to improve conditions within prison to some extent, and increases the amount of liaison the prisoner has with society, which is one of the key questions in this whole problem of what to do with prisoners.
I am so tired of listening to people on open line shows talk about how we coddle prisoners in our institutions. I do not think they have ever gone and seen maximum security institutions, the segregated cells in the B.C. pen, or in Millhaven or St. Vincent de Paul. Those are places of horror of which this country should be ashamed.


Some hon. Members:: Hear, hear!


Stuart Malcolm Leggatt: We do not coddle prisoners in this country, but we do a number of things which I think are wrong. One of the things we do with prisoners in maximum security prisons is to bring social workers in to tell them that it is not their fault that they are there; that it is society which put them there; and that all the prisoner has to do is blame his problems on society and he will be fine. I think that contributes nothing whatsoever to the rehabilitation of those who have offended. The main reasons they are there maybe societal reasons. Perhaps they got a rotten break from society. It is our duty to improve

those conditions which send people there, but once they are there it is no good telling them it is not their fault.
I believe that a person incarcerated, particularly in a maximum security institution, must come to the realization that he has a responsibility for his own actions. It is pointless for those involved in progressive penology to avoid the consequences of that particular issue, and it really is the issue of whether we ask those in jail to feel guilty for their sins.
I suppose it is almost a religious thing. The hon. member for Egmont might be interested in the religious significance. In any event surely it is time we ask those who commit offences against society to feel guilt and a sense of personal responsibility for what they have done. In that process surely it is incumbent on a civilized society to treat those people in a civilized way and to put them into institutions, if they have to be under security, under conditions which are reasonable and at least modestly comfortable, instead of the kind of dark ages institutions we continue to have across this country. These institutions contribute nothing whatsoever to rehabilitation, and in fact contribute to the terrible recidivism rate we have because if inmates were angry with society before they arrived there, by the time they are released, they are spitting nails.
I had the opportunity, along with Your Honour and several others in the House, to tour some of the maximum security institutions in this country a year or so ago. Mr. Francis Fox was with us and he said something which I thought was very astute-"We are bound to come to the conclusion that there is a war going on here, three groups at war within a single institution-convicts, guards and administration." It seems to me that communication between these groups is an absolute prerequisite. We should at least see that there is communication and a general acceptance of the approach we take.
The approach of the guards, in general, is punitive; they believe people are there to be controlled and to some extent punished. Incidentally, that view makes their job a little easier.
The position taken by the administration is often a very progressive one, but they lack the mechanism by means of which they could work out their ideas. I might point out, in this connection, that we are hiring guards at salaries which should make everyone in this House ashamed. We are hiring people to go into situations often of real danger at wages one would not offer to a hamburger stand attendant. No wonder some of these guards feel we are not interested in their situation or in their problems. They see themselves regarded merely as turnkeys, and that is what they become. Until we take a realistic look at salary levels, until those levels are substantially increased-and I am thinking in the range of 40 per cent or 50 per cent-we shall make no progress in the present system.
The bill before us calls for an important step in incul-culating a sense of responsibility. It is valuable in terms of rehabilitation. Recognition of a sense of responsibility is an important step and voting is part of this process. In British Columbia, when dealing with juvenile offenders the intention now, is to divert the offender from the prison


system entirely while making him responsible for compensating the victim-he comes face to face with the person in society he has damaged, and when he does so he begins to feel a sence of responsibility. In my view this is the beginning of the rehabilitation process. I hope such a program can be carried out in areas of serious crime among adult offenders.
Finally, might I express the view that it is not right to continue to imprison people under the Criminal Code for failing to pay fines. A person with money, a person with a position, has no trouble; another fellow, a man who does not have a job, goes to jail. There are many people presently serving sentences who did not have enough to pay a fine. Most of them are native Indians whom it was completely unnecessary to send to jail. I think it is time we amended the code to give those who cannot pay fines under the present system an alternative opportunity to compensate their victims or repay some kind of debt to society.
Again I should like to congratulate the hon. member for Egmont for introducing in this House a subject which, though unpopular, is very important to the health of our society. I hope that the bill will not be talked out; it could be amended in committee with respect to the technical objections raised by the hon. member for Lafontaine.


Mrs. Ursula Appolloni (York South):: Madam Speaker, in discussing any matters dealing with the inmates of penitentiaries we must be careful to avoid any atavistic impulse to punish and, indeed, to overpunish offenders. In fact, in what I like to think of as a more enlightened society it is imperative to steer a course well clear of a vindictive and punitive approach to prison reform. Our main emphasis must be rehabilitation and reformation. It is also important that while aiming at these goals we do not allow ourselves to become permissive to the point of exaggeration.
We must bear in mind that these people have not been convicted because they respected the laws of this country but because they defied them. In this context I would quote the Canadian Bill of Rights which affirms that men and institutions remain free "only when freedom is founded upon the respect for moral and spiritual values and the rule of law." Our society, through the concept of parole, now gives prisoners the opportunity to prove their new respect for its values and the rule of law. Indeed, I believe those on parole are given the right to vote. This is an enlightened approach to penology and I welcome it.
The hon. member for Egmont (Mr. MacDonald) raises another point with which I find myself in considerable sympathy. He refers to the degree of crime and the degree of punishment. It might well be that we ought to review the wording of that clause. I do not think, for example, that I would readily grant the privilege of voting-and it is a privilege-to anyone who committed treason, that is to say an act by which the guilty party sought to destroy our country. Then again it would seem pointless to give the vote to anyone serving a life sentence, for the reason that he is permanently removed from society and is therefore unable to improve it. I would be inclined, also, to include drug pushers in this category on the ground that, in their greed for money, they destroyed minds and in so doing the very fabric of society.
Prisoners' Voting Rights
There are those, however, who are guilty of lesser crimes not so much by deliberate choice but by force of circumstances. I would use every means in our power to help these people in their rehabilitation, although I am not convinced that granting them the right to vote while still in prison would in itself facilitate the rehabilitation process.
My main objection to the Bill is, however, more ethical than legal. Clause 20 of the Canada Elections Act states that anyone who is qualified as an elector may be a candidate-I must say that if one of the people we are considering were elected I could foresee some interim difficulty in his taking his seat.


Some hon. Members:: Oh, oh!


Ursula Appolloni: We would also have to look closely at the question of the compilation of the voters' list which is, of course, a public document. I feel this could cause real hardship and embarrassment not only for the inmate but for his family, especially where publicity surrounding the initial trial has long since been forgotten.
I am also concerned as to how we would determine the residence of an inmate for voting purposes. In the absence of special procedures for determining the ordinary place of residence the results in some constituencies might well depend upon the inmate vote, and I do not believe this would be desirable.
I feel I would be remiss if I did not draw attention to another and perhaps more pressing problem. Others among us cannot exercise the right to vote because of the sheer complexity of our system of proxy voting. I refer to the elderly and to the severely disabled. I stress that these are not people who have deliberately chosen to live on the fringe of society. Indeed, all too often they have paid an inhuman price for their very contribution to our society. Yet, as I said, the very complexity of our proxy system all too often denies them their rights and always denies them their right to a secret ballot. For the sake of these people I urge the adoption of a mail ballot system.
In conclusion, although I agree in principle with the spirit of penal reform as expressed in this Bill, I do not agree that this Bill is suitable legislation.


Almonte Douglas Alkenbrack: Madam Speaker, I had not intended speaking in this debate but feel compelled to make a few remarks in opposing this bill. The bill before the House seeks to amend the Canada Elections Act, which is probably one of the oldest acts on our statute books. It seeks to enfranchise prisoners. I point out that a prisoner is disenfranchised because he cannot fulfil certain functions. For example, he cannot be an elector, since an elector can hold office. How can a person serving time in prison hold office and perform the duties of office? As the hon. member for Lafontaine (Mr. Lachance) asked, what would be the address of a prisoner holding office, assuming that is possible? If this bill were to pass, certain prisons could become constituencies and Madam Speaker might be called on to recognize "the hon. member for Millhaven". Millhaven happens to be in my constituency.


Prisoners' Voting Rights
The hon. member for New Westminster (Mr. Leggatt) said prisons are places of horror. That is not altogether correct. At certain times and under certain conditions, for instance if there is trouble in penal institutions, prisons may become places of horror. But Millhaven, which is certainly one of our most modern prisons built with the most up-to-date concepts in mind, is not normally a place of horror. A prison like that can be a place of harmony and bring profit to those serving time in it, as well as to guards and members of the administration.
The hon. member for Lafontaine also made the point that prisoners are not non-persons. Nobody says they are. On the other hand most of us think that convicted prisoners must lose some of their rights, such as the right to personal liberty, to family association, and the right to the franchise, in accordance with the provisions of the Canada Elections Act.


Mr. Knowles (Winnipeg North Centre):: Madam Speaker, will the hon. member permit a question?


Almonte Douglas Alkenbrack: There are only a few more minutes left, Madam Speaker, but very well, I will accept the hon. member's question.


Stanley Howard Knowles: Madam Speaker, in view or comments made a moment ago and again recently by the hon. member, may I ask him if he is aware that in Manitoba, in the first provincial election after the 1919 strike, certain persons-I believe there were three- were elected while in prison? They walked out of prison and into the legislature. One of them later became mayor of the city of Winnipeg.


Almonte Douglas Alkenbrack: That was certainly to the later credit of those persons and to him who became mayor. Of course the hon. member comes from Winnipeg. There must be some reason behind the fact that certain people were elected in prison, and then walked out of prison and took their seats in whatever body they had been elected as members. I imagine that the present provisions of the Canada Elections Act did not apply. I do not know why this happened. The provisions of the act could not have applied, or what happened would not have been possible.
The Canada Elections Act is on our statute books, and has remained there for a number of years, obviously for a good reason. I oppose the enfranchising of prisoners. I cannot see any advantage at this time in enfranchising prisoners; neither can I see any advantage in paying them the minimum wage which this Government proposes to do soon. We are told this is only an experiment. I think it is an experiment which is being conducted at the expense of the citizens of Canada who have been able to stay out of prison and retain their freedom. May I call it six o'clock.


The Acting Speaker (Mrs. Morin):: As the hour appointed for private members' business has expired, does the House agree that we should revert to committee of the whole, and then call it six o'clock?


Some hon. Members:: Agreed.



GOVERNMENT ORDERS


[Stage Direction]
The House resumed consideration in committee of Bill C-49, to amend the statute law relating to income tax-Mr. Turner (Ottawa-Carleton)-Mrs. Morin in the chair.
B. Keith Penner: As it is six o'clock, I do now leave the chair until eight o'clock.
At six o'clock the House took recess.


[Stage Direction]
AFTER RECESS

The House resumed at 8 p.m.
The Chairman:: When the committee rose, clause 4, with an amendment proposed by the hon. member for Qu'Ap-pelle-Moose Mountain, were under consideration.


Jack Sydney George (Bud) Cullen: Mr. Chairman, I did not know word had gotten around that I would be speaking on this particular amendment. The interest is somewhat surprising. I know that on other occasions I have looked at the other side and have seen only the member speaking, the leader and few others.
I want to respond to a comment made this afternoon by the hon. member for Edmonton-Strathcona. I think he missed the point when he alleged that the Petrosar project would somehow be detrimental to the development of the petrochemical industry in Alberta.


Harvie Andre: Mr. Chairman, I rise on a point of order. I do not think the Petrosar plant has anything to do with the amendment on which we are now ready to vote.


Jack Sydney George (Bud) Cullen: Mr. Chairman, I see the hon. member for Calgary Centre did not pay as close attention to the debate this afternoon as I did. I am somewhat surprised, because it was one of his members who raised the Petrosar project and the development of the petrochemical industry. I thought he was in error, and that is why I intend to respond to his comments.


Some hon. Members:: Oh, oh!


Gérald Laniel: Order, please. The Chair is having difficulty hearing the parliamentary secretary.


Jack Sydney George (Bud) Cullen: I thank you for your courtesy, Mr. Chairman, which you have seen fit to extend to me. Unhappily, it is not coming from-


Douglas Roche: Mr. Chairman, I rise on a point of order. If the parliamentary secretary intends to kill 15 or 20 minutes waiting for his colleagues to return from dinner, would he mind not responding to just one sentence from my speech today and answer some of the real questions raised this afternoon? Would he answer my question as to how the Minister of Finance can reconcile his position as chairman of the IMF committee, trying to cushion the effect of petro dollars, with his responsibilities in pushing


through this bill which will do so much damage to the development of regional an economic expansion in Canada?


Gérald Laniel: Order, please. The hon. member will agree that the point he is raising is far from being a point of order. If he wishes to argue some of the implications of the legislation, he will be invited to take the floor after the parliamentary secretary has completed his remarks.


Jack Sydney George (Bud) Cullen: I thank the hon. member for Edmonton-Strathcona for his intervention. I did intend to deal with other aspects of his address. He made specific reference to Petrosar. I thought he did it in a serious vein, without filibustering and wanted some comment from this side on this subject. It seemed that through his comments he was doing precisely what he said he did not want the government to do, namely, to act in some form of divisive way.
The hon. member's argument could have had some merit back in 1967 or 1968 when the petrochemical industry decided there was not room for a world-scale plant in Canada and Canada could not support it. As a result of the problem that was faced by the petrochemical industry, I am happy to say that the then minister of industry, trade and commerce, the Hon. Jean-Luc Pepin, established a committee to look into the problems of the petrochemical industry as they affected both western Canada and eastern Canada. Coming out of that was an excellent report which, as the president of Petrosar said only recently, indicated there is now room, and by the end of the 1980's will be room for three world-scale plants in Canada, including the one in Sarnia, Petrosar. The Dow-Dome operation, or something comparable to it, should be built in Alberta. There will be spin-off industries from that.
I do not think there is any necessity to fight among the petrochemical companies or the provinces. I think adequate opportunity will be given the petrochemical industry to develop. For hon. members to say we should not have Petrosar because it will not operate to the benefit of the petrochemical industry in Alberta is just not in accordance with the facts. The hon. member had better update his history of the petrochemical industry and read what is said by the people involved in that particular enterprise.
The other question raised by the hon. member had to do with how the Minister of Finance could dovetail his approach in Canada with the one he has had to adopt at the International Monetary Fund. The minister handled that question this afternoon. I think the hon. member was in his seat when the Minister of Finance responded, and I think responded appropriately. The problem is that the OPEC countries have these many billions of dollars which in some way have to be recycled. We are facing a situation where a province has many millions of dollars in its coffers, appropriately enough, and we have to decide how to handle them. It is the responsibility of the federal government to see the money is used not only to the advantage of Alberta but also that it is not used to the disadvantage of other provinces or to the disadvantage of the Canadian economy. Surely that is the minister's role as Minister of Finance.
Income Tax Some hon. Members: Hear, hear!


Some hon. Members:: Question.


Jack Sydney George (Bud) Cullen: I thought for the moment, Mr. Chairman, that another cabinet minister had walked in. I knew they were very popular, but I did not realize how popular. It must have been a good party over the supper hour.
The hon. member for Edmonton-Strathcona misses the point if he feels that the stance taken by the Minister of Finance in Canada and that taken by him at the International Monetary Fund are not consistent. In point of fact we have the advantage of a Minister of Finance who operates, and is asked to operate, as the chairman of an interim committee in the field of international economics. Not only does he chair this committee but he chairs what is probably one of the most important and strongest committees in the international economic field. This is not only to his credit, but in a vicarious way all Canadians can take pleasure from the fact that a Canadian minister of finance was asked to chair this particular interim committee. I have enjoyed the privilege-


Gerald William Baldwin: On a point of order, Mr. Chairman, I think we have had a very useful, instructive and entertaining debate on this issue, or we did until about 15 minutes ago. We are now ready to have this matter tested in this committee.


Some hon. Members:: No.


Harvie Andre: You people are holding up the committee.


Mr. Macdonald (Rosedale):: What arrogance.


Gérald Laniel: Order, please. The Chair also has a point of privilege; it would like to hear the hon. member for Peace River.


Gerald William Baldwin: I want to say to the Minister of Finance, and to those other hon. gentlemen who are intervening in this debate, that we are prepared to bring this matter to a vote. However, if they are determined to continue this debate, it may continue for some time. I want to say the decision rests with them.


Donald Stovel Macdonald: More threats.


Mr. Blais:: Mr. Chairman, I rise on the same point of order. Now that he is back fit and fresh for work, the hon. member for Peace River wants to pose as an authority on the time we spent considering this bill. I would like to indicate to him that, during his absence, when there was no leader to conduct the debate in the House, we were giving Bill C-49 in-depth consideration-


Gérald Laniel: I understand very well, but still- [English]
Two wrongs do not make a right. I think the hon. member's point of privilege is no more valid than the one raised by the hon. member for Peace River.


Jack Sydney George (Bud) Cullen: Mr. Chairman, I am somewhat surprised at my hon. friend from Peace River. He has not enjoyed the advantage I have had of sitting here and listening to all


Income Tax
the speeches from the other side of the House on almost every clause. I was moved on more than one occasion to interject a comment but I bit on my tongue. I listened very carefully to some of the suggestions made on the other side, some of which reflected in appropriate amendments.


Mr. Baker (Grenville-Carleton):: Let us get on with the vote.


Jack Sydney George (Bud) Cullen: Having extended that courtesy, as I have over this long period of time, I think one should be entitled to make a few comments on some of the representations that have been made.


Some hon. Members:: Hear, hear!


Allan Frederick Lawrence: You have been up for 20 minutes now and you have not said anything yet.


Jack Sydney George (Bud) Cullen: Once again, Mr. Chairman, the hon. member for Northumberland-Durham, who is half asleep, says that I have not said anything. I thought we would hear from the hon. member again. In view of the pressure of the public press I thought we would have him bounding to his feet asking more questions on allegations that are unfounded.
I think that the department, through the Minister of Finance, has endeavoured to listen to each and every address. The minister responded this afternoon to many of the questions raised, not only by those who are making such noise now but by the quiet members of the New Democratic Party who asked questions and, I think, were sincerely looking for answers. This afternoon the hon. member for Sault Ste. Marie was so stunned at the excellence of the responses that he nodded his head in agreement with the minister, indicating that he was correct in what he said.


Thomas Clement (Tommy) Douglas: That is what astonished him.


Jack Sydney George (Bud) Cullen: The problem is that hon. members are not prepared to listen. We sat here for two weeks, and when the minister was responding that hon. member was sitting in his seat. It will come as a surprise to no one, Mr. Chairman, that I intend to vote against the amendment proposed by the hon. member for Qu'Appelle-Moose Mountain. Surely what the industry is looking for is the passage of this bill so it can live and work with it. There are many advantages built into the bill, something which even the industry is prepared to concede, even though members opposite are not.
We have moved a series of amendments, many of which have been technical, but I suggest with respect that if this amendment moved by the hon. member for Qu'Appelle-Moose Mountain is allowed to carry the industry will again wonder where it stands. If we pass this bill and do not proclaim these clauses until some date after April 15, what will be the situation? If we proclaim the clauses after April 15 does the effect go back to the May 6 budget or the November 18 budget, or just what will be the situation? How are these energy companies and producers supposed to operate in this state of limbo, wondering

where they stand, how they should plan, what the provinces will do, and what the federal government will do? Surely the industry deserves better than being left in the kind of limbo suggested by the mover of this amendment.


Jean-Jacques Blais: Mr. Chairman, I rise on a point of order.


John Patrick (Pat) Nowlan: You have got your trip, what are you working on now?


Jean-Jacques Blais: Mr. Chairman, I would hope that your ruling of sometime ago, which somewhat shortened my intervention on the point of order being discussed by the hon. member for Peace River, was not the result of some preference to a member with the seniority of that hon. member for Peace River. I do not intend to allege that, but I wanted to point out that I thought that the point of order was not well taken. In my riding the people are beginning to feel that the delay tactics we have watched during the debate on this bill are now turning against those who are using them, and they are now trying to rush the bill through the House.


Gerald William Baldwin: Mr. Chairman, now that the government whips have awakened all the halt, the lame, the blind and the others on that side who have spoken to hold up these proceedings long enough to get a majority, let us get on with the vote and get done with this matter.


Some hon. Members:: Hear, hear!


Jack Sydney George (Bud) Cullen: Mr. Chairman, I should have recognized that something was up when I saw that unholy alliance being formed when the hon. member for Calgary South was talking with the hon. member for Nanaimo-Cowi-chan-The Islands this afternoon.


Some hon. Members:: Oh, oh!


Mr. Guay (St. Boniface):: I rise on a point of order, Mr. Chairman.


Gérald Laniel: Before recognizing the parliamentary secretary I must advise the Parliamentary Secretary to the Minister of Finance who had the floor, of the fact that his time has just expired.


Joseph-Phillippe Guay: Mr. Chairman, in view of the comments-


Mr. Fairweather:: Speak up.


Joseph-Phillippe Guay: Mr. Chairman, I rise on a point of order.


Gérald Laniel: The hon. member for St. Boniface (Mr. Guay) on a point of order.


Joseph-Phillippe Guay: In view of the comment-


An hon. Member:: Speak French!


Joseph-Phillippe Guay: Mr. Speaker, in view of the comments made by the hon. member for Peace River (Mr. Baldwin) referring to our side-he was present in the House a few moments ago-I would like to bring to the


attention of the House the fact for almost two months he has not attended the sittings of the House.


Robert Lorne Stanfield: Mr. Chairman, may I say quite sincerely that I do not blame the responsible parliamentary secretary for holding the floor until there were enough people here to carry the vote, but I would ask my hon. friends in the House to remember that this, after all, is the parliament of Canada.


Some hon. Members:: Oh, oh!


An hon. Member:: Isn't that what we were last week?


Some hon. Members:: Shame, shame!


An hon. Member:: Don't be sanctimonious.


Walter David Baker: You're a pinhead, Macdonald.


Robert Lorne Stanfield: Mr. Chairman, with great respect, I am not trying to be sanctimonious. As I said, I do not criticize the parliamentary secretary at all. In fact I should have thought there was something wrong with him had he not held the floor. I just think that things have gone far enough and we should remember where we are.


Some hon. Members:: Hear, hear!


Gérald Laniel: Order, please. I think the point made by the hon. leader of the opposition is well taken. Hon. members have as much responsibility in this House and to this country as does the Chair, and I suggest it is not the function of hon. members to ask the Chair to rule on abuses and the extravagance of certain speeches. I think it is the responsibility of every member of the House of Commons to keep up our standards. This is the responsibility of everyone here, whether he sits in the chair or on one side or the other of this chamber.


Mr. McRae:: Mr. Chairman, I have been trying now for at least a month or a month and a half to speak on this bill, and I welcome the opportunity tonight to say a few words about resource taxation and the relationship between resources in this country and the federal and provincial governments.
There has been a great deal of small bickering going on in the last six or eight weeks that this bill has been kicking around, but I think a number of things have been missed. It is true that, under the British North America Act, resources for the most part are the preserve of the provinces. However, I think we must begin to think of ourselves in a very different way than we have in the past.
We are told that in the next 10 years capital investment intentions amount to about $107 billion. In today's terms that amounts to the construction of 35 St. Lawrence Seaways over the same period of time. That is why I suggest we cannot afford the luxury in this country of all kinds of separate jurisdictions divvying up resource income. This $107 billion will go into such projects as the James Bay project which will cost $15 billion, the Mackenzie Valley gas pipe line, which is supposed to cost $10 billion, and possibly an oil line which will cost $10 billion or $15
Income Tax
billion. This is what we are really talking about when we have before us bills concerning royalties or taxes in the long term in this area.
I believe firmly that the federal government and the provinces must come together to deal with this large amount of money, which may by now total $120 billion or more. I think that this is what hon. members should talk about in this debate on royalties, the kinds of things that happen when this sort of money is being spent, the kinds of things that are happening, for instance, in the province of Quebec today when simultaneous activities are talking place such as the massive effort in the James Bay area and the preparation for the Olympics in Montreal. The impact of such activities on the construction industry and on capital funds is tremendous.
One must consider that the $107 billion will amount to a doubling of energy capital expenditures over the 10 year period. In other words, 3 per cent will be doubled to 6 per cent of the gross national expenditure. This represents something like 15 per cent of the total capital dollars, and 15 per cent will be doubled to 30 per cent in the course of years in an economy that is fairly tight. This will inevitably create serious problems, and it is to this we should be addressing ourselves.
In my opinion, and I think in the opinion of many people, this $107 billion to $115 billion to $120 billion is a ridiculous sum. Somewhere along the line governments in this country, the federal government representing all the people of Canada, and the provincial governments, must try to reach a consensus. They must sit down and say, "No, we cannot take that route". At some point along the line some of these projects must be cut off. When we are talking about resources, this will be the real crunch.
Let us take a look at some of these projects. Some of them are very important. Syncrude for instance, is absolutely vital. We must have a list of priorities, and I would put Syncrude at the top of the list because we must continue to develop oil where it is found. Some of the other projects, such as the nuclear enrichment plant, I would put low on the list because it is of little merit to Canadians. Another project, such as the diversion of the Churchill River into the South Indian lake, I would put very low on the list, especially if the mighty Churchill river is to be dried up in the process.


Some hon. Members:: What are you saying?


Gérald Laniel: Is the hon. member for Churchill rising on a point of order?


Mr. Smith (Churchill):: Yes, Mr. Chairman. I want to clarify one point. It is not the diversion of the South Indian river into the Churchill, it is the diversion of the Churchill river.


Paul Edmund McRae: I was talking about the mighty Churchill river being diverted into the South Indian lake and down into lake Manitoba.


Some hon. Members:: No, no, you are still wrong.


Income Tax


Paul Edmund McRae: The mighty Churchill river is being diverted into the Nelson river.


Some hon. Members:: Oh, oh!


Paul Edmund McRae: Some projects must be reconsidered on the basis of our need. Do we in effect need that diversion? What will that electricity be generated for? Will it be generated for domestic use or for sale to the United States?


Mr. Epp:: You don't know what you are talking about.


Gérald Laniel: Order, please. We are experiencing some difficulty in trying to keep order. The hon. member raised a point of order which the Chair did not hear because of problems with communication. However, I think that if hon. members would address themselves to the Chair instead of directly to one another, it would simplify matters and might bring more progress to the debate.


Some hon. Members:: Hear, hear!


Paul Edmund McRae: Mr. Chairman, I would like to suggest one or two things that we must do in order to cut this $107 billion down to a manageable amount. One of my suggestions has to do with the conservation of resources, a matter which has been discussed in the House for the last few weeks. Another has to do with the cutting back of exports. I am not just talking about the export of oil and gas, because this has been dealt with already. I am talking about the export of electricity not only in the pure form but in semi-processed form as in enriched uranium. Somewhere along the line we must take a long look at how we are going to cut this $107 billion.


Some hon. Members:: Time is up.


Paul Edmund McRae: I could go on for a long time, but first I would like to ask the minister if he would comment on the long term effects of these royalties and on whether or not he forsees a situation where the federal government will have to cut back on some of the projects. I would like him to comment also about working with the provinces and sharing the results of these royalties with all Canadians.


Some hon. Members:: Question.


Cecil Morris Smith: As I listened to the hon. member for Fort William I realized that he knows nothing of this subject which he spoke about, namely, the diversion of water in the Churchill constituency. If he did his homework he would know that the federal government is involved in this project, as is the provincial government. I think he should do his homework before he starts running off at the mouth on things that he knows nothing about.


Some hon. Members:: Hear, hear!


Some hon. Members:: Question.


Paul Edmund McRae: I want to say that I may have been mistaken, but I must say that for two or three years I have been greatly concerned about the Churchill river, and also about the fact that the Indian people in that area have not been given any guarantees or recompense for the flooding.

I am also concerned that a mighty river like the Churchill will be dried up.


Gérald Laniel: Order, please. Although part of the question might have been out of order, it is certain that the answer is also.


Some hon. Members:: Question.


Jean-Jacques Blais: Mr. Chairman, I want to deal directly with the amendment before the House-


An hon. Member:: Take your time.


Jean-Jacques Blais: -because, to my mind, the whole debate, which has now lasted for over 12 days, hinges on this amendment to Bill C-49. Indeed, the amendment, moved by the hon. member for Qu'Appelle-Moose Mountain (Mr. Hamilton) is a manifestation of the wishes of the Progressive Conservative members from Alberta.
Mr. Chairman, you will remember that, last year, in 1974, the Minister of Energy, Mines and Resources (Mr. Macdonald) introduced in the House a bill on oil administration intended to legislate, and set up the system agreed upon by all the provinces and the federal government. At that time, the hon. members from Alberta wanted to oppose the adoption of that bill because they feared somewhat the provisions of the Turner budget announced for the month of May.
Once that budget was introduced by the government and the Minister of Finance (Mr. Turner), they opposed the bill on oil administration and the budget because, under the circumstances, neither the bill nor the budget were acceptable to the hon. members from Alberta because those nice gentlemen considered that the federal government was intervening needlessly in a field of provincial jurisdiction. Which was absolutely untrue. And why do I say that it is untrue, Mr. Chairman? Simply because, even though the Progressive Conservatives and the New Democrats have tried again and again to bring the people to their ideas, they failed completely. They have had all the chance in the world, Mr. Chairman, because since May 1974, we have been discussing only these blasted provisions in the House. Since 1974, we have been making legislation only in the interest of the province of Alberta. In spite of all the respect I have for that province and its people, I do not think the House ought to think only of them.
Mr. Chairman, I am sure that if you gave us another fortnight, we would still be discussing this same amendment.

I appreciated the comments of the Chair a while back, that each and every one of us has an obligation to this House. I have been strongly advocating Standing Order 75C to limit the debate in this House-


Some hon. Members:: Hear, hear!


Some hon. Members:: Oh, oh!


Jean-Jacques Blais: Both this piece of legislation, Bill C-49, and Bill C-32, which has been long delayed, are essential for the distribution of wealth in this country and the proper administration-


Some hon. Members:: Hear, hear!


Some hon. Members:: Oh, oh!


Jean-Jacques Blais: I can understand the silence on the part of hon. members from eastern Canada. I can understand that because it is detrimental to their own interests, to refuse to pass Bill C-32 and the provisions of this particular legislation. There is no question that it is because the revenue for transfer payments which are made to the eastern provinces and to other parts of Canada comes in part from the natural resources of this country.
Let no one be fooled about the effect of the resources and the amounts derived from them. The province of Ontario has nearly doubled its tax revenue in the past year as a result of resource taxation and royalties. The province of Alberta has salted away over $2 billion this year as a result of royalties.


Some hon. Members:: Oh, oh!


Jean-Jacques Blais: If I can shout loud enough I might run for the Tory Party leadership.


John Patrick (Pat) Nowlan: You had better run after the Prime Minister's plane.


Some hon. Members:: Oh, oh!


Jean-Jacques Blais: That is probably the only way hon. members can distinguish me from the hon. member for Calgary South who, I am told, bears a remarkable resemblance to me-but only in appearance, Mr. Chairman. It has nothing to do with my own point of view and philosophy, I can guarantee that.
I am receiving a lot of assistance from the backbenchers on this side of House. We have been neglected as a result of the irresponsibility of hon. members opposite.


Gérald Laniel: Is the hon. member for Calgary South rising on a point of order?


Peter Colwell Bawden: A question of privilege, but I will withdraw it and let the hon. member continue, Mr. Chairman.


John Patrick (Pat) Nowlan: Just on a very brief point of order, I thought when the hon.member for Nipissing began to speak that he was looking for a pair to cover the fact that he may be away a few days on a trip to the European countries.


Some hon. Members:: Oh, oh!


John Patrick (Pat) Nowlan: But now, having listened to him for ten or fifteen minutes, I know that he will be able to participate in the debates even over in Europe, and we will be bound to hear him here.
The only question I wanted to ask the hon. member for Nipissing is whether this filibuster continues due to the fact that the minister in charge of housing does not yet
Income Tax
have his housing bill ready to proceed, or is it because hon. members on the government side have not yet shown up?


Some hon. Members:: Question.


Gérald Laniel: Order, please. I really do not want to reflect on any hon. member, and certainly not on the last remark, but I think that the committee should consider the proceedings here this evening. I think hon. members should practise a little more what they preach and I hope that this debate will proceed in a more orderly manner so that the Chair can hear what is said.


Jean-Jacques Blais: Mr. Chairman, in view of the indication that the Chair is having a difficult time hearing me, I will try to speak up.


Gérald Laniel: The hon. member for Temiscamingue on a point of order or a question of privilege.


David Réal Caouette: Mr. Chairman, I rise on a point of order. I have a lot of respect for the hon. member for Nipissing (Mr. Blais) but I think he is mistaken when he suggests the amendment involves people from Alberta only.
Yesterday I read in the House a telegram from my area in northwestern Quebec from Falconbridge mining asking me not to repeal clause 4 of Bill C-49 but to resume consideration after the forth coming meeting between the first ministers of Canada.
Mr. Chairman, I think mining companies in the area represented by the hon. member for Nipissing are exactly in the same case and are asking the federal government to take its time and to meet with the provinces before approving Bill C-49.


Gérald Laniel: Order. The hon. member for Temiscamingue who was recognized on a point of order knows as I do that he could have contributed to the debate in a perhaps more effective way had he waited for the hon. member for Nipissing to complete his remarks. I think hon. members will agree with me that the committee is not making rapid progress tonight. We are hearing points of order and questions of privilege.
As I said earlier, it is not up to the Chair to limit or restrict the right to speak of hon. members but hon. members have as much responsibility as the Chair to ensure that the procedure we must follow and which governs our proceedings be respected, otherwise progress would be impossible.


Jean-Jacques Blais: Mr. Chairman, for the information of the hon. member for Temiscamingue I will say to him that there are no mines in the riding of Nipissing, but that is not why I took such a position. Indeed, several industries in my constituency rely on the mining industry.
Mr. Chairman, I do not think that mining companies should be subjected to double taxation. Indeed, an agreement should be concluded between the provinces concerned and the federal government. I entirely agree about


Income Tax
that; readjustments are probably necessary. I have to say so.
However, the hon. member for Temiscamingue who I know is a sincere centralist, a first-rate federalist who has been our defender in Quebec for almost a generation knows that at the federal level the prime responsibility for the good of the community rests with the federal government. When the provincial and federal governments do not see eye to eye, we must as federalists give the benefit of the doubt to the federal government.
I realize that effectively we will find a fair solution to the problem which we are now facing. Still it hardly justifies delaying passage of the legislation under consideration, owing to the interest of some areas of the country while we also find in Bill C-49 some clauses beneficial to our citizens. There are some amendments dealing with registration for the purchase of a house and registration for buying into pension plans. In connection with those bills, my constituents constantly ask me: "What is happening? I want to file my income tax return, but I cannot do so, because you have not yet passed the bill." I answer: "Do not blame us, but blame rather those awful Progressive Conservatives!"

I am glad to have had the opportunity to say these few words. They are essential. I have spent much time in this House because I like this House and the work it is supposed to be doing. But it is not doing that work. As backbenchers we wanted to contribute sensibly to the discussion of this bill. We have not been able to do so because we knew that the need for this legislation was pressing. We wanted to get it out of the House. However, knowing this, members of the opposition took advantage of the fact that we were sitting back wanting to get this piece of legislation through the House.


Some hon. Members:: Sit down and vote on it, then!


Some hon. Members:: Question.


Jean-Jacques Blais: I hear a comment from one of my friends at the back-"Let them know what it feels like!"


Some hon. Members:: Hear, hear!


Gérald Laniel: I am willing to let the hon. member complete his remarks but I would invite hon. members to stick as much as possible to clause 4.
I must admit, and I hope other hon. members will join me in this, that there is some degradation in the House and that our business does not progress very much. Therefore I invite hon. members, without wanting to hurt anyone, to examine thoroughly the matter before us and to prepare a decision which will perhaps be taken later this evening. Now I recognize the hon. member for Lotbiniere.


Mr. Fortin:: Mr. Chairman-


James Aloysius McGrath: On a point of order, Mr. Chairman, the hon. member surely has an obligation to stick within the rule of relevancy. I call attention to Standing Order 34(2). The hon. member's remarks were totally irrelevant to the
clause before the committee and we should rule that the committee vote on the question.


Some hon. Members:: Hear, hear!


Gérald Laniel: The hon. member's point is well taken. I made the same point even before he raised it. I did not relate it to Standing Order 34(2) but I invited hon. members to pay attention to their own responsibility for the application of the rules and not to leave it only to the Chair. Now that the hon. member for Nipissing has resumed his seat and a number of hon. members have indicated that they wish to take part in the debate, it is difficult for me to put the question. I have to accept the fact that the hon. member for Lotbiniere and the hon. member for Nanaimo-Cowichan-The Islands have indicated that they wish to contribute.


Mr. Stollery:: I rise on a question of privilege, Mr. Chairman. The hon. member for St. John's East has brought it to the attention of the committee that we on this side evidently did not have occasion to speak about the bill in general in the way we have heard members of the opposition discuss it for the past three weeks.


Some hon. Members:: Hear, hear!


Peter A. Stollery: We were talking some time ago about taxation. I should like to draw attention to the fact that the taxpayers of Canada have been waiting for a long time now for this bill to pass. I think the hon. member for St. John's East should be ashamed of himself.


Some hon. Members:: Hear, hear!


Gérald Laniel: I am sure the hon. member would agree with me that the subject he has just raised is a matter for argument and debate. He may have wished to have expressed those opinions during the past week; tonight might not be the appropriate time to do so.


Thomas Clement (Tommy) Douglas: It is
perfectly apparent that the Liberal members of the House do not want a vote to be taken either on the amendment or on the clause, clause 4, in spite of the fact that they say they want to pass this legislation. The committee has been held up for one hour-


Some hon. Members:: Three weeks.


Thomas Clement (Tommy) Douglas: -by
irrelevant speeches by parliamentary secretaries and those who hope to become parliamentary secretaries.


Some hon. Members:: Oh, oh!


Thomas Clement (Tommy) Douglas: The
Parliamentary Secretary to the Minister of Finance-


An hon. Member:: You are leaderless.


Thomas Clement (Tommy) Douglas: And
the hon. member is like Horatio holding the bridge while the government Whip goes out to see if he can arouse the Tuscan hordes from their deep slumber.



I want to comment on some statements the Minister of Finance made in committee. The Minister of Finance should not criticize the opposition if the clause we are debating does not pass this evening or tomorrow.


Some hon. Members:: Hear, hear!


Thomas Clement (Tommy) Douglas: We
have as much time as the government, and if we cannot carry on this debate in a sane and sensible way, we can wait for another day.


Some hon. Members:: Hear, hear!


Some hon. Members:: Oh, oh!


Thomas Clement (Tommy) Douglas: We will not be intimidated by the howls and jeers of those who had to be dragged in by the neck in order to save themselves from ignominious defeat.


Mr. Andras:: What did the hon. member say just now?


Thomas Clement (Tommy) Douglas: I said "in order to save themselves from ignominious defeat."


Robert Knight Andras: That is what I thought he said.


Thomas Clement (Tommy) Douglas: Before five o'clock the minister answered some questions I asked yesterday. I shall comment on what he said and ask another question or two.


Some hon. Members:: Oh, oh!


Thomas Clement (Tommy) Douglas: May I point out to the hon. member for St. Boniface that nature gave him a voice, but he need not use it on every occasion, especially when he is sitting down.


Some hon. Members:: Oh, oh!


Joseph-Phillippe Guay: Mr. Speaker, I rise on a question of privilege-


Some hon. Members:: Question!


John Patrick (Pat) Nowlan: Let us bring the television cameras in and capture what is happening on television.


Some hon. Members:: Question!


Gérald Laniel: Order, please. I was under the impression that the hon. member for Nanaimo-Cowichan-The Islands had completed his remarks and that is why he sat down.


Thomas Clement (Tommy) Douglas: No, Mr. Chairman. The hon. member for St. Boniface rose on a question of privilege and I yielded him the floor. I was merely pointing out to him that he seems to speak more effectively when sitting down than when standing up. I assume that this is because when he is sitting down he gets concussion of the brain.


Robert Knight Andras: Would the hon. member mind clarifying that remark.
Income Tax


Thomas Clement (Tommy) Douglas: You
keep out of this. The Minister of Finance answered some questions I had asked. I want to comment. First, the minister agreed that royalties paid to a corporation will be deductible, but at the Same time royalties paid to a government will not be deductible. He said that the reason is that royalties paid to a corporation are paid as a result of a contractual agreement. He also agreed that royalties paid to a foreign government will be deductible, but that royalties paid to a Canadian government will not be deductible. The reason, according to the minister, is that foreign royalties are usually paid on a flat rate. They are not always paid that way, I point out. This legislation does not provide for royalties collected by a provincial government on a flat rate to be deductible.
I am glad the minister made one point clear concerning the Syncrude agreement. Actually, a number of points are now clear. It has taken weeks of prodding to get all the information regarding Syncrude which ministers have made available. First, we struggled to discover if the agreement was open ended, or if it was limited to a commitment of $300 million. Now we know that it is open ended and that the government is committed to pay 15 per cent of the cost, not matter whether the cost is to be $2 billion or, as the Price Waterhouse report suggests, possibly as much as $2.9 billion.


Donald Stovel Macdonald: That is false.


Thomas Clement (Tommy) Douglas: The
minister had lots of opportunity to participate in the debate.


Donald Stovel Macdonald: I have already answered that in the House. Do not try to obscure the matter.


Thomas Clement (Tommy) Douglas: I can
understand the minister being excited. If I had been taken in by the sort of bunkum he swallowed in entering into the agreement, I would be excited too.


Donald Stovel Macdonald: You know what you are saying is false. You know you are speaking a falsehood.


Thomas Clement (Tommy) Douglas: The
minister knows perfectly well that the Price Waterhouse report estimates that the cost can go as high as $2.9 billion.


Donald Stovel Macdonald: That is not what we are paying for. That is not being paid for by this government.


Thomas Clement (Tommy) Douglas: We
don't know what this government is paying for.


Donald Stovel Macdonald: We do.


Thomas Clement (Tommy) Douglas: the minister has to do is table the agreement, let us have the agreement, so that we can know exactly what the people of Canada are paying for.


Donald Stovel Macdonald: You know that already.


Thomas Clement (Tommy) Douglas: The
fact is the government entered into the agreement without knowing all it had committed itself to.
3568


Income Tax


Donald Stovel Macdonald: That is not true.


Thomas Clement (Tommy) Douglas: It did not know all the conditions. The companies, having suck-ered the ministers into signing the agreement, are now tightening the screws and the ministers don't know what they have committed themselves to.


Donald Stovel Macdonald: That is another falsehood, a contemptible falsehood.


Thomas Clement (Tommy) Douglas: What did the Minister of Finance tell us? He said that the partners in Syncrude, Imperial Oil, Gulf Oil and Cities Service, will be able to write off their investment against their other earnings. This is a strange attitude, in view of the minister's attitude last night. Last night he said, as reported at page 3516 of Hansard-


Robert Knight Andras: Are we up to that number?


Thomas Clement (Tommy) Douglas: If the minister of immigration and resources-


Donald Stovel Macdonald: Now who's excited?


Thomas Clement (Tommy) Douglas: If the great Minister of Manpower and Immigration would do a little work on unemployment insurance, he would be much more useful than he is now; he's sitting there and chattering about something he knows nothing about.
As recorded at page 3516 of Hansard I asked the minister the following;
In other words, will Imperial Oil, Gulf Oil and Cities Service be able to write off their Syncrude investment against their other operations?
Then I said, "The minister shakes his head."


An hon. Member:: It rattled. He shook it in the negative.


John Napier Turner: On a point of order, Mr. Chairman, of course I shook my head. I agree with the hon. member. He said I shook my head, and he could hear it from where he was sitting, the implication being, that I had a screw loose which needed tightening, or something like that. The point is the hon. member did not say whether I shook my head negatively or affirmatively. He cannot read that into Hansard. I gave him a clear answer today.


Thomas Clement (Tommy) Douglas: Mr. Chairman, let it then be put on the record that when the minister shakes his head from side to side he means yes, because yesterday he certainly shook his head from side to side. However, today it will be clearly on the record.
The minister has now said that Imperial Oil, Shell Oil and Cities Service will be able to write off their expenditures in Syncrude from their other operations. The Canadian people should know that. They should know that the three governments are going to put up together in equity and a $200 million loan from Alberta some $800 million. The province of Alberta will put up between $500 million and $600 million for a pipeline and power plant. Over a period of four or five years, the three private partners in Syncrude will be able to write off their invest-

ment from the profits they make. This means that nearly 50 per cent of that writeoff will be paid by the taxpayers of Canada. That is what they should know.
The people of Canada will probably pay 80 per cent of the cost of the Syncrude project, and they are going to own 15 per cent. The Syncrude partners, apart from the governments of Alberta and Ontario, will own 70 per cent of the project. That is what should be known.
I would like the Minister of Finance, who is a very able financier and very competent in his field, to tell the House if he thinks it is a good deal for the people of Canada through increased prices, loans and grants from the respective governments and through tax writeoffs to put up most of the money, and the three oil companies in question are going to have 70 per cent of the profit.


Donald Stovel Macdonald: That is not true and you know it.


Thomas Clement (Tommy) Douglas: The
Minister of Energy, Mines and Resources keeps mumbling in his seat. He is much more effective in his seat than on his feet. I suggest he get into the debate and tell the House what are the facts.


Donald Stovel Macdonald: I have told them, but you misconstrue them. You tell falsehoods.


Thomas Clement (Tommy) Douglas: The
other point that comes to mind-


Donald Stovel Macdonald: Tell the truth now.


Thomas Clement (Tommy) Douglas: I am
telling the truth. The truth is the minister is so mixed up he would not know the truth if he met it in broad daylight.


Donald Stovel Macdonald: You know the truth.


Thomas Clement (Tommy) Douglas: In
addition to all these handouts, the Syncrude partners are going to be guaranteed the international price for the oil they sell, which at the present time is about $11.70 a barrel. That fits in very well with what the Minister of Finance said this afternoon.
When the Minister of Finance was replying to the question as to whether the revenue from the export tax would be taken into consideration in computing the federal government's share of tax revenue from resources, he said no because the export tax would diminish as the domestic price gradually rose to the international price.
There we have it in a nutshell. I ask the minister is it now government policy to move steadily toward the international price? Surely that is in line with the commitment that has been made with the Syncrude partners. It is in line with the steps the Minister of Energy, Mines and Resources has been taking, that the government has now committed this country to moving steadily toward the international price. The lower domestic price of $6.50 a barrel, from which the oil companies have made exorbitant profits, is to be abandoned. That was merely a gimmick of the minority government days.
I want to ask the Minister of Finance if he would answer the other question which I asked him. He did not


deal with it today. In his letter to the Syncrude partners the minister committed himself to keeping legally the commitment which he made with respect to deductibility of their royalty payments and other payments to the province of Alberta. Yesterday I asked the minister how he proposed to do that. So far he has not introduced any amendment in the course of the passage of this bill through committee of the whole.
Does the minister propose to do this by using the Financial Administration Act? If so, does he propose to do that annually? By what means is he going to keep that commitment? The minister made a commitment, not just on his own behalf but on behalf of the government, which involves very large sums of money. Surely this House, this committee and the people of Canada have a right to know how he intends to keep that commitment. How is it going to be kept? Will it be done legally, or does the minister propose to go around the back door by orders in council which have had a very dubious history in the past of making rebates which are very difficult to assess properly. Is that how the minister proposes to do it?
The minister ought to tell us at this time the method he intends to use to ensure that the commitment he has made to Imperial Oil, Shell Oil and Cities Service will be carried out in a proper, legal and parliamentary manner.


John Napier Turner: Mr. Chairman, I can give an undertaking to the hon. member that it will be carried out in a proper manner. The Minister of Energy, Mines and Resources and I said that the Syncrude operation was carried on its merits. The only exception from the present budgetary regime is the deductibility of royalties. However, future arrangements will have to be considered on their merits. Because of that position, we are considering the ways in which to implement it, either by a bill under the Financial Administration Act, or in some way reportable to the House of Commons. I tell the hon. member quite categorically that the only distinction is the deductibility of royalty provisions. All the other provisions of the law apply across the board to the Syncrude arrangement.


Thomas Clement (Tommy) Douglas: Hon. members seem to be in a great hurry to vote. They were not in that hurry at eight o'clock, so why now? I want to ask the Minister of Finance if he is telling this committee of the whole that he, the Minister of Energy, Mines and Resources, and the President of the Treasury Board have made a commitment to guarantee the three private partners in the Syncrude project that their payments to the Alberta government will be deductible for income tax purposes, without any clear idea how he proposes to do that? Surely the minister must know how he is going to do that. Surely the place to do that is in this bill or by a special bill. The minister should tell the committee of the whole which of those two methods he intends to use.


John Napier Turner: Mr. Chairman, I have been entirely specific with the committee and the hon. member. It is not merely deductibility of royalties. In this particular situation we are dealing with a joint venture or partnership. The proportion of the revenue of that partnership attributable to the government of Alberta, the government of Ontario and the government of Canada will
Income Tax
not be attributable to the other three parties in the arrangement. That is how the deductibility feature is fulfilled. It can be remitted either under the Financial Administration Act or by a special appropriation of parliament. In any event I have clearly defined the limits of the situation and of the government's commitment for the committee.


André-Gilles Fortin: Mr. Chairman, the Minister of Finance (Mr. Turner) took a rather clear stand on this bill. We know that this bill, dealing with natural resources, entails some problems of interprovincial and federal-provincial nature.
Mr. Chairman, I should like to put a question to the Minister of Finance. As a federal-provincial conference will soon be held at which natural resources and energy generally will be dealt with, perhaps after this bill has been passed, can the minister tell us whether clauses 4(2) and 4(5) of the bill are an integral part of the negotiations with the provinces, or whether his proposals to the provinces, on the conservation and use of energy, are separate questions?


John Napier Turner: Mr. Chairman, some of the provisions of this bill deal with conservation. In the excise bill, that was introduced before this bill, a special tax was levied on motorboats, private aircraft, etc. In the bill before the House, means are found to share the proceeds from the development of our natural resources, and the energy conservation program depends on other measures which are not contained in that part of the bill.


André-Gilles Fortin: Mr. Chairman, may I ask the Minister of Energy, Mines and Resources (Mr. Macdonald), who honours us with his presence, if he can tell us whether the royalty tax repealed with respect to oil companies is an essential condition of federal-provincial negotiations to come in order to make the federal government's position clear with regard to those negotiations, or whether clauses 4(2) and 4(5) are incidental to those negotiations and not essential to the progress and finalization of this debate?


Donald Stovel Macdonald: Mr. Chairman, I must tell the hon. member that those items play an essential part in the federal position. It is a fundamental condition of our situation to the effect that the federal government must get a certain level of revenue in view of the increase in provincial taxes.


An hon. Member:: How many times did you attend the debates since the beginning of the month?


Some hon. Members:: Question!


André-Gilles Fortin: Mr. Chairman, I can understand hon. members opposite wanting to rush the passage of this bill, but I would like to investigate this matter thoroughly. If you want to make me lose time, I can play the same game as you do. Go on, enjoy yourselves!
Mr. Chairman, now that we have silence, I will ask my question. Since the minister just said that passing subclauses (2) and (5) is an essential condition, I will not question his answer. I would now like to know, in case
28996-21V4

Income Tax
this House would pass the bill, whether the minister can give us some indications of the federal government's position with regard to eastern provinces as far as consumption and preservation of Canadian energy is concerned?


Donald Stovel Macdonald: Mr. Chairman, this is a very broad question, but I must say that we have the same acts with respect to minerals in eastern and western Canada, and we must get a minimum amount of income taxes at the federal level. It is then up to each provincial government to determine the level of taxes for each province. For that reason, taxes are higher in Ontario for instance, than in Quebec.


André-Gilles Fortin: I am very grateful to the Minister of Energy, Mines and Resources for his reply. He is apparently willing to co-operate. Therefore, for my own information, I should like him to tell me whether, before the introduction of Bill C-49, he discussed the application of clauses 4(2) and 4(5) with the Quebec minister of natural resources, and since Progressive Conservative members appear eager to defend mainly the interests of Alberta, I feel it is my duty to defend those of eastern Canada. I suggest that the minister's reply at this time will weigh heavily on my vote.


Donald Stovel Macdonald: Mr. Chairman, my colleague the Minister of Finance had discussions with his provincial counterparts. As far as I am concerned, I have met with the provincial ministers of mines and the Quebec Minister of National Resources, after my colleague's speech of November 19-but before the bill was introduced. Therefore, the talks were held before the introduction of the bill but after the budget speech.


André-Gilles Fortin: Mr. Chairman, thank you for your courtesy and patience.
Does the minister mean he obtained explicit agreement from the province of Quebec and the eastern provinces as to the contents of clauses 4(2) and 4(5) of the bill before us, and if not, does the minister expect this agreement will be forthcoming during the next federal-provincial conference?


Donald Stovel Macdonald: Mr. Chairman, I must state there was naturally no unanimous consent to such projects. There was difference of opinion among the ministers represented, but we indicated this was a basic condition as far as the federal position is concerned. I believe this position is now recognized by every province.


André-Gilles Fortin: Mr. Chairman, as a last comment I would indicate I am very much disappointed with the inadequate cooperation on the part of, not the Minister of Finance and the Minister of Energy, Mines and Resources, but rather from the Liberal members in general who-


Some hon. Members:: Question.


An hon. Member:: How often have you been here in this House?


André-Gilles Fortin: As you wish then, if you want it over at ten o'clock, "straighten your tunes".


Some hon. Members:: Question!


Gérald Laniel: Is the committee ready for the
question?
The hon. member for Lotbiniere.


André-Gilles Fortin: Mr. Chairman, when a Liberal member rises in this House we, in the Social Credit Party of Canada, have the courtesy and manners to listen. Mr. Chairman, it seems to me that when a member from the Social Credit Party of Canada rises in the House, the Liberal members should display the same kindness we display for them, particularly on such an important subject as oil and energy consumption in Canada. In this regard, they could be teached manners by the Progressive Conservative members, the members of the New Democratic Party and the Social Crediters.
Mr. Chairman, if they do their job superficially, that is their problem. As far as I am concerned, as the representative of Lotbiniere, and as far as my colleagues from the Social Credit Party of Canada are concerned, we have the right to know the very elements of the matter. That is why I have asked the Ministers of Finance and of Energy, Mines and Resources to answer me. If the Liberal members had the same concern for professional ethics as the Ministers of Energy, Mines and Resources and of Finance do, this debate would probably have ended long since.
The Minister of Energy, Mines and Resources just said that the provincial mines and natural resources ministers were disagreeing with the federal government's position, which is a normal thing in a sound federalism. Could the minister tell us exactly what the position of the province of Quebec was? In our constituencies of Quebec, we hear all sorts of stories about the bad federal government.
Mr. Chairman, I would be happy if the minister would help members from Quebec do their job and show to their constituents what the federal government really is in relation to the government of Quebec.
Progressive Conservative members have delayed the proceedings of the House, raised points of order and made long speeches. Mr. Chairman, it seems to me that the members from Quebec did not take unfair advantage of the situation, yet it is the people of Quebec who for many years have been the losers in the oil situation in Canada. Mr. Chairman, national unity will be achieved only when all provinces sit around a table to reach a consensus.
Mr. Chairman, that is why I ask the Minister of Energy, Mines and Resources to state the position of the federal government toward the province of Quebec. What exactly was the official position of the Quebec government, if it had one? Is Quebec in favour of or against the bill, particularly as regards clauses 4(2) and 4(5)? Did that government undertake to cooperate with the federal government?
Did the government commit itself to help enforce the act or was it against it?


Donald Stovel Macdonald: Mr. Speaker, we discussed the matter in December and I cannot remember the exact words used by my counterpart in Quebec. As far as I can recall, he pointed out the importance of the matter from a constitutional point of view.


I believe he supported the view expressed by the ministers of other provinces with regard to the constitution. To the best of my recollection, he was not exactly against another position. I think it was really from a constitutional point of view that he stated Quebec's position, but he did not express opinions on my colleague's theory.


André-Gilles Fortin: Mr. Chairman, it is a shame to witness such disorder in the House!


An hon. Member:: That's the way it goes in Quebec City!


André-Gilles Fortin: Indeed, that's the way it goes in Quebec City.
Mr. Chairman, I would like to put one last question to the Minister of Energy, Mines and Resources. He probably knows that in some ridings of Quebec, but particularly in the riding of Lotbiniere which I have the honour to represent, several oil companies are making exploration on enormous oil resources. Would the minister tell us whether these companies will be affected by clauses 4(2) and 4(5), as the companies in the western provinces of Canada will be? Did the minister assess the implication of those clauses on the eastern provinces, where exploration is now being made? Did employees of his department consult with the representatives of the companies, which, in fact, are the same as in the west? Did the minister have any discussions on that matter with his provincial counterpart, the Quebec minister of resources?


Donald Stovel Macdonald: Mr. Chairman, I must say that for the time being and from all our available information, the exploration he mentioned is under the jurisdiction of the province of Quebec, which has no wells, oil or gas resources at this time, be it in the riding of Lotbiniere or elsewhere in the province. If such discoveries take place, this law will apply in Quebec as well as in the other parts of Canada. In fact, there may be a 20 per cent federal tax and a provincial levy as established by the provinces. But general taxes in Canada will apply to Quebec as well as to the other provinces.


Mr. Peters:: Mr. Chairman, while this general discussion is taking place on Clause 4 and the amendment thereto, I should like to ask the Postmaster General what arrangements he has been able to arrive at in order to handle the delivery of pension cheques. It seems to me that this is a fairly general debate in which the Minister of Finance and other members have taken part, and I do not see why I should not be able to put my question to the Postmaster General.


Gérald Laniel: Order, please. I would hope the hon. member would not substitute himself for the Chair in respect of the matter of relevancy of debate. The Minister of Energy, Mines and Resources was asked a direct question relating to Clause 4. That does not permit the hon. member to ask questions of the Postmaster General at this time.


William Arnold Peters: Mr. Chairman, to bring this within relevancy I should like to ask if there are any royalty cheques being handled by the post office at the present time? It
Income Tax
may be that some of these companies have sent out their royalty cheques in that unorthodox way.


An hon. Member:: And unemployment insurance
cheques.


William Arnold Peters: Yes, perhaps there are some unemployment insurance cheques in the mail as well, and they are certainly the product of one of these resources we are discussing.


Some hon. Members:: Oh, oh!


Mr. Mackasey:: I was going to add, Mr. Chairman, that there are no royalty cheques coming from Saskatchewan since they have effectively killed the industry in that province.


William Arnold Peters: Mr. Chairman, I have heard little complaint about the health and the wealth of one of the adjacent provinces. Perhaps I could ask if there are any royalty cheques going out in Alberta?


Some hon. Members:: Question.


Gérald Laniel: The question is on the amemdment to Clause 4 as proposed by the hon. member for Qu'Appelle-Moose Mountain.
Amendment (Mr. Hamilton (Qu'Appelle-Moose Mountain)) negatived: Yeas, 77; nays, 107.


Gérald Laniel: I declare the amendment lost. Shall clause 4 carry?


Mr. Symes:: Will the Minister of Energy, Mines and Resources who is here and who has been answering questions related to resources and to this bill, tell us whether the oil produced by Syncrude will be in any way exempt from any kind of export control?


Donald Stovel Macdonald: No, Sir, it will not.


William Arnold Peters: Mr. Chairman, I was interested in the remarks by the hon. member for Nipissing not as related to oil but as related to mineral production. As has already been pointed out by the hon. member for Temiscamingue, a large number of companies have been in touch with members of the House indicating that some of them are really hard pressed to meet the commitment that is demanded in this bill in terms of the double taxation of those companies.
The government has indicated that it does not have too much sympathy for the oil industry and, if it is necessary for the provinces to get a reasonable tax from their resource, then the federal government will take its share anyway. Some charges have been made that as a result oil rigs are leaving Alberta and Saskatchewan. It is my opinion that that is not so. I believe that no new oil development will take place in either of those provinces. All the oil reserves are probably well known.


Some hon. Members:: No.


William Arnold Peters: Members of the Conservative party are saying that that is not so. Let me ask one of them what he


Income Tax
did with his rigs. He put them on a truck and took them to the United States.
The mining industry finds itself in another situation.


An hon. Member:: There is no work there.


William Arnold Peters: I always thought that development companies are making work. There are many mineral deposits in this country.


An hon. Member:: You are contradicting yourself.


William Arnold Peters: If that is my only sin, it is pardonable. There is much development in the mineral field throughout Ontario, Quebec and in the northern parts of the Northwest Territories. These areas can be developed.
I am interested in the answer that the minister gave a few minutes ago, from which it was obvious that he is not interested in any input from the provincial premiers. They might have been able to suggest other ways of engaging in the development without undue taxation being imposed. But he did say that in the case of Syncrude he was going to use the Financial Administration Act. I suggest that if that happens, we will be in a sorry mess in this country.
I can see INCO coming down here, putting on the screws to try to make the government concede. It has many concessions to make, because the total royalty will be a concession. Even if they get part of the royalty, they will have gained. If the minister will exempt them by the simple practice of amending this through the Financial Administration Act, he will be engaging in political football beyond par.
I suggest that the reverse situation might be very interesting. The Minister of Finance may have given his word. He did not give it in the bill because nothing is said about it in there, but he may have given his word that the act will not apply. The Minister of Energy, Mines and Resources might also have given his word. However, those two ministers will not always be here, and surely the Syncrude project is not here for only four years. We expect it to be here for a long time, at least until the end of this century.
If all it takes to change that agreement is to make a change in the Financial Administration Act, then I would be surprised if Exxon or any of the other companies did not divide such a short term agreement on a four year basis. I also suggest that many of the mining companies are extremely limited. As the hon. member for Nipissing said, the mining companies in northern Ontario are extremely limited if the taxation structure is such that they must return to the treasury over 100 per cent of their earnings in the form of taxation to both the provincial and federal governments.
I have never had to carry a brief for the mining industry. We have gold, asbestos, nickel. Almost any mineral you can name has been mined in the district of Timiskam-ing, but very seldom have I had to make representations to the government on their behalf, with the exception of the gold mining industry.
There is uncertainty in the development industry in nothern Ontario and northern Quebec, both of them areas with which I am familiar. This uncertainty will not end

until the federal government and the provincial governments stop their bargaining and come to a conclusion which will not kill the goose which laid the golden egg. This does not just affect the gold mining industry but the mining industry as a whole.
I am shocked that the minister, who has had two or three years to deal with this matter of a fair share of return to the provinces and a fair share of return to the federal government, has not been able to work out an equitable arrangement. What is needed is an arrangement which will not be prohibitive to the exploration and development of additional mineral resources. I suggest that even the oil companies are dependent on the whims of the minister and the political whims which put ministers in their particular portfolios-and move them just as readily. I think it is safe to say that most ministers do not like to stay too long in a portfolio, and I think enough mess has been made of this one.
Whatever decision may come, it will be the decision of the minister who happens to administer the act. It was pointed out by the hon. member for Nanaimo-Cowichan-The Islands, and was repeated by the Minister of Finance, that Syncrude was in a unique position because it had three partners who, I suppose, are not much interested in the problem of royalties because they are governments themselves.
The minister did say that the government was going to allow the participating companies to write off all the profit on that operation. Many have not yet realized it, but Syncrude is a very unique company. Its president spent two hours telling us why Syncrude would never make a profit. It was rather unusual to hear this from a businessman and a promoter. Some of my colleagues said that he was a crook, but I said he is a promoter like some mining people in my area who think they have a good thing and who go out and try to sell it. The president of Syncrude certainly was trying to sell it, but the difficulty was convincing me and a number of other people that this company, with money coming from three or four major oil companies, was not going to make any money.
Yet one of our provinces went into partnership under the law with that company, and stayed in that partnership about two days before it had to withdraw the law because it found that the amount which it had agreed to take in profits was not going to be available. In fact the president was telling us there never could be a profit because, no matter how much money is spent by Syncrude to stay in the game, we have to pay our share. Every oil company has to pay its share, and the oil companies pay the bills and in return receive the product.
But there is in effect no way that Syncrude as an entity can write off any kind of profit because, as a company, it does not exist. As the Minister of Finance said, it is a joint venture or a partnership, or something else, but it is certainly not a normal company. It appears to me there will be a lot of paying on our part and not very much collecting. Any collecting on our part will be in a product which will be difficult for us to handle, and we will have to give it to one of our partners at the regulated price

mentioned in the agreement, the international price, whatever that may be.
We may have to develop the facilities to handle that product ourselves. I suggest that the moneys put into this company under this joint venture will yield huge profits to those companies putting up the money, and the federal government and provincial governments in the joint venture will not take advantage of those same concessions.
Syncrude will go down in history without a doubt as an immense sell-out. My colleague has said it is a greater sell-out than the CPR scandal. I am not sure if it will be in the same league at all. It will be 100 times larger than the CPR scandal, and we will have to stay in it. I think that if we are going to make an exception through the Financial Administration Act of providing rebates to the companies, then we should have no rebate at all. Instead that money should be Canadian money and it should cover the whole operation of that corporation.
If there were ever a good time for public ownership, it is now for Syncrude because it would be in the interest of the public, in the interest of development in an orderly fashion of a totally new form of energy resource for the Canadian people. Even more important, it would keep this government honest and prevent it from having to use exceptions under this act, the Financial Administration Act, or through some other act.
If the government allows an exception in this instance, I suggest that there will be immense pressure on it to allow that kind of exemption for all companies. I suggest that that is not fair or reasonable taxation, and that we should not force this government into it.
I would like to call it ten o'clock and continue my remarks at another time.


Mr. Young:: On a point of order, Madam Chairman, since we are just reaching that point, I would like to move under Standing Order-


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


BUSINESS OF THE HOUSE
Walter David Baker: On a point of order, Madam Speaker, may I ask the government House leader who is-


An hon. Member:: Which one?


Walter David Baker: There is no doubt which one is the leader on this side of the House. In any event, in the spirit of friendship which has prevailed in the House this evening, may I ask what is to be the business for tomorrow?
Adjournment Debate
e (2200)


Mr. Sharp:: I had hoped to say that the next order of business would be the Housing Act, because I know the people of Canada are very anxious to get it.


Some hon. Members:: Hear, hear!


Mitchell William Sharp: In the circumstances we shall continue in committee of the whole on the Income Tax bill, and I do hope the House will co-operate in getting it through as quickly as possible in order that we can move on to the housing bill, which will be the next item of business.


Walter David Baker: May I say that the opposition will not emulate government supporters tonight with respect to co-operation in getting the business through the House.


Some hon. Members:: Oh, oh!


An hon. Member:: Sit down!


Walter David Baker: They will find I do not sit down too easily.


An hon. Member:: Or shut up!


Walter David Baker: We intend to co-operate with the government but we have been subjected to a spectacle which has been a travesty of parliament.


Some hon. Members:: Oh!


Walter David Baker: It does not become the government House leader to ask for co-operation on this side, something he has always received, when he has no control over his own supporters.


Some hon. Members:: Ten o'clock.


The Acting Speaker (Mrs. Morin):: Order.



PROCEEDINGS ON ADJOURNMENT MOTION

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

Elmer MacIntosh MacKay: Madam Speaker, today when I asked the Solicitor General (Mr. All-mand) a question about a transcript at a preliminary inquiry involving the Hamilton Harbour Commission, his answer disappointed me because I felt he was being unnecessarily vague. I realize the Solicitor General has a difficult role to fulfil. On the one hand he must give


Adjournment Debate
guidance and direction to the RCMP, and on the other hand he must not interfere in a purely political sense.
I am tempted to refer specifically to names and events in connection with this transcript but, after much reflection, temporarily I believe it would not be responsible to use my position as a member of parliament to contravene the spirit of the Criminal Law Amendment Act and, by so doing, possibly prejudice the rights of people who have been charged or who may yet be charged. I have thought about this at some length.
I have even considered an interesting case recorded in Ontario Reports of 1971 involving two eminent personages. The case is that of Roman Corp. Ltd. et al. v. Hudson's Bay Oil & Gas Co. Ltd. et al. His Lordship, giving judgment, said:
This is an application by the defendants, the Right Honourable Pierre E. Trudeau (hereinafter called Trudeau) and the honourable John J. Greene (hereinafter called Greene) (a) to strike out certain paragraphs and parts of paragraphs of the statement of claim (b) to strike out the whole of the statement of claim and (c) to dismiss the action against the said defendants.
The ruling was interesting.
No person can have a judgment awarded against him in civil proceedings arising out of statements made in the House of Commons and this privilege attaches also to extensions of the statements contained in a press release concerning them and a telegram to a person affected by them. Hence, allegations contained in a statement of claim that such statements and their extensions have been made by defendant prime minister and defendant cabinet minister will be struck out under rule 139.
I mention this to show that I have given considerable thought to whether I should give the type of information tonight that I could give. But I am not convinced it would be a responsible thing for me to do. Having said that, I want to say to the Solicitor General that, even taking into account the difficult role he plays in this House, his answers have not been as frank as they might be.
If I may speak again about the transcripts relating to the delicate Hamilton harbour matter, I suggest that the Solicitor General should, if he has not already done so, acquaint himself fully with the contents of these transcripts. I refer him particularly to volume I, pages 118 to 127, and more particularly to that part beginning on line 18 at page 127 and ending at line 12, page 129.
I suggest that the Solicitor General should consider his position as an important law enforcement officer who answers to this House, and act, or cause his colleagues to act with greater dispatch when the public interest requires specific decisions to be made in connection with inquiries.
On December 4, 1974, as recorded at page 1939 of Hansard, the Solicitor General, answering a question asked by the hon. member for Wellington-Grey-Dufferin-Waterloo (Mr. Beatty) concerning another matter which also involved tapes and investigation, said:
I have shown the transcript of the tape to certain members of the government, and I discussed it with the Prime Minister as it was my responsibility to do so. This is not a report that should be tabled in the House. I showed certain aspects of the report to the Minister of Labour to determine whether he was in fact involved in such conversations, and he admitted that he was.
When questions arise concerning judicial inquiries and situations involving people who have been charged, people

whose rights are specifically protected by the provisions of the criminal law amendment legislation, as incorporated in the Criminal Code, and people who may be collaterally involved because they hold a public position, the government should make every effort to satisfy the House and the country that nothing has been done which may give rise for concern.
For the present, I propose to leave the matter at that. I hope, in the days ahead, more information will be made available by those on the other side of the House and that a decision will be made as to whether the sort of public inquiry which many responsible people feel is necessary will be undertaken.


William Warren Allmand: Madam Speaker, the case referred to by the hon. member for Central Nova (Mr. MacKay) is one which resulted from an investigation into certain irregularities with respect to dredging contracts in Hamilton harbour. Since the Hamilton Harbours' Commission is subject to federal jurisdiction, the investigation has been carried on by the Royal Canadian Mounted Police.
After more than one year of serious investigation, charges were laid on May 29, 1974, against five individuals, one of whom was a member of the three-man Hamilton Harbours' Commission. The charges-30 counts on 12 informations-were: conspiracy to defraud, fraud, conspiracy to forge, uttering forged documents, and forgery. Three of those charged pleaded guilty and were fined a total of $62,000 on February 5, 1975. Two others pleaded not guilty. Their cases went to preliminary inquiry on October 28, 1974, and they are now awaiting their trial which should take place soon.
In his questions of February 24 and 25 the hon. member for Central Nova asked me questions about the transcripts of evidence relating to the said preliminary inquiry. He asked me if I was acquainted with the transcripts and, if so, could I assure the House that no member of parliament or minister was implicated in the matters under investigation.
First of all I should point out to the House that under the law, under section 467 of the Criminal Code, the evidence at the preliminary inquiry is not to be published or broadcast, in other words, not to be made public. The purpose of this provision is to protect the names of persons who might be mentioned at the preliminary inquiry when they have not been found guilty or even charged with an offence. This is an important provision to protect civil rights. After all, it is one thing for a witness to make statements or allegations; it is another thing to make proof and to be found guilty.
Under the British system of criminal law, a person is innocent until proven guilty, and that proof must be beyond a reasonable doubt. But what is the member for Central Nova and certain members of the press trying to do? They are trying to circumvent Section 467. The law will not allow them to publish the transcripts. Therefore, they are trying to get out the information in the House of Commons so it can be made public through the back door, it appears for the sake of sensationalism and partisan politics, certainly not for the sake of justice.


Let me say this, Madam Speaker: these transcripts of evidence, eight volumes, only became available in part to the Royal Canadian Mounted Police in Toronto a few days ago from the Crown prosecutor and they are not yet available to the force in Ottawa. Since that time I have consulted with the Commissioner of the Royal Canadian Mounted Police about them, and he read to me by telephone those parts where the names of certain political figures were mentioned. I could request the entire transcript and read it once it becomes available, but that will depend on the circumstances. In cases where members of parliament, ministers or senior civil servants seem to be implicated in a criminal or subversive matter then, of course, I would read the evidence in greater detail and report it to the Prime Minister (Mr. Trudeau). However, I would not at that stage of the proceedings make my findings, conversations or advice public.


The Acting Speaker (Mrs. Morin):: Order, please. I regret to interrupt the hon. minister, but the time allotted to him has expired.


Walter David Baker: If it would be permissible, Madam Speaker, we would be glad to hear the minister's answer further.


The Acting Speaker (Mrs. Morin):: This can only be done by unanimous consent. Is it agreed?


Some hon. Members:: Agreed.


William Warren Allmand: Thank you, Madam Speaker. I thank hon. members of the opposition. This is a serious matter. I will take only another minute.
The hon. member for Central Nova has asked me to tell the House that no member of parliament or minister is implicated in the Hamilton Harbour case as a result of the preliminary inquiry transcripts. I can say that, at this time, there is no evidence to lay further criminal charges against anyone. I will not say more about the transcripts because I think to do so would be contrary to our general principles of justice and, in particular, to the principles in Section 467.
In the Hamilton Harbour case a thorough criminal investigation has been carried out by the Royal Canadian Mounted Police. Criminal charges have been laid against five persons. Three have been found guilty, two are going to trial and a further investigation is still possible.
Furthermore, the assessment of evidence and the decision on prosecution are under the attorney general for Ontario and his crown prosecutors. Thus far they have deemed it proper to charge only five persons. If there are to be further criminal charges and prosecutions, then that will be their decision with the Royal Canadian Mounted Police, not mine.
In any case, I am quite prepared to let justice take its natural course and will not, at this stage, do anything which might be prejudicial to innocent persons or contrary to the principles of our criminal law.
Adjournment Debate


HARBOURS-HAMILTON HARBOUR COMMISSION-DOCUMENT SERVED ON MINISTER OF LABOUR TO AUTHORIZE SEARCH OF OFFICE
Eldon Mattison Woolliams: Madam Speaker, in my position as the chairman of my party's justice caucus, I asked certain questions today of the Minister of Labour (Mr. Munro). I would say at the outset that in addition to being responsible for labour this minister, as does every minister of the Crown, has certain other responsibilities. He has responsibility as a member of the House and responsibility in his position as Minister of Labour.
If there should be any suggestion that there is any inpropriety, it is up to the Prime Minister (Mr. Trudeau) and the Solicitor General (Mr. Allmand) to make certain observations and carry out certain research work.
I just want to review the questions I put today. I put them as gently as anybody could. At that time I asked, "Mr. Speaker, I wish to ask the Minister of Labour whether he was served with any documentation at the time the RCMP allegedly had authority to search his office? Was the minister served with an affidavit or any other documentation which led to the authority for his office being searched sometime during the election?"
As I understand it, the RCMP entered his office in Hamilton during the election.
The minister answered in this way, "Mr. Speaker, the RCMP did come to my office. They had a document, but it did not pertain to my particular office. In any event, I gave them access to what they wanted."
We have no information as to what they asked for or why they were there.
Then I asked a further question, "Has the minister seen any documents which gave the RCMP authority to search his office and take certain files or whatever else they did at that time? Has the minister read any documentation which the RCMP had or which was filed in the court house to give the RCMP that authority?"
The minister replied, "Mr. Speaker, I do not think anything was filed in the court house because the documentation was not applicable to my particular headquarters. I just saw what they had. They agreed it was not applicable."
The question I want to put to the minister now is this-I will come to the procedure under the Code in a moment or two-is the reason that the documents were not filed in the court house because the minister said they did not pertain to his office?
I then asked the minister, "Do I take it that no search was made of the minister's office because the authority they had did not pertain to the office of the Minister of Labour or any material or documentation the minister may have had? Also, did the minister read what the RCMP had in their hands which gave them some authority, either in his office or that of someone else?"
Then there was this very unusual answer, "Mr. Speaker, they wanted permission to look at documents in my office, the contents of which I was really not aware. They were in cabinets. I gave them permission to go ahead-"
3576


Adjournment Debate
The minister never read the documents that the RCMP had in their hands, although to the hon. member for Hamilton-Wentworth (Mr. O'Sullivan) he said he had.
I should now like to refer to the Criminal Code. If the RCMP did not have any authority, I would ask the Solicitor General, who is in charge of the RCMP, to make an investigation in order to protect the Minister of Labour. But if the RCMP did have authority, what did they have to be armed with? Section 443 makes it very clear:
A justice who is satisfied by information upon oath in Form 1-
I do not have time to get into a discussion of Form 1. that there is reasonable ground to believe that there is in a building- -and that in that building are documents which might lead to some impropriety or illegality, in which case they would then be armed with an affidavit and a search warrant. Either the RCMP had the documents and the minister knows, or if they did not have the documents the Solicitor General should then inquire why the RCMP acted illegally against one of the ministers of the crown.
I speak tonight as a member of parliament, not as a Conservative speaking against a Liberal. If the RCMP did not have the proper documents, then the Solicitor General has a responsibility to find out what went on.
These are the questions that I want to ask. The minister said the RCMP had certain documents which did not pertain to his office. How did he know that if he did not read them? Secondly, why did he give them access to what they wanted if they did not pertain to his office? If somebody came into my office and said: "We are taking your files, Eldon"-


Miss Campbell (South Western Nova):: That is a mere play on words.


Eldon Mattison Woolliams: I do not intend to get into a debate with the hon. lady, but if they came into my office and said, "Look, we are taking your files", I would ask what was their authority. I would then ask for a lawyer or examine the documents. But what did the Minister of Labour do? He said: "Help yourself to anything you want". I want to know what they took, what authority they had to take it, and why were they there. Would a lawyer or an experienced cabinet minister act in that way? The Minister of Labour is a lawyer, not a layman. He knows the Criminal Code as well as I do. He knows the RCMP are supposed to be armed with a warrant if they make a search.
The hon. member for Hamilton-Wentworth also asked whether there were any cabinet documents there. If so, why did he hand them over? What was going on?
I have two further questions to ask. First, if there is nothing wrong, why did the Prime Minister get into the act today and attempt to say that we were trying to lay charges? We were merely seeking information. In addition to that, why did the Minister of Finance (Mr. Turner), the former Minister of Justice, get up and try to read from Beauchesne, which really had nothing to do with the situation at all? They were ruled out of order, and Mr. Speaker ruled that there was no point of order. I must not discuss his ruling, but it was right on the point.

Those are all the questions I want to ask. If there was no authority and no documentation, or if there was documentation and the minister did not read it, then how does he know they did not pertain to his office? What was in his office, and what did the minister surrender?


John Carr Munro: Madam Speaker, going back to the time the RCMP came into my office, I recall looking at a form they had, and I recall vaguely some comment to the effect that it was not directed at my particular office. That recollection on my part was the basis for my statement. Let me say that I made a decision, rightly or wrongly, to let the RCMP look at the documents they wanted to look at. I did not know at the time what they were looking at, or what documents they were taking. I did not know what documents in fact they did take. I have had some opportunity subsequent to that time to examine some documents they took, but perhaps not all. That is all I can say, Madam Speaker, in the way of answer to the hon. member's questions.


NATIONAL PARKS-REQUEST THAT RESPONSIBILITY BE REMOVED FROM MINISTER OF INDIAN AFFAIRS AND NORTHERN DEVELOPMENT-ALLEGED CONFLICT OF INTEREST
Mr. Peter Elzinga (Pembina):: Madam Speaker, the parliament of Canada has passed the National Parks Act which provides that the parks, as outstanding natural areas of national interest, are to be maintained unimpaired for the benefit, education, and enjoyment of present and future generations. Obviously, hunting or commercial activities like mining and lumbering cannot be permitted because of the great changes that would result. Does that sound familiar? It should, because it is a statement from a publicity brochure put out by the Department of Indian Affairs and Northern Development.
Yet once again people across Canada concerned with the preservation of our national parks face a confrontation with the hierarchy of this same department. Land is being withdrawn from Wood Buffalo National Park without the benefit of full public hearing, before the fact, despite previous promises that this sort of thing would not be allowed to happen.
A land use project, funded by the government through the Department of Indian Affairs and Northern Development, found approximately 75 square miles of land in a national park suitable for an Indian reserve to be used as part payment of a land entitlement totalling 97,280 acres to the Cree Band, granted under a treaty signed in 1899. The department has already approved in principle the transfer of 41,824 acres of land out of the park in two parcels-one at the Embarass Portage, which has lumbering potential, and the other at Peace Point in the centre of the park where a large gypsum deposit is located. The balance of the entitlement will come from outside the park boundaries.
Peace Point is located in the central area of Wood Buffalo National Park slightly toward the east. It can be reached down the west side of the loop road approximately 77 miles south of Fort Smith.


Travelling down the road in the late spring or the early summer a person can see herds of 30 to 40 bison along or across the road every few miles, particularly in the early morning. Peace Point itself is one of the most beautiful areas in the park, with white poplar stands overlooking the Peace River and a panoramic view of sloping banks on the other side, with its forest of pine showing green and black against the usual blue sky. The Embarass Portage is located in the southeast corner of the park.
Wood Buffalo National Park was established in 1922 to protect what remained of the wood bison, which is slightly larger and darker than the plains bison. Later on in the 1920s, beginning in about 1925, plains bison were transplanted in the park where they mixed freely with the wood bison, producing large and vigorous specimens. Since 1967 natural factors such as drownings, severe winters, predators and disease have controlled the herd sizes.
The present bison population is approximately 9,000 to 10,000, down somewhat from just a few years ago. It is estimated that Wood Buffalo Park could at present maintain 30,000 to 40,000 bison under natural feeding conditions. The park presently covers 17,300 square miles.
The land will be removed from park status by transferring it to the province of Alberta, which in turn will transfer it back to the federal government as an Indian reserve. This transaction will require an amendment to be passed to existing parks legislation by the federal government. In addition, alternate methods to transfer this land cannot be discounted.
A spokesman for the Alberta Indian Association has stated publicly that the band eventually intends to strip mine the gypsum at Peace Point and carry on wildlife ranching and agricultural pursuits in the centre of this park.
Under these circumstances it is inevitable that sooner or later additional roads as well as barge traffic, heavy machinery, housing and domestic cattle will find their way into what used to be a park. It is not difficult to determine the events to follow this proposed plunder. Information has also been received from reliable sources that development interests have been encouraging native people for over a year to pressure for the land at the Peace Point gypsum deposit.
This land is being transferred unilaterally without a public hearing and will set a precedent for all such transfers in national parks. It is of concern that this land is being transferred from park status without the general public across Canada being made aware of what is happening, with all the attendant ramifications.
On February 3, 1975, during a television interview on the CBC program "Hourglass" the Minister of Indian and Northern Affairs (Mr. Buchanan) again confirmed his department's intention to transfer the 41,824 acres of land out of park status in Wood Buffalo National Park.
The struggle to establish and maintain the integrity of Canada's national parks is difficult at the best of times without this dangerous precedent. The transfer of land from a national park for this purpose is clearly not acceptable. Land in our national parks has been set aside by law to be preserved unimpaired, for the benefit of future generations. The obligation to ensure this natural heritage
Adjournment Debate
for the present as well as the future rests in the hands of all Canadians.
Yet the government does not want public hearings to be held to give the Canadian people an opportunity to voice their wishes. Our Prime Minister (Mr. Trudeau) said the other day that the people would govern Canada. Is this the type of governing he is talking about?
On December 16, I asked the Minister of Indian and Northern Affairs the following question:
Has the minister's department approved the turn-over of approximately 40,000 acres of land within the Wood Buffalo National Park ...
He stated:
Mr. Speaker, a request has been made for this land, but no decision has yet been made on this request.
In a supplementary I asked the minister why is it that his Edmonton regional office confirmed that the land was to be turned over. He replied that he was not aware of it but that he would be happy to look into the matter.
This leads me to believe one of two things. Either the minister does not know what is going on in his department, or he does not want the public to know. I believe that he does not want the public to know that truly a conflict of interest exists within the Department of Indian and Northern Affairs which has jurisdiction over Parks Canada, for what is good for the department can be disastrous for Parks Canada. This is tanamount to self negotiation, and therefore the dispute is primarily focused upon this department, and this should be corrected.
In closing let me state that I believe that our treaty agreements with our native people must be lived up to, but not at the expense of our national parks.


Mrs. Iona Campagnolo (Parliamentary Secretary to Minister of Indian Affairs and Northern Development):: Madam Speaker, in responding to the question of the hon. member for Pembina (Mr. Elzinga) I feel it would be helpful to get a sense of perspective in the matter. I refer to the proceedings of the Standing Committee on Indian Affairs and Northern Development of December 18, 1973, at which the then minister, now the President of the Treasury Board (Mr. Chretien), is on record as stating the following:
I would like to inform members of the Committee that in Wood Buffalo National Park we had the same problem. There is a group of Indians living in the park and I have told them that their rights to the land there will supersede the parks control of the land and these Chipewyans in Fort Chipewyan at this time are trying to identify the land that will remain their land even if it is within the park. We recognize that their rights were prior to the establishment of the national park.
In addition he said that:
. .. under the Expropriation Act, if we sometime need land for parks, we will take the negotiation route with the Indians.
Returning to the current situation which has prompted this question, under treaty No. 8 the Minister of Indian Affairs and Northern Development (Mr. Buchanan) has a responsibility to ensure that the Indian people of Fort Chipewyan are provided with 97,280 acres of land. The people of Fort Chipewyan have asked that 40,000 Acres of these lands be selected from lands in Wood Buffalo Na-
28996-22I/z


Adjournment Debate
tional Park. The balance of the lands will be selected in other areas which have not been identified.
The 1930 transfer of resources agreement with the province of Alberta requires that any lands no longer required for national park purposes be transferred to the government of Alberta. This is one essential step in the transfer of lands to the Indians. A second essential step is that lands cannot be removed from a national park without the concurrence of parliament.
The minister must arrive at a decision after weighing all of his responsibilities. All ministers must do this. Where major issues are involved a collective decision is taken by
cabinet. In the case at hand the approval of parliament will also be necessary. Thus, without accepting the proposition that any conflict of interest exists, it is clear that full public consideration and debate will take place before any steps are taken to alter the boundaries of the park.


Steve Eugene Paproski: After the next election.


The Acting Speaker (Mrs. Morin):: The motion to adjourn the House is now deemed to have been adopted. Accordingly, this House stands adjourned until tomorrow at 2 p.m.
At 10.35 p.m. the House adjourned, without question put, pursuant to Standing Order.

Wednesday, February 26, 1975