1976-05-25

ROUTINE PROCEEDINGS


Mr. Stuart Leggatt (New Westminster):: Mr. Speaker, I rise under the provisions of Standing Order 43 on a matter of urgent and pressing necessity which concerns the proposed expansion of the Vancouver International Airport. In view of the recent statements by the Minister of Transport (Mr. Lang) that this expansion may take place within the Sea Island dyke, in view of the fact that this proposal has not been referred to the airport planning committee which had previously vigorously opposed the airport expansion, and in view of the fact that such expansion will trigger additional non-co-ordinated development in the Fraser estuary, I would move, seconded by the hon. member for Winnipeg North Centre (Mr. Knowles):
That this new proposal be referred to the airport planning committee and that a moratorium be placed on further development until proper studies not only of the airport expansion but all expansion in the Fraser estuafy be completed.


Mr. Speaker:: Such a motion pursuant to Standing Order 43 can be presented only with the unanimous consent of the House. Is there unanimous consent?


Some hon. Members:: Agreed.


Some hon. Members:: No.


AGRICULTURE
Mr. Rene Matte (Champlain):: Mr. Speaker, pursuant to the provisions of Standing Order 43, I request the unanimous consent of the House to move a motion on an urgent and important matter.
Considering the general discontent of industrial milk producers following the dairy policy announced for the current year, and considering that the Canadian Dairy Commission seems to fail in its task to plan and coordinate this production, that the Minister of Agriculture does not find any reasonable solution for producers, most of whom
are in Quebec, I move, seconded by the hon. member for Rimouski (Mr. Allard):
That this House recommend unanimously that the federal government leave to farmers themselves and to provincial governments the task of organizing, coordinating and planning the affairs of the dairy industry.


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


Some hon. Members:: Yes.


Some hon. Members:: No.


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



ORAL QUESTION PERIOD


Mr. Walter Baker (Grenville-Carleton):: Mr. Speaker, my question is addressed to the Prime Minister and arises out of the dreadful situation in which we find ourselves in the matter of re-equipping the Canadian Armed Forces, particularly having regard to the difficulties in which the country and the government have been placed by his Minister of National Defence. I want to ask the Prime Minister with respect to a quote attributed to the Minister of National Defence in the press today, in which he said-I am quoting-that "he did not necessarily think the Orion was the right one in the first place", referring to a long range patrol aircraft. If this report is correct, can the Prime Minister indicate whether he has conferred with the Minister of National Defence, what is the state of mind of that minister in respect of the matter, and why did the deal go as far as it did if this transaction involving the Orion and its concept did not have the full support of the Minister of National Defence, as he is now supposed to have said?


Right Hon. P. E. Trudeau (Prime Minister):: Mr. Speaker, the hon. member is asking me if a quotation in a newspaper is correct. I have seen the quotation but I do not know if it is a correct one. I can see many ways of explaining the thought that might be behind such a quote. There were many options before the Cabinet, some of which were much more costly than the one we eventually

May 25, 1976
Oral Questions
chose. Perhaps the minister had in mind that there were better deals if we had more money. We certainly made the decision, for the money we could dispose of over a period of time, which represented the best possible deal.


REASON FOR DELAY IN DECIDING ON ALTERNATIVE TO THE &quot;ORION&quot;
Walter David Baker: Mr. Speaker, I was not so much concerned about the Prime Minister having seen the press reports as I was about the Prime Minister having seen his Minister of National Defence. The minister is also reported to have said there are at least six possible alternatives of LRPA, and he has hopes of making a decision by the fall. Since all of these other options must have been thoroughly examined in the past before the Lockheed LRPA was finally decided upon, would the Prime Minister explain why we now have to wait until the fall before a new decision is reached? Are there any other elements that were not present when the other options were discarded that would make one of these other six or so alternatives of which the minister has spoken now relevant?


Pierre Elliott Trudeau: Mr. Speaker, there were, indeed, many options looked at, and the fact of having chosen one means that the other options fell by the wayside. The conditions, submissions and tenderings which were put forward by the other companies would certainly not apply at the present time. We would have to reassess the kind of options the various other companies would be making to see whether they were still within the price range we were interested in and to see what effects inflation or other technological change might have had on them, and then make a new choice. It does not seem to be complicated.


ALLEGED STATEMENT BY MINISTER &quot;ORION&quot; WAS NOT THE RIGHT AIRCRAFT-REQUEST FOR CLARIFICATION
Walter David Baker: Mr. Speaker, now that the Minister of National Defence is in the House I wonder whether he would explain the quotation attributed to him over the weekend in which he is reported to have said in respect of the Orion matter:
-he didn't necessarily think the Orion was the right one in the first place.
If that report is correct would the minister indicate which aircraft he favoured over the Orion and why the deal went as far as it did without his full support, which seems to be the indication in this statement?


Hon. James Richardson (Minister of National Defence):: Mr. Speaker, I do not know what article is being referred to, but my position was very clear. There was a long study undertaken by the project office, which was an interdepartmental office, exhaustively determining which was the best aircraft for Canada. The project office recommended, and we approved as our choice, the selection of the Lockheed for reasons I have given to the House on many occasions. It is the most cost-effective aircraft and we thought it was the best aircraft, but there was, and I repeat it once again, a problem of financing the interim

payments. It is for that reason we did not purchase the Lockheed, not because it was not the best aircraft for the job.


REASON FOR ANNOUNCING PURCHASE OF LEOPARD TANKS AT NATO MEETING-REQUEST FOR ESTIMATE OF COST
Mr. Dan McKenzie (Winnipeg South Centre):: Mr. Speaker, it was reported over the weekend at the meeting of NATO foreign ministers in Oslo, that the Secretary of State for External Affairs announced that Canada is going to purchase 128 Leopard Mark I tanks for use in Canada and Europe. Today it was reported that the West German Minister of Defence has welcomed this decision. Can the Minister of National Defence confirm this decision, and also offer some explanation of why it was decided to have such an important announcement made abroad by the Secretary of State for External Affairs rather than have it made in this House by the Minister of National Defence?


James Armstrong Richardson: Mr. Speaker, I believe that if the hon. member reads the statement correctly he will see there was not an announcement of a purchase. I can confirm that the negotiations with the German government for the purchase of the Leopard I are proceeding satisfactorily, but there are a number of matters still to be concluded, and I think that fact was contained in the statement made. We did not announce the purchase of tanks from Germany.


A. Daniel McKenzie: Mr. Speaker, obviously the Secretary of State for External Affairs has been misquoted and I hope this matter will be straightened out with the West German Minister of Defence.
What is the total cost of these tanks, including spares, jigs and so on? If we are to sign a contract with the Federal Republic of Germany for the purchase of these tanks, can we be assured that this House will be kept informed of the progress of the negotiations, arrangements for financing and so on, so that we will not be subject to another process of bungling and mismanagement as we were with the LRPA.


James Armstrong Richardson: Mr. Speaker, in the first place I should like to point out to the hon. member that the Secretary of State for External Affairs was not misquoted. If he reads his statement closely he will see it is stated that there were still a number of factors to be considered and worked out before any such announcement is made. Until we have completed all the arrangements I cannot describe or talk about the details concerning price. That of course will be done at the time of an announcement.


SUPPLY AND SERVICES
Mr. Edward Broadbent (Oshawa-Whitby):: aircraft with Lockheed as being a greedy project. Is this his view since on behalf of the government he sent a telex communication which amounted to a letter of intent to that corporation last December 2, and if he thought it was greedy at that time what did he mean; did he mean that we were going to get something we did not need in terms of defence requirements or that it was too costly? Why did he send that telegram at that time if he thought it was a greedy deal?


Hon. Jean-Pierre Goyer (Minister of Supply and Services):: Mr. Speaker, I said, in fact, that we were no longer negotiating with Lockheed on a business basis. The matter had become far more imbued with politics than the main business principles that are essential to the negotiation of contracts with suppliers. So, under those circumstances, the government decided to cancel further negotiations with Lockheed.


REASON MINISTER MADE COMMITMENT TO LOCKHEED IN VIEW OF UNCERTAINTY ABOUT FINANCING
John Edward Broadbent: Well, Mr. Speaker, I will have to read the transcript because the answer makes even less sense than usual. Following this answer, and with regard to the report in the Toronto Star of Saturday in which it is stated that the minister said that a "one man to one man verbal conversation" is by no means sufficient when one negotiates a contract involving hundreds of millions of dollars, may I say that I agree with him entirely. However, I should like to ask him if he believes that why would he send a telex committing the government to this deal last December when they had no commitment at that time for front-end financing for which he is responsible, and why more particularly after four further months did he on behalf of the government sign another contract with Lockheed committing the government to pay some $16 million without the assurance at that time that they would have the front-end financing.


Jean-Pierre Goyer: Mr. Speaker, when the hon. member will read today's debates of the House, I suggest to him that he also go over those of the last few months. As a matter of fact, the Minister of National Defence indicated that an official of his department had talked with an official of Lockheed concerning a possible means of financing the contract. Unfortunately, that agreement remained verbal and was never put down in writing, which necessarily made things more complicated.
In fact, as I told the House in December, we authorized Lockheed to undertake preliminary work for the contract. We authorized Lockheed to undertake preliminary work for the contract to protect the terms and conditions we had negotiated with it and which we regarded as a good deal. Unfortunately it was not possible to finance that deal. Since Lockheed could not get approval from the banks and we wanted to continue to protect the terms and conditions already negotiated, we had to sign in March a provisional contract which protected those terms. Our expenses with the Lockheed Corporation were not to exceed $16 million.
Oral Questions
In the circumstances, it was the best agreement we could get from that company to retain good terms and avoid breaking up the budgetary ceiling the government had set for itself.


ALLEGATION MINISTER BLAMES DEFENCE OFFICIALS FOR COLLAPSE OF &quot;ORION&quot; DEAL-PRIME MINISTER'S POSITION
John Edward Broadbent: Mr. Speaker, I am sure many Canadians will wonder how spending $16 million and not getting any aircraft at all amounts to the best of a bad deal.


Some hon. Members:: Hear, hear!


John Edward Broadbent: I would like now to ask the Prime Minister if he thinks it is appropriate for a minister of the Crown who is again quoted in the Saturday Star as putting the blame for the collapse of the Orion deal bluntly on Department of National Defence officials-the Prime Minister knows it is a long tradition for ministers to accept responsibility because civil servants cannot answer for themselves-to make this statement about officials in his or any other minister's department.


Pierre Elliott Trudeau: Mr. Speaker, I have not read the Toronto Star or, for that matter, any other Star. It seems to me that the minister just answered this question. He was quoting the Minister of National Defence himself who was not putting blame on anyone, explaining how there was a misunderstanding between a general in the Department of National Defence who was negotiating with Lockheed and the Lockheed Company. There had been a verbal agreement, as we understand it, and the Minister of National Defence has said this in the House before. From what the hon. member is asking it seems to me this is the reply which was just given by the Minister of Supply and Services.


AGRICULTURE
Mr. Eudore Allard (Rimouski):: Mr. Speaker, I wish to put a question to the Minister of Agriculture.
Considering the general discontent of industrial milk producers and following the dairy policy announced for the current year, and considering that the Canadian Dairy Commission seems to fail in its task would the minister be prepared to let to farmers themselves and to provincial governments involved the task of organizing and coordinating the planning of the dairy industry in this country?


Hon. E. F. Whelan (Minister of Agriculture):: Mr. Speaker, the Canadian Dairy Commission is responsible for all producers of industrial milk in Canada. We are not receiving representations from all parts of Canada, but we

May 25, 1976
Oral Questions
have had some from some parts of the province of Quebec because producers in parts of Quebec recognize their responsibility toward making this program a success, and we are weighing it on those merits. There is no way that this Minister of Agriculture and this government can be responsible for paying money to people to produce a product that has no market. We told the producers what the production had to be last year. The marketing board is responsible for allocating the marketing quotas within the province. Different provinces operate under different systems. This is a most difficult program to operate and it is not without problems, but if producers, provincial marketing boards and the Canadian Dairy Commission want to work together, they can solve this problem.


Some hon. Members:: Hear, hear!


DAIRYING-INQUIRY WHETHER RUMOUR OF 20 PER CENT REDUCTION IN QUOTAS IS WELL FOUNDED
Mr. Leonel Beaudoin (Richmond):: Mr. Speaker, I should like to ask a supplementary.
Since industrial milk producers committed themselves to reduce their production by 12 per cent and the government requested 15 per cent last March or April, and since it seems now that the government requests 20 per cent reductions of their 1973-74 quotas, would the minister indicate whether this rumour is well founded?


Eugene Whelan: We are
not asking for a 20 per cent reduction, but for the month of April the figures still show 15 per cent above last year's production. We asked for cuts in production last year at the end of June and in September. Instead, there were increases both times. There must be some kind of strict quota regulation, or we will only compound the problem we have at the present time. If dairy farmers stay within their production quota which is allocated to them by the provincial marketing boards, they can still make a decent living.


SUPPLY AND SERVICES
Mr. Eldon M. Woolliams (Calgary North):: Mr. Speaker I would like to ask the Minister of Justice a question. Because there was a $1 billion oral contract, on Thursday, May 20, as recorded in Hansard at page 13700, the Minister of Supply and Services said that according to lawyers from the Department of Justice it was from that moment that the government had a contractual link with Lockheed. By signing the agreement with Lockheed on April 1, which limits Canadian liability to $16 million, a sort of retroactive legality appears to have been given to the letter of December 2. My question is, did the Minister of Supply and Services seek the advice of the Minister of Justice in November or December about whether he could authorize Lockheed to begin work on January 5 in spite of the fact that the actual contract had not been signed?
(Mr. Whelan.]


Hon. Ron Basford (Minister of Justice):: Mr. Speaker, I will want to check the precise dates, but I believe that throughout the Department of Supply and Services did have the advice of my officials as to the consequences of any actions it was taking.


Eldon Mattison Woolliams: The minister says they were in contact with him and his officials. What advice did the minister and his officials offer, particularly now that it has come out today that we had a billion dollar oral contract with regard to this matter? What advice was given, and did this commit Canada to liability beyond the $16 million?


Stanley Ronald Basford: The hon. member should know that traditionally, and for obvious reasons, the advice given to other departments is confidential.


PROPOSED CHECK-OFF SYSTEM TO SUPPORT RESEARCH-GOVERNMENT POSITION
Mr. Jack Murta (Lisgar):: Mr. Speaker, I would like to direct a question to the minister responsible for the Canadian Wheat Board. Since it has become very clear that producer groups affected in western Canada are at the present time requesting a grain check-off system to give further moneys to support research, is the government prepared to bring in legislation to accommodate this very necessary and practical request by the producers affected?


Hon. Otto E. Lang (Minister of Transport):: Mr. Speaker, in general my answer would be yes, that we are prepared to facilitate a check-off, which is desired by producers. It seemed to me that the broad determination of producers, in addition to the support of producer organizations, is desirable, and I have responded to the spokesmen for those groups indicating to them our preparedness to finance a plebiscite or a vote among producers, and if that is favourable, to proceed with the necessary provisions to enable the check-off to be adopted.


Jack Burnett Murta: Can the minister give us a time frame in which we can expect a plebiscite in connection with a check-off system; if so, can the minister assure the House that possible legislation would be brought to parliament in the next session?


Otto Emil Lang: The timing of the plebiscite will depend a good deal upon the positive reaction of the groups concerned-which however, I would anticipate-and therefore I would assume we could have that disposed of during the next few months. I am not absolutely sure, in all the circumstances, what form of legislation may be required to implement this, but certainly with the co-operation of the opposition, so that there will be no problem about House time, I would look forward to seeing the necessary implementation as soon as possible after the session closed.
May 25, 1976


TRANSPORT
Mr. Don Mazankowski (Vegreville):: Mr. Speaker, my question is directed to the Minister of Transport. May I ask the minister if he has received a response from the premiers of the prairie provinces and their ministers of transport to his May 6 Telex in regard to the order in council dated May 13 which advanced the new freight rate proposal with respect to rapeseed and rapeseed products which I might say further aggravates the anomaly between raw rapeseed and processed rapeseed? Could the minister indicate the nature of his reply and if he has received a response from the premiers?


Otto Emil Lang: Mr. Speaker, there is a sequence of telegrams moving back and forth and there may have been an interim reply to some of the points in my May 6 telegram. So far as I know, there has not been a reply to my latest telegram. As the hon. member knows, my reaction was to hold the level of rates on rapeseed oil at the lowest rate legally possible under the existing law, namely the compensatory rate. The discrepancy between rates or the anomaly to which the hon. member refers is solely due to the fact that the rapeseed is at a much lower rate than that, even though the oil is at a rate well below cost.


Donald Frank Mazankowski: A supplementary question, Mr. Speaker. The minister failed to acknowledge the fact that the rate for rapeseed meal has been adjusted upwards and that has placed a severe hardship on the processing industry in western Canada. In light of the fact that we now find that processors in western Canada are forced to suspend their rapeseed growing contracts with producers as a result of the new freight rate proposal, does the minister not consider his unilateral dictatorial action somewhat premature, having regard to the fact that we have a Stave-ly commission and a Hall commission studying all aspects of costing and grain transportation in western Canada?


Otto Emil Lang: Mr. Speaker, first of all there has been no change in rates at this point and as far as I know there is no intention to change the rates on meal, if I heard the hon. member refer to that specifically. The specific action is to indicate to the Canadian Transport Commission that it ought not to allow the rate on rapeseed to be set at any higher level than the compensatory level which is the lowest allowed by law. In view of the fact that the appeal process from the CTC decision has in effect taken eight or nine months or more, I can hardly join with the hon. member in thinking that we were in any great rush.


EFFECT ON INDUSTRY OF RATES ON RAPESEED-POSSIBILITY OF CHANGE IN CROWSNEST FREIGHT RATES
Mr. S. J. Korchinski (Mackenzie):: Mr. Speaker, I have a supplementary question for the Minister of Transport. Since he is the only Saskatchewan minister in the cabinet, may I ask if he has assessed the effect of his decision on the secondary and indeed the primary rapeseed industry?
Oral Questions
Also, have all the promises made at the Calgary Western Economic Opportunities Conference been scrapped? May I ask one more question at the same time, Mr. Speaker? In a statement on May 6 the minister suggested that perhaps the alternative might be to increase the Crowsnest freight rates on rape meal; is he opening that discussion again and picking away at the Crowsnest rates one grain at a time?


Otto Emil Lang: Mr. Speaker, I have assessed the impact in relation to processing and, of course, it is true that differences in rates between raw materials and processed materials lead to the movement of the raw material as against the processing and movement of that material. I will be before the House in the next session with legislation to begin to deal more effectively with that whole issue in general. Of course, what I have done in relation to the western premiers or their transport ministers has been to ask them to please be honest enough to say so if what they mean is that they want a subsidy from other freight or from other taxpayers on the rapeseed, instead of hiding behind the argument of equity. Equity, of course, leading to the processing of a product can occur whatever the level of the rate.
I have been pointing out to the premiers that they can hardly expect a rate as far below cost as the Crow rate is, to be applied to other goods today such as oil and beef. In both cases, we get the discrepancy of movement of the seed or the grain instead of the movement of the product. What I want from them is honesty to recognize that if there is equity to be obtained it can be obtained, and perhaps even at a below cost level, but if what they are really insisting upon is subsidies in a new area on particular products, they should be honest enough to say so.


Donald Frank Mazankowski: You want to destroy the Crow rates.


POST OFFICE
Mr. Alan Martin (Scarborough West):: Mr. Speaker, I have a question for the Postmaster General. In view of the minister's positive response during the debate on May 21 to my question relating to the concept of the Post Office being moved from its current status as a department of government to some form of autonomous or special status, such as that occupied by the Royal Canadian Mint, could the minister give some indication of when such enabling legislation might be brought before parliament?


Hon. Bryce Mackasey (Postmaster General):: The
answer is no, Mr. Speaker.


EXTERNAL AFFAIRS
Mr. Stanley Knowles (Winnipeg North Centre):: Mr. Speaker, in the absence of the Secretary of State for Exter-

May 25, 1976
Oral Questions
nal Affairs may I direct a question to the Prime Minister concerning the Ukrainian historian Valentyn Moroz along the lines of a motion that the hon. member for Athabasca sought to move on Friday. As Your Honour knows, those of us who were members of the delegation, of which you were the leader, to the Soviet Union last September tried to make representations on behalf of Valentyn Moroz so we are aware of the difficulty, but even so, in view of the news that he is being transferred to a psychiatric institute, the result of which is likely to be quite ominous, will the government again make representation to the Soviet authorities for the release of Valentyn Moroz?


Some hon. Members:: Hear, hear!


Miss Monique Begin (Parliamentary Secretary to Secretary of State for External Affairs):: Mr. Speaker, in the name of the Secretary of State for External Affairs I recognize that the hon. member expresses the views of many, many Canadians represented by members on both sides of the House.


Some hon. Members:: Hear, hear!


Monique Bégin: The hon. member just said that he knows that the rule of international law is that of not interfering in the domestic affairs of another state. He also knows that we have taken, and will be taking, every chance to put very strongly to the Soviet authorities our concern in the case of Valentyn Moroz, in the context not only of the concerns of Canadians but also of the Helsinki agreement.


DATE OF ACTION TO ENSURE SAFE WORKING ENVIRONMENT FOR ASBESTOS WORKERS
Mr. Paul Yewchuk (Athabasca):: Mr. Speaker, my question is for the Minister of National Health and Welfare. In view of the fact that the report of the federal-provincial advisory group on health hazards related to asbestos has stated that a definite health hazard exists, in the first place, and that, according to the minister's press release, the Department of the Environment on his advice has recently proposed a national emission standard for asbestos under the Clean Air Act, could the minister inform the House when he anticipates that some meaningful action will be taken to ensure a safe working environment for asbestos workers?


Hon. Marc Lalonde (Minister of National Health and Welfare):: Mr. Speaker, as I have already indicated in the press release the hon. member referred to, several steps have been taken by my department in this area but a lot of action is required from the provinces. It is not my responsibility to answer for the Department of the Environment.


Paul Yewchuk: Mr. Speaker, a supplementary question. Could the minister indicate what action he has taken to improve the health surveillance of asbestos workers?


Marc Lalonde: Mr. Speaker, after the report was presented, several steps were taken and announced at various

times. I should like to remind the hon. member that close consultations are now being conducted with the provinces with a view to improving inspection at the various plants where asbestos is being treated. Consultations have been under way for several months. I recommended, among other things, a maximum level of asbestos in the air, but since the inspection of the plants in question falls especially to provincial authorities, the work must be done with them in this connection.


RADIATION HAZARD IN PORT HOPE-LENGTH OF TIME AND COST OF CLEAN-UP
Mr. Allan Lawrence (Northumberland-Durham):: Mr. Speaker, may I direct a question to the Minister of Energy, Mines and Resources? I understand that the minister has received a report from the MacLaren firm of consulting engineers regarding the extent of the damage to the Port Hope area, and perhaps other areas throughout Canada, as a result of radioactivity and radon gas. In respect of Port Hope, could the minister tell the House how long the clean-up will take and how much it will cost?


Hon. Alastair Gillespie (Minister of Energy, Mines and Resources):: Mr. Speaker, I cannot give any precise figures about how long it is going to take, although I wish I could. As the hon. member undoubtedly knows there is a problem in finding a permanent disposal site for the residue which has to be removed from various properties in Port Hope. I was there on Friday and talked to city council and others in the city. I hope we will be able to work out a transitional arrangement so that we can get on with the clean-up, which can start early in June. Meanwhile, work will proceed and the MacLaren report which the hon. member mentioned will be released tomorrow.


CLEAN-UP OF RADIATION HAZARD IN DELORO AND BANCROFT
Mr. J. R. Ellis (Hastings):: A supplementary question, Mr. Speaker. Will the minister use exactly the same kind of pressure to effect clean-ups in Hastings county, particularly in Deloro and Bancroft, as the problem arises in both those communities?


Alastair William Gillespie: Mr. Speaker, I assure the hon. member that the pressure is on.


NATIONAL DEFENCE
Mr. J. M. Forrestall (Dartmouth-Halifax East):: Mr. Speaker, may I direct a question to the Minister of National Defence? I am concerned about the financial authority under which we spend money with respect to the Orion after the initial work-up and definition phase. Is the minis-
May 25, 1976

ter in a position to indicate to this House how the Department of National Defence or the Government of Canada will protect certain engineering rights we have with respect to electronic suits and modifications to the basic Orion airplane which would permit the remote sensing of weapon pods or capabilities. How are we protected?


James Armstrong Richardson: Mr. Speaker, we are the legal owners of any design work that has been done to date under progress achieved by Lockheed before the contract was terminated.


J. Michael Forrestall: A supplementary question, Mr. Speaker. May I ask the minister where those plans are? Are they in Canada or the United States?


James Armstrong Richardson: Mr. Speaker, the work has been done in the United States, at the Lockheed plant.


J. Michael Forrestall: A final supplementary question, Mr. Speaker. In the light of that answer, can the minister indicate what steps the department is taking to bring those plans home to Canada, where they belong?


James Armstrong Richardson: Mr. Speaker, this will, of course, be negotiated at the time of the wrap-up of the progress that has been made on the program to date. We have indicated that the maximum cost is $16 million but there may be negotiations which can reduce the cost below that figure. These discussions are now to take place.


NORTHERN AFFAIRS
Hon. W. G. Dinsdale (Brandon-Souris):: Mr. Speaker, may I direct a question to the Minister of Indian Affairs and Northern Development arising from the announcement concerning reforms in oil and gas regulations in the north and the environmental emphasis. Will the minister outline in specific terms the programs his department has to train and recruit native peoples as environmental inspectors?


Hon. Judd Buchanan (Minister of Indian Affairs and Northern Development):: Mr. Speaker, I do not think I can do that in detail at this time but can assure the hon. member that in this area we feel strongly there should be good opportunities for native peoples. Since this is their natural area, we feel they could fit in very well, and we are moving in that direction.


Walter Gilbert Dinsdale: A supplementary question, Mr. Speaker. Could the minister be specific and indicate if it is his intention to employ native environmental inspectors? What number does he feel would be involved in the program?


J. Judd Buchanan: Mr. Speaker, the answer is, yes, it is our intention to do that. I think the figure suggested to me was between 60 and 70 persons.
Oral Questions


OIL AND GAS REGULATIONS-MINISTER'S VIEW ON PUBLIC HEARINGS IN CONNECTION WITH LAND USE PERMITS
Mr. Bill Jarvis (Perth-Wilmot):: Mr. Speaker, may I direct a supplementary question to the Minister of Indian Affairs and Northern Development regarding the oil and gas regulations? I am attempting to clear up contradictions between statements in those regulations and in his statement entitled, "Land and environmental control," in which he made known his strong feelings about public hearings. Is it the minister's opinion that the oil and gas regulations as tabled last Wednesday made mandatory the public hearings about which the minister in his statement claims to feel so strongly?


J. Judd Buchanan: Mr. Speaker, the process to which the hon. member refers comes under our land use regulations which require that, if there is to be significant exploration, application must be made for a land use permit. That application must be made available to the communities which would be affected. They have six weeks in which to respond to the application.


William Herbert Jarvis: A supplementary question, Mr. Speaker. In his statement the minister referred to environmentally insignificant exploration activities. Would the minister in general terms explain what he meant when, in his statement, he used the term "environmentally insignificant exploration activities?"


J. Judd Buchanan: Mr. Speaker, we felt that some activities had reached a point at which we could not control them. In other words, an individual going down the river in a canoe, taking with him a backpack, might be doing some exploration. We felt it would not be sensible to try to squeeze a case of that kind into our bailiwick and require land use permits.


AIRPORTS
Mr. D. M. Collenette (York East):: Mr. Speaker, my question is for the Minister of Transport. I should like to ask the minister if his two announcements last week, one not to allow more foreign carriers into Toronto International Airport and the other regarding the allocation of $30 million to the CPR for Montreal-Quebec rail improvements, instead of immediate assistance to CN for the Mont-real-Toronto-Windsor rail service, are part of an over-all plan of his department, as alleged by some, to intensify pressure on the citizens of Toronto to accept the air mode as the only way to travel and, therefore, to accept the building of Pickering airport?


Otto Emil Lang: No, Mr. Speaker. Indeed, if there were no need to incur additional airport expenditures in any area of Canada, we would be delighted to avoid them. Our real concern is that people in the Toronto area, as well as people generally, will in all probability want to fly from Toronto and to Toronto from points far distant; therefore there will be the continuing

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problem of lack of runway capacity in a couple of years' time. Rail services from Toronto are at present the best in Canada. That, essentially, is our reason for choosing some other locations for immediate first improvements. As the hon. member will know from having read the full statement, there are intentions, as well, to improve progressively rail travel in all parts of Canada. These include such immediate steps as we can take in the Toronto-Windsor area.


SUPPLY AND SERVICES
Mr. Ray Hnatyshyn (Saskatoon-Biggar):: Mr. Speaker, may I direct my question to the Minister of Supply and Services? In interviews which were broadcast over the weekend the minister claimed that a general of the Department of National Defence had obtained assurances from Lockheed that financing would be available but that officials in the Department of Supply and Services knew nothing about this. Is the minister seriously claiming that Mr. L. H. Stopforth, who was from his own department and was deputy project manager was deliberately kept in ignorance of these facts by his colleagues on the LRPA team? Was the minister's deputy minister not apprised of this particular situation?


An hon. Member:: Anything is possible with that government.


Jean-Pierre Goyer: Mr. Speaker, I do not know whether it was done deliberately but, be that as it may, the representative of my department on the management committee of that project was not advised of the possibility of that financial arrangement.


LOCKHEED CONTRACT-REQUEST FOR TABLING OF CONTRACT AND AUTHORIZATION TO START WORK
Ramon John Hnatyshyn: A supplementary question, Mr. Speaker. In view of the seriousness of the matter, and the serious questions which have arisen with respect to this entire matter, I wonder if I can again call on the minister to table the unsigned contract with Lockheed and the authorization to start work which he sent to Lockheed on December 2, so that we may begin to assess the procedure which led us into this mess.


Jean-Pierre Goyer: Mr. Speaker, I have already indicated why I cannot table the document mentioned by the hon. member. The hon. member referred to one, namely that this document has never been signed and is therefore legally nonexisting. Moreover, it is sure that the tabling of this document which has no legal significance could harm Lockheed, should this company wish to offer the government a new contract. As I do not wish to harm any party, or any

company wishing to deal with the government, I will not table this document.


INCOME TAX
Mr. Gus Mitges (Grey-Simcoe):: Mr. Speaker, my question is for the Minister of National Revenue. At present registered retirement savings plans can neither be withdrawn nor used to purchase annuities available only through insurance companies. Recently Revenue Canada saw fit to approve the conversion of RRSP's to conventional trusts, which would mean that the interest only would be subject to tax, leaving the capital intact. However, final approval from the Department of Finance is necessary before such a change can take place. Can the minister now say whether this approval has been obtained and, if so, when this policy will take effect?


Hon. Jack Cullen (Minister of National Revenue):: Mr. Speaker, there has been a hint or suggestion in the press that there has been some disagreement as between our interpretation and that of the Department of Finance. That is not correct. Before I say any more I think I had better hear what is to be said this evening.


AGRICULTURE
Mr. Heward Grafftey (Brome-Missisquoi):: Mr. Speaker, my question is directed to the Minister of Agriculture and it is based on scores of questions put to me by farmers in my province who come to me and say: "Heward, what are we going to do-kill our cows or throw our milk in the river?"


Some hon. Members:: Shame!


William Heward Grafftey: I ask the minister this question so that I may advise the farmers in my area who are faced with these disastrous alternatives as a result of the minister's milk policy. What does he advise Quebec farmers to do- kill their cows or throw their milk into the river?


Some hon. Members:: Oh!


William Heward Grafftey: On a point of order-


Mr. Speaker:: I will hear the hon. member at three
o'clock.
May 25, 1976


THE QUEEN
Mr. Robert McCleave (Halifax-East Hants):: Mr. Speaker, my question is directed to the Prime Minister. Can the right hon. gentleman tell us soon about the plans for the celebration next year of Her Majesty's Silver Jubilee, more particularly as regards the production of stamps and coins, tours and holidays and celebrations of a Dominion nature?


Pierre Elliott Trudeau: I will have to refer for details to the Secretary of State who has these matters in hand. I can tell the House from memory that apart from Her Majesty's plans to visit Canada during her Silver Jubilee year other ceremonies have been prepared; one of them involves my participation in the Commonwealth Conference in London next year.


CANADIAN NATIONAL RAILWAYS
Mr. John Rodriguez (Nickel Belt):: Mr. Speaker, my question is for the Minister of Transport. In view of the decision of the Canadian National to centralize its revenue accounting operations in Toronto, which will result in the loss of jobs in Capreol and which certainly contravenes the government's often-stated policy of decentralizing its operations, and in view of the fact that more than 1,650 of the residents of Capreol, a community completely dependent on the CNR, have signed a petition protesting this move-I will present a copy to the minister later-can the hon. gentleman assure the House that he will instruct the CNR to cancel this proposal to shift part of its operation to Toronto, which doesn't need these jobs, in the interests of the community of Capreol?


Otto Emil Lang: There are times, of course, when the move of a smaller unit to the location of a larger unit make economic sense, even when the direction is from Capreol to Toronto and consequently inconsistent, certainly, with the objective of the government, that is to say, decentralization. I think it is important for Crown corporations to take account of decentralization objectives whenever they can. However, I would not try to second guess every move of this nature that is made.


TRANSPORT
John R. Rodriguez: A further question to the Minister of Transport, Mr. Speaker. In view of the hon. gentleman's recent announcement that the government will be making $30 million available to the CPR to enable improvements to be made in the company's rail passenger service between Quebec City and Montreal, and in view of the dismal record of the CPR in connection with passenger
Oral Questions
service as compared to the CNR, which has already improved the service in the Windsor-Quebec City corridor, and in view of recent comments by the Minister of Labour suggesting there would be more consultation with unions concerning major issues, can the minister explain, first, why the CPR was chosen for funding in this area rather than the publicly-owned CNR and, second, whether the trade unions concerned were fully consulted in the light of the fact that this funding has serious implications for CNR workers in this area?


Otto Emil Lang: There have been some discussions, and there will be more as matters proceed. It is, of course, important to make a decision and announce it before one can take meaningful decisions about the way in which the various problems associated with it are to be dealt with. As I indicated to the House last week this is not a question of an amount for the CPR but rather of an amount for the upgrading of a rail line along which the passenger service will run. I foresee it will be run as one common marketing operation with the joint involvement of two railways, the CN, without doubt, being the dominant one.


AGRICULTURE
Mr. John Wise (Elgin):: Mr. Speaker, my question is directed to the Minister of Agriculture. It relates to reports this morning that rotten imported cheddar cheese could be sold on our domestic market. It is reported that this product has been offered for sale by cheese importers at a price between 50 and 60 cents below the current market price. Will the minister instruct the appropriate officials of his department to investigate this matter and impose an embargo immediately on all imported cheese?


Eugene Whelan: I understand there is every possibility that this cheese was inspected when it was brought into Canada. But it has been in storage in Canada for over a year; it was when it was brought out of storage that it was found to be unfit for human consumption. It is suggested that with some modification it could probably be made fit for human consumption-this would involve scraping the mold off the sides. I might say that over 4,000 inspections of imported cheese were carried out last year. If the hon. member or anyone else thinks I want Canadians to eat bad cheese they are mistaken; I would like nothing better than to have the authority to condemn it. But if it can be made fit for human consumption, and come up to our standards, it will be approved. Under no circumstances will it be approved otherwise.
95568 - 39

May 25, 1976
Oral Questions EXTERNAL AFFAIRS


CANADIAN POSITION ON COMMITMENT TO COMMON FUND ESTABLISHED BY UNCTAD CONFERENCE
Mr. David MacDonald (Egmont):: Mr. Speaker, my question is for the Prime Minister. It arises from the crucial stage of the deliberations at the United Nations Conference on trade, aid and development in Nairobi. I believe the Prime Minister has received representations over the weekend from some of the non-governmental observers at the conference in Nairobi as well as perhaps some advice from his own foreign policy adviser concerning the basic test of political will formulated by the Group of 77 having to do with participation in the common fund which now stands, I think, at some $430 million with $500 million being the take-off point. Can the Prime Minister indicate whether any special instructions have been directed to the Canadian delegation in Nairobi to making a firm commitment on the common fund before the conclusion of the conference?


Monique Bégin: The hon. member, I gather, will find the answer to that very same question in last week's Hansard. Canada has, right from the beginning of UNCTAD, made a firm commitment to the tin buffer stock. As to the idea of the common fund which arose from the Manila Declaration, a rather recent one received by our country only a few months before the conference, the minister said he would consider the principle very favourably. Everybody read the news reports over the weekend about the tough negotiations at this last week of Nairobi and Canada's role is very well known. We are ready to contribute to anything which makes sense, and we have already announced a first contribution. The common fund is a theoretical proposal which is being negotiated at the very moment.


David Samuel Horne MacDonald: I thank the parliamentary secretary for her answer but in view of the fact that her answer last Thursday was not correct with respect to OPEC country commitments from Iraq, Venezuela and Algeria, and in view of the fact that discussion is not commitment and that there needs to be some separation of the common fund principle from the tin agreement which is really quite another matter, will the Prime Minister or the parliamentary secretary confer with the Canadian delegation in Nairobi to determine whether the facts are not that the Canadian commitment with respect to the common fund would be crucial to achieving success at UNCTAD, crucial, in fact, to the continuing role of the North-South Conference which has already been jeopardized, apparently, according to the comments of Canada's co-chairman, Perrez Guerrero, in criticizing Canada's position?


Monique Bégin: Canada does not jeopardize the future of any common fund whatsoever. Canada has always been favourable to any concrete proposal that is likely to stabilize the production of vulnerable commodities. Out of the 10 major commodities of which we are talking in relation to the idea of a common fund, Canada has already picked one commodity for which the idea of a common fund is feasible, namely tin, and we have made clear we are ready
[Mr. Whelan. 1
to make a contribution. Canada is a party to the two agreements that already exist on other commodities.
The hon. member's personal view is that he favours a common fund; others would go at this for the benefit of the parties concerned, who are the Third World, commodity by commodity. Canada is willing to study any proposal that is of real interest and benefit for the Third World but not for ideological purposes only.


PRESENCE IN GALLERY OF MINISTER OF GREENLAND FOR DENMARK
J. Judd Buchanan: Mr. Speaker, I should like to call the attention of the House to the presence in our gallery of the Hon. Jorgen Hansen, the Minister of Greenland for Denmark.


Some hon. Members:: Hear, hear!


William Heward Grafftey: Mr. Speaker, I rise on a point of order. During the last ten days I have received some extremely serious representations from literally hundreds of Quebec dairy farmers who are faced with a most serious dilemma. They have put the question seriously to me, and I put it seriously to the Minister of Agriculture today.
The Quebec farmers are facing a particular problem. It takes them years to build up a herd. They have to maintain a certain number of cows on their farm if they are going to make farm credit payments as determined by another branch of the federal government. They are literally on the horns of a disastrous dilemma. They have asked me to ask the Minister of Agriculture, as I did today, what they should do-shoot their cows, or throw their milk in the river? That was the serious question that I put today, and I think the farmers of Quebec merit an answer.


Mr. Speaker:: Order, please. The failure of the minister to answer the question was not through any apparent unwillingness on his part. We have reviewed rather carefully the rules that pertain to the question period. I try not to enforce them too strictly against any member who seeks to put a serious question. However, a question ought not to be argumentative, yet not seek too general a reply. It ought not to seek advice but, rather, information; and it ought not to be a repetition of a previous question. Regrettably, the hon. member's question today suffered from all three disabilities.


Eugene Whelan: Mr. Speaker, on the point of order, last Thursday was set aside in the House for debate on the estimates of the Department of Agriculture. A lot of debate took place at that time about dairy policy. I do not know whether the hon. member was absent, but he did not participate in that debate. I do not know where he was. I also suggest to him that he go to his constituents in Brome-Missisquoi and tell them what he said in this House, namely, that I was paying the dairy farmers of Canada too much money.
May 25, 1976



ROUTINE PROCEEDINGS


Marc Lalonde: Mr. Speaker, I would like to table before the House the report of Advisory Committee on the Canada Pension Plan entitled "Analysis of certain proposals for amending the Canada Pension Plan".


SUPPLY AND SERVICES
Jean-Pierre Goyer: Mr. Speaker, I should like to table a letter of agreement dated March 31, .1976, between Lockheed Aircraft Corporation and the Crown, and related articles, in both official languages.


AGRICULTURE
[Stage Direction]
On the order: Government notices of motions:
May 19, 1976-The President of the Privy Council:
That the annual report of the Canadian Wheat Board for the crop year ended July 31, 1975, tabled April 8, 1976, be referred to the Standing Committee on Agriculture.
Mr. Speaker:: Pursuant to section (2) of Standing Order 21, this notice of motion is transferred to and ordered for consideration under government orders at the next sitting of the House.


QUESTIONS ON THE ORDER PAPER
[Stage Direction]
(Questions answered orally are indicated by an asterisk.)
Mr.   J.-J. Blais@Parliamentary Secretary to President of the Privy Council: Mr. Speaker, the following questions will be answered today: 4,119, 4,177, 4,448 to 4,452 inclusive, 4,457, 4,459, 5,310, 5,363, 5,387 to 5,390 inclusive, and 5,456 to 5,460 inclusive.
I ask, Mr. Speaker, that the remaining questions be allowed to stand.
Order Paper Questions


Mr. Robinson: 1.	Do nurses volunteer to care for patients with a lethal disease when at present there are (a) no preventive measures (b) no real treatment (c) a high mortality rate (d) a high risk for health personnel and, if so, how many?
2.	Can such specialty training be obtained and, if so, in what location?


Marc Lalonde: 1. The training received by all graduate nurses includes understanding of isolation techniques in providing care for patients with communicable diseases. There exists a stand-by pool of approximately 80 nurses who have undergone specialized training in isolation nursing techniques related to medical flight evacuation operations and who have volunteered to respond to any emergency in this context.
2. Specialty training in barrier techniques for nurses is available to nursing officers of National Defence from the United States Air Force. Specialty training in Canada was provided by the Emergency Health Services program in the early 1960's in conjunction with other programs of the government and the Emergency Measures Organization in response to concern over the likelihood of a nuclear attack. Since that time, the Emergency Health Services Program has assisted the provinces by providing standards, guidelines, training and education for various groups from the provinces on contingency planning in the event of natural disasters among which would be included techniques of prevention and of containment of infectious conditions.


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


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


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


Fabian Hugh Poulin: Nil.


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


Fabian Hugh Poulin: Nil.
95S68-39'/2

May 25, 1976
Order Paper Questions PSYCHIATRISTS-MONTGOMERY CENTRE


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


Fabian Hugh Poulin: Nil.


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


Fabian Hugh Poulin: Nil.


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


Fabian Hugh Poulin: Nil.


Mr. MacKay: For the years 1970 to 1975, what was the number of (a) full-time (b) part-time psychiatrists at Dungarvon and, in each case, what were their (i) educational qualifications (ii) previous work experiences in Canada and abroad (iii) salaries?
Mr. Hugh Poulin (Parliamentary Secretary to Solicitor General: Nil.


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


Fabian Hugh Poulin: Nil.


Mr. Baker (Grenville-Carleton): 1.	Has Mr. Andrew Cohen, former Executive Assistant to the Secretary of State, been commissioned to do any research work in France on behalf of the Department and, if so (a) for what purpose (b) what fees or other remuneration will he receive?
2.	In what location is such work to be undertaken and what is the duration of the Commission?
3.	What agencies of the government or any other government or the United Nations or any agency thereof have carried on similar research?


Hon. James Hugh Faulkner (Secretary of State):: In so
far as the Department of the Secretary of State is concerned: 1. Mr. Cohen is under contract to do research work in Western Europe. He is living in France, but his work will not be confined to that country, (a) Mr. Cohen is to prepare for the Department of the Secretary of State a report on the extent and nature of government involvement, in a number of West European countries, in the film and publishing fields with respect to: (1) legislation. (2) funding mechanisms. (3) existence of special agencies for promotion of film and publishing on the marketing of books and films. (4) the mandate of Government Departments or agencies. (5) the budgets for promotion of publications and films. (6) the mechanisms for consultation between the Government and the private sector. He will also prepare a dossier of relevant statistics and Government statements for subsequent analysis by the Secretary of State's Department, (b) $5,000 plus $1,000 accountable travel expenses.
2.	Emphasis will be placed on those European countries which have problems comparable to those of Canada i.e. countries of a bilingual or multilingual nature, countries of small population, countries with larger neighbours of the same language, etc. The contract commenced on March 1, 1976 and ends on October 29, 1976.
3.	To the knowledge of the Secretary of State Department no such research work as it pertains to Canada has been carried out since the O'Leary Report "Canada Royal Commission on Publications 1961".



ELIGIBILITY OF FORMER MEMBERS OF CANADIAN ARMED


Mr. Forrestall: Has the government or its agencies taken, in the last six months, any action to make members of the Canadian Armed Forces, formerly resident in Atlantic Canada, eligible to compete in closed competitions held by the Public Service in the Atlantic provinces without regard for the geographical or organizational limits prescribed by the competition and, if so, what was such action?


Miss Coline Campbell (Parliamentary Secretary to Secretary of State):: I am informed by the Public Service Commission as follows: No. The commission, under the provision of Section 13(b) of the Public Service Employment Act, is required to consider only the part of the public service and the occupational nature and level of positions in which prospective candidates must be employed at the time the closed competition is held, in order to be eligible for appointment. Therefore, former residence in a geographical area does not make a candidate eligible to compete in competitions open only to people occupying positions in that same geographical area. In the last six months, the commission has taken no action to change this requirement.


Mr. Nystrom: 1.	Was a new investment proposal made by two British Columbia corporations, River Vista Properties Ltd., which is equally owned by a landed immigrant and a resident of Italy, and Excel Industries Ltd., to establish a new business in Kamloops, British Columbia, under the name Zinetti Pasta Ltd. for the manufacture of pasta products and, if
May 25, 1976

so, what is the total and/or per share price of the transaction, including the value of share transfers or other considerations?
2.	Who are the principal shareholders of River Vista Properties Ltd. and Excel Industries Ltd?
3.	Do River Vista Properties Ltd. or Excel Industries Ltd. control and/or partially own, directly or indirectly, any other businesses in Canada and, if so, in each case, what are the holdings by percent of control and value?
4.	What will be the effect of the establishment of this petroleum refinery on (a) the level and nature of economic activity in Canada (b) resource processing in Canada (c) utilization of parts, components, materials and services produced in Canada (d) exports from Canada (e) productivity, industrial efficiency, technological development, product innovation and product variety in Canada (f) competition within any industry or industries in Canada?
5.	How many persons will be employed once the new plant is established?
6.	What is the degree and significance of participation by Canadians in the business enterprise or new business and in any industry or industries in Canada of which the business enterprise or new business forms or will form?
7.	How will the establishment of this plant be (a) compatible (b) incompatible with national industrial and economic policies, taking into consideration industrial and economic policy objectives of any province likely to be affected by the new plant?
8.	What is the significant benefit to Canada of the transaction?


Mr. Marcel Roy (Parliamentary Secretary to Minister of Industry, Trade and Commerce):: In so far as the
Foreign Investment Review Agency is concerned: an investment proposal was made by two British Columbia corporations, River Vista Properties Ltd. and Excel Industries Ltd. to establish a new business in Kamloops, B.C. under the name of Zinetti Pasta Ltd. The proposed investment was deemed to be allowed on April 13 by His Excellency the Governor in Council. All information with respect to a person, business or proposed business obtained in the course of the administration of the Foreign Investment Review Act is privileged and may not be released except as provided for in Section 14 of that act.


Mr. Nystrom: 1.	In the takeover of Insul-8 Corp. (Canada) Limited of Rexdale, Ontario (which is a company owned by Rucker Company of Oakland, California) by Insul-8 Corporation of San Carlos, California (which is owned by Acieries de Gennevilliers, of Gennevilliers, France), what percentage of control will Insul-8 Corporation of San Carlos, California (which is owned in turn by Acieries de Gennevilliers of Gennevilliers, France) acquire?
2.	What is the total and/or per share price of the transaction, including the value of share transfers or other considerations?
3.	Who were the principal shareholders of Insul-8 Corp. (Canada) Limited of Rexdale, Ontario and what control, if any, will they retain in the company?
4.	Who are the principal shareholders of Acieries de Gennevilliers, of Gennevilliers, France and what are their holdings in the company?
5.	Does Insul-8 Corporation of San Carlos, California and/or their parent company Acieries de Gennevilliers of Gennevilliers, France control and/or partially own, directly or indirectly, any other businesses in Canada and, if so, in each case, what are the holdings by per cent of control and value?
6.	What will be the effect of the takeover on (a) the level and nature of economic activity in Canada (b) resource processing in Canada (c) utilization of parts components, materials and services produced in Canada (d) exports from Canada (e) productivity, industrial efficiency, technological development, product innovation and product variety in Canada (f) competition within any industry or industries in Canada
Order Paper Questions
(g) employment within Insul-8 Corp. (Canada) Limited of Rexdale, Ontario and within the industry?
7.	(a) How many persons did Insul-8 Corp. (Canada) Limited of Rexdale, Ontario employ before the takeover (b) how many are presently employed?
8.	(a) What are the unions, if any, who represented the employees (b) did they approve or disapprove of the takeover (c) was their opinion sought?
9.	What is the degree and significance of participation by Canadians in the business enterprise or new business and in any industry or industries in Canada of which the business enterprise or new business forms or will form?
10.	How is the takeover (a) compatible (b) incompatible with national industrial and economic policies, taking into consideration industrial and economic policy objectives of any province likely to be affected by the takeover?
11.	What is the significant benefit to Canada of the takeover?


Marcel-Claude Roy: See reply to question
3.954	answered on March 2, 1976.


Mr. Nystrom: 1.	In the takeover of The Hamilton Facing Mill Company, Limited of Hamilton, Ontario (which is a wholly-owned subsidiary of Thiem Corporation, a US company) by Koppers Company, Inc. of Pittsburgh, Pennsylvania, what percentage of control will Koppers Company, Inc. of Pittsburgh, Pennsylvania acquire?
2.	What is the total and/or per share price of the transaction, including the value of share transfers or other considerations?
3.	Who were the principal shareholders of Hamilton Facing Mill Company, Limited of Hamilton, Ontario and what control, if any, will they retain in the company?
4.	Who are the principal shareholders of Koppers Company, Inc. of Pittsburgh, Pennsylvania and what are their holdings in the company?
5.	Does Koppers Company, Inc. of Pittsburgh, Pennsylvania control and/or partially own, directly or indirectly, any other businesses in Canada and, if so, in each case, what are the holdings by per cent of control and value?
6.	What will be the effect of the takeover on (a) the level and nature of economic activity in Canada (b) resource processing in Canada (c) utilization of parts components, materials and services produced in Canada (d) exports from Canada (e) productivity, industrial efficiency, technological development, product innovation and product variety in Canada (f) competition within any industry or industries in Canada (g) employment within The Hamilton Facing Mill Company, Limited of Hamilton, Ontario and within the industry?
7.	(a) How many persons did The Hamilton Facing Mill Company, Limited employ before the takeover (b) how many are presently employed?
8.	(a) What are the unions, if any, who represented the employees (b) did they approve or disapprove of the takeover (c) was their opinion sought?
9.	What is the degree and significance of participation by Canadians in the business enterprise or new business and in any industry or industries in Canada of which the business enterprise or new business forms or will form?
10.	How is the takeover (a) compatible (b) incompatible with national industrial and economic policies, taking into consideration industrial and economic policy objectives of any province likely to be affected by the takeover?
11.	What is the significant benefit to Canada of the takeover?


Marcel-Claude Roy: See reply to question
3.954	answered on March 2, 1976.

May 25, 1976

Order Paper Questions COMPANY TAKEOVERS


Mr. Nystrom: 1.	In the takeover of Equity Mining Capital Limited of Vancouver and S.G. Mining, Inc. of Vancouver by Equity Mining Corporation of Vancouver, British Columbia, what percentage of control will Equity Mining Corporation of Vancouver, British Columbia acquire?
2.	What is the total and/or per share price of the transaction, including the value of share transfers or other considerations?
3.	Who were the principal shareholders of Equity Mining Capital of Vancouver and S.G. Mining, Inc. of Vancouver and what control, if any, will they retain in the company?
4.	Who are the principal shareholders of Equity Mining Corporation of Vancouver, British Columbia and what are their holdings in the company?
5.	Does Equity Mining Corporation of Vancouver, British Columbia control and/or partially own, directly or indirectly, any other businesses in Canada and, if so, in each case, what are the holdings by per cent of control and value?
6.	What will be the effect of the takeover on (a) the level and nature of economic activity in Canada (b) resource processing in Canada (c) utilization of parts components, materials and services produced in Canada (d) exports from Canada (e) productivity, industrial efficiency, technological development, product innovation and product variety in Canada (f) competition within any industry or industries in Canada (g) employment within Equity Mining Capital Limited of Vancouver and S.G. Mining, Inc. also of Vancouver and within the industry?
7.	(a) How many persons did Equity Mining Capital Limited and S.G. Mining, Inc. employ before the takeover (b) how many are presently employed?
8.	(a) What are the unions, if any, who represented the employees (b) did they approve or disapprove of the takeover (c) was their opinion sought?
9.	What is the degree and significance of participation by Canadians in the business enterprise or new business and in any industry or industries in Canada of which the business enterprise or new business forms or will form?
10.	How is the takeover (a) compatible (b) incompatible with national industrial and economic policies, taking into consideration industrial and economic policy objectives of any province likely to be affected by the takeover?
11.	What is the significant benefit to Canada of the takeover?


Marcel-Claude Roy: See reply to question
3,954	answered on March 2, 1976.


Mr. Nystrom: 1.	In the takeover of an apartment complex in Longueuil, Quebec, known as Appartements Ports de Mer/Seaport Apartments by Schaan Properties Limited, a private company controlled by Leitungsgesell-schaft A.G., which is in turn ultimately controlled by citizens of Switzerland, Italy and Germany, what percentage of control will Schaan Properties Limited acquire?
2.	What is the total and/or per share price of the transaction, including the value of share transfers or other considerations?
3.	Who were the principal shareholders of Appartements Ports de Mer/Seaport Apartments and what control, if any, will they retain in the company?
4.	Who are the principal shareholders of Leitungsgesellschaft A.G., which is a holding company in Switzerland and what are their holdings in the company?
5.	Does Schaan Properties Limited or Leitungsgesellschaft A.G. control and/or partially own, directly or indirectly, any other businesses in Canada and, if so, in each case, what are the holdings by per cent of control and value?
6.	What will be the effect of the takeover on (a) the level and nature of economic activity in Canada (b) resource processing in Canada (c)

utilization of parts components, materials and services produced in Canada (d) exports from Canada (e) productivity, industrial efficiency, technological development, product innovation and product variety in Canada (f) competition within any industry or industries in Canada (g) employment within Appartements Ports de Mer/Seaport Apartments and within the industry?
7.	(a) How many persons did Appartements Ports de Mer/Seaport Apartments employ before the takeover (b) how many are presently employed?
8.	(a) What are the unions, if any, who represented the employees (b) did they approve or disapprove of the takeover (c) was their opinion sought?
9.	What is the degree and significance of participation by Canadians in the business enterprise or new business and in any industry or industries in Canada of which the business enterprise or new business forms or will form?
10.	How is the takeover (a) compatible (b) incompatible with national industrial and economic policies, taking into consideration industrial and economic policy objectives of any province likely to be affected by the takeover?
11.	What is the significant benefit to Canada of the takeover?


Marcel-Claude Roy: See reply to question
3,954	answered on March 2, 1976.


Mr. Nystrom: 1.	In the takeover of General Crane Industries Limited of London, Ontario, which is a wholly-owned subsidiary of Walter Kidde & Company, Inc, of Clifton, New Jersey by David G. Ghysels, a citizen and resident of the United States, what percentage of control will David G. Ghysels acquire?
2.	What is the total and/or per share price of the transaction, including the value of share transfers or other considerations?
3.	Who are the principal shareholders of Walter Kidde & Company, Inc. of Clifton, New Jersey and what are their holdings in the company?
4.	Does David G. Ghysels control and/or partially own, directly or indirectly, any other businesses in Canada and, if so, in each case, what are the holdings by per cent of control and value?
5.	What will be the effect of the takeover on (a) the level and nature of economic activity in Canada (b) resource processing in Canada (c) utilization of parts components, materials and services produced in Canada (d) exports from Canada (e) productivity, industrial efficiency, technological development, product innovation and product variety in Canada (f) competition within any industry or industries in Canada (g) employment within General Crane Industries Limited of London, Ontario and within the industry?
6.	(a) How many persons did General Crane Industries Limited of London, Ontario employ before the takeover (b) how many are presently employed?
7.	(a) What are the unions, if any, who represented the employees (b) did they approve or disapprove of the takeover (c) was their opinion sought?
8.	What is the degree and significance of participation by Canadians in the business enterprise or new business and in any industry or industries in Canada of which the business enterprise or new business forms or will form?
9.	How is the takeover (a) compatible (b) incompatible with national industrial and economic policies, taking into consideration industrial and economic policy objectives of any province likely to be affected by the takeover?
10.	What is the significant benefit to Canada of the takeover?


Marcel-Claude Roy: See reply to question
3,954	answered on March 2, 1976.

*

May 25, 1976


Mr. Nystrom: 1.	Was a new investment proposal made by Wiltron Company of Palo Alto, California, a private company, to establish a new business in Ottawa, Ontario, under the name of Wiltron Instruments Ltd./Instruments Wiltron Ltee, to market and service, for its parent company, a variety of specialized electronic measuring and testing equipment used in broadcasting, radar, telephone microwave links and satellite communications and, if so, what is the total and/or per share price of the transaction, including the value of share transfers or other considerations?
2.	Who are the principal shareholders of Wiltron Company of Palo Alto, California?
3.	Does Wiltron Company of Palo Alto, California control and/or partially own, directly or indirectly, any other businesses in Canada and, if so, in each case, what are the holdings by percent of control and value?
4.	What will be the effect of the establishment of this petroleum refinery on (a) the level and nature of economic activity in Canada (b) resource processing in Canada (c) utilization of parts, components, materials and services produced in Canada (d) exports from Canada (e) productivity, industrial efficiency, technological development, product innovation and product variety in Canada (f) competition within any industry or industries in Canada?
5.	How many persons will be employed once the new plant is established?
6.	What is the degree and significance of participation by Canadians in the business enterprise or new business and in any industry or industries in Canada of which the business enterprise or new business forms or will form?
7.	How will the establishment of this business be (a) compatible (b) incompatible with national industrial and economic policies, taking into consideration industrial and economic policy objectives of any province likely to be affected by the new plant?
8.	What is the significant benefit to Canada of the transaction?


Marcel-Claude Roy: In so far as the Foreign Investment Review Agency is concerned: an investment proposal was made by Wiltron Company of Palo Alto, California to establish a new business in Ottawa, Ontario, under the name of Wiltron Instruments Ltd. The new investment proposal was allowed by the Governor in Council on April 27, 1976 (P.C. 1976-952). All information with respect to a person, business or proposed business obtained in the course of the administration of the Foreign Investment Review Act is privileged and may not be released except as provided for in Section 14 of that act.


Mr. Nystrom: 1.	Was a new investment proposal made by Wellman Engineering Corporation Ltd. of London, England to establish a new foundry in Saint John, New Brunswick for the manufacture of nickel-chromium alloy castings and, if so, what is the total and/or per share price of the transaction, including the value of share transfers or other considerations?
2.	Who are the principal shareholders of Wellman Engineering Corporation Ltd.?
3.	Does Wellman Engineering Corporation Ltd. control and/or partially own, directly or indirectly, any other businesses in Canada and, if so, in each case, what are the holdings by percent of control and value?
4.	What will be the effect of the establishment of this petroleum refinery on (a) the level and nature of economic activity in Canada (b) resource processing in Canada (c) utilization of parts, components, materials and services produced in Canada (d) exports from Canada (e) productivity, industrial efficiency, technological development,
Order Paper Questions
product innovation and product variety in Canada (f) competition within any industry or industries in Canada?
5.	How many persons will be employed once the new plant is established?
6.	What is the degree and significance of participation by Canadians in the business enterprise or new business and in any industry or industries in Canada of which the business enterprise or new business forms or will form?
7.	How will the establishment of this business be (a) compatible (b) incompatible with national industrial and economic policies, taking into consideration industrial and economic policy objectives of any province likely to be affected by the new plant?
8.	What is the significant benefit to Canada of the transaction?


Marcel-Claude Roy: In so far as the
Foreign Investment Review Agency is concerned: an investment proposal was made by Wellman Engineering Corporation Ltd. to establish a new foundry in Saint John, New Brunswick. The new investment proposal was deemed to be allowed on April 27, 1976 by the Governor in Council. All information with respect to a person, business or proposed business obtained in the course of the administration of the Foreign Investment Review Act is privileged and may not be released except as provided for in Section 14 of that act.


Mr. Nystrom: 1.	Was a new investment proposal made by Pinacle, S.A. of Luxembourg, to establish a new business in Montreal, Quebec, under the name Pinacle Leisure Group Limited/Cercle de Loisirs Pinacle Ltee, a deluxe restaurant facility and, if so, what is the total and/or per share price of the transaction, including the value of share transfers or other considerations?
2.	Who are the principal shareholders of Pinacle, S.A. of Luxembourg?
3.	Does Pinacle, S.A. of Luxembourg control and/or partially own, directly or indirectly, any other businesses in Canada and, if so, in each case, what are the holdings by percent of control and value?
4.	What will be the effect of the establishment of this petroleum refinery on (a) the level and nature of economic activity in Canada (b) resource processing in Canada (c) utilization of parts, components, materials and services produced in Canada (d) exports from Canada (e) productivity, industrial efficiency, technological development, product innovation and product variety in Canada (f) competition within any industry or industries in Canada?
5.	How many persons will be employed once the new plant is established?
6.	What is the degree and significance of participation by Canadians in the business enterprise or new business and in any industry or industries in Canada of which the business enterprise or new business forms or will form?
7.	How will the establishment of this business be (a) compatible (b) incompatible with national industrial and economic policies, taking into consideration industrial and economic policy objectives of any province likely to be affected by the new plant?
8.	What is the significant benefit to Canada of the transaction?


Marcel-Claude Roy: In so far as the
Foreign Investment Review Agency is concerned: an investment proposal was made by Pinacle, S.A. of Luxembourg to establish a new business in Montreal, Quebec under the name of Pinacle Leisure Group Limited/Cercle de Loisirs Pinacle Ltee. The new investment proposal was allowed by the Governor in Council on April 27, 1976 (P.C.

May 25, 1976
Capital Punishment
1976-951). All information with respect to a person, business or proposed business obtained in the course of the administration of the Foreign Investment Review Act is privileged and may not be released except as provided for in Section 14 of that act.


Mr. Speaker:: Under "Motions" it may be noted, in case my voice was not heard clearly, that there were two motions called, one in the name of the hon. member for Labelle (Mr. Dupras) and the other in the name of the hon. member for Saint-Henri (Mr. Loiselle), both of which will stand.



GOVERNMENT ORDERS


[Stage Direction]
The House resumed, from Wednesday, May 19, consideration of the motion of Mr. Allmand that Bill C-84, to amend the Criminal Code in relation to the punishment for murder and certain other serious offences, be read the second time and referred to the Standing Committee on Justice and Legal Affairs.
Mr. Marke Raines (Burnaby-Seymour):: Mr. Speaker, I have felt somewhat like Alice in Wonderland these past few weeks, listening to the debates in the House of Commons. The cry has been "Off with his head", as if that would magically solve our problems. Such a simple solution, so cavalier!
This is an awesome responsibility that we face, Mr. Speaker, and we have a duty to think things through for ourselves. You may remember, in the play "Caesar and Cleopatra," that Caesar says:
To the end of history, murder shall breed murder, always in the name of right and honour and peace, until the gods are tired of blood, and create a race that can understand.
Understanding is the key. Murder does breed murder, and violence does breed violence. These people on death row are the product of our society; and if these people have failed, our society in a measure has failed as well. Therefore, we must examine our society and discover the circumstances that led people to commit mdrder and other crimes, and then let us try to eliminate the causes.
I do not think we can set ourselves up to judge our fellow man so harshly that we say to anyone that they are not fit to live. If we condemn these people to death, we are telling them that there is no hope for them in this world. And who are we to take away hope? When we take away hope for them, we take away the sense of hope for us all. How do we know but that through some ironic twist of circumstance we ourselves could end up on death row, as could someone we know or love? How truly awful to be told that there is no hope for them, that they are beyond redemption. I think we had better not be too self-righteous
[Mr. Roy (Laval).l
and complacent. I think we should remind ourselves that "There but for the grace of God, go I".
I am pleased to note that all the major churches and religions are in favour of abolition of the death penalty, as are the criminologists and humanitarians. While these people may not form the majority opinion, they can take comfort from something Adlai Stevenson once said. He said that all progress has resulted from people who took unpopular positions.
As for this entire question of public opinion, it can be easily manipulated by the media and by pressure groups. We who have the personal responsibility to vote on the hanging bill cannot in conscience, simply rely on the latest poll to make our decision for us. When I sent out my own questionnaire in Burnaby-Seymour on the issue of capital punishment, only 4 per cent of the people answered the survey, most of them favouring capital punishment. One could also note that 96 per cent of the people of that riding left the decision to me. Meanwhile, the government is bringing in Bill C-83, which will introduce stronger measures to protect society.
There are those who believe capital punishment is a deterrent. According to the statistics, it is not. The lowest murder rates in the world are found in countries where capital punishment has been abolished: for example, Sweden, and in the American states of Minnesota, Wisconsin, Rhode Island and Maine. On the other hand, some of the highest murder rates are found where capital punishment is, or was, in force until recently: for instance, in France, Spain, Florida, Georgia, South Carolina and Louisiana.
The unhappy statistics of murder also disclose that most killings are the result of domestic quarrels or love triangles, crimes of passion. In Canada, for example, in a 13-year period ending in 1974 there were 4,500 murders and only 559 took place during the commission of a criminal act.
Given, then, the sudden, unplanned nature of most homicides, it appears highly unlikely that most people who commit murder take into account the threat of capital punishment before carrying out that act. In the case of criminals, they know full well that the police carry weapons, and even the danger of on-the-spot capital punishment does not serve as a deterrent. As for the argument that the cost of keeping prisoners is a financial burden to the taxpayers, I find that a ridiculous and cynical argument. One might as well argue against the high cost of trials and appeals. This argument also ignores the fact that inmates do work in prison and are paid wages lower than scale.
I believe that instead of wasting time and dwelling on this gruesome subject, debating whether or not we are going to hang those few people who are already sweating it out on death row, we should busy ourselves with examining our society and improving it. We must ask these questions of ourselves: What is there in our society that drives people to violence? Our figures show that most murders are domestic. It is probably true that, as Thoreau said, "Most men live lives of quiet desperation", but why is that so? Is it too difficult in our society today to raise a happy family? Is it too difficult in this affluent country just to
May 25, 1976

make a living? Are we goaded beyond our means by the commercialism of our age? Are we teased into wanting too much? Has the crassness of the market place already placed necessities beyond the reach of many people?
Many people today are concerned about the violence, the negativism and the crime depicted in the media. I wonder, too, where are the stories of real heroes that might inspire us to new heights of achievement, such as George Washington Carver, Florence Nightingale, Wilberforce, John Stuart Mill, Mahatma Gandhi, Einstein and Schweitzer? Where are the best from other countries? We have had so much blather in the media about capital punishment and the grisly details of crime that one wonders where is the emphasis on the art of living. As Carl Jung wrote, "The art of living is the rarest and most distinguished of all the arts . . . Whoeyer succeeded in draining the whole cup with grace?"
Our aim should be an ideal society. You may remember Schiller writing "Only the ideal can bring humans to unity. And the ideal has as its foundation ... knowledge". We must have the courage and honesty to look at our society critically and see where it is wanting. We could look to the happy, healthy societies in the world and see how they are achieving this. We could ask ourselves, what are our goals?
I hope this parliament, in a free vote, will vote with hope, with mercy and with confidence that we can abolish forever the barbaric custom of capital punishment. Surely, in this space age, when we have landed men on the moon and have seen miracles in so many fields of human endeavour, we do not have to retain such a medieval practice. I think it has no place in a civilized society.
As a matter of interest, I want to quote something Eugene Debs once said to a judge:
Your Honour, years ago I recognized my kinship with all living beings . . . and I made up my mind that I was not one bit better than the meanest of the earth. I said then and I say now ... that while there is a lower class, I am in it... while there is a criminal element, I am of it.. . while there is a soul in prison, I am not free-
For more than ten years parliament has been poised on the edge of full abolition. Once again the House of Commons has the opportunity to abolish a practice which deprives society of any means to rectify its mistakes; a practice which is abhorrent and which adds the suffering of innocent family members to that of the guilty.
I suggest we vote on this bill with hope for life, not hopelessness with death. I suggest we vote with confidence that we can look critically at our society and see where it is wanting and, hopefully, find our way in changing that society. If our society is indeed leading to crime, there is something very wrong with it. For our own good we must come to grips with the problem. The answer does not lie in hanging a few people to show how tough we are. Unless we come to grips honestly with the problem, I fear that, as Caesar says in the play:
To the end of history, murder shall breed murder ... always in the name of right and honour and peace, until the gods are tired of blood, and create a race that can understand.
Thank you, Mr. Speaker.


Mr. Bert Hargrave (Medicine Hat):: Mr. Speaker, I want to begin by saying that my remarks during this very
Capital Punishment
important debate will outline essentially my own personal views. I do, however, acknowledge with deep appreciation and thanks the heavy volume of mail I have received on the combined issue of capital punishment and peace and security. I have received the heaviest mail ever in my 3Vi years in this House on these two issues.
During the current debate, about 350 individuals have let me know about their feelings on this combined issue, and none of this group is from outside my own constituency of Medicine Hat. These constituency views were contained mostly in personal letters and unsolicited petitions. I did not conduct any formal or informal poll or survey as I did on the previous capital punishment debate in 1973. I freely acknowledge that the greater number of letters dealt with the companion bill on peace and security, Bill C-83. I say this now because I was one of approximately 27 members of this House who was unable to participate in that debate because of the government's closure action.
The ratio in support of the retention of capital punishment in my constituency mail was 17 to 1. After reviewing all these constituency letters, I have decided that in addition to some very blunt comments about the specific issue, there is another, deeper and more serious message-between the lines, if you like; but it is there and it cannot be ignored. That message is one of widespread concern over the state of our nation's apparent attitudes pertaining to law and order. There is deep concern that our respect for law and order and morality has sunk to an all-time low.
These letters make it very clear that the underlying reason for a resurgence in the call for capital punishment is this deep concern over law and order in Canada today. Out of sheer desperation and concern, Canadians are saying that something must be done, that nothing has been done by this government to recognize and abate this obvious trend to national lawlessness, and a growing philosophy in the belief that maybe-just maybe-crime does pay.
Whether we agree that capital punishment can be a meaningful deterrent, my constituents are saying that until something better comes along as a deterrent, we had better bring back, in fact, capital punishment. To those of you who say that the necessary deterrence essential for proper law and order will be provided by this bill and its companion, Bill C-83, I say, very simply, it is three years too late. This government had the opportunity to do something at the time of the last capital punishment debate three years ago with respect to meaningful deterrence. The signs of social concern were plainly evident then, although not as pronounced as now. I was personally concerned about those signs and spoke of them in my first election campaign in 1972. The government's stand-pat attitude in 1973 has been an open invitation to increased crime and violence ever since.
What I have been saying was also expressed much more eloquently by my hon. colleague from Edmonton-Strath-cona (Mr. Roche) in his very thought-provoking speech in this debate as recorded on page 13219 of Hansard for May 5. I commend it to all members of this House and, indeed, to all Canadians at this time. He was so right when he pointed out that "Canada is not yet ready for total abolition" because the current climate for total abolition is
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Capital Punishment
wrong. We should read again and again his statement as follows:
I cannot isolate the principle of abolition from real conditions in our country. The reality is that it is better to keep capital punishment in limited cases than to rush total abolition and diminish respect for the law... And even be prepared to preserve an inferior type of law if necessary.
There is deep concern and infuriation over the package concept of these companion bills on peace and security and capital punishment. The good features of Bill C-83, and there are certainly some, are being deliberately overlooked because of the feeling we are being bribed and coerced into accepting the total package. Suffice it to say that the two bills that make up this package amend old legislation and mix new legislation with it, in the package concept-a situation that simply invites controversy both in our debates in the House and especially at the committee stage.
Also, part of that package is the new use of the term "free vote" in this House. It is difficult to understand the rationale of the Prime Minister (Mr. Trudeau) and the Solicitor General (Mr. Allmand) in their repeated statements that our vote on this bill will be a free vote but that the cabinet will support the bill. For sheer double-talk and hypocrisy we should read again the Prime Minister's response to his own party member from Vancouver-Kings-way when she asked: "Will the free vote on Bill C-84 be free to the cabinet?" The Prime Minister's response was: "Mr. Speaker, a freer group of men and women still has to be found in Canada".
The rationale behind this free vote approach must surely relate to the fact that cabinet has been breaking the law every time it fails to carry out a court's decision calling for capital punishment by abusing its prerogative to grant commutation and is now taking the expedient course of changing the law that still has another year to run. Of course, this change is to be made well before the 1978 election, in the hope that the public will have forgotten these manipulations by then. I acknowledged at the beginning of these comments that my constituency mail on this issue has been very enlightening and rewarding to me, personally. In order to illustrate these "messages between the lines" in these letters from home, I would like to quote a few succinct phrases and statements from some of the mail. From Medicine Hat:
Our governments, federally and provincially, have been handing out lollipops to criminals convicted of major crimes and are now reaping the harvest.
From a rural clergyman in southern Alberta:
The government seems to be relying excessively on prisons, more and more of them. If hanging be not a deterrent, neither is imprisonment. Our prison system is almost universally acknowledged a failure and yet we are rapidly expanding it... The whole approach is topsy-turvy. It is like combating lung cancer by doing nothing except removing diseased lungs. How much better it is to get people not to smoke. It may be difficult to persuade them, and some will not listen, but the effort must be made. The federal government seems to do very little to persuade people to avoid contracting the cancer of crime.
From Cardston, Alberta:
Omnibus bills are a tool of government whereby members may be pressured into supporting "package" legislation, almost inevitably compromising their position on at least part of the package.

From Bow Island, Alberta:
Further, I would urge that all people receiving a jail sentence should be required to produce or work to pay for the expenses incurred.
From Turin, Alberta:
An honest man has nothing to fear about capital punishment.
As a layman in matters relating to religion, but as one who considers himself a practical Christian, firmly believing in the moral and spiritual rights of each of us as individuals, I continue to be amazed, and indeed sometimes confused, about two features of this aspect of the debate. First, the frequent and very genuine references to the Bible in support of either side of this emotional debate. There are literally dozens of quotes available for this purpose. Most of the retentionist quotes are from the Old Testament, while the abolitionist support is from the New Testament. Second, I have the feeling that most abolitionists seem to assume that we retentionists cannot possibly be following the exercise of our personal conscience, whereas abolitionists are truly following their own personal conscience.
I know I will have to disagree with many of my close personal friends, and even relatives, on this issue. While I am pleased, and even obligated, to hear the views of all my constituents where possible, I do not in any way attempt to persuade others to agree with me. I have been known to try to convince others of my viewpoint on other issues, such as our national beef cattle situation, or our local Suffield issue in Medicine Hat-but not on this one. My personal decision on this capital punishment bill will be the most serious, soul-searching decision I have ever been called on to make as a member of this House.
Before leaving this portion of my comments, it seems appropriate to express the feeling that surely it is time for the CBC to cease using that background picture of the hangman's noose on the national TV news when a government news item appears on capital punishment. I am certain I have support for this from other members. I certainly have it from my constituents' letters. Of the many references that all members of parliament have received, I wish to quote briefly from only two. The first is from the Pentecostal Assemblies of Canada, with reference to the Solicitor General's view on deterrence:
What the Solicitor General says may be true of some irrational people. But we believe that capital punishment by due process of law, for calculated premeditated murder by any rational person, does have a deterrent.
There is a further quotation from the Pentecostal group:
We believe also, in principle, that the use of executive clemency by governor in council was a bad practice because, in effect, it made the cabinet rehear the case, and for all practical purposes, constitute another court.
The second author I wish to quote is Dr. Fattah, from Simon Fraser University, who predicts the practical results that could follow the implementation of Bill C-84 if the bill passes. I will paraphrase his suggestions. He states that, first, a considerable number of cases of first-degree murder will be reduced to second-degree. Second, acquittal rates in cases of first-degree murder will be very high, and third, a large number of first-degree murder cases will end with the jury handing out a verdict of not guilty by reason of
May 25, 1976

insanity. Finally, I should like to quote the following statement of Dr. Fattah:
I still remember back in January of 1973, when Marcel Prud'homme, MP for Montreal, Saint-Denis, and James Fleming, MP for York West, suggested that the government bill be amended to imprison killers for a minimum of 25 years. Solicitor General Allmand and other members of the cabinet were the first to declare their opposition. It is disconcerting and disenchanting to see the government, after only three years, adopt the same retrogressive suggestion it once condemned.
I can only add that I can certainly associate myself with these appropriate quotations. In my opening comments I made reference to our concern for the lack of respect for law and order in our society today. Those of us in the Medicine Hat-Redcliff community, including the immediate rural area, have a very special reason to be concerned.
I want to refer very briefly to a terrible tragedy that occurred on August 22, 1974, when a young, 17-year old service station employee was brutally murdered while on duty during the late night hours. Three young hitchhikers robbed the service station of $123.60 and in the process murdered the young attendant by using a mechanic's hammer in a brutal fashion. No firearms were used, but drugs and alcohol were definitely involved. Two of the three young criminals were also involved in an earlier murder in the St. Catharines area that had been committed prior to the Medicine Hat tragedy. Again, no firearms were involved.
I am sure that our Medicine Hat citizens are still asking themselves, "Do we need to have tragedies like this to establish the need for comprehensive and practical law and order guidelines?" As Canadians we have become overly complacent about crime, especially so-called petty crimes. Why should we have to have almost nightly break-ins and robberies in a small city such as Medicine Hat, sometimes as many as eight or ten in a single night? It has been suggested that perhaps many of us no longer believe in evil, only in error or accident. Why are most, if not all, of the current polls so heavily in favour of the retention of capital punishment? Surely it has to be because of this very state of lawlessness in our Canadian society about which I am so concerned.
I should like to conclude by drawing the attention of the House to the sentiments expressed by my colleague, the hon. member for York-Simcoe (Mr. Stevens), when he received one of the biggest responses for a one-liner at our recent leadership convention, which is as follows:
Imagine a Canada in which justice reflects the realities of the public will. Whose rights need the greater protection, the criminals' or their victims?
The rights of the victims of crime must be paramount in our system.
In the final analysis, Mr. Speaker, I cannot support this bill to abolish capital punishment in Canada.


Mr. Joe Flynn (Kitchener):: Mr. Speaker, thank you for the opportunity this afternoon to speak in this debate. The issue being debated this afternoon is more involved than the isolated decision to retain or to abolish capital punishment. Canada still has to face a whole complex of questions about the reform of corrections, parole and rehabilitation. The bill that is now before us in parliament to extend the suspension of the death penalty treats, in an isolated way, a problem which is connected with these many other problems.
Capital Punishment
I come from an almost completely God-loving community; I have listened to and read what my constituents have to say, and I think that they have said many things. But, most importantly, they have in some way repeated what has been stated by many of our church authorities. I would like to convey to you the statement of Bishop W. E. Power, president of the Canadian Catholic Conference, who says:
We consider it an illegitimate use of the Bible, especially the Old Testament, to quote texts in order to argue, in our time, for the retention of the death penalty. Each biblical text supporting the death penalty must be studied in the light of its historical context, and not simply applied to present-day Canada. Furthermore, each such Old Testament text must be weighed against many passages in the New Testament where Jesus constantly rejects the normal human tendency to redress injury by injury and calls instead for generosity. He established the norm that violence and hostility are not corrected by countermeasures of violence and hostility.
I have listened to many hon. members, both the reten-tionists and abolitionists, and I am convinced that nothing new has been said to change my mind in any way. The question of the death penalty ought not to focus on whether a convicted murderer, no matter how wanton, deserves to die. The focus should be on us: Should Canadians, as a community, try to break the escalating spiral of violence by refraining from violence, the same violence that some profess will serve as a deterrent? The Canadian Catholic Conference goes on to say:
To a Christian, whose starting point is reverence for the sanctity of life, the death penalty can surely be only a desperate resort. A Christian must be utterly convinced of its social necessity before supporting it. Our society, it is true, has traditionally exacted the death penalty. But this ought not to mean, as it often seems, that those who favour suspension must bear the burden of proof. On the contrary, those who favour retention should be required to convince a Christian of its necessity.
I would hope, Mr. Speaker, along with many others, that we would investigate further and establish research committees to make an exhaustive study of all the ramifications of this complex problem and then publish these reports within a specified period. As one who three weeks after he was elected witnessed a murder, a shooting of three innocent people, and as one who held the body of the murdered man in his arms, I realized that I was a firm believer in the reverence and the sanctity of life.
I am rather inclined to agree with our Solicitor General (Mr. Allmand) who said that capital punishment is not only ineffective but also immoral, and who listed the following alternatives which I feel are worth repeating here. There should be better trained, better deployed and better equipped policemen; effective gun control; proactive, rather than reactive, police work; more effective correctional programs for juveniles and adults; more effective social and economic programs to remove the causes of crime; improved treatment for alcoholics and drug addicts; improved education and recreation programs; possible restrictions on the showing of violence on television and through other media; and measures to promote respect for legitimate authority in the home, the school, the church, community associations, and government.
I think we had better return to family life basics and to the great respect which some of our ethnic communities demonstrate toward family life and toward the reverence
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May 25, 1976
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for the sanctity of life. I think we must return to the three "R's-Reverence, Respect" and, most importantly, the "Right to Life."
Thank you, Mr. Speaker, for the opportunity to participate in this very profound debate. I am inclined to agree with our Solicitor General and our government that if these and other measures I have mentioned were pursued with more vigour, we would do much more to lower our crime rate than if we merely emphasized the application of harsh penalties after the fact.


Mr. Donald W. Munro (Esquimalt-Saanich):: Mr. Speaker, I wish to point out to the House that this is a completely needless debate. There is legislation on the statute books at this very moment which will not expire for another three or four years. I can see no reason whatever for having this debate today. An experiment is in progress. When we voted the last time, we were told that an experiment was to take place. The government has prejudged the outcome of this experiment and has decided, in its own wisdom, that the experiment was a failure, and we are being asked to write off the experiment and abolish the death penalty. This is a needless debate. Never in my life have I seen anything more needless than this particular piece of legislation.


Mr. MacFarlane:: Why speak on it, then?


Donald W. Munro: I am speaking on it because it needs to be drawn to the attention of the public that it is needless. It is a diversion to take the minds of the public off the serious things which are going on in this country and the failure of this government to deal with our economic problems.


Some hon. Members:: Hear, hear!


Donald W. Munro: How can this government trot out data and conclusions, which is done through the auspices of a pet professor of the government by the name of Fattah, to prove that the experiment has been a failure? It is presumptuous on the part of the government, and on top of that, it is very unscientific. Therefore, I conclude that this is a needless debate. It is diversionary, bearing in mind the legislation which is already on the books, and it is meant to draw attention away from the economic ills which beset this country and to lull those who are really concerned about the failure of law and order in this country, for which this government must take a very large responsibility, and particularly those who are living alone on fixed incomes and who are worried about the economic problems. It is a complete fraud.
It is a cynical misuse of the time of this House to suggest that we must approve this bill before we are allowed out of this House at the end of next month. Are we going to accept that sort of blackmail? That is what it is. There is legislation on the books now. Why should we be subjected to blackmail at this particular time? Why now? Why the rush? Why this bill?
Not for one minute do I believe that this government, which is bringing forward this needless legislation and trying to rush it through, is motivated in this effort by any of the stirrings of philosophic concern for human beings. The motivations of this government are entirely cynical in

this as in many other of its activities. Why now? Why the rush? Why do we have to pass this bill before the end of June, when there is legislation already on the books? It is just to obscure the economic problems besetting this country. It is just to obfuscate.
If there were any true and purely philosophical motivations, why should the government not be concerned about the law-abiding and those who respect the law, rather than pretending that it is moved by the poor, unfortunate, misguided criminal?
If such, indeed, is the motivation of the government, why does it delay so long in sorting out the good from the bad; the recoverable from those who cannot be rehabilitated amongst inmates? This is where the problem lies. This is where the Solicitor General (Mr. Allmand) should be directing his attention-not to wasting the time of this House on needless legislation such as the legislation he has brought forward. Why allow the prisoners in this country to convert prisons into post-graduate institutions where inmates can be instructed on how to beat the law? That is what our prisons have been turned into. Prisoners learn how to pick locks, how to make ice picks and how to hold hostages. Young offenders, through some error, have landed up in some of our penal institutions and are being faced with this sort of deadbeat, the inmate who cannot be rehabilitated. Once the young offender has lapsed once and gets into the hands of those old cons, he is finished; he becomes a criminal for life. This is where rehabilitation should take place.
This bill is not only a needless bit of legislation, but it is bad, bad, and I intend to vote against it. There are certain special aspects to this legislation, however, with which I would like to deal. I could start on page 1 of the bill and go through it seriatim, page by page, but I am going to confine myself to two or three aspects. I would like to deal with the proposal of this government to remove treason as one of the crimes punishable by death. The Encyclopedia Bri-tannica talks of treason in this way:
The law which punishes treason is a necessary consequence of the idea of a state and is essential to the existence of the state.
If there is no law protecting the state against treason, I submit our state is in trouble. In Roman law, the crime of treason was next in gravity to sacrilege, and if it was so serious, and if it is so serious-and I think it is-should it not be punishable by the ultimate penalty? Since by custom and tradition cases of treason are justiciable by special processes, the seriousness of the felony is amply marked. It is a serious crime, and in clause 2 the government proposes to dispose of it and consider that anyone who has committed treason will be subject to life imprisonment rather than the ultimate penalty.
I find it inexplicable that the government should seek to eliminate the death penalty for treason, whether it be against a head of state, a monarch, a sovereign or the forcible overthrow of government. If there is no deterrent to forestall treasonable acts-that is, attacks on our institutions with the object of destroying them-then what motivation is there to make us want to defend those institutions? This is the problem that this government has not faced.


Some hon. Members:: Hear, hear!


Donald W. Munro: Surely these concepts mirror one another: the existence of one determining the existence of the other, just as the absence of a deterrent predetermines the absence of motivation. If I do not hold dear my democratic institutions, be they persons or functional organizations, such as the one in which I proudly speak today and condemn to the ultimate penalty anyone who ventures to deprive me of them, how can I be expected to defend those same institutions with my life, as many of us in this House did 30 and more years ago?
What sort of mentality can draft such legislation? Perhaps I should ask: What sort of mentality can insist that such legislation be drafted? I am not blaming the drafters, but those who instruct the drafters to put this sort of legislation before us. Is no one on that side of the House who supports this bill prepared to defend with his life those very institutions in which we are permitted to discuss this matter freely and openly? Well, I am. Is everyone prepared to tolerate the violent overthrow of those institutions without lifting a finger? Well, I'm not. The death penalty should certainly be imposed upon those who commit treason against the head of state, against those who wage war against this country or assist others in doing so, or who use force-


Some hon. Members:: Hear, hear!


Donald W. Munro: -to overthrow the government, or who commit any other of the incidental treasonable acts outlined in sections 46 and 47 of the Criminal Code. If we remove that ultimate penalty, Mr. Speaker, we will have filleted our nation-we will have removed its backbone and removed from our citizens the will to stand up and defend our way of life when it is threatened. Is that what this government wants? I sometimes think they do.


An hon. Member:: Oh, come on.


An hon. Member:: Sit down.


Donald W. Munro: Is that what the people of Canada want? I do not think it is. If our democratic system and its institutions are not worth the life of someone who attacks them, they can hardly be worth my life to defend them. Then where are we? Is that the message this government is seeking to get across to the nation through this bill? That is what it looks like to me.
This notion should not be pushed aside as if such things could not happen here. They have happened in other states and I, for one, am not prepared to let them happen here. I hope I am not alone.


An hon. Member:: You are.


Donald W. Munro: Someone said I am alone. I am alone. I shall have to stand up and defend this by myself? Shame on anyone who should say such a thing. Let me remind hon. members-


Mr. Cafik:: Mr. Speaker, on a point of order-
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The Acting Speaker (Mr. Turner):: The hon. member for Ontario (Mr. Cafik) on a point of order.


Donald W. Munro: If the cap fits, he can put it on.


Norman Augustine Cafik: Mr. Speaker, I am not rising on a point of order, but I should like to know if the hon. member would permit a question at this time?


Donald W. Munro: When I have finished my speech. The cap, quite obviously, fits.


An hon. Member:: When you get Cafik, you are really hitting home.


Donald W. Munro: All it would take is for a head of government to assert the right of both making and insisting on enforcing the law, as Blackstone has said; whereas we, here, insist upon a clear division between the legislative and executive branches of government. When the same authority both makes and enforces the law, we are in real trouble. That is how simple it would be, Mr. Speaker. Are hon. members prepared to let that happen without lifting a finger? Well, I'm not.
I sometimes wonder whether members on the other side have even read this bill. They have been talking about the noose and all that sort of stuff that gets people worked up emotionally. I am not talking about the noose. I am talking about the death penalty-the penalty of death for doing something very, very seriously wrong, like treason. I do not care how the execution takes place, but there are crimes which deserve that sort of penalty, and I think treason is one of them. I recommend to members on that side of the House that they read clauses 2 and 3 of this bill. Then, if they are prepared to move some amendments, I will have another look at it.
Has everyone on that side of the House who supports this bill sodittle commitment to our traditional, democratic way of governing ourselves that he is prepared to stand by and watch any petty tyrant or demagogue come along and assume all legislative and executive powers of government without protest? That is fine if he is, but I'm not. This bill, Mr. Speaker, proposes wrong law-law that I certainly am not able to justify or to explain. I shall therefore oppose it.
Clause 3 is equally wrong-piracy, presumably including the hijacking of people and aircraft. Where there is loss of life, the punishment would be life imprisonment. Under the terms of Bill C-83 which is now before the committee, that would mean a term of something like 15 years. Never, Mr. Speaker! Piracy is a serious act. At the weekend we heard what happened in the Philippines when an aircraft was hijacked. Are we just going to say, "You should not do that; you had better go to prison?" In light of the experience of the last two or three years, how can we say that people will stay in prison and not be paroled after 15 years? For piracy to be expunged as a crime liable to the death penalty is completely beyond the realm of reason. Piracy is piracy and if a life is lost, death is the obvious and only penalty.
The same should be true of kidnapping when a life is lost, Mr. Speaker. That would include rape, bearing in mind the Latin origin of the word. It means "taking away", "taking off", "carrying away". If, in the course of that act

May 25, 1976
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of assault, there is a loss of life, to my mind it should be punishable by death. The French term for "rape" is so much more accurate-"le viol". It is "a violation". Our word "rape" is completely misleading in this context. I say that kidnapping, including capture and forcible holding of a female in the course of which the death of the victim occurs, also deserves the death penalty.
Section 214 of the Criminal Code is the focus of much attention in the present debate. It concerns the penalty for killing a policeman or prison guard. A colleague, I think with good cause, has proposed that we should amend this bill by inserting a provision to this effect: if a man convicted of a capital offence should, during a fracas in prison or during an attempt to escape, say, cause the death of a prison guard or policeman, the death penalty should become operative, but only then.
In other words, the death penalty would apply to a person who, having been convicted of first degree murder which would be punishable by life imprisonment, tries to break out, let us say, and causes the death of a policeman or prison guard. That provision would be a deterrent. The hon. member is to be commended for bringing forward the point. I say, let us include it in the bill. But I see no reason to remove the death penalty entirely. Leave it for those cases to which it now applies and for the additional ones suggested, because some people attempting to break out or to create a disturbance may not be in prison for the crime of first-degree murder. I would prefer to see sections 218(1) to (4) remain on the statute books as they are. They should not be considered as experimental provisions but as formal points of our law.
I have not dealt with the other proposed sections which redefine murder as first and second-degree murder; one of those offences would be punishable by a long sentence of imprisonment, with provision for parole after a certain period of sentence has elapsed. I suggest, as I suggested at the beginning, that this legislation is wrong. It is diversionary. There is no need for it at present. We are being asked to spend time considering this legislation rather than considering important economic questions which confront our elderly and those on fixed incomes. By acting in this fashion, the government is being dishonest with parliament and the Canadian people.
I propose to stand up when the time comes and vote against the bill. As far as I am concerned, the time need not come before the end of June. The bill could be voted on at any time in the next three years. There is no need at all to vote on the bill now.


Mr. Stollery:: Why three years from now?


Donald W. Munro: Three years from now, when the experiment is over.


Peter A. Stollery: It has been over for years.


Donald W. Munro: Do not prejudge the experiment, and do not hire "pet" professors to prove the experiment has failed, in an attempt to convince the Canadian people. They are not convinced. They are convinced to the contrary.


Mr. Alexander:: They are convinced that it is high time to get rid of this government.


Donald W. Munro: That is right. By bringing forward this legislation, the government is going about that in the right way. It is my feeling that by bringing forward this phoney, untimely, needless legislation, the government is doing the right thing to defeat itself. I propose to oppose this bill when the vote comes.


Norman Augustine Cafik: Mr. Speaker, will the hon. member accept a question or two?


Donald W. Munro: Yes, Mr. Speaker.


Norman Augustine Cafik: Mr. Speaker, I am concerned about a point the hon. member raised in the latter part of his speech. He suggested, or seemed to think, that only members on my side of the House will vote in favour of this legislation. I ask him if he is not aware that there is to be a free vote on it, and that members on all sides of the House will be free to vote either for or against this bill?
My second point concerns a remark he made in the early part of his speech. He talked about the proper motivation on the part of those who would support this bill. I ask if he does not feel that a presumption of good will and proper motivation on both sides of the argument is necessary, indeed essential, if the subject matter we are considering is to be debated intelligently? When the hon. member attacks people individually and collectively and does not deal with the substantive issue before this House, it is difficult for anyone listening to the style and manner of his speech to consider this subject objectively.


Donald W. Munro: Mr. Speaker, if I may answer the first question concerning the free vote, it is apparent to me, if not to the hon. member, that there is to be a free vote on my side of the House. But when members of the government say, "I may have to resign," meaning if the bill is defeated, I do not feel that there is to be a free vote opposite.


Some hon. Members:: Oh, oh!


Donald W. Munro: As for motivation and good will, I accuse no individual. I was speaking generally. I think the question of motivation ought to be considered in light of the law now on the statute books. I made it clear that the experimental period has not elapsed. We are entitled to wonder why, when the experimental period for retention has not expired, the government should decide now, a few weeks before the summer recess, to "blackmail" us. That is the appropriate word. Why should it blackmail us to carry on this debate when there are other more important matters we ought to debate.


Mr.   Jacques-L. Trudel@Parliamentary Secretary to Minister of Finance: Mr. Speaker, may I say at the beginning of my remarks, concerning capital punishment that I respect the opinion of those supporting the bill.
My comments will be very brief. The society has rights, for instance the right to protect itself against those willing to destroy it or destroy some individuals who are part of it. I would like to stress that I used the word "protect" and
May 25, 1976

not "revenge". In this bill, I see nothing indicating convincingly that by abolishing capital punishment we could, with the sentence increased to 25 years of imprisonment, prevent some individuals from committing one or several murders. On the contrary, extending the penalty to 25 years' imprisonment clearly indicates that the offence must be related to the punishment, in the minds of those who have drafted this legislation.
Many references have been made to rehabilitation during this debate especially in relation to crime offenders. I would like to emphasize, Mr. Speaker, that as long as all segments of our society do not feel protected by a just and fair law, there cannot be rehabilitation. This means changes in our social structure, better administration of justice, specialized prevention training for police forces and jail wardens, a review of parole and a rehabilitation plan for those who can still be reclaimed. I must also mention a compensation plan for victims, a review of appeal procedure against the death sentence, whenever the jury has recommended leniency. I suggest, Mr. Speaker, that the final ruling should be heard, not in the way it is done in Cabinet, but before three Supreme Court justices.
I would like to point out that the best way to reduce crime and have an adequate penal system is certainly to increase the opportunity for the guilty party to be brought to court and sentenced to a penalty which includes capital punishment for premeditated murder. For those reasons, Mr. Speaker, having stated I would be brief, I shall only repeat very clearly that I intend to vote against this bill, that is for the retention of capital punishment for premeditated murder.


Mr. Gaston Clermont (Gatineau):: Mr. Speaker, the subject matter of the bill before us was considered in 1961, 1966, 1967, and 1973. Each time it was lengthily and strongly debated, and those who participated expressed contradictory opinions and, until now, we are continuing the same experience because the matter is very controversial.
At any stage of the voting, each member will have to take his responsibilities, for this is a free vote, whatever may think some members of the official opposition. Such particularity implies that the member has an individual role to play and that the line of the party gives way to the voice of the conscience and to the constituents' interest, that is to say that the member votes according to his own assessment of the matter.
First, it is important to place the debate in its general contemporary context. We must above all forget the out-ofdate concepts of the death penalty and consider the problem in the light of present perspectives. First of all, it is essential to abandon the ancient law of retaliation, retribution of an eye for an eye through vengeful punishment.
Ideas, customs and needs of the criminal policy have been changing with time. The problem must therefore be approached in a state of mind adapted to the circumstances of our times. It is not useless, therefore, to recall that Canadian criminal law has made substantial progress in this regard. Is there need to point out some effects of the 1961 act in this field? Since that time, capital punishment has been eliminated for many categories of murders, and
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remains applicable only in the case of qualified murder, and even then the jury may recommend clemency or leniency if they feel this is warranted by the circumstances. Moreover, the 1961 legislation provides for an automatic revision of the case by an appeal court, particularly with regard to questions of law, propriety of procedure and facts. The convicted person is thus given the right to appeal to the Supreme Court. Whether the murderer is rich or poor, his or her case can thus be brought before the highest tribunal in the land without prior authorization. Finally, since 1961, no person under 18 can be given a death sentence. It can therefore be said that in this field, Canadian criminal law has become more humane and that the death penalty is practically brought upon particularly odious criminals only.
Our conception of this punishment and its finality has obviously changed. It is now out of question to impose punishment on the criminal without caring about his rehabilitation merely to set a terrifying example for the citizens. Whatever opinion we have on that subject, we all agree that we should render an offender harmless through reform. Everytime it is possible and not through sheer suppression, everytime circumstances allow it, we must try to rehabilitate the criminal and bring back a social being who can live and be a useful member in society. Having said that, there certainly are convicted criminals who cannot be amended, rehabilitated or socially recuperated and who will finally remain a danger for the community.
It is under that aspect of danger and real necessity that capital punishment must be considered, that is to eliminate once and for all a deadly risk. Capital punishment nowadays should not be considered as a "vindictive torture" but as a "means of defence", an ultimate means to protect the society. It is therefore a matter of social protection by preventing killing and, if necessary, by eliminating beings who are essentially antisocial and a permanent risk for the community. Those who favour abolition of capital punishment put forward various arguments but I want to consider only a few of them.
First, some abolitionists question the state's right to take the life of a citizen. For sure, this debate concerns not only the political concept one may have of the state, but also the religious convictions of every individual. Without starting a philosophical debate, let us say that in Canada nothing takes away such a power from the federal government. Under the constitution, criminal law comes under federal jurisdiction and, furthermore, pursuant to section 91 of the British North America Act, Parliament has the necessary authority to make laws for the maintenance of peace, order and good government of Canada. Thus, the government has not only the power but also the duty to protect the common good and, to that end, it must take all the necessary steps to ensure the security of all citizens and to protect the lives of innocent people.
When the problem is viewed from the angle of the protection of society and the defence of the community, it seems hardly possible to question the right of the state to eliminate dangerous and hopeless individuals once and for all. When dealing with some particularly infamous criminal, does the state not have the right to resort to any measure, if necessary, to the most drastic, in order to protect the rest of society, particularly prison staff and

May 25, 1976
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other inmates? It is also to spare the lives of prison staff, of citizens in general, and possibly of some members of the community in case of an invasion, for example, that the state must, in certain cases, eliminate the individual who is a threat to society. Is it not also under this duty that the state must protect the common good and ensure the security of the country by declaring war at times?
How can we challenge the state's right to take the life of a dangerous criminal when it has the right to demand from the citizens any sacrifice necessary for the protection of society and the defence of the country? The state can compel soldiers to give their lives for the safety of the country. So why could it not, in order to attain an end of the same order, resort to the death penalty? In some cases, the duty to take the life of an individual is no more unethical than the duty to kill in times of war or in cases of self-defence. By the way, the death penalty is the selfdefence of society and the protection of its members. Even the Canadian Catholic Conference, that is the Assembly of Catholic Bishops of Canada, in a recent release, in recommending the abolition of capital punishment on humane grounds, recognized the state certain rights in this area, and I quote:
This stand taken by the bishops does not deny the state the right to impose capital punishment if circumstances were to demand it, nor is it intended to bind every Christian in his personal opinion on this subject.
Here is what His Holiness Pope Pius XXII stated in 1952 with respect to the rights of the state in the matter of capital punishment, and I quote:
It is the prerogative of the political power to deprive the convict of the blessing of life in atonement for his sin, when, through his crime, he lost the right to live.
Second, some abolitionists believe that capital punishment does not deter anyone from committing a crime or has hardly a deterrent effect on him, and that life imprisonment is equally effective. In our society, Mr. Speaker, opinions are divided on the deterrent effect of capital punishment on murderers. I do not think one can use statistics in support of an argument. Statistics are subject to various interpretations and are uncertain. It is nearly impossible to make a useful comparison between countries because of the differences in the legal definition of crimes, legal procedures and court practices, methods used to compile crime statistics, morality standards, and finally political and economical and social conditions. Those are data that defy any valid assessment.
Strict enforcement of the death penalty certainly does not prevent the perpetration of all deliberate murders. In fact, murderers rely on their guile to escape either the police or a conviction for lack of sufficient evidence. Hence, the care they take to escape pursuit. Caught in the act they shoot down the policemen who want to arrest them. In the expectation of criminal prosecution, they do not hesitate in some cases to murder witnesses who would lead to their conviction. This is an indication of the terrible fear they have of capital punishment. As a matter of fact, all punishments are exemplary. We do not park our car in a no-parking zone because we fear getting a ticket. If all punishments are designed to intimidate the offender-and they do have this result to a large extent-how in Heavens

would capital punishment, the harshest of all, miss its goal?
It is perhaps difficult to establish the relationship between capital punishment and crime. However, obviously the concept of this extreme retribution remains closely related to that of some barbarous and abominable crimes. This severeness of punishment concept has undoubtedly been deep rooted in people's mind for generations, and commonsense dictates that no threat other than that of losing one's life would deter a potential criminal from perpetrating a murder.
Moreover, the Senate and House of Commons Joint Committee on Capital Punishment stated in its 1956 report, and I quote:
The law enforcement authorities consider that capital punishment is an effective deterrent to crime, particularly as it prevents professional criminals from using guns and committing violent offences. Capital punishment protects the police forces in so far as a criminal who wants to escape arrest would fear to a lesser extent the consequences of using firearms or resorting to violence if capital punishment did not exist.
Certainly you will be told that this did not prevent policemen and prison guards from being murdered.
Mr. Speaker, capital punishment no longer exists in Canada since 1962, when a death sentence was executed for the last time in this country. Since the current law on capital punishment went into force, 36 police officers and prison guards were killed. Every death sentence for capital murder has been commuted to life imprisonment by the Cabinet. This in certain cases means less than 15 years imprisonment or waiting for Parliament to decide on this legislation.
The third point I would like to make concerns the danger that an innocent be executed following a judicial errror. This is a possibility, but how very remote and problematical. Very few convincing cases can be referred to, because the fact that someone admits to commiting a crime for which someone else has been punished is not sufficient proof that the latter was innocent.
On the possibility of error, on June 27, 1956, the Commons and Senate Joint Committee on Capital Punishment had this to say, as appears on page 60, paragraph 60, of the White Paper on Capital Punishment, and I quote:
Considerable emphasis was put on the risk of irrevocable error in capital convictions. The fact that there was no known Canadian instance of the execution of an innocent person indicated the effectiveness of present procedures by way of trial and executive review and this suggests that the risk of error does not present a reasonable argument for abolition in Canada.
Mr. Speaker, since that report was published, there has been a reinforcement of safeguards against possible execution of innocent people, through Criminal Code and judicial procedure reforms, which practically eliminated any possibility of an error on facts. The death sentence is not given on simple circumstantial evidence any more. Appeal is mandatory up to and including the Supreme Court, which allows the higher courts to review every case and find any minor flow in the Crown's evidence. Then must follow an exhaustive review by the Solicitor General and finally by the Cabinet, and the Cabinet can always use its right to commute a death penalty. It is evident that in all those phases, the least doubt must necessarily be considered in favour of the accused. We already exempt from the death penalty those who kill in a fit of passion, jeal-
May 25, 1976

ousy or anger. We give special consideration in certain cases, for instance a man who is overly nervous and mortally wounds the police officer who tries to capture him.
Mr. Speaker, when the right hon. member for Prince Albert (Mr. Diefenbaker) pointed out that in 1966 there was a miscarriage of justice, he mentioned the United States and England but could not refer to a single case in Canada. Mr. Speaker, the present act has been in force since December 29, 1967 and in 1973 it was extended for another five year period for several reasons, particularly, that a longer period would give the authorities better statistical data.
Now the government has introduced in Parliament Bill C-84 to amend the Criminal Code as regards murder and certain other serious offences, which would replace capital punishment for premeditated murder by life imprisonment. That means in certain cases 25 years imprisonment, but in other cases, after having served 15 years, after being convicted, the inmate could file an application to serve less time before being eligible for parole. I remember that in 1973 an amendment was presented to replace capital punishment by 25 years imprisonment. Mr. Speaker, as concerns such an amendment, members of Parliament, association spokesmen and individuals told us that emprisonment for such a long period is more inhuman than capital punishment itself. To further support this argument, I would like to quote a few excerpts from various newspapers following the announcement of the new peace and security legislation.
On February 25, 1976, the Montreal Start published an editorial which read, and I quote:
By filling up prisons with men sentenced to endless penalties, we are sure to transform these men in time-bombs and to expose prison personnel to a terrible danger.
Mr. Normand Caron, general director of the Human Rights League, stated, and I quote from the newspaper La Presse of February 26, 1976:
These new amendments can only lead to even more desperate people who will not hesitate to attempt an escape faced with a hopeless future.
On the same day and in the same newspaper, the Association of Social Workers gave the following warning in a press release:
We realize that the public must be better protected against criminals, but we do not believe that longer prison sentences are the answer to this problem. In fact, we have every reason to believe that such sentences would only make the problem worse.
Mr. Speaker, while recognizing that many people would like capital punishment to disappear, even more people support and accept it. This support reflects the aversion of the public for murder, the worst of crimes. Moreover, we recognize that public hatred for murder reflects a traditional attitude resulting from the fact that the death penalty is reserved for this crime in particular.
The abolition of the penalty considered traditionally as a fair and effective deterrent could only be recommended if there was clear evidence that the ordinary citizen believes this penalty to be clearly ineffective. The experience of the authorities shows that abolition of the death penalty when the public strongly favours its retention can cause confusion and doubt, which can have disastrous effects on the administration of justice.
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Mr. Speaker, I said in 1973 and I repeat it with more emphasis today that at a time when the state has much to do to control crime, we should be more concerned about protecting society rather than the criminal. There are reasons to believe that the death penalty is a deterrent against armed robbery and the abolition of the death penalty could be interpreted by those who disregard the law as a signal to commit other criminal acts.
At the beginning of my comments, Mr. Speaker, I said that each member should make his own decision, since it is a free vote. This is why I for one cannot support this legislation because I am absolutely convinced that the fear of a violent death has an intimidating effect and is the only deterrent to prevent murder.
Before concluding, Mr. Speaker, I am sure that we all advocate the same objectives which is to provide more protection and better security to the public, but it is possible that we do not consider the same means.


Mr. Elmer M. MacKay (Central Nova):: Mr. Speaker, the current wisdom is that parliament will pass Bill C-84 and thus abolish capital punishment, though probably by a very narrow majority. At the same time, sir, it is readily apparent that no issue in recent years has so aroused the Canadian public, the vast majority of whom, according to most indicators, favour retention. How can this apparent contradiction between the views of parliamentarians and those of the electorate be explained? Paradoxically, I believe it is probably because we are each talking and thinking about different things; some about deterrence and others about appropriate punishment. The latter consideration has been neglected by both sides, and probably to the detriment of each.
Those who oppose capital punishment tell us, correctly, that there is no conclusive evidence which demonstrates that the fear of death or the supreme penalty inhibits the potential murderer from killing. Abolitionists also argue the fact that some murderers have proven to be easier to rehabilitate than other types of criminals-and it is obviously true that you cannot rehabilitate a man after you have hanged him.
Such arguments would be entirely valid if those who sought to retain capital punishment wanted it to apply in all murder cases and if they based their argument on deterrence alone. Retentionists differ on the criteria they would apply in deciding when capital punishment is appropriate-although premeditated murder, or, in other words, murder for hire and the murder of police and prison guards are cited most frequently. However, most retentionists do not advocate supreme penalty for unpremeditated family murders, crimes of passion or murders committed because of quarrels among erstwhile friends. It is noteworthy that crimes of this type constitute by far the largest proportion of murders committed in this and other countries.
The retentionists accept, or I presume most do, that capital punishment would not be an effective deterrent in cases of this second type of murder. Moreover, I contend they believe that this type of crime, while reprehensible, is less vicious than those I enumerated first, in that with

May 25, 1976
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respect to the first group of murderers the retentionist believes, not only that on some occasions the fear of being hanged will have the desired deterrent effect but that, even if it does not, capital punishment is the just punishment for the perpetrators of such crimes. If a person schemes, without extenuating circumstances of any kind, to deprive another person of his life for his own personal gain, then he deserves to receive the maximum penalty possible for his own iniquities.
We should, it is true, consider all diminutions of responsibility and all mitigating circumstances in determining the appropriate penalty. Hence, when there is full responsibility and no mitigating circumstances, the criminal should be treated with the full force of the law. Justice requires that punishment should fit the crime and the criminal. To be sure, there is no more fitting punishment than death for the person who plans to kill his business partner for financial gain. On the other hand, if we discover that the victim was having an affair with his murderer's spouse, we will agree that there are mitigating circumstances. It is precisely when there are no such circumstances that the death penalty for such crime becomes appropriate.
In order to persuade parliamentarians and the public to support the abolition of capital punishment, the government has introduced a punitive bill on prison sentences for murderers which will do little either to make society safer or to improve the quality of justice. The mandatory sentence to be served for first-degree murder is to be 25 years, and ten years for second-degree murder. When, and if, the cynical manoeuvring implicit in trading-off supposedly tougher laws regarding sentencing of murderers in return for the abolition of capital punishment ceases, then abolition will become more feasible. I say, with respect, sir, that there should be no trade-offs involving matters such as these.
The two main aspects of this bill contain contradictory principles, and as a result this legislation is offensive to retentionists and abolitionists alike. There are two questions involved in this bill, and I can see no reason that we cannot discuss them separately, based on their own respective merits. Let us consider, for example, the case of a 45-year old man convicted of first-degree murder. Under the presently proposed legislation, he will be incarcerated until he is 70 years of age. He has no incentive to improve; he is a constant escapee threat, notwithstanding the higher penalties for attempted escape, and a continuing danger to guards and other prisoners. But if the abolitionists are right, as I believe they are, that murderers without previous criminal records are among the easiest to rehabilitate, and if the criminal has not committed the kind of crime of the type I enumerated a few minutes ago, then to incarcerate such a man or person for 25 years is in itself a denial of justice. Here is a man who could probably contribute something to society, and our proposed new law would deny that possibility. Moreover, the government's negligible efforts at rehabilitation make the possibility of further rehabilitation more unlikely, even if the period of incarceration was lengthened.
The ten-year mandatory sentence for second-degree murder, with the judge's option of an extension of this sentence to 25 years, is probably even worse. Take, for
[Mr. MacKay.)
another example, the case of a woman who killed her husband intentionally in a fit of anger because he was constantly beating her and her children, or gambling and drinking away the family income. While we would scarcely consider such behaviour acceptable, it is doubtful that most people would consider it appropriate if she was incarcerated for a minimum of ten years. In each case, I believe the punishment should be determined by the specific circumstances of the crime and the previous record of the criminal. The proposed new legislation denies us the right to such elementary justice and, incidentally, casts doubt on the statement of the Solicitor General (Mr. Allmand) when he speaks of his dedication to a more civilized society.
I believe, strongly, in more judicial discretion and not in tying the hands of our judges with mandatory sentences, which in many cases could be exercised by people without any judicial training whatsoever and which, unfortunately, is becoming more and more a trend in our criminal jurisprudence; that is to say, taking away the right of the judge to decide in individual cases that which is right and appropriate and denying to society and those who appear before him the conscientious deliberation of one of those people in our society whose only mandate is to do the right thing.
The consequence of the proposed new law, if passed, will not merely be that capital punishment will be abolished, but that there will be much less true justice for those who are incarcerated. Moreover, the very real possibility exists that juries will refuse to convict when a minimum sentence seems too excessive.
Should members of parliament abolish capital punishment when its retention is desired by a majority of Canadians is a question which no doubt many members have asked themselves time after time during this debate. Parliamentarians are representatives of the people who elect them, not their delegates. According to the parliamentary tradition, members of parliament should decide on the basis of their wisdom and their conscience. While we should listen to our constituents, the final decision should be ours and not theirs. At this point I reject the self-serving assertions by some abolitionists that only they are following this honoured parliamentary tradition, and also the clear inference that the retentionists are somehow merely responding to the whim of the moment.
Parliamentarians should not mindlessly do what their constituents want. That is obvious. On the other hand, when they want to do something that is abhorrent to most of the people, they should be much more certain of their motives. Members of Parliament ought to be careful in overruling the clear and collective wishes of the people which, of course, in effect is the situation in considering this particular piece of legislation at this point in Canada's history.
I ask the government to withdraw or drastically modify this piece of legislation. As I said earlier, there are two distinct principles involved in this legislation. I believe members of this House must have the opportunity to decide each of the principles separately and according to their merits. In any event I, for one, shall vote according to
May 25, 1976

my conscience. I ask only that the Solicitor General and other abolitionists do the same and refrain from imputing motives to members who may not agree with their point of view.
Our existing criminal law over the centuries has been refined to the point where an accused does have sufficient protection to take into account practically all mitigating circumstances. In this country, when a person is accused of murder there is an assumption of innocence. In our system of criminal jurisprudence there is the right to a preliminary hearing, the right in respect of a grand jury, the right in respect of a petit jury, and the right of appeal right up to the Supreme Court of Canada in respect of any conviction, and in the final analysis, the possibility of the royal prerogative of mercy being exercised on behalf of the person concerned.
All these safeguards are in addition to the very real principle which has existed in our form of justice over the years, that of making sure that it is better for 100 guilty men to walk away than that one innocent man be convicted. All juries are instinctively aware of this tradition. All these safeguards exist, in addition to the option of being acquitted by reason of mental disability, of being convicted of lesser crimes, or included offences, such as manslaughter on the basis on self-defence, mistake or accidentally. Those of us who have practiced law realize, as the previous speaker said, that there is hardly any imaginable chance that in this day and age any person would be executed for a crime that was not of the most reprehensible and terrible type.
We have a system of criminal law and jurisprudence which has served us well. It can be modified and improved, that is for sure; but I am not convinced that the ultimate penalty at this point in time should not be maintained, to be used only in cases when there are no mitigating circumstances that could possibly be taken into account by conscientious jurists or by conscientious members of the cabinet.
To follow the thrust of this bill at this particular time in an attempt to make things more desirable or better for law enforcement in our society, I suggest is not feasible. If this legislation is supposed to be a cure for some sort of malady or disease that is affecting our society at this time because of the forces and influence of crime, it is a cure that I feel will be worse than the disease itself.


Jack Burnett Murta: Mr. Speaker, I feel somewhat honoured to be able to participate in this debate on Bill C-84 since we will be having a free vote on this very important matter. To begin, I should like to say that once again this House meets to debate and vote on a bill involving the issue of capital punishment. The last time the issue came before the House, in the fall of 1973, a measure was passed that saw the death penalty for a five-year period except in respect of those who had murdered policemen and prison guards. It should be pointed out that the result was the abolishment of the death penalty in all cases, since the government has shown itself to be utterly unwilling to apply the law as it stands. The government can argue that it has been completely within the letter of the law, that it has the power to commute any death sentence, but it is the spirit of the law that has been violated. It is satisfying to know we will see the end of the spectacle of a government
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that frustrates the law of the land, whatever the fate of the bill as it now stands. In other words, we will finally see the law carried out one way or the other regardless of how people across the country feel.
In the bill before us we are asked to vote for total abolition of the death penalty in Canada. This I cannot do. In fact, I cannot support any legislation on this matter which does not include the death penalty, as potential punishment, not only for the killing of policemen and prison guards but for all premeditated murder. In taking my position, I do not picture myself as a vengeful, bloodthirsty ogre, but as a responsible member of parliament making a decision that is true to both my conscience and the sentiments of most of my constituents. The decision was taken only after weighing all the factors as I saw them.
I have no great emotional attachment to the death penalty as such, as has been expressed by people throughout the various parts of the country and by some members of this parliament. If an alternative were to appear that I felt was as effective for the protection of society, I would support it. However, due to the unique nature of capital punishment as a deterrent, it is doubtful such an alternative can be found. Capital punishment cannot be dismissed as a simplistic solution. The alternative certainly has not been provided in the mandatory 25-year sentence for premeditated murder found in Bill C-84. This measure is a carrot-on-the-end-of-a-stick approach by the government. In the past, when the government knew it could not get a majority in favour of total abolition, it compromised by making exceptions for the murderers of policemen and prison guards' and by restricting the measure to five years. Now, when the move has been made to total abolition, the 25-year minimum sentence has, in my opinion, been thrown in to pull enough votes to the abolition side in an attempt to ensure passage.
My position on capital punishment is not based on any philosophy of "an eye for an eye" but a desire-and I hope a sincere desire-to protect society, something that is not obvious today. We have been told that use of the death penalty would brutalize civilization. I not only dispute this claim but I suggest that capital punishment is necessary if we are to prevent civilization from becoming more brutal and lawless.
To my way of thinking, capital punishment as a deterrent has two aspects. The first is that the threat of the potential use of the death penalty deters a certain segment of the criminal or potentially criminal population from using murder to accomplish their ends. The second is that carrying out the death penalty in those cases where there is no hope of rehabilitation and the chance of further acts of violence, including murder, seem likely, capital punishment is the ultimate deterrent.
I am not going to quote statistics in support of my position that capital punishment does have a deterrent effect. That has been done, ad nauseum, on both sides of this issue until the figures become meaningless. For example, the retentionist side can point to the rising murder rate since partial abolition in 1967, which in practice under this government has been total abolition, and the abolition-

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ists can quickly point out the rising numbers of all crimes, implying that the rise in the murder rate has little or nothing to do with abolition but is just a reflection of a general increase in crime across Canada and certainly in most countries of the world.
Which view of the statistics is correct? I really do not think that question can be answered, because once again it depends strictly on the way in which you use statistics. Thus, my reluctance to use statistics in support of my argument is not because such statistics are not available but because I recognize that the other side can support their argument equally well with a different interpretation or set of statistics, thus putting us no further ahead.
The use of deterrents is well recognized in our judicial system. It is one of the prime motives behind the principle of lesser penalties for lesser crimes. As murder, especially premedidated murder, must be considered the ultimate crime, should not society impose the ultimate penalty-not for vengeance but for its own defence?
I would like to say a few words on the aspect of public opinion on this issue, and certainly the House of Commons as the forum which we are using to debate this piece of legislation is the focal point of public opinion which is shifting back and forth across the country. I certainly hope I am not one of those people who wish to see this or any other issue decided by public referendum. I would certainly like to state that in my view that would be an abdication of the responsibility of parliament to make the laws for Canadian society. If we used the method of public referendum, we could do this with any number of pieces of legislation. However, in any issue public opinion, especially when it is as clearly defined as it is in this case, must be given some weight in each member's decision. My sympathy goes to those members who must choose between the wishes of the large majority of their constituents and their own personal view. Fortunately, I have no such difficult decision. The vast majority of my constituents, and myself, are in agreement on the necessity of the retention of capital punishment, though not always for the same reasons.
The coverage by the media of this issue seems to imply that the only members following their conscience are those who favour abolition. I want to make the point emphatically that the members in favour of abolition do not have a monopoly on voting by conscience, as the media would have us believe. Many-I believe, the vast majority-of those voting against the bill do so because of their own personal beliefs. That public opinion shares these beliefs in no way alters the fact that these members will be voting true to their conscience, just as will many of those members supporting the bill. If those sections of the media that are pressing members whose personal views conflict with those of their constituents to vote in accordance with their conscience wish to be consistent, should that same principle not also apply to those close retentionists in the cabinet who are being forced to toe the line on this issue?
In Bill C-83 and Bill C-84 the government has supposedly provided us with its definitive statement on violent crime. However, the measures contained in the legislation leave significant gaps in the areas of prevention and rehabilitation. For example, no measures have been proposed to deal with the significant incidence of hard drug
[Mr. Murta.l
related crime, or with the problems of crime among Canada's native population. These problems need special attention which one does not find in the peace and security legislation or in this bill.
I would now like to explain what I feel is the increased danger when a mandatory 25-year sentence is combined with abolition of the death penalty.


Mr. Blais:: Mr. Speaker, I rise on a point of order. I hate interrupting the hon. gentleman in full flight of oratory, but I was wondering if perhaps the House might not give its consent to doing away with private members' hour and continuing this most enlightening debate until six o'clock?


Mr. Paproski:: Agreed.


Stanley Howard Knowles: Agreed.


Mr. Deputy Speaker:: Is there unanimous agreement to suspending private members' hour and continuing the debate on Bill C-84?


Some hon. Members:: Agreed.


Jack Burnett Murta: Thank you, Mr. Speaker. I appreciate the fact that private members' hour will be suspended today to allow us to continue this very important debate. As I was saying before the interruption, I would like to explain what I feel is the increased danger when a mandatory, 25-year sentence is combined with abolition of the death penalty. This increased danger will focus on two law enforcement groups that in the present law are given special status. Consider what will likely be a common case should this bill pass-a murderer sentenced to 25 years in prison, but secure in his knowledge that he cannot be executed no matter what his crime is in the future. Will not the number of attempts at escaping increase when a prisoner is faced with 25 years in confinement, as opposed to, let us say, 10 years? Will not the level of violence used in these more frequent escape attempts be higher when the prisoner is faced with a penalty of only further imprisonment?
Would not a similar response be expected of a successful escapee avoiding recapture? We have enough incidents of escapes and hostage-taking in our penitentiary system at present, without bringing in measures which are sure to increase their number and severity. These problems, these fears, have been borne out by various law enforcement agencies across the country in virtually every province in Canada. From a position of providing special protection for law enforcement officers-at least in theory-we are now being asked to vote in favour of measures which will increase the already substantial risks to which they are exposed. Many of these law enforcement officers are very concerned about the outcome of this legislation if the bill passes as it has been presented by the government.
In conclusion, let me deal with the concept of cruel and unusual punishment. I cannot imagine how any member of parliament can argue that condemning a man to 25 years in our present penal system is an act of mercy, compared with the death penalty. In their zeal to placate their own consciences, many hon. members may be sentencing men to
May 25, 1976

fates far worse than death. Anyone who has had a chance to look at our present penal system certainly must agree.
In my opinion, this legislation is a poor answer to a very complex problem and cannot do anything but make things worse, not only for policemen and prison guards but also for law-abiding citizens across Canada. The most serious effect of the legislation in Bill C-84 and also in Bill C-83- which I suppose we can consider as one piece of peace and security legislation-is that we have not started down the road to any meaningful reform of our penal system at all. When this debate is over, we will go back to what we had before, and unfortunately the issues may not arise again for a long period of time. What we have done is perpetuate a system which has demonstrated that it is just not working.


Mr. Raynald Guay (Levis):: Mr. Speaker, the position I took in this House on February 20, 1973 concerning the abolition or the retention of the death penalty remains the same. This is not surprising since the reforms on crime prevention that I would have wanted to see brought forward have not been forthcoming, unfortunately, so that it is impossible for me today to approve the abolition of the death penalty simply because, to my mind, society's protection would be harmed by such a measure.
Indeed, there are criminals. We are concerned about punishing them through forced labour, imprisonment and hanging. In any event, we are not concerned about healing the causes which drive some individuals to crime. In the social sector, much has been done but there is still much to be done. With our present education system, we are preparing criminals.
In the report which we have been given and which is written by Dr. Fattah, a criminologist from British Columbia, we find on pages 147, 151 and 165 tables which show that among the people surveyed 50 to 60 per cent believe that discipline in schools is not strict enough; this was the opinions of primary and secondary students as much as of adults aged from 20 to 39, 30 to 49, 50 or more. The lack of discipline produces criminals.
In 1968, the Divorce Act was amended, but the regulations concerning the maintenance rules allow one spouse to have a coercive power over the other. As we read on pages 32 and 33 of Working Paper 12 by the Law Reform Commission of Canada on "Maintenance on divorce", and I quote:
It is an unfortunate part of the folklore of marriage, because of the legal tradition involved here, that the "innocent" husband should be able to put the "guilty" wife "out on the street without a penny", and when the situation is reversed, the wife should be able to "take him for every cent he's got."
In most divorce cases the wife is automatically responsible for children. If she finds a job, she will have to pay a baby sitter, but according to the statistics of the Royal Commission on the Status of Women, one sees that generally her salary will not be sufficient for her to adopt such a solution. The only alternative left to her will be social welfare which will be just enough, if not to live, to survive. If she dares pay a lawyer to seek a maintenance allowance from her husband, there will be a ruling of course but how can it be enforced since she is given no coercive means to make him pay alimony?
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In that respect, I hope that the Minister of National Health and Welfare (Mr. Lalonde) who is now studying if it is possible to pay maintenance allowances, will be able to bring forward such a humanitarian policy. To conclude, with entire families living in a state of constant humiliation and poverty, the Senate commission proved that the state of poverty tends to lead directly to crime. In days of yore, we might have been able to suggest that the poor try to recapture in work some of the dignity they lost, but because of current high unemployment, which seems to show a tendency to increase instead of decrease, our solution would not be welcome!
Unemployment strikes like a plague: the young people, without preparation, the drop-outs, soon become young delinquents; the graduates, become our unemployed with degrees. I know a forest engineer with many degrees who has been looking for a job for two years now, and is still looking. People of 40 or more are considered less productive that the young and women. The latter are the least disadvantaged in the labour market, very often because they accept jobs the men would not do for the money offered.
If that continues, we will soon be running short of taxpayers and workers to pay for unemployment benefits. We will then have achieved the real society of leisure, won't we? But, all that compulsory leisure called "unemployment", Mr. Speaker, finally leads to crime.
As a consequence of all those weeknesses in the fundamental systems that govern our Canadian society, we witness high juvenile delinquency rates and criminality that the judicial system does not remedy. We have reached the point where we invoke judicial error as the reason for abolishing the death penalty. We fear judicial errors, Mr. Speaker, but who commits those errors? Certainly not the one who was killed, who was its victim.
Neither by the accused who may also be the victim of this error. By the members of the jury? But if they make a miscarriage of justice, they cannot be held responsible for that since they are also in some way victims of it. There remains only our judicial system to blame. Perjury, forging of evidence, conjuring of witnesses produce miscarriage of justice at the beginning of the chain, and our antiquated and inadequate penitentiary and rehabilitation system closes the ring of injustices. Unable to correct them, we imagine being able to prevent them by trading off the death penalty for life imprisonment.
I have here a document dated June 26, 1973 and signed by inmates from Cowansville. The prisoners themselves do not accept this solution. They say that even though you are against capital punishment and your vote makes the balance turn towards abolition, nothing will change if in exchange you accept the implementation of a prolonged punishment which under a more humane disguise will only be a death by inches. To deny all hope to prisoners means they will become madmen, dangerous people for those they live with or even leading them to suicide.
And it seems they are right, Mr. Speaker, if we are to believe the statistics on the number of suicides among prisoners in federal institutions. Between 1959 and 1965, when capital punishment was enforced, there were 27 suicides. Between 1965 and 1972, after capital punishment was suspended, there were 77. Prisoners advocate what they

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call "preventive detention", a formula which would be more like rehabilitation than punishment and which, in my opinion, would deserve closer study. But we are not talking about prevention, but punishment, are we not, Mr. Speaker?
As things now stand, we will have to be very strict. Even some members of the Parole Board are of that opinion. Mrs. Mary Lynch, who retired last November 26 after 15 years in that service stated before the press that it might not yet be the moment to abolish hanging in Canada.
Some people will retort that moral authorities, namely churches, have just decided against the retention of capital punishment. Personally I think that this position by bishops is ambiguous because they do not deny the state the right to impose capital punishment if required by circumstances. But this is the case and we infer that when required by circumstances, the death penalty must be applied.
The League for Human Rights itself determined two objectives: protect society and rehabilitate the murderer. In its document of January 31, 1973, it says:
It is necessary for Canadian society to have maximum protection against murderers . .. and ... it is fair for society to force the murderer to make up for his act.
There I say, Mr. Speaker, that because society has not yet provided the appropriate prevention and protection mechanisms, we have no alternative other than voting for the retention of capital punishment.


Mr. Bill Clarke (Vancouver Quadra):: Mr. Speaker, I should like to echo a few of the sentiments expressed by some of my colleagues today about the importance of this debate at this time. The government has been stressing that they want to get the business of the House completed as soon as possible and yet they bring on a debate which, as far as I can see, at this moment has very little importance.
This is the second time that I have had the opportunity to participate in this debate, Mr. Speaker, and neither of these instances would have been necessary if the government had tended to its business. Just over three years ago, on May 16, 1973, was the first time I contributed to the debate on capital punishment. The reason I say it is not necessary that I should have participated at all is that at that time the bill had already expired. The government had lacked the foresight to introduce replacing legislation prior to the end of 1972 when the first partial ban on capital punishment expired. The debate in 1973 extended the partial ban on capital punishment to December, 1977, some 20 months from today. I say there was plenty of time for the government to have organized its program so that the debate could have taken place at a time when the pressure of House business was not so intensive.
My stand, however, does not demand capital punishment in any spirit of blood lust or revenge. The argument I hope to develop will stress the fact that society needs protection by the government-it needs protection from the government, too-I suspect-Mr. Speaker. However, protection of the public is the point I want to stress as being the most
[Mr. Guay (Levis).l
important. Before I get into that, however, there is another factor I should like to discuss. This bill presents a "no loss" situation to the abolitionists. In other words, if the bill is passed by the House, then we will have abolition and they will have won the day. On the other hand, if the bill is defeated, it will simply mean that we will continue with the law that exists at the present time and in fact we will still be without capital punishment because for the last 14 years this government has practised abolition.
We should look at the law as it stands so that we will know the alternatives if the bill is defeated. Apparently recognizing the vulnerability of police and prison guards, and probably realizing that it was a necessary feature to get the last bill passed, the government included a provision that killers of police or prison guards shall be or can be executed. Of course, the cabinet retained the power to commute the death sentence and that is the practice they have followed.
I do not think there is anyone in this House on either side of the issue who would not agree with the proposition that murderers should be removed from society, if not permanently then certainly for a very long time. In some cases, that would be extended until they were cured of their propensity to murder. When we are considering murder and the punishment therefor, I think it is important to define exactly what we mean by the term "murder." After all, many offences that involve killing are not murder and the perpetrator is not subject to the ultimate penalty. I should like to read a definition I came across in a Globe and Mail editorial of February 26:
First degree murder is defined in the bill as planned and deliberate murder and as the killing of a police officer, prison guard or a person working in a prison even though the killing was not planned and deliberate. It would also be first degree murder, even though not planned and deliberate, if someone were killed during the hijacking of an aircraft, or during a kidnapping, rape, attempted rape or an indecent assault on a male or on a female.
Those are all heinous crimes, Mr. Speaker, and I am certain there will be agreement that the ultimate penalty should be imposed for them. Where we have some difficulty is with the so-called passion killing or other "heat of the battle" type killings. I do not think most people want to see the perpetrators executed, and that is where some of our difficulties arise. I think some who are abolitionists have arrived at their conclusion, because they fear a miscarriage of justice, that the wrong person will be executed and society will be unable to make it up to him. I am not certain how well we can make up an error after a man has served 25 years. It would be very difficult to restore those 25 years to him if he were found to be innocent or to have been erroneously convicted.
Dealing with the error aspect, I should like to read a paragraph from a letter I received from Hon. J. V. Clyne, a resident of Vancouver. Mr. Clyne is a retired industrialist and, what makes him more unusual, a retired jurist. He resigned from the Supreme Court of British Columbia in order to return to industry, in which he embarked on another successful career. He wrote the following to me:
You know the elaborate precautions which are taken to make certain that the accused is deemed to be innocent until found guilty and is deserving of death. It is necessary for the Crown to prove intent in
May 25, 1976

order for a man to be found guilty of murder. If intent is not proved but death ensues as a result of a criminal act then the charge is reduced to manslaughter. It is likewise reduced to manslaughter even if the accused formed the intent to kill but acted on the instant under extreme provocation and the degree of provocation is for the jury to consider. It may likewise be reduced to manslaughter if the jury finds that the accused acted reasonably in self-defence. The judge must always charge the jury in a criminal action that the Crown must prove its case beyond reasonable doubt and if the defence raises a reasonable doubt in the jury's mind it must either acquit or reduce the charge. I mention these matters to emphasize that every safeguard is taken to prevent a miscarriage of justice.
I shall refer to that letter later. What he said ought to allay some fears. After all, society and governments must make decisions from time to time. Existing safeguards against accidental or erroneous convictions are of a high standard.
Many hon. members have referred to the opinions of their constituents. I want to do the same and to refer to other opinions as well. Like many colleagues in the House, I sent a questionnaire to constituents. In 1974, after passage of existing legislation, I asked my constituents the following question, among others: "Are you in favour of capital punishment for other murderers as well as for murderers of police or prison guards?" In other words, the implication was: "You are stuck with this law for the next four or five years; do you think it goes far enough, or should it go further?" We received 3,248 responses, which represent a return of 13 per cent. Statisticians consider a response of about 6 per cent as normal. I think, as we received double the normal response, that we did fairly well, although I do not think one can assume from the greater than normal response that one side or the other would express a stronger opinion.
The result was that 75 per cent of the residents of my riding expressed themselves as being in favour of capital punishment for other murderers as well as for murderers of police or prison guards. If hon. members consider the definition of "murder" to which I referred previously, it will help them to think more clearly.
Society entrusts the enforcement of its laws to the police. Admittedly, at times the police have a difficult job to do. I do not know why abolitionists seem unable to pay much attention to the views of the police, to whom they entrust the enforcement of the laws. I therefore refer hon. members to what the Canadian Police Association wrote to the Prime Minister (Mr. Trudeau) last year. In part, the letter said:
The association is deeply concerned over the fact that there is now no penalty of consequence on persons who commit murder in our country. Persons convicted of murder who are given a "life" sentence can be eligible for parole in seven to ten years after conviction. It is the view of the policemen of this country, as represented by the association, that this is not a suitable penalty and does not serve to protect society.
The view has been expressed that juries tend not to convict if they feel that a conviction will mean putting the accused to death. On the other side of the argument there is the equal danger that the policeman under fire or the pressure of his job will, perhaps unknowingly or unconsciously, develop a tendency to act without benefit of law. In other words, he may take the law into his own hands. Faced with the choice of making a difficult capture or killing in action, it is possible he will take the law unto himself and act accordingly. That will not be the honourable thing for him to do; he may do it even without
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realizing what he is doing. The point is that the government will put him in such a position that he will be under those pressures.
I shall now refer to something an official of the John Howard Society said. I am sure hon. members appreciate the good work the John Howard Society has done for many years. A member of the board of directors said he would rather "they hang murderers than see them imprisoned with very little chance of coming out." We know that the suggested alternative to capital punishment is the long prison term, perhaps of 25 years. The John Howard Society has long been an advocate of rehabilitation, but it knows, from its experience, that a 25-year prison term will preclude any hope of rehabilitation. It suggests capital punishment is better than 25 years in jail.
Hon. members have received much correspondence from churches. I have a letter from the Canadian Council of Churches; it is addressed to me. The letter speaks of "the following bodies" as having spoken in favour of the abolition of capital punishment. Various churches are listed, including the Anglican Church in Canada which is at the top of the list, the Baptist, Presbyterian and Mennonite churches, the Roman Catholic church, the Society of Friends and the United Church of Canada.


Mr. Johnston:: Hear, hear!


William Hillary (Bill) Clarke: I am an Anglican, Mr. Speaker. I am a supporter of the Anglican church; what is more, I am an attender of the Anglican church. I know that some Anglicans came together and made the statement that the church is opposed to capital punishment. But I also know that the Anglicans with whom I go to church on Sunday and associate during the week are not of a mind to support the body that made this statement regarding the abolition of capital punishment on behalf of the church.


An hon. Member:: Hear, hear!


William Hillary (Bill) Clarke: Mr. Speaker, I have some support in the House. It is all very well for a body to establish a policy, but I do not think they should try to impose their will on the members of the church who have not been consulted on a matter. It is not even as if they were outvoted; they were not even consulted on the issue.
I note that the Baptist church takes a somewhat different position, and I point out that the list previously alluded to contains the Baptist convention of Ontario and Quebec. I have in my possession a letter from a Baptist minister in my riding, Vancouver Quadra. The Reverend Wald Krogu-letz is in favour of capital punishment, but did not try to foist his views on his parishioners. I wish to quote a paragraph from the letter. It reads:
Most politicians who quote the sixth commandment: "Thou shalt not kill", have little or no theological understanding of the true meaning of the same. This divine law forbids any individual to hatefully and planfully murder any other individual. The sixth commandment does not prohibit the state to punish and execute the offending criminal-
He makes a reference to Exodus which I shall not repeat now. I shall be saying something later about the right and duty of the state to afford the protection to which I have alluded.

May 25, 1976
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In the last debate we heard a speech by an Anglican clergyman who was an M.P. of this party. I thought he summed things up very well. In fact I sent copies of that speech out to a number of people who wrote to me concerning capital punishment. In a key paragraph of that speech in 1973 he said:
The conviction is growing among a great number of Canadians that we need the death penalty as one way of reversing the permissive trend of the past decade ... Few citizens of this country find much pleasure in the sight or thought of a fellow human being hanged. But there are many who want some assurance that the law is going to be enforced and that the public is going to be protected. They do not want cruelty shown to anybody but they want the ordinary man, woman and child of this country protected and they want to say to the criminal element of this society that that element is on notice that society is prepared to defend itself.
A lot has been said about the deterrent effect of capital punishment. There is probably no way of proving that capital punishment is a deterrent, or that it is not. I have heard it said that it is certainly a deterrent to repeaters, and I agree with that obvious statement. It is unfortunate we do not have statistics to lend weight to one side of the argument or the other. As hon. members know, capital punishment has not been carried out in this country since 1963, so both sides of the case cannot be argued. The contention that capital punishment is not a deterrent is not a very strong one when we bear in mind that capital punishment has not been enforced for so long a period.
It is accepted, I presume, that penalties of one kind or another do act as a deterrent otherwise there would be little point, for example, in imposing fines for parking offences-and we find that a three dollar penalty nowadays is not particularly effective as a deterrent; indeed we find parking offences committed all over the place. Nevertheless our selection of punishment ranges all the way up to long prison sentences for serious crimes such as assault and robbery, right up to death for murder. If it can be said with certainty that the death penalty is not a deterrent to murder, how can it be argued that life imprisonment is a deterrent? Indeed, why should we concern ourselves with punishment of any kind?
Even in British Columbia where a socialist government decided that traffic fines favour the rich and should therefore be abolished, there is still a deterrent to dangerous or careless motoring. Indeed, it is probably more of a deterrent than the previous penalties. Offenders are now awarded demerit points, and after a certain number of demerit points they lose their licences.
I should like to refer to an article which appeared in a magazine called The Canadian Police Chief, written by one Sid Nelson, and appearing in the issue of January, 1976, He talks about deterrence in these terms:
The question of deterrence is secondary to the question of justice and we ought not to confuse the two. One person has observed, however, that capital punishment is really the ultimate deterrent in that it assures us that he who has murdered another will never murder again. A prominent lawyer in Montreal has affirmed that an escaped murderer who was his client probably killed five other persons on his escape. In this instance capital punishment would have saved the lives of five other people.
I consider this to be a very strong argument although it is evidently one which has not been accepted by the government. Talking about the protection of the public, which is my main theme, I say that if a murderer is sentenced to

life imprisonment or to 25 years in prison it means he will be there for the rest of his useful life. There is no deterrent for him not to stay in prison. In other words there is every encouragement for him to attempt to escape. If he kills people getting out or if he kills people while he is outside the worst punishment he faces is to go back to jail for the rest of his life. But he is already there for the rest of his life, and after all one can only serve one life sentence.
I maintain that the work of prison guards and of police officers becomes increasingly difficult and dangerous in times when the the death penalty is not carried out. As I say, prisoners find themselves in a "no-loss" situation- somewhat the same as the government finds itself in presently. Prisoners are likely to make use of every occasion and every means possible to escape and find their way back to the free world.
I also want to say something about the power of the state to execute. Some people assert that the state does not have the right to take human life. I suggest that the evidence on the other side of the question is stronger. In my view, not only does the state have the power to protect citizens and execute others in the course of carrying out that protection but it has a duty to protect innocent members of the public.
The state abrogates its duty if it refuses to execute people in cases where such a penalty is obviously warranted. I would refer members who are concerned about this aspect to consider what happens when the state declares war on an enemy of the state. In effect, by declaring war, the state gives a licence to members of the armed forces to kill. It makes very little difference whether we are concerned with an enemy of the state during wartime, such as the second world war, or with an enemy of the state in the shape of an isolated individual murderer. The state has a duty to protect, and it cannot protect the public if it declines to use a power which it now possesses under the law.
I realize there are some who are abolitionists because they object to the method of execution used. I am not one who would insist that hanging is the only way or even the best way in which executions should be carried out. Once again I refer to the letter from J. V. Clyne of Vancouver and read these few sentences:
When I was on the bench I did make certain investigations regarding the gas chamber and the electric chair and on the basis of making death quick and effective I think hanging is a better choice than either of them. I believe however that there should be substituted in modern times a form of euthanasia, that is to say, the means of procuring a quiet and easy death. With the advancement in the knowledge of drugs this should not be difficult. As I have said the death penalty should be preserved but there should be an enquiry as to the means of carrying it out.
In conclusion, Mr. Speaker, may I summarize my remarks. My investigation leads me to the conclusion that Canada needs capital punishment at this time. The present abuse of the will of parliament by the cabinet is seriously undermining public respect for the law. The public must be assured of protection of the law and by the law. I urge my colleagues in the House to oppose this bill as a step on the road to these overdue changes.


Stuart Malcolm Leggatt: Mr. Speaker, I think this is the third time I have participated in a debate
May 25, 1976

on this subject since I have been in this House. I must say I think all sides on this particular issue should be congratulated on the rational nature of the debate. I think it has maintained a rather high standard, in the sense that I do not hear too many of those who are abolitionists calling the one side bloodthirsty, and I do not hear those on the other side calling the abolitionists yellow and so on, so in a sense I think the debate is a worth-while one.
Before getting into the question of the death penalty itself I want to deal briefly with the bill and the alternative proposed in the bill, that of a 25 year mandatory sentence for first degree murder. We have had quite a bit of comment about this being a trade-off and so on. The facts are that under section 672(1), as I read the bill, the mandatory nature of the sentence is 15 years, not 25 years. The chief justice of a province has the authority, and I think the duty to appoint three of his judges to sit not merely to make recommendations back to the parole board but to make decisions on how much longer the mandatory section of a sentence is to last. To those who are on the side of arguing that 25 years is a more draconian alternative than the death penalty I suggest they look carefully at this bill.
I think the government should be subject to some criticism for using the argument about a trade-off. Any examination of the bill clearly leads one to the conclusion that the mandatory sentence for first degree murder is 15 years, not 25 years, and I cannot understand why the media and the public are talking about a sentence of 25 years. People in prison who have had the 25 year sentence imposed on them, once they have served 15 years of their sentence will clearly be able to make a routine application to the chief justice of the province, and the chief justice will routinely appoint three judges who will make the sort of decision that the parole board has been making up until now, so I do not think we should kid the public about what this bill really provides.
As for the other issue, the question of capital punishment, we have had this time more than a dialogue between the deaf. Most of the time when we get into this kind of debate we always assume our positions are entirely fixed, that no one will budge from matters of conscience which may have been developed over many years. However, I think in fact some listening is going on. I do not know how much change there has been in terms of debate, but the thrust of the argument has changed. For example, those who are advocating abolition are emphasizing questions that deal with the safety of the public rather than whether we live in a civilized society and such philosophical questions as that. I should like to spend some of my time on whether public safety is enhanced through the use of the death penalty or whether in fact its use increases public risk.
Some of the new evidence that has come forward on this subject has to do with the murder rate. Those who argue for retention have some evidence that we should certainly consider, namely, that the murder rate has doubled since between 1962 and 1974. In 1962 the rate was 1.2 per thousand; it is now 2.4 per thousand, using constant population figures. This is a significant change and well worth examination, no matter which side of the question one is on. It is
Capital Punishment
clear that it is not just public imagination that says that rates of crime and murder are increasing.
I would ask those who favour retention of the death penalty on those grounds to consider the fact that the department of vital statistics disclosed that in 1961, when hanging was in vogue, 20 per cent of criminal homicides led to charges of manslaughter, whereas in 1974 only 7 per cent were manslaughter. What, in effect, has happened is that the murder statistics have risen, not entirely but partly, as a result of the police laying more murder charges. The reason that more murder charges tend to be laid is that the chances of conviction are higher when the death penalty is not the penalty facing the jury when they make their ultimate decision. In terms of statistical evidence murder has increased, but I do not think it has increased quite as dramatically as the bald figures themselves disclose.
The media have some responsibility for the public's perception of its own safety and the risk that the public itself on an average basis faces. There is no question in my mind that anyone who watches a great deal of television has a different perception from those who do not expose themselves to the myriad of media violence to which we are continually exposed. I want to quote briefly from "Psychology Today" for April, 1976, which has an article dealing with the perception of crime and personal safety and how this is affected by watching television. As a result of a very comprehensive study the article says;
We have found that people who watch a lot of TV see the real world as more dangerous, and frightening than those who watch very little. Heavy viewers are less trustful of their fellow citizens, and more fearful of the real world ...
In order to complete a story entertainingly in only an hour or even a half hour, conflicts on TV are usually personal and solved by action. Since violence is dramatic, and relatively simple to produce, much of the action tends to be violent.. . More than half of all characters on prime-time TV are involved in some violence, about one tenth in killing... Among those TV males with identifiable occupations, about 20 per cent are engaged in law enforcement. In the real world, the proportion runs less than one per cent...
Violence on television leads viewers to perceive the real world as more dangerous than it really is, which must also influence the way people behave. When asked, "Can most people be trusted?" the heavy viewers were 35 per cent more likely to check "Can't be too careful."
The conclusion of this study, which was quite extensive, is as follows:
We have found that violence on prime-time network TV cultivates exaggerated assumptions about the threat of danger in the real world. Fear is a universal emotion, and easy to exploit. The exaggerated sense of risk and insecurity may lead to increasing demands for protection, and to increasing pressure for the use of force by established authority.
The media have something else to account for, and that is whether public behaviour itself is affected in individual cases; for examples, whether a brain damaged individual or an individual with lower degrees of resistance to what he is seeing is influenced in terms of his potential for crime. When one looks at some of the more notorious crimes that have taken place involving murder, they are surprisingly close to actual media presentations. I am thinking now of a case that happened recently in the United States, and I read from the Ottawa Citizen of Friday, May 14, as follows:
David McRae, Jr., whose mother said he always wanted to be a policeman, walked into a bar in a seedy area Thursday and fatally shot

May 25, 1976
Capital Punishment
four persons after warning he was coming to clean out pimps, prostitutes, homosexuals and dope pushers.
I do not know whether they asked this individual, David McRae, what movies he had been seeing lately, but if he went to see a movie called "Taxi Driver" that is exactly what he would have seen in that picture. This is not just a coincidence. There are a number of very interesting murders which took place following the exposure to media violence of some person of low resistance or with possible brain damage, but with the potential for violence. It is too often that this sort of thing happens not long after such exposure.
The media have to start cleaning their own house or this place is going to start cleaning it. I think the time has come to examine the amount of violence to which we are exposing the public. Guidelines will have to be developed in the long run if the media do not develop their own guidelines.
We are dealing with a very sensitive area. The average person may not be affected, but if you take the typical serious criminal, and that is the individual who normally has failed at home or his home has failed him, has failed in school or his school has failed him, or has failed with his peer group or that group has failed him, where does he go? He sits at home watching television every day and thinks the whole world is flying to Hawaii and having a great time. He is sitting there with this sense of frustration, and when he is exposed to a film such as that movie "Taxi Driver", or other dramatic cases of crime, he then says, "I am going to go out and get some attention. I am going to get my piece of the action."
It is long overdue that we took a very careful look at some legislative guidelines regarding the kind of violence in the media to which we expose our children and other members of the public.
Let me now turn again to the question of capital punishment. After looking at the evidence and after considering the question of safety to the public, and I may say that I have studied it as intensively as I can, I am still of the opinion that there is no place for the death penalty, not only because it may not be worthy of the kind of civilization we are living in-and I do not believe that out of any sense of arrogance or moral superiority-but because there is no evidence that it will provide a deterrent, and there is no evidence that it will reduce the number of murders in our society. In fact the evidence is the other way. There is a considerable body of very persuasive evidence that the death penalty increases the murder rate by exposing the public to the risk of murderers being acquitted by juries who apply the standards of our criminal law which have been so time honoured.
The hon. member for Central Nova (Mr. MacKay) indicated this afternoon, in favour of the principle of retention, that the safety valves within our judicial system are so extensive the capacity for error is almost infinitesimal or minimal. The facts are that when we examine some of the more dramatic cases which have led to a more widespread call by the public for a return of the death penalty, and some of the cases of the past, we still have the very uncomfortable feeling that we may have gotten the wrong man. Let me give you a couple of examples.
I suppose one of the most famous cases took place in my own riding, the case of the murder of Tanya Busch, the
[Mr. Leggatt.l
daughter of a guard. A man called Head was charged with the murder. It was a particularly vicious, rotten, and violent thing. In this case there was no eyewitness, and I believe two of the Crown witnesses changed their stories. There was no confession. I ask the public and I ask this House to consider whether, given those facts, and given the warning that a judge usually has to give the jury to satisfy itself beyond a reasonable doubt that the circumstances are not only consistent with the guilt but inconsistent with any other rational conclusion, even with capital punishment, that jury would have in fact convicted Gary Head of that murder. In the Saskatoon murders a similar situation occurred. This involves the whole question of dealing as an individual with a case rather than as a group of 200 people who may say, "Yes, bring back the death penalty because that is clearly the right answer." When you have 12 men sitting on a jury they start to act very differently. They assess the evidence, as it is their duty to do.
I can tell you that without exception those lawyers who have been involved in any kind of extensive criminal practice on the defence side will indicate that they prefer the death penalty if their purpose is to obtain an acquittal. The problem continues to be that a jury of 12 looks at a man for up to two weeks, and then has to make the decision.
I do not think we should do anything to abandon the jury system. It works and it works extremely well, but with the death penalty it works less well. The chance for an error by the jury, and the chance of acquittal of a person who is a murderer and who should be taken away from the public for its protection, with the death penalty in place in fact work in reverse to the detriment of the public.
The death penalty is not a deterrent. If you look at those societies which from time immemorial have continued to use the death penalty you will find they are consistently less safe than the one in which we are living. For instance, let us take Brazil, Spain, and Argentina. In Spain they impose the death penalty. In fact they have a vigilante gang running around imposing the death penalty in Brazil, and that does not help their society.
The public is entitled to some solution, but the problem with this long debate on the death penalty is that it deflects our judgment and our attention away from the cause of crime. As long as we continue to agonize on the death penalty or no death penalty we are wasting time in the sense that we should be dealing with what is happening within our society, trying to find out why it is tearing apart and why we have this dramatic increase in all kinds of crime. The fact is that we have done little or nothing about drug abuse. A large percentage of violent crime is related to the drug trade and we have done nothing about it. We have done nothing about alcohol. We continue to sell alcohol and governments continue to support themselves from the revenue.
May I call it six o'clock?


Mr. Deputy Speaker:: It being six o'clock, I do now leave the chair until eight o'clock tonight.
At six o'clock the House took recess.
May 25, 1976



COMMONS DEBATES AFTER RECESS

[Stage Direction]
The house resumed at 8 p.m.

Hon. Donald S. Macdonald (Minister of Finance) moved:: That this House approves in general the budgetary policy of the government.
He said: Mr. Speaker, to commence, I would like to express my thanks to my colleagues, and to the officials in my own department and of the other departments and agencies, for their assistance to me in this my first budget. May I express my appreciation also to members of this House who directly, or by correspondence, have made requests or suggestions on behalf of constituents, and to the many hundreds of Canadians who, through the year, but particularly in the last several months, have made representations concerning a wide variety of changes in our fiscal system.
Though I am completing my fourteenth year as a member of parliament and have witnessed as many budgets, still there were some surprises for me in the task of budget making. One of these has been the extent and variety of changes large and small sought in our tariff and tax system. Each of these is assessed by my officials, they are grouped for discussion and then hundreds of items cross the Finance Minister's desk for final decision. In that pre-budget period, the Finance Minister acquires a nationwide perspective into an apparently inexhaustible variety of personal situations, commercial circumstances or fiscal problems as they affect Canadians.
I am conscious that though some will be gratified by changes arising from this evening's announcements, many will be disappointed that their requests could not be met. I regret being the source of that disappointment but equity, administrative necessity, and a wider public interest have rendered it impossible to satisfy all requests.
Before proceeding with my budget statement, and with the permission of the House, I would like to table a number of supplementary budget papers which provide extensive background material relating to some of the more important measures. I would also like to table a number of Ways and Means Motions and ask that they be appended to Votes and Proceedings. I would ask that the supplementary tables on the government's accounts be appended to today's Hansard.


Mr. Speaker:: Is the House agreed that the minister table certain documents? Is it so agreed and ordered by the House?


Some hon. Members:: Agreed.
[Editor's Note: For notices of ways and means motions, see today's Votes and Proceedings].
[For tables referred to above see Appendix A]


Donald Stovel Macdonald: The International Economy
I would like first to set the stage for my remarks on the Canadian economy by reviewing some of the major eco-
The Budget-Hon. Donald S. Macdonald nomic developments taking place on the international front. These have important implications for our own country as a major participant in world trade and capital markets.
The international economy is launched on recovery from the depths of the worst recession since the great depression of the 1930's. The output of the industrial nations making up the Organization for Economic Co-operation and Development stagnated during 1974 and declined sharply at an overall annual rate of 5 per cent during the first half of last year. This decline, fortunately, was arrested by midyear, and with the United States in the lead, the prospect for strengthening recovery seems well-assured.
The severity of the recent recession was due in large part to the impact of soaring inflation around the globe earlier in the 1970's. From early 1973 spiralling price increases contributed to a substantial reduction in consumer spending, investment, output and employment in the world at large. This process was halted only slowly and eventually reversed as the run-down of inventories ran its course, as automatic economic stabilizers like social security came into play, and as governments injected strong stimulus into their economies. With the revival under way the OECD was able last December to forecast that real output among the industrial nations would rise by 4 per cent in 1976. Since the time of that forecast the world prospect has improved further.
While this strengthening recovery is welcome, the problem of deep-seated inflation persists. Although the rate of increase in consumer prices has slowed significantly, it still remains much too high. The world community continues to face the twin tasks of bringing the rate of inflation down to acceptable levels and maintaining a healthy growth of output, employment and real incomes.
One direct result of world-wide recession was a fall of 6 per cent in the volume of international trade last year. The imports of the industrial nations in particular dropped faster than their exports, and their current account deficits declined sharply from $33 billion the previous year to $6 billion. This reduction was mirrored in the decline of the surplus of the oil-producing nations. Unfortunately, the balance of payments position of the non oil-producing developing nations worsened.
The disruptions of the past few years have severely tested the strength of the institutions and practices of international co-operation built up over the past generation. Happily these did not fail us. On the whole the major countries have refrained from solving their problems at the expense of others. Essential joint action was taken on a number of different fronts-in the General Agreement on Tariffs and Trade, the International Monetary Fund, the World Bank, the OECD and other organizations.
Last January the Interim Committee of the International Monetary Fund, of which Canada is a member, reached agreement on significant reforms in the international monetary system. The government considers that these reforms will facilitate the expansion of world trade and investment. They will help to ensure orderly conditions in exchange markets and smoother balance of payments adjustments. The reforms will be embodied in important

The Budget-Hon. Donald S. Macdonald amendments to the IMF Articles of Agreement. Later this year the government will be presenting to parliament amendments to the Bretton Woods Agreements Act for the purpose of securing parliamentary approval for these changes.
The severe economic difficulties of many of the developing countries have led to intensified discussion concerning the evolution of a new international economic order. This discussion is taking place at present in the meetings of the Conference on International Economic Co-operation in Paris and in the United Nations Conference on Trade and Development in Nairobi. We are playing an active part in both world arenas, as well as participating fully in the preliminary stages of the multilateral trade negotiations now gathering momentum in Geneva. The year ahead promises to be one of exceptional challenge, as we are called increasingly to adjust to new trends and pressures in our relations with the interdependent world community.
The Canadian Economy
Against this brief review of the international setting, I turn now to the economic situation and prospect here at home.
As a country which depends heavily for its livelihood on exports, we were inevitably affected by the deep recession experienced by our major trading partners. During 1975, the volume of our merchandise sales abroad declined by nearly 7 per cent, with obvious effects across the whole economy. A substantial drop in total real expenditures on housing construction also occurred, even though the number of housing starts rose significantly during the course of the year.
Despite the adverse impact of these developments and the run-down of inventories, I want to stress that the performance of the Canadian economy in terms of output, employment and real incomes exceeded that of virtually every other industrial nation. This was mainly because of the sustained strength in outlays of consumers, business and governments.
Given the basic tendency of the Canadian and American economies to move in parallel, the contrast between our two countries over the recent period is particularly noteworthy. In the United States, the gross national product in real terms declined by 1.8 per cent in 1974 and by a further 2 per cent last year. Canada, in contrast, achieved a real growth of 2.8 per cent in 1974, and successfully staved off any decline last year. Employment south of the border fell by about 1.3 per cent in 1975; in Canada it rose by nearly 2 per cent. Over the same period, while unemployment rose to 6.9 per cent in Canada, in the United States it reached an average level of 8.5 per cent.
Real income received per person, after payment of direct taxes and after allowing for higher prices, advanced by 2.5 per cent in Canada in both 1974 and 1975; in the U.S. it declined in both years. Over the longer span from 1971 to 1975 real disposable income per capita has risen by almost 18 per cent in Canada, three times the increase in the U.S.
In real terms, Canadian business investment in plant and equipment grew by 4.7 per cent last year, to a level 40 per cent higher than that in 1970. In the United States it decreased by 12 per cent to a level that was only 2 per cent above that of five years ago.


Our better record in weathering the economic storms of the past three years compared with almost any other country in the western world was not just accidental. One of the important factors was our relatively more favourable position in petroleum supply. That made it possible for the federal government to cushion the economy against the immediate harsh impact of the four-fold jump in world oil prices. But undoubtedly the major factor was the concerted and far-reaching action by both federal and provincial governments to sustain output, employment and real incomes in the face of severe inflation and recession abroad.
During the course of 1974, fiscal and monetary policies became more expansionary. Federal policies, including further major tax reductions, were strongly reinforced by provincial governments. Automatic stabilizers in the economy such as unemployment insurance also played their role, helping to soften the impact of unemployment and buoying up the economy as a whole.
Given these circumstances and deliberate policy decisions, the fiscal position at all levels of government swung heavily into deficit last year. I would re-emphasize the point that if these expansionary policies had not been adopted, the Canadian economy would have experienced a much more severe recession than in fact it did. Recovery, though slow, has been underway for almost a year now, and the pace has started to quicken.
Nevertheless, it is also true that the relatively better performance of the Canadian economy has in itself served to intensify some of our current problems.
In 1975, a domestically-fueled spiral of costs and prices increasingly became the major source of continuing strong inflationary pressures. Understandably, individual Canadians scrambled for substantially increased incomes to catch up with others, to keep up with inflation, or to protect themselves against the risk of even more rapid inflation in future. Canadian salaries and wages began to rise at much faster rates than in the United States, our major market and our major competitor. The advance of prices in Canada also began to outpace that south of the border. This cost-price spiral posed an increasingly serious threat to the competitiveness of the Canadian economy, particularly at the stage when recovery in the United States and other countries from lower bases would provide them with the opportunity to achieve much larger productivity gains. While we may have weathered the recession better than the United States we will be hard-pressed to keep up with U.S. economic performance in its present period of rapid recovery and slower inflation.
Moreover, during 1975 Canada encountered a current account deficit with other countries of nearly $5.1 billion, a sharp deterioration from the deficit of $1.6 billion the previous year. This swing was largely a reflection of the higher level of demand sustained in Canada than abroad, with the resulting faster growth in our imports as compared with exports. There is every reason to expect that our exports will pick up strongly as recovery proceeds
May 25, 1976

abroad, but we must be aware that their recovery could be adversely affected by our reduced competitive edge.
The relatively high interest rates prevailing in Canada also stem basically from the divergent course last year between domestic and international economic conditions. In particular, they reflect today a combination of factors- notably the continuing high rates of price increase, a strong demand for credit and the deliberate steps taken by the Bank of Canada to lean against inflation by moderating the growth of the money supply.
Over a period of many months, the crucial national need has been to gear down the rate of inflation without impeding economic recovery. To this end, over a year ago the government sought to develop a consensus, particularly with labour and business, in support of a program of voluntary restraint on prices and incomes. Unfortunately, as we all know, that effort was not successful. By last fall, in assessing both that experience and the dangers confronting our economy, we came to the conclusion that extraordinary steps would have to be taken to get us back on the course of full employment without inflation.
The anti-inflation program announced by the Prime Minister (Mr. Trudeau) on October 13 contained four closely-related elements-fiscal and monetary policy, government expenditure policy, structural policies and prices and incomes policy. I turn now to consider the evolution of policy on each of these strategic fronts.

Prices and Incomes Policy
The major new element in the Attack on Inflation was a set of guidelines for the setting of prices and incomes. All Canadians were asked to abide by them, and provision was made for mandatory control over the larger economic units within our economy. The essential purpose was to change expectations and to bring about a quicker response to the program as a whole, so that the fiscal, monetary and other general policies would in fact bring about real growth and declining inflation.
In the past seven months, the program has become fully operational and has begun to take effect.
The actual rate of inflation has slowed noticeably since the introduction of the program. In April of this year, the consumer price index was 8.9 per cent higher than a year previously, whereas in October last the year-over-year increase was 10.6 per cent. The seasonally adjusted CPI increased at an annual rate of 6.3 per cent from October to April of this year, whereas it had increased at an annual rate of 11.7 per cent in the preceding six months. This sharp reduction in the rate of price increase is very welcome.
A major factor has been an actual drop in the average price of food. Lower prices of some imported foods and the decline in livestock prices have resulted from market forces rather than the guidelines. The program has, however, ensured that these decreases in costs to the processing and distribution sectors were passed on to the consumer.
In the case of prices for goods and services other than food, there have been significant factors beyond the scope of the program tending to raise the rate of increase in recent months. These have included increases in retail
The Budget-Hon. Donald S. Macdonald sales taxes and other taxes, higher charges for public services and the rising costs of home ownership.
On the other hand, firms have been very cautious in raising prices in order to be certain that they are complying with the program. In a number of cases, firms have responded to requests by the Anti-Inflation Board to reduce proposed price increases. There has been a deceleration in those non-food prices that are subject to the controls.
With respect to wages and salaries under the program, I have tabled tonight a summary of preliminary data on compensation prepared by the Anti-Inflation Board. These figures show that compliance with the program is widespread. They demonstrate that even in the first six months of the program almost two-thirds of the wage proposals reported to the Board are within the arithmetic guidelines. Of the proposals only a small percentage are significantly above the guidelines and the Board is restraining them effectively. Thus, the record to date indicates that for all groups subject to the mandatory controls, average increases in compensation are only 1 per cent above the level provided for in the arithmetic guidelines. Given the significant improvement on the price side, these lower rates of compensation increase still represent sizeable real gains in income.
Mr. Speaker, the program is off to a reasonably good start. We feel a strong sense of responsibility to all those who have already contributed to the success of the program. They have every right to expect that others should be similarly restrained, and that the program should successfully bring the rate of inflation down to the target level.
Based on our experience to date, we have now come to the view that the regulations applying to prices and profits should be revised in order to achieve greater equity and effectiveness. Some firms are subject to insufficient restraint because in practice they have been able to choose which rules are favourable to them. Others are locked into very unfavourable starting positions and therefore have been subject to unreasonable restraints. The result is unfair treatment as between firms in competition with each other. Overall, this has created the danger that prices may be inadequately restrained in the future.
As a result of the detailed information supplied under the regulations, the Anti-Inflation Board has been able to complete an extensive analysis of the way in which the rules apply to the business community. The government has concluded that a number of important changes should be made. The details of the changes are described more fully in a supplementary paper, but I should like to summarize the highlights.
Let me begin by describing how the revised price and profit rules will apply to firms other than those in the distribution business. At present, not all firms are required to meet a profit margin test. Under the new rules, all firms will be required to do so. In justifying a price increase, they will be obliged to take into account not just increased costs, but the implication of the price increase on their profit position. Experience has now shown that a test

May 25, 1976
The Budget-Hon. Donald S. Macdonald based on profits has two advantages. First, it gives the Board a more effective regime to control prices. Second, it leaves everyone basically on the same set of rules and is therefore more equitable.
The new rules will be of particular assistance to many small firms which do not have sophisticated cost accounting systems.
Under the profits test, firms will not be able to set prices in a way which would increase their net pre-tax profits as a percentage of sales above an allowable level. That allowable level will be determined with reference to earnings in a base period. The base period margin is now the average margin in the five-year period ending prior to October 14, 1975. In order to provide a greater measure of fairness among firms, it is proposed that the base margin should be the greater of that calculated under the present rules and the margin earned by the firm in its fiscal year ending before May 1, 1976. For most firms this will be calendar 1975. At the same time, in order to ensure the over-all degree of restraint, it is necessary that the allowable margin be reduced from the present 95 per cent of the base margin to 85 per cent.
Firms will also be required to meet this margin test on each of their product lines as well as on their overall operations. Experience has shown that the product line test is the closest rule to actual business practice for most firms.
There will remain firms whose base margins are too low, whichever time period is chosen. In order to provide some relief for these firms, it is proposed that they be permitted to earn a minimum rate of return. The precise provision will be contained in draft regulations to be issued shortly. Similarly, at that time details will be provided relating to specific pricing and productivity rules.
Within this improved framework of rules, the Anti-Inflation Board will place greater emphasis on price justification. More firms will be required to notify the Board of proposed price increases and to justify them.
I have so far described the proposed revisions of the rules applying to non-distribution firms. The changes proposed for distribution firms are similar but less extensive. As now, they will be required to meet a net margin test on their whole business. In applying the net margin test, they will have the same choice of base period as other firms. However, because of this flexibility, they will be permitted to earn only 95 per cent of the base margin rather than 100 per cent as now. The gross margin test will be 100 per cent of their base year margins as now, but will be applied to product lines rather than on an over-all basis. Distribution firms with low base margins will also have access to the provision for a minimum rate of return.
Certain other changes in the regulations which affect the construction industry, trappers, fur farmers and the land development business are outlined in the supplementary information.
I also wish to announce certain changes in the rule referred to as the "restricted expenses" provision. This provision places a limit on the extent to which increases in certain expenses are allowed as costs. Political contributions will be added to the list of expenses subject to this restriction. On the other hand, charitable donations and
[Mr. Macdonald (Rosedale).l
approved expenditures for research and development will be removed from the list of restricted expenses.
It should be emphasized that the new rules represent a logical and evolutionary development of the present rules relating to prices and profits. They will ensure that the pricing behaviour of firms will be consistent with the general price targets which we have set for ourselves, without reliance on arbitrary powers of direction.
I have asked the Anti-Inflation Board to release as soon as possible a draft of the regulations incorporating all these changes. In order to ensure that the new rules will operate as smoothly and as effectively as possible, they will not become operative until July. Appropriate transitional provisions will be included in the new regulations.
There is one further aspect of the program which requires consideration. Out of a concern to ensure that all income increases were restrained, the rules have prohibited companies from increasing their dividends, except in special circumstances, for the first year of the program. Obviously, this freeze cannot be extended indefinitely. Hence, effective October 15, 1976 and thereafter until further notice, companies will be permitted to increase their annual dividends by 8 per cent.
Before I leave the subject of the prices and incomes policy, Mr. Speaker, let me pay tribute to all those in the private sector and in government who have worked so hard in this major national effort. We are particularly indebted to the Honourable Jean-Luc Pepin, Chairman of the Board, Mrs. Beryl Plumptre, Vice-Chairman, and other members of the Board and its staff, who have applied impressive skills and complete dedication to their tasks. Provincial ministers of all political parties and officials have given us both their support and valuable advice. I know that all involved feel sustained by the knowledge that the great majority of Canadians are solidly behind them.
Structural Policies
Beyond the introduction of a temporary program of controls, the White Paper of last October drew attention to the need for underlying structural adjustments in our economy. Such adjustments are essential if we are to win out against persistent inflation. In many ways, this is much the most difficult terrain of all. It raises fundamental problems of how to assure the most effective functioning of our mixed economy, and how to grapple with those social and institutional forces which make for continuous upward pressure on the general price level. These are the broad objectives which we must seek in looking forward to the removal of controls and in the post-controls period and beyond.
The government's work in this connection will be much advanced by the time of the opening of the next session of parliament, and we anticipate a wide-ranging public dialogue. In addition to the central focus of debate in parliament, the government is looking forward to meeting with all major groups in the community.


Mr. Clark:: That will start next New Year's.


Donald Stovel Macdonald: In that connection, preparations are already underway to meet the Canadian Labour Congress. The statement issued at the recent convention of the Congress makes clear its determination to press its
May 25, 1976

views and interests in the formulation of social and economic policy in this country. The views and interests of all groups in our society must be heard. While government cannot abdicate its responsibilities, the growing complexity of our society requires that there should be every opportunity for consultation and the reconciliation of differing interests.
At this time, I propose to touch upon only those structural problems where immediate initiatives are being taken. Energy Pricing
The first of these is in regard to energy prices-particularly oil and natural gas. The main message of the government's recent paper "Energy Strategy for Canada" is clear-energy is becoming more costly in the world and in Canada. The full impact of this trend on Canadians has been moderated thus far by our national policies for oil and gas. But Canada still has a long way to go in economizing in the use of energy and in developing new energy supplies.
The government has recognized the necessity of allowing prices of oil and gas to rise at a measured pace toward world levels. The need to encourage production and conservation and to ease the fiscal burden on the government points toward larger and faster increases of energy prices. But the need to slow down the rate of inflation, sustain output and employment and limit the immediate burdens on families of moderate means points toward smaller and slower increases. Regional considerations have to be balanced as well.
Having regard to all these considerations, my colleague, the Minister of Energy, Mines and Resources (Mr. Gillespie), has announced that the wellhead price of oil in Canada will increase by $1.05 per barrel on July 1, 1976 and by a further 70 cents on January 1, 1977. Natural gas prices will continue to be set on the basis of 85 per cent of the energy equivalent of oil. The price of natural gas delivered to Toronto will rise by 15.5 cents per mcf on July 1, 1976 and by a further 10 cents on January 1, 1977. There will be some delay before consumers feel the impact of each of these changes. I might note that the increase in revenues to the oil and gas producing provinces will result in higher equalization payments by the federal government to lower-income consuming provinces. Their increase over the 12 months beginning this July will be about $60 million.
I would like to emphasize the broad range of the policies followed by the government to encourage energy conservation and the development of new supplies. In order to discourage private use of gasoline and to help defray the cost of the import subsidy, a special federal excise tax was introduced last June. I will be announcing further new measures tonight to reinforce the energy conservation program developed by the energy minister. The government is strongly committed to active programs of oil and gas exploration and development through its participation in Panarctic, Syncrude, Petro-Canada and the Canada Development Corporation. The new northern oil and gas regulations are designed to speed up exploration and development. The income tax regime which we have evolved in recent years has provided major incentives for exploration. I would stress that for every dollar that the price of
The Budget-Hon. Donald S. Macdonald oil and gas goes up, the federal government will receive only three cents in income tax if producing firms make full use of the incentives for exploration. Further incentives are provided in this budget.
The Pricing of Government Services
A second important area for structural adjustment relates to the question of the pricing of government services.
The high rates of cost increase of recent years have led to rapidly growing deficits in the financing of many of these services. This has meant that only part of the costs have been covered by the users of the service, with the balance borne by the general taxpayer. In the absence of necessary adjustments in charges, the cost borne by the general taxpayer will continue to increase. This prospect of increasing deficits carries with it financial and economic implications which are particularly important over the longer term.
On the financial side, the growing cost to government can be met only through government borrowing or through increases in the level of general taxation. There are obvious limits to the extent to which the borrowing route can or should be followed. A further general tax increase may give rise to as much pressure on the general level of prices as an increase in specific charges. While careful attention has to be given to the objectives of the anti-inflation program, undue delay in needed price increases will simply enlarge the deficits and make it harder to pay our way in the future.
In economic terms, if prices charged do not adequately reflect real costs there will be a tendency towards inefficiency and waste in the use of the country's resources. Heavy subsidies erode the incentive for the development of more efficient ways of providing service. We must therefore encourage greater cost consciousness, not only in the provision of these services, but also in their use.
In recent months a number of provinces, confronted with large and growing deficits on particular services and in their over-all budgetary positions, .have felt impelled to increase user charges. The federal government also faces rapidly growing deficits on a number of general and specialized services. Heavy transportation subsidies are being examined to ensure that they serve a social purpose without impeding the development of efficient systems.
In the case of the post office, my colleague the Postmaster General (Mr. Mackasey), last week announced necessary increases in postal rates. These increases have to be implemented in view of the rapidly accelerating deficit on Post Office operations, which has grown from less than $100 million in 1971 to an expected level of some $700 million this fiscal year in the absence of the rate adjustment. The proportion of costs borne by users of the Post Office has declined from 88 per cent in 1971 to less than 50 per cent this year. The effect of the rate changes will be to retard but not reverse the growth of the postal deficit. For the next fiscal year, the new postal rate structure will mean that the over-all deficit will be some $200 million less than it otherwise would be.

May 25, 1976
The Budget-Hon. Donald S. Macdonald [Translation]
The Efficiency of the Economy
The productivity of the Canadian economy declined in both 1974 and 1975. While some decline is typical of a recession, this experience has raised concerns that the underlying growth of productivity-which is the basis for rising standards of living-may be slowing down.
Lest we jump to conclusions too quickly, we should recognize that there are particular problems of measuring productivity, especially in the service industries, which are becoming ever more important. But there can be no doubt of the importance of rising productivity and efficiency if we are to achieve our economic and social goals in the longer run. The government is giving urgent attention to the whole range of policies which can be brought to bear in fostering productivity.
Many measures have already been put in place to stimulate capital investment. I am thinking particularly of the manufacturing incentives, the investment tax credit introduced in the last budget and the various programs by which the government provides financing directly for energy development, transportation, small business, farming and fishing. These measures have helped to sustain high levels of business investment in Canada. However, the encouragement of business investment is only one part of a productivity policy which must be concerned with encouraging greater efficiency in the use of all factors of production.
A major objective in pressing ahead with the development of our competition policy is to promote efficiency. I will be announcing tonight a further extension of the tax concession to small Canadian businesses to enable them to grow and compete more effectively with large firms. Our negotiators at Geneva are pressing for the further liberalization of trade. This will provide more opportunities for Canadian industry and encourage it to improve its efficiency. The government will be ready to help.

One of the best ways to increase productivity is to encourage the development of high technology and innovative new processes. This is a high-risk business and it is difficult to attract venture capital into it. However, it is one which is of great potential for improving the growth rate of the economy.
The federal government already contributes to this process both through a variety of direct expenditure programs and through existing incentives in the tax system. Nevertheless, it has been proposed that more assistance is needed and that the best way to provide this encouragement is through additional tax incentives. It is argued that this catalyst is needed to bring together pools of venture capital and Canadians with new and innovative ideas.
I am sympathetic with these objectives and am willing to explore avenues to achieve them. However, I am not satisfied that we have yet found an efficient and workable solution to what is commonly referred to as the venture capital problem. Clearly, what is needed is a tax regime which will help do the job effectively but efficiently.
I have already instructed my officials to study this matter on a priority basis. I intend to consult with the provinces to gain the benefit of their thinking and work in

this area. I am also anxious to hear from people who are interested in and knowledgeable about this issue and I invite Canadians to write in their proposals. If we can find the right answers, we will be quick to act.
Finally, to refer to another important part of the financial system, the government's proposals on the decennial revision of the Bank Act will be brought to the House later in the year. This will afford us an occasion for broad consideration of the task of financing the Canadian economy.
Employment and the Labour Force
We have of course a special interest in improving the functioning of the labour market in Canada. The Economic Council's recent study, entitled "People and Jobs", provides valuable insights into the structural problems of employment and unemployment in Canada. It analyzes the flows of people into and out of the labour force, from job to job and between unemployment and employment. This analysis documents the tremendous size and complexity of labour market change which takes place in Canada each year. Structural and frictional unemployment, which arises in this process of change, has increased substantially in Canada during the last decade. It reflects both institutional changes and the increased participation of youth and women in the work force. Better information on job opportunities, improved training and creation of the right kind of jobs are important means of reducing structural and frictional unemployment. The Council's study recognizes that manpower and direct employment policies and the unemployment insurance program have all made useful contributions toward dealing with these problems. It concludes, however, that all of them can and should be improved.
Unemployment arises not only from structural change but also from fluctuations in economic growth. The primary means of reducing unemployment due to periods of slow growth lies in the maintenance of adequate over-all demand. However, the experience of many countries in recent years underlines the danger of setting targets for unemployment too low or trying to reach them too quickly. If we are to sustain economic growth and job creation while simultaneously bringing down the rate of inflation, demand management policies and policies to improve the functioning of the labour market must go hand in hand.
Canada has been a leader in the recent development of direct employment programs. These programs have created jobs to alleviate the most severe problems of seasonal and regional unemployment. They have assisted those groups which are most likely to be without work for periods of time. We believe we have demonstrated that these jobs can have broad social value and are not simply "make-work". We continue to believe that there is a need for such selective programs of job creation if we are to be able to bring the rate of unemployment down without generating new inflationary pressure. They have to be adapted to the changing structure of the labour market, and to the need to obtain the maximum impact from the limited resources which can be made available within the framework of expenditure control.
Last year's budget speech noted that the continuing review of the unemployment insurance legislation had identified a need to strengthen certain aspects of this
May 25, 1976

program. To meet these needs, a number of changes were incorporated in Bill C-69, which has now become law. During the debate on this bill, it was noted that further changes to the Unemployment Insurance Act would be brought forward as the review progressed. As a result of this review, my colleague, the Minister of Manpower and Immigration (Mr. Andras), will introduce legislation proposing a number of significant initiatives. These changes are designed to make the unemployment insurance system more equitable and dynamic, more responsive to regional unemployment conditions, and less costly. They are also designed to encourage those with jobs to stay with them and those who are unemployed to seek suitable jobs.
Three main changes will be introduced relating to unemployment insurance benefits:
First, the present requirement for eight weeks of insured employment to qualify for benefits will be increased to 12 weeks. This amendment is intended to reflect the changes which have taken place in the Canadian labour market in recent years. These include the increase in the number of people who have only a marginal attachment to the labour force and who thus have less of a claim for the protection of unemployment insurance.
Second, the number of weeks during which benefits may be drawn will be more directly related to the number of weeks worked. In addition, regional extended benefits will be related in a more sensitive manner to the level of regional unemployment.
Third, severance pay will be treated as savings and as such will not affect a person's eligibility for unemployment insurance benefits.
The act will also be amended to permit the payment of unemployment insurance to beneficiaries on a discretionary basis where they take part in such activities as selective employment, training or short-time work programs. My colleague will elaborate on this new concept of adding an important thrust to the over-all insurance system.
The Minister will also elaborate proposals to integrate the administration of the unemployment insurance system with the programs and services of the Department of Manpower and Immigration. We believe the time is ripe to have a common organizational setting in order to promote even greater effectiveness in administration and to enhance the quality of employment services to Canadian workers.

Federal-Provincial Fiscal Relations
Finally, Mr. Speaker, a basic structural element in this country is the financial relationship between the federal and provincial governments. We are engaged at present with the provinces in discussion of the Federal-Provincial Fiscal Arrangements Act and shared-cost programs.
My views on the fiscal arrangements that should apply in the post-1977 period are on record. They were discussed with my provincial counterparts at the April 1 meeting, and tabled in the House on the same day. Thus I can simply note the way in which our position fits in with our overall policy.
I want to preserve the principle that the federal and provincial governments should be free, in their taxing and
The Budget-Hon. Donald S. Macdonald spending activities, to discharge their respective constitutional responsibilities. On the revenue side this means access to sufficient fiscal resources. There is, of course, a need for a great co-operative effort if we are to maintain a uniform national tax system. But fiscal freedom and responsibility are also essential for the control of expenditures and the efficient provision of public services.
Equalization payments must be retained as a continuing and central feature of the ongoing system of fiscal arrangements. We are committed to this. Our objective is to help the less affluent provinces provide reasonable levels of service. But equalization and other transfers to provinces impose a heavy burden on Canadian taxpayers generally. Costs must be kept within acceptable bounds and the ability of the federal government to finance the program through its own revenue sources must be protected.
Over the past 10 to 15 years, shared-cost programs have been a major instrument in the development of a high level of public services across the entire country. In such fields as health care, social welfare and post-secondary education, Canadian citizens have benefitted greatly from these programs. However, as some of these programs have matured, the financing and administrative arrangements built into them have not left enough room for improvements and efficiencies. As a result, costs threaten to outrun the financial capacities of both the federal and provincial governments. For the federal government, these open-ended cost-sharing arrangements have raised many problems in the allocation of limited funds for national needs and priorities. A better method of providing these essential services to the Canadian people needs to be found and, to this end, discussions have been held between the federal government and the provinces. They will continue as a matter of high priority.
Government Expenditure Policy
I come now to the third principal element of the antiinflation program-the limitation of the growth of government expenditure and of public service employment.
In recognition of the widespread feeling among Canadians that present circumstances demand restraint in government spending, the government has stated that the "trend in total spending by all governments in Canada should not rise more quickly than the trend in gross national product." Two aspects of this objective should be stressed.
First, it is not put forward as a short-term goal: a brief slowdown in the rate of expenditure growth to be followed by a resumption of excessive growth. Rather, it is put forward as a basic change in the trend of expenditure increase. This guideline is stated in terms of trends in view of the stabilizing role which actual government expenditure should play as the GNP grows more quickly or more slowly than its trend in any particular year. In a period of slow growth, it may be appropriate for government expenditure to rise more rapidly than GNP. In a period of strong economic expansion government expenditures should grow more slowly than GNP.
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May 25, 1976
The Budget-Hon. Donald S. Macdonald
Second, the objective does not imply an indiscriminate slashing of programs. Such an approach would have disruptive effects on the economy, bear harshly on many people and impair the efficiency of government in providing essential services to the public.
Our objective, then, is to achieve a major shift in the pace of growth of the government sector, in a deliberate, sustained fashion. This lay behind the cuts in planned expenditures for the 1975-76 fiscal year announced in the last budget, and the cuts in planned expenditures for this fiscal year announced by my colleague, the President of the Treasury Board (Mr. Chretien), on December 18. It was made clear on both occasions that unavoidable cost escalation in a number of programs had made such action necessary. We have recognized the need for action not just in the government's own manpower and operating expenses but also in major program areas. Some grant programs have been eliminated completely and strict ceilings have been imposed on many others. Measures have been taken to reduce the cost of unemployment insurance to the taxpayer. Ceilings have been placed on the growth in the federal contribution under certain federal-provincial shared-cost programs. Government financing of Crown corporations has been curtailed and in this regard, we have decided upon a further deferral of the proposed Federal Mortgage Exchange Corporation.
To achieve our expenditure control objectives, the introduction of new programs must be kept within careful limits and the resources required for the continued operation of existing programs must be minimized. A number of recent developments should help us achieve this goal and help parliament and the public monitor progress. One of the few areas in which provision has recently been made for a significant increase in staff is in the Office of the Auditor General. I trust the expanded capacity of this office will encourage the efficient use of resources by departments. In a report tabled last year, the Auditor General expressed concern over the adequacy of certain aspects of the government's system of financial management. The government is responding to these recommendations by establishing a separate branch of the Treasury Board secretariat responsible for all aspects of financial management. Additional changes have been made which will strengthen the effectiveness of the Treasury Board through centralizing responsibility for control of outlays in its hands. The Treasury Board itself is reviewing all proposals for increased expenditure before they are approved by cabinet.
In our expenditure planning, we have focused on total outlays, including both budgetary expenditures and loans, investments and advances. Total outlays increased by 28 per cent in 1974-75 and 18 per cent in 1975-76. I should note that the preliminary estimates of total outlays for 1975-76 are somewhat higher than the President of the Treasury Board and I expected earlier this year. A major contributing factor was a decision to permit our enterprises engaged in energy and export development to obtain financing from us somewhat earlier than had been anticipated. While this has increased the growth rate of expenditures in 1975-76, it has helped to reduce it in 1976-77. Based upon planned total outlays of $42,150 million, our target rate of increase for this fiscal year works out at about 14 per cent. Our forward planning for 1977-78 is based on a growth rate of the order

of 11 per cent. For both 1976-77 and 1977-78, these increases are less than the expected growth of the GNP.
I wish to remind the House that my colleague, the President of the Treasury Board, is holding the increase in the public service to 1.5 per cent this fiscal year. This is substantially below the growth rates of earlier years. Given the need to add significant numbers of policemen, prison guards and postmen to the payroll and the need to maintain other essential protective and regulatory services in a growing economy, the strict manpower ceiling is requiring most departments to freeze or actually reduce the number of employees in less essential services.
It is a fact of life that the scope for expenditure control increases as one looks further into the future. It proved very difficult to cut back on our expenditures in 1975-76 once the year was already underway. We have been able to get on track for 1976-77. We hope to consolidate our gains in 1977-78. We believe we have put in place the planning and control systems which will ensure that these targets are met.
Fiscal and Monetary Policy
Finally, the anti-inflation program requires that fiscal and monetary policy be aimed at increasing total demand and production only at a rate consistent with declining inflation. In the White Paper of October 14 I stated that "the success of the government's whole program for achieving a progressive lowering of the rate of inflation, together with a sustained recovery of the growth output and employment, will depend crucially on its success in keeping the over-all level of demand in the economy growing at a pace consistent with successively lower rates of price increase."
The monetary policy of the Bank of Canada has been set out by the governor in his 1975 Annual Report and in recent speeches. It carries my full support. Last autumn the Bank announced an initial target for the growth of the narrowly-defined money supply in the range from 10 to less than 15 per cent and the rate of increase since the second quarter of 1975 is now at the lower end of the range. The Bank has indicated that its target range, which allows for the continued real growth of the economy, will have to be lowered over time so that the rate of monetary expansion will be consistent with the price-level objectives of the prices and incomes policy.
This monetary policy, in its refusal to underwrite continuing high rates of inflation, is helping to destroy expectations that they will continue. It requires that we should expect variations in interest rates and the exchange rate. While we would all like to see lower interest rates, the way to bring them about is to reduce inflation. In the most recent years, the level of interest rates has not been high enough to maintain the real value of the money which Canadians have deposited in banks or invested in Canada Savings Bonds or other financial assets. The strengthening of the exchange value of the Canadian dollar, due in no small measure to high domestic interest rates, has increased the challenge faced by Canadian firms competing in world markets. At the same time, it has lowered the cost of the goods and services we buy from other countries and has thereby contributed directly to the success of the anti-inflation program.

May 25, 1976

The goal of fiscal policy is the same as that of monetary policy-to manage the increase in demand in a way which is consistent with moderate real growth and a decline in the rate of inflation. In present circumstances, this can best be achieved by maintaining close control over the rise in government spending. As I have stressed, our expenditure targets over the next two years involve a commitment to keep the growth of expenditures below the growth of the GNP. However, our revenues will grow more rapidly than GNP because of the very nature of the tax system. The financial requirements will therefore decline.
The deficits of both the federal government and the provincial governments reached record levels in 1975. I have already observed that this was entirely appropriate, and made a major contribution to protecting Canadians against the full force of the world recession. But now that the recovery is well established and private spending is rising, it is equally appropriate that these record deficits should recede.
It would be possible to pursue more restrictive fiscal and monetary policies and rely less upon controls in the battle against inflation. Those who advocate such a course emphasize the adverse effects of controls, in terms of interfering with private enterprise and collective bargaining, discouraging productivity, and creating inequities. We are conscious of these drawbacks and have sought to minimize them. Let there be no doubt as to our desire to remove the price and income controls as soon as possible. But we will not do so at the cost of high unemployment or of undue burdens on the weakest members of society. A more restrictive fiscal and monetary policy would undoubtedly cause unemployment to rise even higher than it is at present. Those who advocate that we slash government expenditure, raise taxes or cut even further into the growth of the money supply in order to get rid of the controls program, betray a shocking indifference to the problem of unemployment.
The other extreme would be to inject more stimulus into the economy by fiscal and monetary means in order to bring unemployment down faster, and to contain the resulting inflationary pressure by relying more upon controls. I doubt if many Canadians would want us to go down that road, and even if we tried we would surely fail. A clear lesson of history is that controls cannot be made to work in peacetime in the face of excess pressures of demand. They have to be supported by careful and moderate fiscal and monetary policy.
Some would prefer us not only of follow a more expansionary fiscal and monetary policy in order to reduce unemployment, but also to abandon the controls program. To accept that counsel is to accept all the agonies of inflation. In the not-very-long run we would all be victims. The rising tide of inflation would inflict severe damage on the economic system, further weaken our competitive position and impair our chances of creating satisfying and well-paid jobs for our growing labour force.
We believe that the problems of unemployment and inflation must be solved together. We cannot solve one of them at the expense of the other. We do not believe that the people of this country want us to try to beat inflation
The Budget-Hon. Donald S. Macdonald down by creating massive unemployment. Nor would they thank us for trying to lower unemployment at the cost of a renewed outburst of double-digit inflation.
Budget Measures
Before turning to specific measures, I would like to raise with hon. members a parliamentary issue which has long been of interest to me. I refer to the process by which budgets are brought forward and dealt with in the House.
By time-honoured custom, a budget is the primary occasion on which the government reports to parliament on the state of the economy and its own fiscal position, and proposes changes in taxation and other aspects of economic policy. But I believe the time has come to consider whether some of the long-standing traditions that surround the budgetary process should be modified to serve better the needs of today.
Two aspects of the budgetary process require particular study. The first is the strict rule of secrecy that applies to the budget prior to its introduction. The second is the procedure for consideration of the budget proposals following their introduction in parliament.
The tradition of budget secrecy has two grounds. It is intended to deny to anyone financial advantage from advance information. And it is intended to ensure that important statements of government economic policy are disclosed first to members of the House of Commons. Both of these reasons are valid and important, but it would be helpful to clarify the precise obligations imposed on the Minister of Finance by this long-standing tradition.
The procedures followed in dealing with the budgetary proposals after their introduction also deserve re-examination. It has been the recent custom to table very detailed Ways and Means Motions on budget night. The intent has been to make public the greatest possible information about the nature of legislation contemplated by the government. Under present House rules, however, this approach has not left enough scope to take account, in the ultimate legislation, of post-budget discussion in the House and in the country.
Some of the Ways and Means Motions I am introducing tonight are written in more general language so that we will be in a better position to make any necessary modifications in the bills that follow. I will look forward to hearing the views of hon. members and others on this innovation and their suggestions for dealing with the budget measures in the House.
For example, study might be given to the way in which parliament deals with changes in income tax legislation which are of a purely technical nature. A further question is whether there is a better way of giving the full force of law to Ways and Means Motions which come immediately into effect.
In this respect I would intend to seek the guidance of my colleague, the House Leader, as to the best way in which to achieve a re-examination by members of the procedures we have followed for so many years.

I should like now to deal with certain tariff changes. Honourable Members will recall that in February, 1973, tariffs were cut on a wide range on consumer products in
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The Budget-Hon. Donald S. Macdonald order to moderate upward pressures on prices. These reductions were originally introduced for one year only but most were subsequently renewed until June 30, 1976.
To ensure that Canadian tariff policy continues to make an appropriate contribution to the fight against inflation, I am proposing tonight that these temporary tariff reductions, with two exceptions, be extended for another year. In the food sector, reductions are being continued on such products as canned meats, prepared cereal foods, biscuits, certain fresh vegetables and raw and refined sugar. In the non-food sector, products on which reductions are being extended include drugs and pharmaceutical products, plumbing fixtures, kitchen and dinnerware, hand tools, photographic equipment and sporting goods.
I am also proposing that temporary tariff cuts be made on several other food products, including fresh pork, ham, bacon and macaroni.
I have considered carefully the implications which continuation of these temporary tariff reductions might have for our position in the GATT negotiations. I have concluded that their extension until June 30, 1977, would not prejudice our position. The tariff reductions are, of course, temporary and will not be the base from which we will be negotiating in Geneva. We intend to ensure that we achieve over-all reciprocity between what we offer and what we receive by way of benefits in these negotiations.
I believe all of these steps can be taken without causing injury. In case unforeseen problems do arise, authority is again being sought to permit withdrawal by Order in Council of any of these temporary tariff reductions which in fact have serious effects on employment or production in Canada. However, I have concluded that the existing temporary reductions on tires and tubes and on scissors should be allowed to expire on June 30 in order to avoid hardship to Canadian firms and their employees.
Details of the reductions proposed are to be found in the Ways and Means Motion. The motion also provides for a few other amendments to the Customs Tariff.

I have received a number of representations from Canadian machinery manufacturers alleging that the 2V4 per cent British Preferential rate has been causing them considerable difficulties. They have urged that machinery imported from Britain be made dutiable at the 15 per cent Most-Favoured-Nation rate. Canada is no longer obliged to accord preferential treatment to Britain or Ireland following their accession to the European Economic Community. In light of these representations, I am directing officials of my department to carry out an intensive study of the situation and to report to me on the operation of the present tariff provisions governing the importation of different types of machinery.
However, there is a particular need to withdraw now the preferential rate on compressor and electricity generating sets. I am, therefore, proposing that imports of such equipment from Britain and Ireland be made subject to the 15 per cent tariff immediately. When such machinery is not available from Canadian sources, the duty can be remitted under the machinery program.

Tax Measures
Mr. Speaker, I turn now to the specific tax measures I am proposing tonight. They will not produce a significant net change in revenues, but they will significantly reinforce the policies of the government.
Energy Conservation
The following measures will help achieve the government's overall objectives for energy conservation recently announced by the Energy Minister.
I am proposing to expand the present two-year fast write-off to include certain types of equipment which contribute to the efficient use of energy resources. The list includes equipment which enables industrial waste to be used as a fuel source and equipment which produces energy from municipal waste. This measure will apply to assets acquired after tonight and before 1980.
I am also proposing immediate removal of the federal sales tax from a number of items which contribute directly to the development of energy sources other than fossil fuels. Included in this list are such items as solar furnaces and heating panels, wind-powered generating equipment, and heat pumps.
Further tax measures to deter wasteful consumption of energy are proposed. Studies indicate that motor vehicle air conditioners increase fuel consumption by as much as 20 per cent. Consequently, effective tonight the budget introduces a specific excise tax of $100 on air conditioners for use in automobiles, station wagons, vans and smaller trucks.
In addition, I am proposing significant increases in the special excise tax on high-energy consuming motor vehicles. This will be accomplished in two ways. First, the weight threshold above which the tax takes effect will be reduced over a four-year period to 3,500 pounds from 4,500 pounds for cars and to 3,700 pounds from 5,100 pounds for station wagons. The annual reductions will be 250 pounds for cars and 350 pounds for station wagons, commencing this August.
Second, the applicable rate will be increased. Effective August 1 of this year the rate will be $30 for the first 100 pounds, $40 for the second 100 pounds, $50 for the third 100 pounds and $60 for each subsequent 100 pounds. The full effect of these changes as of August 1, 1979 will result in a tax of $1,020 on a car weighing 5,300 pounds. The purpose of the tax is not to raise revenue but to encourage Canadians to demand and the auto industry to produce lighter, more energy-efficient cars.
The timetable for the imposition of this higher tax dovetails with that for achievement of gasoline consumption standards for new cars recently announced by the Energy Minister. Both provide time required by the auto industry to adjust its production toward smaller cars.
Resource Taxation
As we are all aware, both the federal and provincial governments have had some very difficult decisions to make in recent years concerning our petroleum and mining industries.
I believe it is important to maintain a stable tax system for these industries and I am not proposing any significant
May 25, 1976

changes affecting them. I am encouraged to see that the provinces, which impose by far the larger fiscal burden on the resource sector, are offering significant new incentives to seek out new reserves or to enhance recoverability from known reserves.
However, I feel the federal government can make an additional input to help encourage this exploration activity. Historically, our tax system has distinguished between those whose principal business is resource oriented and other taxpayers. Principal-business taxpayers have been permitted to claim their exploration costs at a rate of 100 per cent whereas other taxpayers have been able to write them off at a rate of only 30 per cent per year. In an effort to attract funds from Canadians for resource exploration which is so critical in our national development, I am proposing that all taxpayers be allowed to write off immediately 100 per cent of their exploration costs incurred after tonight and before July 1, 1979. This three-year period will provide an opportunity to determine the effectiveness of this new incentive.
I am also introducing an amendment to make it clear that no federal tax will be payable on moneys received under provincial incentives for drilling and exploration.
Air Transportation Tax
I am proposing to extend the Air Transportation Tax. At present, the tax applies only to air transportation purchased in Canada. An estimated 2.3 million travellers using Canadian airports annually do not now pay the tax, because they purchase their tickets outside the country. We propose to amend the Excise Tax Act to extend the tax to these travellers.
It is our intention to consult with the air carriers, other interested persons and foreign governments concerning potential problems of defining and administering the change before tabling a Ways and Means Motion in the House. Consequently, this evening I am only announcing the broad outlines of the extension.
Capital Cost Allowances
The government has been making an intensive review of the Canadian system of capital cost allowances-that is, the system under which a taxpayer claims the cost of depreciable assets as a deduction against his income. The analysis has now reached the point where I am able to present certain conclusions to the House and to propose some changes.
The main conclusion reached is that our system of capital cost allowances is basically sound. It is not out of line with systems in other industrial countries. It is easy for the Canadian taxpayer to apply, and in a time of growing complexity in tax legislation, certainty and simplicity are not to be under-rated.
Our review to date has indicated, however, that some changes in the rates should be made. These changes, which will be made by regulation and which will apply to assets acquired after tonight, are outlined in the budget papers I have tabled. However, I would like to comment on a few of the more important ones.
It has become evident that because of rapidly changing technology in computers, the present capital cost allowance rate of 20 per cent is inappropriately low. I am
The Budget-Hon. Donald S. Macdonald therefore proposing that the rate for computer hardware and the related systems software be increased to 30 per cent, and that the rate for other types of software be increased to 100 per cent.
Other assets for which increases in rates are proposed include taxis, roads, runways and offshore drilling platforms.
On the other hand, our review has shown that the present rate of 40 per cent provided for aircraft is unnecessarily high and I am proposing that it be reduced to 25 per cent.
Other rate reductions are proposed for radio, television and radar equipment, electrical generating equipment, earth-moving equipment, and leased advertising signs.
Mr. Speaker, the government does not intend that capital cost allowances be available for unwarranted use by taxpayers as a means of sheltering income from its fair burden of taxation. With this objective in mind, I am proposing that a new limit be introduced to prevent the creation of tax losses by claiming capital cost allowance on the leasing of moveable property. Specifically, taxpayers will not be allowed to claim capital cost allowances on leased equipment in excess of their net rental income from that type of property. This new limit will apply to both individuals and corporations in respect of moveable property acquired and leased after today.

I refer now to the tax treatment of small business in this country.	*
Canadian-controlled private corporations are entitled to pay tax at a reduced rate subject to an annual and a cumulative limit on their profits. For 1972 and 1973 those limits were $50,000 per annum up to $400,000 in total. In 1974, those limits were raised to $100,000 per annum up to a cumulative total of $500,000. Effective for 1976 and subsequent taxation years, I would like to announce a further increase of those limits to $150,000 per annum up to a cumulative total of $750,000. This measure will significantly benefit our small and medium-sized Canadian-controlled corporations.

Charities
With last June's budget, discussion papers were tabled on federal sales and excise taxation, and on the taxation of charities. With respect to the former, our study of the matter is still in progress. With respect to charities, I am now in a position to present concrete proposals to Parliament. Full details will be found in the material I am tabling tonight, but I would like to mention a few of the more important changes.
One important objective of the review was to rationalize the classification of charities for tax purposes. Under the proposed legislation, all charities will have to be registered in order to retain their tax-free status. Registered charities will be divided into two new groups-charitable organizations and charitable foundations. Charitable foundations will be subdivided into public foundations and private foundations.

May 25, 1976
The Budget-Hon. Donald S. Macdonald
Under the present rules, technically no charity can carry on a business. Nonetheless, many charities do indeed carry on worth-while fund-raising activities which might be construed as business activities. I see no reason to alter this situation as it exists in practice. On the contrary, I want to bring the law into conformity with the current standards of the community. The new rules, therefore, will permit a charitable organization or public foundation to carry on a business activity if it is related to the charitable objectives of the charity or if it is operated substantially by volunteers.
In the discussion paper, a proposal was made which would require private foundations to pay out annually an amount equal to the greater of 90 per cent of their annual income or 5 per cent of the fair market value of their assets. This rule was designed to ensure that charitable activities received some reasonable level of benefit from foundations enjoying tax advantages. As a result of representations received, this proposal will be implemented but in a modified manner. The 5 per cent requirement will not be applicable to "qualified investments" such as publicly listed securities. There will also be a phase-in period to permit existing private foundations to adjust to this new rule.
Proposals were also put forward to deregister charities which incur excessive fund-raising costs. There was virtual unanimity in the submissions that such a rule is needed. Charitable organizations and public foundations will be required to distribute or utilize in charitable activities at least 80 per cent of the funds for which they have issued receipts for tax purposes. There will be a transition period during which the required pay-out will be lower.
The discussion paper also proposed that all registered charities disclose publicly certain aspects of their finances and charitable activities. These proposals received widespread support and will be incorporated in the amending legislation.
I should be remiss if I did not thank the charities themselves and other interested persons for their substantial contribution to this exercise. Many of them presented lengthy and thoughtful briefs. Their views have been carefully considered and account for many of the modifications I have made to the original proposals.
Personal Income Tax
The budget tonight also provides for a number of significant amendments to the Income Tax Act affecting individuals.
As part of tax reform, working women and single-parent fathers were permitted to deduct part of the cost of child care from their earned income. The maximum deduction allowed under this provision was $15 per week per child and $500 per year per child, to a total annual maximum of $2,000 per family. I have received many representations that these figures are now too low. Therefore, I am pleased to announce that commencing with the 1976 taxation year the limits will be doubled to $30 per week per child and $1,000 per year per child with a total maximum annual limit of $4,000. An amendment will also be made to allow such deductions to be claimed against income from research grants and adult training allowances.

I would like to mention an amendment relating to disabled children. At present, a disabled taxpayer is allowed to deduct the amount of $1,000, which is indexed. Effective with the 1976 taxation year, the unused portion of this deduction will be transferable from a disabled dependent child to the parent who claims him or her as a dependant. Because few such children have any income, the effect of this change will be to give supporting individuals a significant deduction in respect of dependent disabled children.
I would also like to outline certain amendments relating to deferred income plans. The government introduced these tax incentives to encourage Canadians to make provision for their retirement years and thus to foster national saving. The limits under all of these plans were substantially increased in 1972 as part of tax reform. Since then, inflation has reduced the real value of these limits.
I am therefore proposing further increases tonight. For the 1976 and subsequent taxation years, the maximum annual amount deductible by employees and employers in respect of a registered pension plan will be increased from $2,500 to $3,500. The same limits will apply to registered retirement savings plans where the beneficiary is also a member of a pension plan, and to employer contributions to a deferred profit-sharing plan. Where the beneficiary under a registered retirement savings plan is not a member of a pension plan, the maximum contribution limit will be increased from the present $4,000 to $5,500.
Finally, in respect of deferred income plans, I am proposing an amendment to the provisions dealing with registered home ownership savings plans which will allow taxpayers to shift plans from one institution to another. This means that if taxpayers move from place to place or if they are dissatisfied with the return they are earning there will be no barrier to finding a replacement and transferring their funds.
Mr. Speaker, I am sure that all members are aware of the widespread concern that is now evident regarding the complexity of the Income Tax Act and of the income tax return. As a first step to improve this situation, I am proposing certain amendments which will contribute to a simplification of the returns for the 1976 and subsequent taxation years.
Apart from these important structural changes, there will be no significant decreases, or increases, in the personal income tax.
Finally, Mr. Speaker, I am proposing a number of technical changes to the Income Tax Act and to other taxing statutes, details of which are contained in the Ways and Means Motions.
The supplementary material shows the estimated revenue impact of the various measures on a full-year basis. The tax and tariff measures are expected to cause a net reduction in budgetary revenues of $75 million in the current fiscal year.

The Economic and Fiscal Outlook
Mr. Speaker, the economic policies of the government, strengthened by the measures I have announced tonight, are directed at the achievement of our goals of sustained growth, high employment and price stability.
May 25, 1976

I anticipate that real growth in 1976 will be about 5 per cent. Our goal of bringing down the year-over-year rate of increase of the consumer price index to 8 per cent by the fourth quarter of 1976 is within our reach. The increase in the GNE price index between 1975 and 1976 is expected to be about 9 per cent. The increase in the nominal value of the GNP in 1976 is expected to be between 14 and 15 per cent.
Employment has been growing quite strongly over the past year and I expect it to continue to grow. I estimate that the Canadian economy will generate more than 250,000 new jobs this year. The broad trend of the unemployment rate has been level for considerable time although there have been erratic month-to-month movements reflecting work stoppages and other temporary factors. I am quite aware of the increase in the unemployment rate reported in April. I assure hon. members that I am keeping the situation under the closest attention. My expectation is that the rate of unemployment will continue the recent level trend in the near term and gradually decline as cyclical expansion takes hold.
The continuing recovery in 1976 will be sustained by the growth of exports in response to recovery in the United States and most overseas industrial countries. I expect that our trade balance will begin to show a significant improvement, bringing about a reduction in the large deficit on goods and services which developed in 1975. Housing expenditures will be strong because of the very high level of starts in recent months. With real incomes rising in response to growing employment and decelerating consumer prices, consumer spending will also be an expansionary force in the economy. Production will have to be incresed in order to rebuild inventories after the heavy liquidation of stocks in 1975. All these factors will outweigh the slowing down of business fixed investment and government spending on goods and services.
The outlook for 1977 is, of course, much more uncertain at this time. The expansion should proceed at a measured pace and the rate of inflation continue to come down. I look to renewed growth in real business fixed investment to help sustain the expansion. I will, of course, wish to review the situation as the outlook for 1977 becomes clearer. If further policy action is needed to keep the economy on the desired track, I will not hesitate to take it.
I now wish to inform the House as to our fiscal position and outlook.
The figures I have tabled on the financial requirements for the fiscal year just ended are still preliminary since the books are not yet closed. More precise information will be available with the publication of the preliminary financial statements in the Canada Gazette this summer.
I should advise that the summary statements of transactions have been modified to bring them into accordance with the recommendations of the report on the Study of the Accounts of Canada, tabled by the chairman of the Standing Committee on Public Accounts on March 9.
On the new basis, the forecast of financial requirements excluding foreign exchange transactions made in the June budget would have amounted to $5 billion. In the event, they amounted to $4.6 billion. I anticipate little change in 1976-77 and a significant decline in 1977-78. These forecasts
The Budget-Hon. Donald S. Macdonald are based on the expenditure projections which I described earlier and the projected yield of the tax structure as modified by the proposals in this budget.
The government was able to finance the bulk of its requirements in 1975-76 through the sale of securities to the general public rather than to the banking system. Canada Savings Bonds outstanding increased by over $3.6 billion. The general public's holdings of treasury bills and marketable issues increased by over $1 billion. We succeeded in placing long-term marketable securities on a substantial scale with private and institutional investors. The Bank of Canada and the chartered banks increased their holdings only by some $800 million in the fiscal year.
At the beginning of this fiscal year, our cash balances stood at $3 billion. They could be run down somewhat, and therefore we expect that we will have to borrow rather less money than we did last year. We have been relieved of the necessity of raising about $300 million since the Canadian National Railways and the Export Development Corporation have been authorized as commercial enterprises to exercise their statutory powers to borrow this amount in the capital markets.
It is intended that much of the government's financing will be by the sale of securities to the general public particularly market issues. The purchases of our securities by the banking system will reflect the strength of private loan demand and the monetary policy of the Bank of Canada.
The National Income and Expenditures Accounts are viewed by many as providing a better indicator of the economic impact of the government's transactions. However, they exclude important loans, investments and advances to Crown corporations, other governments and private firms and individuals. A new table extends the National Income and Expenditure Accounts to provide information on these transactions and on the other factors involved in the difference between the National Accounts balance and total financial requirements. This addition also conforms with the recommendations of the Study of the Accounts of Canada.
The National Income and Expenditure Accounts deficit is expected to decline by $900 million to $3.3 billion in 1976-77, and by a further substantial amount in 1977-78. This decline in the National Accounts deficit and the levelling-off of financial requirements in 1976-77 are possible only as a result of continuing efforts to control expenditure growth in a period of cyclical recovery.
Conclusion
Mr. Speaker, I have provided the House with a full account of the approach of the government to economic policy.
We are still in the critical early stages of the effort to bring the rate of inflation down. Nothing must be done to endanger its success. When there is a solid basis of achievement on the prices front, then we will have greater opportunities for action to maintain the momentum of the recovery. But if we falter in the battle against inflation, we

May 25, 1976
The Budget-Hon. Donald S. Macdonald will face the risk of slower real growth and higher unemployment.
Only by bringing the cost-price spiral under control can we solve many of the key problems which confront us. This is what we must do to restore the competitiveness of the Canadian economy, and thereby ensure the continued improvement in our balance of payments and the health of our export and import-competing industries. This is what we must do in order to reduce interest rates, ease the financial pressures on individuals, firms and governments and reduce our reliance on foreign borrowing. This is what we must do in order to restore the sense of confident expectation about the future, so necessary to the growth in investment, the increase in productivity and the rise in our living standards. If we fail to bring the rate of inflation down, we will also fail in our efforts to achieve a sustained reduction in the level of unemployment.
We also believe that the only way to meet these problems is by a deliberate and persistent approach. No miracle drug exists to provide an instant cure to these economic ills. It will take time and patience to restore price stability and a high level of output and employment. This approach is evident in our monetary policy, our fiscal policy, our expenditure policy, our energy policy and our control policy. In all of these fields, drastic action to yield quick results would be highly disruptive, damaging to the interests of the groups most affected and unlikely to be sustainable. It is far better to maintain a steady course in order to restore confidence and enable all groups in society to plan with greater assurance of settled times ahead.
We see ourselves as partners and not as sole proprietors in this enterprise. It is well to remember that in our economy there is not only a recognized role for governments and their enterprises but also a massive and crucial role for private firms, labour unions and a great diversity of other private institutions and associations. If government alone is held responsible for the performance of the economic system, then government will be driven increasingly into the regulation of the private sector, at the cost both of efficiency and of economic freedom. In general we all look to the private sector to deliver the right goods and services to the right place at the right time and the right price. Productivity growth results primarily from the actions of the private sector, not the policies of government. The private sector can expect government to provide a framework of law and economic policy in which it can best function. But government can expect the private sector to operate efficiently, competitively and with due regard to the interest of society within that framework.
Indeed, all Canadians have their roles to play in the achievement of our common economic goals.


Some hon. Members:: Hear, hear!


Mr. Sinclair Stevens (York-Simcoe):: Mr. Speaker,-


Mr. Guay (St. Boniface):: Where is Joe?


An hon. Member:: We want Marcel.


Some hon. Members:: Oh, oh!


Mr. Speaker:: Order, please. The time allowed for the initial response by the hon. member for York-Simcoe (Mr. 
Stevens) is very limited, and I wonder if he could be given attention.


Sinclair McKnight Stevens: Mr. Speaker, John Turner read better than this minister.


Some hon. Members:: Hear, hear!


Some hon. Members:: Oh, oh!


Sinclair McKnight Stevens: In the budget which we have just had read to us there was reference to a new system for the presentation of budgets in the future. I sincerely hope there will be a new system because it is intolerable that hon. members on all sides of this House should be tied down to their seats while the minister's press conference is aired on television around the nation.


Some hon. Members:: Shame!


Sinclair McKnight Stevens: It is contemptuous of parliament for the Minister of Finance (Mr. Macdonald) to have used that tactic tonight.
I had hoped that the budget tonight would restore the confidence of Canadians in our future, but it has not. It has not restored the confidence of Canadians, of consumers, of labour, of the businessman or of the investor. The budget fails to achieve that purpose because the present administration is unwilling to make a commitment of 6 per cent real growth in our economy and to cut down on its own spending. If such a commitment were made and fulfilled, we would not only have lower unemployment but we would have less inflation as well.


Some hon. Members:: Explain.


Sinclair McKnight Stevens: In plain language, this budget anticipates 9.4 per cent inflation this year. If you read it, that is what it is saying.


Some hon. Members:: Shame!


Sinclair McKnight Stevens: It is anticipating unemployment in this nation of some 750,000 Canadians, and it is anticipating a real growth of 5 per cent. Mr. Speaker, the 5 per cent real growth target of the minister represents a lowering of expectations which Canadians are entitled to have fulfilled. That real growth rate of 5 per cent totally ignores the 7 per cent that has been lost over the previous two years as a result of the ineptitude of the government. That 7 per cent in real growth translates into 210,000 extra Canadians being out of work who would not have to be out of work if it were not for the real growth lag.
When John Turner took over the financial portfolio real growth was averaging 6 per cent; when he left, real growth was little better than zero. That reduced rate of growth has exacted its penalty, as I have stated, on job creation. When Mr. Turner took over as minister of finance in January, 1972, there were, seasonally adjusted, 539,000 unemployed; by the time he left last September there were 732,000 unemployed. Now under this minister there are 761,000 unemployed and the figure is likely to rise as a result of this budget tonight. There is little in this budget to relieve unemployment and in fact there are ingredients that may
May 25, 1976

even increase the unemployment with which we are now saddled.
The administration asks for restraint by Canadians. But at a time when most Canadians could only increase their incomes by a maximum of 10 per cent to 12 per cent, at a time when the economy was only to grow at a rate of 13 per cent-you recall it was to be 8 per cent inflation and 5 per cent real growth-at a time when these were the facts we find that the administration has increased its spending by 35 per cent over the last two years.


Some hon. Members:: Shame!


William Heward Grafftey: Leading by example.


Sinclair McKnight Stevens: Mr. Speaker, is it any wonder we now have 9.4 per cent inflation rather than the target of 8 per cent we were led to believe it would be only a short while ago?
The spending habits of the administration are so extravagant that federal spending will practically have gone up four times in the last ten years. It took us 100 years to get to a budget of $9.9 billion in 1967, Mr. Speaker; this administration doubled that figure in the next five years, and in the last four years doubled it once again to the present $42 billion spending estimate we have before us and which is confirmed by this budget.
Although the federal government asks all Canadians to participate in the anti-inflation program the administration has carefully excluded itself from participation. The battle against inflation is being fought, first by the Bank of Canada, by keeping monetary growth to a 10 per cent annual rate; second, by the provinces which have kept their average spending increases to 11 per cent; and third, by the private sector, labour and business, who are obeying the Anti-Inflation Board rules.
The weak point in fighting inflation in Canada is with the federal government.


Some hon. Members:: Hear, hear!


Sinclair McKnight Stevens: If the federal administration persists in spending at current rates while all other groups in society are relatively restrained, the net result will be an even larger share for the federal government in the economy. This may be the single most alarming feature of this budget. Undoubtedly and unfortunately it is the average, individual Canadian who will be paying for this spending spree of the federal government.
There are no meaningful tax cuts, even for the poor, in this budget. I would point out that despite the fact that the federal government proposes to allow another horrendous cash deficit of $4.5 billion this year-the same cash deficit
The Budget-Hon. Donald S. Macdonald we had last year-Canadians will have to pay more in taxes. The total tax take at the federal level will rise by 18 per cent and falls mainly on the individual Canadian. Under this regime his taxes will go up a startling 25 per cent this year to cover the extravagance of this government.
Turning to deficits, Mr. Speaker, let us look at the inaccurate estimates previously made by the government. Back on November 18, 1974, the former minister of finance totalled the expenditures and revenues and stated the deficit would be $1.5 billion; by June last year he said it would be $3.6 billion, and tonight we find that the deficit as far as this government is concerned is $4.2 billion.
Perhaps the most startling thing of all is that if you add up the aggregate deficit of the government it comes to $11.6 billion, which is four times the amount of deficit of the three previous administrations put together; four times the amount of deficit of the Pearson government, the Diefen-baker government and the St. Laurent government.


Some hon. Members:: Oh, oh!


Sinclair McKnight Stevens: Mr. Speaker, that is what this government has the nerve to call restraint. The extravagance and waste of the present administration will unfortunately be paid for by all Canadians, by a growing tax burden, by sustained inflation, by lower expectations and the declining confidence of all, but more about that later.
I move, seconded by the hon. member for Halifax (Mr. Stanfield), that the debate be now adjourned.


Some hon. Members:: Hear, hear!


Mr. Speaker:: Is it the pleasure of the House to adopt the said motion?


Some hon. Members:: Agreed.
On motion of Mr. Stevens the debate was adjourned.


Mr. Speaker:: Order, please. In accordance with previous practice of the House and as a result of the special proceedings of this evening it is, I take it, assumed and agreed that no adjournment proceedings will take place?


Some hon. Members:: Agreed.


Hon. Mitchell Sharp (President of the Privy Council) moved:: That the House do now adjourn.


[Stage Direction]
Motion agreed to.
Mr. Speaker:: This House stands adjourned until two o'clock tomorrow afternoon pursuant to Standing Order.
On motion of Mr. Sharp the House adjourned at 10.01 p.m.
13836

May 25, 1976


APPENDIX &quot;A&quot;
[Stage Direction]
Table 1
Government of Canada Public Accounts Presentation Summary Statement of Transactions
	1974 75 Actual	1975-76 Preliminary Actual	1976-77 Forecast*1 '
		($ millions)	
Budgetary Transactions
[Stage Direction]
Revenues
[Stage Direction]
28,067
[Stage Direction]
29,811
[Stage Direction]
34,400
[Stage Direction]
Expenditures12*
[Stage Direction]
-29,245
[Stage Direction]
-33,887
[Stage Direction]
-39,400
[Stage Direction]
Surplus or Deficit (- )
[Stage Direction]
-1,178
[Stage Direction]
-4,076
[Stage Direction]
-5,000
[Stage Direction]
Non-Budgetary Transactions
[Stage Direction]
Loans, Investments and Advances*2'
[Stage Direction]
-2,227
[Stage Direction]
-3,338
[Stage Direction]
-2,750
[Stage Direction]
Annuity, Insurance and Pension Accounts
[Stage Direction]
1,328
[Stage Direction]
1,025
[Stage Direction]
2,300
[Stage Direction]
Other Transactions
[Stage Direction]
34
[Stage Direction]
1,799
[Stage Direction]
950
[Stage Direction]
Net Source or Requirement (- )
[Stage Direction]
-865
[Stage Direction]
-514
[Stage Direction]
500
[Stage Direction]
Financial Requirements
[Stage Direction]
*(Excluding Foreign Exchange Transactions)
[Stage Direction]
-2,043
[Stage Direction]
-4,590
[Stage Direction]
-4,500
[Stage Direction]
Foreign Exchange Transactions
[Stage Direction]
496
[Stage Direction]
-190
[Stage Direction]
Total Financial Requirements
[Stage Direction]
-1,547
[Stage Direction]
-4,780
[Stage Direction]
*1 * Numbers in this column should be interpreted as mid points of ranges of estimates. No forecast is made of the cash requirements of the Exchange Fund Account.
(2)
Total outlays are composed of budgetary expenditures plus loans, investments and advances.
Note. This table is not directly comparable to that presented in the June 23, 1975 budget. Since that time, amendments to the Old Age Security Act have resulted in Old Age Security transactions being treated as budgetary rather than non-budgetary. For consistency, they are treated here as budgetary throughout. Also, at the time of the budget, the advance to the Exchange Fund to remit profits was treated as a non-budgetary transaction. This advance is now treated as a foreign exchange transaction. On a comparable basis, the June forecast of total financial requirements, excluding foreign exchange transactions, for fiscal year 1975-76 would have been $5 billion rather than the $5.3 billion presented at that time.
May 25, 1976
[Stage Direction]
Table 2
Government of Canada Public Accounts Budgetary Revenues
	1974-75 Actual	1975-76 Preliminary Actual	1976-77 Forecast*1 *
		($ millions)
[Stage Direction]
Personal Income Tax
[Stage Direction]
11,710
[Stage Direction]
12,703
[Stage Direction]
16,040
[Stage Direction]
Corporation Income Tax
[Stage Direction]
4,836
[Stage Direction]
5,748
[Stage Direction]
5,860
[Stage Direction]
Non-Resident Tax
[Stage Direction]
427
[Stage Direction]
481
[Stage Direction]
520
[Stage Direction]
Customs Duties
[Stage Direction]
1,809
[Stage Direction]
1,886
[Stage Direction]
2,180
[Stage Direction]
Sales Tax
[Stage Direction]
3,866
[Stage Direction]
3,441
[Stage Direction]
3,920
[Stage Direction]
Other Duties and Taxes
[Stage Direction]
2,838
[Stage Direction]
2,713
[Stage Direction]
2,520
[Stage Direction]
Total Tax Revenues
[Stage Direction]
25,486
[Stage Direction]
26,972
[Stage Direction]
31,040
[Stage Direction]
Non-Tax Revenues
[Stage Direction]
2,581
[Stage Direction]
2,839
[Stage Direction]
3,360
[Stage Direction]
Total Budgetary Revenues
[Stage Direction]
28,067
[Stage Direction]
29,811
[Stage Direction]
34,400
[Stage Direction]
*1 * Numbers in this column should be interpreted as mid points of ranges of estimates.
95 568-42 */2
[Stage Direction]
May 25, 1976
Table 3
Government of Canada Summary, Extended National Accounts Presentation
	1974-75 Actual	1975-76 Estimate*1*	1976-77 Forecast*2*
		($ millions)	
Current Transactions
[Stage Direction]
A. Revenues
[Stage Direction]
30,060
[Stage Direction]
32,130
[Stage Direction]
37,950
[Stage Direction]
B. Expenditures
[Stage Direction]
-30,669
[Stage Direction]
-36,365
[Stage Direction]
-41,250
[Stage Direction]
Surplus or Deficit (-!
[Stage Direction]
609
[Stage Direction]
-4,235
[Stage Direction]
-3,300
[Stage Direction]
Loans and Other Transactions
[Stage Direction]
A. Loans, Investments and Advances
[Stage Direction]
-1,968
[Stage Direction]
-2,850
[Stage Direction]
-2,540
[Stage Direction]
B. Cash vs Accruals
[Stage Direction]
663
[Stage Direction]
2,313
[Stage Direction]
1,215
[Stage Direction]
C. Other Transactions
[Stage Direction]
-129
[Stage Direction]
182
[Stage Direction]
125
[Stage Direction]
Net Source or Requirement (-)
[Stage Direction]
-1,434
[Stage Direction]
-355
[Stage Direction]
-1,200
[Stage Direction]
Total Financial Requirements
[Stage Direction]
(Excluding Foreign Exchange Transactions)
[Stage Direction]
-2,043
[Stage Direction]
-4,590
[Stage Direction]
-4,500
[Stage Direction]
Foreign Exchange Transactions
[Stage Direction]
496
[Stage Direction]
-190
[Stage Direction]
Total Financial Requirements
[Stage Direction]
-1,547
[Stage Direction]
-4,780
[Stage Direction]
<1* Estimates for Current Transactions items in this column are based on the official national accounts statistics, issued by Statistics Canada, for the first three quarters of the fiscal year, and on Department of Finance estimates for the final quarter.
1 ' Numbers in this column should be interpreted as mid-points of ranges of estimates. No forecast is made of the cash requirements of the Exchange Fund Account.
May 25, 1976
[Stage Direction]
Table 4 Government of Canada Revenues and Expenditures on a National Accounts Basis
[Stage Direction]
1974-75
[Stage Direction]
1975-76
[Stage Direction]
1976-77
[Stage Direction]
Actual
[Stage Direction]
Estimate*1 *
[Stage Direction]
Forecast*2'
[Stage Direction]
($ millions)
[Stage Direction]
Revenues
[Stage Direction]
Direct Taxes, Persons
[Stage Direction]
14,240
[Stage Direction]
16,000
[Stage Direction]
20,100
[Stage Direction]
Direct Taxes, Corporations
[Stage Direction]
4,642
[Stage Direction]
4,885
[Stage Direction]
5,585
[Stage Direction]
Direct Taxes, Non-Residents
[Stage Direction]
440
[Stage Direction]
485
[Stage Direction]
525
[Stage Direction]
Indirect Taxes
[Stage Direction]
8,360
[Stage Direction]
8,072
[Stage Direction]
8,600
[Stage Direction]
Other Current Transfers from Persons
[Stage Direction]
7
[Stage Direction]
8
[Stage Direction]
10
[Stage Direction]
Investment Income
[Stage Direction]
2,009
[Stage Direction]
2,285
[Stage Direction]
2,700
[Stage Direction]
Capital Consumption Allowances
[Stage Direction]
362
[Stage Direction]
395
[Stage Direction]
430
[Stage Direction]
Total Revenues
[Stage Direction]
30,060
[Stage Direction]
32,130
[Stage Direction]
37,950
[Stage Direction]
Expenditures
[Stage Direction]
Current Goods and Services
[Stage Direction]
7,637
[Stage Direction]
8,825
[Stage Direction]
9,900
[Stage Direction]
Transfer Payments to Persons
[Stage Direction]
9,123
[Stage Direction]
11,100
[Stage Direction]
12,500
[Stage Direction]
Subsidies
[Stage Direction]
2,389
[Stage Direction]
3,025
[Stage Direction]
2,900
[Stage Direction]
Capital Assistance
[Stage Direction]
202
[Stage Direction]
375
[Stage Direction]
435
[Stage Direction]
Current Transfers to Non-Residents
[Stage Direction]
437
[Stage Direction]
530
[Stage Direction]
575
[Stage Direction]
Interest on the Public Debt
[Stage Direction]
3,164
[Stage Direction]
3,910
[Stage Direction]
4,600
[Stage Direction]
Transfers to Provinces
[Stage Direction]
6,598
[Stage Direction]
7,325
[Stage Direction]
8,900
[Stage Direction]
Transfers to Local Governments
[Stage Direction]
139
[Stage Direction]
175
[Stage Direction]
200
[Stage Direction]
Gross Capital Formation
[Stage Direction]
980
[Stage Direction]
1,100
[Stage Direction]
1,240
[Stage Direction]
Total Expenditures
[Stage Direction]
30,669
[Stage Direction]
36,365
[Stage Direction]
41,250
[Stage Direction]
Surplus or Deficit {- )
[Stage Direction]
-609
[Stage Direction]
-4,235
[Stage Direction]
-3,300
[Stage Direction]
<1 * Numbers in this column are based on the official national accounts statistics, issued by Statistics Canada, for the first three quarters of the fiscal year, and on Department of Finance estimates for the final quarter.
*2' Numbers in this column should be interpreted as mid-points of ranges of estimates.
[Stage Direction]
May 25, 1976
Table 5
Government of Canada Revenues, Public Accounts and National Accounts Reconciliation
	1974-75 Actual	1975-76 Estimate11 '	1976-77 Forecast11 * '
		($ millions)	
Budgetary Revenues 

 Public Accounts 			 28,067	29,811	34,400
Deduct
[Stage Direction]
Post Office Revenues and Deficit
[Stage Direction]
-746
[Stage Direction]
-901
[Stage Direction]
-1,125
[Stage Direction]
Deficit of Government Business Enterprises*21
[Stage Direction]
-219
[Stage Direction]
-176
[Stage Direction]
-177
[Stage Direction]
Excess of Accruals over Collections
[Stage Direction]
Corporate Income Tax
[Stage Direction]
23
[Stage Direction]
-791
[Stage Direction]
-203
[Stage Direction]
Oil Export Tax
[Stage Direction]
-160
[Stage Direction]
-127
[Stage Direction]
-79
[Stage Direction]
Add
[Stage Direction]
Government Pension and Social Security Receipts13'
[Stage Direction]
3,304
[Stage Direction]
4,107
[Stage Direction]
5,003
[Stage Direction]
Capital Consumption Allowance
[Stage Direction]
362
[Stage Direction]
395
[Stage Direction]
430
[Stage Direction]
Miscellaneous Adjustments14'
[Stage Direction]
-571
[Stage Direction]
-188
[Stage Direction]
-299
[Stage Direction]
Total Revenues - National Accounts
[Stage Direction]
30,060
[Stage Direction]
32,130
[Stage Direction]
37,950
[Stage Direction]
11 '
[Stage Direction]
Numbers in these columns should be interpreted as mid-points of ranges of estimates.
[Stage Direction]
*2'
[Stage Direction]
In the Public Accounts, deficits of government business enterprises are a charge
[Stage Direction]
to budgetary
[Stage Direction]
expenditures whereas
[Stage Direction]
in the National
[Stage Direction]
Accounts, these deficits are deducted from remitted profits of other government business enterprises.
13' In the Public Accounts, the government pension and social security receipts and disbursements are treated as non-budgetary transactions whereas in the National Accounts, these transactions are included in government revenue and expenditure.
[Stage Direction]
14'
[Stage Direction]
These miscellaneous adjustments arise as a result of conceptual differences between
[Stage Direction]
the two forms
[Stage Direction]
of presentation.
[Stage Direction]
These
[Stage Direction]
items represent,
[Stage Direction]
for example, the proceeds from the sales of existing capital assets; budgetary revenue
[Stage Direction]
items offset against budgetary
[Stage Direction]
expenditures; imputed
[Stage Direction]
items; and, an adjustment for the treatment of revenue in the supplementary period.
May 25, 1976
[Stage Direction]
Table 6
Government of Canada Expenditures, Public Accounts and National Accounts Reconciliation
	1974-75 Actual	1975-76 Estimate*1 '	1976 77 Forecast*1 '
		($ millions)	
Budgetary Expenditures - Public Accounts			 29,245	33,887	39,400
Deduct
[Stage Direction]
Transfers to Funds and Agencies*2'
[Stage Direction]
-1,859
[Stage Direction]
-1,963
[Stage Direction]
-2,824
[Stage Direction]
Post Office Expenditures
[Stage Direction]
-746
[Stage Direction]
-901
[Stage Direction]
-1,125
[Stage Direction]
Deficit of Government Business Enterprises*3'
[Stage Direction]
-219
[Stage Direction]
-176
[Stage Direction]
-177
[Stage Direction]
Add
[Stage Direction]
Expenditures of Funds and Agencies*2'
[Stage Direction]
1,168
[Stage Direction]
1,422
[Stage Direction]
1,370
[Stage Direction]
Government Pension and Social Security Disbursements*4'
[Stage Direction]
2,921
[Stage Direction]
4,022
[Stage Direction]
4,498
[Stage Direction]
Capital Consumption Allowance
[Stage Direction]
362
[Stage Direction]
395
[Stage Direction]
430
[Stage Direction]
Miscellaneous Adjustments*5'
[Stage Direction]
-203
[Stage Direction]
-321
[Stage Direction]
-322
[Stage Direction]
Total Expenditures - National Accounts
[Stage Direction]
30,669
[Stage Direction]
36,365
[Stage Direction]
41,250
[Stage Direction]
*1 * Numbers in these columns should be interpreted as mid points of ranges of estimates.
*2' In the National Accounts, budgetary appropriations to various funds and agencies are replaced by the expenditure actually made by these funds and agencies.
In the Public Accounts, deficits of government business enterprises are a charge to budgetary expenditures whereas in the National Accounts, these deficits are deducted from remitted profits of other government business enterprises.
(4) In the Public Accounts, the government pension and social security receipts and disbursements are treated as non-budgetary transactions whereas in the National Accounts, these transactions are included in government revenue and expenditure.
^ As in the case of revenues, the miscellaneous adjustments arise as a result of conceptual differences between the two forms of presentation. These items represent, for example, reserves and write-offs; purchase of existing capital assets, budgetary revenue items offset against budgetary expenditure; expenditures of reserve accounts and revolving funds; imputed items; and, an adjustment for the treatment of expenditures in the supplementary period.
[Stage Direction]
May 25, 1976
Table 7
Government of Canada Non-budgetary, Public Accounts and Extended National Accounts Reconciliation
	1974-75 Actual	1975-76 Estimate11 *	1976-77 Forecast111
		($ millions)	
Non-Budgetary Transactions - Public Accounts			 865	514	-500
Deduct
[Stage Direction]
Loans and Advances to Funds and Agencies
[Stage Direction]
259
[Stage Direction]
-488
[Stage Direction]
210
[Stage Direction]
Government Pensions and Social Security Accounts
[Stage Direction]
1,296
[Stage Direction]
952
[Stage Direction]
2,216
[Stage Direction]
Excess of Accruals over Collections
[Stage Direction]
Corporate Income Tax
[Stage Direction]
23
[Stage Direction]
791
[Stage Direction]
203
[Stage Direction]
Oil Export Tax/Charge
[Stage Direction]
-160
[Stage Direction]
127
[Stage Direction]
-79
[Stage Direction]
Miscellaneous Adjustments12 *
[Stage Direction]
-331
[Stage Direction]
295
[Stage Direction]
-24
[Stage Direction]
Loans and Other Transactions 

 Extended National Accounts 			 1,434	355	1,200
* Numbers in these columns should be interpreted as mid-points of ranges of estimates.
*2* As in the case of revenues and expenditures, the miscellaneous adjustments arise as a result of conceptual differences between the two forms of presentation. These items represent, for example, the adjustments for the treatment of revenues and expenditures in the supplementary period; the change in the reserves and revolving funds; and the adjustment required to bring financial requirements of entities included in the national accounts government sector in line with the requirements of these entities which are met through the Consolidated Revenue Fund.
[Stage Direction]
Wednesday, May 26, 1976