1976-11-26

ROUTINE PROCEEDINGS


Mr. Speaker:: Order, please. I received advice, and I understand others have as well, that it is the intention of the right hon. Prime Minister (Mr. Trudeau) to seek the unanimous consent of the House to raise a question of privilege at this time as opposed to the usual time at twelve o'clock. I have notice of the question of privilege, but I am not aware of its specific nature or of the reason for seeking the unanimous consent of the House to raise it. May I call upon the right hon. Prime Minister to explain the nature of the question or the reasons for seeking unanimous consent?


Right Hon. P. E. Trudeau (Prime Minister):: Thank you, Mr. Speaker. The reason I ask for this consent of the House is simply because I have a very important meeting with many businessmen from across the country which is scheduled to start at eleven o'clock, and I think it would be very helpful to me and to them if I could be allowed to state my question of privilege now. I understand the House might want to ask me a few questions. I would certainly agree to stay and answer a few of them, but I hope the House will understand that I will not stay for the whole question period as soon as hon. members go on to other matters.
My question of privilege has to do with a very misleading and mischievous headline in the Globe and Mail this morning, and if I had the unanimous consent of the House I would proceed to the matter now.


Mr. Baker (Grenville-Carleton):: Mr. Speaker, I think it is important that the Prime Minister (Mr. Trudeau) be given unanimous consent, but I think it is also important that members of the House who want to reply to the question of privilege that he raises be permitted to reply and question the Prime Minister on his statement. I gather that the Prime Minister is prepared to stay for that. Of course, the Prime Minister can choose whether or not he would stay for any part of the ordinary question period, but in any event if he is prepared to stay, as I understand he is, for questions on his statement-which I think is important-it should be realized that this transcends the importance of any meeting with any
businessmen in the country. They can wait for a few minutes. We would be prepared to give our consent.


Mr. Speaker:: Order, please. Before hearing the hon. member for Winnipeg North Centre (Mr. Knowles), I think we would have to be clear that the question raised by the Prime Minister can be discussed by any other member of the House and, therefore, participation in the question of privilege is open. However, it is not provided that questions on the question of privilege be directed to the Prime Minister. When the discussion on the question of privilege is finished, the ordinary question period will begin, and naturally the Prime Minister will be open to questioning in that way.


Mr. Knowles (Winnipeg North Centre):: Mr. Speaker, you have cleared up at least one point, namely, that the question of privilege will make it possible for others to participate in the matter. We are prepared to give our consent to it being raised now, rather than at twelve o'clock. But I could not agree more strongly than I do with the hon. member for Grenville-Carleton (Mr. Baker) that this matter is so important that the Prime Minister should stay until it is concluded. He has agreed to stay to answer questions, he says, for a limited time, but I think it is extremely important that he stay until this matter has been fully discussed.


Mr. Gauthier (Roberval):: As all the other opposition party leaders, Mr. Speaker, I want to give my consent to the House, so that the right hon. Prime Minister (Mr. Trudeau) may introduce his question of privilege. I have not read the article, but I feel that the House is only being fair in allowing the Prime Minister to answer these allegations published by a newspaper, for hon. members cannot enter news agencies and have published whatever they want.


Mr. Speaker:: Order, please. The raising of a question of privilege by the right hon. Prime Minister at this time can be done only with the unanimous consent of the House. Is there unanimous consent?


Some hon. Members:: Agreed.


Pierre Elliott Trudeau: Mr. Speaker, there appears this morning in the Globe and Mail a story concerning bribery, about which the former auditor general is alleged to have apprised me. My staff was made aware of that last night. I was at a meeting with religious leaders from across the country-
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November 26, 1976
Privilege-Mr. Trudeau


Mr. Hnatyshyn:: If you got down on your knees once in a while, things would be a little better in this country.


Some hon. Members:: Order.


Pierre Elliott Trudeau: -and therefore my staff was unable to reach me. However, my staff did look all night for any letter from the former auditor general which might mention bribery, and no such letter was found. We did dig up a letter from the former auditor general to me, dated March 22, 1973, which involves invoicing practices. The letter concerns the invoicing practices of Polymer Corporation.
I took immediate action on this letter from the former Auditor General. It was acknowledged four days after it was dated, and the next day-five days after the date of the letter-I forwarded a letter to the hon. member for West-mount (Mr. Drury), who was then president of the treasury board, asking that he study this matter or make inquiries relating to these invoicing practices. I was not able to reach the hon. member this morning because he is out west, but I do have from his office a copy of my letter to him, on which he wrote on the bottom some words in his handwriting. It says: "Called Morrison, CDC"-"executive vice-president", if I read it correctly-"on March 29", in other words, two days after having received my letter, "and he has undertaken to get Hampson"-who was president of the CDC-"to justify in writing the future policy of Polysar, Polymer, CDC." All this came to my attention within minutes, and we are presently making inquiries of the CDC to find out what action was taken as a result of these requests.
So my question of privilege is essentially one of drawing to the attention of the House the misleading nature of that headline which talks about bribery, whereas there is no mention of that in the letter. I repeat that it talks about invoicing practices, but however that may be viewed and understood, the important point I want to bring to the attention of you, Mr. Speaker, and the House is that I took immediate action and the minister involved took immediate action. As yet we do not know what follow-up was made by the Crown corporations.


Some hon. Members:: Hear, hear!


Pierre Elliott Trudeau: I wonder if the House wants me to table copies of this.


Some hon. Members:: Agreed.


Pierre Elliott Trudeau: With the consent of the House, I do so now.


Mr. Speaker:: Is that agreed?


Some hon. Members:: Agreed.


Mr. Speaker:: It is so ordered.


Mr. Allan Lawrence (Northumberland-Durham):: Mr. Speaker, I rise not in any way to ask questions or to make any point on behalf of the official opposition but, rather, in my role as chairman of the public accounts committee. I think what the Prime Minister (Mr. Trudeau) has done here this morning

is quite proper and correct. It is an attempt to clear up a very serious allegation against the office of the Prime Minister. I merely want to point out to the House, to the Prime Minister and to the government House leader, that these rather serious allegations have been made by an individual who is not now, but was once, a servant of parliament, the former auditor general.
In those days, as in these days, the auditor general's vehicle of communication, in many ways, with this House was through the public accounts committee. I would suspect that the terms of reference of the current public accounts committee would forbid us to go into this matter, although I am not too sure about that, in that our terms of reference are the current public accounts and the current Auditor General's report on those accounts to this House.
What the former auditor general has said, or is reported as having said, in the article referred to by the right hon. Prime Minister may or may not have reference to current investigations which are going to be undertaken by the public accounts committee. There are things which, in my mind, perhaps at the time should have been reported to the then public accounts committee and not, perhaps, even to the Prime Minister, but that is by the way.
I merely suggest to the Prime Minister, through you, Mr. Speaker, that because the public accounts committee is going to be looking at the role of these Crown corporations, and because Polymer is one of these corporations and we might be prevented from asking these questions-and I know the Prime Minister would like to have the matter cleared up-with the House Leader sitting beside him, that together they might come up with terms of reference expanding the public accounts committee. In that way it may be possible to call Mr. Henderson before the committee so that we can perhaps find out if he has been misinterpreted on this whole matter.
I think that is a valid request. I am trying to put it forward in the same tones of sweet reason that we just heard from the Prime Minister. I can see no possible objection to it. It would fit in with what we are trying to do in the public accounts committee, in any event. If we had Mr. Henderson before us, and he continued with these allegations, and perhaps might even be able to provide us with proof, I am sure the Prime Minister himself would like to appear before the committee in the event that the terms of reference were so wide.
Even if the terms of reference are not wide, I am not sure that the public accounts committee could not inquire into this matter. But let us resolve all doubt about it. If the Prime Minister wants to get to the bottom of the allegations, as we do, I am sure he would agree that the terms of reference for that committee should be widened as soon as possible to make sure we can call Mr. Henderson before it.


Mr. T. C. Douglas (Nanaimo-Cowichan-The Islands):: Mr. Speaker, members of the New Democratic Party readily concurred in giving the Prime Minister an opportunity to make a statement regarding the allegations made by Mr. Maxwell Henderson, the former auditor general. I must take some
November 26, 1976

exception, however, to the Prime Minister (Mr. Trudeau) assuming that he can come into the House to make a statement and then go off to an appointment, no matter how important, without giving members of the House an opportunity to ask some questions. It is not possible to ask questions-


An hon. Member:: He did not say that.


Thomas Clement (Tommy) Douglas: -on a
question of privilege. I therefore hope that the Prime Minister will see fit to stay and answer some questions when we get to the question period.


Pierre Elliott Trudeau: I said I would.


Thomas Clement (Tommy) Douglas: The Prime Minister says that is clear. It certainly was not clear in his opening statement in which he said he had to go to another meeting.
Mr. Speaker, there are a number of points which have to be cleared up, and I hope they can be cleared up later. The first is whether the letter to which the Prime Minister referred is the same letter to which the former auditor general was referring. He makes the very serious statement that he wrote privately to the Prime Minister suggesting that he had information indicating that Canadian Crown corporations were paying bribes to foreign buyers to sell certain products. That is a serious charge.
If there is another letter, I think Mr. Henderson ought to have the opportunity to appear before the public accounts committee, if he is willing to appear, to produce such a letter. Certainly, the Prime Minister has the obligation to have his staff search further to see whether such letter exists. The second thing we ought to know is whether the invoices are being tabled and whether they deal with any company or Crown corporation other than the CDC, which is apparently the only company regarding which Mr. Drury, who was then president of the treasury board, made any inquiries. That matter should be cleared up.
I support the suggestion made, that the terms of reference of the public accounts committee should be widened. That committee has not yet sat. The terms of reference will be, as I understand them, the public accounts and the Auditor General's report. But the matters to which Mr. Maxwell Henderson refers, of course, have much wider scope and cover a different period of time. Therefore, I think the public accounts committee, on the government's initiative-and there will have to be a motion in the House-should be given the widest possible latitude in order to allow Mr. Henderson to appear, to allow the Prime Minister to appear, to ascertain whether there is a letter other than that which the Prime Minister tabled this morning, and to find out whether Mr. Henderson has any substantial evidence to corroborate the statements he makes when he claims that he wrote to the Prime Minister saying that he had information which led him to believe that certain Canadian Crown corporations were using bribes.
Oral Questions
I think this matter cannot be settled simply by a statement by the Prime Minister. We are prepared to accept the statement that this is the only correspondence he can find, but it seems to me, in view of the seriousness of the charge and in view of the person from whom it comes, that this matter ought to have very thorough investigation by the public accounts committee, on the basis of widened terms of reference, so that there will not be any nit-picking as to whether that committee has full authority to go back to some period in time in order to look into this matter and related matters regarding agents who have been used by Crown corporations and have submitted accounts which have been called in question, not just by Mr. Maxwell Henderson but by the present Auditor General.


Mr. Speaker:: Order, please. Oral questions.



ORAL QUESTION PERIOD


Walter David Baker: Mr. Speaker, I want to direct my question to the Prime Minister, if I may. It arises out of the story to which he just alluded, particularly references in the story to Canadian Crown corporations in the plural. In view of that representation which has been made, and in view of the request by the chairman of the public accounts committee that the terms of reference from this House to the committee should be broadened so that there can be no doubt that the former auditor general can be brought before the committee and, indeed, so that there can be no doubt that all information would be available to the committee, including the documents to which the Prime Minister alluded in his statement this morning and the reply from Mr. Hampson to the former president of the treasury board, Mr. Drury, and any other documents, would the Prime Minister undertake to table the invoice to which he refers, which he may have now, and the reply which will be coming obviously to Mr. Drury or to his successor, and will he also undertake to the House to broaden the terms of reference so that there can be no doubt that the public accounts committee will have jurisdiction to call the former auditor general of Canada, in order that this matter may be completely explored?


Mr. Speaker:: Order, please. Before calling on the Prime Minister to answer, I should say that I ought to have concluded the previous chapter in today's proceedings by indicating that, of course, the discussion on the question of privilege raised by the Prime Minister evidently having concluded, it was appropriate to move to the next item of business and begin the question period. I will take appropriate note of the time used and extend the question period accordingly.
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November 26, 1976
Oral Questions
The question raised by the Prime Minister is similar to questions raised under privilege in the past in respect of the refutation of statements made in the press about members; such a question has always been recognized as very important in the past, but not as a question of privilege. The current example is no exception to that past practice. In any case, no specific motion is attached to the question of privilege raised by the Prime Minister and therefore no action is taken by the Chair.


Pierre Elliott Trudeau: Mr. Speaker, the House leader of the Tory party is asking me to table documents that I do not have and the existence of which I have no knowledge.


An hon. Member:: The Conservative party.


Mr. Hnatvshyn:: What does the leader of the Grits say?


Pierre Elliott Trudeau: I did not think it was degrading to call the Conservative party the Tory party. If there is objection to that appelation, I will not use it in the future.
I have tabled the documents that I have in my possession. Your Honour will realize that I was only apprised of this matter a couple of hours ago. We got all the information we have at this time. Questions about other papers or other matters are, as far as I am concerned, hypothetical.
I want to make it clear that in the former Auditor General's letter he only refers to one company, Polymer. Presumably because Polymer was acquired by the CDC, he also mentions the CDC, saying that he sent a copy of this letter to Mr. Rush, president of Polymer and Mr. Hampson chairman of the board of the CDC. It is possible they will have further documents in which the House might be interested. I have no knowledge of them.
As far as the Public Accounts committee is concerned, if I understand the hon. member for Northumberland-Durham, he would like to know from the former Auditor General why he did not apprise parliament of this rather than writing to me privately. I think that question should be best asked of him and I have no objection to him being asked that by the committee. I am sure the press will be asking it very soon. I suggest that the House leaders discuss this matter with great urgency and see if it requires any modification of the terms of reference.
If I could go on and answer the point raised by the hon. member for Nanaimo-Cowichan-The Islands, he asked me if there is any other letter. I thought I had answered that in my opening statement. I said that my staff looked all night for any letter from Mr. Henderson which might mention bribes and they found none. It was in order to be as forthcoming as possible with the House that I produced this letter which may have been the one he had in mind. If that is it, I think the House will agree that the press story was very mischievous and misleading indeed.
If there is another letter, I have challenged Mr. Henderson to produce it. I was asked about this when I came into the

Parliament Buildings this morning. I said that I had no recollection of any letter mentioning bribes. If there is one, we have not found it. Perhaps Mr. Henderson can produce it, if it exists.


Some hon. Members:: Hear, hear!


ALLEGATIONS BY FORMER AUDITOR GENERAL-REASON FOR FAILURE OF PRIME MINISTER TO REFER SUBJECT TO PUBLIC ACCOUNTS COMMITTEE
Walter David Baker: Mr. Speaker, I thank the Prime Minister for what I gather is his consent and his instruction to his seatmate and colleague, the President of the Privy Council, to consult with regard to broadening the terms of reference, if necessary. There is one other matter that was not included in the statement but arises out of it. That matter obviously ought to have been included in an Auditor General's report. The statement by the former Auditor General was improperly reported to the office of the Prime Minister since the Auditor General is a servant of parliament. Why then did the Prime Minister's office determine to initiate an internal inquiry rather than apprising the Auditor General of the laxity in the procedure if that was the case, or why he did not refer the matter to the Public Accounts committee?


Pierre Elliott Trudeau: Mr. Speaker, I think the answer to that is rather obvious. The Auditor General wrote to me and I took action on his letter. He is a servant of parliament-the House will recall that he was no particular servant of mine-


Some hon. Members:: Oh, oh!


Pierre Elliott Trudeau: He chose to apprise me of a matter and, I repeat, I followed it up with great urgency. And I was not in the habit of questioning his actions, hon. members will recall.


ALLEGATIONS BY FORMER AUDITOR GENERAL-POSSIBILITY OF REFERENCE TO MINISTER OF JUSTICE
Walter David Baker: Mr. Speaker, it would not seem to be an unusual procedure to inform the Public Accounts Committee but that action was obviously not taken in this case. Can the Prime Minister inform the House whether he, or anyone on his behalf, spoke to the then minister of justice with respect to the impropriety or lack of propriety which was revealed in the letter from the Auditor General to the Prime Minister respecting Polymer? Was any action taken as a result of that letter with respect to the minister of justice?


Pierre Elliott Trudeau: Now, the House leader for the Conservative progressive party-


Some hon. Members:: Oh, oh!


Pierre Elliott Trudeau: -has smuggled in the word "impropriety", Mr. Speaker. This is precisely what I am afraid of-that this
November 26, 1976

kind of misleading headline will lead to that kind of misleading question.


Some hon. Members:: Hear, hear!


Pierre Elliott Trudeau: The documents in our possession mentioned no impropriety. They do refer to endorsing practices. I am not an accountant and I am not versed in these matters to any great depth. I referred the matter to those persons in the government who are most responsible for accounting practices. If the House feels that in some way Mr. Henderson acted improperly by not referring the matter to the Public Accounts Committee it can make that allegation. But I do not wish it to be said that the letter which is before us mentioned improprieties in any strict sense of the word.


ALLEGATIONS BY FORMER AUDITOR GENERAL-REASON FOR LACK OF FOLLOW-UP BY PRIME MINISTER
Mr. G. W. Baldwin (Peace River):: In light of the fact that the date of the letter in question is March 22, 1973-three and one half years ago-and given the fact that it referred to some $2 million being placed in numbered Swiss bank accounts and the reason given by Mr. Henderson for writing directly to the Prime Minister was that he felt it may be contrary to the best interests of Polymer as a multi-national corporation in a highly competitive field, does the Prime Minister not feel that it should have been followed up by him? Does he not feel that he should have been able, by examination of his correspondence, to tell this House today exactly what was done as a result of those very serious statements?


Pierre Elliott Trudeau: No, Mr. Speaker.


SUGGESTION ALL CROWN CORPORATIONS BE AUDITED BY AUDITOR GENERAL
Gerald William Baldwin: Is the Prime Minister, then, not aware that agents of the Auditor General were subsequently refused the opportunity to make a study of the books of the Polymer Corporation? Does he not think, on a question of larger principle, he should make sure that from now on the Auditor General is at least a joint auditor of all corporations so that situations of this kind will never more recur?


Pierre Elliott Trudeau: This question, Mr. Speaker, along with the previous one, obviously brings into debate the question whether Crown corporations should be at arm's length from the government or whether we should be attempting to manage their affairs, and whether the Auditor General of this parliament should also be Auditor General of Crown corporations which parliament created at arm's length from the government. This question can be discussed and debated. I have no particular desire to have one answer or the other. However, I repeat what I have said before: we are concerned with the complete independence of Crown corporations and we will be presenting to the royal commission we
Oral Questions
have set up a green paper indicating certain courses which would perhaps give the government a greater say in the management and objectives to be pursued and the way they should be pursued by Crown corporations.


INFORMATION
Gerald William Baldwin: I am trying to keep this matter on a high level so it will help the Prime Minister in future prayer meetings. I would ask him this: in view of the fact that this whole issue has been, I will not use the word "suppressed", but kept out of sight for three and one half years, would he not now indicate the necessity of having the government produce a freedom of information bill?


Some hon. Members:: Hear, hear!


Gerald William Baldwin: Or, if the government is unwilling or afraid to do so, of assigning that task to a committee of the House.


Pierre Elliott Trudeau: I am not sure in what way a so-called freedom of information act would have impinged on the judgment of the Auditor General. After all, the Auditor General is a servant of the House and for the course he followed he must be answerable to the House. A freedom of information act would not have changed his mind with regard to the way in which he dealt with this question.


GOVERNMENT ADMINISTRATION
Thomas Clement (Tommy) Douglas: Assuming that the letter which the Prime Minister has tabled is the only letter he received from Mr. Henderson, and this is something which Mr. Henderson himself will have to divulge, even this letter dated March 22, 1973 did endeavour to draw to the attention of the Prime Minister a serious situation concerning Polymer and its dealings with a Swiss subsidiary, Polysar International SA. Perhaps I might quote a sentence from the letter which sums it up.
Briefly, this arises from the subsidiary's practice of invoicing certain European customers by agreement at inflated prices with the difference being remitted to the customer or their representatives in cash in Switzerland or placed in numbered Swiss bank accounts as directed.
The letter then goes on to say that by doing this the customer was able to dodge the tax collector in his own country to the tune of some $2 million. This was a serious situation to bring to the attention of the Prime Minister more than two years ago. The Prime Minister referred the matter to the minister who was President of the Treasury Board at that time. The President of the Treasury Board merely scrawled a

November 26, 1976
Oral Questions
notation which said "Called Morrison (CDC Executive VP)"-I assume that stands for Vice-President-"March 29; he has undertaken to get Hampson to justify in writing the future policy of Polysar, Polymer, CDC." It is just signed "D"-I assume it stands for Drury.
Now, Mr. Speaker, I want to ask the Prime Minister, first of all, did he get an undertaking from Mr. Hampson as to future policy? If so, will he table that document? Second, did he get any investigation into why Polymer was really compounding a felony by allowing its subsidiary to use closed Swiss bank accounts to dodge tax responsibilities in the customer's country? This is a pretty nefarious practice and it was drawn to the attention of the government three years ago last March.


Mr. Speaker:: Order. With respect I believe the questions put by the hon. member are quite clear. I do not believe they need any further elaboration.


Thomas Clement (Tommy) Douglas: First of all, would he table the document requested by Mr. Drury of Mr. Hampson; and secondly what action did he take with reference to the practices which were being carried on by Polymer, and have those practices been discontinued?


Pierre Elliott Trudeau: Mr. Speaker, I answered these questions when I first made my statement in the House. I said that I had made inquiries to see what action had been taken by the CDC following this and I have had no reply from them yet.


Some hon. Members:: Oh, oh.


Pierre Elliott Trudeau: I am sorry, Mr. Speaker, but it seems hon. members were not listening to me when I made my statement. I said this morning that I made inquiries of CDC to see whether there had been any follow-up and whether they had changed their accounting practices, and as I say I have not yet received that information.
I would point out to the hon. member for Nanaimo-Cowichan-The Islands that he is now talking about a felony; it is no longer an impropriety but is now a felony. There is nothing in this letter which uses that kind of word at all. The Auditor General does not seem to be concerned with the illegality, or indeed even the immorality, of any of these practices; he is concerned with a contingent liability.


Mr. Horner:: How do you feel about this?


Pierre Elliott Trudeau: The facts as I know them do not permit me to know of any felony or any impropriety. If hon. members look at my letter to Mr. Drury, they will see I say on page 2:
While there may be no strict breach of law involved in the action that is referred to (I do not know whether that is the case or not), and while the government may not have complete control or direct responsibilityand so on. So I am interested in these questions too, but obviously they are not the aspects which concern the Auditor General.

In so far as his allegations or his statements are concerned, he does refer to tax liabilities and foreign exchange control regulations where they exist. He makes no judgment on this matter either, because I think quite properly he takes the point of view that it is not for him to see if other countries are collecting their taxes in the way they should. He just wants to make sure that our own accounting practices are correct and that they do not bring into account contingent liabilities which might cause us problems. So I repeat to the hon. member for Nanaimo-Cowichan-The Islands, as I did to the opposition House leader, that it would be very misleading and damaging now to read into this letter moral insinuations and criminal liabilities, and I object to that very strongly.


Thomas Clement (Tommy) Douglas: A supplementary question, Mr. Speaker. The Prime Minister knows perfectly well that when I spoke of any felony it was by a subsidiary that was apparently trying to use certain techniques to evade its customer's tax responsibilities in whatever country it was located. What I am interested in is whether a Canadian Crown corporation was a party to such attempted deceit. I should like to ask the Prime Minister, first, whether he condones a Canadian Crown corporation participating in that kind of practice; and secondly, why after more than three years has the Prime Minister not asked for some assurance that such a practice has been discontinued? Has the Prime Minister received any such assurance, will he undertake to get such assurance, and why has it taken so long to look into the matter, or does the Prime Minister not think it is serious?


Pierre Elliott Trudeau: Mr. Speaker, I answered each of those questions this morning.


POSSIBILITY ALLEGATIONS BY FORMER AUDITOR GENERAL RESULTED IN MEETING BETWEEN MINISTERS-INQUIRY AS TO RESULTS
Mr.  R. Gordon L. Fairweather@Fundy-Royal: Mr. Speaker, perhaps the Prime Minister would want sometime to inquire into this. In his letter to his colleague Mr. Drury, he says "it would be a good suggestion to have Messrs. Turner, Goyer and Sharp have a meeting". When was that meeting held and what were the results of the meeting? If the Prime Minister wants some time to reply, what new changes in our administrative arrangements were made as a result of the meeting, if in fact it was held?


Pierre Elliott Trudeau: Mr. Speaker, if the hon. member remembers what it was I indicated earlier, it was that I had not been able to reach Mr. Drury who was out west. In my letter to him, I indicated two courses of action. He appears to have followed one of those courses. I do not know what further results came from his following that course. That is all I can say at this time.
November 26, 1976


ALLEGATIONS BY FORMER AUDITOR GENERAL-ACTION TO OBTAIN PARTICULARS OF POLYMER PRACTICE IN CONNECTION WITH REBATES
Mr. Lloyd R. Crouse (South Shore):: Mr. Speaker, I have a brief supplementary question for the right hon. Prime Minister. In the letter that has been tabled written to him by Mr. Maxwell Henderson, the auditor general of the day, paragraph two reads, in part, as follows: "Full particulars of the practices surrounding these rebates, payment of which aggregated approximately $1,900,000 during 1972, can be obtained from Polymer Corporation Limited". In light of the time which has elapsed from the date of this letter, March 2, 1973 to the present, aside from asking the then President of the Treasury Board to consult with Messrs. Turner, Goyer and Sharp, what other action did the Prime Minister take to get the full particulars of the practices surrounding these rebates? Did he do anything else to learn about this questionable expenditure of public funds?


Pierre Elliott Trudeau: I reported the extent of my involvement in this matter in a previous statement, Mr. Speaker.


ATOMIC ENERGY OF CANADA LIMITED
Mr. James A. McGrath (St. John's East):: Mr. Speaker, may I ask this question of the right hon. Prime Minister. In view of the statement that he made to the press yesterday about discussions that he had had with the Minister of Energy, Mines and Resources on a similar type of arrangement involving Atomic Energy of Canada Limited, would the Prime Minister tell the House precisely when he held these discussions with the former Minister of Industry, Trade and Commerce; and in view of the fact that this raised questions of potentially serious improprieties regarding the actions of at least one Crown corporation, Polymer, what action did the Prime Minister take in dealing with these alleged serious improprieties?


Pierre Elliott Trudeau: Mr. Speaker, the hon. member is repeating a question that I answered yesteiday. The discussion I had with the former Minister of Industry, Trade and Commerce, now Minister of Energy, Mines and Resources, took place many months ago when he raised with me some questions he had regarding AECL and its sale of a CANDU reactor to Korea. At that time he told me what action he was taking and I reported to the House that that action had been taken.
Oral Questions


ALLEGATIONS CONCERNING USE OF AGENTS-REASON MATTER NOT REFERRED TO MINISTER OF JUSTICE
James Aloysius McGrath: A final supplementary question, Mr. Speaker. My question is prompted by the serious questions raised by the Auditor General's letter of March 22, 1973 which would indicate that this is a practice. In light of the fact that this had been brought to the Prime Minister's attention as far back as 1973, and in light of the fact that further suggestions of potential impropriety by AECL had been brought to the Prime Minister's attention, as he says, several months ago, may I ask the Prime Minister why he did not refer this matter, since possible criminal action is involved here, to the Minister of Justice?


Pierre Elliott Trudeau: Well, Mr. Speaker, the hon. member says "possible criminal action".


James Aloysius McGrath: It is bribery.


Pierre Elliott Trudeau: Once again, Mr. Speaker, no knowledge of bribery is put forward in this letter, and there was no knowledge of bribery in the conversations that I had with the former Minister of Industry, Trade and Commerce. He was concerned about certain accounting practices which may or may not involve bribery. That is what we are trying to find out and it is why the minister has requested of the public accounts committee that it look into this matter in every way it can.
Naturally, when the minister heard of these expense accounts and he raised the matter with me, we were both very concerned with the possibility of bribery. At that time the House will recall the Lockheed scandal was making headlines in other countries. We determined, on the initiative of the present Minister of Energy, Mines and Resources, to act as quickly as possible to get to the bottom of this and to find every piece of fact that we could in order to correct any possible situation.
[DOT] (U50)


Mr. Speaker:: A final supplementary by the hon. member for St. John's East.


James Aloysius McGrath: Mr. Speaker, since the Prime Minister admits there were serious questions in his own mind about the potentiality of a criminal act being involved here, once these questions arose in the Prime Minister's mind surely it was then incumbent on the Prime Minister as the leader of the government to seek advice from the chief law officer of the Crown, the Attorney General of Canada and the Minister of Justice. Why did not the Prime Minister consult with the Minister of Justice.


Mr. Speaker:: With respect this question is repetition. The hon. member for Wellington-Gray-Dufferin-Waterloo.

November 26, 1976
Oral Questions


GOVERNMENT ADMINISTRATION
Mr. Perrin Beatty (Wellington-Grey-Dufferin-Waterloo):: Mr. Speaker, to the Prime Minister. Did I understand the Prime Minister correctly that he had searched his files and found no reference in his files to the report that was requested by him of the then president of the treasury board, in the final line in his letter, where he said:
I should appreciate it if you could have this matter given immediate consideration and then let me have your views.
Am I correct in assuming that the Prime Minister has no personal recollection of any report made to him by the then president of the treasury board?


Pierre Elliott Trudeau: If it is on the
matter of this letter, Mr. Speaker, the answer is no; I have no recollection and do not believe any further discussion was made between the minister and myself.


Henry Perrin Beatty: Mr. Speaker in view of the fact that the Prime Minister in his letter specifically requested a report by the then president of the treasury board when he said "and then let me have your views", why did the Prime Minister not pursue this matter with the president of the treasury board to insist that the president of the treasury board give the report which he requested if the matter is, as it is, a very serious question.


Pierre Elliott Trudeau: Well, I think the answer is contained in part in the letter. It says "it seems to me that any further reply, if there is to be one, ought to be directed to the acting Auditor General or the new Auditor General, as the case may be". Mr. Speaker, I repeat that I am not very proficient in accounting matters. When the Auditor General draws a matter to my attention I do as I do in many other matters. I refer it to the minister most directly involved in the matter of accountancy in government accounts and I trust that if there is anything to be brought up with me it would be raised with me. In this particular case I suggested that the minister deal directly with the Auditor General. I do not know at this time if there was any exchange between them.


Mr. Speaker:: A final supplementary by the hon. member for Wellington-Grey-Dufferin-Waterloo.


Henry Perrin Beatty: Mr. Speaker, is the Prime Minister saying, despite the fact that he said "let me have your views", that he made no request to the then President of the Treasury Board for a report back on this matter and that he was not interested in having a report from the President of the Treasury Board.


Pierre Elliott Trudeau: That is right, Mr. Speaker.
j Mr Speaker.]


ALLEGATIONS BY FORMER AUDITOR GENERAL-INQUIRY AS TO ACTION TAKEN BY MR. DRURY
Mr. Edward Broadbent (Oshawa-Whitby):: Mr. Speaker, with reference to the letter the Prime Minister sent dated March 27 in which he says "there are obvious possibilities for embarrassment", which is some understatement, I would like to ask the Prime Minister-he says he has no personal knowledge of a written reply from the former president of the treasury board-if he is telling the House that he had his officials check through the night for that, too, and that there is no such reply and, second, did Mr. Drury, following the receipt of this letter from the Prime Minister, write to any other ministers concerning it and has he in his records copies of replies presumably outlining certain courses of action they might have taken in response to Mr. Drury's inquiry?


Pierre Elliott Trudeau: Mr. Speaker, I repeat for the third time that I apprised the House of the extent of my knowledge and involvement in this matter. If there is another letter to which Mr. Henderson made reference, and on which the Globe and Mail might have made headlines, I do not know of its existence. I would like Mr. Henderson to come forward and produce it if there is. That might clear up that part of the matter. On this particular part of the matter, Mr. Speaker, this is all the correspondence we have. I have not spoken to Mr. Drury and therefore I do not know if he took any further action beyond alerting the CDC. I think I have repeated that for the fifth time.


John Edward Broadbent: Mr. Speaker, before the next sitting of the House will the Prime Minister undertake to make inquiries of the former president of the treasury board and find out from him what specific action he did take and report back to the House. Second, could he tell us why he waited until this morning, which he said earlier that he did, why did he wait three and one-half years before getting in touch with the CDC to find out if they had stopped these nefarious practices.


Mr. Speaker:: The right hon. member for Prince Albert.


ALLEGATIONS BY FORMER AUDITOR GENERAL-REASON FOR DELAY IN ACTION-CONSULTATION WITH FORMER AUDITOR GENERAL
Right Hon. J. G. Diefenbaker (Prince Albert):: Mr. Speaker, there are just a couple of questions which arise out of the Prime Minister's statement. It is very obvious that he regards it as a serious matter for his letter to Mr. Drury indicates that he did-"there are obvious possibilities for embarrassment". Did he discuss this matter with Mr. Drury? What did Mr. Drury tell him? Did the Prime Minister point out to Mr. Drury that while he himself contends there is no criminal offence, certainly these corporations were placed in the position of being an accessory before the fact to the commission of frauds on another country. Why did he wait so long and do nothing about it? That is something which naturally one wonders about because usually he is so acute and on this he apparently forgot all about it. Why?
November 26, 1976


Pierre Elliott Trudeau: Mr. Speaker, I believe I answered every one of the questions asked by the right hon. gentleman. I answered them this morning. There is perhaps an explanation I could give to him. At the time I referred this matter to the responsible minister I trusted my ministers. I trusted them to do their job and did not always ask them from day to day how they dealt with each particular matter. This conversation or this exchange happened some three and one-half years ago. I cannot claim to remember all the details of it. I repeat to the House that we may not even be talking of the same thing as the Auditor General because there may be some other letter which exists involving bribery. I do not know what is in existence. I think if we are a bit patient we might find out from the Auditor General two questions: whether there is another letter which would justify the headlines in the Globe and Mail and, second, whether he is prepared to explain to the House or to the public why he did not refer this matter to the Public Accounts Committee or to Parliament of which he was a servant. That is all I can say.


John George Diefenbaker: Mr. Speaker, all of this is very interesting but most evasive. I ask the Prime Minister this: Did he see the former auditor general in regard to this matter; did he have any conversations with him as a result of receiving this extraordinary revelation that rebates, payment of which aggregated $1,900,000 would be obtained from Polymer Corporation and result in the subsidiary of a Canadian government corporation being in a position to reduce its tax liabilities in its own country and avoid its country's foreign exchange. Surely that was serious enough that he would have discussed it with the former auditor general. Did he have any discussion with him whatsoever?


Pierre Elliott Trudeau: Mr. Speaker, I was not in the habit of seeing the Auditor General privately. If he had found this matter to be as serious as the right hon. gentleman alleges I take it that he would have put it to parliament as was his function to do. If he raised it in this way I presume it was because, for reasons which are apparent in this morning's newspaper, he preferred to keep it private and preferred me to deal in this way through the ministers and the Crown corporations. I apparently anticipated his wishes by proceeding in this way. He has chosen to make it public now, for what reasons I do not know, but if this is the letter he was referring to, he is the only man who can explain to the House why he proceeded in this way.


John George Diefenbaker: In view of the disclosures that the Prime Minister has made today in consequence of the examination of the files, would he say that when this revelation was brought to his attention, he was shocked over the fact that a Canadian government corporation would indulge in such an obvious and transparent fraud?


Pierre Elliott Trudeau: I would point out to the hon. gentleman that there is no allegation of fraud here nor any allegation of an illegality. The Auditor General is concerned, I repeat, not with morality or with law but with accounting practices.
Oral Questions


Some hon. Members:: Oh, oh!


Pierre Elliott Trudeau: There is no indication here that an accounting practice has resulted certainly in any breach of the law or any breach of foreign exchange control regulations. He says they might exist, they might be there, and that is also the question I referred to the minister for study because naturally we are ensuring that Crown corporations of the people of Canada do not break the law. But there is no suggestion, and certainly no accusation here, of any breach of law, let alone fraud.


John George Diefenbaker: Complete fraud.


Pierre Elliott Trudeau: The fraud is perhaps sitting on the other side of the House.


Some hon. Members:: Oh, oh!


ALLEGATIONS BY FORMER AUDITOR GENERAL-POSSIBILITY OF INQUIRY BY PRIME MINISTER OF TREASURY BOARD AND FORMER AUDITOR GENERAL
Mr. Sinclair Stevens (York-Simcoe):: Mr. Speaker, my question is for the Prime Minister. Noting that the Prime Minister has not been able to reach Mr. Drury, I was wondering whether the Prime Minister could indicate if he did in fact contact the present President of the Treasury Board or, failing that, the immediate predecessor of the President of the Treasury Board who sits across the aisle from him, as to what to their knowledge transpired as a result of the letter dated March 22 in which the Prime Minister stated "I would appreciate if you could have this matter given immediate consideration". Did he attempt to find out if the Treasury Board in fact did take some action?


Pierre Elliott Trudeau: I have answered that question, Mr. Speaker.


Sinclair McKnight Stevens: The Prime Minister has referred several times to the Globe and Mail article and has stated that if this is the letter, meaning the March 22, 1973 letter to which Mr. Henderson is referring, he has made certain observations. Would the Prime Minister indicate if his staff attempted to reach Mr. Henderson to find out if in fact this is the letter Mr. Henderson was referring to?


Pierre Elliott Trudeau: I do not know, Mr. Speaker.


ALLEGATIONS BY FORMER AUDITOR GENERAL-SUGGESTED REFERENCE TO PUBLIC ACCOUNTS COMMITTEE
Allan Frederick Lawrence: My previous interjection on this matter was by way of comment. This is a direct question to the government House leader. Because it is pretty obvious that we cannot get all the answers to this problem here on the floor of the House of Commons and the obvious place for them should be a committee of the House-I would suggest to the government House leader that that reference should be to the Standing Committee on Public Accounts-may I ask the government House leader if he

November 26, 1976
Oral Questions
would undertake later in the day to either make a statement about this matter to the House, or be prepared later in the day or on Monday to bring before the House a reference for this whole matter and any allied matter to the Standing Committee on Public Accounts so that there would be no doubt that that committee would have the power to call or perhaps even subpoena, recalcitrant witnesses and would have the power as well to get the full documentation from the Prime Minister's office and any of the other ministerial offices involved, as well as any of the Crown agencies and Crown corporations involved?


Hon. Allan J. MacEachen (President of the Privy Council):: Mr. Speaker, first of all I would like to take a look at the present reference of the Standing Committee on Public Accounts to see whether it is wide enough,-and it may be-to deal with all the matters that are under discussion at present. I am not certain that the committee is limited, but I would like to look at the reference, and if it is too narrow for the purposes the hon. member has in mind, as the Prime Minister has indicated, I will consider whether the reference ought to be broadened in a way that would permit the additional inquiry.


ATOMIC ENERGY OF CANADA LIMITED
Ramon John Hnatyshyn: Mr. Speaker, I would like to direct my question to the Minister of Energy, Mines and Resources. Atomic Energy of Canada announced its intention to pay out a minimum of $175,000 every three months beginning next year to its South Korean sales agent, the Eisenberg Company, in addition to the $ 15 million already spent. In view of the fact that these payments, which are minimum retainers, may go on well past 1980, will the minister tell the House what services AECL will receive in exchange for these massive sums?


Hon. Alastair Gillespie (Minister of Energy, Mines and Resources):: I think the chairman of AECL made a statement on that before the Standing Committee on National Resources and Public Works. He indicated the kind of services provided, and I am sure there will be plenty of opportunity to give further details to members of the House before the committee next week.


Ramon John Hnatyshyn: Under these circumstances, will the minister tell the House exactly why these services could not be handled by the purchaser which, after all, is the government of South Korea, the arbiter of the laws which the Eisenberg Company will be paid to circumvent?


Alastair William Gillespie: If the hon. member is asking why one needs an agent on the ground when one is putting up a massive undertaking, something in the order of $500 million, and if he is asking whether there are likely to be problems with respect to customs clearance and a multitude of administrative details

with respect to a project of that size, then I think he probably answered his own question.


TOTAL AMOUNT TO BE PAID TO AGENT
Ramon John Hnatyshyn: Will the minister then admit that under the contract AECL, and hence the people of Canada, would ultimately end up paying Eisenberg in excess of $20 million, that is to say $5 million more than the payment mentioned in the Auditor General's report, and possibly even more than the original contract with the United Development Company?


Alastair William Gillespie: It was made quite clear before the committee that the re-negotiated contract is for a lesser amount than the original contract.


MANPOWER
Mr.   Albert@: Mr. Speaker, my question is directed to the Minister of Public Works.
Following the announcement yesterday by his colleague the Minister of Manpower and Immigration of a new labour intensive program and the allocation of $50 million for the current fiscal year, could the minister consider, in respect to this sole program, extending it up to the end of May 1977, for the sake of a greater effectiveness?


Hon. Judd Buchanan (Minister of Public Works):: Mr. Speaker, I will have to pursue this matter with my colleague. I do not know whether or not it is feasible beyond the end of the Fiscal year.


INCOME TAX
Mr. Elmer M. MacKay (Central Nova):: Mr. Speaker, I have a question which I should like to put to the Minister of National Revenue and which seems particularly appropriate this morning. I noted she was speaking to her predecessor in office a short time ago. Can the minister tell the House what current steps she is taking, or to her knowledge had been taken, regarding this very important matter of possible offshore tax evasion with reference to dealings between Crown corporations and the private sector] particularly since her predecessor in office dealt with this some time ago?
November 26, 1976


Elmer MacIntosh MacKay: Mr. Speaker, I will repeat my question briefly. In view of the difficulties which have come into focus so sharply here today, and in view of statements made by the minister's predecessor in office regarding his determination to deal with attempts by offshore corporations with Canadian ties to evade taxes in this country, what steps have been taken by the minister or her predecessor recently to combat this situation?


Miss B6gin:: I read the Globe and Mail this morning, and I have followed the question period in the House, and as far as I am concerned those are the steps I have taken.


Some hon. Members:: Oh, oh!


Elmer MacIntosh MacKay: Did you read it three months ago?


MANPOWER
Mr. Jake Epp (Provencher):: Mr. Speaker, my question was to be to the Minister of Manpower and Immigration, but in his absence I will ask the acting minister. My question pertains to the so-called Nanny-gate affair. In light of the fact that the Minister of Transport engaged a nanny from the United Kingdom, would the acting minister tell the House whether the position was advertised so that a Canadian might have filled the vacancy? If this was done without success, was a valid work permit obtained from the minister's office for the job in question, bearing in mind that over 7 per cent of the Canadian labour force is now unemployed?


Allan Joseph MacEachen: 


Mr.   Speaker-Mr. Fairweather@: You are a bachelor; you don't know anything about babies.


Mr. Speaker:: The hon. member for Provencher on a supplementary question.


Arthur Jacob (Jake) Epp: Mr. Speaker, I would like to redirect my question, if the government House leader would indicate to me who the minister in charge is at this time.


John (Jack) Henry Horner: Are they all out west?
Oral Questions AGRICULTURE


INDUSTRIAL MILK-POSSIBILITY SUBSIDIES BEING PAID FOR NON-EXISTENT MILK
Mr. Jack Murta (Lisgar):: Mr. Speaker, I would like to try my luck and direct a question to the Acting Minister of Agriculture or the parliamentary secretary. Is the government aware or was it informed by the Minister of Agriculture either that Statistics Canada has made an error which is forcing farmers to cut milk production more than necessary or that the Canadian Dairy Commission is paying out approximately $10.5 million in subsidies for non-existent milk? I would like to ask whoever is answering if he has been informed of this and if the government is taking any action to investigate this rather serious allegation.


Allan Joseph MacEachen: Mr. Speaker, in the absence of the Minister of Agriculture I will take the question as notice. The Acting Minister of Agriculture was in the House earlier but is now gone, obviously because of the extension of the question period beyond its normal hour.


GOVERNMENT ADMINISTRATION
Mr. John Gilbert (Broadview):: Mr. Speaker, my question is directed to the Minister of Justice. Regardless of what the letter from the former Auditor General to the Prime Minister dated March 22, 1973 states, the fact remains that the publicity attendant on the charges which could be made against a Canadian Crown corporation and perhaps the Canada Development Corporation could have serious and undesirable consequences. Has the Minister of Justice been apprised by either the Prime Minister or any cabinet minister with regard to an investigation which would have been made by the Solicitor General or the Minister of Justice, and if not, would he check his records to see if the former minister of justice was apprised of this problem and report to the House?


Hon. Ron Basford (Minister of Justice):: Mr. Speaker, the answer to the first part of the question is no. The answer to the second part is yes, I will; however, I point out that having just read the letter of the former auditor general, it appears to be concerned with the accounting practices of the Crown corporations rather than the matters mentioned by the hon. member.

November 26, 1976
Oral Questions AIR CANADA


ALLEGED MISAPPROPRIATION OF TICKETS-CO-OPERATION WITH MONTREAL POLICE IN INVESTIGATION-SUGGESTED AUDIT BY AUDITOR GENERAL
Mr. Dan McKenzie (Winnipeg South Centre):: Mr. Speaker, in the absence of the Minister of Transport and the Solicitor General I would like to direct my question to the Acting Minister of Transport who is the Minister of Justice. My question involves a crime, so he should be able to answer it.
Is the minister or the government aware of a story which appeared in today's Montreal Matin with regard to the fraudulent misappropriation by an Air Canada employee of at least $100,000 worth of Air Canada tickets, and is the government working with the Montreal police on this case, especially since it is reported that organized crime is involved in receiving the fraudulent Air Canada tickets?


Stanley Ronald Basford: Mr. Speaker, I am not aware of the story. I will certainly bring it to the attention of the Minister of Transport. If there is truth in the story that there has been a theft of tickets, I am quite confident that it is being investigated.


A. Daniel McKenzie: In light of reports that Air Canada authorities were ignorant of the fact that an internal fraud was taking place, would the minister be prepared to ask the Auditor General to investigate immediately the Air Canada finance branch in Winnipeg to determine how a $100,000 fraud took place practically unnoticed until it was accidentally discovered by the Montreal police?


Stanley Ronald Basford: I will take notice of that with regard to what the proper procedures might be.


An hon. Member:: Why don't you all resign?


GOVERNMENT ADMINISTRATION
Mr. Donald W. Munro (Esquimalt-Saanich):: Mr. Speaker,
I thought I might address my question to the Prime Minister, but I see that I can address it to the Minister of Justice. The Prime Minister made a number of disclaimers of any illegal action, fraud or tax evasion in the Polysar case, and in the letter received by the Prime Minister there is the comment that the extent to which Polymer may be contingently liable for aiding or abetting such transactions depends on whether the customers are apprehended by their respective national authorities. I am wondering if the Minister of Justice agrees, in view of the disclaimers and this comment, that this is a suggestion that the government is condoning irregularities which escape detection.


Stanley Ronald Basford: No, Mr. Speaker, but the former auditor general's letter refers to the possible contingent liability of the Crown corporations.


SEARCH AND RESCUE
Mr. Cecil Smith (Churchill):: Mr. Speaker, my question is to the Minister of National Defence, the Minister of Transport or the minister in charge of search and rescue.


Some hon. Members:: Oh, oh!


Arthur Jacob (Jake) Epp: We are all searching for ministers.


Cecil Morris Smith: I want to compliment the search and rescue unit for its prompt action in locating and dropping supplies to a downed Twin Otter in the Arctic. I want to ask why it took more than four full days to rescue the survivors by helicopter in those sub-zero temperatures.


Stanley Ronald Basford: Mr. Speaker, I do not have a report on that, but I will be happy to get one and supply it to the hon. member.



ROUTINE PROCEEDINGS


[Stage Direction]
(Questions answered orally are indicated by an asterisk.)
Mr. Ralph E. Goodale (Parliamentary Secretary to President of the Privy Council):: Mr. Speaker, the following questions will be answered today: 437 to 441 inclusive, 500, and 731.
[ Text]


Mr. Hnatyshyn: For the years 1970 to 1975, what was the number of (a) full-time (b) part-time classification officers at Cowansville and, in each case, what were their
(i)	educational qualifications (ii) previous work experiences in Canada (iii) individual salaries?


Mr. Art Lee (Parliamentary Secretary to Solicitor General):: (a) 1970: One Classification officer, (i) DEC Sociology.
(ii)	Insurance Agent and Correctional officer at Cowansville.
(iii)	$10,143-$ 11,525. 1971: Two Classification officers. No. 1
(i)	and (ii) see 1970. (iii) $ 10,701-$ 12,159. No. 2 (i) BA, MA.
(ii)	First employment after graduation with MA. (iii) $12,448-$14,145. 1972: Six Classification officers. No. 1 (i) and (ii) see 1970. (iii) $11,236-$ 12,767. No. 2 (i) and (ii) see No. 2, 1971.
November 26, 1976

(iii)	$13,070-$ 14,852. No. 3 (i) BSc Criminology, (ii) Graduation from Ottawa University, (iii) $11,236-$ 12,767. No. 4 (i) BA Sociology, (ii) Social Worker, Sherbrooke, P.Q. (iii) $11,236-$ 12,767. No. 5 (i) BA Sociology, (ii) Social Worker, Montreal Health Agency, (iii) $11,236-$ 12,767. No. 6 (i) BSc Sociology, (ii) Graduate student, Sherbrooke, P.Q. (iii) $9,326-$l 1,107. 1973: Seven Classification officers. No. 1 (i) and (ii) see 1970. (iii) $12,416-$14,108. No. 2 (i) and (ii) see No. 2, 1971. (iii) $ 14,442-$ 16,411. No. 3 (i) and (ii) see No. 3, 1972. (iii) $ 12,416-$ 14,108. No. 4 (i) and (ii) see No. 4, 1972. (iii) $ 12,416-$ 14,108. No. 5 (i) and (ii) see No. 5, 1972. (iii) $ 12,416-$ 14,108. No. 6 (i) and (ii) see No. 6, 1972. (iii) $10,305-$12,273. No. 7 (i) BA Economics, (ii) Imperial Oil, Montreal, (iii) $ 12,416-$ 14,108. 1974: Nine Classification officers. No. 1 (i) and (ii) see 1970. (iii) $13,658-$ 15,519. No. 2 (i) BSc Criminology, (ii) Transfer from Leclerc Institution on promotion, Assistant to professor at University of Montreal. (iii) $13,658-$ 15,519. No. 3 (i) BA Sociology, (ii) Direct entry from the University of Sherbrooke, P.Q. (iii) $13,658-$15,519. No. 4 (i) and (ii) see No. 4, 1972. (iii) $ 13,658-$ 15,519. No. 5 (i) BA Sociology, (ii) Direct entry from the University of Sherbrooke, P.Q. (iii) $13,658-$ 15,519. No. 6 (i) BSc Sociology, (ii) Transfer from Leclerc Institution in 1974 on promotion. Teacher Loyola College, (iii) $11,336-$ 13,500. No. 7 (i) BA Economy, (ii) Graduate-direct entry from Concordia University, (iii) $13,658-$ 15,519. No. 8 (i) BA Criminology, (ii) Transfer from the Federal Training Centre. Direct entry from the University of Ottawa, (iii) $ 13,658-$ 15,519. No. 9 (i) Grade 12 equivalent, (ii) Correctional OfficerLiving Unit Officer, promoted by competition to Classification Officer, (iii) $13,658-$15,519. 1975: Thirteen Classification officers. No. 1 (i), (ii) and (iii)-see No. 1, 1974; No. 2 (i), (ii) and (iii)-see No. 2, 1974; No. 3 (i), (ii) and (iii)-see No. 3, 1974; No. 4 (i), (ii) and (iii)-see No. 4, 1974; No. 5
(i), (ii) and (iii)-see No. 5, 1974; No. 6 (i), (ii) and (iii)-see No. 6, 1974; No. 7 (i), (ii) and (iii)-see No. 7, 1974; No. 8
(i), (ii) and (iii)-see No. 8, 1974; No. 9 (i), (ii) and (iii)-see No. 9, 1974. No. 10 (i) BA Sociology, (ii) First employment, graduate of the University of Montreal, (iii) $13,658-$15,519. No. 11 (i) BA Sociology, (ii) Teacher, Sherbrooke School Board, P.Q. (iii) $13,658-$ 15,519. No. 12 (i) MA. (ii) Social Worker, Provincial Office, Sherbrooke, P.Q. (iii) $13,658-$15,519. No. 13 (i) CEGEP Diploma-Social Welfare, (ii) First employment, (iii) $11,336-$ 13,500. (b) None.


Mr. Hnatyshyn: For the years 1970 to 1975, what was the number of (a) full-time (b) part-time classification officers at Sainte-Anne-des-Plaines and, in each case, what were their (i) educational qualifications (ii) previous work experiences in Canada (iii) individual salaries?
Mir. Art Lee (Parliamentary Secretary to Solicitor General): Note: This Institution opened in 1971 but there were no classification officer positions filled until 1972. (a) 1972: Two Classification Officers. No. 1 (i) BA; (ii) Teacher, Laval School Board; (iii) $11,236-$ 12,767. No. 2 (i) BA; (ii) Person-
Order Paper Questions
nel Office, Imperial Oil, Montreal; (iii) $7,447-$9,801. 1973: Two Classification Officers. No. 1 (i) and (ii) see 1972, No. 1; (iii) $ 12,416-$ 14,108. No. 2 (i) and (ii) see 1972, No. 2; (iii) $8,229-$10,830. 1974: Two Classification Officers. No. 1 (i) and (ii) see 1972, No. 1; (iii) $ 13,658-$ 15,519. No. 2 (i) BA;
(ii)	University of Montreal graduate student; (iii) $11,336-$13,500. 1975: Two Classification Officers. No. 1 (i) BA Psychology; (ii) Transferred from Archambault Insitution, private employment; (iii) $13,658-$ 15,519. No. 2 (i), (ii) and
(iii)	see 1974, No. 2. (b) None.


[Stage Direction]
Question No.439-Mr. Hnatyshyn:
For the years 1970 to 1975, what was the number of (a) full-time (b) part-time classification officers at Archambault and, in each case, what were their (i) educational qualifications (ii) previous work experiences in Canada (iii) individual salaries?
Arthur John (Art) Lee: (a) 1970: Two full time classification officers. No. 1 (i) BA, BSc; (ii) Social Services, Hull, P.Q.; (iii) $10,143-$11,-525. No. 2 (i) BA; (ii) Pinel Hospital, P.Q.; (iii) $10,1430-$11,525. 1971: Four full time classification officers. No. 1 (i) and (ii) see No. 1, 1970; (iii) $ 10,701-$ 12,159. No. 2 (i) and
(ii)	see No. 2, 1970; (iii) $ 10,701-$ 12,159. No. 3 (i) BA, MA; (ii) Social Worker, Montreal; Teacher, Trois-Rivieres; (iii) $12,448-$ 14,145. No. 4 (i) BA; (ii) Social Development, City of Laval; (iii) $ 10,701 -$ 12,159. 1972: Two full time Classification officers. No. 1 (i) and (ii) see No. 3, 1971; (iii) $ 13,070-$ 14,852. No. 2 (i) BA; (ii) University, Madrid, Spain, Social Worker on South Shore of Montreal; (iii) $11,236-$ 12,767. 1973: Five full time Classification officers. No. 1 (i) and (ii) see No. 1, 1970; (iii) $ 12,416-$ 14,108. No. 2 (i) and (ii) see No. 2, 1970; (iii) $ 12,416-$ 14,108. No. 3 (i) and (ii) see No. 3, 1971; (iii) $ 14,442-$ 16,411. No. 4 (i) and (ii) see No. 4, 1971; (iii) $12,416-$ 14,108. No. 5 (i) BA; (ii) Bordeaux Correction Centre, Bordeaux Gaol, Montreal; (iii) $12,416-$14,108. 1974: Eight full time Classification officers. No. 1 (i) and (ii) see No. 1, 1970; (iii) $13,658-$15,519. No. 2 (i) and
(ii)	see No. 2, 1970; (iii) $13,658-$ 15,519; No. 3 (i) and )ii) see No. 3, 1971; (iii) $15,886-$ 18,052. No. 4 (i) and (ii) see No.4, 1971; (iii) $13,658-$ 15,519. No.5 (i) and (ii) see No. 2, 1972; (iii) $13,658-$ 15,519. No. 6 (i) BA; (ii) University student, graduate of the Laval University; (iii) $11,336-$ 13,500. No. 7 (i) BA; (ii) Graduate student in Training and Development, Ottawa University, Ottawa, Ontario; (iii) $7,800-$ 11,820. No. 8 (i) Grade 13; (ii) Guard, Bordeaux Gaol and St. Vincent de Paul Penitentiary; (iii) $9,052-$ 11,913. 1975: Nine full time classi- fication officers. No. 1 (i), (ii) and (iii) see No. 1, 1974. No. 2 (i), (ii) and (iii) see No. 2, 1974. No. 3 (i), (ii) and (iii) see No. 3, 1974. No. 4 (i), (ii) and (iii) see No. 4, 1974. No. 5 (i), (ii) and (iii) see No.5, 1974. No. 6 (i), (ii) and (iii) see No. 6, 1974. No. 7 (i), (ii) and (iii) see No. 7, 1974; (iii) $8,940-$ 13,440. No. 8 (i), (ii) and (iii) see No. 8, 1974. No. 9 (i) BA; (ii) Graduate Student in Training and Development, Laval University, Montreal;
(iii)	$8,940-$ 13,440. (b) None.

November 26, 1976
Order Paper Questions


Mr. Hnatyshyn: For the years 1970 to 1975, what was the number of (a) full-time (b) part-time classification officers at Frontenac Institution and, in each case, what were their (i) educational qualifications (ii) previous work experiences in Canada (iii) individual salaries?


Arthur John (Art) Lee: (a) 1970 One Classification Officer, (i) BA. (ii) School Teacher, several Ontario towns, (iii) $10,143-SI 1,525. 1971 One Classification Officer (i) BA. (ii) Direct from University, (iii) $ 10,701 -$ 12,159. 1972 One Classification Officer, (i) BA, BSW. (ii) Social Worker, (iii) $11,236-$ 12,767. 1973 One Classification Officer, (i) and (ii) see 1972. (iii) $12,416-$ 14,108. 1974 Two Classification Officers, (i) and (ii) see 1972. (iii) $13,658-$ 15,519. (i) BA, BSW. (ii) Direct from Queen's University, (iii) $ 13,658-$ 15,519. 1975 Two Classification Officers, (i), (ii) and (iii) see 1974; (i), (ii) and (iii) see 1974. (b) None.


Mr. Hnatyshyn: For the years 1970 to 1975, what was the number of (a) full-time (b) part-time classification officers at Rockwood Institution and, in each case, what were their (i) educational qualifications (ii) previous work experiences in Canada (iii) individual salaries?


Arthur John (Art) Lee: (a) 1970, 1971 and 1972 One classification Officer, (i) Grade 12. (ii) C.P.S.-Manitoba Penitentiary, (iii) 1970- $10,143-SI 1,525; 1971-$10,701-$12,159; 1972-$11,236-$12,767; 1973 Two Classification Officers. No. 1 (i) BSW. (ii) University Graduate, Manitoba, (iii) $ 12,416-$ 14,108. No. 2 (i) BA. (ii) Canadian General Electric Co., Winnipeg, Manitoba, (iii) $8,229-$10,830. 1974 Two Classification Officers. No. 1 (i) BSW. (ii) University of Manitoba, one year with C.P.S. (iii) $13,658-$15,519. No. 2 (i) and (ii) see 1973 No. 2 (iii) $13,658-$15,519. 1975 Two Classification Officers. No. 1 (i) BSW. (ii) John Howard Society, (iii) $ 13,658-$ 15,519, No. 2. (i), (ii) and (iii) see 1974, No. 2. (b) None.


Mr. Lambert (Bellechasse): 1.	(a) As of December 31, 1975, what was the Canadian money supply (b) of what did it consist?
2.	Of the total amount, how many billions came from (a) the Bank of Canada (b) chartered banks?


Mr. Bob Kaplan (Parliamentary Secretary to Minister of Finance):: 1. (a) As of December 31, 1975, the Canadian money supply was $19,241,000,000 for currency and demand deposits and $67,374,000,000 for currency and privately held deposits, (b) The first definition of the money supply is currency outside banks and chartered bank demand deposits. The second definition includes currency outside banks and privately held chartered bank deposits.

2. First definition: currency outside banks (a Liabilities item of the Bank of Canada's Balance Sheet) $6,778,000,000; chartered bank demande deposits $12,463,000,000; Second definition: currency outside banks (a Liabilities item of the Bank of Canada's Balance Sheet) $6,778,000,000; privately held chartered bank deposits $60,596,000,000.


Mr. Coates: 1.	How long was the drawbacks office of the Department of National Revenue located at Amherst, Nova Scotia?
2.	Was a decision taken to relocate the office in Halifax and, if so (a) on what date (b) for what reason?
3.	How many employees were involved in the Amherst operation and what was the total in salaries and wages?
4.	Had previous decisions been taken by the Department to move the drawbacks operation from Amherst to Halifax and, if so (a) on what dates (b) for what reason were the decisions rescinded?


Hon.   Monique@: 1.
From August, 1947 to July, 1976.
2.	Yes. (a) July 1976. (b) As a result of reorganization, Drawbacks, Refunds and Remissions were combined into one unit, under one manager and the manager together with the Refunds and Remissions Unit were already located in Halifax. The prime purpose was to provide one point of contact for industry and the general public seeking rebates of customs duty. If the full benefits of economy of operations, efficiency and service to the public were to be achieved, it was considered that all three units must be combined physically as well as operationally.
3.	There were six employees involved and the annual salaries amounted to $92,593.
4.	No previous decision was taken by the Department to move the Drawbacks operation from Amherst to Halifax. However, a move was considered on several occasions, but the suggestion was never carried out.


Mr. Speaker:: Do the remaining questions stand?


Some hon. Members:: Agreed.


Mr. Speaker:: Orders of the day. Government order No. 19.


PRIVILEGE
John George Diefenbaker: I rise on a question of privilege. Thank you, Mr. Speaker, for seeing me in this regard. I want to deal with the question which arose yesterday during the debate as set out at page 1366, and
November 26, 1976

following, of Hansard. The Prime Minister (Mr. Trudeau) is not here at the moment. He has every reason to be absent because of his responsibilities, and I reserve the right to raise this matter on Monday. Page 1368 of Hansard shows only a few interpolations by the Prime Minister, whereas my memory is that he went on and on for a period of three or four minutes, screaming and uttering incoherences, all of which do not appear in Hansard.


Mr. Speaker:: Order, please. The right hon. member has given the Chair notice of his intention to raise the matter on Monday. The hon. member for Crowfoot (Mr. Horner).



GOVERNMENT ORDERS


[Stage Direction]
The House resumed, from Thursday, November 25, consideration of the motion of Mr. Andras that Bill C-19, to amend or repeal certain statutes to enable restraint of government expenditures, be read the second time and referred to the Standing Committee on Miscellaneous Estimates; and the amendment thereto of Mr. Holmes.
John (Jack) Henry Horner: Mr. Speaker, in rising to resume debate on Bill C-19 I would refer to my remarks of last night when I said there is a shocking lack of planning by this government, particularly in the Department of Transport. There are heavy lay-offs in the steel industry, but no plans are advanced on how to assist the regions faced with these lay-offs -which come as a result of lack of orders from railway companies and the government's neglect to plan for building more boxcars and railway facilities. Those of us who have an interest in transportation and the railways know there is a dire need for new equipment.
The Prime Minister (Mr. Trudeau) has said that he wants this bill passed. Last night I said that we on this side are prepared to pass it as long as the government makes some serious effort to cut waste and inefficiency and the downright extravagance of their ways. There has been a continuous decline in the amount of money spent on a research and development; there has been some fancy bookkeeping, but there has been no plan or goal set for Canada.
A recent federal conference on residence and homes which took place in Vancouver was told that the increased cost of homes contributed greatly to the increased cost of living in Canada. The director general of Canada's participation in Habitat has said that within the next 25 years Canada will have to build more residences, more industrial facilities, more hospitals, more transportation, more power stations and more
Restraint of Government Expenditures urban utilities than were built in the last 108 years in this country. A massive job lies ahead of us, Mr. Speaker. We see this government spending more and more money, but it has no direct goal. It attempts to control inflation by controlling the money supply, but does not attempt to control the growth of government expenditures in any serious way.
Recently, the OECD countries suggested that the western world would have a growth rate of 3.5 per cent or 4 per cent. In bringing down his budget, the Minister of Finance (Mr. Macdonald) said that government expenditures would not grow any faster than the gross national product. Mr. Speaker, government expenditures are growing at a rate twice the rate of the gross national product, and the OECD projects it will continue to double for all of 1977.
I quote the OECD countries to try to project an unbiased point of view so that the government can be serious about what it intends to do with regard to controlling expenditures and developing the country. The OECD ranked Canada tenth and last on performance and technological innovation. We have a great country, great wealth, the people are highly educated, yet we rank last in the use of our knowledge and education for bettering conditions in this country. We rank second to last in the proportion of our work force employed in the secondary manufacturing industry. There is a high degree of industrial development throughout much of central Canada and Atlantic Canada, but there is no real effort to develop a science policy or a research and development policy to aid our manufacturing industries to compete with other trading nations.
The OECD stated that we had the largest trade deficit in 1975 of most of the industrial countries in the western world, and that we had a huge trade deficit in management and engineering-oriented services. In the old days that was called a brain drain. There are many reasons why we have had such a massive brain drain, Mr. Speaker, as well as a money drain. We have had a cutback in research and development and a curtailment in science policy. This is pointed out in a letter which I received from the Agricultural Institute of Canada, which I am sure most hon. members have received. The letter dated November 8, 1976, begins:
A statement highlighting the worsening situation of agricultural research and development in Canada is enclosed. It has been prepared by the Agricultural Institute of Canada.
Bill C-19 has much to do with agriculture, Mr. Speaker, and, of course, one of the main means of balancing our payments in this country is through the sale of food products. There has been a slight surplus of agricultural exports over imports, but we could have done much better. Our neighbour to the south has taken two steps in order to attain a balance of payments. They have sold armaments and food. We are not in the business of selling armaments, but we can, and should, sell more agricultural products. We should be encouraging more agricultural production than we can consume ourselves, but this government has deliberately discouraged this. In the end, it will have a serious effect on our balance of payments.
About 7 per cent of the land area of Canada is suitable for agricultural production, yet last year we were able to export

November 26, 1976
Restraint of Government Expenditures only in the neighbourhood of $3.9 billion in agricultural products. Imports of every one of the major staple foods produced in Canada was increased, however. Imports of beef were increased by about 60 per cent, and hogs and pork by about 110 per cent. Three or four of our provinces are big producers of apples, yet there was an increase of 60 per cent in the apples that came into Canada last year. We are not doing enough with this great country, Mr. Speaker. The Agricultural Institute of Canada suggests that we are cutting back on research and experimentation in a great variety of goods.
It is not enough that Bill C-19 suggests that the Industrial Research and Development Incentives Act be extended for another year. We have to do much more than that. The position paper of the Agricultural Institute of Canada reads:
There is an intellectual resource of scientifically trained academics with research interests in the 11 facilities of agriculture and veterinary science at Canadian universities. Some provincial governments and agricultural industries also have active agricultural research and development programs.
They go on to suggest that not enough money is allocated to research and development programs, that the federal government has cut back spending on research at universities, and they quote the 1970 special Senate committee report on science policy which said that there should be increased spending on research and development related to the growth of the gross national product. As our gross national product rises, so should our ability to spend money on science, research and development. This government has failed in this regard. It has done little to enable this country to extricate itself, through increased production, from its dilemma.
I now turn to the handling of our finances. Frankly, I do not think this bill will save money. Yesterday, for the first time in a long time, the exchange rate for the Canadian dollar dipped below the value of the American dollar. Many pundits, whom I do not rank highly as economists or experts, attribute the decline in the value of the Canadian dollar to the result of the recent vote in Quebec. I do not accept that view. I think the western world, particularly the United States, realizes that our competitive position vis-a-vis our competitor to the south, Germany, Japan, and other countries, has deteriorated. Our costs are higher.
We may boast of our wage and price controls and our Anti-Inflation Board, but the fact remains that production costs are higher in this country. In nearly every economic sector, including the tourist industry, with respect to the production of manufactured goods, agriculture, and lumber products, our costs of production are higher. Therefore, our competitive position is not as good as that of our trading partners and our dollar has begun to decline. Unless the government enables us to improve our competitive position, allows us to spend more money on research and development, and encourages the use of innovative, new technology, we shall remain in an inferior position relative to our major competitors and our dollar will continue its downward slide.
If our dollar continues to go down, it will be an indication that our government is not managing this country's economy
(Mr. Horner.]
as well as the governments of our major competitors in the western world are managing their economies. In my opinion, this government has failed miserably in the management of our economy. By maintaining high interest rates it has encouraged the importation of huge amounts of foreign investment, which kept the value of our dollar slightly above that of the American dollar. Unfortunately, high interest rates contribute to our inability to compete with our neighbours. I say this because industry in Canada must pay up to 4 per cent or 5 per cent more for capital with which to enlarge and modernize productive capacity than industry pays south of the border. These higher interest rates represent an added cost of doing business in Canada, which must be passed on to the consumer and so increases the price of goods produced in Canada.
The old argument that high interest rates curtail inflation is questionable, to say the least. In this country much business is carried on with borrowed money, and high interest rates merely force up the cost of doing business. The government's deliberate insistence on keeping interest rates in Canada 4 per cent above those in the United States has created severe hardship and has damaged the productive capacity of many industries, including the agricultural industry, which could help greatly to improve our balance of payments.
What I have said will show you what I think of this particular bill, Mr. Speaker. I have nothing but contempt for it, for it shows that the government has no direction, no plan and no goal. It is not even motivated to bringing this country back on track, to making it more competitive in the western world and providing jobs for the many Canadians seeking work. Also, Mr. Speaker, many Canadians will seek work this winter. This legislation does nothing for them.
I now come to the Auditor General's report. When one examines the Auditor General's report and compares it with this legislation, one sees that the two are incompatible. The Auditor General says that he sees all kinds of inequities in the government's accounting system; that based on studies of the system of departments, agencies and Crown corporations audited by the Auditor General it is evident that the financial management and control of the government of Canada is grossly inadequate.
Mr. Speaker, the members of this House are merely representatives of the shareholders of a great company, the government of Canada. If the auditor of any business said that the control of spending of the management team was grossly inadequate-and the government is really nothing but a group of executives managing this great company-the shareholders would call a very important meeting to set up a better accounting system for the executives of the company.
The statement by the Prime Minister and the President of the Treasury Board (Mr. Andras), that a royal commission is to be set up in order to study the system whereby the government's books are audited, just was not good enough. Why did the government not implement the 32 recommendations made by the Auditor General? The appointment of a comptroller general who would be a check on the Treasury Board and the spending of the executive I suggest would in no way infringe

upon the parliamentary process. Treasury Board has the obligation and responsibility to allocate resources. The Auditor General has the responsibility of seeing whether there is excessive waste in the money allocated for resource development or regional development by the Treasury Board.
I have read of the problems in the Department of Transport. In fact, I read a very revealing statement. The Minister of Transport (Mr. Lang) said that no additional airports would be built in Canada without consulting the airlines. That is an admission that when Mirabel was built, the airlines were not consulted with regard to the kind of terminal facilities they wanted. When talking to the former president of Air Canada, he informed me that he was not consulted about the public transit vehicles used between the terminal and the airport. In fact, when he was told what the system would be at Mirabel, he informed the government that it was a very costly and wasteful system. He informed them that only one airport, the Dallas airport, used that system and it was heavily subsidized. The government went ahead with it despite the advice of the president of Air Canada. In addition, CP Air and the other airlines were not consulted.
There was the same kind of situation when the new airport was built at Calgary. Time Airlines, one of the few airlines which made a profit last year and which is not subsidized by the government, said that the Department of Transport was building such a fancy terminal in Calgary, at such an exorbitant cost, that they doubted they would be able to use it. They said that the cost of flying into that airport would be increased so much that it would severely handicap them in their ability to balance their books.
We can also look at the airports at Edmonton and Winnipeg. The users, the airlines, were not consulted.
Terminal two is another prime example of the allocation of resources by Treasury Board. The Auditor General was not given the opportunity to check on the correct allocation of those funds. Terminal two was to be a terminal for the international carriers. However, when the international carriers saw it, they refused to move into it. Air Canada was forced to move into it and the international carriers stayed in terminal one. That is another example of gross mismanagement of the taxpayers' money.
Many members of parliament and the press have been making hay with regard to the Minister of Transport's abuse of the public trust placed in him, with his exorbitant travelling costs. He stated in all seriousness that he had to fly to Calgary a year ago for the Grey Cup game in order to represent the Minister of National Health and Welfare (Mr. Lalonde). I do not know why the Minister of National Health and Welfare had to be represented at the Grey Cup game. The Prime Minister was there. Could he not have represented him? It would not then have been necessary to spend $8,080 to fly the Minister of Transport to the Grey Cup game. I do not want to discourage attendance at this Sunday's Grey Cup game, but I hope the Minister of Transport does not go.
Restraint of Government Expenditures


Mr. MacFarlane:: I hope that nobody from the west turns up.


John (Jack) Henry Horner: The west will turn up all right. They will turn up on top; there is no questions about that.
The bill before the House suggests that the government is going to curtail expenditures. Are there measures in this bill that will curtail the abusive practices being followed by government members? The Minister of Transport made it a condition, with regard to his household, that he would arrange free transportation for a nanny. That is a small item, but it is obvious he has been doing this regularly for his mother-in-law, his nieces and the rest of the family. He has been putting them on government planes one after another. I do not think he is the only minister doing this. It is a shame.
At the beginning of my speech last night I said that we would be prepared to pass this bill when we saw some deliberate action on behalf of the government to curtail these abuses. They have not yet shown that. The Minister of Transport got into a public argument with the Minister of National Defence (Mr. Danson). The Minister of National Defence stated publicly that he was the one who stopped the nanny returning to Scotland on a government plane.


Elmer MacIntosh MacKay: Barney's anti-nanny.


John (Jack) Henry Horner: Yes, that is a good line: that is a very clear and simple policy that everyone can understand. The Minister of Transport abused the public trust placed in him when he became a member of the cabinet. I do not wish him any hard luck. Last night on television the minister stated that he and his wife work excessively long hours for the government, and therefore they need a nanny to look after their seven children. The Prime Minister should relieve him of that excessive work by appointing another member from Saskatchewan to take over the job as minister of transport. In that way the minister and his wife could get back to looking after their seven children.
In yesterday's Ottawa Citizen, the wife of the Prime Minister was quoted on what she had to say about politicians. Speaking in Peterborough, she stated that she was concerned about the honesty of politicians, and assured the ladies present that her husband was very honest. She said:
-politicians should be accountable for their actions.
I agree. She went on to say:
Hopefully, under the country's political system, the poor politicians are weeded out by elections-
I hope she is right there, too, and that the poor politicians will be weeded out. She has the ear of the Prime Minister. She could be very influential in weeding them out before an election. She could assist the Prime Minister in weeding out a few of his careless ministers who are abusing the public trust. The Minister of Transport has fouled up almost everything he has touched-the air traffic controllers, the car rental systems I spoke about last night, and allocating $30 million to CPR which did not know what kind of experiment the department wanted carried out.

November 26, 1976
Restraint of Government Expenditures
Last evening members of the CTC appeared before the committee. I suggested to them that they had a good deal of expertise in passenger traffic, having travelled across Canada to study the question. I asked whether they were consulted before the government allocated $30 million for an experimental passenger train as to what kind of experiment should be carried out. They said they were not consulted at all.
Representatives of the CPR the recipient of the $30 million, informed me and other people interested in transportation that if the government wanted to carry out an experiment on rail passenger traffic, that experiment should be carried out between Ottawa and Montreal. They stated there was good track for the full distance between Ottawa and Montreal. They could change a few curvatures and speed up the train on that track to 125 m.p.h., if that is the speed at which the department wants it to travel. But for one reason or another the experiment is not to take place on the track most suitable for it, because the CPR was not sufficiently consulted.
The minister and his department had it in the back of their minds all along where that money was to be spent. They are going to improve a 25-mile stretch of the track between Quebec City and Montreal. The train will travel at 125 m.p.h. for 25 miles, after which it will slow down to 60 m.p.h. or 70 m.p.h. This doesn't make much sense to me, and it will not make much sense to the travelling public. It would have made a lot more sense if they had spent the money to improve the track all the way from Ottawa to Montreal, not too great a distance to travel conveniently by train. Then they would have known whether or not the appeal of a good railway passenger service can still attract customers. To my mind, this decision is one more example of the incompetence of the Minister of Transport. Now we have evidence of his abusive use of government aircraft. On one occasion the minister flew from Ottawa to Toronto at a cost to the taxpayers of $8,027. He flew by Viscount, and I suppose the bill was larger because he left the Viscount parked in Toronto for three or four days. If it had been flown back empty, it would not have cost the taxpayers so much money. I suppose the minister was making an important decision, one which took him four or five days to arrive at.


An hon. Member:: Don't forget the VIP rail cars.


John (Jack) Henry Horner: A great deal of money was spent on those, too. On another occasion it cost $1,900 to fly by Viscount to Toronto-a little more expensive than flying by Jetstar, and a little slower than the trip would have taken aboard an Air Canada flight. But the Viscount gave him more time, no doubt, in which to ponder decisions designed to save the taxpayers' money. I maintain the minister has demonstrated a careless disregard of the public trust. If the Prime Minister has any guidelines covering the behaviour of ministers he should exercise them now. I am not a fan of the hon. member for Assiniboia (Mr. Goodale) or of the hon. member for Bat-tleford-Kindersley (Mr. Mclsaac), but if the right hon. gentleman wants another minister from Saskatchewan, neither of them could do worse than the present Minister of Transport. I

understand that one of them served at one time in the Liberal administration in Saskatchewan; he was minister of education, so he knows something about running a department. Maybe his respect for the public trust would be a whole lot better than that of the present minister.
Mr. Speaker, I have given the House some idea of my feelings about Bill C-19. I hope many Liberal members become involved in the debate on this subject because they, too, must demonstrate clearly to their voters that they are concerned about waste of money in government. They do not have to single out any particular minister if they do not wish to do so. They can simply express the concern which their constituents have been expressing to them. There is nobody in Canada who has not heard about "Lang Air" or who does not know about Otto's nanny. People are writing to their members, and backbenchers on the Liberal side should be on their feet demonstrating their concern because the government is not doing enough to curtail the extravagance and waste, evidence of which we find in the report of the Auditor General, in returns to questions on the order paper, and in the press.
All this is causing difficulty at home for every Liberal backbencher. They should be advising the government that they are not going to put up with it for ever. The Prime Minister has an obligation to shake up the cabinet in a way which would help Canada and which might even be beneficial to the Liberal party.


Elmer MacIntosh MacKay: Mr. Speaker, I appreciate the opportunity to speak again on this bill by virtue of the amendment put forward by my hon. friend from Lamb-ton-Kent (Mr. Holmes). I would like to think it is an example of good government planning that this bill should be before the House so that we have time to explore some of the areas to which the Auditor General has called attention in his report. I was impressed by the speech of my hon. friend from Crowfoot (Mr. Horner). I believe it is being said that the aircraft in which the Minister of Transport (Mr. Lang) chooses to fly so often now has a new name-the "Otto-Mobile". But that may be carrying things too far. At any rate, it is obvious to me that the continuing saga of waste and extravagance now being perceived increasingly by the general public is an interesting counterpoint to this piece of legislation dealing with government restraint.


The Acting Speaker (Mr. Turner):: Order. It being one o'clock, I do now leave the chair until 2 p.m.
At one o'clock the House took recess.


[Stage Direction]
AFTER RECESS

The House resumed at 2 p.m.
Elmer MacIntosh MacKay: Mr. Speaker, at the time when the interests of Atlantic Canada are being threatened, in the opinion of some of us, by the penny-pinching approach to our transportation needs, particularly in the context of this bill, we see continuing
November 26, 1976

waste and extravagance and outright, apparent mismanagement in many areas of transportation. The story in Montreal-Matin this morning is a good example of something that ought to have been taken care of a long time ago, when at that time the then minister of transport indicated that there was, in his opinion, sufficient justification for calling for a commission of inquiry under Mr. Justice Estey as the result of the payment of $100,000 to a Montreal travel agent.
At the time many of us suggested that this was an admirable thing for the minister to have done and we commended him for it, but we suggested that the terms of reference were not wide enough. Now, once again, we see how right we were, because apparently there is another massive fraud taking place within the financial scope of Air Canada, this time relating to tickets, which as reported in this morning's Montreal-Matin appears also by coincidence to be in the vicinity of $100,000.
There is just no end to the financial mismanagement of this government, Mr. Speaker. When you talk of $100,000 or even $ 1 million, it seems that the people of Canada have become so used to the shocks and horror stories that have been unfolding lately that it does not make an impression on them. I suggest to you that anyone, even someone as naive as I, from a small town, who has had no particular business experience-though I have started and taken part in a few companies, which I guess gives me an advantage over the Prime Minister (Mr. Trudeau)-would be a little suspicious if someone said that we should put part of the proceeds from a business account in a Swiss bank or in a bank in Lichtenstein or the Bahamas for the accommodation of one of the parties.
I find it incredible that when the Prime Minister received this letter from the then auditor general, which said, among other things, that a subsidiary-the subsidiary being Polysar International, a subsidiary of Polymer-had a practice of invoicing certain European customers, by agreement, at inflated prices, with the difference being remitted in cash to the customers or their representatives in Switzerland-


Mr. Deputy Speaker:: Order, please. The Postmaster General (Mr. Blais) is rising on a point of order.


Mr. Blais:: Mr. Speaker, I have been listening to the comments made by the hon. gentleman both before lunch and since resuming at two o'clock, and I have yet to hear him say anything that has any reference to the bill presently under review. I understand that this is the tenth day that this particular bill has been studied by this House. This is the second session during which we have been studying Bill C-19. Its provisions are very clear; they deal with certain specific limitations within certain specific areas of responsibility. The hon. gentleman, as have a number of his colleagues, has attempted to draw into this particular debate a whole series of matters undoubtedly of general interest but which have nothing to do with the debate presently before the House. According to Beauschesne and May, there must be some relevance to the matters under debate. There has been no indication in the words uttered by the hon. gentleman that anything he said
Restraint of Government Expenditures bears even the remotest relationship to any of the matters in Bill C-19.
[DOT] (M10)


Mr. Deputy Speaker:: Order, please. I must say this is not the first time the Chair has had complaints of this kind in respect of this particular debate, either from members standing in the House or outside the House. With a bill of as general a nature as this it is not easy for the Chair to prejudge the point the hon. member is making. The scope of the bill is very wide; it relates to the administration of the government in so far as restraint is concerned.
I do not think members should be prevented from making their points. I realize this brings about some abuses. The minister says that the hon. member has not said a word related to the bill. I must say I was not in the chair previously, and therefore I am not in a position to judge. I have been listening very attentively to the hon. member for Central Nova (Mr. MacKay) and I will continue to do so. I am sure the hon. member and other hon. gentlemen, together with the Chair, will listen to the remarks of the hon. member and note whether he brings his remarks closer to the subject of the bill than he has.


Elmer MacIntosh MacKay: Mr. Speaker, I very much appreciate your remarks. I know the hon. gentleman who has just spoken is very sensitive. In fact, never since I came here have I seen so much that he and his colleagues have to be sensitive about. It is about the worst indictment and example of government mismanagement of this country since confederation. I do not blame him for not wanting to hear about it. I would like to remind him, Mr. Speaker, that we are speaking on principle in this particular case, something that they do not know much about over there, apparently. In any event, it is a wide ranging discussion, as I understand it, on principle. At the report stage one has to be a bit more particular in reference to a statute.
However, as I was saying, the particular concern we have on this side of the House, and which the people of Canada have, is that at a time when we are dealing with a bill which purports to provide ways in which the government can restrain itself from the excessive and faulty practices which are all too evident, we get these continuing revelations of financial mismanagement. We are faced with great reluctance on the part of the government to implement those very clear and sensible measures the Auditor General has suggested must be implemented now and not ignored with the possibility of a two-year long royal commission hiatus.
So far as the revelations are concerned about Treasury Board practices and circumventions of what would be unacceptable practice not only to the Auditor General but to any normal government in presiding over its affairs, there is a very relevant matter which has been before the House for some time which has to do with Statistics Canada. It seems very clear, on the basis of information I have supplied to the House and which was supplied to me, that normal Treasury Board practices are being circumvented.


Jean-Jacques Blais: On a point of order-

November 26, 1976
Restraint of Government Expenditures


Elmer MacIntosh MacKay: Here we go again.


Mr. Deputy Speaker:: The Postmaster General on a point of order.


Jean-Jacques Blais: Mr. Speaker, I will not repeat all the arguments I made before, but I must point out that there is no mention of Statistics Canada in this bill. There is no provision in this bill which deals with any area of Statistics Canada. I would hope that hon. members opposite, instead of unjustifiably taking up the time of the House, would take some time at home to read the provisions of the legislation before us.


Mr. Deputy Speaker:: Order, please. Perhaps I might bring to the attention of the minister that this is the second time he has raised the same question. I hoped he would have some confidence in the Chair. At the same time, I might refer him to citation 119 of Beauchesne's, which states:
Relevancy is not easy to define. A wrong comprehension of it may have a serious effect on the freedom of speech.
I shall try to apply the rule, but it cannot be applied very strictly and I am sure it should not be used to prevent members from making speeches. I do not think the intervention of one hon. member when another member has the floor will help the House improve the situation so far as the application of this difficult rule is concerned. During a long debate such as this, we are aware that members on both sides have strayed in their remarks completely outside the scope of the bill and that the debate has been wider than it should be, but I would hope the minister and hon. members would leave the matter in the hands of the Chair at this time so that I might determine how much closer the hon. member comes to the subject matter of the bill. I assure the minister I will take the responsibility that has been laid upon me.


Elmer MacIntosh MacKay: Mr. Speaker, I very much appreciate your ruling. I remind the minister, who probably has enough difficulty trying to defend the kind of mismanagement in his own department, that we are talking about restraint. That is the principle of the bill. I hope to place on the record some information that will indicate the need for certain restraint by the government. I hope that in so doing I will be doing the House and the country a service. Some of the things I will say have not been said before in this House. Does another hon. member wish to challenge the Chair?


Stanley Howard Knowles: He can't; he is not
in his own seat.


Elmer MacIntosh MacKay: They do not like to sit in their own chairs these days. I notice that the government whip is sensitive about the lack of members in the House.


Mr. Guay (St. Boniface):: Mr. Speaker, I believe there is reason to refer to the number of members in the House at this time simply because this is the first time I have seen so many members of the loyal opposition in the House on Saturday afternoon.


An hon. Member:: It is not Saturday, Joe.


Joseph-Phillippe Guay: It is like Saturday to me, because I am here every day.


Walter David Baker: Mr. Speaker, I hope that the Minister without Portfolio (Mr. Guay), the government whip, will conduct himself a little better tomorrow, which is Saturday, than he is today. The Chair will recall that the Speaker of the House indicated that the practice of keeping records by the government whip is a practice which ought not to be followed in this House of Commons. I would respectfully suggest that the Chair take note that this reprehensible practice on the part of a most inadequate whip on the government side is still being carried on.


Joseph-Phillippe Guay: I should like to advise you, Mr. Speaker, that it is my intention to keep on taking the attendance of opposition members as long as I sit in the House, and I see no reason why any member of parliament cannot do likewise if he so wishes.


Mr. Deputy Speaker:: I am sure hon. members would not wish the Chair to be involved in this debate. I am sure the hon. member for Grenville-Carleton (Mr. Baker) is not asking the Chair to make a ruling on this question, because I do not think it is within the responsibilities of the Chair to decide what hon. members may be permitted to do when they are at their desks. Hon. members will recognize the fact that the Chair has no system by which to take the attendance of hon. members in the chamber and whatever may have been said in the debate, the Chair cannot prevent any member from doing whatever he wants when he is at his desk.


Elmer MacIntosh MacKay: Mr. Speaker, I should like to continue with my remarks, and I hope I have not upset hon. members opposite. Now we have established that the Minister "without" (Mr. Guay) is the second member in the House not to know what day it is, his colleague having had this problem a while ago.


Joseph-Phillippe Guay: At least I am here.


Elmer MacIntosh MacKay: Here in body, perhaps; Mr. Spirit.


Some hon. Members:: Hear, hear!


An hon. Member:: You don't have it together, Elmer.


Elmer MacIntosh MacKay: I hope the minister has it together, because it is obvious the Prime Minister has not got it together.


Joseph-Phillippe Guay: You also don't have it together, but we will overlook that.


Elmer MacIntosh MacKay: I will remind the hon. member opposite that perhaps I could give him some information which the government might find constructive, but it is difficult to say anything when there is a foghorn on the other side. That is the trouble we sometime have in some of the maritime ports in foggy weather but we are used to it. In any event, it appears that
November 26, 1976

Treasury Board practices are being badly circumvented in certain respects in Statistics Canada, and this is of relevance in any debate on a restraint bill, whether it is the one before the House or any other such bill.
I have interesting information which was conveyed to me, and which I would like to convey to the House, about some of the practices which should be, if not amended at least looked at very closely by the President of the Treasury Board (Mr. Andras). Computer systems people, according to my informant, were hired by the system development division in 1972. They are hired for a certain number of days or months, and when the period expires and there is more money available, the contract is extended, again for a certain number of days. In the spring of 1975, system development division employees at Statistics Canada numbered approximately 170 permanent people and 40 to 45 contractors.
All these contractors received consultants fees and were used as part-time help. Not one of the contracts was for the performance of a certain well-defined task or the completion of a project for an agreed upon fee. These contracts remove any risk of loss for the contracting firm; the only party running the risk of loss is Statistics Canada which is, of course, indirectly the government of Canada, a matter which I would think would be of some concern to those opposite who are really interested in saving money, and to the people of Canada. Contract personnel are used as part-time help. They have integrated into the operation and they report to Statistics Canada supervisors. Except for the remuneration, they are treated as employees. There have been instances of contract personnel having participated in performance appraisals of junior Statistics Canada personnel. Some contractors have spent years in Statistics Canada.
I have information on one contractor, whose name I will give to the minister rather than name him in the House, who has been with Statistics Canada since 1973. He is independent and each year his income has been higher than that of the division's director. He does work that could be done by a permanent employee, I am informed, at a salary of approximately $18,000. This type of situation is something with which I hope the government will concern itself in the context of restraint. None of these contractors is doing work that could not be done just as well by permanent staff.
One other matter that is causing concern and which has been brought up before-again I will give the specific instance and give the name to the minister later-concerns an employee who joined Statistics Canada in 1972. He went to England shortly thereafter for a conference and returned, together with his family, at government expense. He studied in England during which time he received two-thirds of his salary. He returned in September of this year, and a collective agreement for his group calls for 50 per cent of his salary during his study leave. These types of instances are very relevant. There are such instances as the excessive use of government aircraft or business incompetence and they bear directly on the honesty and competence of this government. If this is not a good time
Restraint of Government Expenditures to mention such instances within the context of Bill C-19 and this debate, then I do not know what is.
Now I should like to move to another topic about which I have great concern, and I want to assure you, sir, that it, too, is related strictly to the expenditure of the taxpayers' money. It relates to the Department of Labour. As I understand it, the background of this matter is that the government is at present attempting to induce the CLC to be more co-operative. They are planning to advance this group a considerable sum of money, millions of dollars perhaps, to set up a centre of learning here in Ottawa and possibly regional centres in various provinces. As I said, the main centre is reported as going to he established in Ottawa. A considerable sum of money will be involved, it appears.
I should like to pose some questions today which I hope the Minister of Labour (Mr. Munro) will consider and answer. As I understand it, the deal has already been made and it is just a question of how much money has been involved. For example, I should like to know if the CLC has been given assurances by the Minister of Labour that the funds will be received by them, and on what basis. If they are for setting up a labour college for educational purposes, I think this would be constructive in certain circumstances, provided the provinces were consulted, because we are now looking into a question of provincial jurisdiction, provided there is some co-operative effort so that this will be truly an institute of learning, and there will not only be an opportunity to train shop stewards but also foremen so that they can work toward better labour and management relations in this country, not in a unilateral way.
Already the government has been giving money-and I commend them for it-to a labour college which is part of McGill university. If this type of arrangement is going to be carried on a joint federal-provincial basis, then I think the minister should make a statement on motions before he goes any further with this, to tell us what the province's view is and not make any mistakes which he will have to later correct.
The minister and the deputy minister have held meetings across this country for anyone who cared to attend, and in some areas there were very few people, apart from their own staffs, who attended, which says something about the dialogue which exists between labour, government and management in this country at present. I would like to know whether this latest initiative taken by the Minister of Labour is based on the traditional tripartite approach which is equitable and which involves government, management and labour, or whether it is done on a unilateral basis which does not, as is the case in many government policies, take into account the wishes and the needs of other concerned parties. I ask the Minister of Labour: on what basis is, government proposing this payment to labour, and will it be matched with CLC contributions? Will it be tied in with provincial initiatives or matching grants? What will the curriculum be? What do the provinces think and, last but just as important, what will it cost?

November 26, 1976
Restraint of Government Expenditures
I would say at this time that the government of Canada must realize that as an alternative to handing out several million dollars there should be more incentives to encourage labour and management to enter into joint ventures, and to educate not just certain narrow occupations within the labour movement but to bring in representatives from management as well, so there can be a joint effort toward some sort of jurisprudence that will improve the terrible record in the country in recent years which has cost us so much in productivity and has damaged our autonomy.
The government should keep in mind that under the BNA Act the only labour relations fully under federal jurisdiction, in any event, are federal works and undertakings as specifically referred to in section 2 of the Canada Labour Code, and that if the government starts taking unilateral action in taking initiatives with only one partner of the tripartite arrangement-of which it professes to be fond and which 1 think is the proper approach-then perhaps it will do more harm than good.
Referring again to the situation which is troubling the country so far as the report of the Auditor General is concerned, until such time as we get some initiative from the government which can be meaningfully interpreted as a genuine example of trying to save this country money and to live within our means, we are not going to get very far in trying to establish public confidence. The present situation involving the use of public property by ministers in a very casual way, and the government's persistent ignoring of economies which have been put before it either by the opposition or by other wellmeaning sectors of society, is not causing this country to advance as it should in the community of nations.
It has been said in this House in the last couple of days that the various economic indices show that the country is sliding further down on the relative scale of prosperity of western industrialized nations, and that is certainly very evident to anyone who wishes to look at the facts. It is also very clear that the government is getting rather anxious-and I cannot blame it-to have the opposition parties finish with the bill we are discussing. The only difficulty is that this is one of the few forums the opposition has had in recent years to discuss, in a comprehensive way, some of the problems which have frustrated us and some of the facts which must be brought forward for the good of parliament and for the good of the people of Canada.
It has been said before-but I do not think it can be said too many times-that in recent years the executive branch of government has taken unto itself all the prerogatives which are involved in looking after the nation's finances. Parliamentary committees and individual members have no opportunity to examine the estimates in a meaningful way, and when we get a bill such as this before us for our consideration we are provided with an opportunity to suggest to the government certain things it ought to do. Judging by the sensitivity opposite, the government does not want to hear. That is part of the problem;

the government does not wish to listen to constructive suggestions. It is not interested in receiving information, and when it does receive information it is very reluctant to act on it.
Anyone who wants to check the records knows, for example, that it was some time in 1972 that the then minister of transport said he was fully aware that things had to be done to expedite transportation in this country, that he wanted to do something to amend the Railway Act-which is what we are doing in this bill-and that he wanted to do something to take Air Canada away from the control of the CNR. Here we are heading into 1977, many months after a commission of inquiry headed by Mr. Justice Estey, who recommended some of the same things, and they are still not accomplished.
The response of the government to suggestions that things ought to be done is to trot out, in a moment of frantic haste, a royal commission which, however admirable, is certainly not the type of instrument to be used to bring about a quick solution to some of the pressing financial problems facing the country at this time.
Then as a final insult, as it were, to the intelligence of this nation, the Prime Minister came into the House of Commons and tried to tell us that letters such as the one he tabled today, and non-letters such as the one he tabled yesterday, are not to be taken too seriously and that on the face of it there is nothing wrong with acquiescing to the request of a foreign customer to put money into a Swiss bank account, which by the very essence of reading it any person with any common sense would know is not a proper thing to do under the circumstances.
In conclusion, I want to say that until such time as we in this country are prepared to take some stand on the payment of bribes-not necessarily just internationally-we, as parliamentarians, are going to continue to suffer loss of esteem in the eyes of our people, particularly in the field of foreign aid. This government ought to be informed, and inform the nations of the world and its own people that if we have to indulge in the practice of giving bribes in order to be in a position to be able to assist needy people in foreign nations, and if we have to do this by virtue of paying bribes to the people responsible, in many cases, that situation existing, that sort of foreign aid is a type of perversion and should not be given in any event.


Hon. Alvin Hamilton (Qu'Appelle-Moose Mountain):: Mr. Speaker, the bill we are discussing is purported to be for the restraining of the expenditures of government so as in some measure to reduce inflationary pressures in Canada. I doubt if one-tenth of 1 per cent of the people of this country do not support that principle. The question, then, is: why are we in the official opposition taking such strong exception to this bill? We are not opposed to its purpose; what we are opposed to is the list of things which have been proposed to use, as whipping boys, to bring down costs.
When I spoke on this matter on November 16 I took violent exception to the attack on the fundamental foundation of federalism. When we formed our country, we made an agreement with the Atlantic provinces-there were four colonies at
November 26, 1976

that time-that if they joined this union we would maintain connections between us. At that time of our history that meant, primarily, railways. It also included shipping. Every administration to this date has maintained that pledge, and yet we find sneaked into this bill, under the pretence of saving money, that we should reduce or get rid of that particular agreement. I referred to this clause before. It is clause 15 and it proposes to repeal section 272 of the Railway Act. Whenever a government breaks an agreement which is 109 years old, that should be done here with a specific bill and a statute to follow it.


Some hon. Members:: Hear, hear!


Francis Alvin George Hamilton: What irritates hon. members of the opposition and, I trust, the people of Canada is that the amount of money involved at this stage is very small, $11 million, yet this government would destroy a solemn agreement between independent colonies of the Crown who wanted to join together at that time into a sovereign nation, and that agreement is being broken with the excuse that the government wants to save $11 million. Then right in the middle of the debate, when we are supposed to be discussing attempts to restrain expenditures of the government, every day, every hour and every minute brings a new example of some extravagance by the government or some case where the government is ignoring and refusing to take action on the recommendations of the Auditor General, who reports to parliament. How can we be blamed for saying that this bill is nothing but a posturing device so that the government need not do anything about the real causes of waste in government? I do not want to speak too long, but I want to make it abundantly clear that we have to grapple with the fact of what the issue is, and this, I repeat, is the issue.
When I spoke on November 16, I was outlining the same thoughts as I have been today about this type of attitude. At page 1029 of Hansard I said the following:
If the government was elected to make its own decisions, there could be an argument for it. The truth is that this government does not run the country. The country is run by a small group of civil servants who seize the decision-making powers in each major department and run the country.


Elmer MacIntosh MacKay: They are neither civil nor servile.


Francis Alvin George Hamilton: They know best and they tell ministers what to say and what to do. I ask all westerners, all people from Quebec and the Atlantic provinces-
So it goes on, Mr. Speaker. That is what has been demonstrated in the last two weeks. We have the Auditor General's report which bears on the important question of running government and keeping down costs. This is the material that comes in and takes precedence; this is the main report we have from the servant of parliament, the Auditor General. I should like to remind the House of what we have heard so many times before-and I want to put this on the record so there will be no question when anyone reads my speech-of the type of evidence we have before us. This is the view of the Auditor
Restraint of Government Expenditures General in his most recent report as set out in the Conspectus at page 3:	_
I am deeply concerned that, on the evidence of the two-year examination carried out by the audit office, parliament-and indeed the government-has lost or is close to losing effective control of the public purse.
That question has been asked in this House a dozen times in the last week. The significance is that it raises the question of who is responsible. I know that we in parliament, in our urge to get efficiency eight years ago, brought in new rules that took control of the estimates out of parliament. That question will have to be resolved by parliament.
I wonder if we could not track down evidence in respect of the matter I cited in my speech of over a week ago. I refer to the Glassco commission report in this regard. Last spring, when speaking on this matter, I pointed out that the Glassco royal commission had been set up by the right hon. member for Prince Albert (Mr. Diefenbaker) because as a government we were concerned about the efficient administration of the government.
Sometimes you have the impression that you do not have too much say in the running of government. We set up the Glassco commission to make recommendations to us, or whoever followed us, on how we should tighten control and accountability of government agencies, of government and the civil service. The commission reported in 1962. One of the recommendations was that we should raise the salaries or incomes of senior civil servants to a level equal to that obtained in any form of business across Canada, thereby enabling us to draw on the best men in the country to head our departments and agencies. In return for a salary to equal the best in private business, we expected such competence from those civil servants that would match the competence in private enterprise. We expected from them that if they were not competent, they would be held accountable for their actions.
Accountability is a nice word that has been flung around this House during the past week, but it really comes down to the question of what happens to a senior minister or deputy minister who has this income and makes a mess of what he is doing: he lets expenses get out of control, money is spent, bribes are given, millions are spent and we get into a deficit position on the budget-what happens to hold that minister or deputy minister accountable?
There is only one test of accountability: either the man is dismissed or is put out to hard labour for a number of years. Last spring I suggested that he should be put on a pig farm in Saskatchewan. Until we as a government are prepared to hold responsible the men that we appoint to run our departments efficiently, and until we are prepared to punish those who fail to do the job, we have not honoured the recommendation of the Glassco commission, which was to raise their salaries and then hold them accountable. How many senior civil servants have been dismissed in the 15 years since the Glassco commission report? The only people who are fired around here are ministers. Let me develop why that is so and give the evidence, Mr. Speaker.

November 26, 1976
Restraint of Government Expenditures I turn now to page 10 of the Conspectus, where it comments on who runs the government. I think I know why the Auditor General brought this in. He knows as well as I do that the real bosses around here are not the front benches; the real bosses are that small group who have taken control of a few key departments and agencies. They run this government. After recommending the appointment of a comptroller, the Auditor General says, at page 10:
But there appears to be an important difference of opinion with respect to the basic recommended actions I consider essential to correct the situation about which I am so seriously concerned. This difference was evident in several of the hearings of the public accounts committee during March and April, 1976. Excerpts from two hearings of the public accounts committee are relevant. The first is a statement by the Secretary of the Treasury Board at a hearing on March 18, 1976:
The Treasury Board is the chief financial office of the government of Canada. I happen to serve as deputy minister of the Treasury Board, and I have a responsibility, delegated by my minister to me, to carry out those functions, administrative functions, relative to that task. But the Treasury Board is, to use an analogy, the chief financial office represented here.
Here we have a senior civil servant saying, "I am the chief financial officer of the Treasury Board", which is the chief financial office, and telling the committee and parliamentarians who the boss is. He goes on:
A committee member asked the following question:
.. I think this is an important exchange. When you say the Treasury Board is the chief financial office, I wonder if adequate consideration has been given to pinpointing an individual just so we can talk in normal business language?" To which the Secretary of the Treasury Board replied:
"Mr. Chairman, it may seem satisfying to do that but I have to deal with reality in the sense that the Treasury Board is the group responsible in the government of Canada for the finances of the government of Canada, and I will not qualify that statement.
However, then one comes to the question: How does the Treasury Board discharge that responsibility? It does so by appointing a Secretary of the Treasury Board and I am responsible to them for that function.
So the second point is-I have to put it in my own terminology because I think it is correct in terms of parliamentary language-that I have simply a delegated responsibility and I am not independent of the government of Canada. I am the public servant."
There is the boss, Mr. Speaker. The report continues:
Another member asked:
"Do you not feel there should be a chief financial officer?"
The Secretary of the Treasury Board replied as follows:
"No, sir, I believe a government governs and the government is responsible for doing so and is accountable to the country and it must discharge that responsibility.
I say that very directly."
There you have, in cold terms, the attitude and words of a senior civil servant telling members of parliament on that committee just who runs this country. When the Auditor General, our servant of parliament, comes out and lists all these terrible things that have happened, the government stands up and parrots the words of this civil servant. Why do we have a Prime Minister sitting here? Why does the representative of the Treasury Board sit here? That minister is supposed to speak for all Canadians. Why, then, did he stand up and speak those words I have quoted?

This matter did not arise only in committee. On May 17 the hon. member for Scarborough West (Mr. Martin) asked the following question in the House, as recorded on page 11 of the Conspectus of the Auditor General's report:
Mr. Speaker, my question is for the President of the Treasury Board. In view of the recommendation implied by the Auditor General in his report for the year ended March 31, 1975, and later enunciated by him before the Standing Committee on Public Accounts, would the minister give very careful consideration to the establishment of the position of chief financial officer within the framework of the public service of Canada to have express responsibility for overseeing matters relating to the adequacy of financial accounting and control measures over the some $40 billion of annual revenues and expenditures involved in the current operations of the government?
The then minister replied, in part:
Mr. Speaker... I am prepared to consider it favourably. There is a problem of organization within the government. We strongly intend to establish the required mechanisms to the satisfaction of the Auditor General, and I think that with respect to this particular matter, the Treasury Board and the Auditor General will finally find a common ground.
The minister who spoke those words sits in this House today. Last spring he was in favour of the idea raised in the question of the hon. member; but now, when the chips are down, the present minister can only stand in this House and repeat the words of the Secretary of the Treasury Board. The government has changed its mind. The minister's boss has spoken. What is the situation? The government has just been exposed to one of the most scathing indictments in the history of this nation. An idea which apparently was acceptable in May for correcting this situation is no longer acceptable in November. The minister could only repeat the words of the secretary of the Treasury Boad. The Treasury Board secretary is the boss. Apparently that civil servant is the spokesman for the Treasury Board and he said what the minister will have to do.
Instead of acting on the horror stories contained in the Auditor General's report and getting rid of half a dozen men who made the mistakes or should have been held responsible for them, the government set up a royal commission. But this royal commission blew apart when it became evident that one or more of its members could be in an embarrassing position if there were an investigation. That being the case, how can the government bring before this House Bill C-19, the ostensible purpose of which is to restrain expenditure and refuse even while this bill is being debated to take advantage of the recommendations contained in the Auditor General's report whereby tremendous amounts of money could be saved? We are talking of tens of millions of dollars in savings.


Mr. Andras:: Through this bill we could save $350 million.


Donald W. Munro: But we are worried about more than about $7 billion.


Francis Alvin George Hamilton: Instead of talking about possible action, ministers stand up here like trained parrots and suggest, "We cannot touch the civil service." Who runs Canada? Is it the Treasury Board? At this moment of our history the ministers of this government have sided with the mandarins. They are protecting their fellow
November 26, 1976

mandarins. Who are these people, anyway? Three or four names keep popping up nearly all the time.
The hon. member for Central Nova (Mr. MacKay) brought to the fore the Sky Shops affair, one name kept popping up in connection with Sky Shops. Then there is the question of Atomic Energy of Canada Limited. One of the brightest things Canadian scientists have done is develop the CAN DU nuclear device which will provide electricity more efficiently and cleanly than any other similar device in the world. Its merit alone will spread it around the world as one of the main devices for producing electricity from nuclean fission; yet this fine development is covered with the slime of what we heard this past week.
That this government should condone agencies of government doing around the world what Lockheed did is an awful indictment of the moral levels to which this government has descended. I understand why the Postmaster General (Mr. Blais) does not want to discuss these questions. He refuses to admit that the people of Canada are concerned about these matters. He thinks that as long as the government is called Liberal, no matter how wasteful it is the people will return it to power. He is ready to believe that because it has happened time and again. But one week ago Monday the people of the province of Quebec gave us hope that this will change when they threw out that corrupt government which was part and parcel of the corrupt government we have here.


Elmer MacIntosh MacKay: It was a subsidiary, you might say.


Francis Alvin George Hamilton: So I say to
this government, do not ask us to pass a bill which would destroy one of the foundations of our federal system, our agreement to bind Canada together into one nation with railways and other forms of communication. Do not ask us to pass this bill at the very time you are refusing to take advice from anyone on how to save money and restrain waste.
For the foregoing reasons and others, we have proposed the amendment for hoisting the bill for six months. Hopefully during that six months the government will act on those basic problems raised by the Auditor General and by many members of this House during the last three or four years. That is my first point. Second, if we are to put our house in order we must restore to parliament its ancient right of having some say over the voting of money. I know that some intellectuals who got together ten years ago to change the rules now admit they were wrong. It is time for those intellectuals to confer again, to straighten out the rules and to give back to parliament some control over the administration. The first step must be to bring estimates back for consideration in parliament.
Third, a responsible government must hold senior civil servants accountable. Since we turned certain powers over to our civil servants, if in the spending of billions of dollars they make mistakes they must pay the price which all high-salaried people must pay when they make mistakes. Such a civil servant, if he makes a mistake, must go down the road; or, if you prefer a more Christian type of punishment, do hard labour. I hope the backbenchers of this government will dupli-
Restraint of Government Expenditures cate what the backbenchers of Japan did last spring. When their Prime Minister was exposed on account of all the activities of Lockheed in that country and the bribery of officials and business leaders, it was the backbenchers of the governing party in Japan who forced their Prime Minister to resign and go into the wilderness. That is what backbenchers are for. Stand up and be counted as representing the people of Canada and not just the voices of a few people in the cabinet who say you have to be good boys and applaud if you want to be promoted some day. Recognize that we all stand in the same position and that cabinet does not run the government.
They are being run by the same group of people who will want to run the next government that takes over. Sooner or later the ordinary members of this House will have to use their muscle, which is their votes, and throw out their Prime Ministers and leaders if they do not take on the responsibility which is theirs, and that is to govern and not be run by a group of technocrats, bureaucrats, and whatever you want to call them. That is the issue.
If the government wants to save money there is a lot of evidence on how to do that. However, do not ask this House to put through a bill that under the pretense of saving money breaks up the original agreements of Confederation. Once you start on that slope, there is no such thing as honour among the group of colleagues who now make this nation.
I want to conclude by saying let us give this bill a six months hoist. Let us hope that the awful headlines that shock us can disappear from our papers. I do not think there is a Canadian who did not see this morning's Globe and Mail which was headlined "Foreign Firms Bribed by Canada".
Today we have had the letter of the Prime Minister. He said to his senior ministers-Drury, Turner, Goyer, Sharp-"O.K. boys, get together and get this thing quieted down."


Some hon. Members:: Oh, oh!


Francis Alvin George Hamilton: It is right here in the letter. I hear members opposite. Listen to the last paragraph. I am reading from the letter by the Prime Minister to the head of the Treasury Board:
While there may be no strict breach of law involved in the action that is referred to (I do not know whether that is the case or not),-


Mr. Deputy Speaker:: Order, please. I am not sure that the hon. member is not going away from the general debate. I ask him to explain to the Chair how the letter he is about to quote can be related to the bill before us. I have difficulty in accepting that. I want to be fair. I have been refusing points of order from government members and other members in order not to abuse the rules to prevent members from speaking. However, when a letter goes beyond the administration of the government, I do not see how I can allow it.


Francis Alvin George Hamilton: I have no question in accepting the ruling. All I was doing was responding to some of the murmurs of members opposite. Canadians
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November 26, 1976
Restraint of Government Expenditures
are shocked and horrified to find this type of headline. We see what happened here this morning.


Angus (Gus) MacFarlane: The article does not clear up the headline. Read the letter.


Francis Alvin George Hamilton: The hon. member knows the Speaker has asked me not to read the letter which answers this very point.


Joseph-Phillippe Guay: Maybe you should read the letter.


Francis Alvin George Hamilton: A local paper carried the headline, "Liberals Contrive to Sidestep Accountability". That is not talking about this at all. There is another headline, "Cynical, Evasive, Irresponsible".


Joseph-Phillippe Guay: If you read the letter you will see that it contradicts what you said.


Francis Alvin George Hamilton: This government does not accept what it sees in the newspapers about what is happening in this country from Newfoundland to the Yukon and does not heed the fact that the people will not be fooled by phony issues. They want honest administration in the government and they are not getting it.


Some hon. Members:: Hear, hear!


Francis Alvin George Hamilton: We ask this government to drop this bill which is a posturing bill, and get at the real problems of restraining its expenditures as suggested in the report of the Auditor General as well as in other suggestions that have been made on all sides of this House over the past number of years.


Some hon. Members:: Hear, hear!


Mr. Robert C. Coates (Cumberland-Colchester North):: Mr. Speaker, this is a very serious debate from the point of view that somehow or other Canadians expect us to get our House in order. They expect us to set an example and give them leadership on how they should pare their own budgets and live in a less extravagant style than the government has been personifying in recent years.
The proliferation of spending by government departments is shocking to the sensibilities of every taxpaying Canadian. As parliamentarians we must put the reins on Ottawa mandarins or else this country will be the closest thing to bankruptcy that any country can face.
The reason we are faced with inflation in this country more than any other country is because of the open ended spending by all government departments and Crown corporations.
There appears to be no need for the grandiose thoughts of the civil service in general, and the top echelon in particular with regard to spending more and more of the taxpayers' money day in and day out. I am sure that the empire building is repulsive to all members of parliament.


Some hon. Members:: Hear, hear!


Robert Carman Coates: Rather than facing up to the facts laid before it by the Auditor General, the government appoints another royal commission. It will spend more money and allow more empire building while trying to find the reasons why there should be restraint, and the methods by which it can be accomplished. The government should not need a royal commission to determine that there is obviously a great deal of overspending in most government departments.
Year after year the Auditor General's report contains specific examples of departments spending as though it were going out of style. Yet whoever heard of a deputy minister or an assistant deputy minister being fired because of extravagance in running a department? Unfortunately one of the facts of life is that a government which has been in office as long as this one, a government which changes ministers around as often as this one, gets itself into a position where the individual deputy minister has more power than the minister. Portfolios are changed around, as if in a game of musical chairs, in an attempt to produce a new image for the government, but the only result is that the departments are bigger spenders than ever because of the weakness of ministers who assume duties about which they know nothing.
We in Atlantic Canada have suffered the tortures of the damned because of the culpability of the government in ignoring our legitimate aspirations to a better way of life. I should like to give an example of what happens when a government has run its course for a long period and then takes direction from mandarins based in Ottawa, people who have no idea of what is happening in the rest of the nation apart from what they dream up in their ivory towers and impose on those who live in the outer provinces.
In Nova Scotia we have seen money spent wastefully over and over again on projects which produce nothing for us except the ill will of other Canadians because plans conceived in Ottawa and sent down to us proved unworkable. They did not work because there had been no input in decision-making or planning at the local level. A project ends up as a failure, and instead of the mandarins in Ottawa being identified as the reason for the failure, people in the rest of the nation point a finger at us and say "You cannot do anything for them because nothing you do for them works; they will not make it work." Yet it was unworkable from the beginning, the reason being that officials here never took the trouble to seek advice locally as to whether it would work in the first place.
The best example is the record of the Department of Regional Economic Expansion. There is no doubt that the government has committed many millions of dollars to various projects in the legitimate hope that the projects would improve the way of life of the people in our region. But once again the civil servants here conceived the ideas and said to us, "This is what is available for you; this is what you must do."


An hon. Member:: Nonsense!
November 26, 1976


Robert Carman Coates: The money is spent without regard for local opinion. The projects are unsuccessful, and after the investment of millions of dollars the rate of employment is unchanged-we face the same lack of opportunity; we have the same bleak future to look forward to. This situation has to change.
The government could spend a lot less money in Atlantic Canada while deriving much greater benefit from the funds expended, provided the administration would consider projects which we in eastern Canada believe to be workable and likely to give us hope for tomorrow. The government must learn to accept the advice of their own people, the elected people, those who really know what is needed. The sooner it does this the earlier we shall eliminate the kind of attitude expressed by Rene Levesque, one which finds a following because the legitimate aspirations of the electorate have not been met and because of their frustration with governments which are not meeting their commitments. If the government were to decide to do what the people want done, it would be a lot cheaper and a great deal more effective in overcoming regional disparity.
For a long time Canadians across the country have been saying there should be a national power grid, and that if there were such a grid many hundreds of millions of dollars could be saved in the transmission and conservation of electricity. The hon. member for Qu'Appelle-Moose Mountain (Mr. Hamilton), who spoke before me, was a forerunner, along with the right hon. member for Prince Albert (Mr. Diefenbaker), in putting forward the concept of a national power grid to meet the anticipated energy crisis we are now facing. Way back in 1959 the Diefenbaker administration moved forward with this concept in mind. But in 1978 we shall be no further forward in the development of a national power grid than we are today. For 19 years there has been no real progress in achieving something which is realistic, sensible, and valuable to all Canadians no matter where they live. That is just one of many examples.
We in Atlantic Canada have been saying to governments since time immemorial that we want public works projects which are self-liquidating and which will give us the opportunity to develop our resources so that our people might have the option either to remain in the area or go somewhere else if they so desire. Today they have no option. They must go somewhere else if they are to hope to achieve their legitimate aspirations and make an optimum contribution to this nation.
For some 15 years I have been making speeches at every opportunity on the development of Fundy tidal power. I have done so because the harnessing of the Fundy tides would be a tremendous boost not just for the Atlantic provinces but for the whole nation. We in Atlantic Canada would be making a contribution that would be of benefit to other provinces if a national power grid were established. The only reply we have had from the government is the carrot on the stick before the donkey. We have had one study after the other.
Restraint of Government Expenditures
All that Fundy tidal power has produced so far is a very good life for some consultants who happen to be friends of the government in office. One study has been met by another study, followed by yet another study. We in Atlantic Canada have had layers of studies. If we could eat paper we would be the best fed people in the nation. I suggest there have been more studies made of the problems in Atlantic Canada than in the rest of the nation ever since Confederation.
Right now, Mr. Speaker, we are in the process of going through a third study on Fundy tidal power. When the first study was brought down it reported, in effect, that Fundy tidal power was engineeringly feasible but economically unrealistic. There was such an uproar at this in Atlantic Canada that the government finally agreed to conduct another study. This second study was more realistic. The carrot on the stick was not quite so far away from the donkey, but the donkey was still plodding along trying to reach the unattainable carrot. That study found that if tidal power were harnessed it would be competitive with oil at $10 a barrel. At that time oil was not $10 a barrel, Mr. Speaker; I think it was $8.50.
All of a sudden the government said that this study deserved another study. The third study is a lot fancier because it is phased. In recent days we had the report on the first phase of the third study. Probably by the time we are through we will have as many chapters and verses on studies of tidal power as there are chapters and verses in the Bible. The first phase report of the third study now says that if oil rises to $22 a barrel by 1983, tidal power will be competitive.
How we got from $10 to $22 a barrel is not explained. Construction costs and inflation being what they are, this figure is quite significant especially in view of the cost of producing power at either James Bay or at Wreck Cove in Nova Scotia. Even with firm contracts the price of the Wreck Cove hydro project has jumped from $90 million to $140 million. When you can escalate the cost of a project by $50 million under firm contracts, it is pretty good going, but this is typical of the kind of "firmness" that results from most of the consulting expertise that we have received in study reports in recent years in Atlantic Canada.
By the time the second phase is completed we will probably be told that Fundy tidal power will be feasible if the cost of oil rises to $30 a barrel by 1985; or we will be told some other fairy tale of similar type. If we had undertaken to produce power from the tides of Fundy when the first report in 1969 was completed, as they did in France with La Ranee, today we would have power pumping into a maritimes grid which would be competitive with the present cost of power, and probably would be a good deal cheaper. We would also have something else, Mr. Speaker. We would have an assured supply of energy, something that we do not have at the present time. Indeed today we are captives of the OPEC nations, and we all know it. Unfortunately this government and the government of Nova Scotia have gotten themselves in a mess by committing themselves to an energy economy based on what is now very expensive oil.
80005-2 3'/;

November 26, 1976
Restraint of Government Expenditures
If the government wants to know how to restrain its expenditures, one way to do so is by firing half of the consultants it has on contract at the present time, including those studying Fundy tidal power, and by calling tenders to build the actual project. I am not necessarily saying they should build at all three sites at the same time.
If the government wants to improve its engineering expertise, I suggest it build the smallest of the three sites, Cumberland Basin, which would cost approximately $1.2 billion but which, when completed, would guarantee a source of supply for the next 75 years, thus giving protection to the people of Atlantic Canada against power shortages in the future. That is point No. 1. Point No. 2 is that this project would provide much needed employment and would result in such spin-off effects as a fantastic increase in tourism. This would be associated with the desire of people to see the mightiest public works venture ever undertaken in this country, in an area that is completely accessible to everybody here and in the United States who might want to come and see what Canada is doing for its people.
That is the kind of project that makes sense. It would be an investment in the future of Canada. It would be a guarantee of a new tomorrow for Canadians. It would make Canadians believe there is some realism in the minds of the people running the government of this country. Such a realism escapes the thoughts of people these days when they see the kind of headlines that appear, talking about corruption and the like, in respect of the operations of the Government of Canada. Restraint in respect of stupid things would produce the dollars to undertake the realistic things that Canadians want and which would be of benefit to them and of benefit to this nation in its totality.
The sooner we start moving down that road the sooner we will eliminate the talk of separatism, the talk of disenchantment, and the talk of who cares whether we are or are not a nation, which is in the minds of so many Canadians today. We must have a common objective for all Canadians regardless of where they may live. We must have the belief that there is something worth while about this nation that we should work toward.
You know, Mr. Speaker, it is pretty unrealistic that one could come to the conclusion that a nation could break up because some people who speak the French language do not desire to speak the English language, and some people who speak the English language do not desire to speak the French language. This is particularly true when we look at a nation like Israel which is composed of people from all over the world who speak many different languages, and many different dialects of language, people who have come together and who have remained together under the greatest kind of adversity that exists in the world, and yet who are able to marshal to the cause because they have a common objective and a common goal which they all wish to attain.
[Mr. Coates.)
Surely we on the northern half of this North American continent, regardless of the language we speak, have a common goal not only to make this nation and the people who live in it better, but to make the world a better place in which to live because of the tremendous resources God has given us in the northern half of this continent.
Surely we can find in the leadership of this nation the ability to set standards which are high enough that all Canadians can see something in Canada that will make them want to come together, work together, live together, and achieve together. Surely we are not getting that today. This is one reason for the erosion we see and feel in respect of the Confederation of Canada. The government could do much to overcome and eliminate the problems we have today if it would set that high standard, look at the leadership that is being given economically and otherwise, say to Canadians that there is more that is good about this country than there is that is bad, let us work together as Canadians to make it a better place for all of us to live in regardless of where we may live, and say to Canadians that it is important we do this because if we live and live well we can make life a lot better for many other Canadians, and for many other people who live on this earth in other parts of the world by sharing with them some of the things we have in abundance.


Mr. J. M. Forrestall (Dartmouth-Halifax East):: Mr. Speaker, this is yet another opportunity to participate in the discussion in respect of Bill C-19, a bill designed to give effect to government restraint in spending programs. I take pleasure in supporting the amendment that is now before us to the effect that we not now read this bill a second time but rather do something else with it for six months instead of continuing with this madness on the part of the government.
For the next few minutes I intend to concentrate again on clause 15 of this bill which relates to the repeal of section 272 of the Railway Act, dealing with what we now fondly refer to as the "at and east'' grain and flour rates. It has become obvious that the government, hoping to find time to formulate a legislative program for this fall which might show some kind of leadership and some direction for the country, has in fact brought in Bill C-19 containing this controversial clause as nothing more than a stalling tactic to get around its responsibility to govern and give direction to Canada.
Much has been said this afternoon in respect of the degree of restraint that would be achieved by this bill. Let me reiterate what we are talking about with regard to this bill which the government says will do so much, and which it holds up as its great shield in the fight against spending. The government intends to take away the subventions on the movement of grain and flour to the extent this year of, I think, very close to $13 million or $14 million, and yet the government very clearly has before it a recommendation which I assume has cabinet approval, the effect of which would be to establish a program of assistance for Canadian milling operations equal to the money to be saved by the removal of the subsidy in respect of the so-called "at and east" rates on grain.
November 26, 1976

Where is the saving? What the government is doing is taking the money away from the railways and giving it to the millers.
I do not argue against the justness of the plea on the part of the Canadian milling operators for this assistance because they have to compete with foreign countries for the export flour trade. We all know that the European countries heavily subsidize their milling operations for this very specific purpose. 1 am not arguing against that. What 1 am asking is, of what earthly good is it to take it out of one pocket and put it in another? Where is the restraint in spending in that?
The Minister of Transport (Mr. Lang) is trying to achieve his avowed intention to remove all forms of subsidy from the varying transport modes in Canada, despite the still existent government policy that transportation should be used in the development of this country for the proper location of people, to assist people in their settlement in various areas of the country, and for the transportation of goods between them. All this will achieve is to push the Minister of Transport a little farther down the road toward his avowed goal of removing transport subsidies, but it does not save the taxpayer one nickel.
Indeed, as I understand it, the government intends to give to millers an amount of money equal to the compensation paid to the railway. Presumably that compensation in the years ahead would be geared as well to the continuing difference that would exist between the real cost of moving grain and flour and the subsidized rate set in 1960 with respect to flour, just for example. I see no dollar saving futures for the Canadian taxpayer in that. What dollars were saved by bringing the Company of Young Canadians to an end? What dollars were saved by Information Canada, a useless body? This bill does not do what the government purports it will accomplish, and to continue to insist that it does is to mislead the Canadian people.
Let us come back to clause 15 of the bill to see what the social and economic costs to the Atlantic provinces will be if we remove that particular subsidy. If there is any reason for Bill C-19 being in front of us, it is, 1 suppose, to exasperate those who want to get on with measures that are meaningful and useful to the country. If the bill's principal purpose is to frustrate the opposition and frustrate Canadians and put them in positions of confrontation, then it does succeed, and that is regrettable in the sense that we should be doing things to give renewed direction to Canada. I intend, as I said in this debate two days ago, and as I said last spring, to do everything in my capacity and within my abilities to make sure that Bill C-19 does not pass so long as it includes clause 15. For me or for anyone else from the Atlantic provinces to do less, I think, would be to perform a great disservice to the people in the area they represent, and I do not intend to do that.
The deletion of Section 272 from the Railway Act could not come at a worse time for Atlantic Canada currently facing a totally unacceptable unemployment rate and one which, if we listened to OECD, will get worse unless drastic measures are
Restraint of Government Expenditures taken now. For example, energy rates in Nova Scotia are increasing rapidly. Oil, for which we pay $1.75 a barrel until the end of next month, will increase to $12 or $13 a barrel. Who knows what it will go to? Energy rates will go up 65 per cent immediately, which is totally unacceptable to the people. Rates that are already well above those in all other parts of the country except Prince Edward Island, will rise substantially. There is no question that our energy problems will have a serious and long term detrimental effect on the development of the economy of our region. My colleague, the hon. member for Cumberland-Colchester North (Mr. Coates), has spoken about the great potential of the Fundy tides. He is right when he says we should have been developing that program ten years ago. Not to do so within the next two or three years will again be a major disservice to our region.
Late last night we were discussing the shipbuilding and repair industry which in the maritime provinces directly employs thousands of people, and indirectly many more thousands. That industry is in its most depressed state in more than a decade. On top of all this was the recent turn of events in the province of Quebec. I fear-and I hope my fears are groundless-that this could very well cause a serious slowdown in economic investment in Atlantic Canada, and this is to be regretted.
While it has been the federal government's response to the plight of Atlantic Canada to put forward a program designed to combat chronic unemployment in Canada, has the government offered special assistance to energy consumers to help offset high rate increases? Has it increased subsidies for shipbuilding or announced any programs for ship construction to complement our announced intention with regard to surveillance of the 200 mile limit, and the development of underwater resources? Has it assured potential investers in the Atlantic region that their capital is as secure there as in any area of Canada?
I appreciate the Prime Minister's (Mr. Trudeau) remarks on television the other night, but they will not persuade the economic institutions to invest their dollars in Atlantic Canada. It is deeds and actions on the part of the government that will achieve that, not the bland assurances of a government which tricked us in 1970 with smooth words and sweet talk on the crisis in Quebec. We swallowed it. We believed it. We sat in this Chamber and voted for a War Measures Act that was not necessary, only because the people of Canada were persuaded by a great performer, by words and the television medium. We were tricked then. We were tricked with A1B by a smooth talker. I tell you, the people of Canada will not be fooled by what he said the other night. Rather, they will only be convinced by action and deeds and if the government restores their confidence in itself.
The great tragedy today is that nobody in this country believes in the federal government. They cannot trust it. Let us consider Bill C-61. There are some flaws in it but it is not a bad bill. Nobody would accept it. The Minister of Transport could not get that bill through the House on his own terms, not

November 26, 1976
Restraint of Government Expenditures even if he used closure. Why? Because no matter what he says, nobody will believe him, and why should they?
No, it will take actions, not words, from this government before the people of Canada will give back to this institution their trust and give back to those who serve here some of the honour which has been stripped away from us by the Prime Minister and his colleagues on the treasury benches.
The government has not done anything for us yet. Instead it has attempted to shove down our throats and the throats of Maritimers a bill, the immediate impact of which will be to cause the loss of hundreds and hundreds of jobs. This immediate loss of employment will occur at two Maritime ports, Saint John and Halifax, if the "at and east" rates are removed. Let us not kid ourselves; they simply cannot be competitive in grain and flour export traffic without this rate. They will not be competitive, through no fault on their own, but only because preferential treatment has been given to other trading routes. I am also under the clear impression that the government qualified this to say it will not extend any subsidy to any flour which would move through a U.S. trading route, and I hope that that is in fact the case.
Let us see what this means in calculable dollar and cent terms to the port of Halifax-Dartmouth and to the port of Saint John, New Brunswick. I ask hon. members to remember that the port of Halifax is still struggling as a result of a lengthy port dispute which cost us millions and millions of dollars and from which we have not as yet fully recovered. If section 272 of the Railway Act is repealed, the port of Halifax-and I will deal with Halifax and then Saint John and try to sum it up later-will lose 210,000 man-hours with regard to the handling of flour alone. That figure is based on the 1975 figures pro rated to 1977. This, plus the loss of 45 elevator jobs and 5 others in grain handling, will result in a loss to employees in terms of income, wages and benefits of an amount well in excess of $2 million annually.
These figures do not include jobs which would be lost at the port in such areas as administration of the dock employees, port agency staff, pilots, clerks, policing activities, private security arrangements and so on.
The loss to the port of Saint John is just as serious if not more so.


Mr. Landers:: Humbug.


J. Michael Forrestall: Do not say that, or I will remind you that you have not opened your mouth in this debate yet.


Mike Landers: I just did.


J. Michael Forrestall: Sure, with the most serious of consequences. The last time the hon. member got up, he got up on a question of privilege.


Donald W. Munro: Name him.


J. Michael Forrestall: I am talking about the port of Saint John, and the hon. member opposite knows exactly what I am talking about. In fact, since the matter has been raised, of the hon. members opposite from the Atlantic provinces only three of them have bothered to speak. Why? Because you do not give a damn.


Stanley Howard Knowles: Order! Address the Chair.


J. Michael Forrestall: Is that unparliamentary? I am talking about the livelihood of my constituents, about payrolls and about pay packets for their families. You will find that before this bill is finished anger is bound to cause a little bit of unparliamentary language.


An hon. Member:: Oh, come on.


J. Michael Forrestall: Get up on your feet and participate. Stand up for the people in Atlantic Canada, if any of you over there have any sensitivity.
The loss to the port of Saint John is just as serious. The loss of grain and flour export business would mean the elimination of 75 jobs in grain handling alone, representing somewhere in the area of $500,000; two yard crews, about eight or ten jobs, another $100,000; and the loss of jobs for 60 people who work as checkers, coopers, truckers and foremen. The hon. member knows who they are, and if hon. members want to sit down and do a little arithmetic, they can figure out the dollar value of that. However, we know the wages and what the contract settlements were. The loss of those latter jobs amounts to a loss of $700,000, and that is not to mention the stevedores and the ILA checkers who will lose some $850,000.
If clause 15 of Bill C-19 passes, the total initial loss in salaries in the port of Saint John will be close to $2.3 million. That is $2.3 million, and $1.5 over in Halifax directly. The loss of these wage dollars at these two ports in terms of the local economy of the cities, which comprise the largest growth centres in our respective provinces of New Brunswick and Nova Scotia, will be nothing short of disastrous with respect to the operation of these ports. Indirect losses of secondary industries and services alone are conservatively estimated at between an additional $1.5 million and $2 million. Incidentally that figure comes from the Maritime Provinces Board of Trade and the Maritime Transportation Association.
Other areas in which the repeal of section 272 of the Railway Act would cost the Atlantic provinces greatly include increased rail rates for all industries, which would be brought about by the loss of revenue to the railway companies themselves by the reduction of traffic, and an increased cost to farmers for feed grain. In Nova Scotia alone there are some 24,470 tons of mill feeds presently imported annually.
To me personally one of the most disturbing aspects of the debate on Bill C-19 has been the absence of any apparent concern on the part of hon. members opposite from the Atlantic region, as I just mentioned.
November 26, 1976

The total dollars and cents we are talking about are best estimates from those people involved in institutions such as the Atlantic Provinces Economic Council, the affiliated boards of trade of the Maritime provinces, the Maritime Provinces Transportation Council, and others. Their assessment is between $5 million and $6 million in direct losses to these two ports.
May 1 call it four o'clock, Mr. Speaker?


The Acting Speaker (Mr. Ethier):: It being four o'clock, the House will now proceed to the consideration of private members' business as listed on today's order paper, namely, public bills, notices of motions, private bills.
Shall order No. 1 in the name of the hon. member for Lotbiniere (Mr. Fortin) stand at the request of the government?


Some hon. Members:: Agreed.


PRIVATE MEMBERS' PUBLIC BILLS
Mr. Ron Huntington (Capilano) moved: that Bill C-203, respecting the inter-provincial enforcement of alimony and maintenance orders, be read the second time and referred to the Standing Committee on Justice and Legal Affairs.
He said: Mr. Speaker, Bill C-203 has been around the Parliament of Canada for quite a while. It was first presented to the Twenty-Ninth Parliament as Bill C-377 by the present Minister of National Defence (Mr. Danson), who is and was then the hon. member for York North. As I have seen the destructive effect of present legislation on human beings many times in my life in service to the community, and as I made in 1972, and again in 1974, an election platform commitment to support that bill, I went to the hon. member for York North, who became a minister of the Crown in the Thirtieth Parliament, and asked if I could resubmit the principle of his bill to this parliament. The hon. gentleman agreed and gave me his blessing, and here we are two years later with the privilege of discussing this important subject matter in this parliament.
Somewhere, somehow, there has to be a person who can express in other than legal terms the plight of adults, and particularly of young people who have been caught in the ever increasing social malaise of family breakdown in Canadian society. The introduction of this private member's bill is an attempt to draw attention to this matter and to ask the Minister of Justice (Mr. Basford) to use the power of his office, and the responsibility given to him by the people of
Alimony and Maintenance
Canada, to correct the rising level of anguish which is affecting the quality of life and the future of many Canadians.
I am a layman, and I realize that in true legal terms we are dealing with a division of legal powers pertaining to marriage and/or family breakdown, the federal legal responsibility being for alimony orders granted at the time of the divorce decree. I realize also that the provincial legal responsibility is for maintenance orders from the time of the separation to the time the divorce decree is granted. But, Mr. Speaker, some way, somehow, we have to find a way out of this constitutional and legal jungle if we are to reduce the growing number of family and human tragedies in this country. To continue with an abdication of our responsibility in this area of social need is to abandon any further move toward true justice in society.
The government is obviously aware of this social-human problem for it has commissioned study upon study on the subject. All that can really be said has already been printed. 1 should like to quote from the most recent study paper done by the Law Reform Commission, again at the request of the federal government. The paper is entitled "Family Law Enforcement of Maintenance Orders", and extracts are as follows:
A court order for maintenance of a dependent spouse or child is for all practical purposes often worth no more than the paper it is written on.
I quote again:
The rules, practices and procedures that exist in Canada for ensuring that support obligations are met following a marriage breakdown or divorce are the weakest links in the legal chain that comprises family law.
I quote again from that paper:
The primary federal interest in maintenance obligations and their enforcement stems from parliament's occupation in 1968 of the legislative field of family maintenance following divorce. Parliament has a clear responsibility to ensure that orders made pursuant to its legislation for the support of children and the economically weaker spouse are more than empty gestures. In addition to maintenance of a spouse and of children of a marriage-are matters historically associated with the status of marriage, a subject matter falling within the legislative competence of parliament under the Canadian constitution. For many years parliament has been inactive with respect to the exercise of such legislative powers as it possesses in this area.
Another quote from that paper is as follows:
The enforcement of the federally-created maintenance obligation on divorce is often done by provincial courts employing provincial law.
The federal government, Mr. Speaker, has been sloughing off leadership and action and its responsibilities to the provinces. If 1 may quote again from the report:
Jurisdiction questions should be distinctly secondary to finding appropriate answers.
As a layman, Mr. Speaker, impatient with the legal jurisdictional jungle, I am aware that maintenance and alimony orders from the courts of Canada are being abused. Contempt for the justice system is enhanced because of this enforcement breakdown and apparent refusal of the Department of Justice to accept its full social responsibility.
In support of this harsh challenge I offer a few statistics. The Vancouver Family Court reports that for the month of

November 26, 1976
Alimony and Maintenance
June, 1976, 65 per cent of receipts due under orders were received, leaving a failure to pay rate of 35 per cent. In March of the same year, the failure to pay rate was 42 per cent. In cases where the earning spouse who has received an order from the British Columbia courts has moved away from that provincial jurisdiction, the 1972 statistics show a failure to enforce rate of 72 per cent. We have had trouble updating these statistics, and I might add that Vancouver appears to be one of the few areas keeping a record that is available.
These figures are further confirmed by a statement in a letter from the assistant deputy minister of social allowances and services, Department of National Health and Welfare, as follows:
Some degree of default with respect to obligations arising under maintenance orders occurs in as many as 75 per cent of all maintenance orders.
Can you imagine, Mr. Speaker, the anxiety and destruction of spirit that must exist for people and children living under these conditions? People without hope or a goal are people missing out on a fair chance at the excitement of life.
According to the Law Reform Commission Report on Alimony and Maintenance, there are many factors causing the non-payment syndrome. Some factors are federal and some are provincial, and some overlap these legislative jurisdictions.
The present federal Divorce Act and the provincial Deserted Wives and Children's Maintenance Acts foster alienation between the partners in the procedures used are fault oriented and accusatory. The spouses are polarized through accusations and counter accusations because the "legal fault" affects the award they will receive. In most cases the legal fault or innocence is far removed from the actual cause of the marriage breakdown. Because of these procedures the spouses having to pay the order see the order as having been imposed on them because they are the bad person in the relationship- not because they should bear the responsibility for supporting their family. This resentment is in many cases the reason for non-payment.
Section 4(1 )(c) of the Divorce Act seems to provide a way to avoid the painful process of the accusatory procedures. Divorce is allowed after three years of legal separation. However, on careful scrutiny we note that it promotes the disassociation of the partners. Only 90 days of cohabitation are allowed for reconciliation and if that period should last for longer before they separate again, the entire three year separation must begin again from the start. Judges have also been known to refuse a divorce because the partners had seen each other too often. This disassociation of spouses causes children to lose interest in the parent who is not living with them. This again leads to non-payment, in that the parent feels that if the children do not care, why should they?
The quasi-criminal nature of enforcement proceedings may involve putting a defaulter in jail using procedures prescribed by the Criminal Code. These very harsh measures have caused spouses who have fallen into arrears due to real financial difficulties to fear the court, and such people will allow arrears to pile up rather than consult the court with their problem.

The present system is designed to involve lawyers, and because of their cost people are reluctant to use their services. On the other hand lawyers are reluctant to get involved because it is time-consuming and there is no money in it. An extract from a bar admission course on enforcement of periodic maintenance orders confirms this as follows:
There is no money in maintenance enforcement from the point of view of the solicitor-it is time-consuming, frustrating and often engenders ill-will from your client when she is charged a fee that she considers exorbitant but is still less than your time is worth.
A new system must be developed that does not depend entirely on the services of the legal profession in this area of need. Welfare payments also tend to promote non-payment; deserted spouses often prefer welfare because payments are regular. Another factor is the seemingly permanent nature of maintenance orders which is said to be psychologically discouraging. A lump sum arrangement should be considered.
The garnisheeing of wages of the spouse who is paying the maintenance is rarely considered. The legal procedures and the administration and bookkeeping involved on the part of the employer are such that garnisheeing is not feasible. Many times the employer would rather get rid of the employee than get involved in these procedures. Judges are also extremely reluctant to place defaulters in prison. The defaulters may lose their jobs and would therefore not be able to pay at all.
The lowest success rate in enforcing alimony and manite-nance orders occurs when a spouse leaves the provincial jurisdiction of the deserted partner. The interprovincial enforcement of alimony and maintenance orders is almost impossible, even when reciprocal agreements exist between the provinces. The low success rate is in part due to the varying provincial statutes relating to maintenance orders and procedures involving the finding and summonsing of the deserting spouse. This is time consuming and costly, and more often than not results in non-payment anyway in that the spouse cannot be traced. On the other hand the spouse, if found, could be having financial problems and only has to prove this fact to the court. The spouse may be then relieved of responsibility.
Increasing welfare costs surely dictate a move on the part of the federal government toward the co-ordination of collection procedures. It has been reported to me by a reliable source that 80 per cent of welfare costs in the city of Vancouver not attributable to senior citizens, are caused by deserted women with children. I am sure that other Canadian cities would show similar statistics. Such welfare cost burdens are shared equally by federal and provincial jurisdictions.
In any study to resolve this problem one must take note of the successes being experienced by the Ontario automatic enforcement program which has also been supplemented with their parental support program. 1 would think that the experience gained under these two programs in the province of Ontario would be useful and is essential if there is to be action on the part of the federal government in this serious area of social need.
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As I approach my conclusion I can do no better than quote again from the Law Reform Commission paper on family law. I quote paragraph (m) on page 941. The paragraph is headed "Uniform Enforcement of Maintenance Orders Legislation". It reads in part:
Since many of the possible solutions to present problems involve interprovincial issues as well as federal-provincial matters, consideration should be given to a co-operative approach among the provinces and between the provinces and the federal government with a view to uniform provincial legislation embodying new enforcement techniques, coupled with new federal legislation complementing the action taken by the provinces. Such an approach is closely connected with the creation of the unified family court.
As 1 have become more involved in the technical considerations of studies made since presenting this bill for first reading, I fully realize that the bill is a broad and simplistic attempt to resolve a serious and complicated social problem. I can only hope that this debate on the principle of the bill will once again bring an awareness to the federal government that leadership and legislation are urgently needed to reduce the degree of emotional warping of both parents and children, and to reduce the long-lasting social damage and costs that present legislative indifference encourages. Again 1 ask the government to approve Bill C-203, especially in light of apparent federal government concern that new legislation in the area of marriage and family law is past due.
To close my remarks may 1 put on record the explanatory note concerning this bill. It reads:
In the eyes of many people, deserting spouses in default of alimony and maintenance orders are a blight on our society who are aided and abetted by the costly and timely procedures under the various provincial statutes respecting the reciprocal enforcement of these orders. This bill, which purports to establish with the approval of all the provinces, an agency to enforce in one province alimony and maintenance orders issued in another, is admittedly only a first step. It is hoped that from this bill will flow a government measure providing for the automatic and guaranteed payment of alimony and maintenance orders awarded by the court, and for the federal and provincial governments to be responsible for collecting these payments.


Mike Landers: Mr. Speaker-


Donald W. Munro: Mr. Speaker, I rise on a point of order. If the parliamentary secretary speaks now, will he close the debate?


Mike Landers: No, Mr. Speaker.


Joseph-Phillippe Guay: No, Mr. Speaker.


The Acting Speaker (Mr. Ethier):: The parliamentary secretary will not be closing the debate.


Donald W. Munro: Mr. Speaker, you can never tell what parliamentary secretaries will do these days. They do so many things.


Joseph-Phillippe Guay: Mr. Speaker, I hope all the comments which were made just now are recorded in Hansard.


Mike Landers: Mr. Speaker, allow me first to assure the hon. member opposite that the federal government is fully aware of the need to amend family court procedures. This question was
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discussed at length at the last meeting of the Minister of Justice (Mr. Basford) and the attorneys general of the provinces. Hon. members opposite no doubt understand that although these matters are being discussed in the provinces, reaching agreement will take some time.
May I turn now to Bill C-203. In the first place the consideration of this bill is probably contrary to the rules of the House of Commons. In authorizing the creation of a federal-provincial alimony and maintenance enforcement agency, the bill is in effect providing for the expenditure of money out of the Consolidated Revenue Fund. It should be considered as a money bill for which no recommendation has been received from the Governor General.


Walter David Baker: Nonsense!


Mike Landers: The purpose of the bill is to establish a federal-provincial agency to enforce in one province alimony and maintenance orders issued in another. It would, in effect, make the federal and provincial governments jointly responsible for the collection of payments under these orders. What would such an agency do and where would it be located? If the agency were only used as a data and tracing centre, possibly one national office would suffice. However, even as a tracing service one would expect that at least one office in each province would be necessary.
Further, if the agency were to go beyond tracing and attempt to provide an effective enforcement service, the agency would probably have to have offices not only in every province but also in at least several areas of nearly every province. It would have to hire investigative officers to trace missing persons against whom maintenance orders had been issued, and to investigate the means of such persons to pay orders. It would also have to hire enforcement officers to enforce the orders where a person refused or neglected to pay. If these procedures were handled purely automatically, it would be a very rigid system and would probably result in many people who could not pay their debts being sent to jail or forced to suffer other penalties.
For any system of enforcement to work there must be an opportunity for judicial review. It is pointless to enforce an order against a person who has no money to pay. If there is to be a judicial review to ascertain whether orders should or can be enforced, then any agency created to perform this function would in effect be a court. If a special federal court were created to perform this function, it is highly likely that the provinces, with considerable justification, would object strongly on the grounds that the creation of the court was an infringement of the administration of justice in the provinces. There are already provincial courts in existence that are engaged in the enforcement of maintenance orders. It would seem preferable to strengthen the enforcement function in existing court structures, or in new unified family court structures, rather than to try to create a new agency to handle the problem.
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The enforcement of maintenance orders is an important element in the administration of justice in the family law field. The scheme of reciprocal enforcement is grafted upon provincial enforcement in the province where a maintenance order is confirmed or registered. As a result, no scheme of reciprocal enforcement will be able to operate any better than the provincial procedures to be applied in the endorsement of all maintenance obligations in the province.
The question of how to achieve more effective enforcement of maintenance orders has been considered by a number of authorities. They stress the importance of not only uniformity of substantive law but also uniformity of procedure in legal institutions. The Ontario commissioners, in a report to the Uniform Law Conference of Canada Annual Meeting, 1976, expressed the view that most problems, not only of inter, but also intra-enforcement of maintenance orders, would best be solved by vesting jurisdiction over all family matters in a single unified family court. This view reflects similar views expressed by the Law Reform Commission of Canada in its report on family law issued last June.
In order to provide an effective national enforcement scheme, it is necessary not only to have uniformity throughout the country but also to have automatic enforcement whereby the court rather than the recipient of the order is responsible for the enforcement of the order. If a maintenance order is not paid, then a wife and children often require welfare payments. The state then, as well as the person being maintained by the state, is directly interested in enforcing the maintenance order. The automatic enforcement of maintenance orders has other beneficial effects. It discourages the accrual of arrears which form a psychological barrier to future compliance with the order. Also, the regular review of performance under the orders often discloses factual situations that would justify applications to vary the orders. It is submitted that only a court, not a government agency can maintain the supervision necessary to ensure that the order is enforced in a manner fair to both parties.
Recognition of the necessity for the state to enforce maintenance orders has already led the courts in several provinces to experiment with automatic enforcement programs. The provinces of Alberta, British Columbia, New Brunswick, Nova Scotia, Manitoba and Ontario all have some system of court enforcement under development or in operation. Under the Ontario program enforcement proceedings no longer await the initiative of the welfare administration or the spouse in whose favour the order is made, usually the wife. Maintenance accounts are reviewed regularly, and as soon as an account appears to be in arrears, the defaulting spouse, usually the husband, is notified and asked to explain the default.
There is evidence, even at this date, that automatic enforcement schemes are effective. Indeed some of the current problems of the schemes are the result of their success. In some areas the system has become overloaded and appears to suffer from inadequate staffing. The result is that periodic review of the files can only take place at more infrequent intervals, which places the entire program in jeopardy. In order to
[Mr. Landers.)
prevent these schemes from faltering, it then becomes necessary to allocate more resources to them. However, in these days of financial constraint, both federal and provincial, the allocations of financial resources to new programs is difficult to accomplish.
The federal government, in an effort to improve the enforcement of maintenance orders along with other aspects of the administration of family law, is encouraging the provinces to establish unified family courts with effective support services by offering funds for cost-shared pilot projects. To this end the federal government has appropriated $400,000 for unified family court pilot projects for the 1976-77 fiscal year, and the same amount for the 1977-78 fiscal year. For various reasons none of these projects is yet operational.
In Manitoba approval in principle for a jointly funded unified family court pilot project within the County Court District of St. Boniface, was announced on July 18, 1976, by the Minister of Justice and the attorney general of Manitoba. Pursuant to provincial legislation now enacted, the St. Boniface Family Law Division will hear and determine all family law matters that arise in the district. The court will provide enforcement services. It was intended that the project commence operation November 1. However, the Manitoba government has requested the attorney general of that province to defer the starting date for the project until the fiscal year commencing April 1, 1977, for budgetary reasons.
The province of British Columbia unilaterally commenced a pilot project two years ago in the provincial family court. It provides a two-tier system, usually federally appointed judges, to hear divorces and other matters beyond the jurisdiction of provincially appointed judges. The Department of Justice has recently entered into an agreement with British Columbia under the unified family court pilot projects program to cost-share the evaluation work now being done on that unified family court pilot project. It is hoped that this evaluation will prove useful in respect of future family court pilot projects and programs.
In Ontario discussions have been held between the Minister of Justice and the attorney general of Ontario respecting the establishment of a unified family court pilot project in the Hamilton area. It is expected that agreement to proceed with this will soon be reached.
With regard to the other provinces, negotiations for a cost-sharing agreement with Saskatchewan were in an advanced stage when the province postponed the project for budgetary reasons. Some discussions have been held with other provinces but have not reached an advanced stage.
To say that the federal government is giving support to family court pilot projects is not to say that this is all that can be done by the federal government to facilitate the enforcement of maintenance orders. Every means of co-operation with the provinces should be and is being examined. In some cases, the means to promote the enforcement of maintenance orders may conflict with other social goals, such as the goal of ensuring privacy for persons in their transactions with the state. For example, in England the government has authorized
November 26, 1976

the disclosure of addresses from some official records to courts at their request. In the United States special units have been set up in state welfare departments to trace missing persons who are in breach of their support obligations. Legislation has been enacted in some states allowing departments to obtain from the records of other state agencies information which would assist in tracing individuals.


An hon. Member:: What are they doing in Canada?


Mike Landers: I am trying to take a global view rather than be parochial.
The development of facilities for the rapid and thorough exchange of information about persons, subject to suitable safeguards regarding the privacy of individuals involved, would greatly aid the effective enforcement of maintenance orders. Perhaps it is time that the social goal of ensuring privacy to individuals in respect of their dealings with the state be made subordinate to the goal of ensuring that parents who are able to do so support their children. In such a case is it time to open provincial and federal records to enable the tracing of people who do not comply with maintenance orders?
For tracing purposes at the provincial level the records of motor vehicle registration departments and hospital insurance agencies would be most useful. At the federal level, tax records, unemployment insurance records, and social insurance numbers would provide valuable information.
Given the conflicting social goals, the opening of these records for any purpose, even one as worthy as the one discussed here, is a matter which would have to be developed and worked out with the provinces over a period of time. It is also a matter which might require reference both to parliament and the provincial legislatures. It is not something which can be achieved over night through the creation of a new federal agency.
Taking into consideration the need for consultation and the necessity for maintaining close contacts with the courts in respect of the enforcement of maintenance orders, I would submit that the creation of a new and expensive federal-provincial agency, as suggested by this bill, is not the answer to the problem of how to provide an effective enforcement service. Rather, the answer lies in greater federal-provincial co-operation and the development of existing and new court systems and methods to meet this very real need.


Stanley Howard Knowles: Mr. Speaker, on Tuesday of this week in the private members' hour we had before us a very sensible bill in the name of the hon. member for Scarborough West (Mr. Martin). The House recognized the validity of that bill, gave it second reading, and sent it to the standing committee. That is no guarantee that the bill will be passed and become law, but the procedure we followed does guarantee that the bill will receive serious consideration. I see no reason why we should not do the same thing in the case of the bill which is now before us.
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This bill is a sensible one. It attempts to meet a pressing social need, and even that global analysis which was given to us by the hon. member across the way did not set aside the common sense of the measure proposed by the hon. member for Capilano (Mr. Huntington). So I hope we shall treat this bill from the opposition side in the same way as we treated the bill from the government side a few days ago. Both deserve consideration by the appropriate standing committee and I hope we will agree to take action today along the same line we took three days ago.


Elmer MacIntosh MacKay: Mr. Speaker, I should like to say again what the hon. member for Winnipeg North Centre (Mr. Knowles) has said perhaps better than 1 can. This is a sensible and practical approach to a problem which has been imposing tremendous costs in every sense, fiscal, social and legal.
I note, looking over some of the material I am privileged to read, that the former minister of justice had this on his mind and that in reply to one of his constituents about this problem on May 7, 1975, he stated certain views. 1 see also that the present Minister of Justice (Mr. Basford) released a communique on this subject on June 18 recognizing the seriousness of the matter which has been brought up so well by the hon. member for Capilano (Mr. Huntington).
1 was disturbed by what 1 considered to be an unnecessarily complicated and negative approach taken by the parliamentary secretary. As the previous speaker has just said, there is no reason why the bill should not be sent to the committee for further consideration and possible amendment. As one who has practised law 1 can testify that under the present circumstances everyone involved is unhappy with the situation as it now exists.
The federal government took the initiative some years ago to amend drastically the law on divorce. It now has a duty to go further and deal with the consequences which were implicit in those amendments and join with the law enforcement agencies in the provinces to find some acceptable way of enforcing what every lawyer now knows is practically unenforceable. Today, any person who is determined to avoid alimony payments can do so simply by moving to another province, and moving again if necessary. The cost to the country and to the people who are victimized is enormous. Apart from the additional welfare costs, one must also take account of increased social unhappiness and disrespect for the law. Neglect of this problem produces not a single desirable consequence.
To take the view that the bill is too complicated or insufficiently comprehensive to warrant consideration at this time is nonsense. The bill is one of the best which has been brought into the Chamber recently in private members' hour. It is the product of a bipartisan attempt by a minister of the Crown, representing an initiative conceived by him when he was a backbencher, and it is brought forward by the hon. member for Capilano who made a very perceptive speech in its support. I would urge all members to let the measure go to committee where it can be amended if need be-I am sure the hon. member for Capilano is not going to take a dogmatic
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approach. If members opposite care to suggest an improvement I am certain my hon. friend will be sure to commend them for so doing. I urge that the bill be passed on to the committee.


Mr. Robert Daudlin (Kent-Essex):: Mr. Speaker, it gives me pleasure to be able to add a few remarks to the debate this afternoon inasmuch as I, like the hon. member for Central Nova (Mr. MacKay), have had practical experience in attempting to pursue maintenance orders from the point of view of a practitioner of law. I do not, however, share the hon. member's dissatisfaction with the ability to pursue these matters quite to the extent that he does or seems to think the entire legal fraternity does.
It seems to me that with the assistance of legislation such as exists in the province of Ontario with the Reciprocal Enforcement of the Maintenance Orders Act-and I cannot but assume that the same type of legislation exists in many if not all of the other jurisdictions in Canada-the provincial jurisdiction has made a substantial attempt to provide mechanisms and agencies whereby maintenance order persons who attempt to get away from their obligations can be tracked down. I would advise the hon. member that with some satisfaction on a number of occasions I have successfully followed single time and double time movers. I am suggesting to you, Mr. Speaker, and to those persons across the way who obviously know not whereof they speak, that it is not particularly costly to do; that mechanisms have been set up which allow one to go through family courts and through the division courts, which are substantially less expensive than the other courts, to collect maintenance orders granted by the divorce courts which the federal jurisdiction set up just a few years ago.
To set up another agency and another level of courts would, I suggest, be foolhardy, and would add inordinate costs to a system which is already prepared and capable of handling the situation, with a few amendments. The State of Michigan, for instance, has a mechanism whereby through an agency called the Friend of the Court, maintenance orders can be deposited within the jurisdiction of the state in which a defaulting maintenance father or mother is located. The sheriff of the jurisdiction pays a visit to the individual and requires that he, under a warrant he has with him, show cause why he should not be put in jail immediately. I suggest that the effect of this has been substantial in that state, and in fact has substantially reduced the number of defaulters.


An hon. Member:: When are you bringing in the bill?


Robert Mose Patrick Daudlin: I suggest to hon. members who ask me whether or not I will be bringing this forward shortly that it cannot be brought forward under the type of legislation the principle of which is set out in this bill. If in fact the provincial jurisdictions accepted the responsibility vested in them and provided teeth for the family courts and collection agencies in their province to collect what can be collected before a family court in another jurisdiction, then we would not have the

problem we have at the present time. The difficulty is that provincial jurisdictions have not accepted their responsibility. In addition to that, might I suggest that they obviously recognize their responsibilities in legislation like the Reciprocal Enforcement of Maintenance Orders Acts. The problem is that we have not followed through. I suggest that it is at these levels that the following through should take place.
Hon. members opposite say there are problems here. A couple of nights ago their leader was talking of decentralization. They are now suggesting that another form of federalism should be applied so as to take away more powers from the provinces. 1 would really ask them just where they stand. If we are talking about decentralization and we really mean it, then let us give the leadership to bring the provinces together so as to provide the mechanism whereby maintenance orders can be collected. This is where the problem lies. The power should lie with the provinces, and it is there we say it should stay.
The hon. member for Capilano (Mr. Huntington) argued that a mechanism such as garnishee does not work. 1 suggest to hon. members that it not only works but it is the cheapest mechanism that is available. For instance in Ontario an order of the court either in the divorce jurisdiction or of the family court can simply be deposited with the division court at no cost. It is accepted at face value, and all the offices of the court are then brought to bear and made available to collect the amount. A garnishee order is simply sent forward with a stamp from the clerk of the division court to the employer, who is then bound by law to forward the funds.
To suggest that this procedure does not work, I put it to hon. members, is clearly wrong. Similarly it has been suggested that it might mean the loss of the job of the individual concerned. If the hon. member would pursue that he would find that although frequently this is suggested by the employer, who does not like being embroiled in all the paper work, the labour code of the various provincial jurisdictions of this country will not allow a person to lose his job for this reason. An employee would soon get his job back if ever his employer did try to take it away on that ground.
The hon. member brought up a number of valid points regarding the cost of the welfare system. He suggested that we do have a false system of divorce in this country at the present time and that there are motions afoot to have it changed. That fact is substantiated by the numerous changes that are being offered in legislation. For example, I understand that in its current session the province of Ontario is bringing forward new legislation in the field of family law. I submit that a recognition has taken place in that jurisdiction that there is an obligation to bring forward this kind of legislation.
To put into place a new series of courts, or another agency to do what the provincial courts can do now, seems to me to be a principle that is unacceptable at this time. Therefore in standing to speak on this matter I would suggest that I cannot support this principle. I think this is the wrong place; legislation should be brought forward at the provincial level, not here. I do not think that this bill deals with the issues advanced by the hon. member for Capilano, such as legal fault, deser-
November 26, 1976

tion, ability to pay. The principle of this bill is simply that of setting up an agency for collection purposes. Collection facilities already exist.


Donald W. Munro: But it would help.


Robert Mose Patrick Daudlin: My hon. friend says it would help. It would not help to have another agency.


Donald W. Munro: It would interprovincially.


Robert Mose Patrick Daudlin: I suggest it would not help to have another agency dealing with fault. This bill does not deal with fault, it deals with collection. I suggest that you cannot stretch the principle of this bill so as to deal with whether there be fault or no fault.


Donald W. Munro: Send the bill to committee then.


Robert Mose Patrick Daudlin: If we stick to the subject matter of this bill, the bill seeks to set up another agency for collection purposes. However, to afford other members the opportunity of speaking, let me put my point simply. Agencies are already in place for collection purposes and we need no more. If we are to exercise leadership, let us suggest to the provincial jurisdictions that their agencies need more teeth, and we would support their having it.


Mr. B. Keith Penner (Parliamentary Secretary to Minister of Indian Affairs and Northern Development):: Mr. Speaker, 1 listened to the remarks of the hon. member for Central Nova (Mr. MacKay), a member I know and like very much. I was interested in his earnest plea that this very fine piece of legislation, as he described it, be sent to the justice committee for further consideration and amendment, so as to give an opportunity for something to be done in the complex and urgent area of reform of family law. However, I believe he neglected to listen carefully to his colleague, the hon. member for Capilano (Mr. Huntington), who indicated to the House, I thought in a magnanimous and forthright way, that he really was not offering parliament a solution to this complex problem but was merely opening up the subject for debate. He recognized that what he was putting forward was a band-aid solution, a small patch on a very complicated system that certainly needs reforming.
I think the hon. member for Capilano deserves to be commended for bringing this matter before the House, because in so doing he properly urges that the government with all due haste take action in the whole area of family law reform, which is something we all want. The parliamentary secretary correctly pointed out to the House that this is not an area where the federal government can move unilaterally; there has to be negotiation with the provinces. There has to be extensive consultation. It seems to me that this is the theme that the official opposition has been proposing all along as'being the approach in a federal system. The opposition has been saying that the federal government too often takes the high-handed approach, that it takes the leadership approach in solving
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national problems, and that we should talk more with the provinces. When we tell them, Mr. Speaker, that this takes a great deal of time, that it cannot be done overnight, they then protest that there is unnecessary delay. It seems to me that that is not an acceptable debating point at all.
In putting forward the proposal that we have this new agency established, the hon. member really has in mind one particular scenario. The scenario is that, on the one hand, we have a former partner in a marriage who is in desperate need. On the other hand we have a partner with the ability to pay who is not coming across with the dollars required under the maintenance order. The hon. member for Capilano indicated in his remarks that he recognizes this is part of a much larger question, namely, the economic readjustment on the dissolution of marriage. On that particular theme the Law Reform Commission has spent a great deal of time and has even come forward with a number of recommendations which could guide this government in its discussions with the provinces. Eventually I hope this will result in the kind of reform legislation the hon. member for Capilano and the hon. member for Central Nova say they want to see on the agenda.
I think it is well known that a marriage is not only a personal relationship but that it is also an economic arrangement. It is an essential aspect of the family unit that all who are not employed for wages must have their financial needs provided for. We begin with that principle. Then we know that it is a cultural fact, and usually a legal requirement as well, that men are the primary source of this financial provision. This means at the time of the divorce husbands have become owners of most of the property acquired during the marriage and are the ones who have a continuing maintenance obligation. The Law Reform Commission in its report on family laws addresses itself to this particular cultural aspect which has become enshrined in law, and challenges it, and suggests certain changes should be made in respect of that tradition.
Before 1968 divorce law in Canada assumed that a wife was always the financially dependent spouse. The old rules of maintenance provided a life income to a wife who was the "innocent" party in the divorce and punished the wife who was "guilty" by giving her nothing. That was the old law. The present law does not any longer assume the inherent dependency of women, but neither does it furnish any new rationale to replace the traditional reasons one spouse should continue to furnish money to the other after divorce has ended all other aspects of the relationship. There must of course always be some financial provision on dissolution of the marriage to meet the reasonable needs of the spouse who performed on behalf of both spouses family obligations which carry certain economic disadvantages.
We find so far as cash payments or alimony are concerned it is recommended in the Family Law Report that these should only be made during the time of transition from a period of dependency until the formerly dependent spouse is able to achieve a degree of self-sufficiency. The duration of the post-

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dissolution dependency period should be governed by the principle that everyone is ultimately responsible to meet his or her own needs. That is why I say the hon. member for Capilano was thinking of a particular situation in which a spouse was not able to do that, and the other or former partner was in a strong position to meet those financial needs. There are many aspects in respect of which that is not the situation. The family law report addresses itself to those matters which are an equally important part of the larger problem referred to.


Donald W. Munro: Where is the just society?


B. Keith Penner: The term "just society" is thrown out by the member opposite. The just society means there is justice under the law for people who have a particular problem. That is what the Law Reform Commission is talking about-justice under the law for the marriage relationship and what follows after its dissolution.


Donald W. Munro: Disillusion.


B. Keith Penner: Dissolution. It goes on to say that the financial guarantee provided by law should be one of rehabilitation to overcome economic disadvantages caused by marriage, and not a guarantee of security for life for former dependent spouses. The obligation of the former spouse who is required to pay
should be balanced by the obligation of the other eventually to become self-sufficient, as are all other unmarried persons, within a reasonable period of time. 1 suppose that reasonable period of time would vary in all kinds of circumstances. This would need to be looked at periodically by the court in order to decide when that period of time had been completed.
The law should provide for the possibility of a permanent obligation only where the economic disability of the spouse flowing from the marriage is permanent, so there must be some kind of permanent disability. If a person could never under any circumstances become self-sufficient, as most persons are expected to be, then under those circumstances a permanent arrangement could be established under the maintenance order, but under other circumstances such would certainly not be required. My general disagreement with Bill C-203 is its extreme narrowness. It seeks to put a patch on a faulty system.


The Acting Speaker (Mr. Ethier):: Order, please. The hour provided for the consideration of private members' business has expired.
At 5 p.m. the House adjourned, without question put, pursuant to Standing Order.

Monday, November 29, 1976