1976-02-03

Mr. Tom Cossitt (Leeds):: Mr. Speaker, I rise to propose a motion of urgent and pressing necessity under Standing Order 43. I would move, seconded by the hon. member for Winnipeg South Centre (Mr. McKenzie):
In view of the obvious widespread concern on the part of Canadians in regard to certain statements and actions of the Prime Minister during his visit to Cuba,-


Some hon. Members:: No.


Thomas Charles Cossitt: -especially when this occurred against the background of Cuban military participation in Angola, the House directs the Prime Minister to give an immediate and complete account to Parliament on all aspects of the situation, specifically including any use of Canadian territory by Cuban aircraft involved in the Angolan war, the reported invasion of the Cuban embassy in Havana by Cuban security police and finally,-


Some hon. Members:: No.


Thomas Charles Cossitt: -the Prime Minister's apparent highly questionable gushing and stage-struck admiration for Prime Minister Castro and his dictatorial socialist government.


Mr. Speaker:: Order, please. It is evident that the hon. member does not have the unanimous consent of the House.


SUGGESTION UNITED STATES STOP INTERFERING IN CANADIAN AFFAIRS-MOTION UNDER S O. 43
Mr. John Rodriguez (Nickel Belt):: Mr. Speaker, I rise under the provisions of Standing Order 43 and seek the unanimous consent of the House to deal with a matter of serious and pressing necessity. In view of the CIA's blatant attempt to jeopardize the Prime Minister's most successful visit to Cuba by using the Canadian media to spread false reports by Trans-National Oil Company employees regarding the use of Gander airport to transport Cuban military personnel to and from Angola, I move, seconded by the hon. member for Yorkton-Melville (Mr. Nystrom):
That this House go on record informing Henry Kissinger and the United States State Department to stop interfering in Canadian external affairs.


Mr. Speaker:: Order, please. Pursuant to Standing Order 43 the motion cannot be presented without the unanimous consent of the House. Is there unanimous consent?


Some hon. Members:: No.


PROPOSED REMOVAL OF AMBASSADOR TO CHILE PENDING NEW LAWS TO PROTECT ARRESTED SUSPECTS-MOTION UNDER S.O. 43
Mr. Andy Hogan (Cape Breton-East Richmond):: Mr. Speaker, I rise under the provisions of Standing Order 43 on a matter of urgent and pressing necessity. Since the International Commission of Jurists supposed to be aimed at protecting suspects from danger of torture is inadequate, for the sake of the welfare of the Chilean people I move, seconded by the hon. member for Sault Ste. Marie (Mr. Symes):
That Canada remove the ambassador from Chile until the International Commission of Jurists approves of a new Chilean law to protect arrested suspects.


Mr. Speaker:: Order, please. Pursuant to Standing Order 43 such a motion cannot be presented without the unanimous consent of the House. Is there unanimous consent?


Some hon. Members:: No.


Mr. Speaker:: The motion cannot be put.



ORAL QUESTION PERIOD


Hon. Robert L. Stanfield (Leader of the Opposition):: Mr. Speaker, I have a question for the Right Hon. Prime Minister. Accepting that Canada and the Prime Minister's government disapprove of foreign adventurism of the sort that Cuba is pursuing in Angola, why did the Prime Minister not take this opportunity to make this point very effectively to Cuba and to the world by simply postponing his visit to Cuba at this time?


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


Some hon. Members:: Hear, hear!


Pierre Elliott Trudeau: -because of the importance of the situation which had developed in Angola long after the agree-
211 30-47'/i

February 3, 1976
Oral Questions
ment had been made to visit these three Caribbean countries, I felt it most important that our government, through our Secretary of State for External Affairs, make Canada's position clear on Angola. This was done, as the House knows, by public statement here condemning Cuba for the intervention, calling for a ceasefire, and so on. That being the background, I felt that the Cuban government knew our position very clearly. Since there could be no misinterpretation on the part of anybody, let alone the Cuban government, about our position, the trip should proceed as scheduled unless, of course, the Cubans themselves did not want to meet with our disapproval.
I venture to say that if we had postponed the visit, it might have been postponed for a long while, and without making any certain predictions I thought it important that Canada show its desire to continue the peaceful exchanges with Cuba which had begun in the days of the right hon. member for Prince Albert and that my visit to Cuba should precede any possible visit of a high level official from the United States.


Some hon. Members:: Hear, hear!


Robert Lorne Stanfield: Given the fact that the importance of the Angolan developments, as the Prime Minister just indicated, including the Cuban participation to the extent of thousands of troops in Angola developed since the original arrangements were made, why was it not appropriate for the Prime Minister to follow the time honoured and very acceptable diplomatic practice by way of deferring his visit rather than giving the Canadian people and the world at large the impression, regardless of what was said privately between the Prime Minister and Fidel Castro, that Canada regards as tolerable or does not take very seriously this kind of intrusion into Angolan affairs which, despite whatever protests hon. members opposite may make, is the general perception of this event? Why did the Prime Minister forgo an opportunity to use the very acceptable diplomatic practice to make the point very effectively and firmly?


Some hon. Members:: Hear, hear!


Pierre Elliott Trudeau: Mr. Speaker, if the perception of it is as the hon. gentleman says, that we in some way condone the action in Angola, I can only say that he is very badly informed and I regret that that is the case. I hope that hon. members opposite and the media will make sure that that is not the case, in view of the fact that the government's position was stated very clearly before my visit to Cuba, during it and then after I left Cuba. Therefore, any misinterpretation in the sense of what the Leader of the Opposition says can only be wilful and malicious.


Some hon. Members:: Hear, hear!


Some hon. Members:: Oh, oh!


Pierre Elliott Trudeau: I point out that the trip to Mexico, Cuba and Venezuela had been arranged quite some time ago. Cancelling Cuba and visiting Mexico and Venezuela would certainly have been considered by Cuba as not only a condemnation of its action, which it knows we have made, but also as a definite slight and a cooling, if not a breaking, in our relations. I think that would have worked to the

disadvantage of Canadians. It might have worked to the disadvantage of the relations between our two countries.


Some hon. Members:: Oh, oh!


Pierre Elliott Trudeau: It is not a change in the policy of the government not to agree with all the policies of all the countries which we visit. Tens of thousands of Canadians go to Cuba as tourists, and there have been parliamentary delegations, including members of all parties.


Some hon. Members:: Hear, hear!


Pierre Elliott Trudeau: That policy was established by the right hon. member for Prince Albert when he was prime minister and has been followed ever since by every other government, and with regard to these two countries it has established a feeling in the world that Canada indeed follows its own foreign policy, and is able to disagree with other countries and still have civil and commercial exchanges.


Some hon. Members:: Hear, hear!


Robert Lorne Stanfield: It being very clear that people judge governments and prime ministers within their own country by what they do rather than what they say, similarly people judge governments in an international sense by what they do rather than by what they say because traditionally nobody pays very much attention to what governments say they are going to do.


Some hon. Members:: Oh, oh!


Robert Lorne Stanfield: This seems to be a great source of amusement to my hon. friends opposite.


Mr. Guay (St. Boniface):: Just because we are looking at you, that is all.


Robert Lorne Stanfield: Despite what the Secretary of State for External Affairs said as a result of the visit of the Prime Minister, the general perception abroad is that it was great for Fidel Castro. What did it do for Canada?


Some hon. Members:: Hear, hear!


POSSIBLE USE BY WARSAW PACT COUNTRIES OF GOOSE BAY AS REFUELLING POINT FOR FLIGHTS TO CUBA
Mr. Allan B. McKinnon (Victoria):: Mr. Speaker, my question is for the Secretary of State for External Affairs. Can the minister inform us if there have been any flights recently by Warsaw Pact countries which used Goose Bay airport as a staging or refuelling point between Cuba and points in east Europe or Africa?


Hon. Allan J. MacEachen (Secretary of State for External Affairs):: Mr. Speaker, I have no log on the stopping down of flights from eastern European countries at Goose Bay, but I believe that there have been two scheduled flights in the last months to Cuba stopping down at Goose Bay.


Allan Bruce McKinnon: Would the minister investigate a non-scheduled flight, seek information and relay it to the
February 3, 1976

House concerning Flight IF 901, an East German Interflot IL62 which landed and refuelled in Goose Bay last Wednesday en route from Cuba to points east? At the same time will the minister tell us if it is the position of the government that Canada is willing to provide what amounts to a staging area for Cuban traffic going to Europe or Angola?


Some hon. Members:: Hear, hear!


Allan Joseph MacEachen: The hon. member realizes that his final allegations are totally without foundation. It has not been used as a staging area for any such flights, and the hon. member really ought to be more careful about his statements.


Some hon. Members:: Hear, hear!


ALLEGED DESIRE OF VENEZUELA TO DEAL DIRECTLY WITH GOVERNMENTS PURCHASING OIL-CANADIAN POSITION
Mr. Edward Broadbent (Oshawa-Whitby):: Mr. Speaker, my question for the Prime Minister will perhaps have some direct bearing on the possible consequences of the trip he took to South America. Since the government of Venezuela had indicated prior to the Prime Minister's visit to that country that they would prefer direct government to government dealings on oil exports without going through the oil company middle men, could the Prime Minister indicate if in his discussions in Venezuela he indicated Canada's support for this idea?


Pierre Elliott Trudeau: Mr. Speaker the answer is yes but perhaps not in the areas which would be more directly interesting to the hon. member. I indicated that officials of Petro-Canada would be meeting with Venezuelan officials in the immediate future. The vice-president of Petro-Canada was in the group which visited Venezuela, and he has already engaged in discussions with the Venezuelan government. But beyond an assurance exchanged by both governments that we were interested in each other as a secure source and a secure market, there were no precise plans made for Petro-Canada to buy any quantities of petroleum.
The Venezuelans are interested at this time in seeing that Canada keeps up, more or less, its traditional liftings from Venezuela. This result has now been achieved. As to who the buyer should be, the hon. member knows that Petro-Canada, under the legislation, is empowered to embark on such contracts but they do not seem the likely avenue at this time. Petro-Canada does not own any refining capacity in Canada and it would not be of great advantage if Petro-Canada were to buy their bulk petroleum.


John Edward Broadbent: A supplementary question. Since the crucial financial point in Canada's favour is that such transactions proposed by the Venezuelan government would, I understand, involve a long range commitment at lower than normal prices or at lower prices than would
Oral Questions
otherwise be the case if they went to the oil companies I should like to ask the Prime Minister if the government would not indeed make Petro-Canada the exclusive importer for Canada of Venezuelan oil in order to get this lower price for Canadians?


Robert Lorne Stanfield: What lower price?


Pierre Elliott Trudeau: Mr. Speaker, if the results were as the hon. member indicated I am sure this would be considered with much attention, but certainly in my discussions or talks there was no reason to believe that the Venezuelans would sell to Petro-Canada at a lower price than to the multinationals. As a matter of fact, there have been discussions on price with Venezuela and I am sure that both the multinationals and Petro-Canada would try to get the best possible price and Canadians would benefit in one case or another if prices can be made lower. That is not the issue at this time, however. The issue with the Venezuelans and with us was to talk about secure supply in the long run.


John Edward Broadbent: A further supplementary, Mr. Speaker. In order to clarify this issue I should like to ask the Prime Minister if it is not part of the policy of the Venezuelan government, both in terms of ensuring long-range agreements for their products and ensuring a long-range and stable group of customers, that they build in as an incentive for purchasers, Canada in this case, a guarantee that if a long-term contract were entered into by a government agency they would sell at a lower price than on short run contracts to the oil companies?


Pierre Elliott Trudeau: Mr. Speaker, I am not sure whether that is or is not the Venezuelan policy. I can assure the hon. member that this point was not raised by me or my delegation. I repeat, there will be a delegation of officials from Petro-Canada pursuing the opening we made, and it is possible that that principle will then be stated. I can assure the leader of the New Democratic Party that it was not put to me.


EXTERNAL AFFAIRS
Right Hon. J. G. Diefenbaker (Prince Albert):: Mr. Speaker, reverting to questions asked by the Leader of the Opposition, if I may. The Prime Minister mentioned that during my period of administration we had relations with Cuba and that is right; we traded in non-strategic materials but we did not cuddle up to Castro.


Some hon. Members:: Hear, hear!


An hon. Member:: With whom?


John George Diefenbaker: That, apparently, is a Liberal at large. I would ask the Prime Minister whether he would tell the House in the clearest of terms what he said to Castro in regard to Angola, because his own statement was, "I talked to him brutally and frankly."


Some hon. Members:: Hear, hear!

February 3, 1976
Oral Questions


Mr. Baldwin:: Just as in caucus.


John George Diefenbaker: I hope there were no four-letter words used. I ask the Prime Minister this: will he actually tell the House what he said, because his public statements were those of adulation? What did he say in regard to Angola? Did he say to Castro, "You should get out of Angola, because of the serious situation in Africa, and the involvement of the African organization?" What did he say? Instead of evading the subject, just tell the House, even though the language be brutal.


Pierre Elliott Trudeau: Mr. Speaker, I realize that in the right hon. gentleman's day there was no cuddling up to Cuba, probably because the right hon. gentleman was never very good with the Latin connection.


Some hon. Members:: Hear, hear!


Pierre Elliott Trudeau: It is interesting to note, though, that there was no noticeable cooling off in the relations of his government with Cuba after Cuba had accepted missiles which were pointed at the heart of the United States. If the right hon. gentleman was so concerned with the effect of my visit, he might have shown a little bit of that concern in those dark days of 1962, when he was leader of the Conservative party.


John George Diefenbaker: But the Prime Minister supported our position.


An hon. Member:: How were you paddling your canoe in 1962?


Pierre Elliott Trudeau: As to the exchange of opinions on the subject of Angola, I can say that it took the better part of three hours-


John George Diefenbaker: But what did the Prime Minister say?


Pierre Elliott Trudeau: -and it might be difficult to give a blow account here, Mr. Speaker. But I can say this: one of the points of view that I took was that, apart from the destabilizing effect of any foreign intervention, particularly by nations from outside the African continent, I felt that Cuba, and I said so, was making a very serious mistake from the point of view of its own involvement in that Angolan situation. Regardless of the harm that they might be doing in Africa, I thought they were doing a fair amount of harm to themselves, and I made that quite clear.


John George Diefenbaker: Mr. Speaker, in 1962 the Prime Minister of this day was supporting my government in what was done. But he changed strongly when he saw the light and switched from socialism to the Liberal party. I simply ask this: did the Prime Minister suggest the withdrawal of the
10,000	Cuban soldiers in the Angolan civil war, because the Prime Minister said that Castro displayed a great deal of thought and feeling for the situation. Did he suggest that these forces should withdraw? In that three-hour tete-a-tete did the Prime Minister bring to Castro's attention the great disturbance in the OAU over the fact that the deputy prime minister of Cuba had said that Cuba "would continue to send troops to Angola to kill Africans whether the

OAU liked it or not?" What all did he say about these things in that three-hour chat?


Pierre Elliott Trudeau: Mr. Speaker, on the first question, the answer is yes. I suggested to Premier Castro that he would be well advised indeed in withdrawing his troops from Angola.


Some hon. Members:: Hear, hear!


Pierre Elliott Trudeau: I repeat, my argument was not only from the point of view of Angola itself and the disturbance it might create in world stability, but from the point of view of the Cuban government and the people themselves. I think they are making a serious error by aiding Angola. They are dividing the Africans amongst themselves. The attitude of half the members of the Organization for African Unity was on one side of this and the other half on the other side. I think that is a perilous position for any outsider to get into.
In so far as Premier Castor's views, he made them known to me. I have the feeling that he has a good knowledge of Africa and a good feeling for the realities there.


John George Diefenbaker: And no knowledge of democrary.


Pierre Elliott Trudeau: Certainly no experience in democracy, but you cannot blame Mr. Castro for not having learned that in his childhood under Mr. Batista.


Some hon. Members:: Hear, hear!


Pierre Elliott Trudeau: In so far as the so-called quote from the vice-premier of Cuba, this is the first time I have heard of it. I doubt whether I could agree with the hon. member in the NDP. I doubt whether that would be an accurate quote.


SUGGESTED USE OF PORTION OF CIDA FUNDS FOR CUBA TO EXTEND WHARF IN NOVA SCOTIA
Mr. Lloyd R. Crouse (South Shore):: Mr. Speaker, I wish to direct my question to the Secretary of State for External Affairs. On January 8, 1975, the Minister of State (Fisheries) informed me that $50,000 would be made available for a 60 foot wharf extension at Vogler's Cove, Nova Scotia, and on June 23, 1975, the minister deferred this work as a result of budget restrictions. In light of the fact that CIDA gave the Cuban National Fisheries Institute $1.7 million in 1975, will the minister ascertain whether CIDA gave all this money to Cuba? If not, will he try to obtain $50,000 to be used as development assistance to Canadian fishermen in Nova Scotia?


Allan Joseph MacEachen: Yes, Mr. Speaker.


REQUEST FOR ASSURANCE AID TO CUBA NOT USED IN ANGOLAN WAR
Mr. Paul Yewchuk (Athabasca):: Mr. Speaker, I have a supplementary question for the Prime Minister. Can he assure this House that none of Canada's aid to Cuba is being rechannelled into the Cuban war effort in Angola?
February 3, 1976


Pierre Elliott Trudeau: Yes, Mr. Speaker, I can give that assurance. Of course, our officials are constantly making sure there is no change in that situation. There was a special precaution taken in the fact that we had chartered two airplanes from Air Canada to Cuba before the Angolan situation developed. Of course, there was nothing in the contract about using those airplanes outside of Cuba. However, when the Angolan situation developed, we insisted on obtaining and did obtain from the Cubans an assurance that those planes would not be used for transporting anything that would, directly or indirectly, assist in the Angolan situation.


ALLEGED NEW AID AGREEMENTS WITH INDONESIA AND EGYPT-COMPLIANCE WITH CANADIAN AID POLICY
Mr. Douglas Roche (Edmonton-Strathcona):: Mr. Speaker, I wish to direct my question to the Secretary of State for External Affairs. I ask the minister to confirm that Canada has signed a new aid arrangement with Indonesia for $25 million along with a $1 million aid arrangement with Egypt. How do these two countries, Egypt and Indonesia, comply with Canada's five-year strategy on international aid which is to be directed to the least developed countries?


Allan Joseph MacEachen: In the case of Egypt, Mr. Speaker, when I was in Cairo, I advised the Egyptian government that Canada would make a contribution of $1 million through the United Nations development program for reconstruction of the Suez Canal. Second, I advised that at the present time I had under consideration the provision of economic assistance to Egypt or to include it as one of the countries eligible for economic assistance. Of course, the foreign minister of Egypt informed me when we discussed per capita income figures that in his estimation, the per capita income of that country was less than $100. That certainly would put it among the poorest countries.
With respect to Indonesia, I am not aware of any new contract in the amount of $25 million with that country, but I will check into it and provide the information.


REQUEST FOR REPORT ON CONTINUING CONFERENCE ON INTERNATIONAL ECONOMIC CO-OPERATION
Douglas Roche: Mr. Speaker, last week the Secretary of State for External Affairs said he would report to the House on the north-south conference in Paris and make clear Canada's position on the two commissions to which we have been appointed, energy and development. Will he be making that statement soon? When will it be made? Also, will he clarify Canada's role?


Allan Joseph MacEachen: Mr. Speaker, I did say that I would report on the two conferences on International Economic Co-operation in Paris, the first before Christmas and the second later. However, it is not possible to make clear at the moment what Canada's complete or even tentative positions will be at the energy and development commission because these policies are presently under elaboration.
Oral Questions
I gather that the process of development of policies on the part of every country involved will continue throughout the whole year in which this dialogue will take place. However, I will attempt to oblige the hon. member and the House as well as I can.


INCOME TAX
Andrew Hogan: Mr. Speaker, my question is for the Minister of National Revenue. Now that the minister's department has opened a data processing unit in Winnipeg with an accompanying employment of some 1,400 full and part-time workers, will the minister consider doing the same this year for the Atlantic region and putting it in the Cape Breton industrial area where there is an obscenely high level of unemployment?


Hon. Jack Cullen (Minister of National Revenue):: Yes
to the first question, Mr. Speaker; possibly to the second part.


GOVERNMENT ADMINISTRATION
Andrew Hogan: Mr. Speaker, I have a supplementary question for the Prime Minister. In light of the recent seemingly controversial statements before the Canadian Club concerning, among other things, the locational policy of private profit companies, can we expect a more decentralizing policy on the part of the federal government into different regions of Canada, especially slow growth chronic unemployment areas rather than the high employment metropolitan areas of various Canadian provinces?


Pierre Elliott Trudeau: Mr. Speaker, the House knows, particularly under the direction of the President of the Treasury Board, that the government has been taking some very firm steps in the area of decentralization. Of course, we have to balance that always with the necessity of keeping the decision-making powers close to the House of Commons and to ensure that the national capital continues to remain a focal point for all of Canada. However, the decentralization policy is very much a part of general government policy. If the hon. member wants to make any particular representations, I suggest that he address them to the President of the Treasury Board.

February 3, 1976
Oral Questions NATIONAL DEFENCE


RADIATION LEVELS IN PORT HOPE AREA-REQUEST FOR IDENTIFICATION OF AREAS WHERE READINGS TAKEN IN 1951 AND 1953 STUDIES
Mr. Allan Lawrence (Northumberland-Durham):: Mr. Speaker, I have a question for the Minister of National Defence of which I have given him notice. In spite of the fact that last week the minister undertook to release the actual radioactive readings and levels found by the army in their exercises in Port Hope in 1951 and 1953, and that yesterday we received only a partial extract of that report, will he now give the actual locations of where the readings were made by the army in 1951 and 1953 in view of the fact that some of the locations are glossed over by referring to such terms as "residual waste deposit sites of Eldorado" when in actual fact one of those sites was and is the Port Hope public beach?


Hon. James Richardson (Minister of National Defence):: Mr. Speaker, I did agree to give an unclassified report and that was tabled in the House yesterday. The exact location of the disposal dumps of Eldorado are not, of course, known to me personally, but I understand that generally they are north of the city. One is approximately one mile north and the other about four miles to the north and north west.


Allan Frederick Lawrence: In view of the fact the minister obviously refuses to table the full report, I will direct a supplementary question to the Minister of Energy, Mines and Resources. Can he explain to the House the circumstances in which his department and agencies of his department have known since 1951 on the basis of this report alone that such areas as Port Hope Public Beach have registered massively high radiation levels?


Hon. Alastair Gillespie (Minister of Energy, Mines and Resources):: I think it was made very clear in previous answers to questions that the report to which the hon. member referred, the exercise undertaken by the Department of National Defence, was an exercise for military purposes and was not a monitoring exercise for civilian purposes.


Some hon. Members:: Oh!


EXTERNAL AFFAIRS
Mr. Eldon M. Woolliams (Calgary North):: Mr. Speaker, I should like to ask the Prime Minister a question. I was most interested in the answer he gave the hon. member for Athabasca. Would he tell us how he can assure this House and the country that the aid Canada is giving to Cuba is not being used by Cuba in the aggression in Angola and the military penetration with which Cuba is involved?


Pierre Elliott Trudeau: By the
nature of that aid, Mr. Speaker, which is, to give one example, assistance in the breeding of cows.


Some hon. Members:: Oh, oh!


Pierre Elliott Trudeau: I cannot describe all the areas of assistance under CIDA but this point has been made so clearly by the government that if it would satisfy the hon. member I would try to get a list of all the specific items. Perhaps he would wish to look at it, and if he has any thoughts about it I would be very willing to clear up any possible misunderstanding on my part of the way in which the policy is applied. But the policy is quite clear.


Eldon Mattison Woolliams: I would be most interested in connection with the discussion which lasted three hours, to learn whether there was any discussion in relation to these aid programs. Bearing in mind that the Prime Minister is supposed to have had some strong things to say about the aggression in Angola, did he state that this aid would be cut off if it were not stopped?


Pierre Elliott Trudeau: No, Mr. Speaker, it is not Canadian policy to base our aid on all aspects of the foreign policy of a country receiving it. If we knew that our aid were to serve purposes unacceptable to Canada we would, of course, consider cutting it off. That is why I stated to the hon. member what our policy was. But there is another clear example in that area of the Caribbean. We are giving aid to Cuba but we are also giving aid to Haiti, two very different forms of government and two very different social systems. But we believe there are very poor people in those countries and that they should be helped.


Some hon. Members:: Hear, hear!


CUBA-REQUEST FOR STATEMENT BY PRIME MINISTER ON DISCUSSIONS WITH CASTRO CONCERNING ANGOLA
Mr. Walter Baker (Grenville-Carleton):: A question to the Prime Minister. In the light of the statement which has been made and the interest shown during the question period concerning Angola and the Canadian attitude to Cuba, particularly to that country's intervention in Angola and in view of the fact that the official joint communique only devotes two lines to what has been termed a frank and brutal discussion of this important question, would the Prime Minister not consider making a full statement in the House with respect to what was said during this "frank and brutal" discussion?


Pierre Elliott Trudeau: I can
assure the hon. member that if he asks the right questions I can be frank and brutal with him.


MIDDLE EAST-POSSIBLE PROPOSALS BY MINISTER DURING VISIT TO HELP EASE TENSION
Mr. Heath Macquarrie (Hillsborough):: Mr. Speaker, may I direct a question to the Secretary of State for External Affairs with regard to his mid-eastern trip which has been somewhat obscured by a certain southern safari? Did the hon. gentleman make any proposals or offers to
February 3, 1976

help abate tension in the middle east and, if so, what were they? What changes, if any, in Canadian foreign policy respecting this area can be expected to follow from the minister's high level, but, I trust, not brutal conversations?


Allan Joseph MacEachen: I want to make it clear that there were no proposals on the part of Canada to enter into the situation in the role of mediator. We did not propose any political gestures or manoeuvres which would ease the situation. Certainly, as far as economic relations with all the countries of the area are concerned, and as far as relationships involving the granting of economic assistance are concerned, proposals were made which will, I believe, in the long term, have a very definite bearing on the stability of the middle east. In terms of bilateral relations with a number of countries including Israel, Saudi Arabia and Iraq, concrete proposals were under consideration to accelerate and intensify economic co-operation.


INQUIRY OF THE MINISTRY
Mr. Maurice Harquail (Restigouche):: My question is for the Prime Minister, Mr. Speaker, While we welcome him back, and congratulate him on a most successful trip-


Some hon. Members:: Hear, hear!


Maurice James Harquail: -my question is not related to Cuba. My question has to do with something which has bothered me, as a member of this House, with respect to a statement which was made by a former Prime Minister when he was appointed to the company of Companions of Honour. I should like to ask whether, in fact, the recommendation was acknowledged and approved by the Canadian government through the Prime Minister's Office.


Mr. Speaker:: Order, please. With all due respect to the hon. member, I think it has been understood for some time that questions which occupy a portion of the question period ought to have a currency to them which really cannot be dealt with in any other way, and I do not think this applies to the hon. member's question.


AIR CANADA
Mr. Steven E. Paproski (Edmonton Centre):: Mr. Speaker, my question is directed to the Prime Minister. Would the right hon. gentleman advise the House whether he has made a decision with regard to the appointment of a president of Air Canada?


Pierre Elliott Trudeau: I discussed this matter with the Minister of Transport before my departure and I am to see him tomorrow, I believe, to continue our discussion of the subject.
Oral Questions


Steve Eugene Paproski: Can the Prime Minister assure the House that the appointment will be made from within the executive ranks of Air Canada?


Pierre Elliott Trudeau: The Minister of Transport answered this question some weeks ago by saying we would choose the best possible person regardless of where he may be found.


EXTERNAL AFFAIRS
Mr. Dan McKenzie (Winnipeg South Centre):: A question to the Secretary of State for External Affairs, Mr. Speaker. In the light of the fact that the executive secretary of CUSO-SUCO has confirmed that a grant was made to assist an MPLA organization in Angola and that two of the three volunteers engaged in the project are now back in Canada actively soliciting support for the MPLA, will the minister inform the House whether an investigation has been, or will be conducted into the criteria used before extending government support to such an organization?


Allan Joseph MacEachen: I believe the question of assistance to African liberation movements was discussed some time ago, along with the policy which was presented by my predecessor to the Standing Committee on External Affairs and National Defence. As I recollect it, the policy had been to make certain specific grants for humanitarian purposes to liberation movements in Africa. That is the general situation. I will review the matter to see whether in fact any such assistance was made available to the MPLA.


A. Daniel McKenzie: Mr. Speaker, could the minister also table in the House information on the type of aid that is going to Angola and the amount of money spent, and would he inform the House whether the government is considering selling a nuclear reactor to Angola?


Allan Joseph MacEachen: Yes, Mr. Speaker, I would be pleased to get the information on the question that has been raised. I really do not know which aspiring government in Angola would be able to conclude a transaction for a reactor, even if such were available.


HEAVY CRUDE OIL-ACTION TO ELIMINATE PRODUCTION AND MARKETING PROBLEM
Mr. Don Mazankowski (Vegreville):: Mr. Speaker, I have a question for the Minister of Energy, Mines and Resources having regard to the serious impact which the federal government's pricing and export policy is having on the production and marketing of heavy crude in the Lloydmin-ster area. Would the minister indicate whether the govern-
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February 3, 1976
Oral Questions
ment is contemplating any immediate action to alleviate this problem which sees the massive shut down of many heavy crude oil producing wells in that area with the corresponding economic implications?


Alastair William Gillespie: Mr. Speaker, there have been some measures taken in conjunction with measures taken by the Saskatchewan government, and I am referring to the oil export charge and other measures that will be taken for the months of March and April. The National Energy Board has indicated to those who wish to import Canadian crude that they will have 35,000 barrels subtracted from their quotas and will be limited, therefore, to that amount of light crude. By doing it this way there will be an incentive then to the importers to import a significant amount of heavy crude.


Donald Frank Mazankowski: Mr. Speaker, I can appreciate the minister's answer inasmuch as something is to be done in March and April, but since Husky Oil, which is the major producer in the area, is faced with the prospect of shutting down another 500 wells before the end of February, and I am sure the minister can appreciate the difficulties in starting up the process again after a well has been shut down. I am wondering whether the government is contemplating any immediate action to alleviate this problem in the month of February?


Alastair William Gillespie: Mr. Speaker, this is immediate action in the sense that nominations are now being received for the months of March and April.


THE CANADIAN ECONOMY
Mr. James A. McGrath (St. John's East):: Mr. Speaker, notwithstanding the assurances given to the Leader of the Opposition on December 19 by the Minister of Finance that our export situation would not be adversely affected by the controls program or the export levies, and in light of the statement made yesterday that this control or export levy program was under review, I should like to ask whether the government is now considering dropping this export control or making any other changes to it?


Hon. Donald C. Jamieson (Minister of Industry, Trade and Commerce):: Mr. speaker, I think my colleague the Minister of Finance made some public reference to this yesterday. Of course, along with that minister I have been aware for sometime that some exporters were looking for some changes. Incidentally, I might say that different exporters are looking for different changes. In direct answer to the hon. member, we are looking at it again, and if we can accommodate some of these proposals we certainly will do so. My own view is that we should not put any serious impediment in the way of exports, obviously, and if we can meet what the exporters are seeking then, as the Minister of Finance has said, we will do our best for them.


ANTI-INFLATION PROGRAM-EFFECT OF FAILURE TO REACH DECISION ON EXPORT CONTROL PROGRAM ON SECURING AGREEMENTS WITH PROVINCES
James Aloysius McGrath: Mr. Speaker, in view of the fact that this review, or the inability of the government to reach a final decision on the whole business of control on export income is serving as an impediment to a federal-provincial agreement on the over-all controls program, I would ask the minister when the government expects to complete this review?


Donald Campbell Jamieson: Mr. Speaker, I would have to await the return of the Minister of Finance to give a specific date on that. I do know that discussions have been going on, even before yesterday, but I am not sure just how quickly the problems can be resolved. As to the reference in respect of the provinces and the holdup in the signing, my information at the meeting yesterday was that there was in effect no serious likelihood of that occurring simply because of the failure so far to resolve the export levy question.


VETERANS AFFAIRS
Mr. Stanley Knowles (Winnipeg North Centre):: Mr. Speaker, in view of the fact that last week both the Minister of Veterans Affairs and the President of the Privy Council indicated to the House that within two weeks we might expect an announcement on legislation regarding Canadian veterans who were prisoners of war, would the Minister of Veterans Affairs now confirm that there will be an answer regarding this matter next week?


Hon. Daniel J. MacDonald (Minister of Veterans Affairs):: Mr. Speaker, in reply to the question I can only give an answer similar to the one I gave last week, that I hope to be able to say something within two weeks of that day.


PUBLISHING
Mr. Norman A. Cafik (Ontario):: Mr. Speaker, I have a question for the Minister of Revenue. In light of the announcement today by Reader's Digest that they may now be able to comply with the contents of Bill C-58 as a result of meetings with officials of the federal government, I wonder whether the minister can indicate to this House what, if any, change might be in the wind or in fact agreed to in relation to substantially the same advertising provisions which would give rise to them changing their view?


Some hon. Members:: Order paper.


Mr. Speaker:: Order, please. The question clearly anticipates an order of the day.
February 3, 1976


PUBLIC SERVICE
Mr. Benno Friesen (Surrey-White Rock):: Mr. Speaker, my question is directed to the President of the Treasury Board. Sometime ago I spoke to him about the fact that teachers in the federal service have been teaching without a contract since last September, during which time they have been in negotiations with officials of his department. I wonder if he can tell the House how soon we can expect a contract?


Hon. Jean Chretien (President of the Treasury Board):: Mr. Speaker, there have been negotiations since the beginning of the week and lasting through part of last night. I was informed this morning that they are close to settlement and I hope there will be a contract very soon.


REQUEST FOR CONSIDERATION OF DATE OF OLD CONTRACT WITH TEACHERS
Benno Friesen: Mr. Speaker, since the contract that expired was a pre-1974 contract, will the President of the Treasury Board indicate whether the new contract will take that into consideration as far as the benefits teachers will receive are concerned?


Joseph Jacques Jean Chrétien: Mr. Speaker, negotiations are still under way. However, when the contract is signed, we will then be in a position to know what factors led to an agreement.


ANTI-INFLATION BOARD ALLEGATION CHAIRMAN TRAVELLED FIRST CLASS ON FLIGHT TO TORONTO
Joseph Jacques Jean Chrétien: Mr. Speaker, while I am on my feet I should like to reply to a question posed yesterday by the hon. member for Winnipeg South Centre.


An hon. Member:: Motions.


Some hon. Members:: Order, order.


Joseph Jacques Jean Chrétien: Mr. Speaker, Mr. Pepin travels economy when on Anti-Inflation Board business. The Anti-Inflation Board has purchased only economy tickets for him. On the one occasion to which the question presumably refers, he was as usual carrying an economy ticket but was invited to sit in the first-class section in order to discuss matters relating to the anti-inflation program with a passenger who was travelling first-class.


Some hon. Members:: Hear, hear!


Joseph Jacques Jean Chrétien: The staff member accompanying him travelled economy class.
Privilege-Mr. MacKay HOUSE OF COMMONS


PRESENCE IN GALLERY OF DELEGATION FROM ONTARIO LEGISLATURE
Mr. Speaker:: Order, please. Before proceeding with orders of the day, I know that all hon. members would want me to call attention to the presence in our gallery of a very distinguished delegation from the legislature at Queen's Park, the members of a special committee on procedure here to study, among other things, our great success in the question period.


Some hon. Members:: Hear, hear!


Mr. Speaker:: They are members from the Ontario Legislature headed by their former Speaker, Mr. Morrow.


Some hon. Members:: Hear, hear!



ROUTINE PROCEEDINGS


[Stage Direction]
MR. MacKAY-SERVICE OF SUMMONS IN CONFEDERATION BUILDING
Mr. Elmer M. MacKay (Central Nova):: Mr. Speaker, I rise on a matter that most nearly touches and concerns the privileges and prerogatives of your office, both as the guardian of our freedoms and as the warden of this House, and no outsider enters to meddle with those freedoms save with your leave and by your licence.
Yesterday I was served with a civil writ of summons, and a statement of claim alleging libel, issued out of the Supreme Court of Ontario. These legal processes were served upon me in the Confederation Building. Similarly served with similar processes were three employees of the parliamentary research office of the caucus of the official opposition. These persons, Mr. Speaker, are employees of the House of Commons and under your appointment, jurisdiction and discipline. All of us accepted service without protest. I do not propose, therefore, to support this question of privilege with a motion. However, Mr. Speaker, it is my information that the process servers sought no permission from yourself or any of your officers to effect their purposes. For your information, Mr. Speaker, the legal heading in the cause is:
Thomcor Holdings Limited, plaintiff, and Christine Johnson, Elmer MacKay, William Neville and Douglas Nixon, defendants.
The writ purports to be issued by Gowling and Henderson, barristers and solicitors, 160 Elgin Street, the city of Ottawa. It was apparently at the behest and in the pay of the plaintiffs and these solicitors that the process servers acted as they did. For myself, Mr. Speaker, I wish to emphasize the following points. I am not raising privilege in respect of this matter on behalf of myself, and I am authorized by the three House employees to state the same upon their behalf. Again, the alleged libellous statements
2 1 1 30-48)4

February 3, 1976
Privilege-Mr. MacKay
were deliberately made by me as a private citizen outside this House, without any attempt or desire to protect myself by raising parliamentary privilege to shield myself in a manner not available to any other private citizen of Canada. Finally, I intend to defend this action as a private citizen, on behalf of private citizens, in a court of law that will be free to decide the question at issue on the merits, unhampered and free of the intricacies of parliamentary privilege.


Some hon. Members:: Hear, hear!


Elmer MacIntosh MacKay: I leave the matter with you, Mr. Speaker, for your consideration and for such action as you may wish to take in the circumstances upon behalf of members generally and the respect due your office.


Mr. Speaker:: Order, please. The hon. member, of course, gave the Chair notice of the question of privilege, which gave the Chair at least a cursory opportunity during the conduct of the question period to verify with the hon. member whether the customary practice of introduction of visitors to this building was followed. In respect of those people who are staff members of the caucus of the official opposition, of course, a question of privilege in the formal sense cannot arise since they are not members of the House. However, in respect of the hon. member, access to this building without his consent or permission by anyone would constitute a question of privilege which would affect very greatly and very obviously the privileges of all members.
The practice, of course, has been customary that visitors call at the security entrances to these buildings and identify themselves, through the security officers there, in order to go to the office of the member. Whether or not that is a sufficiently complete practice, it was in fact followed in this particular instance. The fact that the hon. member is unable, without some information, to determine the purpose and the name of the caller is something to which all hon. members may wish to address themselves. But in any case there is no access to the office of any member-I think I should make this very clear although no action is sought by the proposed question of privilege-in this building except specifically with that hon. member's permission and consent. That is something which ought to be guarded very carefully.
In this case the visitor was admitted with the consent of the hon. member or of his staff. Whether or not it was with full knowledge of the intention of the visit is something to which hon. members might wish to address themselves. The fact of the matter is that, in terms of security of this building, it can be as secure or as relaxed as hon. members wish it to be. Therefore, it might be a matter for the consideration of the very valuable committee, the new Standing Committee on Members' Services, to ascertain whether or not hon. members seek a consensus to determine whether security should be tighter than it is. The effect of it, of course, would be to make access for the public and those who wish to visit the building for the purpose of those in the gallery today much more difficult than it is.
That is a question that has always posed great difficulty for hon. members but in any case there is no motion

attached to the question of privilege. The customary practices were in fact followed. If there is to be any change in those customary practices, I suggest it might be a matter for reflection by the new Standing Committee on Members' Services.


A. Daniel McKenzie: I rise on a point of order, Mr. Speaker, with regard to the prompt answer of the President of the Treasury Board, which I appreciate, in respect of the chairman of the Anti-Inflation Board having the privilege of using first-class facilities. I should like to point out to him that Air Canada regulations clearly state that only persons with a first-class ticket can-


Some hon. Members:: Oh, oh!


Mr. Speaker:: Order, please. The hon. member for Vancouver Quadra.


Mr. Clarke (Vancouver Quadra):: Mr. Speaker, on Friday, by way of a point of order, I raised the matter of an undertaking by a minister, in this case the Postmaster General, to provide more detailed information. The concession was given that the minister was not in the House when that undertaking had been given. I note that Your Honour addressed remarks to this important problem concerning ministers who give an undertaking. I note now that the Postmaster General is in the House, and I wonder if he might be given an opportunity to respond to this point of order.


Mr. Speaker:: Order, please. The hon. member for Churchill.


Mr. Smith (Churchill):: Mr. Speaker, my point of order arises out of the question asked yesterday of the Minister of the Environment which is to be found at page 10523 of Hansard. I asked the minister a question concerning Norway House and his reply was, very correctly, that the survey was so secretive that he did not know about it himself. However, in Hansard it is recorded only that he did not know "whether it is a secret", and he said, "but I am not in a position to answer today". I feel the minister's answer at that time does not resemble what is printed in Hansard, and that is my point of order.


Mr. Marchand (Langelier):: Mr. Speaker, I discovered a report. It was a report of April 15, 1975. It is a public report. The hon. member may have it if he wishes. He will have all the story about it. There is nothing secret about it. I think the Norway reserve will not be affected even marginally by the project of the government of Manitoba.


Mr. Mackasey:: Mr. Speaker, I rise on the point of order raised a few minutes ago by the hon. member. The question of obtaining information for the hon. gentleman is quite a valid one. Assuming that the question is asked in good faith for as much information as possible, the hon. gentleman would help his cause by taking advantage of our written questions procedure or at least having the courtesy of giving me advance information of when he intends to ask his question so that I could obtain information for him.
If I had been told ahead of time, as all ministers would like periodically in order to answer an inquiry for detailed information, I would have had an opportunity to check
February 3, 1976

with the department. Had I had notice that the hon. gentleman intended to ask a question about the theft of 39 mail bags, I would have been able to tell him that a subsequent check with the department showed that the bags were turned over to Air Canada. We have the receipts. The problem is not loss or theft from the Post Office, but loss or theft from Air Canada.


Mr. Speaker:: Order, please. The hon. member for Resti-gouche on a point of order.


Maurice James Harquail: I rise on a point of order, Mr. Speaker. While I accept your decision, with great respect, I am sure Your Honour will appreciate that this is my first opportunity to place this question before the House. When I read in the press that a former prime minister of this country said he would only accept an appointment from the Queen if it-


Mr. Speaker:: Order, please. The hon. member, I am sure, will realize that his comments are critical of the resolution or interpretation, or seek to add comment to the question which he sought to put which was ruled out of order. They really amount to an appeal against the Speaker's ruling, which I am sure he does not want to initiate or, alternatively, they amount to a discussion of the point which may take place at some other time. Certainly that does not constitute a point of order at this time.


Maurice James Harquail: Mr. Speaker, this is my final point. Am I to interpret, then, that your decision is that this type of action has no effect or is of no concern to this House?


Mr. Speaker:: Order, please.


EXTERNAL AFFAIRS
Pierre Elliott Trudeau: Mr. Speaker, I should like to table under Standing Order 41(2), copies, in both official languages, of a joint communique signed by myself and the heads of the governments of Mexico, Cuba and Venezuela during my recent visit to those countries. If I may sum up in a few words what these documents contain-


Some hon. Members:: No.


Pierre Elliott Trudeau: Then let me just say, in the other language, "Viva Canada y Cuba y viva la amistad entre Canada y estos paises."


Some hon. Members:: Oh, oh!
Order Paper Questions INCOME TAX ACT


MEASURE TO REPEAL EXCEPTION RESPECTING CONFIDENTIALITY OF INFORMATION OBTAINED
Eldon Mattison Woolliams: the first reading of Bill C-426, to amend the Income Tax Act.
He said: Mr. Speaker this is an act to amend the Income Tax Act and it arises as a result of a decision in the case of PPG Industries Canada Limited v. the Attorney General of Canada.
This bill would repeal an exception to the guarantee in the Income Tax Act that information obtained from private persons for income tax purposes would be confidential except for the purposes of prosecution under the Income Tax Act. In 1966 the Income Tax Act was amended to provide that private information obtained in confidence by the Minister of National Revenue for income tax purposes could be used by the government in any criminal proceedings whatever, and against any persons as well as the person from whom the information was obtained.
In consequence of this 1966 amendment, serious abuses occurred. In other words, information which is confidential and private which is filed by taxpayers could be used for other purposes, and the purpose of this act is to plug this hole so that privacy is not invaded.


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

[Stage Direction]
(Questions answered orally are indicated by an asterisk.)
Mr.   J.-J. Blais@Parliamentary Secretary to President of the Privy Council: Mr. Speaker, the following questions will be answered today: Nos. 69, 2,792, 2,795, 3,516, 3,694, and 3,695.
I ask, Mr. Speaker, that the remaining questions be allowed to stand.


Mr. Cossitt: 1.	How many trips outside Ottawa were made, in whole or in part, at public expense by the Prime Minister or any members of his family between October 30, 1972 and the date on which the answer to this question is prepared?
2.	In each case, by whom was the trip made, what places were visited and for what purpose and what was the specific means of transportation used?
3.	Of the total trips made in whole or in part at public expense, how many and which specific ones included at any point therein holidays, private journeys or attendance at any meetings or functions of the Liberal Party, specifically, where and on what dates did such holidays, private journeys or Liberal Party functions occur?
4.	Will the Prime Minister discontinue making any private or political trips at public expense and (a) if so, on what date (b) if not, for what reason?


Hon. Mitchell Sharp (President of the Privy Council):: 1.	Number of trips: Members of the Prime Minister's family

February 3, 1976
Order Paper Questions
do not travel at public expense unless accompanying the Prime Minister by DOT or DND aircraft or by car.
	Transportation	Place	
2. Date	Used	Visited	PurposeNovember 19, 1972	Car	Montreal	PrivateDecember 1, 1972	DOT Aircraft	Regina	Regional visitDecember 2, 3, 4 and 5,	DND Aircraft	London,	Meeting with1972	England	Prime Minister HeathDecember 12, 1972	Car	Montreal	PrivateDecember 15, 1972	Car	Montreal	PrivateDecember 23, 1972	DOT Aircraft	Ottawa- Vancou- ver	PrivateDecember 28, 1972	DOT Aircraft	Vancouv-	Mr. Pearson'ser-Ottawa	funeralJanuary 17, 18, 1973	Car	Montreal	PrivateJanuary 26, 27, 28, 1973	DND Helicopt-	Montreal	Review Cdner and Car	Troops en route to Viet Nam and Regional VisitFebruary 2, 3, 1973	DOT Aircraft	Kitchener, London (Ont), Toronto	Regional visitsFebruary 15, 17, 1973	DOT Aircraft	Winnipeg and Sud-	Regional visitsbury	February 21, 1973	DOT Aircraft	Montreal	Regional visitMarch 2, 4, 1973	DOT Aircraft	Montreal	Speech "La Jeuneand Car	Chambre"March 7, 1973	DOT Aircraft	Toronto	Regional visitMarch 8, 9, 10 and 11,	DOT Aircraft	Nassau	Private1973 March 21, 1973	DOT Aircraft	London (Ont)	Regional visitApril 6, 7, 1973	DOT Aircraft	Montreal and Beauce	Regional visitsApril 19, 1973	DOT Aircraft	Vancou-	Meeting with PMver	of AustraliaApril 27, 28, 1973	DOT Aircraft	Kamloops, Vancou-	Regional visitsver	May 4, 5, 1973	DOT Aircraft	Toronto, Hamilton, North Bay	Regional visits
May 11, 12, 1973	DOT Aircraft	Cantons	Regional visits
	and Car	de l'Est	
May 25, 26 and 27, 1973	Car	Montreal	PrivateJune 1, 1973	Car	Montreal	PrivateJune 5, 1973	Car	Montreal	PrivateJune 15, 16 and 17, 1973	DOT Aircraft	French River	PrivateJune 20, 1973	DOT Aircraft	Niagara	Accompanyingon the Lake	Mrs. GandhiJune 25,1973	DOT Aircraft	Toronto	To meet the QueenJune 29, 30, July 1, 2,	DOT Aircraft	Charlotte-	Accompanying the1973	town	QueenJuly 4, 5, 1973	DOT Aircraft	Calgary	Accompanying theand	Queen andEdmonton	Regional visitJuly 7, 1973	Helicopter	St-Sauveur Private	July 9, 1973	Car	Mont-	Economic CouncilGabriel	of Canada Lunch12 July p.m. 13-14-15	DOT Jet Star	Vancou-	Western Objectivever	Conference23 July p.m. 24-25-26	DOT Jet Star	Calgary	WEOCJuly 26 p.m.-27	DOT Jet Star	Vancou-	Privatever	July 27 p.m.-28	DOT Jet Star	Quebec	Rt. Hon. LouisCity	Saint-Laurent's
funeral
Transportation Place
Date	Used	Visited	PurposeAugust 4-5	DOT Helicopt-	Mont-	Commonwealther	Tremblant	ConferenceAugust 14-20	DOT	Cam- pobello Island	PrivateAugust 24	car	Montreal	PrivateSeptember 22	DOT	St- Andrews, New Bruns- wick	Regional VisitSeptember 22 p.m.-23	DOT car (return)	Montreal	PrivateSeptember 25-26	DOT Helicopt-	St-Sauveur Private	October 8-19	DND	China	Official VisitOctober 25-26	DOT and DND	Nova Scotia P.E.I.	Testimonial Dinner for Hon. A. MacEachenNovember 10	car	St-Sauveur Private	December 5	DOT	Mount Royal	M.R. Liberal Ass. Reception Ouver-ture de la maison Radio-CanadaDecember 6-8	DOT Jet Star	Vancou- ver	Regional VisitDecember 13	DOT Jet Star	Montreal	Speech-Economic Council of CanadaJanuary 19-21, 1974	DOT	Montreal	Liberal Convention Fund-raising cocktailJanuary 27-February 6	DND commercial (return)	Europe	Club of Rome MeetingFebruary 7-11	Commercial, commercial (return) Toronto (DOT)	Antigua	PrivateFebruary 14-15	DOT	Toronto	Regional VisitMarch 6	DOT	Toronto	Fund-raising dinnerMarch 21 p.m.-24	car	Mont- Tremblant	PrivateMarch 30	DOT	Saint- Gregoire	Partie de sucreApril 1	DOT	Toronto	Taping-Front Page ChallengeApril 4 p.m.-8	DND	Paris	Funerailles de M. PompidouApril 12-17	DOT Jet Star	Barbados	PrivateApril 25-27	DOT	Hamilton Toronto Sudbury	Ontario TravelMay 12	DOT	North Carolina	Duke University Honorary Doctorate in LawJuly 12-13-14-15	Helicopter	Saint- Sauveur	PrivateAugust 12-13	DOT	Quebec	Fete de la Franco- phonie PrivateAugust 14-17	DOT	lie d'An-ticosti	August 23 p.m.-24	DOT	New York	PrivateSeptember 5-6	DOT	Vancou- ver	Regional VisitSeptember 7-9	DOT	Alberta	Regional VisitSeptember 17	DOT	Quebec City	Messe solennelle Hockey -Cda/ URSSSeptember 22	helicopter	Montreal	Private

February 3, 1976

do not travel at public expense unless accompanying the Prime Minister by DOT or DND aircraft or by car.
3.	Visits listed as private include holidays and private journeys. In the case of regional travel the Prime Minister participates in a variety of events some of which may be sponsored by provincial or municipal groups and others by the Liberal Party.
4.	The Ministry of Transport is responsible for the provision of short to medium range airlifts of the Governor General, Ministers of the Crown, Members of the Royal family or foreign dignitaries visiting Canada, Parliamentary Committees or Delegations on official business and, from time to time, federal officials on government business. These flight operations are mainly confined to the North American continent. For its part, the Department of National Defence operates an air service for the transportation of its personnel. However, on occasion, it is called upon to provide special flights for other government departments. This occurs when the demand for such airlifts exceeds the Department of Transport's capacity, or when a transoceanic air airlift is required, since MOT's service is primarily limited to domestic operations. As just mentioned, the Department of National Defence operates certain regular flights of armed forces aircraft to Europe. Unassigned space is made available upon application to Members of Parliament at no cost. The aircraft are manned by crews made of public servants or of members of the Canadian Armed Forces or both. It is not deemed to be in the public interest or in the interest of the traditions of a non-political public service to answer questions calling for the names of such persons. Except during general election campaigns, the Prime Minister, when travelling by air, uses government-owned aircraft. This policy is based on the practice of successive former Prime Ministers, who, when travelling about Canada, had the use of a private railway car owned by the Government. In May 1968, the Prime Minister, following the practice adopted by his predecessor, issued guidelines governing the use of official aircraft by Ministers during a general election campaign. These guidelines, which still prevail, provided that official aircraft were not to be used for purposes related to the election campaign. This means not merely that government business must be involved in any such journey but that official aircraft may be used only when the performance of government business is the sole public purpose of the trip. The reasons that the Prime Minister travels in government-owned aircraft, except as provided above, are that he often requires travel facilities on short notice, he should be able to come back at once to Ottawa in cases of a national emergency, he often requires privacy so that he and his staff may work while travelling, he wishes, as a rule, to avoid inconveniencing the travelling public on commercial airlines and he has been advised that government facilities should be used for security purposes (see page 8618 of Hansard for December 11, 1973). Information about the official trips of the Prime Minister both within Canada and abroad is communicated to the media as a matter of course. Details concerning the destination, purpose and general duration are made public. For security reasons, both for the Prime Minister and accompanying persons and for crew members, it is deemed preferable not to disclose too precise details such as actual departure and arrival times, stops en route, itinerary, place of accommo-
Order Paper Questions
dation of crew members and support staff, etc. Information about the private trips of the Prime Minister, his family, and any accompanying persons is communicated to the media in summary form only.


Mr. Cossitt: With reference to the answer to Question No. 1,666 which stated in part that the Department of Public Works spent $89,196.53 for "supplies" at the Prime Minister's official residence at 24 Sussex Drive during 1973-74, what is a complete list of all items making up this total along with the cost in each case?


Mitchell William Sharp: For practical reasons, there must be some limit as to the detail provided in answers to questions relating to expenditures. This question seems to exceed that limit.


Mr. Cossitt: With reference to the answer to Question No. 1,667 which stated in part that the Department of Public Works spent $3,577 for "supplies" at the Prime Minister's official residence at 24 Sussex Drive during 197475, what is a complete list of all items making up this total along with the cost in each case?


Mitchell William Sharp: See reply to question 2,792.


Mr. Cossitt: Are written questions on the Order Paper concerning matters pertaining to the Prime Minister now being answered by the President of the Privy Council rather than by the Prime Minister as in the past and, if so (a) for what reason (b) on what date was such a change made (c) who authorized the change (d) will the Prime Minister be answering such questions in the future?	.


Mitchell William Sharp: On some occasions when the Prime Minister is out of Ottawa, in order to expedite the process of answering written questions, the President of the Privy Council in his capacity as Acting Prime Minister, signs responses to the Prime Minister's questions. In addition, it is the practice of the government that the President of the Privy Council deals with any questions with which there appear to be procedural considerations involved.


Mr. McKinnon: 1.	What is the cost to the government of the brochure distributed over the signature of the President of the Treasury Board to employees recommending the purchase of Olympic Coins, including distribution costs?
2.	Is any costing being done of the time spent by public servants on such duties supporting the Olympic Games?
3.	Have arrangements been made for COJO to reimburse the government for such expenditures?


Joseph Jacques Jean Chrétien: 1.
The costs of the brochure in question are recovered from

Non-Canadian Publications
the proceeds resulting from the sale of Olympic coins before the profits are transferred to the Comite Organisa-teur des Jeux Olympiques (COJO).
2.	Yes, costing is done for duties of civil servants directly related to the Olympic Coin Program.
3.	Costs incurred by the Olympic Coin Program are deducted from the proceeds of sales before any remittance is made to the Comite Organisateur des Jeux Olympiques (COJO).


Mr. Nystrom: 1.	Has the Department of Public Works rented the old Greenwood Cheese Factory in Sarsfield, Ontario and, if so (a) for what purpose (b) on what date was the lease signed and for what period of time (c) on what date (i) did the lease come into effect (ii) does the lease terminate (d) what is the monthly rental rate of the lease?
2.	Are there any escalator clauses in the terms of the lease and, if so, what are their terms?
3.	For what reason was the Greenwood Cheese Factory chosen over other vacant cheese factories in the area?
4.	Is Albert Belanger the principal owner of the old Greenwood Cheese Factory and is he the lessor in the agreement to lease?


Hon. C. M. Drury (Minister of Public Works):: 1. Yes. (a) For the purpose of providing accommodation for experimental animals for Health Protection Branch, National Health and Welfare, (b) March 23, 1973, for a term of three years from March 1, 1973 with two options of one year each, (c) (i) February 15, 1973. (ii) February 28, 1977 with a further option of one year, (d) $1,918.95.
2.	Yes. An amount equal to any increase in taxes over base year 1974 and cost for heating in excess of cost for base year 1975.
3.	The said premises were chosen by the client, Health Protection Branch, who requested that the Department of Public Works lease the building.
4.	The premises are leased from Greenwood Cheese Co. Ltd., of which Mr. J. Albert Belanger is president.



GOVERNMENT ORDERS


[Stage Direction]
The House proceeded to the consideration of Bill C-58, to amend the Income Tax Act, as reported (without amendment) from the Standing Committee on Broadcasting, Films and Assistance to the Arts.
Mr. Speaker:: Order, please. There are 12 motions at the report stage of Bill C-58 and it would appear to the Chair, after a cursory examination at least, that the Chair should not intervene, from the procedural point of view, in respect

of any of them. However, if any points of procedure or points of order are raised in respect of any of the motions, of course the matter may be discussed as each motion is put before the House. It would appear obvious that motions 1 and 12 are related in that motion 12 is consequent upon the acceptance of motion 1. Accordingly, it is the view of the Chair that these two motions should be grouped together for the purposes of debate and for one division.
Motions 2 and 3 should be discussed together, but probably would require separate divisions. Motions 4 and 5 are suitable for grouping for debate. A vote on motion 4 would appear to dispose of any necessity of a vote on motion 5. Motion 6 appears to be procedurally in order and should be both discussed and voted on separately. Motions 7, 8, 9 and 10 standing in the name of the hon. member for Surrey-White Rock (Mr. Friesen), and motion 11 in the name of the hon. member for Fraser Valley West (Mr. Wenman), appear to be suitable for discussion together, but a separate division would be required on each motion.
It should be noted, of course, that because of the similarity of motions 7, 8 and 9, in the event that any of these motions are accepted, editorial changes will have to be made to the motions that follow. Motion 10 is consequential upon the acceptance of motions 7, 8 and 9, and obviously no vote would be necessary unless one of those three motions is accepted by the House.


Mr.  R. Gordon L. Fairweather@Fundy-Royal: Motion No. 1.-That Bill C-58, An Act to amend the Income Tax Act, be amended in clause 1 by striking out line 12 at page 1 and substituting the following therefor:
Periodicals dated after December 31, 1976.
Motion No. 12.-That Bill C-58, An Act to amend the Income Tax Act, be amended in subclause 4(1) by striking out line 35 at page 2 and substituting the following therefor:
force on the 1st day of January, 1977.


Mr.   J.-J. Blais@Parliamentary Secretary to President of the Privy Council: Mr. Speaker, with reference to your comments, the House leader agrees with the grouping that you presented. With reference to the acceptability of the motions that have been presented, I simply wish to give notice and file a caveat with reference to motions Nos. 2, 3, 4 and 5 which deal with content. While we have our reservations as to the procedural acceptability of those particular motions, we recognize that there has been considerable debate directly on the content aspect, and therefore we would agree that we should debate those particular motions. However, we wish to file a caveat relating to the relevance of those motions to the bill that is being studied. With reference to motions 7, 8 and 9 we will be making representations to Your Honour relating to their acceptability, alleging that those motions are not acceptable procedurally.


Mr. Speaker:: Order, please. I understand the position respecting motions 7, 8 and 9 is that an argument will be put forward about their procedural regularity. Of course, that will be discussed at that time. However, I am not clear on the position with respect to motions 3, 4 and 5. I understood the parliamentary secretary to say that there was a desire on his part, or on the part of the government, that those motions be debated; however, there were some
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reservations as to their procedural regularity. I do not know how he can have it both ways. Either there will be discussion about their procedural regularity or there will be a debate. But I want to be clear at this point whether we should anticipate an objection to the procedural regularity, and therefore to a debate on the content of the motions, or whether, while there is some reservation, there will be no argument suggesting the motions are not in order.


Mr. Blais:: Mr. Speaker, we have looked at the motions and have determined that there is some question as to their acceptability. However, those questions are borderline, and in view of Your Honour's position initially when you addressed yourself to the various motions, we accept the ruling you have made with reference to them.


Gerald William Baldwin: Very, very good.


Some hon. Members:: Hear, hear!


Mr. Speaker:: The hon. member for Fundy-Royal (Mr. Fairweather) on motions 1 and 12.


Mr. Fairweather:: It will take me a little while to swallow that. However, we all love the parliamentary secretary and know he is trying to make his points, so we will forgive him.
There has been a curious addition to this debate which is very appropriate to discuss on motions 1 and 12. It is rather unfortunate that I was handed this press release unsigned. It looks as though it came from some government department. However, I think it was in a Reader's Digest envelope. It was handed to me just as I entered the House, although the subject has been current for some time. I wish to put this on the record because it will have some effect on how the debate goes. Then I will have some questions to pose to the Secretary of State (Mr. Faulkner) and, hopefully, the Minister of National Revenue (Mr. Cullen). Perhaps we could resolve quite a number of questions on the matter of content vis-a-vis publications, leaving aside those issues having to do with broadcasting. The news release reads as follows:
It was announced by Reader's Digest today that, after an examination in depth of the interpretation and application of section 19 of the Income Tax Act as it will apply if and when Bill C-58 is adopted, and, after discussions with officials of the federal government, it has come to the conclusion that the steps it has already taken or under way to conform to the amended statute, will permit it to continue to publish its French and English editions in Canada in such a way as to have them classified as Canadian issues of Canadian periodicals for income tax purposes.
The result will be, it stated, that advertisers in its periodicals will continue to have the right to deduct their expenses for advertising space for income tax purposes.
I do not know what ruling has been made, but I am sure parliament is entitled to know. This is rather a key question. I am not even remotely suggesting there is anything underhanded about this. I want to know, and the House is entitled to know, what bargains have been struck by the Minister of National Revenue and his officials to make Reader's Digest feel that it can live with the content rule. I think this is extremely apposite.
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I shall not continue at this stage for very long if the minister indicates he will be giving a substantive answer to this question. I am somewhat upset by the fact that in general one can apparently jettison a principle-that is, the 80 per cent content rule-or that those of us who have resisted the content aspect of this legislation should have to cease to make the points we want to make just because Reader's Digest has had some discussions with officials which makes it comfortable with Bill C-58. It does make it rather awkward to carry on the debate, not knowing what the undertakings have been. I think we are entitled to know what the discussions were.
I must say that the officials of the department were very frank and forthcoming-which is in the best traditions of the public service of this country-when they appeared before the committee, but I want to know, and the House is entitled to know, what has happened since to make Reader's Digest able to live with the bill. If the hon. member has something to say, perhaps he will say it in a moment. This is quite a serious point. It will seriously affect the length of this debate if the minister is able to give us an assurance.
We all know Reader's Digest has filled our offices with an alarming amount of paper telling us about the difficulty they would have. Now, after discussion with officials of the federal government, they have come to a different conclusion. We would like to know the purport of the discussions and how Reader's Digest is now able to take such an about-face: it is almost a faster about-face than this government made with regard to wage and price controls from 1974 to 1975.


Jack Sydney George (Bud) Cullen: Mr. Speaker, I welcome the opportunity of participating in the debate. I intended to make substantive comments when the second motion came up for debate. The first one, having to do with the time element, did not in fact involve myself or my department.
Following the issuing of the press release in October, 1975, along with my colleague the Secretary of State (Mr. Faulkner) I appeared before the standing committee and several questions were raised at that time involving-


Stanley Howard Knowles: Mr. Speaker, I rise on a point of order. I should like to know where we stand. I was expecting that the hon. member for Fundy-Royal (Mr. Fairweather) would speak to motion No. 1 which he moved. He has not yet done so. By relinquishing the floor, has he lost his right to speak to motion No. 1?


Some hon. Members:: No.


Robert Gordon Lee Fairweather: I was very much hoping that this debate could be shortened by a statement. I find the House a comfortable place in which to ask questions and to receive answers. I will not need to make very much of a speech if the minister can give the assurances I have asked for by way of a question.


Stanley Howard Knowles: I just do not want the hon. member to lose the opportunity to make his statement.


Robert Gordon Lee Fairweather: Thank you.

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Mr. Deputy Speaker:: Order, please. It was my understanding that the hon. member had made his contribution in the expectation that the minister would satisfy him, and that he had spoken on his motion.


Jack Sydney George (Bud) Cullen: As I indicated, the press release was issued in October, 1975, and following my appearance before the standing committee there were several questions raised about the uniqueness of digests. We indicated there, and have indicated publicly, that it was not the intention of the legislation as produced by my hon. colleague to preclude the operation of a digest in Canada. As a result of questions which were raised in the committee as to whether this legislation in fact had that effect, I again discussed the matter with my officials and subsequently talked to counsel for Reader's Digest.
It seemed to me at the time that the legislation would have that impact, that is, that it would preclude digests, so that if two, three or ten Canadians got together and decided they were going to have a Canadian digest 100 per cent owned by Canadians, with the editing and publishing being done in Canada, it would be theoretically possible for them to operate in Canada under the 80 per cent rule, but it would be for all practical purposes impossible because of the unique nature of digests.
I then discussed this at some length with counsel for Reader's Digest and I asked them also to discuss it with my officials. At that time it seemed really academic, because Reader's Digest had indicated publicly through Mr. Zimmerman that it did not intend to abide by the 75 per cent ownership rule. That being the case, any discussion about content and the 80 per cent "not substantially the same" rule seemed to be really an exercise in futility because they were not prepared to go down this route. In conversations with counsel for Reader's Digest we more or less operated on the basis of assuming that that in fact will take place.
We have a proposition, or a proposal to make that we can abide by the 80 per cent rule provided it is clearly understood that if the United States Reader's Digest secures its material from American or, for that matter, British magazines and that material is used in the U.S. Reader's Digest, and if that same article was condensed and used in the Canadian one, would that be considered as 80 per cent different? We considered that and decided, because of the unique nature of digests that we would accede to that, so the 80 per cent rule holds.


Some hon. Members:: Oh, oh!


Jack Sydney George (Bud) Cullen: But in extending this to make this provision, we felt we should accommodate digests, not Reader's Digest. On that basis we indicated that we were prepared to give that interpretation. That press release, I would assume, has been issued by Reader's Digest. The hon. member indicated that it looks like a government release, but it is not a government release.


Robert Gordon Lee Fairweather: Mr. Speaker, will the minister permit a question?


Mr. Deputy Speaker:: Order, please. We will have to ascertain if the rules permit a question. The hon. member knows we are not in committee of the whole, and he has already spoken on the motion. I want to make sure that he just wants to ask a question of the minister. He can ask a question, but I would not want to have cross-examination across the floor. It has been the practice to allow members to ask a member who has spoken to give an explanation or answer one question, but not to do it in the same manner as in committee of the whole. I will allow this question, but I hope it will not be cross-examination.


Robert Gordon Lee Fairweather: Thank you, Mr. Speaker. I wonder if the minister would say, as a result of this very interesting statement, whether the comments he gave before the standing committee-I will paraphrase them-namely, that if the 80 per cent rule were found to be ultra vires or beyond the powers of the legislation, the minister would consult his cabinet colleagues about amending the rule, are now moot in so far as Reader's Digest is concerned?


Jack Sydney George (Bud) Cullen: No, Mr. Speaker, the rule stands. I have had some criticism of the fact that I said the 80 per cent rule is an interpretation. It is an interpretation. It is not an amendment to the regulations, as has sometimes been indicated in the press. It is an interpretation that was given about the meaning of "not substantially the same". Because it was an interpretation, I felt I had to have the backing of my cabinet colleagues on it. I indicated, as a courtesy to publishers and those who might consider advertising in these magazines, that if this were challenged through the usual tribunal and it was not substantiated, then it would be the intention of the government to bring in a new notice of ways and means motion to define that "not substantially the same" means 80 per cent difference. But the advertiser who successfully challenged would be able to write it off in the current year. It would not be retroactive.
The reason for indicating this to the publishers was to save the expense and frustration of going down this route, conceivably winning a case and then finding that the government moved in and applied the hammer. This is not an unpredecented move. It has happened on many occasions that a government has indicated it proposed to go a particular route and what the intention of legislation was, then it has been changed by a decision of the courts or a loophole has been found. In order to give effect to the government's intention, the bill has subsequently been amended but not amended to give a retroactive effect.


Douglas Roche: Mr. Speaker, I should like to speak to motion No. 1. The events of the past few moments underline the wisdom of this motion, the effect of which would be to postpone the effect of this bill until December 31, 1976-a one-year delay. The confusion now existing about the effect of Bill C-58 has just been multiplying. Last May an interpretation was offered by the office of the Minister of National Revenue to the effect that a content of roughly 50 per cent difference would be acceptable. That was overruled by fiat from the office of the Minister of National Revenue, by a press release under his own name in which the 80 per cent content rule was enunciated. That led to great discussion in the committee following second reading of the bill.
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The committee tried to bring before the government evidence that the 80 per cent rule was unfair, would be ineffective and practically impossible to police. Members of the committee from both sides were disposed to find an accommodation whereby the committee would be able to report a recommendation that the 80 per cent content be reduced. What is happening now is that the bill is to be allowed to stand with the 80 per cent content, but interpreted by the department in such a way that Reader's Digest will be able to continue to publish in its customary manner.
I suggest to Your Honour and to the minister that this is bringing us back to the very situation that Bill C-58 was intended to obviate, namely, the existence of special status for certain magazines. Time and Reader's Digest had special status, and a great effort was made to find a way in which Canadian publications could be enhanced. The method the government submitted was, as was repeatedly said on second reading in the House and in the committee by witnesses of diverse background, an unfair way.
I suggest to Your Honour that at the very least the bill ought to be referred back to the committee in light of the astonishing developments today. If I were the editor of Time magazine for which this bill has disastrous implications, as well as for Reader's Digest until a few moments ago, I would be asking if there was any chance of negotiating with the minister to find a formula through which the interpretation for Time would be allowed in the same way as for Reader's Digest.
I recall, at the committee hearings, the editor and publisher of Time magazine submitted in rough form a proposal for a new Time Canada. Under the changes proposed for that magazine they considered it should be able to qualify under a reduced interpretation. If we are to go along with what has been suggested this afternoon, namely, that Reader's Digest be allowed to continue and meet the requirements of this bill when it becomes law, then I submit the same opportunity ought to be given to Time magazine. I think the same holds true especially for the auxiliary publications also affected by this bill, for whom a great deal of concern was evidenced in committee but which do not hit the public eye as much. I speak particularly of MD of Canada, a magazine of great import to the medical profession which makes a very special contribution to medical knowledge in this country.
Motion No. 1 underlines the necessity of delaying the implications of this bill for one year once it becomes law. Even before that, however, I believe it would be grossly unfair of the government, in light of the interpretation on behalf of Reader's Digest, not to resubmit this bill to the committee for a thorough examination of how the full aspects of interpretation will be ruled on in the case of all publications that would be severely affected.


Mr. Bill Jarvis (Perth-Wilmot):: Mr. Speaker, I, too, wish to speak in support of this particular amendment. Nothing has given greater cause for that support than the words of the Minister of National Revenue (Mr. Cullen) a few moments ago. Having been on the committee, and having seen this bill progress from tragedy to tragedy and chaos to chaos, I feel we have only added fuel to the fire today. The minister indicated that he looks forward to the time when he can make a more definitive statement about his negotia-
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tions and consultations with Reader's Digest. This has left us in a quandary.
If I understood the minister correctly, if the Canadian edition of a digest, any digest, reprinted an article that had appeared in a parent, whether it be a United States parent or not, which article was directly commissioned by the parent, then it falls within the 80 per cent test. If, however, the journal printing that article had not been directly commissioned, but it had been a condensation or reprint from any other publication in the world, then it would not fall within the 80 per cent rule. I hope the minister will rise on a point of order to correct me if I misinterpreted what he said.
What if an article appeared in the German edition of Reader's Digest or in any other publication: would it be considered? In other words, are our tax collectors directing their minds only to what is happening to the United States parent edition in order to determine whether an article falls within the 80 per cent rule, or will they consider articles in all editions of the Digest?
Second, will the minister explain, hopefully during the debate on the proposed amendment, whether the provision previously referred to relates only to the United States parent edition, or to other editions controlled by the U.S. parent, or is the matter broader than that? Will the authorities go so far as to determine whether the U.S. parent edition has an indirect association or connection with some other publication? For example, if Reader's Digest were to be involved with an interlocking board of directors, with publication XYZ, say, would our tax collector look at publication XYZ because of their association with the Reader's Digest parent company?
I reaffirm what the hon. member for Edmonton-Strath-cona (Mr. Roche) said. Although the minister has denied vigorously the sorts of allegations the hon. member made, it seems to me that Time, in the matter of their negotiations with the Department of National Revenue, were sold down the river. Without doubt, men of honour stood before the committee and said they were left with the clear impression that the content rule was not to be one involving 80 per cent. Subsequently, under what is known as the Cullen rule, they were zapped with the 80 per cent provision. They were knifed in the back with that 80 per cent provision.
I do not want this legislation to be passed in that atmosphere. I do not think legislation should be enacted in an atmosphere of distrust, particularly legislation involving the Department of National Revenue. Although on occasion we have all argued with the Department of National Revenue, that department for many years has enjoyed a reputation of integrity and can be proud of it.
The hon. member for Edmonton-Strathcona referred to MD of Canada. One could include other medical publications in what he said. Certainly, we should direct our attention to those publications. What is the position with regard to such publications? I know that the Secretary of State (Mr. Faulkner) feels that he is in a shooting gallery, that foreign publications are daily taking potshots at him. Since the Minister of National Revenue is more sensitive and sensible about this particular issue than his cabinet

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colleague, I urge him to accept the amendment proposed by the hon. member for Fundy-Royal (Mr. Fairweather).


Robert Lorne Stanfield: Mr. Speaker, I wish to express my concern about what is happening. I am very sympathetic toward efforts to encourage Canadian publications, writers and artists in general, but find it difficult to accept what has been put before parliament and what seems to be happening.
The position taken by the Minister of National Revenue (Mr. Cullen) on what is meant by "substantially different", and to what extent a publication must be different in order for its advertisers to claim a tax credit is, in all fairness, substantially different from the position his predecessor seemed to take as stated in the House. Clearly, there is nothing in the bill to prevent the minister's successor, of whatever political stripe, or his colleagues in government from redefining what "substantially different" means. Surely that is not acceptable to members on either side of this House. That is not how we like to do these things in this country. There is no certainty to this measure. Basically, the government is following an arbitrary procedure.
At the moment I am not expressing any view on the 80 per cent difference rule or content rule. One might accept it in principle; I am not expressing any view on that. One might accept the necessity for some such law requiring Canadian advertisers to use Canadian-owned publications, that is, 75 per cent Canadian-owned, containing material that is 80 per cent different from something printed in the United States, for example. Even if we could agree on that, how many of us can accept the idea that the definition as to what is substantially different can be pulled out of the air by the Minister of National Revenue or his cabinet colleagues and changed from time to time? As it is, there is nothing to prevent their changing it two weeks from now or one year from now. There is nothing to prevent some successor government changing it. That is the point. Surely, this is a most unacceptable way of proceeding.


Some hon. Members:: Hear, hear!


Robert Lorne Stanfield: I am not attacking the Minister of National Revenue personally. I think he is acting in good faith. The same applies to the Secretary of State (Mr. Faulkner). I accept their sincerity although suggest that they are most misguided on this occasion. This afternoon the Minister of National Revenue gave a good example of how subjective the implementation of this law is to be and will continue to be. In days of old when the law of equity was developing, it used to be said that the interpretation of the law depended on the length of the chancellor's foot. What is meant by "substantially different" will depend on the judgment from week to week, month to month and year to year of the Minister of National Revenue. It will depend on the interpretation of different ministers.
It may be said that we have had in Canada for some time provisions governing broadcasting and Canadian content of broadcasts. At least these provisions are administered in public by a commission which operates in public. It is not-I hope the minister will not take offence-a hole-in-the-corner operation of the kind associated with this legislation. That is how it is to continue. The minister has

indicated a tendency which would make it possible for Reader's Digest to continue to operate. I do not want to dissuade him, because I happen to think that Reader's Digest should continue to operate. Nevertheless, the ruling in question is peculiar.
The test as to whether something is different, as I understand it, depends on its origin, not whether it happens to be the same as something being published in the United States, for example. Are we to have a succession of ingenious developments of this sort in relation to the application of this bill? I say as earnestly as I can, and without wishing to take too much time, that the 80 per cent provision is not embodied in any statute. It is only something which came out of the mind of the minister or the minds of his colleagues. It is arbitrary in that sense. It is also completely arbitrary in the sense that it can be changed whenever the minister changes his mind or whenever his cabinet colleagues change their minds. In that event there is to be no public discussion: there is to be a nice, cosy discussion within the confines of the minister's office or possibly in the cabinet room.
Is that the way we want to aid Canadian culture and Canadian publications? Is that the way we want to operate in this country? It is a secretive hole-in-the-corner kind of operation; it is fundamentally and totally arbitrary. I cannot support it. The government should think longer about this. I believe the motion calls for a deferral. The most charitable thing I can say for the minister and his colleagues is that they must be totally confused and mixed up or they would never have put this kind of proposition before parliament or this kind of interpretation before this House.
In order to prevent their making fools of themselves in perpetuity, I suggest that they defer further consideration. I suggest that they not impose their large majority upon this House, nor put through something, no matter how well motivated the idea may be. The method of interpreting, application and administering, in view of its arbitrariness and secretiveness, is opposed to the whole Canadian tradition of law and the way we want to see governments doing things.


Some hon. Members:: Hear, hear!


Robert Lorne Stanfield: I am not at this point going to discuss the wisdom of having a rule which states that in order to get these tax benefits one must advertise in a Canadian publication that is 80 per cent different. That is just something the minister pulled out of the air. I may want to discuss that later. I say to both ministers through you, Mr. Speaker, that with this arbitrary, secretive way of proceeding, resulting in the kind weird sort of ruling the minister indicated he has given to Reader's Digest, is unacceptable to this side of the House. It is surely unacceptable to anyone who still believes in the fundamental principles of a liberal democracy.


Hon. James Hugh Faulkner (Secretary of State):: Mr. Speaker, I just want to speak briefly to this first amendment. I remind hon. members that it does not deal with the matter of "not substantially the same". It deals specifically with the proposition that the bill should be delayed for a
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further year. I am only going to talk about that particular point. I might say, in passing, that I find the charge of secrecy levelled by the Leader of the Opposition (Mr. Stanfield) to be something of a specious, hollow and regrettable charge. There has not been a piece of legislation in the ten years I have been in the House of Commons that has been subjected to anything like the searching examination the propositions contained in this rather simple bill have been subjected to, and not only in the House but in the country at large. No other piece of legislation has generated more mail on both sides of the question or more letters to the editor, unless possibly the matter concerning the hunting of baby seals.
This issue has been openly examined in the committee. Officials have been available to answer questions from hon. members. Questions have been asked and interpretations have been given. I regret the fact that in his continuing campaign against this bill and what it is attempting to do, the Leader of the Opposition at this stage of the game has introduced specious charges of secrecy and things of that kind.
When one looks at the proposition that this bill should be given another year's delay, it becomes increasingly difficult to take the opposition seriously. I have had a chance to review the history behind this bill, a bill that is obviously concerned with trying to create equity in the imposition of the tax law in terms of periodicals. That, of course, deals with the whole proposition of trying to provide some assistance to periodicals. One need only go back to 1923 when a Conservative member of parliament, Mr. Hocken, obtained the unanimous approval of the House for his motion that measures be adopted to encourage the publication of Canadian periodicals. From there we go to the regime of the Right Hon. R. B. Bennett and the fact that he introduced a tariff. One traces it through reference to the study of the periodical industry in the Massey report. In 1956, a 20 per cent tax on advertising was contained in a budget. There was the reneguing of that tax by the subsequent Conservative government.
A royal commission went into, at length, the needs of this industry and the need to do something. It concluded, in 1961, that a nation's domestic advertising expenditure should be devoted to the support of its own media communications and that a Canadian periodical is one published in Canada, owned either by Canadian citizens or by a company incorporated under the laws of Canada or one of its provinces which is controlled and directed by Canadian citizens and is not a licensee or otherwise substantially the same as a periodical owned or controlled outside of Canada. All that was said back in 1961.
What has been the record of this parliament since then? Has the problem disappeared? Have those problems disappeared that one of the greatest civil libertarians of this country, Gratton O'Leary, studied? Of course not. All that persists in this debate is the obstruction and refusal to act on the part of members of this parliament. This is now being led by members of the official opposition. They can charge secrecy. They can charge that 80 per cent is too high. They can live with 50 or 60 per cent. These are games of arithmetic. However, the problem persists. Therefore, I suggest that this House should reject, and reject in a definitive fashion, any notion or suggestion, and in par-
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ticular any motion, that asks for a further delay in dealing with this matter.


Benno Friesen: Mr. Speaker, it may come as some surprise to members of the House that when this bill was first introduced I was at least mildly interested in supporting it. First of all, like many hon. members, I wanted to repatriate foreign industry back to Canada and have as much indigenous publishing industry here as possible and belonging to Canadians. However, as I began to examine the fundamental and underlying issues before us in this debate and in this legislation, I could not help reaching the conclusion that I not only had to oppose this bill, but should oppose it vigorously and do all I could to prevent its passage, or certainly, in the context of this amendment, delay it.
The Secretary of State (Mr. Faulkner) said there has been no legislation before the House which has enjoyed such openness and examination from all parts of Canada. It may be that the bill has undergone that kind of scrutiny. It is a short bill and, seemingly, a simple and innocuous bill; but the fact remains there are other matters related to it which have not been put openly before the Canadian public. I refer specifically to the kind of negotiations which have been going on behind the scenes between members of the Department of National Revenue and other various elements.


An hon. Member:: Not to mention the Liberal caucus.


Benno Friesen: Not to mention the Liberal caucus. The fact is, the great difficulty about this legislation is that the so-called Cullen rule is not part of it. This clearly shows the sloppy way in which the bill was drafted in the first place. The former minister of national revenue stated that he would be satisfied with a 50 per cent or 60 per cent content rule. Then, as the committee met to discuss the legislation, the head of the Maclean-Hunter board established under questioning that Maclean-Hunter had interceded with the minister several times for no less than 80 per cent; they would like to have had 100 per cent "substantial difference" but they could live with 80 per cent. I quote from page 25:63 of the committee proceedings, where Mr. Hodgkinson is reported as saying:
We made a suggestion to them that if it was less than 80 per cent the Canadian magazine industry would be in grave difficulty of survival.
That, I suggest to the minister, was not under public scrutiny. These were private, almost clandestine negotiations going on between leaders of the industry and officials of the Department of the Secretary of State and the Department of National Revenue. The Secretary of State can say as often as he wishes that the legislation was open before the Canadian people. The fact is that the operative clauses of the legislation and the rulings have not been under public scrutiny. If the Secretary of State wants to be genuine and serious about openness in this legislation, let him work together with the Minister of National Revenue (Mr. Cullen) and make sure that the ruling will be included in the legislation so that the writers in the publications industry may know exactly where they are when they negotiate for magazine articles.

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I guess that in times of excitement like this you tend to revert to your previous vocation, and I flip back very easily to the days I was teaching writing and I imagine in my mind's eye hundreds of writers across Canada waiting to know what kind of climate they are entering. It was Aristotle who said a good writer keeps his audience in mind; he always has his audience in mind when he writes. The dilemma which faces the writer in Canada today is; what audience? I think it is an established fact that Reader's Digest and Time have created the largest circulation in Canada, and though some government members would like to have us believe that it is because of the support given by the parent organization in the United States, nothing could be further from the truth.
Mr. Speaker, you can have all the support you like from parent organizations, but if these periodicals were not publishing the kind of material Canadians want to read, there is no kind of support from parent companies which could make them popular magazines. Reader's Digest and Time have been very careful to publish those kinds of articles, that kind of material Canadians want to read, and that is why they have the largest circulation in Canada. It is a tragedy that the one publication in Canada we can leave lying anywhere without having to be afraid of our children reading it is the publication which is under attack. That is the one the Secretary of State wants to make difficult to operate in Canada.
If the Secretary of State really wanted to help writers he would be more disposed to tear down walls than to create them. I have already suggested that the Secretary of State wants to help writers. He said, however, in a statement to his caucus:
Even if Selections were no longer published in Canada, no doubt the French edition presently printed and available in Europe would be available for distribution to Canadian readers.
What kind of a contradiction is that between the public and the private statements of the minister? On one hand he says he wants to help writers and provide a medium in which they can operate in Canada so that they can publish their articles and become known, and on the other he says that if the French edition of Reader's Digest does go out of existence, the French edition can still be sent over to Canada. Is he sucking, or blowing? Is he tickling, or scratching? Does he want to shut down a magazine, or encourage it? He went on to say:
The uncertain short-term consequences of eliminating the tax exemption for advertisers using Reader's Digest must be weighed against the long-term effects for the Canadian periodical industry of eliminating lumpiness in competition and the removal of a major inconsistency in the government's cultural policy.
That makes my hair stand on end. What is the government's cultural policy for us? Is the beginning of its design first to make sure that a few publications can no longer operate successfully in Canada? Does he wish to eliminate that kind of competition and then move on to other areas? The Secretary of State told us in committee that he does have a cultural design for Canada, and he suggested at that time he would make that design available to members of the committee. We have not received it yet, even though it is two months later. Is that his cultural policy for Canada? Frightening! Then he went on to say:
Of all the major consumer magazines in Canada, Reader's Digest is the most cost-effective magazine advertising medium as the table derived

from the Canadian Advertising Rates directory of December, 1974, indicates.
I underline the words "the most cost-effective advertising medium". Do you suppose it has been the most cost-effective advertising medium because advertisers just love Reader's Digest and Time? No. It is because they know that those two periodicals are the two which Canadians most want to buy and read, and they know that in this way their products will get the greatest amount of exposure before the Canadian public.
On the other side of the ledger, we must ask ourselves this question: If Time and Reader's Digest have been so successful, why have other publications not been equally successful? Immediately you cannot help thinking of the dominant periodical in Canada, namely, Maclean's magazine. I would simply suggest that if a publishing company decides to cater to a very urbanite group, in the style that caters to that small select group of urbanite society, especially Toronto urbanites, it must take the consequences of that publication's decision and suffer a small circulation. Apparently Maclean's is not willing to do this.
I suggested in the committee some time ago that the problem in Canada is not a shortage of good writers, and certainly not a shortage of periodicals but, rather, it is the inhibitions which these writers and periodicals face when it comes to circulation. It so happens that Maclean-Hunter denied this vehemently. Of course, they said it was not a circulation problem but rather, other problems including the competition they face. Just by coincidence, next to Time and Reader's Digest, Maclean-Hunter has the largest distributing facility in all of Canada. That is strange.
I suggested in the committee that if Maclean-Hunter is really interested in helping the publication industry in Canada, what it could do is carry piggyback some of the small publications which are finding it hard to get exposure before the Canadian people. I suggested that maybe what they should do if they' want to help these publications is carry them along in the distribution of their own magazine. This would give phenomenal coverage to the small publications. But they said that was not the solution.
On January 7, a month after the committee had met, there appeared in one of the Toronto newspapers an article regarding the magazine distribution industry. It suggested this was virtually a closed shop. We find in this article a statement like this:
A Maclean-Hunter national magazine distributor said he will not provide magazines to a wholesaler operating in the territory staked out by the Maclean-Hunter regional wholesaling subsidiary, Metro News.
Metro News does have a corner on the market. The article continues:
Many have quit dealing with Metro because of dissatisfaction with accounting systems and service. A normal turnover, Metro counters.
Another Maclean-Hunter operation, Maclean-Hunter Distributing, one of the few national magazine and paperback distributing companies not foreign controlled, refuses to provide even Maclean-Hunter's own circulation-hungry magazines to wholesalers trying to crack Metro News' large territory.
There you have an industry that wants a closed shop and a corner on the market, without competition. That is the background to the kind of legislation that we are faced
February 3, 1976

with today. The Secretary of State just last week published a letter, I suppose you could call it but it is more like an article, in the Vancouver Sun in response to a letter written previously by another gentleman. In that article he stated:
I think the point to keep in mind, however, is that a Canadian writer's chances of success in a foreign market are enhanced if first he or she has managed to get established at home and to develop a solid readership in his own market. It is with that objective in view that government support of writers and publishers is being provided.
I would like to ask the Secretary of State how he can prepare that kind of statement when indigenous writers are complaining all the time about competition from American publishers in Canada without the benefit of relief? The minister has not seen fit to look after that dilemma. There are gaps like this in every aspect of the legislation before us. I could go on, but suffice it to say simply that the amendment before us has a lot of wisdom, especially in light of the statement Reader's Digest has issued today, as well as the statement of the Minister of National Revenue. That statement has muddied the waters more than cleared them and we need time to look at the legislation as well as the ruling.
As the hon. member for Edmonton-Strathcona (Mr. Roche) has already suggested, the bill ought to be sent back to the committee to be re-examined and to find ways to include the ruling, if there is to be a ruling, in the legislation so that the writer in Canada can move out of this world of insecurity to a place where he knows where he is at and does not have to worry about these rulings of the Minister of National Revenue. I distinctly remember members of the committee asking some very specific questions of officials of the Department of National Revenue, who on the spur of the moment made some judgments as to how the ruling would operate in this case. As they gave their answers, the Secretary of State sat there shaking his head, saying "No, no; that is not it". He then proceeded to reinterpret what that ruling would imply for that particular situation.
We go back to the statement that the writer must always have his audience in mind. I would ask, again, what audience is this? Is it the audience that the writer wants to reach in terms of a reading audience? If that is the case, then he is going to enjoy the freedom of expression that all writers in Canada must have if they are to write creatively and artistically and if they are going to write in a way that Canadian people will want to read. If in the meantime, however, they have to interject before their reading public three other voices of the reading audience for which they must account, namely, the Secretary of State's Department, the Department of Justice, and the Department of National Revenue, then I would ask very carefully again, which audience is it for which the writer must account?
The Secretary of State and the Minister of National Revenue can state as often as they want that this is not curtailing writing and that this is not censorhip. Perhaps in a legal sense it may not be, but in a psychological sense regarding the work that goes into the writing and preparing of a manuscript, this is censorship of the most subtle nature. No writer of any artistic or intellectual integrity, or with a creative desire, will want to submit a writing to any publication if first of all in his mind's eye he has to picture before him the scrutiny of a dollar-oriented Treasury
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Department official or a legally-oriented Justice Department official. That is no way to stimulate the writing profession in Canada and it is no way to stimulate the publishing industry in Canada.
What we need in this country is freedom of expression without bounds and without the deterrent effect of these various levels of government interfering with our writers.
I return to the injunction that this piece of legislation must be sent back to the committee where it can undergo that kind of scrutiny it deserves, or that kind of scrutiny the Minister of National Revenue has given us reason to believe it deserves as the result of his change in ruling today.


Mr. Cyril Symes (Sault Ste. Marie):: Mr. Speaker, the Minister of National Revenue (Mr. Cullen) in his intervention this afternoon raised some very interesting points which I think have some important implications for this legislation. While addressing myself to motion No. 1, which would delay the implementation of this bill for another year, I should like to put on record some of my concerns about the statement of the Minister of National Revenue, to which perhaps he will reply when we come to motion No. 2.
I think all members of this House and the people of Canada must realize and keep firmly in mind that Bill C-58 is a piece of legislation, not to decide who will be allowed to publish in Canada but, rather, who will be assisted to publish. An anomaly in our income tax regulations that has existed since 1965 allowed two major publications, Time and Reader's Digest, to qualify for income tax purposes as Canadian magazines when in fact they were not. The legislation seeks to rectify that anomaly.
The purpose and the hope of the legislation is that the advertising revenue that had in the past gone to these two foreign periodicals, or some of that advertising revenue, will be redirected back to Canadian periodicals unless Time and Reader's Digest conform to the principles of what it is to be, a Canadian periodical. When the minister was before the committee he outlined four criteria for qualifying as a Canadian periodical. They were: place of production, ownership, licensing, and similarity to a foreign publication.
To this date neither Time nor Reader's Digest qualify in those terms as being Canadian, although we learned this afternoon just as the debate began that the Minister of National Revenue had worked out a deal with Reader's Digest concerning the fourth criteria, similarity to a foreign publication. As I understood the minister, he said an understanding had been reached by his department and Reader's Digest that if Reader's Digest bought an article from an American or any foreign magazine and did the editing or did the digesting of that article here in Canada, and at the same time if the parent magazine, Reader's Digest U.S., bought an article from the same source and did the editing and digesting in the United States, then the Canadian article would not be subject to the provision regarding similarity to a foreign publication. Although the two magazines may be using and publishing the same article in their magazines, because the editorializing and

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the actual digesting was done by Reader's Digest Canada, it then would come under the 80 per cent rule.
If that is so, then it raises another very important question which I should like the minister to clarify. If they worked out that kind of deal with National Revenue, they must at the same time have worked out a revision of the third criteria the minister mentioned to the committee, which is licensing, because under the existing situation with Reader's Digest Canada and Reader's Digest U.S., its parent, the licensing agreement works as follows: Reader's Digest U.S., the parent, has a pool of articles that it digests, and Reader's Digest Canada can draw on that pool of articles.
As part of the licensing agreement between Reader's Digest Canada and the United States, the following provisions must be met: Reader's Digest Canada must first promise to make no changes to editorial material obtained from the U.S. parent company without written consent. Second, the Canadian subsidiary must not distribute material which the parent disapproves of, or use material from any source other than those sources approved by the U.S. parent company.
Third, it must encourage Canadian writers to contribute material which would be of significant interest to international audiences, and submit any such material to the U.S. parent company for publishing consideration. Unless that licensing arrangement has been changed, in no way, even if they make the arrangement now with the 80 per cent "substantially the same" provision, by any stretch of the imagination can we consider Reader's Digest Canada an independent Canadian periodical if it is subject to the three licensing conditions I have just outlined. So I believe it is important that the minister make a statement to this House concerning what changes his department has agreed to with Reader's Digest Canada, not just on the point of similarity to a foreign publication but on licensing, ownership and place of production.
If this deal has been worked out and there have been some changes in the licensing arrangement, and Reader's Digest qualifies under all the other provisions, then we may accept that it is truly by definition a Canadian magazine and that advertisers in Reader's Digest, Canadian edition, will have the tax deduction benefits. However, I think this is still a blow, in one sense, to the Canadian periodical industry because, as was pointed out effectively in testimony before the committee, Reader's Digest and Time magazine for ten years were allowed to have the benefits through the tax system in respect of advertising revenue, and therefore have been able to capture about 50 per cent of the advertising revenue in this country.
We cannot quarrel with this if they comply with the four criteria, but this certainly does not do anything about redirecting some of that huge amount of advertising revenue back to the Canadian magazines which have been struggling for so long against these huge odds and advantages Reader's Digest and Time magazine were able to enjoy over a ten-year period. The point should be raised that what made Time and Reader's Digest so successful, and what gave them such an unfair competitive advantage, was that they were able to get much of their content at reduced rates from their parent company-at a fraction of the cost
[Mr. Symes. j
any Canadian magazine would have to pay if it tried to acquire the same material.
While these two magazines, Time and Reader's Digest, were able to get that kind of advantage of a cut-rate cost for the material, they also had the advantage, as foreign magazines, of being able to qualify under the provisions of the Income Tax Act for deductibility of advertising expenses. This attracted many advertisers to advertise in Time and Reader's Digest, which would not have been the case had these magazines been classified as foreign, because they would not have had that income tax deductibility benefit. So it seems to me that the Minister of National Revenue has much explaining to do about the kind of deal worked out with Reader's Digest as it relates to the four criteria for a magazine qualified as a Canadian edition.
I cannot support motion No. 1, in the name of the hon. member for Fundy-Royal (Mr. Fairweather), to delay this bill for one year. As was pointed out in committee and on second reading, we have allowed this anomaly in our definition of a Canadian periodical to go on for far too long, so that Time and Reader's Digest have been able to capture most of the advertising revenue of magazines in this country and Canadian magazines are really at the breaking point. They need to attract more revenue, and unless we move to implement Bill C-58 this will not take place. It can only mean the continuing backsliding of the Canadian periodical industry as it hopes to improve and compete with these two giants.
We need a healthy Canadian periodical industry. From the testimony we have heard, if even a fraction of the advertising revenue which now goes to Time and Reader's Digest were diverted by the passage of this bill to the Canadian periodical industry, it could mean the difference between the collapse or the survival of a number of magazines. This is something to be borne in mind. For a country to have a sense of identity and to be able to speak to people both on the west and on the east coast, we need a healthy magazine industry which can interpret Canada to Canadians, not through the eyes of subsidiaries of some foreign magazines.
So I say that there is no time for delay. This issue has been before the House previously. We have had a royal commission studying it and a special Senate committee studying it. Their recommendations were that we move in the direction in which Bill C-58 is moving and that the longer we delay, the worse the situation will become for Canadian periodicals. I think it is important that we pass this legislation. If Reader's Digest and Time want to conform to the legislation and become Canadian magazines, then that is fine; they will be on the same footing as our industry in Canada. But I cannot see the logic of perpetuating an anomaly that allows these two magazines, of all foreign magazines in Canada, to receive benefits under the Income Tax Act which allows their advertisers to receive these benefits while the same benefits are not given to other foreign publications.
We seem to have a lot of concern for these two magazines at this stage. I find it surprising that the same concern and logic was not voiced for other foreign publica-
February 3, 1976_______________________COMMONS DEBATES_____________________ ____________ 10591
tions back in 1965 when they fell under the provisions of the Income Tax Act which classified them as foreign magazines, but Time and Reader's Digest did not. It seems important that we move to the speedy passage of this bill. As I said earlier, I certainly want to hear clarification from the Minister of National Revenue as to the deal that has been worked out with Reader's Digest and what has happened not only to the "substantially different" clause but to the licensing provisions which the minister outlined when he was before the committee. I hope that we can dispose of motion No. 1 soon, and that we can have an answer from the minister on those important questions.


Mr. Jake Epp (Provencher):: Mr. Speaker, in rising on motion No. 1, asking that the bill be delayed for one year, or until December 31, 1976, I would like to make a few comments regarding the intervention of the Secretary of State (Mr. Faulkner). It was a typical performance by a minister who is again in trouble. He has staggered from crisis to crisis on Bill C-58. He has been trying to ram something through the House for which he has not had the support of his cabinet, his caucus, or his voters, and now he is trying to weasel once again. Then he gets up with a sanctimonious type of approach and goes after the Leader of the Opposition (Mr. Stanfield), suggesting that by asking simple questions the Leader of the Opposition is trying to delay the bill. I really question whether the minister has any right to consider anyone else to be less pure than he thinks he is on this issue.
Before we even started in the committee we were told that closure would be in effect. They did not exactly use closure, but they told us that the bill would have to be out of the committee by Friday. They said that was it; that was all the time we would have. They said, "We will have the bill back in the House prior to Christmas, and it will be rammed through the House because it is to become effective on January 1, 1976." Now we have a retroactive bill on our hands. I say to you very bluntly, Mr. Speaker, that that minister does not have the support of the House. I suggest that if he checked with members of his caucus he would find that he does not have the support of many of them, either. All that happened today clouded the issue further. Whenever we asked questions of the minister in the committee, he became defensive and said that we had to get this bill through the House because the effective date was January 1, 1976.
The hon. member for Sault Ste. Marie (Mr. Symes) also supported this bill in committee. I imagine he thought it was the greatest thing since rye bread, and he thought it would be great for the periodical association. Today he asked the Minister of National Revenue for clarification and said that he does not really know what we are debating. Then he turned around and said that his party is in favour of the bill. How does he know what he is in favour of? Throughout our debate on Bill C-58, the argument has been that if the large amount of advertising revenue which Reader's Digest and Time get were given to Canadian periodicals, it would help the Canadian Periodical Association and Canadian writers. That has been one of the basic arguments of the proponents of this bill. Yet if Reader's Digest can continue to advertise and to exist, where does that argument go?


An hon. Member:: It is out the window.
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Arthur Jacob (Jake) Epp: Right, it goes out the window. So really what are we debating at this point? We really do not know. What bothers me more than anything else about the stonewalling and the closure that has been used on Bill C-58 is the arbitrary manner in which this legislation was introduced and is now before the House. Throughout this debate we have been wrestling and shadow-boxing with the so called Cullen rule which was not part of Bill C-58. When we had officials from the Department of National Revenue before the committee, we kept asking them how they would interpret the phrase "not substantially the same". I could just see these dear souls, these gentlemen, running out whenever the issue of Time or Reader's Digest came around. They were somewhat like a chain gang, these people who are supposed to measure how much work was done this week and how much will have to be done next week. I can see the officials of the department bringing out their tape measures to decide whether it is 79 per cent, 80 per cent Canadian content, or whatever. Surely that is not the way to go about passing legislation. Let the minister say what we are debating. Let him tell us what the conditions and the criteria are and how they are to be interpreted. We have been through second reading and committee stage of the bill, but actually we know less today, after the intervention of the Minister of National Revenue, than we knew when the committee returned the bill back to the House. There is less clarity.
This is the arbitrary manner with which Bill C-58 is being dealt. While on one hand the bill is quite clear, the operative or the administrative part which National Revenue would play is not clear. I ask the minister, again, whether our interpretation of the deal he apparently has worked out with Reader's Digest is correct. Our interpretation is that if Reader's Digest international commissions an article, that article appears in any Reader's Digest magazine other than the Canadian one and then it subsequently appears in the Canadian edition, it falls under the 80 per cent rule but if, on the other hand, an article appears, for example, in Redbook, is edited and appears in the U.S. edition of Reader's Digest and then subsequently appears in the Canadian edition, is that acceptable?


An hon. Member:: No, it is the other way round.


Arthur Jacob (Jake) Epp: The minister shakes his head. Obviously my interpretation of his arbitrary rule is wrong. I think it is important that the minister again rise in his place and not only refer to the interpretation but put it into the statute. It is important that this be in the legislation so that we can take a position on it and pass the legislation. With regard to this arbitrariness, what happens when we have a new minister? Will an order in council change it again? Can it be thrown out? I imagine it can be. Any subsequent minister can come along and say that the content rule will not apply at all in order for a magazine to qualify as a Canadian magazine. I submit that that is not the way to go forward with this kind of legislation.
A number of us received by hand-I received mine at 1.50 this afternoon-a press release from Reader's Digest Canada which indicates that a backroom deal has been made which will allow Reader's Digest to continue more or less in the manner it has up to the present time. I quote

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from that press release, or that official communique, as follows:
It was announced by Reader's Digest today that, after an examination in depth of the interpretation and application of section 19 of the Income Tax Act as it will apply if and when Bill C-58 is adopted, and, after discussions with officials of the federal government, it has come to the conclusion that the steps already taken or under way to conform to the amended statute, will permit it to continue to publish its French and English editions in Canada in such a way as to have them classified as Canadian issues of Canadian periodicals for income tax purposes.
The result will be, it stated, that advertisers in its periodicals will continue to have the right to deduct their expenses for advertising space for income tax purposes.
There are a number of questions which arise from that statement. What were the discussions with the officials of the Department of National Revenue? What steps were taken other than those Reader's Digest told the members of the committee about-for example, 30 per cent plus now having Canadian ownership? What other steps has Reader's Digest committed itself to, with the minister and officials of his department, in order that it will conform to the regulations which will classify it as a Canadian edition? Also, I believe the minister should state very clearly what long-term agreement, written or otherwise, Reader's Digest has made with National Revenue officials regarding its Canadianization. Is it a ten-year deal, is it in perpetuity, or what?
We should also have a commitment from the minister as to whether the so-called regulations will be put into the statute. We have many questions at the present time, but the major argument, obviously, must be with regard to the arbitrary approach being used. The Secretary of State and the minister are telling us to leave this matter in their hands, to let them make the rules, to let them make the backroom deals, and that we as members of the opposition, and the Canadian people in general, should be satisfied because those two ministers will make the best deal possible. That is what they are saying, and that is not good enough. The matter of the arbitrary manner in which this rule will be interpreted must be discussed and the minister must stand in his place and clearly explain that situation.
For example, when Time was before the committee, it indicated to us very clearly that it had submitted to National Revenue a so-called 50 per cent Canadian and 50 per cent other than Canadian mock-up for adjudication by officials of the department. During the course of the debate on this bill, Time had been under the impression that a 50 per cent content rule, if it could abide by it, would qualify it as a Canadian magazine if the other matters were adherred to. Obviously, the question for the minister is this: Is a backroom deal also being worked out with Time Canada, and in the not too distant future will we have a press release from them indicating that they, also, have been able to flex their muscles and move the minister to get a deal which will also classify them as Canadian? If that is the case, what has been the point of this whole exercise which is taking the time of the House?
Further, what about the licensing arrangement? Has a change been made in the so-called deal for Reader's Digest and Time with regard to licensing? The hon. member for Sault Ste. Marie also mentioned licensing. With all this in mind, and considering the long discussions which have taken place, the bill should be referred back to committee for full disclosure and discussion, without the time restric-

tions which were placed upon the committee and without the restrictions which were also placed on government members who wanted to sit on that committee and who were in opposition to the bill.
We saw a charade in committee, the like of which I have not seen in my time here. Long-standing, full-time members of the committee were suddenly bumped because they were going to ask embarrassing questions of the minister and his officials and because they were not in favour of this bill. It is incumbent upon us to lift this bill for one year so that during that period of time full disclosure can be made and the Minister of National Revenue can give us a commitment that the administrative regulations will be incorporated in proposed legislation which can be debated in this House.
I should like to serve notice that I will move that the bill be referred back to committee once we get to third reading stage.



PROCEEDINGS ON ADJOURNMENT MOTION


The Acting Speaker (Mr. Turner (London East)):: It is
my duty, pursuant to Standing Order 40, to inform the House that the questions to be raised tonight at the time of adjournment are as follows: the hon. member for Edmon-ton-Strathcona (Mr. Roche)-External Affairs-Paris economic conference-Possibility of Canada being co-chairman-Canadian position at conference; the hon. member for Winnipeg South Centre (Mr. McKenzie)-The Canadian Economy-Allegedly conflicting views of ministers on economic policy-Request for clarification; the hon. member for Nickel Belt (Mr. Rodriguez)-Consumer Affairs-Transfer of food stocks from Loblaws to Zig-gy's-Suggested investigation of justification for price increase.



ROUTINE PROCEEDINGS


The Acting Speaker (Mr. Turner (London East)):: It is
my duty, pursuant to section 19 of the Electoral Boundaries Readjustment Act, chapter E-2, Revised Statutes of Canada, 1970, to lay upon the table of the House a certified copy of the report of the Electoral Boundaries Commission for the province of Manitoba, 1976.
February 3, 1976



GOVERNMENT ORDERS


[Stage Direction]
The House resumed consideration of the motion of Mr. Sharp (on behalf of the Minister of Finance): That Bill C-58, to amend the Income Tax Act, as reported (without amendment) from the Standing Committee on Broadcasting, Films and Assistance to the Arts, be concurred in.
Mr. Armand Caouette (Villeneuve):: Mr. Speaker, if I have not yet taken part in the debate on Bill C-58 it is not because I believe that this legislation is not important; on the contrary this issue is, in my opinion, most important. However I wanted to listen to what my colleagues had to say about this legislation which directly concerns two magazines now published in Canada, namely Time and Reader's Digest. After listening to the interventions for and against this legislation, I can only urge that consideration of the bill be postponed, according to the amendment.
I hope that government members will pay attention to the arguments that were or will be put forward by the members of the opposition for I sincerely believe that no member should support such a legislation which will destroy the freedom of the press in Canada. This bill was introduced by the Secretary of State (Mr. Faulkner) with the view of putting those two magazines on the same footing as other Canadian publications.
Since the publication of the Davey report on mass media, I believe everybody agreed that only truly Canadian publications should be granted tax deduction for advertisements appearing in their columns. So far, Mr. Speaker, I think everyone agrees, and even Time magazine has clearly indicated its intention of being bought off by Canadian interests so as to comply with the requirements of the bill. Selection may have done the same thing, namely become a genuinely Canadian magazine, in spite of its initial lack of enthusiasm for this prospect.
Unfortunately the government allowed itsef to be carried away by nationalist feelings. Not content with trying to make Canadian publications out of Time and Selection by encouraging Canadian interests to purchase them, the government decided to go further and to interfere with the content and the nature of the articles published in those magazines. This in my view, Mr. Speaker, is a gross and unforgivable abuse of power.
We are not in Germany under Hitler's domination nor are we is the USSR under Stalin's, we are still living in Canada, a country where democracy and the freedom of the press should always be very well protected.
Does the present government wish to be remembered as the government that restrained and destroyed the freedom of the press in Canada? It is remembered as a government that has told the newspapers: "Publish 80 per cent of this and 20 per cent of that, but publish this article and not that one because it is not Canadian". And yet that is more or less what is advocated under the stupid Cullen rule which requires that the content of a magazine be 80 per cent
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Canadian in order that those who advertise in it may obtain income tax deductions. I just cannot find words to say how shocked I am by this unjustifiable intervention of the government in this field where freedom is sacred.
Today, the government requests us to let it control the percentage of Canadian articles in magazines; so what will prevent it from coming back soon and ask us to let it control the ideas expressed in those magazines under the pretext that they are not as consistent as they should be with Canadian ideas?
The step that the government wants to take today with the adoption of Bill C-58 is extremely dangerous. It is a step towards dictatorship. The government should be aware of the dangers that Bill C-58 will create for the future of the freedom of the press and the freedom of speech.
That is why, Mr. Speaker, the government should differ passage of Bill C-58 for a year, as requested in the amendment under consideration today, or the bill should be replaced by some provisions granting tax deductions for advertising space in Canadian-owned publications only. Such a measure would help to reassure all Canadians who rightly wish to see Canadian publications become more prosperous and better able to meet fair competition from foreign publications.
It is very hard for Canadians to understand this government's attitude when it comes to protecting Canadian interests against our powerful southern neighbours. Indeed, the government has no qualms, as far as publications are concerned, in using brutal force to the extent of endangering freedom of the press, while, in other fields where Canadian interests are strongly threatened, it does not even lift a finger.
For example, it is well known that Canadian car rental companies are now facing unfair competition from giant American companies. The Canadian government, far from helping them in that connection, leane them to struggle without any assistance against the giant financial interests of American companies.
The Canadian government is not consistent with itself, not does it appear logical to Canadians. On the one hand, under the pretext of promoting Canadian publications, it puts the blame on the freedom of the press and, on the other hand, it allows Canadian car rental companies to be crushed by American companies. How can we have confidence in the good will of such a government? Further, the minister in charge of the Secretary of State does not deserve any congratulations for the manner in which he has piloted this bill. He repeatedly said in this House in May last that the exact meaning of the words "which is not substantially of the same kind" would be known in advance by the magazines involved. We now know that it was only very late in October-hardly two months before the date it came into force-that the Minister of Revenue made known his interpretation. We also know that, because of the effects, this interpretation-which calls for a Canadian content of 80 per cent-is the most explosive and the most dangerous legislative proposal of all measures now under consideration in this House. Had the Secretary of State (Mr. Faulkner) proceeded with a minimum of competence, he would have taken the trouble to consult the Minister of National Revenue (Mr. Cullen)

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before presenting his bill. His clumsiness and negligence in this affair are inexcusable. All Canadians know he was talking through his hat last May when he said that the Department of National Revenue was ready to produce its interpretation. And today, Mr. Speaker, all Canadians know that the former Minister of National Revenue was talking about a 50 per cent Canadian content before the present minister introduced the 80 per cent rule. I therefore cannot accept the attitude of the minister responsible for this bill and his performance will no doubt be cited as an example when it comes to showing how to present a bill.
The Secretary of State has been stubborn in his incompetence, and has persisted in the repeated mistakes he has made during the discussion of this bill. I understand the irrritation of the directors of Time and Reader's Digest, when they said:
In the face of uncertainty, we may have to close down ...
-even if today the minister tells us that the publication of the same magazines may go on under some arrangements with the government, but they said they were ready to close down not because they do not want to comply with the law but because they were able to determine with a reasonable minimum of certainty what this bill says.
I would like to come back to the question of the dangers this bill will represent for the future of the freedom of the press in Canada, because this consideration is the most important of all. It is necessary, Mr. Speaker, to insist on the fact that all newspapers in the country are unanimous in condemning firmly the measure put forward by the Government.
La Presse of Montreal says without hesitation: "The measure is "a masterpiece of stupidity". "The Toronto Globe and Mail writes: "A foolish and dangerous censorship". The Edmonton Journal headlines: "An unjustified measure in a free society". And I could quote hundreds of articles and thousands of statements which agree that Bill C-58 is a menace to the freedom of the press and the freedom of speech in Canada.
Mr. Speaker, the minister proved himself to be very determined in insisting that his bill be passed, despite the lifting of shields by all who believe in the freedom of the press. Determination is often a quality. But, in this instance, Mr. Speaker, I doubt that it is. It reveals a tragic lack of common sense and realism.
Mr. Speaker, let us reflect for a few moments on the consequences of Bill C-58 if it is applied in its present form. Contents should be 80 per cent Canadian. Let us suppose that in the course of a week, five events occur, namely, war breaks out in the Middle East, Brezhnev resigns or is replaced, a flying saucer really lands in Japan, the Queen of England resigns, and the Prime Minister of Canada decides to build himself an even larger pool. As no Canadian publication can afford to send journalists everywhere throughout the world, and bearing in mind the fact that our newpapers and magazines must respect the 80 per cent Canadian content rule, we stand a chance of getting a paper or magazine 80 per cent of which would be devoted to the Prime Minister's new pool, the four other events being relegated to the last pages.
Mr. Speaker, one sees immediately that the 80 per cent content rule threatens the Canadian people, primarily with

not being properly informed of international events. Who, Mr. Speaker, would ever want that kind of situation? Yet, that will be the result of Bill C-58 if it is applied strictly.
It is as easy to imagine a crowd of officials with a lot of rules trying to read the articles to ascertain that 80 per cent of the pages are filled with Canadian texts. It is really a nightmare, Mr. Speaker. Adoption of this legislation must be delayed or the bill withdrawn by the government. If the government and the Secretary of State persist in their attitudes, I hope there will be enough members in this House to delay the adoption of this bill, which is ridiculous and dangerous.
As a conclusion, Mr. Speaker, I urge the minister responsible to think it over. Is he prepared to leave his name tied to a piece of legislation which directly undermines the freedom of the press and of speech in Canada? Does he want our country to recall him as the man who struck the first blow against the liberties which we hold as heritage since the existence of Canada? If he wants us to remember him by a saying that he was able to preserve those liberties, he must withdraw this bill or delay its adoption as required in the amendment.


Mr. Gordon Towers (Red Deer):: Mr. Speaker, I welcome this opportunity to express my sentiments on this bill, but suggest that our being forced to participate in this debate, and the government's procedure in bringing this bill forward now, shows that the government is in a shambles. With your indulgence, may I read to the House the exchange which took place yesterday evening as recorded on page 10561 of Hansard. The hon. member for Peace River (Mr. Baldwin) rose on a point of order and asked if we were to continue debating Bill C-68 today. Hansard records the following exchange after the hon. member spoke:
Mb. Knowles (Winnipeg Nokth Centre): We were told otherwise.
Mb. Blais: Mr. Speaker, it is my information that tomorrow we are to continue with Bill C-68.


Stanley Howard Knowles: Mr. Speaker, I rise on a point of order. This afternoon at three o'clock the government House leader said definitely that we would not go on with Bill C-68 tomorrow but consider either Bill C-58 or Bill C-81, or he would see the Prime Minister (Mr. Trudeau).


Jean-Jacques Blais: Mr. Speaker, further to the point of order, my information is that we are to deal with Bill C-68 tomorrow.


Stanley Howard Knowles: You can't trust those Liberals.


Stanley Howard Knowles: Hear, hear!


Thomas Gordon Towers: Considering the sorts of remarks the hon. member for Winnipeg North Centre (Mr. Knowles) has made, I am really surprised to note that the hon. member for Sault Ste. Marie (Mr. Symes) supports the government on this particular bill.


Mr. Beatty:: You can't trust those socialists, either.


Thomas Gordon Towers: I think the assessment of the hon. member for Winnipeg North Centre was correct, and the hon. member for Sault Ste. Marie would be well advised to reconsider his position and support the amendment before the House.

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Mr. MacFarlane:: Mr. Speaker, I rise on a point of order.
I hope the hon. member will indicate that the remark he read, attributed to the House leader of the NDP, was made in levity and not in seriousness. I hope he is not suggesting anything else.


Stanley Howard Knowles: Shall I rise on another point of order?


Thomas Gordon Towers: Mr. Speaker, I am sure hon. members opposite do not realize the difficulties they are apt to encounter from trying to proceed with this legislation at this point in time. There is no reason for this House to be asked to deal with legislation of this kind, especially in view of the information that came to the attention of members of parliament this afternoon as a result of the circular all members received from Reader's Digest. What is to happen to other publications? Other magazines and periodicals will be affected by this legislation. What will happen to TV Guide, to our medical journals and other journals which the Canadian people like to read? You know, I always like to have a new coat before I throw my old one away. I suggest that the House would be well advised to delay this legislation for 12 months, which is what the amendment suggests, and reconsider the entire gamut of the matter.
I have had great respect for the Minister of National Revenue (Mr. Cullen) and hope what I have to say will not force him to stay out of the House for too long. His statement regarding the 80 per cent content, 80 per cent the same as, or the 80 per cent difference rule-whichever way you want to interpret it-was most unfortunate and dangerous. I don't care what the minister says and I care less for the government. I say emphatically that the minute any government begins to decide what the Canadian people shall read, it becomes very, very dangerous. I am surprised that the hon. member for Sault Ste. Marie goes along with the government in this regard. You do not build up the weak by tearing down the strong. It seems to me that there are other ways to help Canadian periodicals develop, other ways to help them become strong.
I am happy to see the Postmaster General (Mr. Mack-asey) in the House. I am sure he knows that increased postage costs have created financial difficulties for many periodicals. The magazine Country Guide is not nearly as large a publication as it once was, mainly because of the cost of postage. I suggest we can support Canadian periodicals in many ways. Why are we not looking at those ways and means of supporting the industry within Canada? I am sure we in the opposition are just as great Canadian supporters as anyone else in Canada. Nevertheless, why do we have to try to tear down the strong in order to build up the weak?
In committee I took issue with a promoter of Maclean's magazine because there was such a large amount of advertising in that periodical. At one point it was 60 per cent, which means 60 pages out of 100. Unfortunately, many of those 60 pages were advertising American liquor. Is the Secretary of State (Mr. Faulkner) saying that it is all right for Canadian magazines to advertise American liquor rather than publicize commentaries that are acceptable, required and in some cases almost necessary because
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Canadians like them? Many Canadians like to peruse these magazines.
This government would be well advised to really consider this amendment. The bill should be taken out of the House for 12 months and sent back to committee. The minister shakes his head. It is unfortunate that he has become dogmatic and is going to force this issue even though there have been so many inconsistencies. Since the presentation of this bill, changes have been made. We had 50 per cent, 60 per cent, 70 per cent and 80 per cent. This is frustrating for everyone. Why should we have had to wait 12 months on this legislation and then, at the very last moment, a statement has been made? We have no guarantee that the statement will be correct that there is provision for Reader's Digest to survive.
We then came to the point where there is a real problem. Who is to decide that it will be 80 per cent different? I cannot accept this. I believe it is a right of the Canadian people to decide for themselves what they want to read and when they want to read it. If we are going to continue entering into state control in all facets of our way of living,
I suppose we are going to have to accept it. However, just because we are entering into a program of economic control that is to last for three years, we should not have to accept a publishing control that may be for all time.
It is most unfortunate that any minister, not necessarily this Minister of National Revenue, or any government by any whim of fancy can change the whole aspect of this. This is a very dangerous precedent that we are setting here today. I hope the minister and the government will reconsider and accept this amendment. They should take the legislation back to committee where it can be reconsidered once again and adequately amended. This is an unprecedented move. It is beneath the dignity of this House of Commons. I hope the minister will give it further consideration.


Mr. Stan Darling (Parry Sound-Muskoka):: Mr. Speaker, like many of my colleagues, I appreciate the opportuniy of speaking to and supporting this amendment. I spoke at some length when the bill originally came into the House. I pointed out then that I felt the great majority of Canadians thought the bill was very unfair. I agree with the Leader of the Opposition (Mr. Stanfield) who stated that we all agree that Canadian magazines and Canadian writers must-be helped. However, this should not be done at the expense of doing away with Time and Reader's Digest. That is the view of a great many people of Canada, especially the older families.
The Secretary of State (Mr. Faulkner) mentioned that this bill has generated a lot of mail pro and con. I agree with him to some extent. However, the great majority of mail that came into my office was in favour of continuing Reader's Digest. I would say it was about 25 to 1. I know that at one time I had received about 250 letters. I would point out to the Secretary of State, who is standing in the confessional at the back, that the letters are again starting to come in. Therefore, people must be concerned about this matter.
Many people have questioned the 80 per cent that was set by the government or the Minister of National Revenue (Mr. Cullen). They feel that Reader's Digest will not be as

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good a magazine. Many people stated in their letters that of all the magazines that came into their houses, Reader's Digest was the only one they really liked and respected. They do not want anything done to change that. I hope the minister gives that matter serious consideration. The directive that was issued today by the Reader's Digest officials came as a shock and a surprise to many members including, I am sure, some on the government side.
Our spokesman for this particular bill, the hon. member for Fundy-Royal (Mr. Fairweather) had to leave early in order to visit the constituency of the Secretary of State. I hope he will put the situation to them plainly. The Reader's Digest press release came as a great surprise to many of us. As the House leader of the NDP said, Bill C-58 is thrown in here again. The government does not know from one day to the next what bill it will bring into the House. A great many of us would have been interested in more clarification from Reader's Digest and the Minister of National Revenue on this press release. It might have had some bearing on this debate and might possibly have shortened it.
Many of us are skeptical and worried. As was pointed out by previous speakers, the Minister of National Revenue may interpret the bill one way, but his successors, after reading an article which may be critical of their department of the government, could have another interpretation. In that event, the headsman's axe or the witch hunt would start again.
In today's mail I received a clipping from someone in Regina. I do not know why it was sent to me, when we have so many western members. It came from Grace Stewart, of Regina, who wrote:
Can you possibly help do something about this and help prevent the government pursuing its present collision course with Reader's Digest?
Application of Bill C-58 to Reader's Digest and Time magazine, to deprive the publications of Canadian status, sets a precedent that is frightening.
The legislation to amend section 19 of the Income Tax Act revises the regulations which grant Canadian status to foreign-based newspapers and periodicals.
Not many people will question the authority of parliament to enact the legislation. Application of it retroactively, however, to established Canadian corporations is another matter.
Reader's Digest and Time magazine were granted Canadian status several decades ago under R.S.C. 1952, and are, by law, Canadian publications with inherited responsibilities and rights.
One of the rights, under the Canadian Bill of Rights, 1960, part 1, section (b), is the right to equality of the law and the protection of the law.
The law is defined under part II, section (2) of the act to mean an Act of the Parliament of Canada, enacted before or after the coming into force of the act, any order, rule, or regulation thereunder and any law in force at the commencement of the act that may be subject to be repealed, abolished or altered by the Parliament of Canada.
In assuming authority to go beyond the law, the government has made the law a nullity.
Today the hand of power is directed against Reader's Digest and Time magazine, tomorrow it could be someone else. An amendment to the Immigration Act could take away the Canadian citizenship of immigrants who have become Canadian citizens.
Another letter I received recently reads as follows:
Dear Mr. Darling:

Thank you for the information on the debates with reference to Reader's Digest and the tax policies. You certainly did everything possible to help let the Digest continue as before. We seem to be on the losing team this time, but thank you for speaking out for us.
That letter came from Mr. and Mrs. A. Baston, of Gra-venhurst, Ontario. Let us hope we are not on the losing side this time after all and that something can still be done. I am hoping that the government will yet decide to take account of the views which members of the opposition have expressed. I am speaking primarily on behalf of Reader's Digest. I know this issue was discussed and fought in committee. I know, too, that the government's own supporters are not 100 per cent in favour of the bill.
I think of certain members of the standing committee on the government side who were, in fact, against the bill. I think of the hon. member for Cochrane (Mr. Stewart), the hon. member for Vancouver-Kingsway (Mrs. Holt), the hon. member for Ontario (Mr. Cafik), the hon. member for Vaudreuil (Mr. Herbert), and others. There are a great many more who may not have spoken, but those were members of the committee and they did their best to get the government to change its mind. That is one reason I am speaking in favour of the amendment recommending that the bill be given a year's hoist during which the government can reconsider its position, allowing us to consider the matter a second time.


Henry Perrin Beatty: Mr. Speaker, my remarks with respect to motions 1 and 12 in connection with Bill C-58 will be quite brief. I had not intended to speak at this stage until I heard the remarks of the Secretary of State (Mr. Faulkner) which I thought were ill-tempered and partisan. I think it is worth while addressing myself to some of the points raised by the minister, and also to put on record my concern about the government's attitude.
The government has made it quite clear that it intends, whatever the opposition might be within the country, within this House or within its own caucus, to force this bill through parliament as rapidly as possible. I think it is bad legislation. I think the government should take a second look at it before requiring it to be passed. I support motions 1 and 12 which would result in one year's delay in the implementation of the legislation because this would give the government a chance to reconsider its policy and reverse its direction.
There was an interesting development today with the announcement by Reader's Digest that it feels the deal cooked up with the Minister of National Revenue (Mr. Cullen) will enable the publication to continue in business. This is an important development. We were told time after time, as government members spoke on this legislation, that it was vitally important to the survival of the Canadian periodical industry that Reader's Digest Canada be put out of business and that its advertising revenue be made available to other Canadian publications.
It is interesting that the government should have changed its mind on this issue. It doesn't feel this is important any more. It doesn't feel it is crucial that Reader's Digest be put out of business. The Government felt the pressure within its own caucus, within the country at large, and it has finally retreated. It has recognized that it would be extremely unpopular in the country at the
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present time to force this legislation upon the Canadian people. So it has left one target. The government is not terribly concerned about peripheral publications such as MD Canada which would be affected by this legislation, but they are concerned about Time. That is the target which is left. The government is willing to sacrifice its attack on Reader's Digest but it remains-the Secretary of State shakes his head and I can hear him from here.


An hon. Member:: Oh, oh!


James Hugh Faulkner: The hon. member should inform himself.


Henry Perrin Beatty: The Secretary of State says I should inform myself. Certainly, listening to the comments made by the Secretary of State and by the Minister of National Revenue it would be very hard to glean much heard information from either of them. I think the most important thing, watching the performance of the Minister of National Revenue today, was to see how he reversed himself on the policy. He has decided, in an arbitrary fashion, to interpret the legislation in a very different way from the way he said earlier he would be interpreting it. Now, apparently, Reader's Digest is to stay alive.
After news release which was referred to earlier, Mr. Speaker, put out by the Reader's Digest Corporation, they heaved an audible sigh of relief about the fact that the government had reversed itself and felt there could not be an accommodation between Reader's Digest and the Minister of National Revenue. Mr. Speaker, before Reader's Digest feels too comfortable in its new position, before it feels its future is assured, it should take a look at the track record of this government. It should ask itself whether to trust the government to continue to support the policy which has just been announced by the minister or whether, in the erratic fashion in which it has been acting today, the government is not apt to reverse itself again in the future.
The government has been legislating by interpretation in this matter. Then make quite clear what they want to do, and then they find some way around the law without even coming before parliament-as in the case of the 80 per cent difference provision-and thus find some way to force their will upon parliament and the Canadian people. When it suits their purposes to do so, Mr. Speaker, they can keep on flipping back and forth, and it may be that Reader's Digest will find once again that they are put on the firing line. They should be aware of this and should look critically at the behaviour of the government before the standing committee.
The Secretary of State, when he spoke earlier, talked of the very open nature of the proceedings before the committee and of the debate which we have carried on in connection with this piece of legislation. Mr. Speaker, if the proceedings in the committee were an example of openness and of the government's perception of the way in which legislation should be handled, I fear for this country's future. I think what has happened in this parliament, and what was exemplified very well by the government's behaviour in the committee as this bill was being studied, is that the government has proven itself to be contemptuous of the rights of parliament and contemptuous of the rights of the Canadian people. They did not have any time for dissent on this bill. The minister himself is very intol-
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erant of people who express opinions which differ from his own. He made that clear in his remarks today. He just wants to put this legislation through, no matter how people feel.
If you take a look at the government's behaviour in committee you will see it has followed a course of action, which I think is very dangerous, in saying that there would be a time limit put on the debate in the committee whether the committee members liked it or not. The government said there was a time limit by which the bill would have to be reported back to the House of Commons, and that the government would put it through the House whether we liked it or not.
At that committee there were a number of Liberal members who had the courage of their convictions to stand up and say they disagreed with the position taken by the government, that they felt this was bad legislation and should not be passed. How were they rewarded for that courage? Let us take the case of the hon. member for Cochrane (Mr. Stewart), the former chairman of the Standing Committee on Broadcasting, Films and Assistance to the Arts. I had the honour in the last parliament to serve on that committee under his chairmanship and I feel he was a very excellent chairman. He was one member of the Liberal caucus who stood and said that in his judgment this was bad legislation. He had the courage to do that in spite of the fact that the government does not look very kindly upon people who speak their own minds. What happened to him? He was not allowed to speak by the Liberal members.
The only way in which a Liberal member who disagrees with government policy can be allowed to speak before a committee is by that member going to the opposition and asking for opposition time to speak.


An hon. Member:: That is not correct.


Henry Perrin Beatty: This is the government's attitude and this is the way in which it is dealing with this legislation. I think when the publishers of Reader's Digest issue news releases and applaud the course of direction taken by the government they should take a look at the government's track record and the government's erratic behaviour to date. They should take a look at the way the government views those who dissent in respect of government decisions, and they should fear for their future as a publishing entity in Canada.
The minister's problem with this bill is not that he is faced with opposition from this side of the House or that we have been unreasonable in any way in our dealings with the bill. The problem is that the minister has handled the bill in a very incompetent fashion. This piece of legislation is the bright, shining epitome of the government's approach toward the problems of periodicals in Canada.
I asked the minister during the second reading debate, and I ask him again now, when will the government be introducing a Canadian periodicals policy? What is the government's policy in respect of Canadian publishing? We know what it is. It is to continue the vendetta against Time and Reader's Digest, and I do not think that is acceptable in Canada today.

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The members on this side of the House feel very strongly that positive action should be taken to encourage the growth, the health, and the vitality of the Canadian periodicals industry. The minister has done nothing to encourage or sustain the vitality of that industry. Before the minister forces this legislation through the House and puts this piece of punitive legislation into effect we should be able to give him time to reconsider his policies and present parliament with a Canadian periodicals policy which will give positive incentive to Canadian publishers.
I am pleased to see that Maclean's magazine has decided to go bi-weekly and become a news magazine. This is a healthy development in Canada and I applaud it. No member on this side of the House would in any way want to denigrate the development that has taken place. I do not know of any member on this side who would want in any way to discourage the development of new Canadian periodicals which are spoken of from time to time in these debates. None of us would want to discourage the development of a truly indigenous Canadian news magazine.
The minister in answer to questioning at the committee by myself, I believe last summer or spring, indicated that there were at least two or three groups looking at the possibility of establishing a new Canadian news weekly. Where are these groups? They have not surfaced. We have not seen an indication that if we drive Time of Canada out of business we will in fact have a wholly new Canadian news weekly. I think it is incumbent upon the minister, before he forces this legislation through parliament, to tell us what groups there are at the present time which have made a firm commitment to establish a new Canadian news weekly, and we would like to see this. We would also like to be able to have the opportunity of questioning the minister on the positive incentives he is giving to groups to form news weekly publications in Canada.
What is at issue here is really the right of Canadians to read what they want to read. Certainly it was made clear to me over the course of the Christmas recess that Canadians resent the increasing government involvement in their day-to-day lives. The Prime Minister (Mr. Trudeau) perhaps does not, and he has told us it is going to be necessary for even greater government control of our day-to-day activities.
Canadians who for many years have supported Canadian Time and Reader's Digest are asking for nothing more than the opportunity to continue as they have in the past to read the periodicals they enjoy. The government, for some inexplicable reason, is anxious to deprive them of that right. That is a wrong and disastrous course of action for the government to be following at this time.
If Reader's Digest can survive, as it has indicated today in its news release, this is very interesting because the government will have admitted defeat on one of the things it wanted to do. It is quite clear, if you read speech after speech made by government members on second reading of this bill, that they were anxious to do away with Reader's Digest in Canada, and did not like the sort of service provided Canadians by Time Magazine. It is quite clear in this case, if what Reader's Digest says is correct, that at least in respect of Reader's Digest the government has admitted defeat and decided that Reader's Digest should be allowed to continue. This is one very important develop-
ment that has taken place today. The government has retreated on one aspect of this bill.
This whole issue raises questions of economic and cultural nationalism. I believe we should do whatever we can to repatriate our economy and culture to Canada. I believe this should be done by strong, positive incentives which will allow Canadians to encourage entrepreneurship. I am sure that Canadians would support the government in passing legislation which sets rules of behaviour for corporations operating in Canada, and I believe that multinational corporations operating in Canada are willing to accept that. Some of the argument that has been made in respect of this legislation is that this is precisely what the government is doing. I do not think that is the case.
A couple of years ago the hon. member for York-Simcoe (Mr. Stevens) and I had the opportunity of travelling to Washington and talking to the people there who run the Canadian desk in the U.S. State Department. We asked them about this question of economic and cultural nationalism, and what American reaction, both governmental and of the business community, was to Canadian action attempting to Canadianize our economy. I was surprised by the response. I had initially expected there would be a certain amount of hostility among Americans to a Canadian attempt to take control of our own economy. I was surprised to learn that was not the case.
The official with whom I spoke stressed the fact that Americans recognize that we must be the masters in our own house. They recognize the fact that Canadian nationalism and Canadian independence are a healthy force in the world today. They recognize it is necessary and quite proper that we should take action to protect our interests and to encourage Canadian culture.
These people made the point very clearly that they were prepared to live with whatever rules were set by the Canadian government. They felt that the American business community was willing to abide by these rules. However, they pleaded with us that, once we set the standards for American corporations operating in Canada, we live up to our own regulations. They cited instances where the government had simply reversed itself overnight; having set standards of behaviour for Americans operating in Canada it changed the rules in the middle of the game. This is clearly the case in respect of this legislation.
The government has brought in legislation before. At the present time there are regulations governing the conduct of Reader's Digest in Canada. For some unknown reason the minister has decided it is not good enough that they abide by the laws which have been passed by the Parliament of Canada, and not good enough that they attempt to be good corporate citizens in following the regulations which were set by the government from time to time. Now he wants to do away with these companies operating in Canada.
This is the sort of reversal or flip-flop on the part of the government that has done so much damage to our relations with our neighbours to the south. Those people recognize and accept the concept that Canadians should take strong action to repatriate control over our own economy, but they say that once we set the rules and pass the legislation in this parliament, and once we say to foreigners that they are welcome to operate in Canada as long as they abide by
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our regulations and our laws here, we should stop flip-flopping overnight and completely reversing ourselves. I think Canadians, and the other people who would like to operate in this country, are entitled to better behaviour on the part of our government.
Before Christmas the hon. member for Frontenac-Len-nox and Addington (Mr. Alkenbrack) raised another point at which I think we should take a look. I refer to the effect the government's action will have on the stock of Reader's Digest. The people who have invested in the stock will find that their equity has turned down because of the government's action. I think many Canadians, who are not rich or powerful, are trying to save for retirement by investing in such a company. The action of the government simply will take away a part of the nest egg they have been trying to set up for their retirement. I think this is a point which should be recognized by the government.
I repeat that this bill is not in the interest of the Canadian public and industry. The government is proven to be bankrupt when it comes to producing incentives for Canadians to develop a strong and viable publishing industry in Canada.
The minister has lost the respect of the Canadian cultural industry. He has been forced to go incognito with his new beard so that he will not be recognized by angry artists who are tired of the vacillation they see today. I think members on this side of the House feel very strongly that the government has a responsibility to come up with strong, positive policies to encourage Canadian cultural nationalism and give the artistic community an opportunity to survive and prosper. This legislation does not do that. It is punitive, unfair, and bad legislation. I believe this legislation should be set aside for another year before it is put into effect.


Mr. Robert C. Coates (Cumberland-Colchester North):: Mr. Speaker, there are a few things I should like to say about this legislation at this point in time. It seems to have a tendency to degrade this institution and the people in it by leaving the impression with the public that members of parliament do not have a voice and are not heard, but I think the fact that members of parliament in all corners of this House have expressed some of the reactions of the Canadian public shows that we do have a concern and speak out about that concern on our own part and on the part of our constituents.
I believe the public has taken some heart from the fact that spokesmen from all parts of this House have expressed their views in the hope that perhaps the government would respond. While I am not completely happy about the way in which the government has responded, I should say that the Minister of National Revenue (Mr. Cullen) at the very least has ears that hear, and has a public perception of what people want, as well as an appreciation that perhaps culture cannot be legislated or that social habits cannot be legislated, as some of his colleagues unfortunately seem to believe.
From that point of view I always feel it is great when parliament is strengthened in any way and when members of parliament, regardless of their political affiliations,
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stand up and are counted on behalf of their constituents. In that regard I would have to say the ruling in respect of the regulations indicated by the minister is a victory for the individual member of parliament in this Chamber.
Second, I should like to say that unfortunately, as so often happens, once again the deliberations of the committees associated with this parliament have been proven to be useless and worthless from the point of view of really producing something of value and benefit to the Chamber. Committees are asked to consider in depth the legislation that is placed before the House. Witnesses are invited from all parts of the nation to appear before committees to express their views. Then in some minister's office negotiations are carried out that are not heard by members of the committee and that are not a part of the report rendered by the committee.
The government made a farce of the committee which considered this legislation by moving members in and out of it in a game of musical chairs when it was found that some members voiced dissent in respect of the government's proposals. Then at the eleventh hour the people affected sat down with the minister and his officials, and all of a sudden a magic formula appears which changes the whole concept of what the legislation is purported to do. That, unfortunately, is the bad aspect of parliament and what it stands for; it is a bad aspect of the committee system so far as this parliament is concerned.
I remember an occasion when the Standing Committee on National Defence was supposed to be considering what our posture would be in respect of NATO. In the midst of our hearings the Prime Minister (Mr. Trudeau) made a pronouncement which did not even take into account the fact that the committee was deliberating on the matter. He cut them off at the pass concerning what they might produce. How can members of parliament take committees seriously when this happens time and time again when the committees are considering propositions that have been placed before them? That is the sad part of what has happened today.
What bothers me, my leader, and most members who are taking part in the debate on this subject is that here we have a firm that is in the business of publishing which has a deep concern about what its future in this nation would be if the legislation should become effective, whose representatives find themselves in the unfortunate position of going to a minister's office and accepting a proposition in relation to regulations as to the future of their operations.
I have no doubt that the Minister of National Revenue is as good as his word. He always has been with me and in this House. I am sure he will always be so long as he is a member of this House, either in cabinet or outside cabinet. I know that any businessman who had to rely on what this minister told him could feel confident about the word of the minister, but I am very concerned about the fact that he might not always be the Minister of National Revenue. Indeed he should not be, because he is a man with much ability and promise who could do a lot of good for the country if he were in the right positions in government. This company, however, has to rely on the interpretation of his successors in respect of the regulations. I would not want to be a businessman in this country if I had to depend
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from day to day on the word of any minister of any government in respect of the interpretation of regulations.
There are 500 employees in this country who rely on what the government does about these regulations, and who would like to know whether or not they will get their pay check at the end of every week. I do not think that we as members of parliament should subject any group of individuals to such a guillotine. For that reason I suggest to the minister that he consider this amendment before us, or bring in some other amendment to the legislation which would give more strength to what he is now proposing with regard to Reader's Digest.
Canadians in general believe that Reader's Digest should continue to be a Canadian publication because they like it, they subscribe to it, they enjoy it, and they want it. I think that the minister and the government came to that conclusion belatedly, and because they hate to face that fact they might have to involve themselves in a completely new debate on this bill they are endeavouring to do by the back door what most Canadians want them to do by the front door. I say there is no reason why we cannot do it by the front door.
I do not think there is any major argument about any other aspect of this legislation, and because it would be in the best interest of parliament to get this legislation out of the way so that we can deal with other things I would like to urge the minister to consider this amendment, or to bring in another amendment putting into effect what he proposes to do by regulation so that Reader's Digest may feel they have a guarantee not just for today or for the duration of the minister's tenure as the Minister of National Revenue, or for the tenure of this government, but for all time until a government comes in with another piece of legislation some day in the future and says it wants to change the rules whereby we, and the people of Canada, will know that the only way in which a change can be made is through parliament and that members of parliament will be given an opportunity to have their say about what the change will be.
It worries me a lot to think that the government feels that it can find a method or a device at the eleventh hour to do something that we have been urging it to do all along because it knew that it would not be an easy task to get this legislation through the House without using closure. Surely that would be the most retrograde step possible which would make Canadians believe that not only do they have a government forcing legislation on them which dictates their cultural and reading habits but that it was imposing these things upon them by closure.
I do not know how hard I have to work to convince the minister that there is another way in which he can do it, a way which would give a guarantee to Reader's Digest, and a guarantee to members of parliament who have tried so hard to convince the government that this is what should be done. The minister should offer the Canadian people an assurance that what they want will take place in the proper way. This is what I urge on the minister.
I think the minister will find that a degree of co-operation from members of this House which has not existed up to now because of the step he has taken will be forthcom-

ing if he accepts my suggestion. I think there is a major difference between Time magazine and Reader's Digest. Reader's Digest is the type of magazine that relates to people in a completely different way. It has given a great deal of security to a great many Canadian writers. I think they are desperately concerned about their future in continuing their writing for Reader's Digest in the days ahead if that magazine is put out of business.
I think also that magazines such as MD are in need of some assurances. That magazine might well conform with the regulations that the minister has brought down for Reader's Digest and therefore be able to continue its publication. I think it is a most useful magazine both for the medical profession and the public in providing information about the health and well-being of our citizens. It is a magazine that does not interfere with any other magazine of the same calibre in this nation, and therefore we should do everything we can to ensure that Canadians have access to it.
I urge the minister to transfer the proposition he put before the House earlier today into some form of amendment so that this legislation can be passed by the House, and so that we can get on to other business of value and benefit to the nation. If we were to do that it would give hope to the people of this country that Canadians are heard by the government when they speak out and when they find representatives in all parties to voice their concerns, because the action of the government will be an indication that it has heard them.
Perhaps the government took a long time, and perhaps it took members on the government side to stand up in committee courageously and oppose the government's legislation, sometimes only to find out that they were no longer members of the committee and were replaced by other members who would go along with what the government said. Perhaps that was necessary to convince the government of the seriousness of members of parliament when they proposed that Reader's Digest should be allowed to continue in existence in this country.
I am looking now at the hon. member for Ontario (Mr. Cafik), who was certainly in the forefront of the fight to allow Reader's Digest to continue to live. He deserves our congratulations. He is a man who puts the feelings of the nation and of his constituents above party loyalty, not on every issue but on important issues. He does not really feel the government should be dictating what we see, write, and read. I congratulate him, and I say to him that because of actions such as he has taken parliament is a stronger and better place for all of us.


The Acting Speaker (Mr. Turner (London East)):: It
being six o'clock, I do now leave the chair until eight o'clock this evening.
At six o'clock the House took recess.


[Stage Direction]
AFTER RECESS

The House resumed at 8 p.m.
February 3, 1976
Mr. Bob Wenman (Fraser Valley West):: Madam Speaker, on November 24, 1975, the Secretary of State (Mr. Faulkner) spoke at the opening of the CBC centre in Vancouver, and toward the end of his remarks he had this to say about Bill C-58, which is really his latest pronouncement: "At this time I cannot say how effective the legislation will be. We will have to give it time." Unfortunately the bill has not had time to be passed, to be brought into being or to work, let alone to become established.
We cannot demand a guarantee of success every time the government brings in legislation, and we do not in this case. However, while guarantees are unnecessary, surely there should be some likelihood of success before the government asks this House to approve a measure such as this. I suggest to the minister that there is no such likelihood in the case of Bill C-58. On what basis do I make this suggestion? I make this suggestion having sat on the committee and heard, time and time again, from witness after witness that Bill C-58 cannot and will not achieve what it was set up to accomplish.
What seems to be the purpose of this measure? It seems that the purpose of this measure at many different levels, and from perhaps even the smaller, more insignificant level, is just taxation, and it applies to the larger and broader issues of Canadian cultural identity, Canadianism and so forth. I wish to address myself to that element a little later on, but first I should like to outline some of the other reasoning involved. It is claimed that this measure is intended to encourage the growth of a strong and viable Canadian broadcasting and publishing industry. How? It will do so by denying to all advertisers in non-Canadian media the right to deduct the cost of such advertising from income tax as a business expense.
Since this bill has received second reading I cannot reiterate my opinion that it is unfortunate that the very basic principle is at fault, but because the principle is at fault, this amendment should pass. This amendment will delay implementation, and by delaying implementation perhaps the government will have an opportunity to see that a great business principle established throughout the world should be maintained in Canada.
The question is then, will this method prove successful in the stated aim of strengthening Canadian broadcasting and publishing? Again I suggest that the answer is no. Furthermore, this measure will do great damage to many Canadians, to those whose jobs will be lost and to those who may lose the reading and viewing material which has been available and which gave them a broader freedom of choice.
With regard to the potential effectiveness of Bill C-58, the first point to be made is that there is substantial evidence that no significant amounts of advertising revenue will accrue to Canadian media as a result of this measure. Of those non-Canadian media most affected, Time magazine has vowed to reduce its advertising rates to compensate its clients for the loss of tax deductibility. KVOS television in Bellingham, Washington, is going to follow the same course. Reader's Digest estimates that only 19 per cent of its current advertising would be diverted to other magazines, and most of that would go to Maclean Hunter. Now that Reader's Digest has indicated that it can
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reach a compromise and continue to exist under these provisions, that revenue will not accrue to Canada.
The very objective of the bill, to increase revenue to those magazines the government has defined, or seems to have difficulty defining as Canadian, and to bolster our culture as a side effect, will not be met, by the admission of the minister today in the House. So where are the massive amounts of advertising money supposedly released for the Canadian media? Where are they coming from, and how is this bill helping?
The second point to be made here was made before the standing committee by representatives of the Association of Canadian Advertisers. That is a group of 215 companies which together account for over 75 per cent of all expenditures on advertising annually in Canada. Their point is that the reduction in competition resulting from this bill could well have the inverse reaction of reducing, rather than stimulating, the demand for advertising in Canadian periodicals and on television. Mr. Tom Blakely, the president of the association, put it this way:
Our Association is concerned that if advertising expenditures cease to be deductible in circumstances contemplated by the bill, not only the purpose underlying the bill may not be achieved but also advertisers may be adversely affected.
As a lay politician I quote these people because they are expert in their field. I suggest that their knowledge is at least equal if not superior to the laymen politicians of this House. The professionals in the field tell us that we will have inverse, adverse effect rather than the positive one contemplated in the bill. Mr. Blakely also said:
Some advertisers might well reduce their expenditures in the magazine medium as a whole and use their dollars in a more efficient or less costly way.
As outlined in our position paper, Time and Reader's Digest are key factors in many advertisers' decisions to use magazines as an advertising medium. We feel that the bill would impede advertiser access to Time and Reader's Digest. Those publications may cease to publish their Canadian editions. If that happens, many advertisers would face significant cost increases in using magazines to achieve their advertising goals.
In regard to broadcasting he said:
We therefore feel that the serious reduction of border-station competition will increase the market power of the viable Canadian stations. That may result in higher advertising costs on those stations with these results. Advertisers will have to pay more for time on stations that deliver the audiences they seek and that will leave less money to be spent with new or developing stations so that, in fact, the ability of those stations to grow and become attractive to advertisers may be hindered.
Taken together these two points underline the futility of this bill. No substantial sums of money become available, and what does become available more likely than not will not end up supporting the struggling Canadian media we are supposedly trying to help. For a bill that holds out such meagre hope of yielding any positive results, C-58 has more than its share of negative end products.
It seems to me that as this bill progresses it gets in deeper and deeper. Perhaps it was well intentioned at the start but it might well be left not only for a year, as the amendments suggest, but might well be left, redrafted, and tried again under a little broader objective.
21130-49%

February 3, 1976
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At this point I want to commend the minister, which might seem rather unusual. I think he is attempting to do something in the direction of shaping Canadian identity and I think this is a proper direction. If we look at the definition of what a Canadian is, a very simple dictionary tells us it is "a native or inhabitant of Canada". I think as maturing Canadians we need to move beyond the simple definition. I think we need to make a definition of Canadian newspapers, Canadian magazines, Canadianism and as far as the minister makes that kind of attempt in this bill,
I applaud him.
The thing that concerns me is that he seems determined to impose his idea of Canadianism upon Canada-it seems as if he feels bound to get his way and if he does not get his way he will bring in other legislation. The bill itself loses this kind of direction and credibility where we look for this Canadian identity because its first purpose becomes more and more to say yes to 75 per cent Canadian ownership. That will make it more Canadian, so I think it is a good move. But what happens after that, Mr. Speaker? The minister does not stop there but goes on to the "Canadian content different" rule.
All of a sudden what started out as a very high and worthy objective seems to move from a matter of wanting to throw out something-it starts to take on an "anti" tinge just like anti-Americanism or the evils of pro-nationalism. We have to be very careful that our pro-nationalism is not expressed in negativism. I think when we get into this content rule we go a little beyond the positive direction that was initiated in the original pronouncement of this bill.
The minister seems to be talking about Canadianism or Canadian culture. What is this elusive culture that he is attempting to stimulate by this bill? One definition defines culture as the customary beliefs, social forms, and material traits of a racial, religious or social group. The other part of that cultural identity is looked at as the condition of being the same with something described or asserted, or sameness or essential generic characteristics.
All of a sudden we are talking about losing our cultural identity, this identity of Canadianism-but we lose this anyway when in this bill we talk about content differential. If we look to this commonality of beliefs as representing a cultural identity we must ask, what is this commonality and how is it expressed? When we talk about 80 per cent difference we should really be talking about the similarities. I would suggest that between Canadian and American culture there is easily an 80 per cent similarity. In fact, I would say that would be true if comparing our culture with any other culture of mankind. We should be emphasizing the things that we have in common rather than any differences.
When we look at cultural identity I suggest that we have started a thrust here. Even if the minister scraps this bill, delays it, modifies it, or passes it, I hope he will not lose sight of this thrust, this beginning to identification of Canadianism. Indeed I hope he will carry this further because until we decide on a definition of Canadian, how can we determine how we want to get there? The first job is to identify what we are; after we identify what we are then we must decide what we would like to become, what we ought to become, and then decide on measures to work

toward this goal. We are doing it all backwards; we are feeling a strong surge of Canadian nationalism and saying, now let's do something about it, before we can even identify what it is.
I think the minister is struggling to find what it is. He talks about the struggle to uphold the ideals of Canadian identity and unity. Those are good words and thoughts, and I think he sincerely means them. The minister is a highly competent and intelligent individual and he knows that is what he was trying to do with this bill, but it is not working. I am sure he knows in his own mind that if he could accomplish only the 75 per cent Canadian ownership he would be better off than muddying the waters as he is doing with this content rule.
The content rule has much broader implications, but I do not think the minister wants a cultural czarism where we say, "This is Canadianism, and this is the border around Canada." That is what the bill is leading up to and I would ask the minister to step back and look at the amendment again. Perhaps he feels that he does not want to lose the progress the bill has made, so the bill could be referred to committee again during this year to grapple with the question of Canadian identity and culture. The subject is so large that we probably would not get near it, but we might discuss what Canadianism is, what a Canadian is, what Canadian identity is and what Canadian culture is. If we reach a common denominator on Canadian culture then we might be able to develop methods for teaching it. We are going in a directionless direction at the moment, and that needs to be changed.
My appeal on this first clause is that the minister accept this amendment and show faith in the parliamentary system, in the committee system. Otherwise this, unfortunately, will be a sad day for democracy.
The minister described the process which led to this legislation and pointed out that the government had considered, in the procedures leading to this legislation, the recommendations of two royal commissions and of the Senate committee. But he forgot to add that the parliamentary committee had also made its contribution. The parliamentary committee was engaged in its deliberations, but the minister did not allow that committee to provide any input. The government did not respond to it. Instead of listening, the minister throttled the committee and throttled his own members, so to speak. That was unfortunate for parliament and Canada, as such a committee can do a great service in establishing this country's cultural identity and showing the direction in which we should move.
I hope the minister will respond this evening and make a positive contribution. Instead of adopting a negative attitude, instead of giving a negative definition as to what a Canadian is and what Canadian culture is, let him be positive and say how we are to move positively in the direction of establishing Canadian identity. We should not move in the direction suggested by this bill.


Mr. Bob Brisco (Kootenay West):: Madam Speaker, I note that the Secretary of State (Mr. Faulkner) listened with interest to the speech of the hon. member for Fraser Valley West (Mr. Wenman). The hon. member's appeal is
February 3, 1976

valid. I hope it struck a responsive chord in the Secretary of State's mind.
The basic thrust of Bill C-58 is suspect. Frankly I fear that the government is doing again what is has done for some time past, creating an addition to its burgeoning bureaucracy. Actually I can see an entirely new bureaucracy being created. There will be new offices and new appointments, simply to monitor Canadian content. Or is the Canadian content of our Canadian publications so small that we need appoint only one person to measure it, no matter whether he measures it by column inches or percentages? That part of the Bill, I feel, is suspect. That is why I support motion No. 1, in the name of the hon. member for Fundy-Royal (Mr. Fairweather).
I question the ability of any thinking person to distinguish between "different", "substantially different", and "substantially the same", to distinguish between what is truly Canadian, what is pseudo-Canadian, and what is not Canadian. Apparently if a Canadian author were to write an article solely about South America or solely about Africa, his article would be classed as being of Canadian content, even though it is not about Canada. The author is Canadian you see. On the other hand, if an African author were to write an article solely about Canada, it would not be considered as being of Canadian content, because the author would be from Africa. Are these anomalies not strange? I suppose the only truly Canadian articles would be ones written by Canada's scouts or cubs. I ask hon. members to reflect on this.
Will this law, and regulations passed under it, suffer the same fate as other laws and regulations this House has passed in the last little while? For example, you will remember that the Minister of National Health and Welfare (Mr. Lalonde) claimed that the government was being generous with Canadians by removing the tax from shoes and clothing. Members asked if the tax saving would be passed on to the consumer and the minister said that, of course it would be; the government would monitor the process. If my memory serves me correctly, two members of this House questioned the minister at different times on the effectiveness of the program and on whether the government was making sure that the tax reduction was passed on to the consumer.
Later the government removed part of the tax on building materials and we were told that, yes, the government would monitor the process and make sure that tax savings are passed on to the consumer. That matter went into limbo. Nothing has been said about it, or heard about it. Little has been said about the tax abatement. No one, either on the government or opposition side, has expressed concern and wondered if the consumer is reaping the benefit. I suggest the same will be true with Bill C-58. Assuming it becomes law-perhaps I assume too much- and assuming the regulations are drafted, I foresee the entire matter disappearing into a vague limbo. Yes, there will be talk of monitoring the bill and of looking into the anomalies and aberrations which will take place. Finally, two or three years after passage, no one will know how to interpret the bill. That will happen if the House does not adopt motion No. 1.
The government has intruded on various aspects of Canadian life. At one time it said that the government has
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no place in the bedrooms of the nation. Now, apparently, it is to take its place in the reading rooms and libraries of the nation. It is to control what Canadians read. Some claim that any talk of censorship in connection with Bill C-58 is simply a red herring. I do not accept that. Surely the government is intruding on what we can read, and Lord knows for what reason. I can see the government becoming involved in other areas of our life. I should not be surprised if, next month, Playboy magazine carried in its centre fold, in full living colour, the Secretary of State in hirsute splendour, but possibly without his glasses. Seriously, I am pleased to see the Secretary of State there.


An hon. Member:: In what magazine?


Robert Hylton Brisco: Playboy. Perhaps that is stretching the imagination a little far in that particular context, but perhaps I am making my point.
Evidently the government intends to intrude on what we can read and on how productive our Canadian publishing industry will be.
On January 6, 1976, the Vancouver Sun carried a report concerning the proceedings of the Standing Committee on Broadcasting, Films and Assistance to the Arts, of December 4, 1975. The author of the article is Lisa Hobbs. May I quote from the report of the proceedings, as reported in the Vancouver Sun.
Committee member John Roberts (L.-St. Paul's): If the Canadian edition of Reader's Digest wishes to make an arrangement with, say, an American author such as Norman Mailer, for an article and that article appears ... that is part of the 80 per cent substantially different?
Secretary of State Hugh Faulkner: I would think so.


Mr. Roberts:: Can they sell it?


James Hugh Faulkner: I don't want to get too deeply involved in this ...
That statement is a reflection of the thinking of the Secretary of State. Quite frankly, the Secretary of State has a tiger by the tail. He wishes it were a Persian cat. It is going to bite him. The minister is being scratched, indeed bloodied, by the introduction of Bill C-58.
When speaking a moment ago, the hon. member for Fraser Valley West expressed the discomfort and concerns about the areas of vagueness in this bill. I share his feelings. He asked where the minister is heading and what he truly wants.
In the treatment of this bill in this House, there has been very unusual procedure. It was forced into closure on second reading, expanded and debated in committee at great length, and four members of the government party were removed from the committee. I am sure Your Honour will agree that that is an unusual procedure.
With the protracted debate on clause 1, it is very difficult to conceive that in the beginning the bill probably had wide Canadian support. Indeed people in my constituency were in favour of this bill initially. That support has been reversed. People no longer speak of being in favour of Bill C-58. Letters from my constituency run ten to one in opposition to the position of the minister. That is a reversal of feeling. Why is it present? It is because of its vagueness of basic purpose, and its thrust which is really no longer understood by Canadians, nor for that matter by many members of this House.

February 3, 1976
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There are three points that can best be made at this time with reference to an organization called the B.C. Civil Liberties Association. In a letter addressed to the minister that association said, and I quote:
Unfortunately, we cannot consider the promotion of a 'truly Canadian' outlook by the destruction of what have hitherto been publications supported by Canadian readers as other than censorship. Censorship in our understanding is content control or content manipulation by government.
This is a very unusual, perhaps unexpected approach by the B.C. Civil Liberties Association which, like any other organization of similar thrust, is nationalistic in its views. It went on to say:
Deduction of expenses does not appear to us to be a privilege which the government of the day has allowed a business only where socially desirable aims are to be achieved by the outlay. Deductibility is the ordinary rule and not a 'special advantage'... thus the content test which may result in non-deductibility for advertising in certain publications (which may be domestically owned and printed) creates an anomaly operating against these publications. It does not remove an anomaly which once favored them.
In their final remarks they stated:
We do not know what aspect of content a future government, still disclaiming (as you do) any intention to censor, might see fit to consider in imposing taxation. A still more nationalistic administration might decide to define only writings about Canada as domestic for taxation purposes.
A paternalistic government might decide that creation of jobs for Canadian writers was so high a priority that only Canadian citizens' work would rank as domestic. As civil libertarians, we would not be concerned with what laudable motives might underlie either of these fears of content manipulation.
Nor are we concerned with the policy of cultural renaissance which underlies the current government's policy. Our objection is to the intended results, not to the reason for seeking those results.
So spake the B.C. Civil Liberties Association. I would think that the directors of that organization in seeing the letter go forward would certainly be aware of its contents and be prepared to endorse them. Otherwise it would never have gone forward. It is interesting to note that among the directors of the B.C. Civil Liberties Association we find such notables as "Justice Minister Ron Basford". The party to my left, which is in favour of Bill C-58, has failed to mention this, but another of the directors of the B.C. Civil Liberties Association, and his name is given, is the great libertarian, Tommy Douglas. Is it not strange that we should have two such notable politicians who in the House are supporting the bill and who serve as directors of an association which strongly opposes it?
My other concern is with reference to the very thrust of the 80 per cent, 75 per cent, 20 per cent, 40 per cent, or whatever. There is nothing in the bill that really defines it. We have been informed that these provisions will appear in the regulations. I understand the second amendment will deal with that very fact. However, I find it very disturbing that it is not clearly spelled out in the bill. Rather, it is subject to the whim and change of the ever-changing ministers. God knows, we see enough of that in this House. It is also subject to the ever-changing bureaucrats who perhaps will be responsible for the implementation of Bill C-58 if and when it becomes law.
Let me join with other members of the House such as the hon. member for Fraser Valley West in supporting amendment No. 1 at report stage of Bill C-58.
[Mr. Brisco.)


The Acting Speaker (Mrs. Morin):: Is the House ready for the question?


Some hon. Members:: Question.


The Acting Speaker (Mrs. Morin):: The question is on motions Nos. 1 and 12. Is it the pleasure of the House to adopt the said motions?


Some hon. Members:: Agreed.


Some hon. Members:: No.


The Acting Speaker (Mrs. Morin):: All those in favour of the said motions will please say yea.


Some hon. Members:: Yea.


The Acting Speaker (Mrs. Morin):: All those opposed will please say nay.


Some hon. Members:: Nay.


The Acting Speaker (Mrs. Morin):: In my opinion, the nays have it.
And more than five members having risen:


The Acting Speaker (Mrs. Morin):: Pursuant to Section 11 of Standing Order 75, the recorded divisions on the proposed motions stand deferred. The House will now proceed to Motions Nos. 2 and 3.


Steve Eugene Paproski: motion No. 2:
That Bill C-58, to amend the Income Tax Act, be amended in Clause 1 by striking out line 14 at page 1 and substituting the following therefor: "a market in Canada where more than half the contents of such issue, excluding advertisements, are substantially the same as the contents of an issue that was printed, edited or published outside Canada."


Mr.   Jean-R. Roy@Timmins: Motion No. 3.
That Bill C-58, An Act to amend the Income Tax Act, be amended in Clause 1 by striking out line 14 at page 1 and substituting the following therefor:
"a market in Canada, except in the ease of a newspaper or periodical whose general content relates to scientific or medical subjects and is published for the general interest and benefit of professionals."


Benno Friesen: Madam
Speaker, I rise to speak to Motion No. 2 on behalf of my hon. friend, the member for Fundy-Royal (Mr. Fairweather).
I should say at the outset that the amendment he has proposed is a conciliatory one; it has obviously arisen out of the intransigence of the government on this issue. It is designed as an effort at conciliation. I should like to make it clear that I, for my part, do not share an approach on that level; I would not support any kind of restriction being placed on the freedom of information in this country. I am moved to read several lines on this subject which I believe to be a propos.
February 3, 1976

On a huge hill,
Cragged and steep, truth stands, and he that will Reach her, about must, and about must go,
And what the hill's suddenness resists, win so.


Some hon. Members:: Author?


Benno Friesen: John Donne.


An hon. Member:: They have never heard of John Donne.


Arthur Jacob (Jake) Epp: Does he qualify under the 80 per cent rule?


Benno Friesen: I guess those Phillistines opposite do not recognize good poets when they hear them.
It has always been the hallmark of good journalism that information should have free concourse in a society. The free interaction of information and discussion has always been the accepted medium of discovering truth, and truth has always been the goal of good journalism. It is upon the percolation of information and discussion that news magazines and the intellectual health of a nation depend. Now, it would seem, those famous lines must be rewritten on the basis of the government's intention, and we must read them:
On a huge hill,
Cragged and steep, truth stands, and he that will Reach her, about must, and about must go To the Secretary of State's Department,
The Revenue Department and the Justice Department.
I suggest this is not the kind of foundation on which a nation is built, and I would simply refer to the historic experiences of nations around the world which have experienced the kind of measures the government is trying to introduce. If the government would look at the historical record of those nations which have introduced measures such as this, which really has at its heart the control of free access to information, it would find that the nations which introduced such legislation are those with which it would not want to identify itself.
Look through the pages of history at the experience of the nation of Persia or of the nation of Rome. Look at the Reformation and the Counter-Reformation. Now look at the 17th century in England. It was a Puritan government in England which first introduced legislation requiring the licensing of books in that country. The government felt legislation was necessary to control information because it was not sure what the printers were going to print and wanted to make sure that the material that went out to the reading public would meet the desires of the establishment of the day-that it would no way threaten those in power. I keep wondering whether there is a parallel between the experience of those nations and the government we face today.
Behind all this, I suggest, is a feeling of insecurity. Surely when we begin to build walls we are announcing in loud terms that we feel insecure, that we feel threatened. One of the hon. members opposite has already used a very good term for it, namely, cultural paranoia. Maybe the government is experiencing just that. It feels threatened from every side.
It seems strange to me that while the government is seeking to impose restrictions of this nature on the pub-
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lishing industry it should also be espousing the cause of free enterprise-at least it was doing so as recently as last December. Until last December, at any rate, the market was to be open. On one hand they want a free market in the economy but, on the other, they do not want a free market place in the publishing industry, in the world of ideas. What is wrong? Is something wrong with the thought patterns of Canadians? Is there something wrong with the way we think? Is there something wrong about the ideas which come across international boundaries? Are we afraid of those ideas?
Along with all other members of the House I want to see the Canadian identity enhanced, and in many ways I agree we are sometimes too greatly affected by cultures other than our own. But that is a choice we make. We can never reach the point in this country at which we restrict our people when it comes to opportunities to make an individual choice. As soon as we restrict free movement of ideas across international boundaries we are telling the people: you do not have the right to choose what you should read or think.
While I enjoy the distinctiveness of the Canadian identity I hasten to add that I do not regard it as sacred. It is not the only valid identity in this world. Are we afraid of the ideas which come from the United States, or of the ideas which may come from Germany, Japan, India or China? Why is it the government wants to restrict the 80 per cent content on the free inflow of information? I ask the minister very seriously whether members of his department or any other department of government are competent to deal with this kind of legislation?
The issue is not one of establishing a Canadian publishing industry. The issue is whether each Canadian has the right to read that literature he chooses to read, and make for himself the decisions as to what reading material ought to cross his desk. Again we come to the same issue on the other side of the spectrum. We are dealing with periodicals that for the most part are widely accepted across Canada as being reputable, wholesome reading literature, albeit in the case of Time magazine especially we may not always agree with its opinions as it may have some subtle overtones. At least we have the opportunity of making the decision. What the government wants to do now is take that choice away from us.
The decision on the part of the government to introduce a content rule is restrictive and paranoic, and has no place in a country that honors freedom. As I have suggested before, if the government is really serious about having dependable guidelines, and I emphasize the word dependable, for writers to follow, the most simple thing the government can do is withdraw this legislation as it stands and include the so-called Cullen rule, so that the country will then know in a very firm way exactly where we stand on this ruling, and will not be carried about on the whim of fancy of every minister who comes into this portfolio. The rule will then not be subject to the dyspepsia, of the minister of the day.
How are we going to know whether the departmental rule which says 80 per cent today is going to mean 80 per cent tomorrow? Our country is founded on law and on the

February 3, 1976
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need for a firm and dependable understanding of where we are. I challenge this minister to find some way of including his ruling in the law so that we know by the final decision of this House that we are dealing with a statute and not with a departmental regulation.
I challenge this minister to work with other members of his Cabinet in finding some way of accommodating the regulations he has articulated by putting those regulations into the statutes, so that the House of Commons can debate the ruling rather than simply having this done by departmental regulation. In this way the writers of our country will know where they are at and will be able to write with a feeling of security.


Mr.   Jean-R. Roy@Timmins: Madam Speaker, the amendment I have proposed to the House for adoption is a very simple one and does not require a long explanation or speech.


James Aloysius McGrath: Madam Speaker, I rise on a point of order. I thought we were on motion No. 2, yet it seems the hon. member is speaking to his own amendment.


The Acting Speaker (Mrs. Morin):: The two motions have been grouped together.


Mr. Roy (Timmins):: Madam Speaker, I thought we were discussing motions Nos. 2 and 3 at the same time. I was suggesting that the amendment I proposed was a very simple one which requires little explanation. It would exempt from the changes the minister has proposed newspapers or periodicals whose general content relates to scientific or medical subjects published in the general interest of and for the benefit of professionals. My amendment deals with a very specific type of printed material which zeroes in on subjects of particular and specific interest to professionals and scientific people. I cannot for the life of me think why such scientific material would represent any sort of challenge to the cultural integrity referred to in this bill.
If the material to which I refer does not in any way affect the culture of Canada and is rather strongly directed towards scientific and medical material, I can see absolutely no objection, and no reason why we should not exempt that type of published material.
It has been said that the government does not want to make any exceptions. I do not understand the reason for that because I think we should not only be looking at the short term but as well at the long term in respect of these specific publications. It is already too evident that the bill seems to be pointing at two publications, namely, Time and Reader's Digest. We have all seen the statement of Mr. Zimmerman on behalf of Reader's Digest this afternoon. It seems to me that if we are going to consider this legislation we should have the wisdom to adopt the long-term view, and in that way present acceptable legislation. In this way we would not be placing unacceptable controls on the publication of specific scientific and medical material which is published for the purpose of educating doctors and scientists. I certainly hope this House will give favourable consideration to this amendment, finding it desirable and acceptable.


Jack Sydney George (Bud) Cullen: Madam Speaker, as I listened to the speaker for the opposition, just prior to the last speaker, I wondered whether we were even talking about the same bill. There seemed to be some suggestion of censorship, or that people are being forbidden to read what they choose to read. I would respectfully suggest another reading of the bill which would indicate that there is freedom of information, and a freedom of choice so that the Reader's Digest, Time, or any other material the hon. member wants to read will still in fact be available.
I think this kind of misrepresentation and misstatement in respect of the bill does the hon. member little credit and does a disservice to the Canadian public. There is in fact no intention to curtail the free flow of information. I will leave it at that, and deal primarily with the percentage content.
It seems to me as we reach this stage of the bill it would be appropriate that I make a few comments on the government's interpretation of "substantially the same" as used in Section 19 of the Income Tax Act. The interpretation has been both misunderstood and misrepresented, and I welcome this opportunity to ensure that the record is clear.
On January 23, 1975, the Secretary of State (Mr. Faulkner) announced the government's intention to remove the special tax status enjoyed by certain foreign-controlled publications. Bill C-58 seeks to repeal sub-sections 19(2) and 19(4) of the Income Tax Act, and in that way no business deduction may be claimed for the cost of an advertisement placed in an issue of a non-Canadian periodical if the particular advertisement is directed primarily to a market in Canada.
Predictably and appropriately enough, periodicals affected by this change in legislation carefully re-examined the bill first passed in 1965 and had little difficulty in understanding that in order to become qualified as a Canadian magazine within the meaning of the act it would become necessary first to be produced and published in Canada.
Second, it would have to be 75 per cent owned and controlled in Canada. Third, it should not be produced under some licensing arrangement with another magazine.
The fourth criterion, that is, that the contents must not be substantially the same as those of a foreign periodical, has not been as clearly understood and has needed clarification. I think it is fair to say that estimates of the required degree of difference ran from 50 per cent to over 80 per cent, and we have heard as high as 100 per cent. It had been the intention of my predecessor in office to announce the interpretation to be given those words at the committee stage. However, because the effective date in the bill was January 1, 1976, I felt it was more appropriate to make my decision, and to make it known, as soon as possible so that publishers and advertisers would be aware of their tax positions and have an opportunity to rearrange their affairs accordingly.
In deciding the interpretation to be given to the words "not substantially the same", there were several criteria to be followed. First and foremost, the government's intention was clear: there were to be no special privileges or exemptions under section 19(1) of the Income Tax Act. I
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should point out at this point that such a position was a recommendation of two federal inquiries, the Royal Commission on Publications, which has been called the O'Leary Commission, and the special Senate Committee on the Mass Media. The thrust of both inquiries was that exemptions granted to foreign publications under income tax legislation should be repealed to ensure the survival of a healthy indigenous periodical industry.
To give effect to the government's intention, it was obvious that a specific position had to be determined. Secondly, the provision relating to "substantially the same" was enacted in 1965 so that Canadian publications would not have undue competition for advertisers from "split runs" or "dressed up" versions of foreign publications. The requirements with respect to ownership and control by Canadian citizens, that is, 75 per cent, and the preclusion of licensing agreements, made it obvious that a great measure of independence would be expected from a truly Canadian periodical.
With this in mind I issued a press release on October 23 to announce that, in order to be considered not substantially the same as one or more issues of one or more foreign periodicals, more than 80 per cent of the contents of a Canadian periodical must be material which has not appeared in any current or prior issue of foreign publications with which the Canadian periodical has any type of continuing arrangement for access to material.
There has been some criticism of the procedure because this is, after all, an interpretation. Quite frankly I would have preferred an amendment to the Income Tax Act to specify unequivocally that the words "not substantially the same" be defined by regulation as meaning 80 per cent different. However, this would require a new notice of ways and means motion, and such an amendment would not be feasible at this time.
I have met personally with Mr. Paul Zimmerman of Reader's Digest and his counsel, and also with Mr. LaRue of Time Canada and his counsel, together with a counsel from one of the intended purchasers, indicating that my announcement, like thousands of others we are called upon to make, was an interpretation. However, because it had the backing of the government and my cabinet colleagues, if a challenge were successfully made it would be incumbent upon the government to proceed under a new notice of ways and means motion to define the meaning of the words, to restore the government's intention.
This has been the subject of some criticism and I would like to comment briefly upon it. First, such an amendment would not be retroactive. If an advertiser successfully challenged our interpretation in the court, that advertiser would be permitted the business deduction. My announcement about legislation that would follow a successful challenge was made as a courtesy to those who might see fit to launch an action and spend a considerable amount of money-only to find that down the road the policy's intent would be restored by legislation. This procedure of subsequently amending legislation is not unprecedented.
Usually when parliament passes legislation it announces the intention of that legislation, and what it is proposed to do. Sometimes that legislation is challenged, loopholes are discovered, or court decisions are rendered that are different from the original intent of parliament. When this
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happens, future legislation is passed to plug the loopholes, or to give effect to the original intention. I submit there are many precedents for the introduction of such an amendment to ensure that policy intent is achieved.
In June, 1972, for example, the Department of National Revenue issued an interpretation bulletin relating to government grants to industry. In May, 1974, this interpretation was challenged before the courts, which decided in favour of the taxpayer. Because the court's interpretation of this pertinent section of the Income Tax Act did not reflect government policy, an amendment was proposed by ways and means motion in the November 18, 1974, budget. A sub-section was subsequently enacted, with effect from November 18, 1974, but not retroactive, nor is that the intention here.
In my view, public awareness of the government's intended publications policy is important, and I felt I would have been remiss in my responsibilities and been unfair to the publishing firms in question, and to their advertisers, if I had left any room for doubt that we might accept a figure less than 80 per cent. I therefore opted for letting the publishing industry and the advertisers know well in advance precisely what the government's intention was.
The reference to "continuing arrangement" in the press release is vital to the understanding of our interpretation of "substantially the same"-the written law is given much greater flexibility by its inclusion-yet it is an important point that is often missed.
Because the interpretation specifies material "acquired through a continuing arrangement" an issue of a Canadian magazine may consist of even 100 per cent "spot" articles taken from foreign periodicals and still be considered Canadian, if those articles are not obtained through a "continuing arrangement"; that is, an arrangement by which a periodical has an on-going right for availability of general material.
In the case of a digest, Mr. Speaker, the definition of continuing arrangement will not refer to that arrangement which a periodical may have with a middle party to obtain material. The purpose of the legislation is not to preclude the possibility of a digest-which, by definition, reproduces most if not all of its material existing in Canada, but rather to ensure that the editorial choice and condensation, if necessary, of that material are done in Canada.
If a continuing arrangement must be made through a second party to have access to third party material, it would not be the purpose of the law to thwart that access but to ensure that that material is chosen and edited in Canada. The ruling remains the same. We are saying that "middle party access" used to obtain third party material will not be regarded as a continuing arrangement. This technique will allow a Canadian digest access to original material.
Before I close, Mr. Speaker, I would like to comment briefly on the recent editorial in Time magazine entitled "Freedom and Fairness". This is such a distortion of the truth and such a misleading representation of the facts that it simply cannot go unanswered.
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I take strong issue with the suggestion that my department or my predecessor misled Time. The former minister indicated in early discussions with Time editors that a content decision had not been made-that this would have to be referred to cabinet. He assured Time editors that this would not be less than 50 per cent, but at no time did he suggest that it would be 50 per cent.
The only public declaration made by the former minister with regard to content was that somewhere between 60 per cent and 80 per cent would have to be different content to qualify for the definition of "Canadian". The memo referred to in the Time editorial was part of a draft memo, never sent and never signed. It had been prepared with regard to format. No particular attention was being given at that time to the question of content. Time lawyers and editors know this as well as anyone and have twisted the words ripped from an unsent, unsigned memo to suit their own purposes. This is misrepresentation of the worst order.
In fact declaring that the government's policy requires that more than 80 per cent of the contents of a Canadian periodical must be material which has not appeared in any current or prior issues of foreign publications with which the Canadian periodical may have any type of continuing arrangement for access to material, allows more, not less freedom to periodicals. Articles do not have to have Canadian subjects, nor be written by Canadian authors. Canadian magazines will have access to a variety of foreign sources and still qualify as a Canadian magazine, as long as there is no continuing arrangement with the source for more than 20 per cent of their material.
The 80 per cent content ruling does not abridge, check or change the free flow of any information. Foreign magazines should and will continue to appear on all newsstand-but alongside their issues will be stronger and better Canadian periodicals which will be benefiting from a redirection of Canadian advertising support. This is the intent of Bill C-58.


Some hon. Members:: Hear, hear!


Jack Sydney George (Bud) Cullen: Madam Speaker, for several months there has been a demand for a definite decision on what is meant in the Income Tax Act by "substantially different". I have publicized that decision, and pointed out government policy, as a courtesy, and in fairness to those interested or affected.
This interpretation was arrived at through much careful consideration of the interests involved. It was arrived at, as I have just demonstrated, by weighing many factors and by listening to the opinions of parties both for and against. It is a clear, responsible, and necessary interpretation which I have come to believe must be made if this bill is going to achieve its purpose, that of ensuring that Canadian publishing is in a position to grow and to compete with foreign magazines both within and beyond its borders.


Robert Lorne Stanfield: Madam Speaker, I simply wish to direct the attention of the House to one point. Quite frankly I alluded to it this afternoon.

I rise tonight because I find the attitude of the government completely shocking. I am not speaking now about the policy of 80 per cent difference or any policy. I am referring rather to the fact that the parliament of Canada has passed a statute which, like other statutes, would normally be interpreted by the courts in case of any dispute. We are now being asked to adopt an amendment to that statute, and we are being told simultaneously by the Minister of National Revenue (Mr. Cullen) what "substantially different" means. I want to know what there is in any statute and any tradition in this country that gives a minister of the Crown the right to determine authoritatively, and without reference to the courts, what the words of acts of parliament mean. Who gave the Minister of National Revenue the authority to determine what "substantially different" means? It is a complete usurpation of the position of our courts in this country.


Some hon. Members:: Hear, hear!


Robert Lorne Stanfield: I find it completely revolting that the government should take an existing statute, introduce an amendment, and then say how that statute passed some ten years ago will in fact be interpreted, regardless of what a court may say as to what "substantially different" means. Courts are not to be allowed to determine whether "substantially different" means 80 per cent different.
The minister referred to a ruling he has given arising out of conversations with representatives of Reader's Digest about the importance of the existence or the lack of a continuing arrangement. Is that in a statute? Is there anything in our statutes about continuing arrangements? Is there anything in the statutes passed by this parliament, or which we are asked to pass, which relates continuing arrangements or the absence of them to "substantially different"? I ask that question.
There is nothing in the statute which we are asked to pass which gives the Minister of National Revenue, or indeed the governor in council, the authority to say that the absence of a continuing arrangement as he defined it is significant or determinant for this purpose.
I rise at this time, as I say, not in connection with the policy at all but to express my distate for and indeed disgust with the approach of the government which in effect removes the whole question of interpretation of the statutes from the courts. I would like some member of the government to set my mind at rest or to point out to me if I am wrong in this respect.
I say it is a complete subversion of our whole judicial system. I do not see how the government and its supporters can ask this parliament to endorse a proposal or an approach which takes away from the courts the interpretation of statutes already passed by this legislature and substitutes the Minister of National Revenue as the Supreme Court of Canada in this respect, without the slightest authorization by parliament.
The minister says that he is trying to be helpful by telling publishers and others how the statute will in fact be interpreted by the department. I suggest to the minister that neither he nor his colleagues have that kind of an authority, and if I am wrong, if I misunderstood the situation, I would like to be corrected. It seems to me that the government, in an entirely arbitrary way, is assuming the
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right to interpret in a manner beyond appeal what the words of parliament mean, and that is something that I am not prepared to accept, quite apart from any question of policy.


Some hon. Members:: Hear, hear!


Norman Augustine Cafik: Mr. Speaker,-


An hon. Member:: Is he the government?


Norman Augustine Cafik: -I really want to talk about motion No. 3 which is before the House, but in light of the intervention by the Leader of the Opposition (Mr. Stanfield)-


Robert Lorne Stanfield: And by the minister.


Norman Augustine Cafik: -I feel it is essential to point out that in substance I agree with a large part of the argument that the hon. member has made.


Some hon. Members:: Hear, hear!


Norman Augustine Cafik: It seems to me that the very essence of Bill C-58 is that the essence of it is not in the bill at all, and what really counts in this bill is that which is outside the bill, that is, the interpretation of "not substantially the same as." I must admit that this offends me to some extent as a parliamentarian because in my years as a member of this House I have constantly and consistently fought to try to minimize the effect of regulations and interpretations, although it could not always be done.
I think all hon. members readily recognize that a bill cannot always indicate every aspect which is going to be covered, but it ought to do so wherever possible, and in this particular case it is quite evident that it would have been possible to have treated that particular aspect of the bill, not now contained in the bill, in the bill itself.


Some hon. Members:: Hear, hear!


Norman Augustine Cafik: We would then have had an opportunity to know and to debate precisely what the government had in mind when this bill was introduced.


Robert Lorne Stanfield: Would the hon. member permit a question?


Norman Augustine Cafik: Yes.


Robert Lorne Stanfield: Would he not agree that this goes even further than the concerns he has expressed, that the bill goes beyond the question of delegating powers to make regulations? Will he not agree that the legislation which exists and the legislation we are being asked to pass make no provision for the minister or the government defining what "substantially different" means by legislation?


Norman Augustine Cafik: I think I would disagree somewhat with the precise wording used by the Leader of the Opposition (Mr. Stanfield) in this respect. I think it would be counter productive to conclude that the government did not have some responsibility, particularly the Minister of National Revenue (Mr. Cullen), to apply some interpretation to the law.
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The fact is that this provision for "not substantially the same as" is part of the existing law. I have no quarrel with the minister giving that an interpretation. My quarrel is on a different basis altogether. I would have preferred, and I think the Minister of National Revenue has already indicated that he also would have preferred, to see that particular interpretation embodied within the law. However, unfortunately, if I understand his previous remarks, he would have preferred to move in that direction but was given advice that it would have required a new ways and means motion. Be that as it may, it does not in any way alter the substantive points.


An hon. Member:: Bring in a new motion.


Norman Augustine Cafik: Don't debate with me. I am not on the minister's side on this particular point.


Some hon. Members:: Hear, hear!


Norman Augustine Cafik: However, I am not prepared to use a stick to beat a dead horse. If the minister is right, I see no reason not to defend him, and where he is wrong I see no reason to defend him either.
In any event, as I pointed out at the beginning, aside from wanting to make a brief comment with respect to the comments of the Leader of the Opposition, I really want to deal more substantively, but briefly, with motion No. 3, which has been brought forward by the hon. member for Timmins (Mr. Roy). This amendment would provide an exemption for periodicals which deal with scientific or medical subjects. In that respect I must say that on June 4, 1975, in the second reading debate on this bill I raised for the first time the question of Modern Medicine, MD of Canada, and some possible other publications in that caterogy. At that time I indicated that I felt it was unacceptable that we prepared legislation in such a way that it would prohibit our people in the medical field from having access to whatever information may be available form elsewhere in the world.
It can be argued that these magazines can be published in the United States, printed there, forwarded into Canada and our medical people could have access to those journals, and I agree that that is a valid argument. Nonetheless, we should bear in mind that the stated purpose of this bill- and there may be a difference between what is stated and what is perceived to be the purpose-is to assist Canadian publishing concerns, and to that I largely subscribe. I think most of us, if not all of us, would like to see a healthy publishing industry in Canada, so we do not disagree with that. However, with respect to this motion I should like to raise one point.
How indeed are we going to help the publishing industry in Canada by effectively prohibiting under previous conditions the right to publish Md of Canada or Modern Medicine in Canada? Do they have competitors in Canada to which the advertising would be diverted? To my knowledge, the answer is no. Are we really suggesting that those who advertise in publications do so on a willy nilly basis?
With regard to trade magazines, those who publish in them are really looking for a particular target audience, and in the case of these medical magazines it is unthinkable that those who advertise in them will divert those
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advertisements to Maclean's magazine or to any other magazine which does not reach with the same target audience. Therefore, to contend that we have made an amount of advertising revenue available to Canadian publications by wiping out these particular magazines to my mind is just fiction and an excuse. In my judgment that is just not so.


Some hon. Members:: Hear, hear!


Norman Augustine Cafik: Therefore, if we want to assist the magazine industry in this country substantially, it seems to me that we must deal with two aspects; first, attack the dumping problem. If there is editorial material coming into Canada at a price to the Canadian publisher or subsidiary of a foreign publisher in Canada at a cheaper rate than they could generate it themselves, we should deal with that kind of question in ordinary, traditional ways through our dumping legislation, and that appears to be the appropriate way to deal with that aspect of the question.
Second, if we really want to help the magazine industry in Canada, we need more advertising dollars directed into periodical publications as opposed to other advertising media. When we consider this side of the coin, it is quite evident that Canada has one of the lowest rates of advertising per advertising dollar in the publication industry in the world. Less than half our advertising dollars are diverted to the magazine industry in comparison with the United States. We are so far below that which occurs in Europe that it is almost beyond description.
For instance, I understand that in Italy something over 50 per cent of every advertising dollar goes to the periodical industry. In Germany, France, and England there are very large percentages compared with that of Canada which, I believe, is in the neighbourhood of 2.8 per cent.
If we really think that we ought to protect, expand and to give reason for new Canadian magazines to come into the field, perhaps we ought to consider this matter altogether differently, and we ought to indicate to advertisers that if they want a tax advantage from advertising in Canada, they should divert at least 5 per cent of their advertising dollars into the periodical industry. By doing so we would have twice the advertising revenue and many more Canadian magazines. That would be a very constructive approach to assisting the magazine industry. The present approach, particularly as it relates to this amendment, is not productive in terms of helping anybody in the magazine industry. It will simply adversely affect two medical journals which provide information to our doctors and professionals in this country. I frankly, am prepared to vote in favour of the amendment put forward by the hon. member for Timmins.


Mr. P. B. Rynard (Simcoe North):: Mr. Speaker, I rise to support the hon. member for Timmins (Mr. Roy) and what he had to say, as well as the hon. member for Ontario (Mr. Cafik) who, in my view, put the situation in its proper light.
As we know, the Canadian population today has reached about 221/2 million people. We also know that medical science extends around the world. Experimental work is being done in China, in Great Britain, in France, in Ger-

many, in the United States, South America-all over the world. The Canadian magazines in the medical field that the hon. member for Ontario mentioned, Modern Medicine and M.D. of Canada, come in free to the medical profession, bringing the latest scientific data gathered from all over the world.
I think it would be the height of folly to build a wall and say that we have all the scientific expertise we need in this country. We know what would happen to the exchange of ideas in the medical field then. Just to give an example, the Mayo clinic is doing research work on dissolving gallstones. A Canadian firm and others are also working in this field. When the research is complete it will be available to medical periodicals all over the world, not only for the benefit of the United States but that of the world at large. If there is humanity in this parliament how can we deny this information to countries that are ill-equipped and cannot afford the research?
Only a few years ago Great Britain was the medical centre of the world, but the centre has now shifted to the United States. We are doing a lot of valuable research work in Canada because of our connections and communications through journals and other ways with the United States. In the field of aeronautical science we are learning about the reaction of the human body in the medical end of that speciality and this knowledge is made available to the world through the magazines that I have mentioned. Knowledge about operative procedures in the same field is made available as well.
It is interesting that the hon. member for Ontario said that if we want to publish magazines in Canada the first thing we must do is apply for sufficient funds or get people to advertise in these journals. That is not the case at the moment; advertisers are using other avenues. I think the figures that the hon. member for Ontario quoted are about right. The only way these magazines can go to medical doctors, researchers, and other fields in Canada without charge is if the advertising pays for it. Modern Medicine and M.D. of Canada are well put together and bring to our attention facts that are many thousands of years old that still have a bearing on the human body.
This is the most reckless piece of legislation that I know of, Mr. Speaker. It is not only reckless, it is destructive. It is not only destructive, it is trying to build a wall to keep out information that comes to us free of charge.
I know the minister is rather a nice fellow but I cannot understand his thinking on this. He taught school himself so I cannot understand his motives. I hope he will see that this bill should be set aside for the present.


James Hugh Faulkner: Mr. Speaker, would the hon. member permit a question?


Mr. Deputy Speaker:: The hon. Secretary of State (Mr. Faulkner) wishes to ask a question of the hon. member for Simcoe North (Mr. Rynard).


Philip Bernard Rynard: Certainly, Mr. Speaker.


James Hugh Faulkner: Mr. Speaker, I listened with a great deal of attention to the comments of the hon. member, a member for whom I have a great deal of affection and respect. In fairness, however, no one is suggesting that we
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build a wall. These medical magazines will have free circulation in Canada.
The question I put to the hon. member, and it is a question raised by the bill is this: should Canadian business be able to advertise in these magazines and use that advertising as a tax deduction? I do not think anyone is suggesting that the magazines should not circulate. I do not think anyone is suggesting there should not be a free flow of information. The question comes back to the point made by the hon. member for Sault Ste. Marie (Mr. Symes): should these magazines be assisted? That is what we are talking about.


Philip Bernard Rynard: Mr. Speaker, I pointed out in my speech, and I think the minister must have missed it, that Canada, the United States, and other countries exchange information through their various periodicals. I would expect-and I say this with frankness-that Canada should bear its fair share of the cost.


Reginald Cyril Symes: Mr. Speaker, I want to address my comments specifically to motion No. 3 standing in the name of the hon. member for Timmins (Mr. Roy), which seeks to exempt scientific and medical periodicals from the provisions of this bill.
I should also like to reply to the remarks of the hon. member for Ontario (Mr. Cafik) who, I thought, would have followed some of the testimony given in the standing committee and realized the motivation behind removing subsection 4(b) of section 19 of the Income Tax Act. I think it relates to a decision of the Federal Court of Appeal in 1972 that pointed out a loophole in the legislation that was not intended by the framers of the legislation nor by the royal commission from which the bill flowed. In order to inform the hon. member for Timmins and the hon. member for Ontario, I should like to relate some of that background and testimony. It will then become clear why the section will be repealed.
Section 19(4)(b) of the Income Tax Act exempted foreign publications from the tax effects of section 19 applying to any publication the principal function of which is the encouragement, promotion or development of the fine arts, letters, scholarship or religion. The members of the Royal Commission on Publications were clear in their intent: These foreign "little," or cultural magazines would not, I repeat, would not be carriers of Canadian advertising to Canadian audiences.
As we know, the royal commission recommended that the deduction from income tax by a taxpayer of expenditures incurred for advertising directed at the Canadian market in a foreign periodical wherever printed should be disallowed. The commission, in its conclusion and summary said that the foregoing recommendations I just mentioned would prevent the diversion of Canadian advertising expenditures from Canadian periodicals. They strike at split runs, regional editions, "Canadian" sections, "Canadian" editions, and other techniques of diversion which exist now or may be developed in future. They do not bear upon any Canadian periodicals and do not affect foreign cultural, "little," consumer or business periodicals in any way unless they are used as carriers of domestic advertising.
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I should mention a court case concerning JayKay Publications, which publishes a medical magazine. I will not dwell on the history of the appeal. What happened was as follows: The judge in the first instance interpreted very narrowly the question of content, but the appellate court did not look at what the judge below had considered, and looked at the total workings of the magazine. The decision of the Federal Court of Appeal in 1972 meant that the courts were to interpret subsection (4) as including foreign publications used as carriers of domestic advertising. In effect it means that a loophole has been opened affecting the narrow area of educational, medical or scientific magazines.
As the law now stands as a result of the decision of the Court of Appeal, any foreign publication that can be judged to have scholarly content seems to be in the position of becoming a Canadian periodical, and any Canadian periodical that can be judged to have scholarly content could therefore be purchased by foreign interests, without subsection (1) of section 19 coming into force. This means, then, that a number of Canadian scholarly magazines in fields of medicine, history, arts, science and so on can be bought out, or foreign publications could set up equivalent magazines, under the guise of their being scholarly or scientific magazines, and these foreign publications would not be barred from using the Income Tax Act and allowing their advertisers to deduct the expenses of advertising.
The testimony we heard in committee from Canadian scholarly magazines, scientific journals, and so on, and from the Canadian Periodical Publishers' Association was to the effect that if this loophole is not plugged, which is what Bill C-58 attempts to do, Canadian magazines, especially Canadian medical publications, cannot survive the assault of this potentially new low-cost competition. Therefore I suggest it is important that this House reject motion No. 3, proposed by the hon. member for Timmins (Mr. Roy). The amendment would, if passed, open the floodgates for foreign magazines, which could qualify as scholarly or scientific publications in those narrow areas and escape the advertising prohibition provisions of the Income Tax Act.
I remind hon. members who are concerned in case this bill would somehow be a form of censorship that rejection of the amendment will not stop those magazines from crossing the Canadian border and being distributed to the scientific or medical community. Their members will still have access to those magazines. Certainly, if this bill is passed, it will protect scientific and scholarly journals of Canadian origin against unfair competition from magazines which could qualify under the loophole created by the decision in 1972 of the Federal Court of Appeal.
Let us remember that the United States has enacted much more stringent regulations concerning the publishing of scientific journals and the allowing of Canadian scientific or medical journals to penetrate tbe United States market. That may be a form of censorship or, at least, protection under American copyright legislation.
At present no foreign periodicals are denied entry to this country. Remember, this bill will not prevent them from doing so. At present Canadian scholarly publications are liable to be subject to a form of censorship, or they are

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denied entry to the United States by American law. Let me explain.
Unlike Canada, where our borders are open to foreign publications, the United States, through its manufacturing clause in the Copyright Act, effectively prevents Canadian journals containing articles by United States citizens from selling more than a limited number of copies in the United States without threatening the American citizen's copyright protection. The Americans do not call this censorship; they call it protecting their printing trade.
However, a Canadian publisher wishing to produce a scholarly journal concerned, for example, with medicine or economics, and to sell it to a North American market, has only two choices: to limit the size of his sale to the United States market, or to scrap the idea of including writings by American writers. No similar restriction exists in Canada, nor would Bill C-58 create such restriction.
We are in this position: the Americans, by their law, have effectively put up more barriers to the free flow of information than we have in Canada at present, or will have even after Bill C-58 passes.
For the sake of consistency, and in order to heed the intent of the royal commission, I suggest that it is important for us to reject the amendment proposed by the hon. member for Timmins. We should pass parts of the bill relating to subsection (4) and pertaining to scholarly journals as they stand. Otherwise the federal court decision which I mentioned will have opened a loophole whereby many Canadian scholarly magazines can be bought by Americans or foreign publications, and these foreign publications would then qualify for advertising advantages that were not intented for such scholarly magazines.
Also, if we do not pass the bill as is, many Canadian scholarly publications will face continued severe and unfair competition from certain magazines such as MD and others which have been able to exist through the qualifying provisions of Section 19 of the Income Tax Act. I say it is important that we do not follow or agree with the reasoning of the hon. member for Timmins or of the hon. member for Ontario.
The other point that is important and that we should turn our attention to is motion No. 2. This amendment seeks to reduce the 80 per cent substantially different clause to 50 per cent. We heard in testimony from many Canadian publishers that this would in effect destroy the intent of the legislation to promote and sustain a healthy Canadian periodical industry.
One of the great advantages that magazines like Time and Reader's Digest have that Canadian magazines do not is that those magazines can get editorial material much more cheaply from their parent companies than any competing Canadian magazine. In addition to getting that content cheaply, up until now they have been able to qualify for benefits under the Income Tax Act, or their advertisers could qualify for such benefits. This has allowed Time and Reader's Digest to capture over 50 per cent of magazine advertising revenue in this country.
If we are to agree to this amendment and reduce the substantially different aspect from 80 per cent to 50 per

cent, this will mean that magazines like Time and Reader's Digest will be able to continue to lift half of their content from parent companies outside Canada while retaining their favourable status under the Income Tax Act.
It is obvious what they will do. The 50 per cent content they can get from the parent will be the most expensive content that they will acquire. It will be the material that is before colour work, feature articles, that kind of material that Canadian companies would have severe financial difficulty trying to duplicate. They will be able to get cut-rate costs. The royal commission documented that it costs Time and Reader's Digest as little as 5 per cent of the original cost of production for these materials. It cost Canadian publications 5 per cent of the cost borne by the parent. That is a totally unfair competition for most Canadian magazines trying to work up the same material.
We accepted the opportunity of protecting Canadian industry against unfair foreign competition. I think the same principle should apply here. To reduce that content regulation would mean a windfall for these subsidiaries to get the most expensive materials at cut rates from their parent companies. It would negate the whole intent of the bill. Therefore I do not see how we can support that amendment standing in the name of the hon member for Fundy-Royal (Mr. Fairweather).
I am still a bit worried about the statement of the Minister of National Revenue as to the accommodation reached with Reader's Digest on the content regulation, 80 per cent not substantially the same as the parent. As I understood him, he said there could be a continuing arrangement by the Digest with the second party in order to have access to third party sources. I would like further clarification of this. I wonder whether it does not open up a loophole for Time Canada as well in terms of the fact that Time Canada could buy original materials from Time correspondents scattered throughout the world that are in fact being subsidized by Time in the United States.
If Time Canada could buy that material at a reduced rate, or that material which is surplus to the actual material appearing in the American edition of Time, it would in effect be continuing a kind of relationship almost approaching a licensing, but different enough that these magazines could qualify as Canadian magazines for advertising income tax purposes.
If that kind of loophole exists for the Reader's Digest, and more particularly for Time, it pulls the rug out from under the intent of the legislation which is that these magazines, by virtue of their symbiotic relationship with the parent company, are not truly Canadian magazines. I want to look at Hansard tomorrow and examine very closely what the Minister of National Revenue said so that I can be very clear. Perhaps when the Secretary of State (Mr. Faulkner) rises, he can further elaborate on that situation.
To conclude, we in the New Democratic Party cannot support motions Nos. 2 and 3 for the reasons I have outlined.


Mr. Abbott:: Mr. Speaker, may I call it ten o'clock.
February 3, 1976


BUSINESS OF THE HOUSE
Mr. MacLean:: Mr. Speaker, I rise on a point of order to ask the government House leader if he would clarify the situation-


Mr. Deputy Speaker:: Order, please. There is some technical difficulty. The microphone in front of the hon. member is not working at this time.


John Angus MacLean: Mr. Speaker, I simply ask the government house leader to clarify the situation so that all members will have it clear in their mind as to what business the government proposes to present tomorrow.


Mitchell William Sharp: Mr. Speaker, it is the intention of the government to continue with Bill C-58 until the report stage has been disposed of.



PROCEEDINGS ON ADJOURNMENT MOTION

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

Douglas Roche: Mr. Speaker, my question dates from December 8 last when I asked the Secretary of State for External Affairs (Mr. MacEachen) whether he would put forward the ideas on trade and monetary reform to close the gap between the rich and the poor in the world, which he would be introducing at the conference on economic equality, otherwise known as the North-South Conference which was held in Paris which brought together the industrialized and the poor nations, the first real effort at bargaining on the issues which divide the rich and the poor countries. The minister replied at that time that he was then working out preliminary policy attitudes which would require elaboration as the work progressed.
Since that question was asked and the answer was given, the minister did, in fact, go to that conference in Paris, bringing honour to Canada in his role as co-chairman of the conference, and I wish to congratulate the honourable gentleman for the role he continues to play.
The conference went on into the middle of December and it was reconvened last week for two days to work out details for the work of four commissions. Canada has been appointed to two of them, namely, the commissions on energy and development.
Upon coming back to the House last week I asked the minister to give a report on the North-South Conference. The minister said he would be bringing some news of the conference before the House, perhaps this week, together with some of his own views. In his answer today he backed
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away from any commitment to bring into the House in the immediate future a report on Canada's participation in the conference, the most important conference on international life which has been held since the seventh special session of the U.N. General Assembly in September. More to the point, he backed away from his undertaking to bring before the House the policy positions to be adopted by the commissions on energy and development.
I must point out with great reluctance that the minister does not seem to be cognizant of the need to bring into a higher public profile in our country what Canada is doing in the whole application of the new international economic order with which the North-South Conference has been grappling.
While the minister was travelling overseas, I was travelling a bit myself. I went across Canada for ten days in January with two other members of parliament, the hon. member for Sherbrooke (Mr. Pelletier) and the hon. member for Greenwood (Mr. Brewin). The three of us, in a non-partisan way, sought to explain to the Canadian people why there ought to be a greater degree of Canadian participation at both government and private levels in Canada's international development program.
As we were explaining this need to the Canadian people we were constantly asked the question: what is Canada's position? Madam Speaker, the Canadian people do not know that a major shift has taken place in Canadian policy which has now been codified in the Canadian five-year strategy called Strategy for International Development Co-operation, 1975-1980. That document is not even known across Canada. That is tied in with my point tonight.
It is imperative this House be told the concrete proposals Canada is bringing before international fora at the present time-what we intend to do at the Law of the Sea Conference, what we propose to do at UNCTAD IV in Nairobi in May, as well as our continuing effort in the North-South Conference.
While all this has been going on the Canadian people are under the impression that our effort in international development is concentrated upon aid, and are not yet aware of the structural changes or the multi-dimensional policy which the five-year strategy really introduces. In the five-year strategy a commitment is made which implies a concentration of our aid upon the least developed countries, the countries now known as the fourth world, identified by the World Bank, and Canada has pledged under point 18 of that strategy to concentrate our aid on those least developed countries, about 35 in number, containing one billion people. What do we find, though?
While the minister is overseas he pledges $1 million dollars to Egypt for the rebuilding of the war-battered Suez Canal zone. Today, although he was not as cognizant of the details as we might have expected, the minister confirmed the latest announcement by CIDA of the $25 million loan in concessional terms for mutually agreed projects to Indonesia. We do not know anything about this project at all.
My point in bringing this up now in connection with the North-South Conference is that Canadian aid is going to Indonesia and to Egypt, countries which do not qualify as the least developed countries under the figures of the

February 3, 1976
Adjournment Debate
World Bank. The figures offered by the minister today show that Egypt's net per capita is income under $100, not quite in conformity with the World Bank figure which is $240. However, deplorable as that figure is, it still leaves the Canadian people in some confusion as to where our aid is going. Is it to go to the least developed countries, or are we going to continue to give aid for political purposes, whether of not those political purposes relate to our foreign policy, or is it for purposes of our trade position with Indonesia, which seems to underlie the new $25 million arrangement?
I take exception to a press release fron CIDA which attemps to explain why aid is going to Egypt, without giving any of the details. I urge the Secretary of State for External Affairs to bring into this House the full program of Canada's participation in international development so that we can begin to understand, with the Canadian people, some of these details, allowing us to continue our responsibilities.


Miss Monique Begin (Parliamentary Secretary to Secretary of State for External Affairs):: Mr. Speaker, I would first like to apologize to my colleagues in this House tonight for my unpleasant voice due to laryngitis. I should also like to thank the hon. member for Edmonton-Strath-cona (Mr. Roche) for his congratulations on the role played by the Secretary of State for External Affairs (Mr. Mac-Eachen) as co-chairman of the Conference on International Economic Co-Operation.
This conference has had two meetings now, as reported on by the minister not later than this afternoon in the House. I should like to clarify one thing that has been said in respect of the minister's statement as having been a "backing away", according to the hon. member for Edmon-ton-Strathcona, from his previous intention of informing the House and making a complete report on the conference in Paris.
In fact what was approved by the two chairmen, the hon. Mr. MacEachen and Manuel Perez Guerrero, of Venezuela, and the other 25 colleagues of the other countries, of which 19 are developing countries, was a timetable for meetings and a general setting of guidelines, not of policies, for the meeting of the four commissions which are to start their work on February 11.
As we know now, we are members of the energy and development commissions. We shall, of course, also be engaged in the dialogue in areas covered by the two other commissions, namely, raw materials and finance. I think it is rather easy to understand at this point in time the general strategy to be followed by the 27 members of the conference. It is to act as a team that should respect the rules of work. The 19 developing countries have indicated topics which they wish to discuss in each of the commissions. Now that this has been done we shall be indicating how we think the commissions should be working.
For instance, we have started urging the adoption of a pragmatic dialogue to avoid confrontation, and we are at this point in time urging more than what the group has been doing as a working team. It is rather interesting and difficult to launch a working team which will have to create a network of relationships and a good, positive working atmosphere in setting up the most difficult dis-

tinction between aid and trade. My colleague gave the impression of mixing the two as interchangeable, which I suggest they are not.
I do not think anyone can settle the international economic order in a few weeks. Our senior public servants reached Paris recently and are working full time on the development of the policies.


THE CANADIAN ECONOMY-ALLEGEDLY CONFLICTING VIEWS OF MINISTERS ON ECONOMIC POLICY-REQUEST FOR CLARIFICATION
A. Daniel McKenzie: Mr. Speaker, it is most interesting to note that the Minister of National Defence (Mr. Richardson) is here this evening. I hope he is here to answer my observations personally this evening and is not here simply as an observer.
Over the past few weeks there has been considerable concern over the Prime Minister's (Mr. Trudeau) remarks on the Canadian economy. The majority of Canadians are upset, to say the least. Toronto Liberal Leaders have expressed their concern about the Prime Minister's way of fighting inflation. The former minister, the hon. member for Windsor West (Mr. Gray), has requested that the Prime Minister call a Liberal caucus meeting to explain his remarks about long-term economic controls.
The president of the Canadian Chamber of Commerce does not agree with the Prime Minister's remarks that the free enterprise system is not working and that we should have more government intervention. The last thing we need in this country is more government intervention.
Canada is the most over-governed country in the world both municipally, provincially, and federally. What we need is less government. The Liberal government is responsible for our economic chaos and high inflation through its uncontrolled spending which has increased 151 per cent since 1968.
Labor and unions have no faith in the government or the Anti-Inflation Board. They are organizing official protests to say they will refuse to co-operate with the government. We now have the Minister of National Defence (Mr. Richardson) clearly repudiating the Prime Minister's controversial analysis of Canada's economic system. He says he is opposed to big government and big labour. How on earth can he stay in a Liberal cabinet when he feels this way? I see him smile. He should resign immediately. The minister made the above remarks in Winnipeg recently and distributed copies of his speech to the press in Ottawa. The acting Prime Minister stated in the House last Friday that the Minister of National Defence spoke without a text in Winnipeg. This is not true, as the speech was distributed.
There is no doubt in my mind that, under the Liberals, Canada is in for permanent controls. The Anti-Inflation Board rules and regulations are becoming so complicated and involved that a huge bureaucracy will be needed to compile all the paper work that the detailed Anti-Inflation Board forms will generate.. Business is already complaining of the additional workload in its accounting systems now
February 3, 1976

that it must provide information for the Anti-Inflation Board. This in itself will add to our inflation problems.
There has never been so much confusion and concern in Canada over how we are being governed. The Prime Minister has told Canadians the choice is theirs, and he also stated he welcomes the debate about the future of Canada which the government's actions and his words have stimulated. He further stated that we are living in a new economic era. I certainly agree that the Prime Minister's remarks have stimulated debate, and if the choice of a new economic era is to be left up to Canadians then an election should be called. There could be no better time, say in May or June, as the official opposition will have a new leader in less than three weeks and this would give Canadians an opportunity to decide between Progressive Conservative policies and the Liberals' new society of more government intervention. Also, the Prime Minister claims parliament is not working well, so at this time both major parties could explain to the electorate how they would make parliament work better.
The government was not given a mandate on July 8, 1974, to introduce a three-year or permanent government control scheme. As the Liberals stated, inflation was a world-wide phenomenon and nothing could be done about it, nor was any mention made of a new economic era being introduced.
Also, when there is a split in the cabinet, and the Minister of National Defence states in his Winnipeg speech that his economic views run counter to those of the Prime Minister's, and when a former cabinet minister, the member for Windsor West, states:
that the Prime Minister's remarks have been taken by some to mean that the government is planning drastic changes in the free enterprise system and a pervasive new system of government regulationsthen I have some uneasiness about what the Prime Minister's remarks could mean. The former minister further stated:
If major changes are in store, the Prime Minister has an obligation to explain them to caucus and to the public.
This is enough in itself to warrant an election.
I also believe, Mr. Speaker, that the majority of Canadians would welcome a complete explanation from all parties as to the direction in which they would lead Canada if in power. I am also sure there would be very little objection to an election being called this spring, and under the present circumstances it would be best for the country. The parties could also explain their priorities at this time and we could have a dialogue with the Canadian public, labour, and business, as to their choice of priorities.
In closing, Mr. Speaker, the Minister of Public Works' (Mr. Drury) speech in Winnipeg last week on consumer buying requires clarification almost as badly as the Prime Minister's post-Christmas broadcast did. The Minister of public Works' speech also conflicts with the position now taken by the Minister of Finance (Mr. Macdonald). His speech is also reminiscent of the disastrous Liberal policies of 1969 and 1970, of which he was a leading exponent.
Also, an election is needed so the Liberals can be more specific in their definitions of restraint and its approaches to the whole question of consumer demand. When a Liberal cabinet minister states that high consumer buying is
Adjournment Debate
harmful to Canada and is inflationary, then it is time we hit the campaign trail, Mr. Speaker.
When we read the headlines in newspapers across the country we find "Minister on Collision Course with PM". Another headline reads "PM is Scaring People, Mayor Says". Another reads "PM Urged to Explain". Another one reads "Government Blamed for Inflation". Another one reads "Trudeau's Way of Fighting Inflation Worries Toronto Liberal Leaders". Another one reads "Trudeau Scheme Absolute". Another reads "Insanity". Another reads "Mr. Trudeau Is Wrong On Economy-It Is Government Out Of Joint". Another one reads "Destroy Trudeau-Carr". He is a labour leader. These are great comments coming from Canadians about our Prime Minister. Another reads "100,000 Cubans Cheer PM;. Castro's Welcome Top Level". Another reads "Could Trudeau Pull a Ghandi?" Another refers to Trudeau as Mr. Hitler.
If we are going to be faced with these sorts of things, I can see no better time to call an election in Canada. Another headline reads "Bankers Gloomy Over Canada's Long Term Prospects".


Mr. Deputy Speaker:: Order, please.


James Armstrong Richardson: Mr. Speaker, I am very pleased to hear that my hon. friend from Winnipeg South Centre is continuing to read my speeches and to study them.


Some hon. Members:: Hear, hear!


James Armstrong Richardson: I am glad also that he has seen fit to draw attention to the fact that I was speaking in Winnipeg. This was at a B'nai B'rith dinner when I was pleased to receive their International Citizenship Award. I expressed a number of thoughts on that occasion, on national defence, our relationship with Israel and peacekeeping, and I also talked about free enterprise. At that time I did not say anything about free enterprise that I have not said on a number of previous occasions. In fact some of my sentiments stated at that time I expressed even before I was in public life.
To remind the hon. member of what I did say, the essence of what I said was:
It has not been free enterprise that has failed. It has been just the opposite. It has been all Canadians, working through the free enterprise system that has given Canada its high standard of living, and a way of life that in many respects is the envy of the world.


Some hon. Members:: Hear, Hear!


James Armstrong Richardson: I might say that the hon. member for Winnipeg South Centre (Mr. McKenzie) suggests that I used a text. That is not correct. I did not speak from a text. Perhaps he has not heard of recording. My speech was recorded. It was later transcribed, and what was transcribed was later distributed. If the hon. member is not aware of that mechanism, perhaps he should learn that these techniques are now available.


A. Daniel McKenzie: A very moot point.

February 3, 1976
Adjournment Debate


James Armstrong Richardson: However, on this occasion I did not have reason to mention the Prime Minister (Mr. Trudeau), and I did not have reason to quote anything he had said, but in view of the relationship between what I have said and what the hon. member suggests the Prime Minister has said, I should like to draw his attention to words the Prime Minister used as recently as last month here in Ottawa, and I quote:
There is no desire on the part of the government or the people of Canada to impose more regulation on the truly competitive sectors of the economy....
The preservation and strengthening of the free market sector of our economy is absolutely central to the Liberal view of the Canada of the future...


Some hon. Members:: Hear, hear!


James Armstrong Richardson: I simply say to those who are trying to suggest that there is a conflict between what I have said and what the Prime Minister has said, that those are the words of the Prime Minister which I just read. They reflect my views, and they reflect what I said in my speech in Winnipeg.


CONSUMER AFFAIRS-TRANSFER OF FOOD STOCKS FROM LOBLAWS TO ZIGGY'S-SUGGESTED INVESTIGATION OF JUSTIFICATION FOR PRICE INCREASE
John R. Rodriguez: Mr. Speaker, on November 7, 1975,1 brought to the attention of the Minister of Finance (Mr. Macdonald) the fact that Loblaws Pickering Farms in Toronto had closed and reopened on October 18, after the announcement of the Prime Minister (Mr. Trudeau) of his anti-inflation policy, under the name of Ziggy's, which is also a Loblaws operation but with significantly higher prices.
The matter was referred to the Anti-Inflation Board by the minister, and last week that board made known its findings. The Anti-Inflation Board in its statement said, among other things, and I quote: "The decision of Loblaws was part of their ongoing marketing strategy".
It is no surprise that the board makes these kinds of decisions regarding prices. Board member Beryl Plumptre made it clear where she stood when she said:
The board will have to show restraint with companies and their profits. After all, we need profits to provide jobs and investment for more growth and more jobs.
Board chairman Jean-Luc Pepin also made it pretty clear where the board stands on prices, and he is quoted as saying the following:
Only by the end of the year, after we're able to study the big companies' profit reports will we be able to say that we've had an effect on prices here or touched something there. These guidelines on prices are much more difficult to put into use than the ones on wages.
That is what he said, again stating the obvious. Mr. Pepin accused the reporters of wanting instant coffee in terms of results on price controls. Obviously he was talking about instant coffee from Ziggy's, which now costs 20 per cent more.
In bringing down the Ziggy's decision Mr. John Hague, the director of the Anti-Inflation Board's prices and profits branch, said the decision was made to allow Loblaws to change its name to Ziggy's and raise its prices because the

increases were the result of normal business practices and decisions taken prior to the implementation of the program. No doubt it took Mr. Hague's group a very long time, since November 7 until last week, to come up with that excuse. I mean, here is an excuse that not only lets these Weston-owned stores off the hook and allows them to raise prices as much as they want, but they set a terrific precedent for other businesses. I will bet that executives across this country are still scrounging through their files looking for memos talking about price rises dated before October 14.
It looks as if any price increases in this country will be getting red carpet treatment from the government and its flunkies on the Anti-Inflation Board. I am confident enough in this country's corporations to be sure that, no matter how excessive and unreasonable their price increases are, they will be able to come up with a memo dated before October 14 to back them up.
I notice that these sorts of regulations do not apply to unions, however. Loblaws decides to change its name to Ziggy's before October 14 so they can raise their prices as much as they want. But unions which had their contracts expire before that date and which were negotiating with employers have no such luck.
Say the two parties to the negotiation have agreed to negotiate. They have agreed to come to an agreement satisfactory to both of them, regardless of how much that is. Surely, using the logic of Ziggy's, anyone whose contract expired before October 14 should be able to bargain without the interference of the Anti-Inflation Board. But it does not work that way. You can only pull that kind of a stunt if you own a multi-million dollar corporation.
The board is not even content just to roll back wages, its only real function. Instead it feels compelled to jump in on the side of employers in every collective dispute it sees. And Jean-Luc Pepin in not content just to be the government's pet crocodile, snapping at the wages of workers whenever he can; he now sometimes even feels compelled to mouth the Liberal party line as well. He apologized to the Conservative Party leader for some of his partisan remarks, but it is clear he has in no way changed his mind.
The government made it clear what this program is all about through the Anti-Inflation Board's announcement on Ziggy's. It might as well have erected billboards telling the corporations, "Help yourselves-no price interference here!"
In fact the only price freezes we have seen around here have been ones the supermarkets put on themselves. Those, the Globe and Mail discovered, included prices which were frozen higher than they should have been in the first place.
There is only one good thing which can be said about the Anti-Inflation Board's Ziggy's decision, and that is it is decisions like these which indicate that the board might be committing suicide. It is decisions like these which show the people of Canada what a hypocritical farce and fraud are being perpetrated on them.


Mr. Maurice Foster (Parliamentary Secretary to Minister of Energy, Mines and Resources):: Mr. Speaker, the Anti-Inflation Board has carried out an investigation of a report that a Loblaws Pickering Farms store located at
February 3, 1976

Yorkville Avenue and Yonge Street in downtown Toronto closed on October 18, 1975, and re-opened two weeks later as Ziggy's, a specialty chain owned by Loblaws, with higher prices.
The board's investigation disclosed no evidence that indicated the change in question was in any way an attempt on the part of Loblaws to circumvent the antiinflation guidelines. It was determined that Loblaws was in the process of rationalizing supermarket operations by closing down unprofitable stores. During the past four years, 110 supermarkets were closed. On October 18, 1975, the Loblaws store located at 852 Yonge Street, in Toronto, closed down and re-opened on October 30, 1975, as a Ziggy's operation, a wholly-owned subsidiary of Loblaws Ltd. The Ziggy's store in question operates as a specialty delicatessen store and carries, in addition to the regular Ziggy's product line, certain convenience products similar to Beckers, Mac's Milk, etc. Certain of these convenience products are common to both Ziggy's and Loblaws, and initially some prices were higher at Ziggy's. After public outcry, prices were immediately rolled back by Ziggy's. Therefore
Adjournment Debate
the decision to close the Loblaws store and to open as a Ziggy's outlet would not appear to contravene the guidelines.
The characteristics of Ziggy's are sufficiently different from that of a supermarket in that it offers specialty merchandise, uses special equipment, and renders a personal service that a special pricing policy would seem justified. However, the so-called convenience products, such as bread, milk, eggs, sugar, coffee, salt, etc., offered for the shopper's convenience only, and which do not fall under Ziggy's normal pricing policy, in the judgment of the board, should be priced in accordance with Loblaws' pricing methods. To this end the board has told Loblaws that the maximum price to be charged for these so-called convenience products at Ziggy's should not be priced higher than these same goods at Loblaws supermarkets. Loblaws have agreed to abide by this decision of the Anti-Inflation Board.


Mr. Deputy Speaker:: The motion to adjourn the House is now deemed to have been adopted. Accordingly, this House stands adjourned until tomorrow at two o'clock p.m.
Motion agreed to and the House adjourned at 10.32 p.m.

Wednesday, February 4, 1976