1976-06-02

ROUTINE PROCEEDINGS


Mr. Walter Baker (Grenville-Carleton):: Mr. Speaker, I rise under the provisions of Standing Order 43 on a matter of urgent and pressing necessity with regard to the scandalous precedent of the Minister of Supply and Services (Mr. Goyer) in his scurrilous attack on the Public Service of Canada. In light of the fact that cabinet as a whole knew and approved the LRPA purchase contract despite a significant shortfall on November 27, 1975, I move, seconded by the hon. member for Fundy-Royal (Mr. Fairweather):
That this House deplore the recent attack upon the integrity of the Public Service of Canada made by the Minister of Supply and Services and direct the cabinet to publicly assume the entire responsibility for the failure of the LRPA contract, as both honour and precedent dictate.


Mr. Speaker:: Order, please. This motion requires unanimous consent. Is there unanimous consent?


Some hon. Members:: Agreed.


Some hon. Members:: No.


Mr. Paproski:: Resign, Goyer. Mr. Speaker, Pierre said no.


ROYAL CANADIAN MOUNTED POLICE
Mr. Elmer M. MacKay (Central Nova):: Mr. Speaker, I, too, rise on a matter of urgent and pressing necessity pursuant to the provisions of Standing Order 43, with reference to the policies and responsibilities of the RCMP and the Solicitor General of Canada (Mr. Allmand), and in particular the report of the RCMP investigation into the break-in at the offices of the Agence de Presse Libre du Quebec. On several occasions this year the Solicitor General has detailed in Hansard his promises to report to the House on this matter. On May 18, as reported on page 13613 of Hansard, he stated he had received a full report from the RCMP but indicated he agreed to let the Quebec solicitor general deal directly with the RCMP, to determine whether something illegal had taken place. I move, seconded by the hon. member for Fundy-Royal (Mr. Fairweather):
That the Solicitor General, as minister responsible for the RCMP, make a statement on motions outlining fully the circumstances and the responsibility for the apparently illegal break and entry into the premises of this Quebec newspaper, above and beyond whatever action the Solicitor General for the province of Quebec intends.


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


Some hon. Members:: Agreed.


Some hon. Members:: No.


AGRICULTURE
Mr. Gilbert Rondeau (Shefford):: Mr. Speaker, pursuant to Standing Order 43, I request the unanimous consent of the House to present a motion dealing with a matter of urgent and pressing necessity.
Since the new federal government dairy policy was developed because of an alleged overproduction of dairy products, and since the findings of research made in some dairy warehouses, especially for powdered milk, where stocks are equivalent to only 15 days of production, show that those same warehouses are 15 to 20 per cent full, I move, seconded by the hon. member for Lotbiniere (Mr. Fortin):
That simultaneously and without notice, the Standing Committee on Agriculture visit all dairy warehouses to check and make the inventory of existing stocks so that farmers not be penalized for a surplus production which is apparently nonexisting.


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


Some hon. Members:: Yes.


Some hon. Members:: No.


Mr. Speaker:: There not being unanimous consent, the motion cannot be put.


Transport


AIR TRANSPORT
Mr. Roch La Salle (Joliette):: Mr. Speaker, under the provisions of Standing Order 43, I ask the unanimous consent of the House to move a motion on a matter of urgent and pressing necessity.
Considering that the Minister of Transport thought it proper recently to make an inquiry on the application of bilingualism in air communications, and considering also that the minister appointed as responsible commissioner Mr. John Keenan, a former adviser to the Canadian Air Line Pilots' Association, which prompts quite a few people to question the impartiality of the inquiry, and recognizing that the inquiry must be conducted with the strictest impartiality, I move, seconded by the hon. member for Brome-Missisquoi (Mr. Grafftey):
That this House unanimously ask the responsible minister to appoint immediately a French-speaking co-commissioner, if we want to give this inquiry the credibility required in such circumstances.


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


Some hon. Members:: Agreed.


Some hon. Members:: No.


Mr. Speaker:: There is not unanimous consent; the motion therefore cannot be put.
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TRANSPORT
Mr. Armand Caouette (Villeneuve):: Mr. Speaker, pursuant to Standing Order 43, I ask the unanimous consent of the House to move a motion on a matter of urgent and pressing necessity.
In view of the fact that the discontinuance of western feed grain freight assistance might result in the short term, in higher prices for pork, poultry and eggs and, in the long term in the closing down of hog breeding and poultry operations, according to Mr. Francois Dagenais, research director for the UP A, I move, seconded by the hon. member for Champlain (Mr. Matte):
That the House urge the government to reconsider immediately its feed grain assistance policies in order to protect the farming industry from bankruptcy following the discontinuance of feed grain freight assistance.


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


Some hon. Members:: Agreed.


Some hon. Members:: No.


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


AGRICULTURE
Mr. Rene Matte (Champlain):: Mr. Speaker, under the provisions of Standing Order 43, I ask the unanimous consent of the House to move a motion on a matter of urgent and pressing necessity.
In view of the disastrous situation industrial milk producers have experienced following the dairy policy announced by the Minister of Agriculture; since some of them even receive cheques on which the amounts are replaced by the word "cancelled"; in view of the fact that deductions and levies exceed incomes and also that thousands of producers will be here tomorrow to voice their grievances, I move, seconded by the hon. member for Lot-biniere (Mr. Fortin):
That the House instruct unanimously the government that industrial milk producers be guaranteed a higher income than last year's under the anti-inflation guidelines.


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


Some hon. Members:: Agreed.


Some hon. Members:: No.


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



ORAL QUESTION PERIOD


Mr. Joe Clark (Leader of the Opposition):: Mr. Speaker, my question is to the Minister of Supply and Services. It arises out of the attempt by the minister yesterday to transfer blame for this government's gross incompetence in the Lockheed affair to a middle ranking civil servant. Since civil servants do not place recommendations before cabinet, will the minister confirm that a recommendation to proceed with this deal was made to cabinet by a minister and can he tell us which minister took responsibility for that recommendation?


Hon. Jean-Pierre Goyer (Minister of Supply and Services):: Mr. Speaker, I wonder what suggestions the Leader of the Opposition has in mind.


Charles Joseph Clark: Mr. Speaker, I was referring to the agreement that has become known as the $16 million misunderstanding.


Some hon. Members:: Hear, hear!


Charles Joseph Clark: With regard to the proposal apparently submitted to cabinet in December of last year, will the minister advise this House and me whether the recommendation made on that matter with respect to the establishment of government policy was made by a minister, and, if so, by which minister?


Jean-Pierre Goyer: Mr. Speaker, the documents provided to the cabinet are of course presented by the responsible minister.


Charles Joseph Clark: One of my colleagues suggests I would have been better off asking Mother Theresa. It will clearly be necessary to pull out answers one by one. Will the minister tell us by which minister that recommendation was made?


Jean-Pierre Goyer: Mr. Speaker, I really thought that the Leader of the Opposition had understood that the minister responsible for national defence programs was the Minister of National Defence.


NATIONAL DEFENCE
Charles Joseph Clark: I should like to direct a supplementary question to the Minister of National Defence. Yesterday, the Minister of Supply and Services said, as reported in Hansard at page 14030 that the financing of this contract was the prime and exclusive responsibility of the customer department, that is, the Department of National Defence. Does the Minister of National Defence accept prime and exclusive responsibility in this matter and, if so, can he tell us precisely what recommendations he made to cabinet on this matter and what supporting documents he put forward?


Hon. James Richardson (Minister of National Defence):: It is well known that the user department, the department making the purchase, is responsible for the funding. This is the responsibility of the Department of National Defence in relation to the purchase of long range patrol aircraft. When we come to the question how payment is to be made over a period of years, and how the progress payments are to be made, it becomes a matter of negotiating a contract and in that sense there is a dual
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responsibility because the negotiation of a contract belongs in the Department of Supply and Services.


Some hon. Members:: Oh!


Charles Joseph Clark: One is led to ask which of the ministers we are supposed to believe because they are clearly in direct contradiction.


Some hon. Members:: Hear, hear!


Charles Joseph Clark: Does the Minister of National Defence deny the suggestion made by his colleague yesterday that the prime and exclusive responsibility in this matter-I emphasize the word "exclusive"-lies with the customer department, that is to say, with the Minister of National Defence and that none of the responsibility is shared with the Minister of Supply and Services? Or does he disagree with the position taken by his colleague yesterday?


James Armstrong Richardson: I was not in the House yesterday and I am not aware of all that was said yesterday. I can only repeat that the total funding is the responsibility of the user department. National Defence had within its budget $953 million to purchase aircraft and in addition it had approval from the government for more than $100 million for interest payments. The program was funded by National Defence but it was not funded in the years in which payments were required in order to get the most cost effective arrangement with the Lockheed Company. The negotiation of the contract is very definitely not the responsibility of the Department of National Defence. That situation of divided responsibility has existed for many years. I have been Minister of Supply and Services and Minister of National Defence and I understand the distinction and the responsibilities that rest in each of those departments.
I am not at this time wishing to place blame; I am simply trying to answer clearly the question of the Leader of the Opposition. I would think the crucial point in these negotiations turns around the telex that was sent on December 2. It was signed by my colleague the Minister of Supply and Services, but I would share with him, and my officials I believe should share with his officials, responsibility for the sending of that telegram. Because at that time the telegram was sent in the belief that it was in the best interests of the government and the people of Canada, since we were protecting our rights, our price, our industrial benefits and the schedule that had been negotiated over many months. So, I would support the Minister of Supply and Services in the signing of that crucial document.


LOCKHEED CONTRACT-MINISTER'S POSITION ON FAILURE TO OBTAIN WRITTEN AGREEMENT
Mr. Allan B. McKinnon (Victoria):: Mr. Speaker, I have a final supplementary question for the minister. I presume it was a Freudian slip when the minister said that he had been Minister of National Defence. Yesterday the Minister of Supply and Services said in his statement that "not obtaining a written agreement from Lockheed was a serious error" and further that it was also "a very serious


Oral Questions
mistake that the minister responsible for negotiating the agreement with Lockheed was not informed of the basic funding difficulties before December 2". Does the Minister of National Defence's support of his colleague extend to agreeing with this criticism and accepting it as factual?


James Armstrong Richardson: Mr. Speaker, I have not been misled by any of my officials or by any officers, including General Allan. I believe they have performed their duties as well as they could and they performed them honestly in all of this.


Some hon. Members:: Hear, hear!


SUPPLY AND SERVICES
Mr. Edward Broadbent (Oshawa-Whitby):: Mr. Speaker, I hope I have a question for the Minister of Supply and Services. Last Tuesday when I asked the minister why he had sent a telegram on December 2 over his signature in which for the first time, at least according to the information revealed by the government, the government of Canada committed itself in a serious contractual way with the Lockheed Corporation, the minister replied that "the matter had become far more imbued with politics than the main business principles that are essential to the negotiation of contracts with suppliers." I would like to know what the minister meant when he gave me that answer last Tuesday about the telegram. In particular, having said in the House yesterday that neither he nor the Minister of Defence on December 2 knew of the details of the financial arrangements that were being worked out with the Lockheed Corporation, then under those circumstances why in heaven's name was that telegram sent on December 2?


Jean-Pierre Goyer: Mr. Speaker, it is quite simple. If the hon. member refers to what was said in the House and if he wants to use his brains, he will easily understand. As the Minister of National Defence (Mr. Richardson) indicated, the deadline to sign an agreement with Lockheed to protect the cost and industrial benefits offered by that company as well as the delivery schedule was December 2. Indeed, on that date, the government sent a telex to Lockheed indicating our desire to negotiate a contract with that company.
Of course, the government was then considering how to meet its financial commitments, as shown by the agreements negotiated between the Crown and Lockheed.


LOCKHEED CONTRACT-RECOMMENDATION TO CABINET PRIOR TO DECEMBER 2-ASSURANCE AS TO FINANCING
John Edward Broadbent: Mr. Speaker, I will direct my supplementary question to the Prime Minister since this was a Cabinet decision. Can he inform the House whether the Minister of Supply and Services, the Minister of National Defence or, indeed, the President

of the Treasury Board, recommended to the Cabinet the course of action which led to the sending of that telegram on December 2, and in that recommendation did they assure the Prime Minister and other members of the Cabinet that there was no problem in terms of financing the project?


Right Hon. P. E. Trudeau (Prime Minister):: Mr. Speaker-


Some hon. Members:: Hear, hear!


An hon. Member:: That is just to cheer you up, Pierre.


Some hon. Members:: Oh, oh!


Pierre Elliott Trudeau: Yes, Mr. Speaker.


John Edward Broadbent: I am sorry, did the Prime Minister say
"yes"?


Some hon. Members:: Oh, oh!


John Edward Broadbent: Mr. Speaker, the Prime Minister has obviously mastered the art of loving, and he is now trying to-


Some hon. Members:: Order.


An hon. Member:: Get to the question.


Some hon. Members:: Hear, hear!


LOCKHEED CONTRACT-REASON PRIME MINISTER DID NOT ASK FOR RESIGNATIONS OF MINISTERS CONCERNED
John Edward Broadbent: I will get to the point, Mr. Speaker. If the recommendation came to the Cabinet, for confirmation of this deal with Lockheed, with the understanding there were no financial problems involved, in light of what has since transpired, why does the Prime Minister wait so long either to demand the resignation of the Minister of Supply and Services, the Minister of National Defence or, preferably, both?


Some hon. Members:: Hear, hear!


Pierre Elliott Trudeau: Mr. Speaker, I answered "yes" because these facts are well known by the House, and a resignation would be a complete non sequitur in relation to the question. The answer was "yes" because those facts were given repeatedly to the House several months ago by the Minister of National Defence and the Minister of Supply and Services. I do not know why the opposition is only beginning to understand this.


Some hon. Members:: Oh, oh!


GOVERNMENT ADMINISTRATION
Mr. Real Caouette (Temiscamingue):: Mr. Speaker, my question is also directed to the right hon. Prime Minister who has just said that the House was aware of all the facts for months, when facts were brought to light yesterday that they were not known previously. I find the Prime Minister rather mute about the question put to the Minister of National Defence and the Minister of Supply and Services. When you see them tossing the ball around back and forth as they are doing, one wonders if one is dealing with a ministerial or a baseball team, so much so that I even wonder if it might not be better than the Montreal Expos.
In view of the very touchy situation, yesterday the Minister of Supply and Services announced the transfer of a high official who did not remember what had happened a few months ago, and the suddenly remembered. Does the Prime Minister intend at least to transfer either minister to another job to spare the public, the Canadian taxpayers, apprehensions about the situation?


Pierre Elliott Trudeau: Mr. Speaker, the hon. member is mistaken. When I said the facts were known, I was speaking of those with which the question of the leader of the New Democratic Party dealt. Obviously, yesterday the Minister of Supply and Services told us about a development which had been brought to his attention, but it was not what the leader of the NDP was talking about. The hon. members were made aware of the fact yesterday. The minister expressed his surprise and asked, according to normal procedure, the deputy minister and the persons responsible to see whether there had been any wrongdoing, and if so, how serious it was. I don't see what there is to fuss about.


SUPPLY AND SERVICES
Mr. Peter C. Bawden (Calgary South):: Mr. Speaker, my question is for the Minister of Supply and Services. On Monday evening in the House the parliamentary secretary to the minister stated that the verbal arrangement in respect of the cash shortfall that was to be financed by Lockheed did not become known to the minister or the senior officials of his department until January and the minister said in the House that he did not know about the shortfall until subsequent to December 2. Will the minister say when he did first know about this verbal agreement, how he learned about it, where it was and what was the date?


Jean-Pierre Goyer: Mr. Speaker, that is obvious and has been said many
Oral Questions
times. I would simply remind the hon. member that according to normal government procedure, the client department must provide the funding and necessarily take full responsibility for it. Now, it is normal that my department, when the time comes to sign the contract, if a department asks us to purchase an aircraft of a given type with certain specifications, should include them in the contract. The same thing applies to financial arrangements. When a department tells us about its financial situation, we include that in the contract, and that is all. It is as simple as that, I see no problem.


LOCKHEED CONTRACT-ATTENDANCE OF MINISTER AT TREASURY BOARD AND CABINET MEETINGS WHEN FINANCING APPROVED
Peter Colwell Bawden: Mr. Speaker, it is very clear that the minister is purposely avoiding the question.


Some hon. Members:: Hear, hear!


Peter Colwell Bawden: I invite the minister to answer my first question when he responds to my supplementary. In view of the fact that all the details of the verbal agreement with Lockheed and the interest payment for the Lockheed loan were approved at the Treasury Board meeting of November 27 and at the cabinet meeting the same day-and this point was confirmed in a Commons committee by the Minister of National Defence-will the Minister of Supply and Services say whether he attended the Treasury Board meeting that day and the cabinet meeting that day when these payments were authorized? If he did not attend those meetings did he receive the minutes of the Treasury Board meeting and the cabinet meeting subsequently?


Jean-Pierre Goyer: So, if the hon. member is so well informed as to say that the cabinet and the Treasury Board approved the expenditure, I cannot see then why he asks whether the financing was provided for on December 2.


Mr. Speaker:: A final supplementary by the hon. member for Calgary South.


Peter Colwell Bawden: Mr. Speaker, will the minister say whether he knew about these details as a result of the cabinet meeting and the Treasury Board meeting or did the minister feel that $16 million was not enough for him to be involved?


Jean-Pierre Goyer: Mr. Speaker, if we agreed on December 2 with Lockheed to sign a formal contract with them in the near future, it is because at that time it was necessarily understood that the expenses incurred until then could be met by the Department of National Defence.


Oral Questions


GOVERNMENT ADMINISTRATION
Walter David Baker: Mr. Speaker, my question is directed to the Government House Leader. In view of this veil of secrecy that seems to have fallen from the lips of the Minister of Supply and Services through which in an unprecedented way he has taken shots at specified public servants, an action virtually unprecedented in the history of this House, and he has done this to people who have no opportunity to defend themselves,-


Some hon. Members:: Hear, hear!


Walter David Baker: -will the Government House Leader agree to an immediate reference of this matter to the appropriate standing committee with a specific understanding that these officials against whom his colleague has made serious accusations be given a full opportunity to explain their side of the story and produce any and all the supporting documentation for the purpose of this presentation. I think we should get at the truth in this, Mr. Speaker.


Some hon. Members:: Hear, hear!


Hon. Mitchell Sharp (President of the Privy Council):: Mr. Speaker, may I make two comments with regard to the suggestion from the House leader of the opposition. First of all, if the House wants to inquire further into this matter of the minister there are many opportunities when they can do so on opposition days if they are really interested or they may prefer to keep a veil of secrecy over this matter which is apparently what they prefer to do. Certainly, if the civil servant in question has a grievance, as the hon. gentleman knows since he had a good deal to do with the legislation, there are plenty of opportunities for him to express it and to get justice.
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SUPPLY AND SERVICES
Hon. George Hees (Prince Edward-Hastings):: Mr. Speaker, I have a question for the Minister of Supply and Services. As it has always been accepted procedure in all governments for a minister to accept full responsibility for the actions of the civil servants who work in his department, I ask the minister how he can possibly try to justify his actions of yesterday when he tried to avoid his responsibility in the Lockheed case, known now as the $16 million fiasco, by blaming one of his senior civil servants for something which obviously is the responsibility of the minister.


Jean-Pierre Goyer: On the contrary, Mr. Speaker, First, I feel precisely

that I have taken my responsibilities, and I have indicated in the House how I did so. If the House prefers not to be informed, it is its right, but I will not play this game.
Second, to the hon. member's allegation that the rights and privileges of a civil servant have been encroached upon, I will simply answer that if this civil servant does not accept the decision, the law exists and is very clear: he has 14 days to file a grievance. He may also, thanks to an amendment brought in by this party, appear before the Federal Court and take an action against the deputy minister and the minister, if he so wishes. That is clear enough.


George Harris Hees: Mr. Speaker, I have a supplementary. It is very obvious from the minister's answer that his idea of how he, as a minister, should treat his civil servants is completely different from the idea of those who have served in the cabinets of this country for over 100 years.


NATIONAL DEFENCE
Mr. T. C. Douglas (Nanaimo-Cowichan-The Islands):: Mr. Speaker, may I direct a question to the Minister of National Defence. Arising out of the statement yesterday by the Minister of Supply and Services in which he said that neither he nor his deputy minister were informed of the financial negotiations by the Department of National Defence and Lockheed prior to December 2, I want to ask the Minister of National Defence if he was aware of the financial negotiations which were going on, and if he was did he at any time pass this information on to the Minister of Supply and Services? Did he place these facts before the cabinet when it met at its meeting of November 27?


James Armstrong Richardson: Mr. Speaker, I think it will help the House and the hon. member if I try to make a distinction between the shortfall and Lockheed's inability to finance the shortfall. The shortfall is the difference between the funds that were available in the Department of National Defence and the funds required for payments by Lockheed. That was clearly known in November and it was in the cabinet documents. I have described many times, before the committee and in other ways, that the government approved $100 million in interest for financing. If you are going to have interest for financing, you must be intending to borrow. If you are going to borrow, there must be a shortfall-that is self-evident. So that any number of cabinet ministers who attended those meetings knew there was a shortfall-that is clear.
The timing of Lockheed's inability to provide the interim financing may not be so clear. That was not known to me or to my colleagues until at least mid-December because Lockheed only told us then after the cabinet decision that they could not provide the financing. If anyone has misled anybody in these days it was Lockheed which misled us by saying they could provide the interim financ-


ing. It was not known to me until I returned from the NATO meeting in Brussels that they could not do so. I remember very well coming back here on about December 15 at which time my deputy minister told me for the first time that Lockheed were not able to do what they had said they could do. If that is what my colleague, the Minister of Supply and Services, is referring to, I would like the House to understand the difference. It is one thing to know about the shortfall-which I think we all knew about-and it is another thing to know about Lockheed's failure to provide interim financing, which came at a later date.


LOCKHEED CONTRACT-POSSIBLE REQUEST OF COMPANY FOR WRITTEN COMMITMENT ON FINANCING
Thomas Clement (Tommy) Douglas: Mr. Speaker, may I ask the minister, since the minister now says the problem lay in the interim financing which Lockheed was not able to supply or negotiate when the minister made his recommendation to cabinet on November 27 which was followed later by the telex sent out on December 2, whether he asked Lockheed for any written commitment that they could supply the interim financing or, in the absence of that assurance, whether he insisted on any provision being placed in the agreement that in the event that they were not able to supply the interim financing the contract was null and void and the Canadian people would have no financial responsibility?


James Armstrong Richardson: No, Mr. Speaker-


An hon. Member:: Why?


James Armstrong Richardson: The officials who were negotiating with Lockheed expected to continue these negotiations. It did seem at the time completely reasonable that as the government of Canada had approved $953 million and, as I said, had approved more than $100 million for interest payments, the project was financeable. When Lockheed said that they could provide the interim financing-and we must remember we were still at that time also dealing with Boeing, it was still a battle between the two companies- Boeing also said they could provide the financing. So there was no attempt by anyone at that time to get confirmation of the Lockheed statement.


Thomas Clement (Tommy) Douglas: I take it from the minister that what the minister is saying is that he accepted a verbal assurance. I would have thought that one with his experience would know that a verbal assurance is not worth the paper it is written on.


Some hon. Members:: Oh, oh!


ALLEGED NEW LOCKHEED PROPOSAL-GOVERNMENT POSITION
Thomas Clement (Tommy) Douglas: It is reported now that the Department of National Defence and Lockheed are looking at a new proposal for an Orion with less sophisticated equipment. Can the minister tell us anything about this deal which is being discussed and whether or not there is any problem of interim financ-
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ing and who will supply it, or will we have another re-run of this horror movie?


James Armstrong Richardson: Mr. Speaker, in response to the first part of the question I would like to say that I believe, in fairness to the officials who were negotiating with Lockheed at the time, that they were concentrating exclusively on the terms of the contract and that they were not concentrating at that time-perhaps as they should have been or as we all should have been-


Some hon. Members:: Now you got it.


James Armstrong Richardson: -on the financing aspects. But I can only repeat that with the interest payments approved by cabinet, and with the assurances from Lockheed as well as the fact that we were working in a tight time frame, I think it is understandable that we proceeded as we did.
In answer to the second question, Lockheed submitted an unsolicited proposal to us yesterday, and Boeing have also submitted a new proposal to us; these are now being studied.


LOCKHEED CONTRACT-DATE MINISTER KNEW OF SCHEDULE OF PAYMENTS
Allan Bruce McKinnon: Mr. Speaker, my question is supplementary to the ones asked by the hon. member for Nanaimo-Cowichan-The Islands, and it is addressed to the Minister of National Defence. The schedule of payments which was set out in the part contract tabled by the Minister of Supply and Services on May 25, at page 8 or 4 depending on whether you read the top of the page or the bottom, called for an expenditure of over $120 million by the Department of National Defence this year for the LRPA. Can the minister tell us when he first knew of the schedule of payments, and can he assure us that he did not know of that schedule of payments before December 2, because if he knew of the schedule of payments he cannot possibly say that he was satisfied that Lockheed would be able to find the money. They were asking for that payment.


James Armstrong Richardson: A schedule of payments was drawn up during the summer months. As I have said on other occasions, it was not known during those months whether the schedule of payments would be met by direct funding by the government or whether the restraint program of the government would suggest the advisability of financing the payments in the first, second and third year of the contract. It was only in the final weeks of the negotiation that the decision was made by the government that it was better to proceed by the financing route. So we actually in that sense changed from direct funding-which had originally been the concept-to another form of funding.

Oral Questions


GOVERNMENT ADMINISTRATION
Right Hon. J. G. Diefenbaker (Prince Albert):: Mr. Speaker, it being very obvious that it is impossible to secure any clear and truthful answers to the various questions that have been asked-


Some hon. Members:: Question.


John George Diefenbaker: -and the desire of the government to cover up is apparent-I would ask the Prime Minister whether the Minister of Supply and Services-the $16 million kid-will be able to get away with his explanations placing responsibility of others, civil servants and the like, and on the Minister of National Defence, and whether he will produce the minutes of the cabinet and of the Treasury Board dealing with this matter and table them in the House. There is nothing constitutional against this. All we want to get is the truth, which apparently is not being secured through the questions that are asked here because of the type of answers that are being given which negate each other.


Pierre Elliott Trudeau: Mr. Speaker, I am surprised to hear the words "cover up" used by a party which hires secret detectives.


Some hon. Members:: Hear, hear!


Charles Joseph Clark: Any evasion will do, won't it Pierre?


Pierre Elliott Trudeau: -and not only tries to hide the use of those detectives from the House but tries to hide it from the detectives themselves by going under another name.


An hon. Member:: You know you are on weak ground.


Pierre Elliott Trudeau: As to the suggestion of the right hon. member, he is quite right-there is nothing I know of written in the constitution about this but there are of course certain constitutional conventions.


Charles Joseph Clark: Such as ministerial responsibility.


Pierre Elliott Trudeau: If he wishes us to begin making public the minutes of cabinet and of the Privy Council we will consider it, providing he gives me the privilege of making public the minutes of his cabinet.


Some hon. Members:: Hear, hear!


An hon. Member:: Another diversion.


John George Diefenbaker: Mr. Speaker, this gratuitous observation by the Prime Minister indicates that his mind is most uncertain on this and that is understandable after all the holidays he takes.


An hon. Member:: Just say yes.


John George Diefenbaker: I again ask him whether he would produce those records. There is nothing constitutional against it being done. The President of the Privy Council

said they would not permit this matter to go before a committee. What are they hiding and why? It becomes very clear that the Minister of National Defence is to become the scapegoat here. As far as I am concerned he is the only one who has shown any proof.


Pierre Elliott Trudeau: Mr. Speaker, perhaps the right hon. gentleman did not hear my answer. I indicated quite clearly that there was certainly a convention-


John George Diefenbaker: There is no convention of that kind at all.


Pierre Elliott Trudeau: If there is no convention, Mr. Speaker, I take it from the suggestion of the right hon. gentleman that I am now free to make public, documents and minutes from his cabinet.


An hon. Member:: Are you going to produce them, yes or no?


John George Diefenbaker: A final supplementary, Mr. Speaker. We on this side of the House have nothing to cover up.


Some hon. Members:: Hear, hear!


John George Diefenbaker: What I am endeavouring to do is to uncover an obvious loss to the Canadian people as a result of the stupidity of the Minister of Supply and Services.


Some hon. Members:: Hear, hear!


Pierre Elliott Trudeau: Mr. Speaker, I just indicated in an answer to the leader of the Social Credit party that in so far as the conduct of my ministers is concerned, they have given to the House the knowledge they had when they received it and I add that in so far as their conduct is concerned, il n'y a pas de quoi fouetter un chat.


AGRICULTURE
Gilbert F. Rondeau: Mr. Speaker, my question is directed to the Minister of Agriculture.
Could the minister assure the House that the total surplus of dairy products mentioned in the various reports submitted by the Canadian Dairy Commission agree with the stocks stored during the given periods?


Hon. E. F. Whelan (Minister of Agriculture):: Mr. Speaker, there is so much noise in the House I did not hear the first part of the question.


Walter David Baker: Get in on the cabinet meeting over there, Gene.


Gilbert F. Rondeau: Mr. Speaker, I am pleased to repeat my question for the Minister of Agriculture. Since we will have the visit of farmers tomorrow who are wondering about a number of serious questions, could the minister


assure the House that the total surplus of dairy products mentioned in various reports of the Canadian Dairy Commission fully agree with the stocks stored during these same periods?


Eugene Whelan: Mr. Speaker, if I understood the question correctly the hon. member has asked about dairy stocks, if they are accurate. They have these changed from month to month because we are always disposing of some stocks, selling them domestically or selling on the world market. They have a sales program. I would say the stocks we have on hand and on record are fairly accurate from month to month.


NATIONAL DEFENCE
Mr. Gordon Ritchie (Dauphin):: Mr. Speaker, my question is for the Minister of National Defence. What were the factors that prevented the Canadian banking consortium from financing the $300 million Orion deal and was there any exploration of the possibility of the government involving itself in any way to allow the banks to do this bridge financing?


James Armstrong Richardson: Mr. Speaker, I really believe that is a question that should be answered by the banks.


SUPPLY AND SERVICES
Mr. Eldon M. Woolliams (Calgary North):: Mr. Speaker, my question is directed to the Minister of Supply and Services. On Monday the minister was asked about the content of the Telex he sent to Lockheed on December 2 last informing them that the government intended to sign a contract with them if certain conditions were met. The minister was asked what these conditions were and he replied that one was that Lockheed would have to get permission from the government of the United States to transfer certain pieces of manufacturing equipment to Canada. Can the minister now tell the House how many other conditions were enumerated in that Telex and what those conditions were?


Jean-Pierre Goyer: Mr. Speaker, if my memory serves me right, we then indicated to Lockheed that we were prepared to sign a formal contract on the condition, of course, that industrial windfalls would be taken into consideration and that the American government would grant permission to Lockheed to transfer some pieces of machinery to allow them to face their obligations in respect of industrial windfalls to
Oral Questions
Canada. We also told Lockheed that we would sign a contract in the near future.


Eldon Mattison Woolliams: A supplementary question, Mr. Speaker. In light of the fact that the minister says there is no cover-up, would he be prepared now to table the Telex and any reply to the Telex in question?


Jean-Pierre Goyer: Mr. Speaker, I think I did fully satisfy the wishes of the House. I tabled the documents-


Some hon. Members:: No!


Jean-Pierre Goyer: -maybe I could finish? I tabled the documents which constituted our contractual commitment with Lockheed and then, of course, all other agreements automatically became void. What is before the House is the contractual commitment the government has with Lockheed, and the document is complete.


LOCKHEED CONTRACT-DATE ON WHICH MINISTER AWARE OF SHORTFALL IN FINANCING
Mr. Allan Lawrence (Northumberland-Durham):: Mr. Speaker, my question is also for the Minister of Supply and Services. In several statements the minister has made in the House and if he wants I can give him the dates and page numbers in Hansard, he said that it was only on December 2 that he was finally made aware of the basic funding difficulties in this whole transaction. He is shaking his head-is he shaking it no? You mean you knew of these difficulties before December 2 or have you-


Some hon. Members:: Order!


Some hon. Members:: Oh, oh!


Allan Frederick Lawrence: All right. On Monday evening the parliamentary secretary to the minister told the House at page 14015 of Hansard:
The question of a shortfall of cash to be financed by Lockheed did not become known to the minister and to the senior management of DSS until January.
Which was it? Was it on December 2 or in January that the minister finally realized the basic funding difficulties in respect of this transaction?


Jean-Pierre Goyer: Mr. Speaker, once again I beg the hon. member to be honest. Let him say on what page I mentioned it was on December 2. The Minister of National Defence replied that we had been informed that Lockheed could not fulfill its undertaking in mid or late December. At any rate, the important point is that it was after December 2. I think the hon. member ought to check in Hansard.


Allan Frederick Lawrence: A supplementary question, Mr. Speaker. I repeat: as reported on page 14015 of Hansard, on Monday


Order Paper Questions
evening of this week the minister's parliamentary said in the House, and I quote:
The question of a shortfall of cash to be financed by Lockheed did not become known to the minister and to the senior management of DSS until January.
Can the minister explain this discrepancy, please? [Translation]


Jean-Pierre Goyer: Mr. Speaker, I have just answered the question. Would the hon. member tell me how large this looms in his mind?


Gilbert F. Rondeau: Mr. Speaker, I rise on a point of order.


Mr. Speaker:: The hon. member for Shefford (Mr. Rondeau) on a point of order.


Gilbert F. Rondeau: Mr. Speaker, I rise on a point of order. I would like very respectfully to point out that the hon. member for Temiscamingue (Mr. Caouette) did not have the opportunity to ask a supplementary while several members in the House today were able to put supplementary questions on very important matters. I have a supplementary question and I would be thankful to you for giving me the opportunity to direct it to the Minister of Agriculture (Mr. Whelan).



ROUTINE PROCEEDINGS


[Stage Direction]
Thirteenth report of Standing Committee on Health, Welfare and Social Affairs-Mr. Robinson.
[Editor's Note: For text of above report, see today's Votes and Proceedings.]

[Stage Direction]
(Questions answered orally are indicated by an asterisk.)
Mr.   J.-J. Blais@Parliamentary Secretary to President of the Privy Council: Mr. Speaker, the following questions will be answered today: 3,988, 4,170, 4,566, 4,802, 4,995, 5,043 5,087, 5,250, 5,254, 5,266, 5,308, 5,356, 5,396, 5,419, 5,422, 5,439, 5,451, 5,474, 5,483 and 5,526.

43-DAY STRIKE OF CUPW WORKERS


Mr. MacKay: 1.	In the recent 43-day strike of CUPW workers, did the inside workers receive a pay cheque including pay for days not worked because of the strike and, if so, for how many extra days?
2.	Is action being taken to recover the extra days pay and, if so, in what manner?

3.	How many inside workers did not return to work after the strike was settled?
4.	Does the government plan to recover the extra days pay from workers who did not return and, if so, in what manner?
5.	How much will be lost to the government if it is unable to recover the extra days pay from those who did not return to work?


Mr. Paul E. McRae (Parliamentary Secretary to Postmaster General):: 1. Yes. Nine days.
2.	Yes, by deductions from subsequent cheques.
3.	To give a proper estimate would require a survey of each staff post office and in all probability would not give us an accurate answer. In addition, the cost factor would be prohibitive.
4.	Yes, from any termination payments that may be due. Where necessary, legal action will be taken.
5.	The policy is to recover all debts.


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


Mr. Hugh Poulin (Parliamentary Secretary to Solicitor General):: Nil.


Mr. MacKay: 1.	For the years 1970 to 1975, what was the number of living unit-officers at Laval?
2.	Was their education (a) less than grade 10 (b) grade 10 to grade 12 (c) some college (d) beyond a first university degree?


Fabian Hugh Poulin: Nil.


Mr. Reynolds: 1.	For the years 1970 to 1975, what was the number of living unit-officers at British Columbia Penitentiary?
2.	Was their education (a) less than grade 10 (b) grade 10 to grade 12 (c) some college (d) beyond a first university degree?


Fabian Hugh Poulin: Nil.


Mr. Howie: What was the cost of the 1976 Post Office calendar advertising the Olympic Games and, to whom was it paid?


Paul Edmund McRae: The 1976 Post Office calendar did not advertise the Olympic Games per se. The calendar contained 12 pages of copy and illustration in addition to the 12 monthly calendar pages. The copy and illustrations served to communicate the role of the Post Office and its many services, and how users may employ these services to


their advantage. One of the 12 pages explained the ways in which the Post Office supported the Olympic Games. The cost for the 1976 calendar was $146,480. Ashton-Potter Ltd. did the printing, and B. and B. Advertising Ltd. handled the artwork.


Mr. Jones: 1.	In light of the provisions of Quebec's Official Language Act has the government considered the educational recommendation of the Royal Commission on Bilingualism and Biculturalism that "we recommend that when both types of school exist in the community, the right of parents to send their children to either the majority language school or the official language minority school be recognized"?
2.	Are any communities in Canada not following the recommendation and, if so, in which communities and in what provinces?
3.	Has the government considered opposing Quebec's Official Language Act if and when the Act or any section thereof is referred to the courts?
4.	Does the government support the Act?


Mitchell William Sharp: I am informed by the Department of the Secretary of State and the Prime Minister's and Privy Council Offices as follows: 1. Official-language teaching is not the responsibility of the federal government but rather that of the provinces.
2.	Not applicable.
3.	There is presently an action before the Courts challenging some sections of Quebec's Official Language Act. The trial before the Superior Court of Quebec has been concluded but a decision has not yet been rendered. While the Attorney General of Canada did not take an active part in the proceedings at that stage, he is a party thereto and has been and will be watching the proceedings carefully.
4.	The Government is sympathetic to the object of the Act, which is to ensure the continued strength and development of the French language in Quebec. The Government does regret, however, those provisions which are not consonant with current trends towards the expansion of linguistic rights in Canada.


Mr. Caouette (Temiscamingue): 1.	In the past three years, how many Quebec station masters have been suspended or discharged as a result of CNR station closures?
2.	How many had more than (a) ten (b) fifteen (c) twenty (d) twenty-five years of service?
3.	What (a) are the names and addresses of the stations closed by CNR in these years (b) were the reasons given by the CNR to close the stations (c) will be the future use of the closed stations?
4.	What is the current location of the services related to transportation, such as telegraphic services for each community now deprived of stations that provided CNR telegraphic services?
5.	What is the situation in l'lle Verte in relation to the services offered to the population, such as, station master, telegraphic services, ticket counter, etc.?


Mr. Ralph E. Goodale (Parliamentary Secretary to Minister of Transport):: The Management of Canadian National Railways advises as follows: 1. None.
2. Not applicable.
Order Paper Questions
3.	(a), (b) and (c) The stations at the following locations have been closed by authority of Canadian Transport Commission: St. Benoit, St. Jacques, Marieville, St. Placide, Beauharnois, Nicolet, St. Andrews East, Chambly, and, it is proposed to dispose of the buildings through public advertisement. At many locations Station Agents have been replaced by an On-Hand Representative or by a Caretaker who continues to provide the service required at each location. At stations where passenger traffic is very limited planning is in progress to replace the station building with another structure more suitable to meet customer requirements.
4.	Telephone zenith service is available at locations where a Station Agent was previously employed. Customers can dial a Servocentre serving the territory and obtain the desired information at no additional cost. Telegraphic services are made available in a similar manner offering a 24 hour service, seven days per week.
5.	Subject to CTC approval for closure of the station at lie Verte, and On-Hand Representative will handle Express requirements. Other services will be available via zenith telephone. Passengers may purchase tickets on board the train or through the Riviere-du-Loup-Rimouski Seryocentre on advance notice, with tickets being mailed to the customer, or they may be purchased from on open agency.
1975-76 SUBSIDIARY AGREEMENT ON HIGHWAYS


Mr. Marshall: As a result of the 1975-76 subsidiary agreement on highways between the government and the Province of Newfoundland, amounting to $22 million, what highways' work (a) was carried out (b) remains to be carried out in the present year?


Mr. Cliff Mclsaac (Parliamentary Secretary to Minister of Regional Economic Expansion):: The reply for the Department of Regional Economic Expansion is as follows: Under the 1975-76 Highways Subsidiary Agreement between the Department of Regional Economic Expansion and the Government of Newfoundland; (a) All contracts for highway construction as outlined in the schedule of cost to the Agreement were awarded, and construction to the value of $18.3-million was completed prior to the expiration of the 1975-76 fiscal year; (b) The remaining construction under these contracts (to the value of $3.7-million) will be completed in the 1976-77 fiscal year.


Mr. Knowles (Winnipeg North Centre): 1.	Since the inauguration of the Spouse's Allowance under the Old Age Security Act, how many Allowances, in each month, have been granted and how many are now being paid?
2.	What is the average amount paid in the latest month for which records are available?
3.	Since the inauguration of the Spouse's Allowance, how many Allowances, in each month, have been cancelled because of the death of the older spouse?


Hon. Marc Lalonde (Minister of National Health and Welfare):: 1.


Order Paper Questions Number
Spouse's Allowance
Month	Granted	TotalOctober, 1975	7,901	7,901November, 1975	28,770	36,671December, 1975	5,567	42,238January, 1976	3,679	45,917February, 1976	4,476	50,393March, 1976	3,801	54,1942.	$136.92, as of March, 1976.3.	October, 1975, 108; November, 1975, 149; December,1975,	174; January, 1976, 197; February, 1976, 204; March,1976,	200.


Mr. Cossitt: Have the wives or any members of the families of any Deputy Ministers or other senior public service officials travelled on Air Canada with passes or any other type of free transporation with Air Canada during 1975 and 1976 and, if so, what are the names of such persons along with the job designations of their spouses?


Ralph Goodale: The management of Air Canada advises as follows: Each year, a number of individual trip passes are issued, in accordance with CTC regulations, to spouses of some government officials who hold annual passes on Air Canada. These individual trip passes allow the spouses to accompany the official on certain specific occasions. Records of these issues, unlike those relating to Cabinet Ministers' spouses, are included with other general pass issues, and it would require an inordinate amount of clerical time and cost to search for and find the information.


Mr. Cossitt: Has the government given any consideration to the establishment of passenger and baggage helicopter service between Dorval and Mirabel Airports to facilitate quicker and easier passage of passengers making connecting flights and, if not (a) for what reason (b) will the matter be given consideration?


Ralph Goodale: Transport Canada has not given any consideration to the establishment of passenger and baggage helicopter service between Dorval and Mirabel Airports, (a) Reasons: (i) A bus service is already being provided by the Montreal Urban Transportation Committee, scheduled every half hour between 1330 and 2330 (peak period at Mirabel) and every hour between 0600 and 1300, for a total of 29 return trips per day; (ii) Current departmental policy leaves the provision of all such services open for competition; to this date there has been no application by private companies, (b) Future Considerations: Transport Canada has no intention of changing current policy with respect to the provision of such services. However consideration will be given to provision of services by other modes.


Mr. Forrestall: 1.	What is the government's actual cash contribution to date in respect of the MAGI Corporation in Halifax-Dartmouth?
2.	How much has been spent on (a) administration (b) grants or loans of any type to the private sector made pursuant to the articles of incorporation?
3.	On what date was the Corporation established?
4.	Does the government expect the Corporation to be in operation (a) before (b) after the date of the next general election?
5.	What factors are presently restraining the Corporation's operation, if any?


Joseph Clifford McIsaac: The reply for the Department of Regional Economic Expansion is as follows:
1.	March 29, 1973, $5,001,000 in share capital; March 30, 1973, $4,999,000 loan to Nova Scotia.
2.	(a) A total of $3,168 was spent on administration to the end of the 1974-75 fiscal year. The audited statement for FY 1975-76 will be available shortly; (b) MAGI had not made any loans or grants to the end of the 1974-75 fiscal year.
3.	The agreement with Nova Scotia to establish MAGI was signed September 22, 1972; consequential memoranda and articles of association were signed with the Province on March 21, 1973; and Mr. Haysom was appointed chief executive officer of MAGI on September 26, 1975.
4.	MAGI is now operational.
5.	Not applicable.


Mr. Cossitt: How many persons have applied for employment on the Rideau Canal since January 1, 1975 and of these (a) how many were residents of the constituency of Leeds (b) how many were hired (c) how many were interviewed and by whom (d) what is a full description of the hiring methods of Rideau Canal officials (e) were any hirings made on the basis of politics and, if so, how many (f) were any representations whatsoever received from Liberal Party Associations or Liberal Party Executive members in respect to any persons hired and, if so, from whom were such recommendations received and who were the persons subsequently hired?


Hon. Judd Buchanan (Minister of Indian Affairs and Northern Development):: 651; (a) 102; (b) 282; (c) 529 interviewed by area superintendents and area supervisors; (d) hiring methods-Public Service Commission Acts and Regulations on hiring; (e) No hirings were made on a political basis; (f) No.


Mr. MacKay: 1.	What was the cost of producing the Annual Reports of the Department of Regional Economic Expansion in 1974 and 1975?
2.	(a) Were the publications printed by the Department or by a private firm (b) if contracts were let, were public tenders called?


Joseph Clifford McIsaac: The reply for the Department of Regional Economic Expansion is as follows: 1. Refer to recently-tabled responses to Questions 5,034 and 5,036.


2. (a) The 1973-74 report was printed by the Canadian Government Printing Bureau. The 1974-75 Report and Review was printed by a private firm; (b) The printer was selected through regular Department of Supply and Services public tendering procedures.


Mr. Epp: 1.	Has the Air Transport Committee issued a Class 7 specialty licence to the Manitoba Government Air Division?
2.	Has the Committee issued a Class 4 licence for charter to the Manitoba Government Air Division?
3.	Is the Manitoba Air Division presently a holder of a licence that qualifies it to engage in charter work?


Ralph Goodale: 1. Yes, Licence No. A.T.B.
310/47(C).
2.	No.
3.	Yes; however, the licence was issued as Class 7, pursuant to Section 6 of the Air Carrier Regulations, as the service being provided is not compatible in its entirety with the definition of a Class 4 Charter commercial air service. By the terms of the licence, the Licensee is expressly prohibited from providing any form of commercial air service other than the following: (a) Flights required in connection with the health and welfare of the Indian population in Manitoba; (b) Transport of Government officials and staff of the Province of Manitoba; (c) Emergency service for isolated areas within the Province; (d) Transport of Federal Government personnel on passen-ger/mile basis only when the services of such personnel and their transportation is being paid by the Province of Manitoba and/or in exceptional circumstances where there is no adequate scheduled or non-scheduled services available to render the desired transportation; (e) Transport of members of the R.C.M. Police on Federal Government business in isolated areas only when a planned commercial flight or other means of transportation on which passage has not been booked requires a delay of more than 24 hours and no additional flying or landings are required to perform such transportation. In exceptional circumstances where there is no adequate scheduled or non-scheduled services available to render the desired transportation, such provision of transportation will be undertaken only with the authority of the Director of Air Service or the Deputy Minister of Mines and Natural Resources, and all such flights will be reported to the Committee on a monthly basis. The Licensee is restricted in its operations to Groups A, B and C aircraft (i.e.,-aircraft not in excess of
18,000	pounds maximum take-off weight on wheels).


Mr. Herbert: 1.	Was the tender call for the control aircraft de-icing facilities at Mirabel International Airport cancelled before the stated time for the opening of tenders?
2.	Were any tenders received opened by officials of the Department of Transport?
Order Paper Questions
3.	What is the practice or procedure followed concerning tender documents received prior to the (a) cancellation of a tender call (b) announcement of an extension of time for the receipt of tenders?


Ralph Goodale: 1. The tender call for the aircraft de-icing facilities was scheduled to close on November 21, 1975. The tender call was cancelled by a telegram to interested parties on November 20, 1975.
2.	No tenders were received.
3.	(a) Tender documents received prior to the cancellation of a tender call are returned unopened; (b) Tender documents remain sealed until the officially published tender closing time. Tender documents received prior to the announcement of an extension of a tender call may be withdrawn at the option of the tenderer so that he may resubmit his tender to reflect any changes that he may deem advisable. The tenderer could also elect to leave his tender with the Department and amend his bid by registered letter prior to the tender closing time.


Mr. Beatty: 1.	When will the Minister of Agriculture appoint a third member to the three-man body overseeing the operations of CEMA?
2.	Did the Minister appoint Mr. John Hyde Chairman to the body overseeing the operation of CEMA and, if not, who did?


Eugene Whelan: 1. A
number of individuals have been interviewed and an appointment will be made as soon as possible.
2. No. CEMA elected Mr. Hyde to act as temporary Chairman until a new one is appointed by the Minister.


Mr. Cossitt: With reference to the answer to Question No. 3,240 which stated in part that one specific trip made by the Minister of Agriculture, his wife and members of his family cost the taxpayers $13,965, does this represent the average cost of each of the 32 trips made by the Minister and his family at public expense since January 26, 1973?


Eugene Whelan: No.


Mr. Stevens: For the years 1973, 1974 and 1975, by quarter, what were the total number of (a) takeoffs (b) landings by scheduled aircraft at (i) Toronto International Airport, Terminal 1 (ii) Montreal International Airport (Dorval) (iii) Montreal International Airport (Mirabel)?


Ralph Goodale: The following table contains statistics on scheduled air carrier aircraft movements for 1973, 1974 and 1975. The data are presented on a quarterly basis for (i) Toronto International Airport; (ii) Montreal International Airport (Dorval); (iii) Montreal International Airport (Mirabel). The data in the table are for takeoffs plus landings. On a quarterly basis, there is a negligible difference between the number of takeoffs and of landings.
14084


Order Paper Questions
Therefore, the numbers presented can be divided by two to obtain either takeoffs or landings.
Note: Figures that appear for Toronto International Airport include scheduled traffic associated with both Terminal 1, Terminal 2, and the cargo terminal, as the same runways serve all terminals.


[Stage Direction]
Toronto	Montreal	'MontrealInt'l	Dorval	Mirabel1973	1st qtr	33,106	26,347	Nil2nd qtr	33,747	28,713	Nil3rd qtr	34,826	30,629	Nil4th qtr	33,786	29,540	NilTotal	135,465	115,229	Nil1974	1st qtr	34,393	28,016	Nil2nd qtr	33,826	28,280	Nil3rd qtr	37,582	28,294	Nil4th qtr	35,691	26,531	NilTotal	141,492	111,121	Nil1975	1st qtr	33,560	26,244	Nil2nd qtr	34,158	27,084	Nil3rd qtr	35,502	28,609	Nil4th qtr	33,442	24,870	2,026Total	136,662	106,807	2,026*Data for	Montreal-Mirabel	contains	the activity
December 1975. Scheduled commercial flights commenced in late November 1975. Please note that totals may differ very slightly from published annual numbers due to adjustments in monthly figures for the annual publications.
Mr. Cossitt: With reference to the answer to Question No. 3,801 concerning $36,000, paid under contract to a language training school by Statistics Canada for which no services were received and with reference to the answer to Question No. 3,802 concerning failure of the CBC to record an amount of $14,053,000 interest owed on government loans in its 1975 financial statement and with reference to the answer to Question No. 3,803 referring to losses amounting to $40,000 and $48,000 to the Post Office Department on December 7 and 10, 1974 as a result of two forged certified cheques in payment of postage stamps and the subsequent answers thereto which stated such questions should be asked before the Standing Committee on Public Accounts (a) has it now become government policy that standing committees have priority over the House of Commons insofar as the asking of questions is concerned (b) is this the beginning of a new government policy to eliminate the asking of Order Paper questions in the House of Commons?


Mitchell William Sharp: (a) It has always been government policy to comply with the rules and practices of Parliament. Beauchesne's Parliamentary Rules and Forms has for many years been considered to be an authoritative guide in these matters. Citation 171(hh) of the fourth edition of Beauchesne clearly indicates that questions, oral or written, must not "seek information about proceedings in a Committee which has not yet made its report to the House."; (b) See answer to part (a) above.


Mr. Blais:: I ask, Mr. Speaker, that the remaining questions be allowed to stand.


Mr.   J.-J. Blais@Parliamentary Secretary to President of the Privy Council: Mr. Speaker, would you be so kind as to call notices of motions for the production of papers Nos. 100 and 101?


[Stage Direction]
Motion No. 100-Mr. Yewchuk:
That an humble Address be presented to His Excellency praying that he will cause to be laid before this House copies of all correspondence and minutes of meetings between the Minister and officials of the Department of National Health and Welfare and the ministers and officials of the various departments of health of the provinces on the implementation of a national swine influenza vaccination programme.
Mr. Bob Kaplan (Parliamentary Secretary to Minister of National Health and Welfare):: Mr. Speaker, considering the urgency of the action required following the meeting held on March 23 by the National Advisory Committee on Immunizing Agents (see Statements and Recommendations by this committee, tabled on March 30, Sessional Paper No. 301-7/51), no correspondence or minutes of meetings have been exchanged between, on the one hand, the minister and the officers of the Department of National Health and Welfare and, on the other hand, the ministers and agents from the various provinces concerning the implementation of the national swine influenza vaccination program. Consultations were made by telephone at that time.

In view of this, I request the hon. member to withdraw his motion.


Mr. Speaker:: Order, please. Perhaps this notice of motion for the production of papers might be allowed to stand until the next time such motions are called. Is this agreed?


Some hon. Members:: Agreed.
Motion stands.


[Stage Direction]
Motion No. 101-Mr. Yewchuk:
That an Order of the House do issue for copies of all papers relating to calculations by means of which the Minister of National Health and Welfare arrived at his estimate for the cost of swine influenza vaccine at $0.60-$1.00 per dose.
An hon. Member:: Stand.
Motion stands.


Mr. Speaker:: Shall the remaining notices of motions for the production of papers be allowed to stand?


Some hon. Members:: Agreed.



GOVERNMENT ORDERS


[Stage Direction]
The House resumed from Thursday, May 27, consideration of the motion of Mr. Macdonald (Rosedale) that this House approves in general the budgetary policy of the government, and the amendment thereto of Mr. Stevens (p. 13901), and the amendment to the amendment of Mr. Salts-man (p. 13905.)
Hon. Robert K. Andras (Minister of Manpower and Immigration):: Mr. Speaker, I should like in my remarks today to provide further information regarding the budget announcement relating to employment matters, to deal with some of the unfounded criticisms which have been raised, and to outline the government's views regarding an employment strategy for Canada. I will try to condense my remarks into the 30-minute period allotted, but may need to ask the indulgence of the House for a few minutes of extra time.
May I put the employment aspects of the budget in context by reminding hon. members that the June, 1975, budget announced a two-year program of expanded manpower activities. We are currently in the second year of that program and our regular manpower budgets are being augmented as follows: first, there is a $40 million increase in institutional and industrial training bringing the total available for training in the fiscal 1976-77 to $522 million, and enabling the training this fiscal year of over 305,000 Canadians; second, there is an additional $2 million for our mobility program, expanding our budget in 1976-77 to $13.7 million. This enables us to undertake the permanent relocation of 15,000 families, and covers other mobility grants to between 40,000 and 45,000 workers. Next, there is an enrichment of our job finding and placement services, costing an extra $3 million, and involving an additional staff of 150 for our Canada Manpower centres. Finally, there is a $100 million job creation program for next
The Budget-Mr. Andras
winter. It is untrue to say we are doing nothing this year for the unemployed.
We are continuing to analyse the labour market prospects and are carefully considering whether additional funds should or could be provided. In the meantime, plans are proceeding, based on the approved level of financing. I shall announce the details of the 1976-77 Local Initiatives Program in a few days.
While not minimizing the seriousness of the situation during the present fiscal year, 1976-77, I should like to focus my remarks today primarily on the longer term employment problems and prospects of our country for 1977 through to 1981.


Mr. Stanfield:: Where is your crystal ball?


Robert Knight Andras: I am about to look into it.


Robert Lorne Stanfield: I cannot see it.


Robert Knight Andras: Our best estimate is that labour force growth will be somewhat less over the next five years than it was in the past ten years, but I caution that labour force forecasts are extremely hazardous. We know fairly well how many youths will come into the labour market each year and we know how many workers will retire or die. We can and we will control immigration. However, we cannot accurately forecast what will happen to participation rates. Moreover, we know that while we have a labour force of about ten million people at any given time, there are actually closer to 13 million Canadians who work during the year, and almost five million job changes. How many of these part-time or intermittent workers will become or even want to become full-time regular employees, we just cannot tell with precision, but we can make some rough forecasts based on certain assumptions.
First, we are assuming a somewhat slower growth in participation rates than over the past few years. We are also assuming a reduction in immigration from a gross level of about 200,000 in the last two years to under 150,000. With these assumptions, we forecast labour force growth at from 1.1 million to 1.2 million over the next five years.
We also forecast that employment growth will exceed labour force growth by about 100,000. That will bring unemployment down only gradually. That is of great concern to us, and the government is therefore committed to reducing-


An hon. Member:: Is that five years?


Robert Knight Andras: 1977 through 1981, five years, yes. The government is committed to reducing this unacceptable level of unemployment by direct job creation and other measures which I will outline today, and in more detail in the fall session.
Our goal is not necessarily a 5 V4 per cent or even 5 per cent unemployment rate. Our goal is the fullest employment rate possible in light of inflationary pressures and the international economic situation. It must be realized, as the Economic Council of Canada recently pointed out, that unemployment in Canada is not as simple or as comprehensible as it once was. There is an over-all shortage of
9SS68-S7V2


The Budget-Mr. Andras
jobs, but a significant proportion of current unemployment is caused by structural problems, problems such as the particular difficulties of youth, of women, of native peoples, the handicapped, or regional economic disparities, and skill mismatches.
Some unemployment, which we call frictional unemployment, results from the sheer dynamism of the labour market which even in the best of economic times always has some people between jobs. Some other unemployment is the effect of our lessening but still significant seasonal labour market fluctuations.
We analysed the available data. We concluded that the 1975 unemployment rate of about 7 per cent was composed roughly of four percentage points of frictional and structural unemployment, 2.7 percentage points of cyclical unemployment, and about .3 per cent of seasonal unemployment. We therefore see that over half of our unemployment is due to frictional and structural causes. This situation simply cannot be solved by any one program or policy nor by simplistic generalized solution. It requires an array of more fully developed and precisely aimed manpower programs focusing specifically on each element of the unemployment total.
It is clear that we must improve and expand our policy and programs to create jobs, to provide occupational training and mobility, to help the disadvantaged and the handicapped and to help young people bridge the growing gap between school and work. We have been developing comprehensive and effective manpower programs and services, but let's face the fact that, frankly, the costs are enormous.
It takes about $200 million to shave less than one quarter of a percentage point from our unemployment rate for a full year by putting the unemployed into training or job creation projects.
To reduce our current unemployment to 5 per cent would cost about $2 billion more per year using training, and a local initiatives type program which is by far the cheapest available to government.
We have scoured the world and we have concluded that the best job creation approach is one which does the following: first, expands the stock of regular jobs in the private sector as much as possible without generating a new round of inflation; second, maximizes our utilization of existing jobs by improved manpower services, mobility and training, and by a tighter control of immigration.
We are doing all these things, and in 1976 we shall receive 40,000 to 50,000 fewer immigrants than in 1975, and tighten up our issuance of employment visas to temporary workers.


An hon. Member:: That is not what the Prime Minister (Mr. Trudeau) said.


Robert Knight Andras: It is what the Prime Minister (Mr. Trudeau) said. I heard him last night. I say that in spite of the lead story of the CBC. I suggest that the hon. member obtain a transcript before making any further comments.
Third, we want a plan that creates as many jobs by direct job creation programs as we can afford, at the lowest possible overhead cost, and with the least possible disruption of the regular private sector labour market.

We need resources to do the job. We need money. We also need a new policy approach and employment strategy. Our labour market is too dynamic and our problems too complex and fluid to be able to afford a fragmented, inefficient approach to employment policy and to the organization of the labour market.
That is why we are merging the UIC and the Department of Manpower and Immigration into the new Commission and Department of Employment and Immigration, and that is why I propose that the new organization should benefit from the continued and strengthened participation of business and labour in its work, both at the national policy level and at the local operational level. I shall have more to say about this when I introduce a bill in the next session of parliament to authorize the integration.
For the same reason I feel strongly that the activities of all levels of government in the labour market must be better co-ordinated. I have recently met with my provincial colleagues and we are unanimously agreed on this point. We plan to meet early in the fall to deal with a number of major issues involving not only the effectiveness of federal efforts and plans, but also such matters as the growing concern about the lack of effective linkage between the worlds of school and work which contributes to our high unemployment among youth in Canada.
With this strong institutional base, and co-operation with the private sector and between governments, we can reduce our employment problems in Canada if we can find the resources to do so, and I shall try to explain how resources might be made available.
I have long been concerned about the anomaly in Canada of substantial numbers of unemployed people receiving income maintenance on the one hand while there is a great deal of public work and training which needs to be done, and a shortage of public funds to do it. For that reason, I have proposed an amendment to the Unemployment Insurance Act which will allow the government to develop programs whereby Canadians who are in receipt of unemployment insurance can participate in public employment programs and occupational training.
The principle underlying this proposal is that unemployment is costly not only for our economy and society but most particularly for the worker who loses his or her job. Idleness brings loss of skills and of confidence, and erodes the worker's feeling of participating in his community. While he needs, and has a right to, income maintenance, we would like to be able to offer him something more.
We are now developing job creation models in which workers who are likely to be unemployed and on unemployment insurance for some months would be invited to participate in activities of social value for the betterment of their communities. We have in mind projects which could utilize many of the best features of earlier Local Initiatives Programs but which could be tailored more carefully to the needs of the individual and the community. There could be included arrangements for the individual to spend some time in a continued job search and in job counselling.
Our plan would be to have participants continue to receive U.I. benefits and we would provide other moneys,


for example, for cost of work allowances and project overhead costs, from additional moneys which would have to be voted for this purpose.
Some people are repeatedly on unemployment insurance because they lack basic job skills and they would benefit from occupational training or retraining. There is already some integration of unemployment insurance and training allowances but the system is complex, and unfortunately the training program cannot accommodate all who need training. We have been experimenting in Newfoundland with a pilot stfheme to use unemployment insurance more productively in financing training, and our experience to date warrants expansion of such projects.
Another potential developmental use of unemployment insurance is the short work week. A well-established system in Europe enables enterprises which propose to lay off part of their work force to retain all workers on the job but on shorter hours, with allowances being paid in respect of the difference between the hours worked and the normal work week. Naturally it would require the co-operation and agreement of both company and union, and initially it would be done on a very selective basis. It has the great advantage of maintaining job attachment and skills of workers during temporary business downturns.
Other aspects of the unemployment insurance program also require change, primarily for reasons of equity and to promote a more effective labour market. In the course of our comprehensive review of the unemployment insurance program we have identified certain categories of workers for whom present coverage can be regarded as inappropriate.
The efficiencies and savings in the unemployment insurance program which we will be able to achieve if parliament approves our proposed changes will provide us with additional resources to devote to the prevention and alleviation of unemployment-and that is how we intend to use those resources. Mr. Speaker, Canada has one of the most efficient and comprehensive unemployment insurance programs in the world, but it must constantly be adapted to meet changes in society and in the labour market. The proposed amendments to the Unemployment Insurance Act announced in the budget are designed to make that program more effective in protecting Canadian workers from the economic impact of unemployment, without in the process unnecessarily spending money which would be better allocated to employment programs.
During our comprehensive review of the unemployment insurance program we devoted particular attention to the benefit structure which in many respects is the core of the legislation. Based on our own analyses and the advice and comments we have received from many private organizations and individuals, we reached the conclusion that a recasting of the benefit structure is now in order.
The proposals we have in mind are designed to enhance motivation to work, to achieve a greater degree of simplicity, and to provide more equity. A greater degree of simplicity will be obtained by reducing the number of phases from the present five to three. There will be a more equitable relationship between the number of insured weeks and benefit entitlement in the initial benefit period. Greater equity will result from eliminating the national unemployment rate as a trigger for extended benefits, and basing
The Budget-Mr. Andras
regional extended benefits entirely on regional unemployment rates which are a better indication of the difficulty of obtaining and retaining employment.
While the benefit entitlement of those with a shorter labour force attachment will in general be curtailed, adequate income protection will continue to be provided for those with longer labour force attachment and for those residing in regions with high unemployment rates.
In summary, the benefit structure based on three phases of initial phase, labour force attachment phase, and regionally extended benefits phase will be designed to provide continuing adequate income replacement during periods, and in regions of high unemployment, but will result in curtailed benefits and reduced costs at lower rates of unemployment.
We also propose to increase the minimum entrance requirement for the unemployment insurance program from eight to 12 insured weeks. The purpose of this amendment is to bring unemployment insurance more in line with realistic principles of social insurance programs and with the realities of the labour market. The Canadian unemployment insurance program now ranks among the best and most generous in the world. At eight weeks our entrance requirement is the most generous in the world, and we will still be among the most generous national schemes at 12 weeks. Since the announcement of this proposal I have been gratified by the reaction in the Canadian press and from many people in both the private and public sectors.


John Edward Broadbent: Chambers of Commerce!


Robert Knight Andras: No, not Chambers of Commerce.


John Edward Broadbent: Name one provincial government, then!


Robert Knight Andras: Yes, I can. I will get the documentation about which I talked to the hon. member the other day.
However, in the past few days we have also heard from a wide array of critics who have either stated or implied that the government intends to throw 330,000 persons off the unemployment insurance rolls and on to the provincial and municipal welfare rolls.


Mr. Peters:: That is right.


Robert Knight Andras: The alleged impact of our proposal has been denounced as tampering with a very fine unemployment insurance program at a time of high unemployment, and simply shifting the burden of cost on to the provinces. These critics have based their statements on a complete misunderstanding of the facts of the situation, which I would like to clarify.


William Arnold Peters: Talk to Mackasey and Herb Breau.


Robert Knight Andras: Reference has been made to a figure of
330,000	individuals who would be affected by the increased entrance requirement. It is essential to interpret this figure correctly. It is an estimate of the total number of individuals who, on the basis of eight to 11 weeks of insured earnings, would receive benefits during the whole of 1976 at an unemployment rate of 7 per cent. This does not mean, as has been alleged by many commentators, that


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at any moment of time in the year 330,000 people would be affected. Because the average duration of benefits extends only for a portion of the year-17 weeks-at any moment in time only about 100,000 individuals would be affected. It is nonsense and irresponsible to argue that all of these individuals will, as a result of a higher entrance requirement, be prevented from receiving benefits and will be, in fact, taken off the unemployment insurance rolls.
Based on our analysis of the work behaviour patterns of the "eight to 11 weekers," we have estimated that a substantial number of them, indeed between 40 and 50 per cent, will be able immediately or within the qualifying period to work for the additional four weeks and thereby qualify at the higher entrance requirement. This in fact means that at any moment of time only abo it 50,000 individuals nationally would not be able to receive benefits.
Particular concern has been expressed about the Atlantic provinces where employment conditions are less favourable. In these provinces we estimate that at any point in time only 10,000 individuals would not be able immediately to find 12 weeks of insured earnings.
In order to assess the impact of the higher entrance requirement on the 50,000 individuals in Canada as a whole, or the 10,000 individuals in the Atlantic provinces, it is essential to bear the fundamental characteristics of those individuals in mind. The overwhelming majority of them,.indeed about 80 per cent, have no dependants. This would mean that of those excluded from benefits at any point in time, only 10,000 individuals in Canada as a whole, or 2,000 people in the Atlantic provinces, would have dependants.
Moreover, the eight to 11 weekers, as we call them, are approximately four years younger on average than the remainder of the claimants. Almost half of them are under 25 years of age. Many of the eight to 11 weekers are in fact secondary earners, such as working wives and young persons living at home. They are members of families who already have a main breadwinner. Studies have shown that in many cases these families have incomes in the middle and higher ranges.
As a result of this analysis, Mr. Speaker, it is quite clear that very few of the eight to 11 weekers will find it necessary to turn to welfare. Moreover, it is our intention to direct our developmental programs of training and job creation to those individuals and areas requiring assistance to establish more stable employment patterns.
Furthermore, I want to make the point that a study of 1974 claimants found that 64 per cent of the group with eight to 11 weeks' attachment at that time had dropped out of the labour force one year later, by March, 1975. We did not know these facts before; these figures have all come out of the recent analysis. Many of these people subsequently re-entered the labour force and worked for a sufficiently long period of time to establish another unemployment insurance claim. In other words, many of this group are particularly prone to move in and out of the labour force, in and out of jobs, on and off claim, and apparently suffer little or no hardship.

Contrary to the popular impression, Mr. Speaker, seasonal employment patterns are not the prime cause. Only 30 per cent of the eight to 11 weekers have established a seasonal type repeat pattern. This compares with 43 per cent for those with major labour force attachments. Our belief that claimants with eight to 11 weeks of insured employment have little difficulty moving in and out of the labour force has been reinforced by other statistics. For example, eight to 11 weekers have a greater tendency to draw down their full entitlement under the act than the claimants with 12 or more weeks of insured employment. However, we cannot really conclude from this that things are tougher for them; quite the contrary. A 1973 survey showed that 70 per cent of all eight to 11 weekers have found work within six weeks of exhausting their benefits. And what happened to the remaining claimants who did not find a job after six weeks? This is the welfare question.
Despite the fact that of all UI claimants, exhaustees could be assumed to be the most needy-"exhaustees" are those people who have run out their full entitlement-it was found that only 8 per cent of exhaustees resorted to welfare, or less than 2 per cent of the total unemployment insurance claimants.
These figures may be taken as an indication of two things. First, eight to 11 weekers who want or need to take another job tend to find one very quickly once UI benefits are no longer available. Secondly, many of those who do not find a job do not do so because they were not seriously tied to the labour force in the first place.
Some critics have pointed to the fact that eight to 11 weekers tend to be low wage earners, and that is quite true. But these claimants usually have no dependants, as I have indicated; they are usually young, mobile, and generally more successful in finding new employment, and are often secondary workers and members of middle to higher income families. I think that places the fact that they are also low wage earners in an entirely different perspective.
Critics have said that this proposal for a 12 week entrance requirement will hurt the Atlantic provinces or hurt Quebec. I can assure hon. members from high unemployment areas that we will tilt our expanded manpower programs and services so that the unemployed in those areas will not suffer financially from this change but in fact will gain from the productive impact of these enhanced programs.
What is the effect on the cost of the unemployment insurance program of providing coverage to a group with such an unstable and marginal attachment to the labour force, a group which can move in and out of employment and in and out of the labour market, suffering little economic consequence? This is the effect, Mr. Speaker. The cost ratio of claimants with eight to 11 insured weeks is 20 times the ratio for the average claimant. I believe that this money could be better spent. I believe that priority and funding should go to programs which deal more directly with the underlying problems of the labour market.
It is and always has been one of the primary concerns and purposes of the unemployment insurance program to help workers maintain a steady, constant connection with the labour market. In retrospect, Mr. Speaker, now we have the experience and the analysis of five to six years under our belt, I think that the eight week entrance


requirement has not been successful in furthering this goal and in fact has created a disincentive in the labour market.
I recognize, Mr. Speaker, that there may be some genuine hardship for a few in this group. In order to keep off welfare any eight to 11 weekers who are in genuine difficulty in finding and keeping steady employment, surely it would be much more appropriate to develop and strengthen special job creation, job counselling, and mobility programs targeted to specific groups and specific areas, and tailored to suit the needs of youth and marginal atta-chees to the work force. These new or expanded programs will, in my opinion, give the right kind of help to any eight to 11 weeker who really needs help.
It should also be stressed that even with the higher number of weeks of insured employment, Canada's entrance requirement for unemployment insurance will remain, apart from The Netherlands, the most generous of any industrialized country in the world. For example, Sweden's entrance requirement is based on 12 months of contributions, five being within the last year.


John Edward Broadbent: But what has been their average unemployment level over the last ten years?


The Acting Speaker (Mr. Turner):: Order. I regret to interrupt the minister but his allotted time has expired. He may continue with the unanimous consent of the House. Does the minister have unanimous consent?


Some hon. Members:: Agreed.


Robert Knight Andras: In the United Kingdom 26 weeks in the previous year are required for minimum benefits, and 50 weeks for maximum benefits. In Germany the entrance requirement is 26 weeks within the last three years.


John Edward Broadbent: They have 1.5 per cent unemployment too.


Robert Knight Andras: This package of proposed amendments to the Unemployment Insurance Act will also bring about a change in the severance pay provision. The existing UI regulations treat severance pay as earnings for the purpose of unemployment insurance benefits. We have examined this and I feel that there is a very good reason to treat severance pay as a form of deferred savings which are accumulated during the period of employment.
The fact is that many employers and unions are able to work out mutually satisfactory arrangements for the purpose of getting around that existing regulation, so I think it should be revoked. Other amendments are designed to increase the incentive to work, for example, with respect to the so-called "four week rule". This rule now means that an individual who does not receive extended benefits for four weeks or more has his claim permanently terminated. Experience has indicated that this rule has clearly served as a deterrent for claimants to return to short-term work that last longer than four weeks, so therefore we propose to eliminate it.
They are the major changes that I propose to make in the unemployment insurance program at this time. The primary purpose of the changes is to promote a more equitable and effective labour market and to free funds for more productive use in job creation and training. With these
The Budget-Mr. Andras
funds, and the potential flexibility offered by the other amendments to the Unemployment Insurance Act, I expect to be able to recommend to my colleagues an employment strategy for the years ahead which would include these elements: a new, year-round, multi-faceted, direct job creation program which would build on the successes of earlier Local Initiative Programs; take account of the proposals of the Economic Council and others; and attack cyclical, seasonal, area-specific, and, to some extent, structural unemployment, in ways tailored to local needs and targeted to areas and groups suffering high unemployment.
For example, unemployed heads of families not eligible for unemployment insurance would be given a special priority in entry to this program, which would include a creative linkage of all labour market programs, particularly the more productive use of unemployment insurance in developmental activities; a strategy for youth employment covering not only student summer employment but the more serious and pervasive problems of unemployed school dropouts and graduates; it would require expanded training and mobility programs, and other employment policies which respond to the needs of particular groups of workers and employers, and which support economic and manpower adjustments and productivity improvement.
I have outlined today a number of legal and institutional changes which will facilitate, in my opinion and in the opinion of the government, a more effective employment policy in this country. I will be announcing details of that policy in the months to come, and in the meantime I truly invite hon. members' ideas and suggestions and will welcome them. This is going to require a lot of work and it will be a difficult exercise with all the interfaces we have to examine. I must emphasize again that we need amendments to legislation to give effect to this policy and to secure the necessary financial resources.


Some hon. Members:: Hear, hear!


William Arnold Peters: Mr. Speaker, before the minister resumes his seat I should like to ask if he would give an indication-


The Acting Speaker (Mr. Turner):: Just a minute. Order, please. Will the minister entertain questions from two Progressive Conservative members and one New Democratic Party member in order that the time can be taken off for those questions?


Robert Knight Andras: If the House wishes.


Mr. McGrath:: Mr. Speaker, I have a very brief question for the minister. In the course of his speech he gave an undertaking, indeed I think he used the word "guarantee", that no one in any high unemployment area would suffer as a result of the proposed amendment to the Unemployment Insurance Act changing the qualifying period for eight weeks to 12 weeks. Can the minister tell us if he intends to lay these programs before the House before he brings in the amendment to the bill, and when can we expect to see these programs which will ease some of the potential hardship of this measure?


Robert Knight Andras: Mr. Speaker, I will be in a better position to give the hon. member, and I am not hedging, the full


The Budget-Mr. Andras
details probably when the legislation is introduced in the fall. But I reiterate, and I think you can probably see exactly what I said if you want to look at Hansard-I do not want to equivocate as I do not have it here, but at the fall session we would see the legislation coming in for both the integration and the developmental use and the UI amendment, and whatever other authority we may require for the job creation projects. I doubt very much if the implementation of the UI amendment to which the hon. member is referring could possibly become effective until early next year, this is around January; this is my best guess now. By that time I hope to have in place and place before the House an understanding of the developmental programs I have talked about today.


William Arnold Peters: Mr. Speaker, I would like to ask the minister if at some time he would table or make available the statistics about the UIC assignments which have been made in that category of the young worker in relation to the eight weeks.


Robert Knight Andras: Mr. Speaker, perhaps the hon. member would clarify what he means precisely by "assignments".


William Arnold Peters: In many of our northern areas people have to go on welfare because they do not have the money for the eight weeks, and the UIC has an assignment which it makes in respect of welfare. Would the minister give us an indication of how many in that age group during the eight weeks would in fact be applying for and receiving welfare, and then paying it back from unemployment insurance?


Robert Knight Andras: Mr. Speaker, I will do my best to make that information available to the hon. member.


Mr. MacDonald (Egmont):: Mr. Speaker, inasmuch as it was recognized by the Minister of Finance (Mr. Macdonald) in his budget presentation, and again by the Minister of Manpower and Immigration (Mr. Andras) this afternoon, that there is recognition under these new proposals of the benefit structure with regard to the regional unemployment situation, for which I commend the minister, I wonder whether he can give some indication, since the qualification period is to be raised from eight weeks to 12 weeks-at the present time the figures I have looked at show that those who would fall most heavily in that group are in areas of chronic high unemployment, plus areas which have industries which are largely seasonal; I think for instance of the major industries in the Atlantic provinces such as fisheries, tourism, and agriculture, which by their very nature offer short-term employment, in fact even less than the new 12-week qualification period proposed by the minister-of any definite plan he has in mind in respect to flexibility in this area? Or can he offer any particular guarantee that the people who are available for employment, but because of their attachment to seasonal industry will simply not be able to obtain employment, will have a definite commitment of employment other than simply moving from unemployment insurance benefits to welfare?


Robert Knight Andras: Mr. Speaker, the elements of the job creation plan, first of all, will be very definitely tilted, that is, weighted through funding and application, to those various high unemployment areas, and indeed Atlantic Canada

is unfortunately one of them. In terms of the decision or the guarantee the hon. member is asking for, I would like to examine that as we work it out. I tell you frankly that there are a great number of things that we still have to put together, which will be in the next two or three months, and I hope I will be in a position to come to parliament in the fall to give then details of a more precise application to local situations.


David Samuel Horne MacDonald: One supplementary question, Mr. Speaker-


The Acting Speaker (Mr. Turner):: Order, please. I am sorry, but there will be lots of time for questions later on.


John Edward Broadbent: Mr. Speaker, in Vancouver on Monday the Prime Minister (Mr. Trudeau) was in one of his philosophical moods. He said at that time that only "a conspiracy of love" can save mankind. That is what the philosopher, Pierre, is reported as having said. Well, talk is cheap. Such hypocrisy, to put it in its coldest terms, simply cannot be ignored. The only tangible evidence of a conspiracy as it is influencing the Government of Canada now is not one of love. On the contrary, it is directed at Canadian men and women among those most in need in our country. It is a conspiracy, in short, against the unemployed in Canada, and nothing the minister has said this afternoon, and I propose to deal in some detail with what he has said, has caused me to change my judgment on this issue one iota.
The minister said, just picking up a couple of details at the outset, that it was wrong for critics to allege that
330,000	Canadians are going to be affected as a result of the announced changes to the Unemployment Insurance Act. He said it is very misleading, and that only 100,000 at any one time will be affected; that the 330,000 are spread throughout the year. Presumably those 100,000 people are to take some consolation from that fact. He said also that at any one time only 10,000 of those affected by the change from the eight weeks to the 12 weeks happen to reside in Atlantic Canada. Again I say to you, that is some solace to the 10,000 involved in Atlantic Canada.
It is almost impossible to imagine a more calculatingly cruel budget than the one the minister brought down last week. It has been said that the new Minister of Finance (Mr. Macdonald) has simply neglected Canada's unemployed. I emphatically disagree with that. He has consciously brought in a budget which, at every crucial point, touches directly those thousands of men and women in every part of Canada who find themselves unable to obtain jobs.
Let us first consider the tax policy. What was required in this budget was a tax cut for middle and low income families in order to stimulate an economy in which manufacturing is running at only 80 per cent capacity. Instead, the minister brought forward tax benefits for upper income Canadians who alone have disposable income at home, enabling them to invest more lavishly in registered retirement savings plans. Without the needed stimulus which tax cuts would have provided, the cruel result will be increased unemployment, and the minister knows it.


Second, in respect of fiscal policy, the minister has announced that he plans to reduce the deficit by a further $900 million at a time when there are more than 760,000 Canadian out of work. Such a step inevitably means fewer, not more jobs. Again I say the minister knows it, and knows it very well.
Third, finally and most brutally of all, the two major changes proposed in the Unemployment Insurance Act will mean a direct increase in the misery of our unemployed. There is no other conclusion that a fair-minded person could draw who knows the implications of the changes which would cut 330,000 people entirely off from benefits and which would reduce substantially the benefits of those who need them most, namely, those Canadian men and women in areas where regional unemployment is most persistent. The minister has attacked precisely those in Canada who are in greatest need.
Unlike certain commentators I do not regard the minister as he has been described in certain quotations recently. I do not describe him as tough-minded, or courageous, or practical, when he takes such a stand as revealed in this budget. Quite the contrary. I regard him as being politically cynical and chillingly smug. Who, I ask, is tough-minded when he kicks people who are down? Who is courageous when he yields to widespread indifference about the poor and the unemployed in Canada? Where is the political leadership which cashes in on the sad sentiment that our unemployed are responsible for their own misfortune?
In my comments today I want to show not only that the budget proposals are morally offensive, which they are, but that they are wrong from a purely technical point of view as to what it is possible to achieve now in 1976 in our economy. For if it is wrong to be cruel when it is possible to be magnanimous, it is equally wrong in politics to pretend that more justice should be done if it is impossible to do so. Hypocrisy, I say, cannot be a substitute for callousness.
Let me dwell specifically now on the changes in the Unemployment Insurance Act because I think, and my colleagues and this party think, and all kinds of sensitive people from one coast to another coast in Canada think, this is the most reprehensible aspect of the budget. A myth is abroad in the country. The myth is that we are in substantial debt in the unemployment insurance program, that somehow the taxpayers are being forced to make up this debt. Well, the reality is that the largest part of the program, that which is the direct responsibility of working Canadians and employers, has a substantial surplus. There is no debt at all. The surplus for last year was in the range of $400 million, and in the current year it is estimated to be in the neighbourhood of $200 million. This means that the working men and women of our country are fully paying their share of a program that was set up for their benefit. They are not, in respect of the overwhelming number of dollars being spent on the program, being subsidized by anyone. They are paying through an insurance scheme for their own benefits.
At present, unemployment insurance costs beyond the 5.4 per cent unemployment level are paid for by the federal government out of the federal treasury. The justification for this is that unemployment of such magnitude-and it is
The Budget-Mr. Broadbent
one of the worst of all the industrial countries of the world-is not by any conceivable line of reasoning the responsibility of the men and women who have to suffer its ravages. Rather it is the collective responsibility of all of us in this country, and in particular it is the responsibility of the federal Government of Canada whose obligation it is to manage the economy in a way in which jobs are available for everyone who wants to work. That is the first myth.
The second myth-and we have all heard this-is that there are plenty of jobs available for all those who want to get out and look for them. I am sure every member of parliament regardless of the party to which he belongs can cite stories about meeting people in his constituency office, or about meeting people in subways and on airlines, who come to him and say that if people want to get out and find a job they can find one.
What is the reality in 1976? The fact is that there are now more than 12 men and women in Canada available for every job that is open. There are more than 12 men and women available for every job from Vancouver to St. John's. What this cruel statistic means is that if every available job were taken up tomorrow there would remain in our country more than 700,000 Canadians who want to work, who are desirous of getting out and contributing to our economy, who do not want unemployment insurance benefits, who do not want welfare, but who want to make their contribution and are unable to find a job. That is the reality.
The New Democratic Party says that the only acceptable, sensible, and relevant way to bring down the cost of unemployment insurance in Canada is for the Government of Canada to manage its economy in such a way that jobs are available. That, Mr. Speaker, is precisely to what last week's budget should have addressed itself. Instead of taking aim at the problems of the unemployed, the budget brought in by the new minister took aim at the unemployed themselves.
Let us consider in a fair-minded way, but I hope with some sense of compassion, the two major changes in the Unemployment Insurance Act that were announced in the budget. First, the government plans to change the five-phase structure of benefits to a three-phase one, contending that this will help those in areas of persistently high unemployment. The minister in his remarks earlier this afternoon repeated the argument. Mr. Speaker, I say to that: what a cruel hoax, because a hoax it is. It is the case that some people will benefit from this particular change, but I will illustrate to you why, particularly for Canadians in Atlantic Canada, in Quebec, in northern Ontario and in southeastern Ontario, the change is, as I say, a cruel hoax that will mean disadvantages for those people, not advantages.
More often than not people in the areas I have just listed will suffer more, not less. Consider a man or woman in the province of Nova Scotia who has had 20 weeks of insured earnings, that is, he or she has been working and productive in the Canadian community for at least five months, and he or she finds himself or herself laid off for whatever reason. Under the present law such a person would be entitled to up to 51 weeks of benefits. I want to stress the entitlement to up to 51 weeks. Most such people are active-
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ly seeking employment, and if they are not they are cut off from benefits. People in our country who are fully employed have to be reminded of the fact that if the unemployed are not actively seeking a job, they are cut off.
I come back to the particular case of a man or woman who has worked for five months, is out of work, is in Nova Scotia and is trying to find employment. That person is trying to bring in money for a family at home. Under the present law that person can claim benefits for up to 51 weeks if he or she is unable to find a job. But under the proposed changes that the minister so glowingly referred to this afternoon, that same person would be entitled to at most 40 weeks of benefits-a reduction of some 20 per cent in the time of benefits to which that person is entitled. The New Democratic Party says, shame to that, and shame on a government that brings in a scheme that has this kind of effect on people in Canada who need more, not less, assistance.
Consider another person in the same province of Nova Scotia, this time one with 12 weeks of insured earnings. Under the present scheme such a man or woman could get up to 44 weeks of benefits, again I repeat, assuming they are actively seeking employment. Under the budget proposals announced by the Minister of Finance last Tuesday and reiterated here this afternoon by the Minister of Manpower and Immigration (Mr. Andras), instead of getting up to 44 weeks of benefits that person would have a maximum of 32 weeks. This means a drop in the number of weeks of benefits by more than 25 per cent for a man or woman in Nova Scotia who happens to be in that particular situation.
The point I am making is that at a time when we have the highest level of unemployment in our country in 15 years, in a part of Canada where unemployment is even higher than the average, the government's change is one which cruelly hits at those most in need of benefits. Although I refer in my examples to Nova Scotia, it goes without saying that I could have selected New Brunswick, Newfoundland, Prince Edward Island, or whole regions in the province of Quebec. The same persistently high level of unemployment exists in all these parts of Canada. In all these parts of Canada these negative results will follow from changes in the Unemployment Insurance Act.
Consider also the effects of extending the minimum employment period for any benefits from eight weeks to 12 weeks. Once again those parts of the country which need assistance most will be treated first. It is precisely in Atlantic Canada and in many parts of Quebec that seasonal or short run jobs are the principal source of income.
The hon. member for Egmont (Mr. MacDonald) was questioning the minister earlier this afternoon and very correctly pointed out that workers in those parts of Canada compared to the rest of the people in our country are disproportionately employed in the fisheries, in tourism, and in agriculture. And he was quite correct in the implication of his question that the people who will be most negatively affected by this cruel change from eight weeks to 12 weeks are precisely the same people. The fact is that people employed in these occupations very frequently cannot get a job that lasts longer than eight weeks.

That is the cold reality, and members in the House from Atlantic Canada and from the province of Quebec know that very well. Now that such people will no longer be eligible for unemployment insurance after working up to 11 weeks, the municipalities of Saint John, New Brunswick; St. John's, Newfoundland; Halifax, Nova Scotia, and Rouyn, Quebec, will be paying increased welfare costs.
I do not care what the minister said earlier today because the men and women who will not be able to work and to get the benefits that they were once getting, will need financial resources in order to feed their families, and at least in Canada we have reached the point where we will not permit people to starve. If we will not permit people to starve, it means that the cities in these areas will pay increased welfare costs for these people, and it means indirectly of course that the provincial governments in these areas will have to pick up a major part of the tab for the increased welfare costs.
Is it any wonder that every premier in every province in Atlantic Canada is opposed to these measures? Is it any wonder that any informed Canadian, no matter where he may live, with an ounce of moral conscience, who knows the facts about the implications of this proposed change, is disgusted with the whole thrust of the budget?
The minister this afternoon said he would be interested in providing more information about the discussions that have taken place between his government and the governments in Atlantic Canada. I can tell you, Mr. Speaker, that I have been in touch with most of the premiers of the provinces in Atlantic Canada and, without exception, they are fundamentally and totally opposed to this legislation. They are opposed to this legislation because they know it is cruel and callous and because their provincial treasuries, which are already hard pressed compared to the more affluent parts of Canada, will have to pick up the tab.


Some hon. Members:: Hear, hear!


John Edward Broadbent: Why, one must ask, is this Liberal government doing what it is doing? I will offer a theory on what the Liberal Party of Canada in 1976 is up to. They are simply yielding to the concern-and I put that in italics- about unemployment abuses about which we have all heard. However, they are concerned not about Canada in general but mainly about the province of Ontario because they know that when the next election comes in 1978- assuming their relatively safe base in the province of Quebec-it will be the cities in Ontario that will elect most members to the House of Commons. I put forward for hon. members consideration that the kind of callous disregard that is being expressed in this budget and in these changes to the Unemployment Insurance Act is designed to appease the indifference in part and in part the legitimate concern with unemployment insurance of people in the mote affluent province of Ontario. Instead of supporting these changes, we in this party are in favour of enforcing the existing law. We are in favour of getting at those who cheat this system, or cheat any other laws on the books of Canada.
Instead of dealing directly with these abuses, what the government has brought forward are these two major amendments to the Unemployment Insurance Act which would deal with the sentiment that is expressed in the big


cities of affluent Ontario but has, as its effect, a kick in the pants and a little more to the people in Atlantic Canada. That is great disservice to the people of this country. Such a policy is nothing short of despicable. It provokes anger on our part with the government for bringing it in at this time. I would be less than straightforward however, if I said I was not equally concerned with the official position so far put forward on behalf of the Progressive Conservative Party of Canada.
The official spokesman for the Conservative party said in his initial response to the budget that the one thing he thought the Government of Canada was sensible about in its budget was its announced changes in the Unemployment Insurance Act. The same member has described unemployed Canadians as "lead swingers". He announced this change in this budget as one small step forward. I hope that a number of members in that party from Atlantic Canada who know reality and who, I think, speak honestly for the people they represent, will have some influence with the official opposition when it comes to the vote on our amendment and can bring some sense and some decency to the formation of their position.
I said earlier that it is not enough for a political party to make a moral criticism of a government. If we are going to suggest that a moral alternative is what should be pursued it is also obligatory, to avoid the serious political charge of hypocrisy, to suggest how it might be possible. In the conclusion of my remarks, Mr. Speaker, I want to do precisely that.
As the Minister of Finance well knows, we now have in the Canadian economy a manufacturing sector that is functioning at only 80 per cent capacity. In straightforward economic terms that no economist would deny, this means that we could have had stimulation now, in 1976, by means of a tax cut for people on average and low incomes. This would stimulate the economy and cause manufacturing industries to call men and women who want jobs in off the streets. They would produce the goods that an increased supply of money would demand. And the point is there would not be an iota of new pressure on inflation. That is the crucial point, Mr. Speaker.
On budget night the Minister of Finance said that if we stimulate the economy it will cause inflation. He was only half right or, more correctly, only telling a half truth. If you have an economy that is already functioning at maximum capacity where there is no slack in our offices or factories and you stimulate it, then the minister is right; you cause great inflation. When you are only operating at 80 per cent capacity, however, and when you have more than 760,000 Canadians who want jobs, a tax reduction would cause stimulation and take people off the streets to work, but would not cause any increase in inflation.
The minister took a callous and cynical approach in this budget, Mr. Speaker. He announced forthcoming changes in unemployment insurance which will wreak havoc with many men and women, particularly in Atlantic Canada, who are going to lose the benefits we have built up over a period of time in a fine Unemployment Insurance Act. Beyond that, he did not stimultate the economy in a way that at least during this year could have brought the
The Budget-Mr. Alexander
unemployment level below 7 per cent. Instead, throughout this year unemployment will remain above that grotesque level which no one with any sense of decency in politics finds tolerable.
I urge members in this House to give serious consideration to supporting the amendment put forward by the New Democratic Party which would have the effect of removing that disreputable change. If we had support from members on both sides of the House for the amendment, even though it did not carry, the message of concern that most decent people in the country feel about unemployment might even get through to the government.


Mr. Lincoln M. Alexander (Hamilton West):: Thank you for recognizing me at this time, Mr. Speaker. I take a very dim view of the minister and his predecessor continually telling us that we should be proud of our most generous unemployment insurance scheme. We do not want a generous unemployment insurance scheme; what we want are jobs. This is the only way we can reduce the significant impact of unemployment insurance-by the creation of jobs.


Some hon. Members:: Hear, hear!


Lincoln MacCauley Alexander: I hope the Minister of Manpower and Immigration (Mr. Andras) will remember the undertaking he gave to me to table the documents, surveys, studies and statistics which allowed him to come to the conclusions urged by the Minister of Finance (Mr. Macdonald) that certain amendments are necessary to the Unemployment Insurance Act. This is most important in order that we may be as apprised of the situation as is the minister. There are a lot of unanswered questions, and we want to know whether the minister has done his best with this horrendous problem of unemployment insurance.
Our friends on the left want to know whether we will give their motion very serious consideration. We have given it serious consideration, and by necessity we have to vote against it. What the New Democratic Party is attempting to put before the Canadian people is the idea that we should accept unemployment insurance as a way of life. They do not want meaningful amendments to this legislation.
I should like to refer to an editorial in this morning's Globe and Mail, Wednesday, June 2. I do not say this newspaper is the Bible, but I think the statements in the lead editorial mirror the thinking of the vast majority of Canadians. The article pointed out that:
The majority of Canadians don't want a program that encourages people to work for a while with the carrot of months of rest. They don't want a program that discourages mobility in the work force or continuity in the job. They don't want any more of those hilarious stories about good life on the pogey.
What do they want?
The article then makes reference to my friend, the Postmaster General (Mr. Mackasey), but I will ignore that. It continues:
.. . but a good many people want an unemployment program that will be even more sensitive to the needs of individuals and the community at large. A program that will be related more directly to job creating schemes-particularly for workers in the 18 to 25 age bracket-and to the problem regions where high unemployment is chronic.
95S68-58V2


The Budget-Mr. Alexander
This is the gist of the situation. We want amendments to the Unemployment Insurance Act in order to bring it, as the minister has indicated, to a social insurance program, while at the same time making sure that those who live within high unemployment areas do not suffer. This is all that people are requesting. They want jobs, whether in the private sector or the government, and I will get into that a little later. What they want is a social insurance program that takes into consideration the needs of those in high unemployment areas.
I was amazed to hear the minister say that an eight week qualification period is a disincentive. I am not going to brag or seek any glory with respect to that, but I should like to refer to the debate on second reading of Bill C-229 in Hansard for April 19, 1971, where I said as rep orted at page 5054:
There are several sections in this bill raising questions of interest and concern and calling for deep consideration, not only by members on this side of the House but by members on the other side. Unemployment insurance programs should maintain a proper balance between providing temporary income maintenance and facilitating reabsorption into productive activity. Therefore, with all due respect to the arguments of the minister, I question whether the reduction of the qualifying period to an eight-week attachment to the labour market is practicable in view of the probable abuses that this will encourage. Further, such a short period of time does not indicate even a strong seasonal attachment to the labour force.
The bill was read the second time, referred to the standing committee, considered in committee, then sent back to the House for consideration at the report stage. On June 10, 1971, as recorded at page 6582 of Hansard, an hon. member-I will tell you shortly which one-moved the following motion:
That Bill C-229, An Act respecting unemployment insurance in Canada, be amended by deleting the word "eight" in paragraph (a) of subclause (2) of clause 17, line 16 at page 11, and substituting the word "twelve".
That Bill C-229, An Act respecting unemployment insurance in Canada, be amended by deleting from Schedule A at page 106, under the column titled "Weeks of insurable employment in qualifying period" in Table 1, the figure "8" in the first entry thereunder and substituting the figure "12".
After proposing those amendments I said, as reported by Hansard at pages 6582 and 6583:
All I can say in conclusion is that I am dismayed by this particular clause, and I am afraid that with all the good intentions the government may have, this clause is open to abuse. It removes the incentive that we are all seeking. It certainly does not enhance personal initiative. So, my two motions are an attempt to make the act more reasonable. What we are trying to do is to allow people to help themselves. I think this is what the government should be doing.
The philosophy of my party is that the government should not move in until it is actually and really required. In other words, the individual should be able to help himself, and this is what I like about our philosophy. Governments should not just look after people from their birth to their death, but we are starting to move in this direction. Whether or not Canadian people can afford this is questionable. But I hope that the minister, as well as my colleagues in the House, will appreciate what 1 am saying. It is not that the Canadian people are lazy. Heavens, no, I would never say that. What I am saying is that when you hold out these enticements, these inducements, these carrots, there is bound to be abuse. I hope that the administration which will be set up will be able to cope with these abuses effectively, because I can foresee problems for the department and for the minister. What he has done, in effect, has been to remove the initiative from people to continue to seek work.

That happened in 1971. I will not take credit for the government's present action. After all, it is my duty to tell the government how to show leadership; it is my duty to suggest policies. It took the government six years to figure out what we figured out in five months. I see the Minister of Finance laughing. Mr. Speaker, the facts speak for themselves. We impressed on the minister in that previous debate that the provisions then being proposed would constitute a disincentive to work. The government disagreed. They said, "No, we do not think so." Now the government admits that those provisions to which we objected are a disincentive to work. Consequently it has proposed the amendments now to come before the House.
Let me refer to another document to show that the government does not keep its promises. Six years ago, in June, 1970, the government produced a white paper on unemployment insurance. On page 18 of that report we find the following words:
... fishermen, who have for the past few years been covered as a total group will now be covered only if they are working for someone else... the self-employed fishermen, however, will be provided for. Income stabilization is imperative in the commercial fisheries, with particular reference to the remote fishing communities, and pending completion of plans being prepared specifically for this purpose, self-employed fishermen will be covered by unemployment insurance.
Why has the promised incomes stabilization plan not been introduced? We have demanded it for the past five or six years. Certain people need that kind of help. I remender the minister saying in the past when we debated this matter, "Don't worry, just pass the bill we are considering and we will bring in an incomes stabilization plan." That happened some time ago; so far we have not heard anything about that plan. No wonder people in the Atlantic provinces are upset.
In his speech the minister spoke of savings he intended to effect, and guaranteed they would not involve hardship for people in our slow growth areas. But when I think of what the government has done with regard to our fishermen, am I supposed to feel happy and pat the minister on the back? I cannot do it. We have been too disappointed.
The minister alluded to certain interesting statistics. Apparently some 22 per cent of all unemployment insurance recipients receive benefits for the full 51 weeks and are known as exhausters. Of these, 8 per cent subsequently go on the welfare rolls and constitute between 1 per cent and 2 per cent of all people on welfare. Contrary to what my friends on my left think, there will not be any massive application to welfare offices. The statistics show it will not happen. Why? The evidence suggests, I think, that other sources of income are available to unemployment insurance recipients. In other words, our work patterns are changing. There may be more than one income earner in a family; therefore one member of a family may work off and on and, when unemployed, collect unemployment insurance.
The minister related other significant facts. He suggested that there are more than ten million people in our labour force, that actually our labour force is about 13 million people strong, but that between two million and three million people intermittently enter and leave the work force. Why, Mr. Speaker? I suggest we must blame the generous provisions of the Unemployment Insurance Act. We ought to be concerned about those who are not


permanently attached to the labour force. The hard core of ten million people is in the work force to stay. Apparently the minister thinks that his proposed amendments will affect about 300,000 people who are included in the roughly three million people not permanently attached to the work force. Under the proposed amendments they will not get benefits.
The impact of the 1971 UIC revision was made apparent by the Economic Council of Canada study entitled "People and Jobs." I think the minister was waiting for the report to be made public before bringing in necessary amendments. Actually the Economic Council report is a scathing condemnation of the government's policies and attitude to manpower and unemployment insurance. Clearly the government has not kept abreast of the times. The Economic Council of Canada says on page 19 of its report:
The wider coverage and higher benefits introduced into the unemployment insurance program in 1971 have probably had four general effects; some increase in voluntary quits, lay-offs and turnover because of reduction in the cost to individuals of periodic bouts of unemployment and an easing of the responsibilities of employers for lay-offs for sickness or maternity; less incentive for some unemployed individuals to search vigorously for work until the end of their benefit period; an inducement for others outside the labour market to seek work in the knowledge that they could thereby qualify for more generous benefits; and finally, in the larger sense, a selective stimulus to the economy through the transfer of hundreds of millions of dollars to individuals and communities affected by unemployment.
The Economic Council is of the opinion that our existing legislation induces people to join the unemployment rolls and is a disincentive to work. It estimates that present legislation induced between 70,000 and 80,000 people to go on unemployment.
Having said that I must indicate that both the Minister of Finance and the Minister of Manpower and Immigration said that changes will be proposed. The House was told that the weeks during which benefits may be drawn will be related more directly to weeks worked, and that regional benefits will be related more closely to regional unemployment. By saying this the government is showing a certain flexibility. It realizes that we face a chronic situation in the Atlantic provinces, parts of Quebec, and other parts of this country which needs special attention. The government is therefore proposing an amendment which will deal with the matter.
It goes further and says that the act will also be amended to permit the payment of unemployment insurance to beneficiaries on a discretionary basis where they take part in such activities as selected employment training or short time work programs. Clearly the government wants to be flexible. It wants to provide for benefit payments on a discretionary basis. I do not know what that means, but will try to find out. The government realizes that it created tremendous difficulties by ignoring the needs of areas like the Atlantic provinces and will be flexible. Notwithstanding the position we have taken, I say that there is nothing wrong with flexibility which, enshrined in legislation, will determine the period of time benefits may be paid in high unemployment areas, and rightly so.
If the government is so concerned about that, why was not some flexibility given in that eight to 12 week formula in order to relieve the pressures and the problems which
The Budget-Mr. Alexander
the minister has recognized in terms of the flexibility with regard to the extension or length of time for the benefits? I hope the minister will be able to answer that question because in many areas of this country people want to know what flexibility means, and who go this far and not further.
We will have to find out where these regions are, how they are going to be determined, how much saving there will be, where the saving will be directed, and what is meant by payments on a discretionary basis. We do not want any pork barrelling for which this government is famous.
I listened to the minister's speech. I have not yet had a chance to digest it. It was a very important speech with a lot of statistics, plans, and so forth and so on. However, the minister did not give it to us in detail. That is a requirement so that we can know what we can do when the bill comes before the House.
We have to see that our slow growth areas are protected. If the minister cannot give us those matters in detail, we will have to think them. I wonder whether the minister has given us another con job. I do not want to get mean with the minister, but we are used to being conned on unemployment insurance. I do not look at any minister in particular-


An hon. Member:: Bryce is the only one in the House.


Lincoln MacCauley Alexander: I do not intend to mention any names this afternoon. My time is extremely limited. In fact I want to know if I can have a little more time because I have just begun the fight.
I sometimes wonder whether the government has any ideas of its own. During the 1974 election we had an incomes policy in which we discussed wage and price controls. The government said no, you will freeze wages, not prices. After the election the first thing we got was wage and price controls. I think the government is bankrupt in programs.
Another matter disturbs me. When the former leader of the opposition indicated that it was wrong to pay taxes on the inflated dollar, the then minister of finance said that was crazy, they could not do it, it would cost too much. But what do we have now? Relief from that.
When we suggested Manpower and the Unemployment Insurance Commission in order to bring counselling, payment of benefits, and job placement under one roof, the government said no. It also said no to the eight to 12 week period. Now we will have the eight to 12 weeks. What kind of a government is this? Do ministers not have any ideas of their own? They always criticize us for not having any ideas, but every time we turn around they are stealing our ideas. They are the greatest bunch of thieves I have ever seen.


Some hon. Members:: Hear, hear!


Lincoln MacCauley Alexander: Let me get back to the unemployment insurance proposed amendments. In 1965 there was the divorce. Why? As the present minister indicates, the government thought that a positive manpower program or policy could best mature if it were allowed to develop

The Budget-Mr. Alexander
independent of an unemployment insurance program. What nonsense. What a costly error that was.


An hon. Member:: It was not an error.


Lincoln MacCauley Alexander: There is another smart aleck across the way. If it was not an error, why is it not being continued in separation? It was an error.


Some hon. Members:: Hear, hear!


Lincoln MacCauley Alexander: There was the frustration of error in payments, duplication of documentation, and a complicated system of payments between two bureaucracies. The right hand never knew what the left was doing, and neither did it care.
The Council of the Organization of Economic Co-operation and Development called for a balanced development of income maintenance and positive utilization measures which would ensure the earliest possible return to employment. In the past the government has made it easy to get on unemployment but doggone hard to get off. It should be the reverse. I am pleased to see that the minister in his wisdom, with the backing of his officials, has now noted that the former was wrong and the latter is right.
The council implied that it would be preferable to have a one stop program. As a matter of fact the Economic Council of Canada referred to the same sort of one stop program with counselling, payment of benefits, and the placement of jobs all under one roof. The result would bring the two functions into closer harmony. It would reduce the incidence of pauses in unemployment insurance, and the staff should be able to determine how seriously recipients are searching for jobs.
We are all getting a little concerned about the search for jobs. We have seen some significant moves of late. Through the good offices of the Minister of Manpower and Immigration there are now Manpower offices in provincial welfare offices. This enables the matching of people with jobs. There is a feeling that there are too many people seeking welfare as a way of life when there are jobs going begging. I know there are a lot of problems with respect to the atmosphere in which a job may be, the amount of pay, and all the other matters that can make a job a little tough to accept. However, there are a lot of good jobs available. There is now a move in the direction of matching people with jobs in co-operation with the welfare officers and the Ministry of Manpower.
Severance pay is another matter of concern. Two or three years ago the minister not only said he would examine severance pay but holiday pay. I do not know why he is only bringing in severance pay in terms of relief and not holiday pay. There may be a matter of discrimination in this area.
I listened to the minister state something to the effect that unions and business could get together. Is severance pay universal? If the minister is talking about the unionized portion of the labour force, he is only talking about one third. What about the other two thirds? Are they entitled as of right to severance pay? I will have to look into that because I do not want the minister to bring in any bill that is discriminatory and not equitable. If the government is going to move in that direction, why not move in

terms of holiday pay, which I understand through provincial legislation is universal? The minister will have to expand on that.
We are all concerned about jobs. The state of the economy is of major concern to all, particularly the unemployed. Here we are faced with the worst of both worlds, high unemployment and high inflation. There are 760,000 people, some 7.4 per cent of the work force, who would like to work but are unemployed. That is the highest for some 15 years. These are heads of families who cannot get jobs and who want to work in order to gain the necessities of life for their families.
The young people who represent the highest incidence of unemployment cannot find jobs. Now we have the students coming on to the labour market. What are we going to do about the students? We have raised this question many times. What is going to happen to some one million students who will be coming out-if they are not already out-and who will add to that total of 750,000 people already unemployed? These people are victims of a mismanaged economy, an inept government which is both callous and cavalier about the plight of its citizens.
The climate is one of concern, despair, and resentment. Imagine the situation. Here we are, a country the envy of most others in terms of wealth-wealth in natural resources, in human resources, wealth in technology-and yet we cannot achieve a 5 per cent real growth level. Is that not amazing? In the period 1974-75 we were short seven percentage points, the equivalent of $7 billion or $330 for every man, woman and child in the country. This is a situation which, in effect, leads to further unemployment.
What is significant, Mr. Speaker, is that for every percentage point of real growth we gain something like 30,000 jobs. So when we are seven points behind we are in effect 200,000 jobs behind. That is why we on this side of the House say the least the Minister of Finance should have done was to give us some indication that he was trying to get something in the region of at least 6 per cent real growth. But no, he is talking about some 4 or 5 per cent, as if that were some big thing. And with every percentage point we lose on real growth we are out some 30,000 jobs. It does not take long to figure that out.
Jobs are a most important consideration in our economy. In this regard the private sector should be and must be the primary source.


Some hon. Members:: Hear, hear!


Lincoln MacCauley Alexander: When I say that, I do so in the knowledge that this cannot be achieved under the stewardship of the Minister of Finance. I say this because the private sector has no confidence in the government, because the Prime Minister (Mr. Trudeau) goes around talking about his new society-


An hon. Member:: And love.


Lincoln MacCauley Alexander: Well, love is something we heard about the other day. And you know what Mother Theresa said about love. Then again, charity begins at home. But let me not get away from what I have to say. The new society


musings of the Prime Minister, and his light dismissal of the free enterprise and free market system have caused the business community concern. There has been no meaningful restraint on the part of the federal government. It is increasing its expenditures by about 15 or 16 per cent but it wants everyone else to accept a ceiling of 8 per cent-there may be 2 per cent for productivity and 2 per cent for cost-of-living increases. Controls, according to the Prime Minister, may last for three years and one thing which should be of concern to all of us is the indication by the Prime Minister-and now I am paraphrasing-that there is likely to be not less authority exercised in our times, but more. All these things have created an intolerable at mos-phere leading to less productivity and less profit.
It is the government's business to create a positive atmosphere in order to allow the private sector the opportunity to provide jobs, thus developing the economy. The budget could have been utilized to create this atmosphere, but the minister did not take advantage of his opportunity. He abdicated his responsibility in this regard. The government, in my humble submission, must get off the pot. It must say whether or not there is a meaningful role to be played by the private sector.
For the past five years we have been living in a vacuum-benign neglect. We must get together with business, labour, consumer groups and other levels of government to determine a game plan. We have to determine what ought to be our real growth; what our aims ought to be. How we can reduce our export deficits which today stand at some $5 billion? How can we place greater emphasis on the need for higher productivity? We must determine some kind of industrial strategy in co-operation with all these sectors of the economy, and outline the roles each have to play. These are important questions, Mr. Speaker, but the budget was totally silent with regard to them.
In terms of bringing about a climate of confidence the budget was an unqualified disaster, given the very serious economic problems we face. The budget will be known for what it failed to do rather than for what it accomplished. It showed, as I said earlier, that the government is bankrupt in terms of policy, is devoid of any constructive ideas. The economy, which needed a shot in the arm, instead got a shot in the head.
I see my time is about to expire, Mr. Speaker. If hon. members would agree to allow me about three more minutes I would have time to finish my remarks. I would appreciate that consideration.


Mr. Deputy Speaker:: Order, please. I am sure hon. members will agree to the hon. member's request. Is there consent to allow the hon. member to complete his remarks?


Some hon. Members:: Agreed.


Lincoln MacCauley Alexander: I shall not take the time of the House unduly but I think we should be apprized of the fact that, as the hon. member for York-Simcoe (Mr. Stevens) has indicated, there could have been a cut of one billion dollars had proper restraints been exercised. I will not spell out the details, but what was significant was that he was prepared to give a tax credit of $250 million, of which $100 million would go to those earning $8,000 or less, the remainder to be given on the basis of a scale to those
The Budget-Mr. Alexander
earning between $8,000 and $16,000, most of which would go directly into consumer spending, adding nearly three tenths of one per cent to the gross that would occur with such a tax credit. There would be a considerable impact on domestically generated demand, and thus on jobs.
A further proposal made by the hon. member for York-Simcoe involved a $100 million tax incentive program adjusted to ensure the greatest benefits to regions where disparity is greatest. That is what is bothering my friends from the Atlantic provinces. There has been no recognition of the need in areas where disparities are greatest. Not only would this incentive encourage the construction of research facilities, particularly in areas of regional disparity, but job opportunities for skilled workers would increase as well, as would those for the unskilled workers required to support the plant.
My hon. friend from York-Simcoe also advocated export incentives and promotions to the tune of some $75 million. This was part of the savings we were going to get by way of restraint. Then we would shift the priorities. In fact we had about $450 million left over in order to reduce other deficits. Other proposals included a program of tax incentives to encourage exports, and government spending directed to gain export markets, primarily for the benefit of small businessmen.
The government has time in which to reflect upon what it is doing right now. I refer particularly to the proposed amendments to the Unemployment Insurance Act in terms of their impact upon job creation. I am not all that happy when I hear the minister say "We are going to extend LIP." That's good but it is only short term. All those jobs will sooner or later be eliminated. What we need is an approach along the lines the Economic Council of Canada indicated with respect to the $1 billion savings. I hope the ministers are looking at this suggestion with interest because we just cannot continue these ad hoc approaches, these piecemeal attacks on unemployment insurance. People want to work, but somebody has to create an atmosphere favourable to job creation. In this regard some attention will have to be paid to the question of whether in fact the government is interested in the private sector.
The musings of the Prime Minister have made a lot of people extremely nervous. Is there one rule for the public sector and another for the private sector? This is what we shall be looking at. Before the minister brings in his bill for first reading, what is to happen in the interim? Is there to be a serious effort to get away from this ad hoc approach to the serious problems I have outlined? As I said, this country should not have 760,000 people out of work.
The government has stolen our policy. We are not going to quibble about that; it is to be expected from that gang. Our policy was that the Unemployment Insurance Act, in terms of the minimum qualifying period, should allow entrance after 12 insured weeks, and since we have advocated such a policy since June, 1971, or prior thereto we have no alternative but to vote against the NDP motion which, in effect, does not want any meaningful amendment to be made to the Unemployment Insurance Act. The NDP want people to rely on unemployment just as the government does, and this is the matter we object to most strenuously.


The Budget-Mr. Cafik


Mr. Norman A. Cafik (Ontario):: Mr. Speaker, in view of the fact that this is the first budget brought forward by the present Minister of Finance (Mr. Macdonald)-


Steve Eugene Paproski: And the last.


Norman Augustine Cafik: We will have to wait and see about that-I want to take this opportunity to congratulate the minister on his budget. He faced, as I think everyone in the country appreciates, an enormous dilemma in preparing a budget at a time of high inflation and high unemployment, a budget that would be satisfactory to all Canadians. He has met this challenge quite well from my standpoint. He has brought forward measures that I believe will stimulate the economy without over-heating it; it will be sufficient to improve employment opportunities in a significant way without at the same time undermining the anti-inflation program.
The key elements of the budget that I would briefly touch on before dealing with the primary issue that I want to deal with in my speech today are as follows. First of all the amendments to the anti-inflation program dealing with the price side are very important steps in the right direction so as to create a better degree of credibility for the whole anti-inflation program, which I think has been launched with some degree of success to date. But by and large the public have felt, rightly or wrongly, that the greatest emphasis has been on the wages side. Quite frankly I think there has been equal emphasis and even more stringent control on the price side, though it may not have been very visible.
The rulings of the Anti-Inflation Board have been primarily on the wages side, and this has created the impression that the controls on prices are in fact not working. This is not the case. The change proposed in the budget will create, I think, a better climate where the public at large will come to realize that we are very serious about fighting inflation, and particularly about controlling prices in Canada.
The other steps announced in the budget to inhibit increased government expenditure are, of course, welcome. For instance there is the proposal in the budget that in the year 1976-77 and in 1977-78 the actual increase in government expenditures will be kept below the increase in the Gross National Product projections. This is something many people have wanted to see happen for some time. We will now be moving in this direction, and in terms of getting a handle on the economic situation in this country these are extremely important steps. However, I would enter one caveat, one word of caution, and that is that we should be very careful that we ourselves as parliamentarians do not over-react and paint out ourselves into a corner of restraint in terms of government expenditures, because this will render it impossible for us to provide good government.
There is no doubt that governments have to spend money for socially desirable purposes, such as transfer payments and the basic necessities required by our citizens. I think it would be very unwise not to bear in mind our responsibilities in this regard. We should not overreact to people who have a distorted view of the impact of

government expenditures on the economy. These people seem to think that if a government spends a dollar, it is a different dollar from the dollar spent by the private sector, it is true that private sector expenditures, like all expenditures, stimulate the economy, but the fact of the matter is that a dollar is a dollar. When money is needed in the economy it really matters not where it comes. The fact is that it is needed, and it has to be provided in one way or another. When the sector is not able to provide adequate job opportunities or stimulation of the economy, then the government itself has to intervene. However, it should do so only when there is a demonstrable reason for so doing.
I am also very pleased with the steps announced in the budget to improve the measure of assistance given the private sector, particularly the small business community. Perhaps we should move even further in this connection. I have spoken many times in this House about some of the programs in Industry, Trade and Commerce, where we should shift the emphasis from grants, interest free loans or forgiveable loans into straight loans to the private sector, particularly to small businessmen, so as to provide them with the growth capital they require to meet the needs of themselves and the rest of the community. More money could be loosened up in this way without increasing government expenditure one iota.
The basic change proposed in the budget to increase the rate of taxation for small business people from $100,000 to $150,000, and the cumulative figure from $550,000 to $750,000, is going to provide a considerable incentive and stimulation to the small industrial sector and business community. When we think of the private sector many of us think almost exclusively in terms of multinational corporations and the giants of the business community. The simple fact of the matter is that the small businessman who employs a small number of people really provides more jobs and stimulation of the economy than all the multinationals put together. This is why providing assistance to these entrepreneurs and business people who have the incentive to move forward is very important.
I think the tariff changes that benefit consumers are very worth while. I have some reservations about the tariff cuts that relate to farm products because of my deep concern for the well-being of farmers. We must continue to have an adequate farming base in this country, and I do not think it is useful to achieve low prices for foodstuffs if this dries up the very source of these commodities because the farmers do not have an adequate incentive to produce food.
I think the energy conservation proposals were a bit of a surprise but quite useful in terms of increasing taxes progressively on heavy cars, thus bringing about some fuel economies. The measures to provide a two year tax writeoff for equipment used in the private sector and by municipalities to convert industrial municipal waste into productive energy sources are also worth while.
One matter that concerns me about energy and energy sources is the price of oil and petroleum products. I have mentioned on a number of occasions the reservations that I have about increases in the price of fuel and oil products, which to a very significant extent are designed to assist the exploration activities of the multinational corporations. I realize there are many safeguards to ensure that


this money is spent in that area, and I am pleased that there are these safeguards. But I would rather see the additional money received by the multinationals transferred to the government itself, and that we establish an appropriate federal agency that would reinvest this money in exploration activity. In this way Canadians will personally have some kind of equity interest in the development that must take place.
It seems to me to be inappropriate to allow these advantages to the private sector when we, through tax measures and other means, are providing them access to the funds to be able to do that. I think we need a national development fund for this purpose, and I believe it would provide some degree of credibility to the increases in petroleum prices the public is so aggrieved about at the present time.
In addition I am delighted with the personal income tax changes, particularly the additional deductible allowance for child care. This is very important at a time of high inflation when often of necessity both parents have to work. The additional allowance for deductions for child care from $500 to $1,000 per year is a very important measure, with the maximum deduction being changed from $2,000 to $4,000 per year per family. This will provide considerable assistance to people in this income category and in this condition of need.
The deferred income changes in relation to registered and non-registered retirement savings plans are also worth while in that they really escalate these levels so those planning for retirement can plan for a retirement income more consistent with what retirement needs will be in the future because of inflation that has taken place in the past and is taking place at the present time. The proposal is to change the level for registered plans from $2,500 to $3,500 per year, which is a step in the right direction, and for non-registered plans from $4,000 to $5,500.
Let me now address myself to what I think is one of the most significant aspects of the budgetary proposals. I should like for a few minutes to talk about those proposals relating to the unemployment insurance plan and to job creation generally.
I for one am very pleased to see the remarriage of the manpower and the Unemployment Insurance Commission sections of the Department of Manpower and Immigration. The divorce that took place during the Pearson days in respect of those two elements of the same department I thought at that time was unwise, and I have felt so ever since. I have been a strong advocate of the need for bringing these two elements back together so we can provide a one-stop service centre for those in need of this service. This will provide greater efficiency, and I hope that in some small way this will contribute to a reduction in federal government expenditures, as I am sure it will when this program is fully put into place. In addition to this there are other things that need to be done. One thing that concerns me greatly in connection with the unemployment insurance program today is its credibility, or to put it more accurately, in some quarters its lack of credibility.
The UIC program brought forward by the new Minister of Consumer and Corporate Affairs (Mr. Mackasey), the Postmaster General, was a very important departure. It
The Budget-Mr. Cafik
was a program I supported very strongly at the time, not only in the House but at all stages. That does not mean anyone at that time felt it was a perfect answer to a difficult problem, because clearly perfect answers to problems of this magnitude are rarely arrived at, in the House of Commons or anywhere else in society. Nonetheless I supported it then.
I am a great admirer of the Minister of Consumer and Corporate Affairs for the concern he has had for the lower income people in our society. I do not want to detract from that feeling by any remarks I am about to make now, and I am sure I will not do so.
Credibility in the program is extremely important. If the public views this program as a rip-off, which I really do not think it is, and if it views the program as providing a disincentive to work, then we as politicians have to deal with that perception. It is not good enough to deal with it only by citing statistics. I happen to think that this perception, that it does provide some disincentive to work, has some degree of justification, and we have to meet that. At the moment, on the basis of the information and statistics I have seen, much of which have been developed in recent days by the Department of Manpower and Immigration relating to the whole question of the eligibility period, I think are convincing.
The present rules in relation to eligibility, which require somebody to be attached to the work force for eight weeks, as far as I can make out, with the exception I believe of Holland, represent the lowest entrance requirement in any country in the world. That is my understanding, but that does not mean to say it is wrong for that reason. In countries like England, which is considered by many to be an excessively welfare state, the entrance requirement is 26 weeks, and all over Europe the entrance requirement ranges up to a year and sometimes more, but rarely less than the figure of 26 weeks. I have just quoted for England. We have a program before us today under which the entrance requirement is eight weeks. That is technically less than two months. It is a small attachment to the work force, there is no question about that. The proposal is to change that attachment, not to the figure in England or even the much higher figures in Europe, but in a very modest way from eight weeks to 12 weeks. There is a significant impact, but a modest one nonetheless.
The Minister of Manpower and Immigration (Mr. Andras) has cited some facts in this case and I am not going to review them all today. I am impressed by a number of them. First of all, I am told that 64 per cent of those with an attachment of between eight weeks and 11 weeks drop out of the labour force after drawing their benefits. If that is the fact, and at the moment I have no reason to question the validity of it, that is a very staggering fact. Let us compare that dropout rate with the average of those who collect unemployment insurance. We find that the over-all average is 13.5 per cent, and for those who have been covered by insurance for a 52-week period the average is 1.8 per cent. I think that is quite significant.
The cost ratio of benefit payments to those in this category of eight weeks to 11 weeks is 20 times the average cost ratio. This does not mean we have to change the program by virtue of that statistic, but it does indicate in terms of insurance principle that there is reason to believe we ought


The Budget-Mr. Cafik
to reconsider our approach in respect of such a short attachment to the work force.
I am informed that the savings involved here run into the hundreds of millions of dollars, and we ought to redirect these funds toward job creation. If that could be done effectively, particularly on a regional basis for the Atlantic provinces and other areas of high unemployment, we would be doing the wise thing. I have not met many unemployed people who would rather be unemployed than working. Our responsibility is to provide them with that kind of job opportunity. I am not convinced that the redirection of a modest $200 million or $300 million would in fact achieve that objective, but I think it would be a step in the right direction, although more has to be done.
It is really incredible in a society like ours, with all its wealth, its intelligence, its resources and so on, that we cannot find ways and means of more properly matching our labour force and job opportunities. We have to do that as best we can. I believe, therefore, that the changes being proposed in the UIC plan are worth-while changes. I think we have to do this in order to create credibility for the program so that the original UIC program will not die because people relate badly to it. I think that by the changes we would reduce the misuse of the law for personal gain.
Some people have argued that all we need do is tighten up on the administration and that would cover all the abuses which exist. I do not believe that. I believe we have to tighten up the administration in certain areas. However, the abuses which take place now are abuses within the law. These cannot truly be called abuses because people take advantage of the law which parliament gave them to use. If the law is wrong, if it provides a disincentive in some way which reduces the desire of people to get out and find work when they need income, then I think the law needs to be changed. I think the changes will provide more stability in employment patterns by forcing people to have longer attachment to the work force.
It is true it is not always possible for people to be attached to the work force for the period they would like. Obviously that is not possible in many areas. However, there is no doubt there are people drawing unemployment insurance after having been attached for eight weeks now because they do not want to work for more than the period required in order to become eligible for those benefits. I have known of such cases. I believe that although this may not be a widespread abuse it is something which ought to be corrected within the law.
I also believe more funds should be provided and targeted toward job creation. That is important. We also need to provide more funds and initiative in the area of upgrading job skills through mobility and retraining programs. The minister has indicated his intention in this regard. I support that move considerably. I think one further point in connection with the need for the creation of job opportunities is that we should have what I have advocated for a long time. This is what I would call a national advisory council, on education in relation to skills needed by our society in the future.

It seems to me, now that the Department of Manpower and Immigration is married to the UIC in one unit, we might well consider the advisability of sitting down and trying to determine in a sensible and reasonable way what job opportunities are anticipated in the future in all the various trades and professions, and non-trades and professions, not that anyone should have a mandatory requirement to be educated, to be streamed only into a particular area of need, but so that we might find a guidepost in respect of those who go to our universities and trade institutions so that a job would be available to them when they graduate a few years hence. This is done in other countries and I think it might be done to some extent here so that we do not end up training more people in one profession than society will require. I think this should be considered by the Department of Manpower and Immigration.
Furthermore, I believe a change in the formula for federal contributions into the UIC fund from the moving average which exists now on a national basis to an average on a regional basis would assist the department in directing funds and benefits into those target areas which require the benefits most, those areas of high unemployment. That would be a worth-while step which in some way would minimize the fear and concern many members of this House have in connection with the high levels of unemployment in their own regions and the impact of this particular program on that problem.
I also believe that the Department of Manpower should look very closely, with national bodies such as labour unions and so on, at appropriate methods of providing adequate apprenticeship programs within our society. I have a tendency to believe that far too many trades and even professions look upon apprenticeship programs, or even educational programs in such a way that they want to keep a closed shop to some extent to provide the maximum benefits to their own members. It seems to me that in the national interest we must ensure that such self-regulating bodies do not act in such a way as to deny job opportunities in skills and professions to many people in our population who at the present moment do not have an opportunity to enter into them. I think this is an important area of activity and one most appropriate for the consideration of the Department of Manpower.
I shall not continue any further in connection with the unemployment insurance program except to say that, on the basis of information I have, I believe it is important that we make adjustments in this program, not to destroy it but to preserve it, and to make sure that it does serve not only those people who are unemployed but all Canadians.
It would seem to me that by using our resources properly, which are contributed to in that plan by management, the employees, and the government, and that by earmarking those benefits in the right way we will serve all people in our society. I sincerely hope these proposals will play their role in providing more job opportunities and providing the kind of incentive we require in our labour force so that we may continue to have the kind of society we have had in the past number of years.


Mr. Adrien Lambert (Bellechasse):: Mr. Speaker, before dealing with the two topics I intend to discuss, I would like


to congratulate the hon. member for Rosedale (Mr. Macdonald) for having been invited by the Prime Minister to assume the responsibilities of Minister of Finance. From the economic and financial standpoint, it is one of the most important departments in the Canadian administration. The Minister of Finance has very heavy responsibilities, and a lot of courage was necessary to agree to make a speech which shows a lot of timidity in attacking the real causes of inflation, a generator of unemployment with all the attendant problems.
Mr. Speaker, if we look back at past budget speeches, we see that government policy has been changing from year to year. First the government fought inflation while taking the chance of seeing unemployment rise; the next year, the government conceived a policy to fight unemployment, while risking a surge in the inflation rates. This year, the new Minister of Finance is offering us a new formula when he says:
We believe that the problems of unemployment and inflation must be solved together.
I am in complete agreement with this attitude. However, no new formula has been announced which would let us hope that an answer will be found to these two problems caused by an outmoded and distorted financial system which no longer corresponds to the economic realities of this day and age. To be fair to the minister, I must admit that the increase in the profit ceilings for small businesses will be an incentive for those who make considerable efforts to maintain their business in operation in spite of all the difficulties caused by legislation which is becoming more and more obscure and regulations which complement this legislation and are prepared by qualified public servants, but do not always reflect the true feelings of the legislators. I am convinced that if we took the trouble of really attacking the main causes of the problem, we could improve the economic situation of our country, and consequently that of all Canadian citizens.
As concerns the fiscal benefits granted to small businesses, I think that they are well deserved, and that they will promote further development. I always support private enterprise, and when I see that the government develops formulas and benefits to help the development of private enterprise, I am convinced that we are on the right track because the private sector allows businessmen to use their energy, develop their talent and prepare a way to encourage others who would be tempted to do more.
An aspect which the Minister of Finance did not really mention is that of benefits for single dwelling owners. We have been asking for a number of years that property taxes be deductible from the income tax. I believe that if this formula were approved, it would be a step in the right direction and would promote residential construction, create employment and assist home ownership.
Mr. Speaker, I would now like to talk about a very important subject on which the minister did not dwell sufficiently in his budget. I mean the farming industry, and more particularly the dairy industry and the cattle industry. Dairy producers are now going through a very difficult crisis which threatens to eliminate a number of producers who have answered in good faith to the appeal of government authorities.
The Budget-Mr. A. Lambert
Indeed, Mr. Speaker, in recent years governments at all levels have advocated a policy for larger farms assuming that they would be more viable. The government has even gone further in encouraging farmers to move along that line by increasing loans granted to those who wanted to buy a farm, build up a herd and mechanize their operations.
Building upon that policy for larger farms, a great many farmers got into debt for years and now the federal government refuses to recognize it is responsible for the higher dairy production and to fully assume its responsibilities. An increase in dairy production was to be expected with the launching of this policy for quasi-commercial type of arms. In 1973-74 and 1974-75, the government urged dairy producers to boost their production. A number of producers answered to that requirement by raising a good many heifers that have or will become milking cows.
The government told dairy producers that they are themselves responsible for this situation. However, what the government does not say and should say is that in 1975 Canada imported $56 million worth of dairy products and exported for $36 million-hence a deficit of $20 million.
In the whole, when it comes to farm products such as cattle on the hoof or carcasses, dairy products, eggs, veal, lamb, pork, horse and chicken meat, from a favourable commercial balance of $1 million in 1973, Canada accumulated a commercial deficit of $52 million in 1975. In fact, here is where we stand how: in April 1975, the levy for export costs was 45 cents a hundredweight. The support price was $11.02, the actual price was $10.52.
In April 1976, the export levy went to $1.35 a hundredweight and the support price was raised to $11.45 which reduced the actual price at the producer level at $10.10-a reduction of 47 cents a hundredweight. Furthermore, the quota subjected to subsidies was established at $9.5 billion. In Quebec it will result in a 16 per cent reduction from last year deliveries. The surplus will be penalized to the tune of $8.60 a hundredweight on the farm. But if the producer still delivers more milk in April 1976 than he did twelve months earlier, less 16 per cent, there will be a penalty of $8.60, plus transportation costs, plus the cost of publicity and the joint program which will cost in fact $9.13 a hundredweight.
A producer who marketed 20,000 pounds of milk in April 1975 will see his quota reduced by 16 per cent, or 3,200 pounds. Then his deliveries for 1976 will be restricted to 16,800 pounds. If he is paid $8.50 a hundredweight by the plant plus a $2.66 subsidy and less exportation and other costs, he will get $1,564 for the rest, the 3,200 pounds on which there will be a penalty of $9.13 a hundredweight and he will have to pay a penalty of $292.
If in April 1976, the same producer has turned out, as most of them do, 4,000 additional pounds of milk as compared with 1975 and if he delivers this milk to the plant, he will have to pay on this additional amount a penalty of $9.13 a hundredweight, that is $365.20. The aggregate of penalties will amount to $657.20, and therefore he will in fact be left with only $906.80 for a total production of 24,000


The Budget-Mr. A. Lambert
pounds of milk, that is $3.78 a hundredweight. To this the producer will have to add his production cost for the amount of milk produced on which he must pay a penalty of $4.13 a hundredweight.
This amounts in fact to a direct tax on the producer's gross income, the most appalling I have ever seen. This is only one example, Mr. Speaker, Some producers will lose a few thousand dollars this year. Their financial status will be bad, worse than last year, as a result of this reduction in income. And all this is reward for the work that the farmer, as the owner, his wife and children have strived to do.
This is their reward. How can the problem be solved? We must not simply note the facts, we must suggest solutions. Therefore, as a responsible member and spokesman for a large number of people affected by this measure-because my constituents are primarily farmers-I say that the answer of the government was that producers are responsible for this situation and they can manage to solve their own problems.
First of all, have we made all necessary efforts to promote the consumption of dairy products in Canada? Are substitutes not cornering an overly large part of the market? Could anything be done in this regard? Second, why not reinstate the subsidy on the quart of fresh milk? This measure was good in 1973, it would still be good today. It would contribute to increase the consumption of fresh milk and to cut down the substantial surplus of fresh milk and that of industrial milk as well.
In 16 months, in 1973 and 1974, the government paid $108 million in subsidies throughout Canada. That is much more than the industrial milk producers are now asking as compensation for loss of income, for submitting to the quotas the government has decided will apply this year. I shall now speak of the distribution of milk in schools. To achieve that, a practical way of doing so should be found: the government should ask its researchers and economists to work on the project. CIDA could also absorb some of the costs with part of the billion dollar budget it is allotted to help developing countries.
I really believe it is unreasonable to pour down the drain a product Providence enables us to have in Canada. Let us take care for, if we waste too much, some day may come when we are short of the basic necessities and we, in turn, become a famished people. It is unreasonable to ask that category of workers to accept lower incomes in 1976 when the government recognizes the necessity of increases for all other groups in our society to enable them to face the cost of living. Farm producers live in the same country as the others, and also bear the burden of the soaring cost of living. Canada, as compared with many other countries, devotes a smaller portion of its budget to agriculture. Producers are willing to agree with lowering their production.
But this requires that the government give them compensation for the loss of revenue relative to last year. This the Canadian government did in 1969, when we helped the prairie grain farmers faced with an overproduction of grain. The federal government spent $100 million to compensate for the revenue lost by western farmers in not seeding a certain acreage. This week, the government hit eastern farmers on the head, especially those in the prov-

ince of Quebec, with the partial cancellation of the subsidy on feed grain transportation. I have here a telegram received yesterday from the milling association of the province of Quebec, begging the government to reconsider, because of the tremendous impact on the cattle industry.
In their name I ask the Minister of Finance to consider that request and take corrective measures before it is too late. Since Quebec accounts for almost 50 per cent of the total Canadian milk production and since this is the main farm industry in Quebec, that province will be more severely hit. The last two agricultural initiatives by the federal government are giving fuel to the arguments in favour of separation. Sensible people who firmly believe in federalism are seriously shaken by such measures. This is not an off the cuff suggestion. I have received communications to support that indication.
Last night on television, the Quebec Minister of Agriculture was quite categorical on the subject. Those who heard him must share my view. I will not quote him, but the import of his statement was that he could be anything but satisfied and he did not accept the government's decisions.
So, Mr. Speaker, I beg the government to be more flexible and to accept to spend a few million dollars to save the dairy industry from this disaster. Measures must be taken immediately to hearten the producers who send their milk cows to the slaughter house, which will inevitably lead us to shortages.
Mr. Speaker, during the few minutes I have left before the vote, I would like to deal with the second subject, which came to my mind after I read a release which the Minister of State for Urban Affairs (Mr. Danson) sent to hon. members on April 28, 1975, and which reads:
... The Minister of State for Urban Affairs, the Hon. Barney Danson, and the Minister of Municipal Affairs and of the Environment, who applies the rules of the Quebec Housing Corporation, Dr. Victor C. Goldbloom, have announced that 38 construction projects for 1,435 housing units ...
. .. will be built. Then the release says:
Loans amounting to $30,193,489, refundable on a 50-year period at 103/s per cent, have been granted by the CMHC pursuant to the agreement of 1974 ... These loans cover nearly 90 per cent of the construction costs of the projects and the balance will be provided by the Quebec Housing Corporation.
As two communities situated in my riding participate in this program, I asked a question to the minister, which is recorded in the order paper, and we were given the answer on February 23, 1976.
The question was: Were loans made in the riding of Bellechasse, in the municipalities of Saint-Damien and Saint-VAUier, to the Quebec Housing Corporation for building 30 housing units in Saint-Damien and 20 in Saint-Vallier? In answer I was told that indeed an amount of $537,863 was provided for 30 units in Saint-Damien and $292,473 for 20 units in Saint-Vallier. The interest rate, as I just said is 103/s per cent. The loans will be repaid over an amortization period of 50 years.
Well, Mr. Speaker, I did some figuring and on the basis of the figures I came up with if the Quebec Housing Corporation repays $57,617.24 a year over 50 years, it will pay $2,342,999 to the Central Mortgage and Housing Corporation-the price of 120 units. And older people will get only 30 of them, the 90 others going to finance. So, on the


basis of those figures, and I had them checked, I am told they are right. The Quebec Housing Corporation will have to pay back the Central Mortgage and Housing Corporation and the Central Mortgage and Housing Corporation will have to pay back the government which will have to pay back those who control-the credit makers-and mint the credit of this nation.
So high finance is well organized, it uses government to put people in debt, to impose obligations upon them, and they do not have to put out money. So I say it is a method of financing that is too costly. We cannot afford to pay that financing-for $537,863 Canadian taxpayers will have to shell out $2,880,862. I feel this is usury. I made the calculations with the same figures provided by the minister at a simple interest of 103/s per cent, not compound interest- and that is compound interest. Considering the cost of compound interest in the public sector, I am beginning to understand why Canada's debt since 1867 went from $75 million to $55 billion today. That is why we have a financing system in the public sector that burdens federal government budgets, and it is the same thing with the provinces and the municipalities.
At simple interest, even 103/a per cent, the repayment would be only $1,423,667.39 that is $1,961,530.39 in all with capital. That is according to the debt credit system under which we are run. With the credit system based on what we believe to be true, that credit belongs to society with true social credit and of which only the administration costs would have to be paid, we would pay back $10,757.26 a year on the capital and we would pay administration costs at 1 Vi per cent. It means that at the end of the year through credit created by the Bank of Canada instead of chartered banks, because one must recognize that the public sector is different from the private sector, the money market would be freed for the private sector, interest rates would go down. Inflation would be fought effectively and so would unemployment. And I think it would be a good thing to accept that formula; that is what I am asking the Minister of Finance.


Mr. Deputy Speaker:: Order, please. It being 5.45 o'clock p.m., it is my duty, pursuant to section (6) of Standing Order 60, to interrupt these proceedings and put forthwith every question necessary to dispose of the amendment to the amendment now before the House.
The question is on the amendment to the amendment. All those in favour of the amendment to the amendment will please say yea.


Some hon. Members:: Yea.


Mr. Deputy Speaker:: All those opposed will please say nay.


Some hon. Members:: Nay.


Mr. Deputy Speaker:: In my opinion the nays have it.
And more than five members having risen:


Mr. Deputy Speaker:: Call in the members.
The Budget-Mr. A. Lambert


Mr. Speaker:: I therefore declare the amendment to the amendment lost. It being after six o'clock, this House stands adjourned until two p.m. tomorrow.
At 6.12 p.m. the House adjourned, without question put, pursuant to Standing Order.


Thursday, June 3, 1976