1976-11-16

GOVERNMENT ORDERS


[Stage Direction]
The House resumed, from Monday, November 15, consideration of the motion of Mr. Andras that Bill C-19, to amend or repeal certain statutes to enable restraint of government expenditures, be read the second time and referred to the Standing Committee on Miscellaneous Estimates.
Mr. Gordon Towers (Red Deer):: Mr. Speaker, last evening I commenced my remarks just prior to ten o'clock. 1 want to impress upon the House that the statements 1 make reflect my opinion and also, I am sure, the opinion of many hundreds of people across Canada, that this government is nothing more than a leaky vessel which can no longer hold water. In looking back over the statement made in the House of Commons by the Minister of Transport (Mr. Lang), as recorded at page 957 of Hansard, I find he stated:
If the government on behalf of the taxpayers in this country wants to cut expenditures, as it does, one of the clearest places to go to work is where expenditures have unfortunate impact and where the spending is unwise or leads to extra cost than is otherwise the case.
The first question I would like to put to the minister is: How can he prove that the government wants to cut expenditures, in light of the recent publicity that was given to his travel expenses? It is almost idiotic, in my opinion, for the minister to say in the House that the government wants to cut expenditures when a minister of the Crown is spending a quarter of a million dollars a year in taxpayers' money. This has to stop. We just cannot afford it. The taxpayers of Canada cannot stand that. Further on he says that where expenditures should first be cut is where they have an unfortunate impact. This is exactly what the government is doing; it is cutting expenditures where they are having an unfortunate impact.
Take, for instance, the withdrawal of the subsidization of the flour milling industry in eastern Canada. I want to impress upon hon. members the fact that not only eastern Canada is suffering as a result of this policy of the government, but also the millers in western Canada. 1 have been informed that millers in western Canada will suffer more than millers in eastern Canada. I think the government should explain to this House just where this burden will fall.
When the minister found out he was in trouble on the issue, he said the government would institute a new program which would cost $9 million. I have seen some of these programs which the government said would cost so much. Let us consider A1B which employed 200 people to administer its program at first. Now the personnel number around 1,000, five times the original number, within the first year. When the minister says in the House that the new program will cost $9 million, I just do not believe him, neither do a great many Canadians. The minister went on to say, " . .. and where the spending is unwise or leads to extra cost than is otherwise the case."
What could be more unwise than an hon. member spending money to travel back and forth to his constituency by private jet when there is accommodation provided by common carriers? We have Air Canada and CP Air. There are two means of travel open to the minister, and there is travel accommodation to the city of Saskatoon. The statements of the minister do not hold water, and I am sure the people across Canada recognize that. The minister went on to say the following:
That really means it is not just a matter of who pays-between the taxpayer and the person who is asking for the service or using it - but whether the lowest possible amount is in fact incurred.
If that is not a joke, 1 have never heard one. When the minister can spend $7,000 on a trip from here to Saskatoon, when he could take a common carrier for less than $300, how in the world can he say that he is using the least expensive means and that the lowest possible amount is incurred? That is nothing short of a joke. That is why I say that the government is becoming nothing more than a leaky vessel.
The government is pouring cold water on incentives to work. People are losing faith. There is distrust in Canada. We are suffering a rate of inflation which is not acceptable, and it has put us beyond the cost factor in other countries in production and living. We cannot survive under that and we have to realize that the policies of governments have a great deal to do with the problems we are undergoing at the present time. The taxation policies of governments are very important. That is why we are debating this bill at such length. There are many ways in which the government could move in order to implement policies and means of taxation which would be beneficial to the people and not necessarily an increasing load for them.
In my remarks yesterday I stated that in 1969 the accumulated taxation by all levels of government totalled $24 billion. Five years later, in 1974, the accumulated total was $48 billion. The people of Canada cannot stand this kind of taxation without getting some return. When 1 say that the government is pouring cold water on incentives, this is exactly
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November 16, 1976
Restraint of Government Expenditures what is happening. It is destroying the incentive to work and to produce. When the Minister of Agriculture (Mr. Whelan) came into this House he went across the country asking farmers to produce to beat the band. We all remember that. Now he is telling them to cut back. What better way is there to destroy incentive than to do that? When a minister does that, he destroys the faith of the people in any form of government. When we cannot find honesty in the higher echelons of government, how can we find honesty in other segments of our society? One of the worst things which could happen to Canadians would be to learn how to be dishonest. Once people become dishonest, they lose their worth-and this we cannot afford.
How can we measure the worth of the programs governments are instituting? This is one of the main problems the Auditor General has to face. How do we measure the worth of any individual in a department? How do we measure manhour worth? This is a very complicated subject which deserves consideration, and this government would do well to work in conjunction with the Auditor General to devise programs which can be set in place whereby there can be a certain measurement of the man-hour worth of civil servants within departments. We, as members of parliament, are a cost to the taxpayer, and when I discuss the worth of anyone, members are included. I have to think about the expenditures which are paid by the taxpayers. Certain publications come to our desks and sometimes I think that the government is penny wise and pound foolish. How do we deal with items which the government considers petty, when $1 million means so little to it? In many ways there could be a considerable amount saved.
The press carried a story to the effect that a grand move had been made by the government to save paper by using both sides of every page. I suggest that the number of pages should be considered first; then using both sides might have some impact. I doubt if any member of parliament could estimate the number of tons of paper delivered to his office by hand or by mail in any given week. I want to mention a few unnecessary documents or papers which could be eliminated or decreased. Perhaps this will make government members realize that we on this side are making observations and suggestions to the government which it can use in order to cut down expenditures. We do not need copies of speeches or statements delivered in the House of Commons. That is a waste of time and a complete abuse of paper. Hansard gives us this information.
I have here a speech in very colourful form. It was a speech by the Minister of Consumer and Corporate Affairs (Mr. Abbott)-who is a good fellow-at second reading of the borrowers' and depositors' protection bill given on November 1, 1976. All that is in Hansard, so why do we have to have it delivered to our offices? The Minister of National Health and Welfare (Mr. Lalonde) addressed a national conference with regard to mental retardation. We received that address in both English and French. There are few hon. members in this House who read both versions. Surely they read only one or the other. Hon. members should request which version they

want. I agree that they should have either one, but I think it should be the responsibility of hon. members to request whether they want English or French speeches delivered to their offices. That would prevent much paper from going into waste-paper baskets.
I suggest that speeches delivered by members of the cabinet, their parliamentary secretaries or representatives should be supplied only to hon. members who request them. Even if hon. members had time to use documents and speeches in either English or French, no one should receive copies in both languages unless there is a specific request. A circular to each office with simple questions would take care of that duplication.
Large numbers of envelopes come to our offices, and they are sized 816 by 11, 15 by 916 and even bigger on occasion. They are used to deliver just one sheet which, if folded, would fit into a No. 9 or No. 10 envelope. That happens on a continuing basis. The Public Service Commission is one of the chief offenders. Time and again competition posters of one or two pages are sent out in 15 by 916 envelopes. Thousands of them go out across Canada daily. The waste is incalculable. I have one here. There seems to be no will on the part of government departments to cut back this extra cost.
Then, of course, there is other dressing-up which is wasteful. I refer to the use of heavy and unusually glossy folders which enclose pamphlets, speeches and other information from departmental branches or government offices, usually of ministers. These are useless and unnecessary and I wonder why they are ordered at all. I and other hon. member have examples of these. 1 have one here. It is from the Unemployment Insurance Commission. Another is from Information Canada. So it goes, Mr. Speaker. While I realize and understand the importance of publishing reports, background papers, books and other documents in two languages, surely every person, whether in parliament or not, would be satisfied with one copy in one language. More often than not, one copy is thrown out if for no other reason than to save space in the office. I am sure I am speaking about something of which all members are aware. As members of parliament, we have to take issue with this because if we are to cut back we have to do it in these areas where it will not affect the development of our country.
I am very sure that these are the areas governments will have to look at in order to get away from the terrible deficit which faces us at the present time, and possibly again next year. Canadians are getting sick and tired of being taken for a ride-whether it is by "Langair," "Lang rent-a-car", "Lang's fliers", or what have you. They are just sick and tired of the way their tax dollars are spent.
After those preliminary remarks, Mr. Speaker, I want to get down to why I oppose this bill. One year ago the minister in charge of the Canadian Wheat Board was adamant about bringing the grain stabilization bill before this House. Now he wants to renege on the government's payments into that stabilization fund. He is demanding that producers pay their
November 16, 1976

share, which could amount to $50 million per year according to his parliamentary secretary. The government must-and I emphasize this-be held responsible, and this portion of the bill must be deleted, because grain producers are going to lose faith in the government if they do not receive fair play.
Promises are not good enough-promises that three, four, five or six years ahead the government will have not only to pay in their portion to the fund but also will have to reimburse the treasury for that portion for which the producers may be liable. 1 am sure everyone realizes that our economy will not be in good condition if the time ever comes that we have to pay out from this fund. It means our economy is going to be in the doldrums and will be a load on the taxpayers if it has to pay back money which should have been paid in this year or next year as the program continues.
If the government cannot afford to make the payments now when times are good, how will it make them when the going gets tough, Mr. Speaker? It is irresponsible for any government to bring in this type of legislation and renege on payment. This is not the way business operates in Canada. What would happen if a business reneged on payment of income tax? The Department of National Revenue would move in and freeze its bank account. I am sure all members of parliament have had to deal with such situations.
If the federal government, through the Department of National Revenue, has the right to freeze bank accounts and finances of citizens, those citizens should have the right to move in and freeze a certain part of the revenue of Canada. We have to hold this minister responsible for at least this part of the bill, Mr. Speaker. It is of fundamental importance that we do not allow the government to adopt this unbusinesslike practice of delaying payments which are due. I am sure even the hon. member for Assiniboia (Mr. Goodale) would agree that at all costs the government must make its payments current, and keep them current, because the fate of producers is at stake.
The cost of farm labour is increasing and it is becoming more and more difficult to get people to work. I think that is true of industry as well. 1 am sure all members realize that it is becoming difficult to get educated people, trained people and technologists to do the jobs which are required in business in this country. It has been said, and 1 think correctly so, that a person has to be re-educated, that life is a continuing sphere of education and that we have to develop certain educational attributes five or six times during a lifetime.
It would, therefore, seem penny wise and pound foolish for the government to cut $20 million from the Manpower training program when labour, business and agriculture are demanding a higher degree of technical ability. While this $20 million is being cut from the training program, the budget of the unemployment insurance fund is being increased by $700 million. This just does not make sense, Mr. Speaker. Surely we are moving in the wrong direction. We should be retraining personnel and giving them the opportunity to work into our technical system. If we are to continue in the forefront of technology in the world today, we must continue to train
Restraint of Government Expenditures people. We must adapt to situations and circumstances and participate in the development of this land of which we are so justly proud and in which we all have the right to participate.


Mr. S. Victor Railton (Parliamentary Secretary to Minister of Veterans Affairs):: Mr. Speaker, it is interesting to hear the opposition criticizing and attacking. That is their function, 1 suppose; but if they would be a little more practical and offer some real suggestions, I think they would be well received not only by the government but by the people of Canada.
As far as the restraint policy is concerned and the way it is outlined in Bill C-19, it embodies a firm intention to reduce spending, not only the budgetary and statutory items but also non-statutory items. The budget has been increasing at a rate of 20 per cent to 24 per cent, but it will be cut down to 16 per cent.
Of course, the government does not admit, nor does any economist, that government spending is the cause of the present level of inflation. We must keep repeating this because people try to cloud the issue by saying government spending is the cause of the trouble. I repeat, inflation is worldwide and it was going up at an acceptable, although deplorable, rate even before the OPEC countries quadrupled oil prices. Since that price rise came into effect, inflation has run rampant. Even so, this government has led this country down a well-lit path of economic stability. It is about time hon. members opposite realized this.
The government is being criticized for its record on unemployment, but one must realize that our record with regard to the rate of increase of unemployment is still one of the best in the industrialized western world. Naturally, an unemployment rate of 6 per cent or 7.5 per cent is not acceptable or desirable, but if you want to be honest you will concede, after examining all the facts, that our record is among the best. The same can be said of our rate of inflation and standard of living.


Mr. McKinnon:: We are not number one in that regard. The United States is number one.


Samuel Victor Railton: The hon. member says the United States is number one. I expect hon. members opposite to criticize us, but I would prefer hearing good advice which we could follow. 1 have heard hon. members opposite offer much criticism, but since 1972 I have heard few suggestions as to what they would do if they were in our place. One wonders how gullible the opposition thinks the people of Canada are. Of course, not only opposition members opposite criticize us; the media also acts as a secondary opposition, taking it upon itself to criticize the government when it thinks we are not doing an adequate job. Mr. Speaker, we can take criticism because we know we are providing good government.
We must realize that democratic government in any country of the industrialized world is a most tenuous affair these days. I should like to know what the opposition would do if they were in our place. I keep asking the opposition that question

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Restraint of Government Expenditures
because it is important to know the answer. I think opposition criticism leads to misrepresentation of certain facts and this troubles our electorate. If the opposition were honest, it would say what it would do if it were the government. As soon as we hear honest criticism we will provide the appropriate answers.


Mr. Mazankowski:: You people are not experts in that field.


Samuel Victor Railton: The people of Canada are in favour of stable government and do not believe conditions are nearly as unstable as hon. members opposite make out. Part of our present-day troubles may be blamed upon the absolute misrepresentation of facts and twisting of truth. This must stop. We need statesmen-and 1 do not see many on the other side of the House. Actually, 1 should like to know when hon. members opposite are going to produce one statesman.


Thomas Gordon Towers: There are more on my side than there are on yours.


Samuel Victor Railton: Let me now deal with the government's proposed cutbacks. The government, in trying to reduce spending, will divert certain expenditures, eliminate others and cut down on certain activities. The first step was taken some time ago and was rather painful. The salaries of members of the House of Commons and the Senate, of judges of the Supreme Court, the Federal Court and provincial superior courts and of senior public servants were frozen. That was supposed to be a good example for the rest of the country, but perhaps it went unnoticed. I do not know if we received any thanks for our gesture.
The government has decided to terminate the Opportunities for Youth program, Information Canada and the Company of Young Canadians. Opinion on such programs and agencies was somewhat divided. Perhaps they would not be discontinued if there were no need for restraint. 1 think they were all examples of a broadminded approach to certain Canadian social difficulties.
By not indexing family allowances, the government hopes to save $221.3 million in a year. 1 think most Canadians are satisfied that with unemployment insurance and other social security programs such as old age security, widows pensions and the guaranteed income supplement, we are doing our best to look after those in difficulty because of unemployment or lack of income. If we can save $221.3 million without creating hardship, 1 think we should do it, although 1 do not like cutting back on any kind of pension.
The government has also decided that it will defer or reduce loans to Crown corporations in the hope that they will get their financing from the commercial sector. We look on our Crown corporations much as we look on our LIP projects. We look askance at people who come to us in the third year of a LIP project and say they want a hand-out to keep this or that good work going. We expect people operating LIP projects to make them self-supporting within the first two years. We are applying the same reasoning to our Crown corporations and reducing the loans which will be made available from the central government. We feel that they, too, should work toward
{Mr. Railton.)
independence and prosperity. But please remember that many Crown corporations were set up in the beginning because their activities were important to all Canadians. They were financed by the government because in the beginning they could not be profitable. 1 am thinking of Crown corporations like the CBC, Air Canada and the CNR. Now we are urging them to become self-supporting.
There is to be a reduction in planned expenditures, the total of budgetary and non-budgetary items amounts to $1.5 billion. These reductions are being carried out on target. In other words, without such reductions the main estimates brought down in February this year would have been $1 billion higher, and the budgets of the Crown corporations would have been $500 million higher. In order to reduce expenditures we must amend several laws which give statutory authority for money to be spent on certain programs. For instance, we are to amend part of the adult occupational training program. The provision for granting certain annual increases is to be repealed and the government will substitute a provision which will permit the setting of these allowances by regulation. There will not be an automatic indexation. Then there is the Company of Young Canadians Act. We have to amend that act. 1 was not greatly gripped by that act in the first place. 1 thought it was somewhat far out.
I mentioned family allowances. That act will have to be amended also. I am rather sorry about the Industrial Research and Development Incentives Act. When I first saw this legislation I thought we were taking away from our eventual prosperity by reducing money to research and commercial and manufacturing industrial development. There is no doubt that the National Research Council does provide a great deal of industrial research. It was not considered that the research and development incentives to private companies added a great deal to the improvement of technology.
The government has been giving manufacturers and industry in general, including primary producers such as oil companies and resource industries, a very good thing by allowing them the 10 per cent incentive deferral. The only thing we request, and we still keep this in force, is that the corporations reinvest in their plant and machinery; in other words, incentives have to be based on profitability, productivity and reinvestment.
Then we have the Supply and Services Appropriation Act of 1970. That item was Information Canada. Many people in this country regarded Information Canada as nothing more than a frill we could live without. Its abolition shows the serious intention of the government with regard to cutting out expenditures that are not necessary. The only thing done to the Western Grain Stabilization Act was to defer it. No one is going to lose anything; everyone will be paid their interest on the amount which is being deferred.
Then we come to the Railway Act. We have to realize that transportation companies must work toward becoming selfsupporting, the same as any other company. 1 mentioned that
November 16, 1976

fact with regard to Crown corporations and similar institutions. This act will remove the subsidies for removing grain and flour for export to the east. It will give us breathing space until the whole matter is organized. This is one of the greatest things the Minister of Transport (Mr. Lang) is now busy doing.
I have some figures which will be of interest. All ministers are cutting many millions of dollars out of their budgets: Agriculture, $10 million; Consumer Affairs, $1 million; Energy, $16 million; Environment, $11 million; Industry, Trade and Commerce, $13 million; Labour, $6 million; Manpower and Immigration, $56 million; Health and Welfare, $223.8 million. I could go on and on. The total for budgetary items amounts to $828.5 million, and non-budgetary items to $726.8 million, for a total of $1,555.3 million. This shows that the government's intentions are serious and that they are carrying them out.
Many things have been said about this government by members on the opposite side, as well as in various articles which have appeared in the press. When the people of Canada hear this, they think about what "that terrible government" is doing. For example, it is claimed that in the ten-year period just past, Ottawa increased its spending by 600 per cent. Actually, this increase was 388 per cent, which is quite in line and parallel with the growth of the gross national product.
I am going to quote Richard S. Malone, the publisher of the Globe and Mail. He wrote a scathing article about the government and its expenditures. Practically everything he said was incorrect. If you are going to criticize this government, for goodness sake be accurate. We will then do our best to make it right. There is no way you can make right in people's minds a misrepresentation which has been intentional. People fall for it and believe it. If members opposite are responsible, they will stop this.
Mr. Malone stated that overspending could only be done with devalued dollars or legal counterfeiting. That is a ridiculous statement. The budgetary policy is not determined only by the requirements of the federal public sector, but also by the imperatives of macro-economic management; in other words, what is necessary to sustain growth and to check inflation in the Canadian economy as a whole. One of the factors which led the government to introduce price and income controls a year ago last October was precisely the need to avoid, at this juncture, changes which are too abrupt in our economic policy; in other words, that accusation was demagogy. He further said that the financial estimates and budget in Ottawa will call for an even greater increase in spending, an increase of 16 to 19 per cent, quite apart from the supplementary estimates. He was quite wrong, assuming that the figure will be 16 per cent not only for budgetary but for non-budgetary amounts and all the expenditures which will be contained in the main estimates.
Another statement was that a recent estimate shows that 43 per cent of Canadians who are employed are on government payrolls. What an asinine statement! I will go through a little exercise to illustrate why I say that. Public servants in Ottawa and members of the armed forces total 412,000. That is, the
Restraint of Government Expenditures number of Canadians directly employed by the federal government. It represents 4.4 per cent of the country's employed labour force. Therefore, his figures are wrong by ten times the actual amount. There are 346,000 provincial public servants and 267,000 municipal employees. If they are included, the total number of government employees is 1,025,000-11 per cent of the total number of employees in Canada, not 43 per cent.
There are approximately 637,000 employees in the hospital and welfare sector, and in the educational sector-such as school teachers-there are 662,000 employees. These are not direct employees of the federal government. However, even if we included those figures in the number of employees of the three levels of government, the total is something over two million, which is about 25 per cent of the employed labour force in Canada.
What happened to the Crown corporations? Employed in that field amounted to 270,939. That brings us up to 28 per cent, or 2,595,000. In other words, that criticism of the federal government was ten times wrong. If the hon. member wants to be nasty and include all governments, national and provincial, and all the agencies which work for the government, he is still wrong: Even in the totals we supplied he has doubled the figure. 1 believe we are entitled to fair criticism. We should not hear any more of that type of nonsense.
It is rather interesting to note that for the last 10 or 15 years our gross national product has been increasing at the rate of about 5.5 per cent. Canada's growth performance is better than that of the majority of OECD countries including West Germany, the United Kingdom and the United States. In 1974, while real growth contracted by 2.1 per cent in the United States and by one-tenth of 1 per cent in the OECD as a whole, the GNP in Canada rose by 2.8 per cent. In the recession of 1975 only five OECD countries were expected to achieve any degree of real growth and the GNP was forecast to decline by 2 per cent or more in France, the United Kingdom and West Germany. In Canada, the GNP was expected to fall by only 1 per cent. But instead of experiencing a decline of 1 per cent, we increased the GNP by 0.2 per cent. In fact, we were the only country in that small group of countries to experience an increase.
Hon. members who consider the figures will realize there is a great deal of misinformation being given to the Canadian people. I deplore the misinformation which emanates from the opposition and from the media.


An hon. Member:: You are paranoid, doctor.


Samuel Victor Railton: No. That is a very difficult diagnosis for a member on the back benches over there to make. Our living standard is the third best in the whole world. For a long time we were second only to the United States, but we were edged out recently by Iceland. I do not wish to take up any more time of the House. I realize my speech might have been a little difficult for members on the other side to listen to because I

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Restraint of Government Expenditures might have sounded partisan. But I am not partisan; I like to regard myself as being fair-minded.


Hon. Alvin Hamilton (Qu'Appelle-Moose Mountain);: Mr. Speaker, I know there will not be much publicity given to anything 1 have to say today on Bill C-19, or anything else for that matter, since the news on everybody's mind comes from the province of Quebec. 1 have been watching the faces of members opposite this morning, as I did last night. They are asking themselves: What happened? In discussing the bill before us, I shall attempt to put forward some ideas hon. members may wish to consider even though they are very few in number over there. 1 can understand that; the shock to them must be unbelievable.
I intend to show how bills such as C-19 which are so often slipped through the House after a discussion directed to details, such as we have heard this morning, often contain principles of great substance, principles which are somehow lost sight of. If hon. members would read the speech which the Minister of Transport (Mr. Lang) made last Wednesday, and then read the maiden speech of the new member for St. John's West (Mr. Crosbie), 1 believe they would better understand the significance and the danger of this type of posturing bill. The measure before us is in several parts, but the part which draws my attention-I hope it will draw the attention of all Canadians who believe in one Canada-is clause 15 which simply repeals section 272 of the Railway Act. Mr. Speaker, that clause is a direct attack on the very foundation of the federal system.
Every schoolchild, when they used to teach history in schools, learned that our country became a country because the various colonies across the eastern part of this part of the continent did not want to become absorbed into the country to the south, the United States, and the only way in which it was possible to tie those colonies together in an economic as well as political unity was through the provision of transportation. Those of us who know the history of our country in that early period understand the importance of the intercolonial railway system in bringing those eastern colonies into touch with central Canada and each other. That railway system was the tie which brought those six colonies together: admittedly, Newfoundland did not come in until much later, but that was the tie. Those of us who come from the west and know the history of that part of the country are aware that it was the decision of the government of the day to build a railroad which was uneconomic, marginal and difficult to construct, which brought the four western provinces into confederation.
Any person who is familiar with these Parliament Buildings knows that the largest committee room in the place is the railway committee room. Every member of parliament who comes here should walk into that room, look around in silence, and ask himself why they chose so large a room to be the railway committee room. It was because transportation is the very foundation of this country. That is why the railway committee room is so large. For the great bulk of our history it was the most used room in this entire building. It has not been used very much in recent years because the government has

forgotten that Canadian history has been largely concerned with bringing great regions, far from the centre, into one Canada, one nation.
Those words are not just an empty slogan, Mr. Speaker; they are the basis of our political thought, the philosophy which makes the economics of this nation viable. Yet we find in the bill before us, a bill which professes to deal with the saving of money, an attack on the very foundation of our unity. There are, of course, other expressions of the same philosophy, for example, the St. Lawrence Seaway in more recent days. Though it is hardly ever mentioned in the House, the building of that seaway was an effort to make it easier for goods from the eastern part of the country to reach the central regions. For years no one has mentioned the fact that for the great northern regions of Quebec and Ontario and the northern parts of the four western provinces, together with the Yukon and the Arctic Islands, transportation was the key. The people of Canada as a whole have paid, without question, for this northern transportation system. We are still doing that, and 1 hope will continue to do so.
If we are to hold this country together, it must be recognized by our political leaders in the federal government and each province that transportation and communications are the key. That is how our federal system developed. The key to making the system work was the recognition that wherever one lived, wherever areas were opened up, there would be equal treatment. Basically, Mr. Speaker, it is transportation inequity that forces the westerner to be alienated from the central part of this country. Basically, it is transportation inequity that forces the Atlantic provinces to feel forgotten. Basically, it is transportation inequity and remoteness from communication which make our northern people so hostile to those of us who live in the south. We have built this nation by recognizing that if we want political union, one Canada, we must have economic union. The key to this is transportation, along with harbours, docks, search and rescue and all the other facilities. This has been our history, and it will be our history for many decades to come.
The attack on federalism by the government in this bill, using the excuse of saving money, is not an isolated one. In the last three years, just think of the attacks we have had in this House on the part of the government on the basic foundations of our federal system. No matter what kind of scare campaign you run, Mr. Speaker, you cannot get away from the fact that there is the belief in the minds of the people that this principle which builds our country and makes it strong is being forgotten. Let me give the House an example or two of what makes this seem so devilish. Just three years ago the government introduced the petroleum administration bill which was a direct attack on the wealth of the provinces. The government said that because it represented all the people, it had the right to break the constitution and take ownership and control of the resources in the provinces of this country. I opposed the petroleum administration bill, as did all my colleagues.
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When the mines ministers met in December, 1974, nine out of the ten mines ministers of the provinces, led by the mines minister of the province of Quebec, opposed the bill and the minister had to hold it up so they could consult with the provinces whose resources they were stealing. In mentioning that to the House I direct my remarks particularly at members of the Liberal party who, after the results last night, must be wondering what is wrong.
You cannot safely attack the basic principles of this country unless you know what makes the people tick. What makes the people of rich resource provinces like Newfoundland and Quebec angry is that they sense that this government is constantly attacking the powers and taking the wealth of the provinces, trying to centralize them. 1 do not find any difference on this issue between the Liberals and the NDP; both believe they know better than the people how to run this country.


Some hon. Members:: Oh, oh!


Mr. Gilbert:: Poor Alvin; he cannot understand the difference.


Francis Alvin George Hamilton: I love to hear the suckers roar. This is one example, along with this bill, of an attack upon the federal system. Many members have been around here long enough to remember what happened in 1974 when we had a budget in the spring and a budget in the fall. We called them the Turner budgets. The Turner budget in the spring and the Turner budget in the fall were attacks on the basic foundations of our federal system. The government has a majority in this House-but not across the country-and feels it represents all the Canadian people. It feels it has the right to take away the wealth of provincial governments and their people. Sooner or later, Mr. Speaker, when that budget is overturned, it will be safe for Mr. Turner to come back into the House. But until it is, he will not come back because he knows that in those budgets of his of 1974 he attacked the basic economic foundations of all provinces.
I mention these points because this bill pretends to appeal to us to do something that we have to do, namely, reduce government expenditures. But when you read the speech of the Minister of Transport it is apparent this is not just a one-year shot. He knows that if he gets rid of section 272 of the Railway Act he will blast the people east of Montreal, because this bill affects only those east of Montreal. Let me read to hon. members section 272 since it is important not only to the Atlantic provinces but to the whole country:
(2) For the purpose of encouraging the continued use of the eastern ports for the export of grain and flour,
(a) rates for grain moving in bulk for export to any eastern port from any
inland point over any line of a railway company subject to the jurisdiction of
parliament shall be maintained at the level of rates applying on the 30th day
of November, 1960, to the movement of such grain to eastern ports-
The rates that we set up as a government in 1960 allowed these ports to be used by the railways not only to keep people in the Atlantic provinces at work but to give us access to markets year-round. This founding principle of the economic
Restraint of Government Expenditures security of ports east of Montreal is now being attacked in this legislation. They want to repeal section 272, so let me just drive this point home. This bill may be an attempt to pretend that they are cutting back expenses, but it is really part of an over-all program to reduce the power of the provinces and to turn all decision-making over to the government in Ottawa.
If the government was elected to make its own decisions, there could be an argument for it. But the truth is that this government does not run the country. The country is run by a small group of civil servants who seize the decision-making powers in each major department and run the country. They know best and they tell ministers what to say and what to do. I ask all westerners, all people from Quebec and the Atlantic provinces, and all northerners in Ontario, the Northwest Territories and the Yukon, to rally to the fact that this attack on the "at and near" rates going to the maritimes is an attack on them all, and I ask them to throw the bill out, and this section in particular.
I have related my remarks to the political situation. It must be abundantly clear that just as once upon a time Saskatchewan and Quebec were the political heartlands of the Liberal party, provinces on which they depended for their massive support to overcome the votes of other provinces and form the government of Canada, today those heartlands are disappearing. The Liberals are pretty well subdued in Saskatchewan and now it looks as if after 90 years of domination in the province of Quebec their heartland there is beginning to shake.
I should like to advise my Liberal friends across the way that Saskatchewan is gone from them, that Quebec is going and it will not be long before they go, too, unless they start taking control of their government. They have the voices of the backbenchers; they can tell the Prime Minister (Mr. Trudeau) what to say and what to think. He will not kick them out. He does not dare. Everybody who has been kicked out comes back. 1 say to them, "Stand up and express your views."
In 1974 the cattle industry was in trouble. The Minister of Agriculture (Mr. Whelan) asked us to support him in amending the price stabilization act. All parties supported him in the committee. We put it through. Then when the bill went before the cabinet and treasury board, the minister was turned down in respect of the very act he had put through on behalf of all parties, the Liberals, the Progressive Conservatives, the New Democrats and the Creditistes. We know who runs this country. It is not those on the back benches-but the people in the back benches have the chance to stand up. I think their Prime Minister will listen today. He was an angry man last night when he realized that one cannot, by propaganda, fight the whole country. Some people will stand up against that kind of thing.
I say to members opposite, "Put the fear of God in your Prime Minister and speak up for these areas-the northern part of Quebec, the northern part of Ontario, the Atlantic provinces and the far north. Speak up, because this is the basis of our federal system." I do not want to embellish the point
1030

November 16, 1976
Restraint of Government Expenditures any more. I put it before you seriously, Mr. Speaker, that by the repeal of section 272 of the Railway Act the government is attacking one of the basic foundations of our federal system. If members opposite cannot hear my voice and are frightened to speak up in front of their Prime Minister, there is not much I can do. But at least I have put forward my views, and 1 intend-like the hon. member for St. John's West-to continue putting them forward because we on this side of the House do not intend to sit down and let this matter lie.
We have heard from the hon. member for Welland (Mr. Railton) that we are not putting forward ideas. I have gone back over my speeches in the last 15 years in the House. 1 have laid ideas in the laps of government members. Last December, before the Christmas adjournment, I rose in the House and quietly asked the Prime Minister, in view of the budget and the price and wage controls brought in in October, whether during the recess he would quietly consider the posture the government was taking vis-a-vis the monetary and fiscal situation in this country. The government had brought in wage and price controls and I could see the economy slowing down to a stop and levelling off.
Now we sit on the edge of a precipice and may be going into a lengthy period of recession. The Prime Minister said he would consider that proposal. But then he stood up on December 28 and said we had to have permanent controls because we could not trust the people to make their own decisions. He said we were such a greedy nation that we had to have controls imposed by the elite of the country. I throw that at the House because this is another attempt on my part to remind members opposite that there are proposals on the record.
One can fiddle around with all these little things and get peanuts. What is the cause of inflation? It is caused by the government. This is what embarrasses politicians. We talk about the necessity to cut down on everything. All members had their incomes frozen at $24,000. Aren't we good boys! Yet we have a minister running up and down the country at $750,000 a time to see his constituents rather than ride on Air Canada. I think maybe it is cruel and unnecessary punishment for ministers to have to ride on Air Canada, but at the same time this is what destroys our posture that we are trying to save money.
This bill is another issue which is just a posture. Let me give you a list, Mr. Speaker, of some of the proposals I have put forward in this House. You can look it up if you really want to get at the causes in the western world for this inflation. Let us get interest rates down. Our interest rates in Canada are 4 per cent higher than in the United States because we have a group of economic nitwits who believe it is necessary to have higher interest rates in this country in order to keep money flowing into Canada. What a mythology to impose upon the Canadian people, the greatest saving people in the world!
We must get the interest rates down. That is fundamental in getting at inflation, price and wage controls and this type of legislation. Second, get your land costs down around the cities. Housing costs have gone up, but greater than that has been the unbelievable escalation in the price of land around the cities. If

you do get the people who are doing it, you only get half a dozen in each city. Just because they are Liberals does not mean they should dominate the whole country and force prices up. Get your land costs down around the cities. The legislation is in place to do that.
Third, we have tremendously costly universal social welfare programs which cost $18 billion to $20 billion a year. The people want those programs, but common sense and knowledge should tell the government that positive individual incentives should be put into these programs or we will lose them. That is the subject of a speech I have made here on several occasions.
Fourth, in trying to get at the cause of inflation and all these costs, you force men and women in the cities to ask for higher and higher wages in an effort to keep up, and they never manage this. The government should use the knowledge and precedents that are available and end this wasteful labour-management confrontation. Everyone has heard of the theory of productivity and how it is rewarded. Everyone has heard of the portability of pensions and insurance. Everyone has heard of the formula methods of achieving wage settlements. Strikes are as outmoded as the dodo bird. They cost not only billions of dollars but smash the labour man and the businessman at the same time. The knowledge and the precedents are there. Members opposite should not walk into this House and say that we never put forward ideas.
The fifth point I want to mention is that if you want to get at inflation you should use the monetary and fiscal systems of this country to help the economy, and not fight them. It is said that 40 per cent of all revenue of our gross national product goes through government hands. That 40 per cent can be utilized in a way to reinforce the other 60 per cent and we would have a 100 per cent economy, or we could use that 40 per cent of government financial control, to work against the economy and reduce the net to less than 60 per cent. There are all sorts of proposals. The Porter royal commission recommended several. No one pays any attention to the Porter royal commission. That report was published in 1964. Some members think it is a dirty book. That is wrong, because if it was a dirty book they would all read it. Look at the proposals there. I quoted them to the Prime Minister in the House on one occasion. There was no reaction.
Members opposite are not interested in economics. All they are interested in are these posturing devices of exposing themselves on every occasion so that they will be seen, rather than getting at the economic problems. If they have not learned any lesson from yesterday, they should have. A government goes along trying to amaze its people by posing as their great defenders, becomes involved in discussions which arouse the emotions of the people, and then takes away their civil liberties that government will be defeated. We still cannot get away from the fundamental fact that what changed that government in Quebec was the failure to deal with economic matters. You cannot ask people to accept a low level of living year after year and decade after decade without their asking themselves whether they could not have a government of the people who sometimes gave them economic well-being. So I suggest that
November 16, 1976

the government should use the economic and fiscal system to work with the economy, instead of against it.
Mr. Speaker, I think I have made my point, which is that no one in any party in the House is opposed to restraints on superfluous spending, but when the government slips into this bill a proposal which undermines the basic foundation of our federal system, the pledge made 109 years ago and renewed by government after government of all political stripes since that time, a pledge with regard to transportation and communication which is now attacked by this government, and when we see the attack in 1974 on the ownership of resources which are in the hands of the provinces, an impression is created across the country that the government is not really concerned with helping the people and the provinces but is only concerned with one thing, that is, control over and restriction of the minds and pocketbooks of the people.
Any parliament will support reasonable proposals to reduce the spending of money, but not when the government attacks one of the basic agreements that we have made with the people east of Montreal in the "at and east" rates. Every government has respected this agreement since then, but now we see the government sneaking in a clause to section 272 of the Railway Act, and this we cannot support. I hope you Liberal backbenchers opposite rally in caucus and tell your Prime Minister to take that nonsense out of the bill.
We hear all these little arguments about user-pay. If it could be done by a person who paid all the time, it would be different. If the government wants our support in reducing expenditures, let it not attack our federal system. We believe in Canada, we believe in our nation, and we believe that people in all parts of our country should have an equal right to opportunities. When you destroy that for the Atlantic provinces, you destroy it for the west also. Westerners know that if you take out that section 272, our Crowsnest pass rates will go next and subsidization of the north will go after that. If you look at the price of things in towns such as Thunder Bay and Kenora, you will know what I am talking about. These people take a heck of a beating because we have a government which thinks of public relations and of getting control into the hands of a few civil servants here in Ottawa, rather than of the interest of the people. That is not why we are here. For a rich country like Canada, which is coming out of a recession, to be sent back into it by the stupidity of the advisers of this government is plain stupid and should not be tolerated.
If I were a backbencher over there, I would be yelling my head off, not just on issues of language, which are important, but also on economic issues. Tell your Prime Minister, who is not a stupid man, to take control and tell his Minister of Finance (Mr. Macdonald) to read and find out the facts, and to show some leadership, instead of surrendering to this tendency whereby they think they have everything in their hands because they know best. It is not only the dairy farmers and the chicken farmers who get it. They are taking every taxpayer in the country and wringing him and her like a wet cloth. Let
Restraint of Government Expenditures us stand up as parliamentarians and speak up for the concept that every person in Canada deserves an equal opportunity. If you take out section 272 of the Railway Act, you will know what trouble is.


Mr. Les Benjamin (Regina-Lake Centre):: Mr. Speaker, I hope that today, for the first time in a long time, members of the old-line parties are in a mood to listen.


Mr. Paproski:: Are you taking credit for the victory?


Leslie Gordon Benjamin: I hope that a lesson has been learned, but I note there are only 13 members on the government side, which would indicate they are still losers. I am glad to see what the hon. member for Assiniboia (Mr. Goodale) is here. However, I am sorry the Minister of Transport (Mr. Lang) is not here.


An hon. Member:: "Jet" Lang!


Leslie Gordon Benjamin: The Minister of Veterans Affairs (Mr. MacDonald) is here. He has his version of "at and east" rates. 1 was interested to listen to the remarks of the hon. member for Qu'Appelle-Moose Mountain (Mr. Hamilton). I agree with some the things he had to say, but I disagree with the way he wants to do it, because it is no different from the way the Liberals want to do it. He still believes in free enterprise which is neither free nor enterprising. He still believes you should have competition in transportation across Canada, as do the Liberals. He even believes that our modes of transportation should show a profit, as do the Liberals, when in fact no mode of transportation has ever shown a profit without public subsidization. I wish the hon. member would add one additional step-which would have brought him to the 1980s instead of the 1880s-and would agree that all modes of transportation are an essential public service and a public utility, and that goods, services and people should be treated fairly in Canada no matter where they are located.
This bill is a typical old-line party, free enterprise attack on those who do not cause inflation. It is a typical failure to show restraint in areas where they could show restraint without hurting the country and hurting the low and middle income families, without hurting primary industry and without hurting regions of Canada that are located somewhere other than south of North Bay between Windsor and Quebec City. In this bill, the government is even attempting to hurt people in that area for the sake of saving a paltry $11 million.
The government did not allow the indexing of family allowances last year on the premise, I suppose, that these young families with two, three or more children somehow or other cause inflation. The removal of the indexing of family allowances in 1976 cost Canadian families about $230 million. Why the government should stop this transfer of income to families is unknown and does not make economic sense. In fact, the government's own economic review in April of this year states:
There is no doubt that the strength and timeliness of the income support given to Canadians between November. 1974. and June, 1975, were among the most important factors in the milder recession experienced in Canada compared to the United States.
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November 16, 1976
Restraint of Government Expenditures
It went on to say:
Persona! expenditures on goods and services were a major source of sustaining strength during the cyclical decline and a further support during 1975.
The government chose to rob Canadian families of $230 million in 1976 in the name of so-called fiscal restraint. Why did they not attack those who cause inflation? Why does not the Prime Minister (Mr. Trudeau), or the Minister of Finance (Mr. Macdonald), for example, suggest that the president of Massey Ferguson, whose income is now in the order of $330,000 a year, be required to show some restraint? Why was his last year's increase not taxed away, instead of taking away a few dollars a month from families? The family allowance with full indexing for the high and upper middle income families should be taxed away through income tax. There is no real cost to the taxpayer and there is no real increase in inflation when family allowances are indexed. But the old line parties still attack people. They have not changed. They promise to take money from the rich and votes from the poor, and then they promise to protect them from each other.
I want to get to the matter of freight rates and make reference to a remark of the hon. member for Qu'Appelle-Moose Mountain. I do not recall his exact words, but he said something about the NDP and the Liberals being the same. I am not sure exactly what he meant.


Mr. Brisco:: Look at the voting record.


Leslie Gordon Benjamin: My hon. friend says, "Look at the voting record". I remind him that all the Tories present voted with the Liberals against all grains being under the Canadian Wheat Board. If that is not an unholy partnership in bed, 1 have never seen one.
I would like to give two examples of the betrayal of Atlantic Canada, western Canada and northern Canada by the Grits and the Tories. They fundamentally agree in principle. There is no basic difference between them on how to order the economy of this country in the area of transportation when it comes to passenger trains. The minister of Transport (Mr. Lang) says he is going to revitalize and improve the passenger trains' service by reducing their number. 1 do not know how he can do that, but that is what he says. Then I will be darned if the Tories didn't agree with him. The Tory transportation critic appeared before the Standing Committee on Transport and Communications and said that we should reduce the service to one transcontinental passenger train, although he would run it over a slightly different route. He left out the riding of the Leader of the Opposition (Mr. Clark). I am sure the folks at Jasper, Edson and Hinton will be glad to hear that.
The Tories agree with the Minister of Transport that there should be only one transcontinental passenger train and inland terminals, an item of economic exploitation which will mean the death of scores of towns and villages in the prairie provinces which would otherwise be viable. The hon. member for Moose Jaw (Mr. Neil) and the minister of agriculture of the Tory government in Edmonton agreed that we should have
(Mr. Benjamin.J
inland terminals. They not only agreed that we should have them, but also that they should receive incentives. So Tories agree with Liberals on inland terminals. In fact, they even want to help outfits like the Cargill Grain Company.
The hon. member for Qu'Appelle-Moose Mountain had best be careful. Let us look at the Crowsnest rate, the statutory grain rate. By golly, hon. members of the opposition have fought that battle for many years in this place. 1 want to give credit to a former member for Humboldt-Melfort-Tisdale for his work with regard to rapeseed and rapeseed products, as well as his predecessor, a CCF member from the same riding, who led that fight, and a former prime minister, the right hon. member for Prince Albert (Mr. Diefenbaker), who arranged that rapeseed and rapeseed products would be under the statutory rates. Now the Minister of Transport arranges that, after all the appeals and hearings, the cabinet's decision is that the railroads will receive compensatory rates on rapeseed products.


Mr. Dionne (Northumberland-Miramichi):: You could call that "statutory rape rates."


Leslie Gordon Benjamin: That is to be expected, but I will be darned if the Conservative minister of agriculture in Alberta does not agree that the compensatory rates on rapeseed products should apply, and not the statutory rates. I warn the hon. member for Qu'Appelle-Moose Mountain that he had better be looking over his shoulder at who is supporting the Liberals and who is agreeing with the Minister of Transport.
As I mentioned, the Conservatives chose to get into bed with the Liberals on the matter of all grains being under the sole jurisdiction of the Canadian Wheat Board and they screamed at the NDP saying that it is undemocratic and that it will try to force it down the farmers' throats. Far from that, in fact if my hon. friends in the Liberal and Tory parties would like to attend the National Farmers' Union convention in Edmonton next month, or the Saskatchewan, Alberta or Manitoba wheat pool conventions, they will find that they have had their plebiscite many times in forty years. The overwhelming majority of grain producers have said time and time again at their subdistrict meetings and at their annual conventions that that is what they want. It has been an article of faith with the overwhelming majority of grain producers since the early 1930s. The plebiscite has been held many times, and I suggest that hon. gentlemen who belong to the Liberal and Tory parties should wake up and quit living together in the 1890s when it comes to farm grains being under the Canadian Wheat Board and orderly marketing for any farm product. Farmers who produce other kinds of agricultural products have repeatedly asked for orderly marketing, but the Grits and Tories cling to 1890 concepts of the free and open market. It is free and open for middlemen and end retailers, but not for primary producers.
Let me turn now to clause 15 of the bill which proposes to repeal section 272 of the Railway Act. In a country like ours, with a large geography, a diverse and often harsh climate, and a population which is widely scattered, much of it isolated, we
November 16, 1976

submit that the nation as a whole has to share in the cost of all modes of transportation. Canada is about the only country left in the world in which this does not happen. Even the United States now recognizes this to some degree. But in the rest of the world transportation costs are shared because it is an essential public service; it is something everyone has to use. Trying to implement a concept of user-pays is not only lunacy but-and ! agree with the hon. member for Qu'Appelle-Moose Mountain here-it will also lead to more break-up in this country. It will lead to more disparity, unequal treatment and discrimination.
Let us remember that in the main, grain is produced in the three prairie provinces. It is produced far away from the people who buy most of it. It is produced far away from seaports and inland ports, and that puts our country at a disadvantage compared with the United States, Argentina or Australia where most of the grain production takes place near a sea coast or near an inland waterway. They have the benefits of much denser populations lower transportation costs and certainly shorter distances. However, even where they have the same or longer distances, those nations as a whole share those costs and they are not just laid on the backs of primary producers or processors of those primary products.
The "at and east" rates are described in the legislation and the purpose of the subsidy is to encourage continued use of the eastern ports of Halifax, Saint John, West Saint John, Montreal and any of the ports on the St. Lawrence River east of Montreal for the export of grain and flour. The subsidy applies to rail shipments only. It applies to shipments of grain from railway points along Georgian Bay-1 hope hon. members who hold constituencies along Georgian Bay will have a chat with the Minister of Transport-along Lake Huron and east of Prescott but not including Prescott. That is, from those points to eastern port that I mentioned earlier. In the case, of flour, it applies to shipments from any point in Canada east of Thunder Bay to eastern points in the Atlantic provinces; flour from western Canada goes to Thunder Bay under the Crowsnest or statutory rates.
The legislation requires the Canadian Transport Commission from time to time to determine the level of rates compensatory to the railway companies. I do not mind if they do that, Mr. Speaker, provided they do not leave the cost of the compensatory rates on the grain producers and the milling industry. That cost should be shared by the whole country. If we are to compete in selling grain and flour, and if we are able to pay a good price that will ensure those sales, we have to share the cost of transport. This is necessary in a country with our kind of geography. The actual rates paid by shippers of grain and flour is based, in the case of bulk grain, on the rate which was in effect on November 30, 1960, and in the case of flour the rate in effect on September 30, 1966.
While there has been no public announcement of the government's intention in regard to the "at and east" rates in December, 1975, the then president of the Treasury Board
Restraint of Government Expenditures suggested in the House that elimination of the subsidy was a possibility. The Canadian National Millers' Association asked the Minister of Transport for a statement of government intent and received a telegram from him dated January 13, 1976, in which he finally said that the government intends to abolish the "at and east" subsidy effective April 1, 1976. The bill says that repeal of section 272 is effective the day the bill passes. At least that would save the farmers and the millers some money for several months. The telegram continued:
I would therefore suggest that your price in upcoming negotiations with Export-kleb for sale of flour make consideration for the inclusion of freight rates at compensatory levels.
It appears that abolition of the subsidy can be done only by amendment of the Railway Act, and the government has finally brought in this amendment. But what will be the effect of the removal of the subsidy, Mr. Speaker? On flour milled in western Canada, shipped to Thunder Bay at statutory rates and then on domestic rates to export ports on the lower St. Lawrence and Atlantic, if exported from Montreal the subsidy amounts to 39.15 cents per hundred pounds, and if exported from Halifax 69.35 cents per hundred pounds. On flour milled in Ontario and shipped from railway points along Georgian Bay, Lake Huron and Prescott, if exported from Montreal but milled in Bay ports the subsidy is 42.25 cents per hundred pounds; if milled in inland western Ontario, 52.65 cents per hundred pounds; if exported from Halifax but milled in the Bay ports, the subsidy is 71.15 cents per hundred pounds; and if milled in inland western Ontario and exported from Halifax, it is 81.55 cents per one hundred pounds. With respect to wheat shipped from Bay ports, Georgian Bay and Prescott, if exported from Montreal the subsidy is 35.58 cents per hundred pounds, and if exported from Halifax the subsidy is 51.75 cents per hundred pounds. The loss of these subsidies would make Canadian flour shipped during the winter from eastern ports to Russia, Caribbean area countries and others, noncompetitive with flour from United States. It would have a similar effect on grain which is shipped by rail from Thunder Bay or the Bay ports during the winter when navigation on the St. Lawrence Seaway is closed.
Let me quote now from a letter sent to the Minister of Transport on February 16 by the Canadian National Millers' Association, as follows:
This policy change has come without warning to the flour milling industry and, it would appear, without careful analysis as to the impact this action will have on overseas flour/grain sales, employment and economic activity both in the milling industry and in the ports concerned, or on government revenues and expenditures. It is our view that a cost/benefit analysis will prove that the subsidy and the "hold down" are financially and socially sound and should be continued.
In my communications with you prior to going to Moscow on January 15, I indicated we would likely experience difficulty in negotiations due to the potential new freight factor. The representatives of Exportkleb found it difficult to understand why Canada could not sell at a firm price for calendar year 1976. As anticipated, they absolutely refused to close the contract. So, while they have indicated a requirement for 375,000 tons of Canadian flour during 1976 they have insisted on new negotiations should we need to adjust the current prices for additional freight costs.
The U.S.S.R. representatives stated that Canada is no longer competitive in world markets and that further price increases will require them to look for

November 16, 1976
Restraint of Government Expenditures
alternative suppliers. Those of us who have negotiated with Exportklcb over the years judge this situation as serious and that our further business with them is definitely in jeopardy.
Eliminating the subsidy and the "hold down" will visit disaster upon Canadian millers and damage a substantial export market for Canadian wheat in the form of flour. We cannot believe that these and other foreseeable consequences are in the public interest.
We cannot understand how this change can be of any benefit to Canada other than by achieving a short term but ultimately illusory reduction in government expenditures.
In an attempt to examine the impact of this policy change we are enclosing a submission on the subject. We urge you to give this matter very close consideration.
In spite of the evidence that this places Canada's flour exports to the U.S.S.R., the Caribbean and a few other places in jeopardy, the Minister of Transport and this insensitive government who up until last night refused to listen, still insist on including repeal of section 272 of the Railway Act in this legislation. The least they could do is withdraw that clause. Their saving will be SI 1 million, but if they examine the other side of the coin the cost will be many times that.
As 1 said at the outset, Mr. Speaker, a user-pay concept is not feasible in a country like ours. It is only feasible in a country with densely settled population, a compact geography and uniformity of distribution, but in a country with a large geography and a harsh climate, you cannot get away with it. It simply cannot, and does not, apply in a country like Canada. For us to be able to deliver our primary products and processed primary products in competition with the United States, Argentina, Australia or the European Economic Community, we must share the costs of transportation over the whole country. The "at and east" rates did that: maybe not as well as it should be done, but they made a contribution toward sharing the cost and putting Canada in a position to have a viable milling industry. I hope the hon. member for Assiniboia will sit down with Mr. Sarasen in Saskatoon-


Mr. Goodale:: 1 have.


Leslie Gordon Benjamin: Well, he was not listening so I suggest the hon. member should go back and discuss it with him again, especially after what occurred yesterday. Maybe now the hon. member's hearing will be a little more sensitive. 1 have received correspondence from Mr. Sarasen and I think I understand him. I have had conversations with him. I agree with him. 1 do not agree with the hon. member for Assiniboia and the government.
The removal of the "at and east" rates, if you are talking in terms of restraint by the federal government, is sheer windowdressing at best, and outrageous discrimination at worst. I know the hon. member for Assiniboia and the hon. member for Battleford-Kindersley (Mr. Mclsaac) and other Tories are interested in helping the inland terminals. They have visions of unit trains loading up at the Cargill terminal or at Rosetown and all 100 cars of each train rushing through almost non-stop

to Halifax. They have that vision. They want the grain to be hauled at a compensatory rate for which grain producers will pay. It will be done at the expense of the milling industry. But, of course, Mr. Speaker, according to the Liberals and Tories that is free enterprise. They believe in that nonsense. They have been governing this country for about 110 years and the disparities and discrimination in Atlantic Canada and the Prairie provinces continue. It does not matter which one of those two parties is in power.


Mr. Knowles (Winnipeg North Centre):: It seems as if they have governed this country for 1,000 years, not 110.


Leslie Gordon Benjamin: It has made no difference at all. The hon. member for Qu'Appelle-Moose Mountain spoke in glowing terms of what he and the right hon. member for Prince Albert (Mr. Diefenbaker) tried to do when they were in government in the 1960s. Mr. Speaker, they had the golden opportunity of the century to change all these things, and they blew it. Their government fell apart and they ran around stabbing one another in the back. The boys who are really running the Tory party in central Canada got their own way again. The same thing is happening today.


Steve Eugene Paproski: Where?


Leslie Gordon Benjamin: It is happening right now.


Steve Eugene Paproski: Name one example.


Leslie Gordon Benjamin: I will tell my hon. friend, if he wants to know. When the Tory minister of agriculture in Alberta says that rapeseed products should not be under the Crowsnest Pass rates, that is an example occurring right now. When the Tory transport critic in the House of Commons says that we should, have only one transcontinental passenger train, that is an example occurring right now. When the Tories say that feed grains should be on the open market, and they even write a letter to the Prime Minister (Mr. Trudeau) endorsing the policy of the Minister of Transport (Mr. Lang), that is an example occurring right now.


Donald Frank Mazankowski: Come off it.


Leslie Gordon Benjamin: When the Tories believe that family allowances should come under the means test, that is an example happening right now. I don't want to hear any more nonsense from the Tories, Mr. Speaker.


Steve Eugene Paproski: Hogwash!


Leslie Gordon Benjamin: We have a list of Tory proposals as long as your arm, Mr. Speaker. They are even worse than the Liberals, if you can believe it, and that's saying something. It means that they are really working at it.


Thomas Gordon Towers: Oh, boy, you people are really scared of the Tories.
November 16, 1976


Steve Eugene Paproski: Why are you laughing, Benjamin? What do you think is so funny?


Robert Hylton Brisco: Remember what happened in British Columbia.


Some hon. Members:: Oh, oh!


Stanley Howard Knowles: Who has the floor?


Ralph Goodale: Who is in charge over there?


Leslie Gordon Benjamin: Mr. Speaker, 1 know 1 touch a tender nerve when I show there is little difference between Grits and Tories. In Saskatchewan the other day a Grit switched over and joined the Tories without any difficulty, ethical, moral or conscience. He said on television that it was an opportunity. The interviewer did not have to mention the word "opportunism." The whole operation was designed to protect his own backside, and to hell with his party. Of course, that's the kind of thing that happens among the Grits and Tories. They have little difficulty making such switches back and forth. If they are proud of that, fine; that is their problem.


Robert Hylton Brisco: Tell us what Barrett did to Strachan in British Columbia.


Leslie Gordon Benjamin: Mr. Speaker, not only are we prepared not to support this legislation; we are prepared to hold it up as long as we possibly can, or at least until clause 15 of the bill is deleted. We want a commitment from the minister or the parliamentary secretary that the government will not do away with the "at and east" rates. If the government is not prepared to do that, I am afraid it will be some time before the bill passes, if it ever passes. This is not restraint, Mr. Speaker; this is shifting costs far greater than the amount of the subsidy. It is shifting costs on to the shoulders of the milling association and the grain producers, on to the shoulders of workers and operators in the ports of the Great Lakes, the lower St. Lawrence and the Atlantic and that is all.
Actually, the government's proposal will result in costs greater than the amount of the subsidy being so shifted. 1 know the hon. member opposite is thinking about the $9 million in the first year which the government proposes to give the milling industry and the phasing out of help over five years. Mr. Speaker, you do not consider the milling of flour and the export of wheat from Atlantic ports merely within a five-year time-frame. You think about such matters in terms of 50 or 100 years.


Stanley Howard Knowles: Hear, hear!


Leslie Gordon Benjamin: Mr. Speaker, this is some big deal! The government is merely helping the milling industry to take that much longer to go broke and lose its export market. It is like chopping a dog's tail off an inch at a time instead of doing it in one clean motion. This is nothing less but an attempt to buy off the milling industry and the people working in it, and it is a damned cheapskate attempt to buy them off. You cannot soften the blow with that kind of nonsense.
Wharves
Mr. Speaker, the $11 million-odd which the government provides is not really a subsidy. It represents a sharing of costs by the nation as a whole. By providing the money, the government is playing its proper role in transportation. It is making sure that growers and processors in western Canada and handlers in the Atlantic ports can compete with overseas millers and have equal access to our own markets in central Canada. If the Minister of Transport, with the support of the hon. member for Assiniboia, gets his way I suppose we can look for flour mills in downtown Toronto and Montreal because no doubt you can make money there.


The Acting Speaker (Mr. Ethier):: Order, please. It being one o'clock, 1 do now leave the chair until two o'clock p.m.
At one o'clock the House took recess.


[Stage Direction]
AFTER RECESS

The House resumed at two o'clock.


Mr. Adrien Lambert (Bellechasse):: Mr. Speaker, under the provisions of Standing Order 43, I ask the unanimous consent of the House to introduce a motion dealing with an important question of pressing necessity.
Considering that urgent repairs are needed to the St. Lawrence wharves used as means of communication and that the lack of maintenance is due to the lengthy negotiations between Ottawa and Quebec over the transfer of those wharves to Quebec, I move, seconded by the hon. member for Roberval (Mr. Gauthier):
That this House urge the government to intensify its negotiations with the new Quebec government to settle the matter without delay and that the Minister of Transport be asked to report to the House as soon as possible.


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


Some hon. Members:: Agreed.


Some hon. Members:: No.


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

November 16, 1976
Oral Questions



ORAL QUESTION PERIOD


[Stage Direction]
government action to ensure economic stability in

Mr. Joe Clark (Leader of the Opposition):: Mr. Speaker, my question is for the Prime Minister and I want to preface it by noting, as, I think is agreed by all parties in the House, that the essence of yesterday's election in Quebec was that the people of that province voted according to democratic principles to change the government of their province. But following appeals last night by the leader of the Prime Minister's party in Quebec for the economic milieu to remain calm, can the right hon. gentleman advise the House what steps he has taken or intends to take to make sure that this important message reaches investors in Canada or abroad?


Right Hon. P. E. Trudeau (Prime Minister):: I am sure the statement I made last night, and which 1 would willingly repeat today, is a clear indication that this government is dedicated to an inseparable Canada, a Canada which is indivisible. And we have only one mandate: it is to govern the whole country, including Quebec.


Some hon. Members:: Hear, hear!


Pierre Elliott Trudeau: Whatever financial concerns the Leader of the Opposition may be referring to should know that this will continue to be our mandate and that we do not intend to negotiate any form of separatism with any province.


Some hon. Members:: Hear, hear!


Charles Joseph Clark: 1 take it, then, that the Prime Minister is not planning to take, or has not taken, any special steps to try to deal with the concern about investment which was expressed last night by the leader of his party in the province of Quebec. If he should decide that it is necessary, on behalf of his government, to take any action of that kind, will he make the nature of that action known to the House? In the meantime, can he advise us whether, in the light of the change in the government of Quebec, there is any intention to revise the timing of the meeting of first ministers planned for next month?


Pierre Elliott Trudeau: As to the first part of the question, I believe the best way of making sure that no panic reaction takes place is to refrain from speculating upon it or asking hypothetical questions as the Leader of the Opposition has just done.


Some hon. Members:: Hear, hear!


Pierre Elliott Trudeau: 1 have stated the basis on which the federal government will operate. As far as the second part of the question is concerned, I have already written, as is customary, to the premier-elect indicating we are planning to go ahead with the conference in mid-December but that I would be
writing to him, as I shall be writing to the other first ministers, to discuss the precise agenda.


Charles Joseph Clark: I simply wish to draw the attention of the Prime Minister to the fact that the concern expressed was expressed by the leader of his party in the province of Quebec.


Some hon. Members:: Hear, hear!


Charles Joseph Clark: If the Prime Minister considers it hypothetical, he should perhaps speak to the leader of his party in Quebec.


Mr. Fairweather:: Or tell Lalonde to speak to Bronfman.


Charles Joseph Clark: Is it the intention of the Prime Minister to take the initiative by meeting with the new prime minister of Quebec prior to the meeting of the heads of government?


Pierre Elliott Trudeau: Mr. Speaker, I failed to get the second part of the question; it seemed to be a repetition of the first as far as I heard it.


Mr. Speaker:: Order, please. In respect of the repetition, the question was rather definitive. It was whether it was the intention of the Prime Minister to have a special meeting with the premier-elect of the province of Quebec prior to the prime minister's conference in December.


Pierre Elliott Trudeau: Well, Mr. Speaker, I have not given that any active consideration yet, but if the premier wishes to meet with me 1 will, of course, be open to meet with him on the basis I have just stated. As far as the preface to the question is concerned, I did not realize that it was a justification for the Leader of the Opposition to be quoting the person he calls "the leader of my party in Quebec". Obviously, he has no leader of his party in Quebec.


Some hon. Members:: Hear, hear!


THE CANADIAN ECONOMY
Mr. Edward Broadbent (Oshawa-Whitby):: Mr. Speaker, I have a question also for the Prime Minister. Given the fact that the Liberal government in the province of Quebec was defeated precisely for ignoring basic, real problems like the 10 per cent unemployment level in that province, and given the fact that the national government here in Ottawa has been following precisely the same kinds of policies at the national level, I would ask the Prime Minister whether this election and its real and serious implications have caused him and his colleagues overnight to rethink the unemployment situation in particular, in such a way that the Prime Minister will now assure the House that the government will bring before the House a budget prior to Christmas announcing a full employment program.

November 16, 1976


Pierre Elliott Trudeau: Mr. Speaker, 1 do not admit the premises of the question. If they were correct, it would be difficult to explain why the hon. member's party in Quebec did not do any better than it did. Surely, he must be communicating with the NDP members in Quebec.


FEDERAL-PROVINCIAL RELATIONS REQUEST THAT QUESTION OF FULL EMPLOYMENT BE PUT ON AGENDA OF PREMIERS' CONFERENCE
John Edward Broadbent: It is precisely that attitude, Mr. Speaker, that defeated a man named Bou-rassa. You have got two years to go, maybe. I should like to ask the Prime Minister, since unemployment has been running nationally at more than 7 per cent for more than 19 months and it is over 10 per cent in the province of Quebec, and since we have a first ministers' conference scheduled for early December, whether he would get in touch with the premiers, including the new premier of the province of Quebec who does want to do something about the real problems of the people in his province, and put on the agenda for that conference a discussion of full employment in which the Prime Minister would show some leadership and try and get the support of all the premiers to deal with this pressing issue?


Pierre Elliott Trudeau: Well, Mr. Speaker, I have just indicated a couple of answers back that I would be communicating with the provinces to learn what items they wanted to see on the agenda. Obviously, in our minds there is one item, which will be the economy, and I am very glad that the hon. member is beginning to realize the importance of that item too.


THE CANADIAN ECONOMY
John Edward Broadbent: A final supplementary question, Mr. Speaker. I must say the Prime Minister's condescension is touching. I address my supplementary to the finance minister. Given the fact that his own officials have forecast a level of job creation during the coming winter months which is the lowest in ten years, would the finance minister now tell the House whether he has reconsidered the answers he has given in the House in the past couple of weeks, and will be prepared to bring before the House special measures which will ensure a higher rate of job creation in the coming winter months, a winter which will see the highest level of unemployment since the great depression in this country?


Hon. Donald S. Macdonald (Minister of Finance):: Mr. Speaker, the underlying facts of the Canadian economic situation remain the same today as they have for many weeks. We have, and must have, a concern about the rate of inflation in
Oral Questions
Canada which over any period of time will be far more damaging to job creation in Canada than any of the other difficulties we face. The leader of the New Democratic Party shakes his head. He presumably is not concerned about inflation but for this government it remains a primary concern.
I said last week and repeated this week, that indeed in dealing with the inflation problem in Canada we have a very narrow margin within which we could take additional spending measures or make taxation changes given the importance of overcoming inflation. That continues to be the reality. My colleague, the Minister of Manpower and Immigration, and other colleagues and I have been analyzing the various ways in which specific programs may be directed to those specific members of the work force who have been in a particularly difficult situation in respect of employment. But I am not proposing at this time general economic measures which might work against the over-all policy of the government against inflation.


UNEMPLOYMENT INSURANCE
Joseph Adrien Henri Lambert: Mr. Speaker, 1 wish to direct my question to the Minister of Manpower and Immigration.
Considering that an increasing number of applicants are declared ineligible by Unemployment Insurance Commission officials, pursuant to sections 25(a) and (b) of the Unemployment Insurance Act, and Regulations 164 and 166 of this act, although those applicants are actively seeking employment, would the minister advise the House whether or not special instructions were given to the officials for stricter enforcement of the law and its regulations in view of making as many applicants as possible ineligible for benefits?


Hon. Jack Cullen (Minister of Manpower and Immigration):: No, Mr. Speaker.


Joseph Adrien Henri Lambert: Mr. Speaker, I would like to put a supplementary question.
Would the minister inform the House whether he deems it reasonable to turn down an applicant who has been trying to find a job but did not succeed because employment is getting increasingly scarce?


Jack Sydney George (Bud) Cullen: Mr. Speaker, the hon. member asked for an opinion; it is not easy to answer this question in the House.

November 16, 1976
Oral Questions


THE CANADIAN ECONOMY
Mr. Sinclair Stevens (York-Simcoe):: Mr. Speaker, 1 should like to put my question to the Minister of Finance. Now that we have last week's disappointing statistics on current unemployment which is running high across the land, and indeed ranges between 10.1 per cent in Quebec to 13.9 per cent in Newfoundland, and also have rising prices, in spite of the minister's comment that inflation is still his number one priority, would the minister indicate if he still sticks to his budgetary forecast of a 5 per cent real growth in the economy this year or may we anticipate bad news on that front as well?


Donald Stovel Macdonald: Mr. Speaker, the experience in Canada will very likely parallel the experience in the rest of the OECD nations; that is to say, the levels of growth hoped for in the fourth quarter of this year may well not be attained.


Sinclair McKnight Stevens: Mr. Speaker, my supplementary is again addressed to the Minister of Finance. As the economy stagnates as the minister indicated in the current quarter, and with the budgetary deficit for the first half of the fiscal year reaching $3.3 billion, 50 per cent higher than the same period last year, would the minister indicate if he holds to his May budget forecast of a $5 billion budgetary deficit or does he believe the trend shown in the first half of this year and into the third quarter will carry on and that there will be a budgetary deficit in 1977 of over $6 billion, the highest in our history?


Donald Stovel Macdonald: No, Mr. Speaker.


Sinclair McKnight Stevens: Mr. Speaker, as the minister has said that inflation is still his number one priority and, based on the finance department figures in the first six months, it would appear that federal spending may be up as much as 16 per cent or 17 per cent this year, would the minister indicate if he expects federal spending increases will taper off in the balance of the year so that the minister's commitment to a 14 per cent ceiling on federal spending increases will be met or may we expect federal government spending will be higher than the 14 per cent ceiling the government undertook to achieve in the May period?


Donald Stovel Macdonald: Mr. Speaker, we anticipate being able to keep expenditures within the goal or framework set out in the budget.


PUBLIC WORKS
Mr. R. E. McKinley (Huron-Middlesex):: Mr. Speaker, I have a question for the Minister of Public Works. In his opening speech to the Standing Senate Committee on National Finance he stated that alternative methods for recording and displaying real property costs to departments will be adopted, instead of the charging for services concept, which until now has only been talked about. What method, other than the charging for services concept or the method employed, does the minister intend to use?


Hon. Judd Buchanan (Minister of Public Works):: As I
indicated at that same meeting of the Senate committee, my personal inclination was to use "charge for services". I think that is still the most valid principle to pursue.


FISHERIES
Mr. James A. McGrath (St. John's East):: Mr. Speaker, 1 have a question for the Minister of Fisheries and the Environment. Is it his intention to establish single desk selling for Canadian fish products abroad, as hinted in press reports of the statement he made in Sydney, Nova Scotia, yesterday?


Hon. Romeo LeBlanc (Minister of Fisheries and the Environment):: Mr. Speaker, if the report referred to single desk selling, it is erroneous. What I said was that the Canadian industry, like our main competitors, should move to the concentration of our efforts in the foreign markets instead of competing against each other in export markets.


James Aloysius McGrath: May I preface my question by saying that I support the minister's intentions. Could he perhaps expand on what role he sees for the federal government in rationalizing this highly competitive situation which, in many cases, is hurting our exports?


Roméo LeBlanc: I do not know what the hon. member describes as "highly competitive". Surely, one of the reasons that in many cases we are price takers instead of price setters in the export market is the competition we talked about, that is competing among ourselves. The federal role is to encourage by voluntary means. 1 hope that the industry will see the wisdom of this. At present I do not envisage introduction of legislation in this area but I hope that the industry will encourage us to do so when they see the possible benefits.
November 16, 1976


DATE OF BY-ELECTIONS
Mr. Roch La Salle (Joliette):: Mr. Speaker, my question is directed to the right hon. Prime Minister.
In view of the interest we hold for the representation of those ridings without members in the House, and since our organizers-particularly in Quebec-have been quite well trained for the last five or six weeks, could the Prime Minister tell the House when he will announce the holding of by-elections, because I think this moment is quite appropriate?


Pierre Elliott Trudeau: Mr. Speaker, 1 intend to announce that date in the House.


IMMIGRATION
Mr. Jacques Lavoie (Hochelaga):: Mr. Speaker, my question is directed to the Minister of Manpower and Immigration.
Because it is my duty both as a Quebecer and as a member of parliament to defend my fellow citizens, and in view of the fact that a Canadian individual of Portuguese origin anxious to obtain landed immigrant status has been forced to pay $150 for some formalities to be filled on his behalf by the Liberal representative for Montreal-Saint-Louis in the Quebec National Assembly, can the minister advise the House whether such action is acceptable on the part of either a provincial or federal elected representative and also whether he intends to investigate this matter in view of the large number of people who have been victimized in this way and about whom 1 shall let him know as soon as I am in possession of the documented evidence?


Jack Sydney George (Bud) Cullen: I will be happy to receive the information which the hon. member has indicated he will provide and I will turn it over to my colleague, the Minister of Consumer and Corporate Affairs, if such action is in fact taking place.


DECISION ON REFINERY FOR ELDORADO NUCLEAR AT PORT
Mr. Allan Lawrence (Northumberland-Durham):: Mr. Speaker, 1 should like to direct my question to the Minister of Energy, Mines and Resources. Can the minister inform us whether there has yet been a ministerial or government decision with regard to the request that the new refinery of Eldorado Nuclear be built at Port Granby, Ontario, which is
Oral Questions
just outside Port Hope? If that decision has been made, will the minister tell us what the decision is, and if the decision has not been made, will he tell us why not?


Hon. Alastair Gillespie (Minister of Energy, Mines and Resources):: Mr. Speaker, the hon. member always tries to make his questions very simple with "if not, why not", and so forth.


Mr. Baker (Grenville-Carleton):: A simple minister; that's why.


Alastair William Gillespie: It is never quite as simple as the hon. member would like it to be. The hon. member must know that there are a number of agencies which would have to approve any new plant in the Port Granby area. 1 refer to the local authorities with respect to zoning, the provincial government with respect to health and the environment, the federal government with respect to health and environment and the Atomic Energy Control Board and approval with respect to the question of the capital budget of Eldorado itself. Against that background it is quite clear that the approval of all of these bodies has not as yet been obtained nor have applications been made to all of them. The answer is that no approval has yet been given.
If I understood correctly, the second part of the question was with respect to waste management. 1 think the hon. member implied this. The federal government will be taking steps to provide for a permanent waste management facility in that area.


Allan Frederick Lawrence: I gather from that that the ministerial decision has not yet been made. If that is so, 1 wonder why this Crown agency, for which the minister is responsible, is now very actively taking up options on the land and in effect is buying the land needed for the refinery. If the Crown agency does not believe the minister has made the decision, why is it buying the land for the refinery today?


Alastair William Gillespie: If the hon. member had listened to the last part of my answer, 1 think he would have found the answer to that question. The reason is that under its terms of reference the corporation is perfectly free to make an acquisition and to exercise an option for the purchase of land. It is under very stringent constraint orders from the Atomic Energy Control Board to provide a permanent waste management facility with the existing waste management facility at Port Granby. The corporation has exercised its option, which is perfectly legal.


STATISTICS CANADA
Walter David Baker: Mr. Speaker, I have a question for the Minister of Industry, Trade and Commerce which arises out of an answer he gave to a question asked yesterday by the hon. member for Central Nova. The minister indicated his willingness to bring the matter of Statis-

November 16, 1976
Oral Questions
tics Canada before a committee of the House, and he said he would also be willing to have Dr. Kirkham come forward and answer all questions. Aside from the question of the appropriateness of that forum, which is another matter, since Dr. Kirkham was not the chief statistician during the time these alleged questionable practices took place-and perhaps his testimony alone might not be sufficient-would the minister undertake that if the committee requests it, he would use his good offices to ensure that the committee could have the attendance of Dr. Sylvia Ostry, who was in fact the chief statistician at the time these alleged matters took place?
[ Translation]


Hon. Jean Chretien (Minister of Industry, Trade and Commerce):: Mr. Speaker, I think that Dr. Kirkham will be able to satisfy the committee's curiosity, because the record is quite clear, and also that hon. members will be satisfied with his answers. Should Dr. Kirkham be unable to make his points clearly enough, we might then examine the suggestion made by the hon. member; in view of the circumstances, however, I feel that it is the person in charge who should answer for the department.


ROYAL CANADIAN MOUNTED POLICE
Mrs. Simma Holt (Vancouver-Kingsway):: Mr. Speaker, my question is for the President of the Treasury Board. Is the minister aware of the matter of ex-RCMP constable Eugene Hale, whose disability pension was cut back from 100 per cent to 20 per cent because he was taken from hospital to his home to live out the final days of his life, and if so, will he now intervene to correct this cruel cutback and also move to change the Canadian Pension Commission regulations so that this situation will never again arise?


Hon. Robert K. Andras (President of the Treasury Board):: Mr. Speaker, I will take very careful note of the comments and recommendations of the hon. member and have my department look immediately into rectifying any injustice or error which may have occurred. I should like an opportunity to check the facts fully before making a final decision.


ANTI-INFLATION PROGRAM ALLEGATION BELL CANADA RETAINING AS PROFIT PART OF FUNDS ALLOWED FOR LABOUR COSTS-GOVERNMENT ACTION
Mr. John Rodriguez (Nickel Belt):: Mr. Speaker, my question is for the Minister of Finance. In view of the fact that members of the Communications Workers Union of Canada have been attempting to negotiate a new contract with the Bell

Telephone Company for over a year now, and in view of the fact that this company, Canada's richest and largest communications corporation, received a rate increase last fall, approved by cabinet, which included provisions for a labour cost increase of $80 million, what personal intervention is the minister prepared to take to prevent Bell Canada from keeping as a windfall profit, up to $52 million of the $80 million which was approved for increased labour costs, by hiding behind the anti-inflation guidelines?


Donald Stovel Macdonald: Mr. Speaker, I do not think it would be advisable for the Minister of Finance to become involved in the negotiations in that labour contract and it would not be my intention to do so. It is, of course, a matter for the parties involved to negotiate their collective agreement. We have heard a lot of discussion about free collective bargaining in recent months. The hon. member seems to be saying the Minister of Finance should take it over; I do not propose to do that.


COMMUNICATIONS
John R. Rodriguez: Mr. Speaker, a supplementary question to the Minister of Communications. In view of the fact that it took Bell Canada only two months to negotiate and get approval from the CTC and cabinet for their last rate increase of $102 million, can the minister assure the House that the CRTC and cabinet will take as long to negotiate Bell Canada's present rate increase application as it has taken the company to negotiate a new contract with the Communications Workers Union?


Hon. Jeanne Sauve (Minister of Communications):: Mr. Speaker, the CRTC has to look into demands for increases in rates by Bell Canada and that demand has been deposited with the CRTC which, according to its new procedure, is asking Bell Canada to come forward with the detail that will allow the commission, as well as other people who are interested in intervening, to look into all the facts. Then the CRTC, I hope, will be able to come to its final decision. The CRTC follows the guidelines of the Anti-Inflation Board and will make allowance for any new expenses or any new expansion which Bell Canada has. As a regulatory body, the CRTC looks into those questions very rigorously.


REQUEST FOR REPORT ON PROPOSAL TO ESTABLISH URANIUM REFINERY IN SASKATCHEWAN
Mr. Ray Hnatyshyn (Saskatoon-Biggar):: Mr. Speaker, I have a question for the Minister of Energy, Mines and Resources. In view of the very severe rebuke given to the
November 16, 1976

provincial government of Saskatchewan at the New Democratic Party convention last weekend respecting its uranium policy, I wonder if the minister could run through the situation with respect to the establishment of a refinery in Saskatchewan, the studies that are under consideration and when a decision will be taken with respect to the establishment of a refinery in Saskatchewan, if ever?


Alastair William Gillespie: Mr. Speaker, if 1 understood the hon. member, he said the New Democratic Party convention had given a strong rebuke to the government of Saskatchewan. If the hon. member is asking me to answer for the government of Saskatchewan, he is asking the wrong man.


Ramon John Hnatyshyn: A supplementary question, Mr. Speaker. I realize the minister wants a simple question so I shall put a very basic one to him. What is happening in the province of Saskatchewan with respect to the establishment of a uranium refinery? 1 hope he can answer that simple question.


Alastair William Gillespie: Mr. Speaker, I would not want to take any liberty with the hon. member, other than to suggest that he read the public release which sets out in some detail the arrangements that have been made by Eldorado, and the kind of discussions that have taken place between Eldorado and the government of Saskatchewan.


COMMUNICATIONS
Mr. J. P. Nowlan (Annapolis Valley):: Mr. Speaker, my question is to the Minister of Communications. In view of the unique arrangement and agreement the minister announced last week between the government of Canada, the government of Manitoba and the telephone system which will give a cable plant to Manitoba, is the minister going to use this as a precedent for other provinces, particularly Saskatchewan and Quebec which also have telephone companies interested in the ownership of cable plants?


Jeanne Sauvé: Mr. Speaker, I think the hon. member knows that the company which gives the greater part of the telephone service in the province of Quebec is Bell Canada and it is regulated by the CRTC. As for the first part of his question, if any other province has an interest in the kind of agreement which I have negotiated with the province of Manitoba, I am willing to enter into discussion. I feel that agreement sets forth the way the two governments decided to administer a particular area where the provincial government has an interest as well as the federal government.
Oral Questions


RESUMPTION OF ADJOURNED CONFERENCE WITH PROVINCIAL MINISTERS
John Patrick (Pat) Nowlan: A supplementary question, Mr. Speaker. Can the minister assure the House that in future negotiations there will be some consistency in the type of agreement made between provinces where there is an interest by a provincial government, through its telephone system or a private system, in the ownership of cable plants. Since the communications conference which was to be held in November was adjourned because of the election in Quebec will the minister take the initiative with her provincial counterparts to get that conference back on the road so that the question of jurisdiction and other matters, particularly cable, can be resolved?


Jeanne Sauvé: Mr. Speaker, I have every intention of resuming discussions and planning for a future conference with the ministers of communications. I feel it is important for the provinces to have an input into the federal government's policies of telecommunication. As for the hon. member's worry about my being consistent, I can assure him that 1 will be. The agreement that was negotiated between myself for the government of Canada and the provincial government of Manitoba dealt with problems between us. The situation in other provinces might be slightly different. I can assure the hon. member that I shall be as consistent as I possibly can.


PROVISION IN AGREEMENT WITH MANITOBA FOR EXTENSION OF CABLE TO RURAL AREAS-GOVERNMENT POSITION
Mr. Jake Epp (Provencher):: Mr. Speaker, I have a supplementary question for the Minister of Communications. In the agreement she signed on behalf of the government of Canada, with the government of Manitoba on behalf of the Manitoba telephone system, were guarantees given by the government of Manitoba that the investment of the two cable operators would be guaranteed? Also, were formal commitments made by the Manitoba telephone system that they would expand cable into rural areas if this agreement could be signed? Was a commitment made by the Manitoba telephone system or the province of Manitoba that this cable extension would take place as an integral part of the agreement signed with the communications minister?


Jeanne Sauvé: Mr. Speaker, that agreement was signed between the provincial government of Manitoba and the government of Canada. The government of Manitoba will deal with the Manitoba Telephone Company as it feels it should. I have secured in the agreement guarantees for the federal jurisdiction over broadcasting matters. That was my specific function and my specific mandate. As for the modifications or future planning of Manitoba telephone and the relationships it should be developing with cable operators, that is a matter between them.


Arthur Jacob (Jake) Epp: A supplementary question, Mr. Speaker. In view of the Manitoba government being the sole negotiator and also

November 16, 1976
Oral Questions
the sole owner of the Manitoba telephone system-in other words they are negotiating with themselves-has the minister given guarantees that the private operators will have the ability and the license to expand into markets that at the present time they have not been able to expand into because the CRTC has withheld licences, even where hearings have been held two years previously? They have frozen any decision.


Jeanne Sauvé: Mr. Speaker, as far as I know the CRTC is on schedule as to the examination of applications for cable.


Arthur Jacob (Jake) Epp: No. Two years.


Jeanne Sauvé: No, sir. They are on schedule. They come down with their decisions and I have nothing to do with the decisions of the CRTC as they apply to specific applications.


TRANSPORT
Mr. Donald W. Munro (Esquimalt-Saanich):: Mr. Speaker, a question for the Minister of Transport. During the past fortnight there have been two incidents involving foreign flag tankers wandering about in the most dangerous fashion in the waters of the straits of Juan de Fuca-the Panamanian flag White Poppy and the Kuweiti flag Warbah. I hope the minister has recovered sufficiently from his trip on the people's airline which so many of us are obliged to take as a matter of routine. 1 wonder if the minister has now recovered and is prepared to look into these infractions of good seamanship and tell the House what steps he plans to take to make sure they do not occur again.


Hon. Otto E. Lang (Minister of Transport):: Mr. Speaker, I had an opportunity to look into the first incident and discovered that the vessel in question was under the voluntary control of United States authorities, under the existing arrangements. The voluntary system is due to be replaced with a compulsory system as soon as discussions between the United States and Canada in that regard can be completed. We look forward then to having one of the best possible systems of navigation.


Donald W. Munro: A supplementary question, Mr. Speaker. 1 gather from the minister's reply that he suggests an accident on the United States side would not affect our beaches and fisheries. I wonder if that is the purpose of trying to place the blame on the American side.


Otto Emil Lang: Mr. Speaker, I do not think any reasonable person could draw that inference from what I said. I simply indicated that in that particular situation the vessel was under the guidance of American authorities.


Donald W. Munro: But it was in Canadian waters.


Otto Emil Lang: I made no comment about what damage it might or might not do.


CANADIAN DAIRY COMMISSION
Mr. Perrin Beatty (Wellington-Grey-Dufferin-Waterloo):: Mr. Speaker, my question for the Minister of Agriculture arises because of the sudden firing of the chairman and vice-chairman of the Canadian Dairy Commission. Has the minister received the telegram sent on behalf of some 18,500 dairy producers in Ontario by the chairman of the Ontario Cream Producers Marketing Board and the Ontario Milk Marketing Board which states in part that as a consequence of the reported appointment of a new chairman with little knowledge of the national dairy industry, "We are requesting immediate consultation with you" regarding the strong and respected leadership required of the Canadian Dairy Commission in these difficult times? If so, has the minister set a date for the meeting which was requested by Mr. Smeltzer and Mr. McLaughlin?


Hon. E. F. Whelan (Minister of Agriculture):: Mr. Speaker,
I have not seen the telegram but my office has an open door policy and we will discuss anything with them at any time. Let me say that they make appointments from time to time. 1 do not think I have ever discussed this matter with them, but what they do affects the policy for which I am responsible and for which, on behalf of all Canada, I must answer. I do not object to what they do. After I explain what I have done and why I did it, I am sure they will not have any further objection. I am not aware of the telegram alluded to. As I have said many times in the past, their concern is my concern. This Minister of Agriculture and this government have given the dairy farmers of Canada the best income and the best dairy policy they have ever had in the history of this country.


Some hon. Members:: Hear, hear!


Some hon. Members:: Oh, oh!


ALLEGATION CHAIRMAN PROMISED HE WOULD RETAIN POSITION FOLLOWING SICK LEAVE
Henry Perrin Beatty: A supplementary question, Mr. Speaker. The telegram was sent on Thursday and I think every member of parliament from Ontario, except the minister, got a copy. I can send the minister a copy of it. Can the minister confirm that when the former chairman of the Canadian Dairy Commission began his sick leave, he, the minister, promised him that his job as chairman would be awaiting him on his return, but that he, the
November 16, 1976

minister, changed his mind and broke that promise by attempting to demote Mr. Powers to the position of vice-chairman, a demotion which Mr. Powers refused to accept?


Eugene Whelan: Mr. Speaker, Mr. Powers and I have been friends for a long time. We made this decision and we are still friends. Mr. Powers has agreed to meet me in January, to discuss other responsibilities which 1 feel he is capable of fulfilling in Agriculture Canada. He has made a tremendous contribution to Agriculture Canada. He is a tremendous individual; but the workload in today's dairy commission is most demanding. I talked to him about his own and his family's position. We discussed these questions in total before the decision was made. When I offered him the vicechairmanship of the commission, he said he would rather not be a member of the commission because he did not think it would be fair to the new chairman of the commission if the old chairman were to sit at his side as vice-chairman.
I respected Mr. Powers for that position. Let met say that 1 also talked to his doctor and discussed Mr. Powers' position in an attempt to learn if Mr. Powers could fulfil the full-time obligations of this board. It is a demanding job and needs someone working at it full time. Mr. Powers agreed with what we had decided. As I said, we parted on amiable terms and we still have respect for one another.


Henry Perrin Beatty: A final supplementary question, Mr. Speaker. Would the minister confirm that when Mr. Powers took his sick leave he was promised by the minister that his job would be waiting for him when he returned? Secondly, may 1 ask-


Mr. Speaker:: Order, please. With respect to the hon. member, I suggest that he has precisely repeated his earlier question.


FINANCE
Mr. Bill Jarvis (Perth-Wilmot):: Mr. Speaker, my question to the Minister of Finance relates to accelerated capital cost allowances for purchasers of anti-pollution equipment. Since the accelerated write-off program is scheduled to end on December 31, will the Minister of Finance say if he intends to extend this provision for the 50 per cent per annum write-off and, if so, for how long a period would that extension be in effect?


Donald Stovel Macdonald: Mr. Speaker, certain of the provisions in this regard were dealt with at the time of the budget this year. Perhaps it would be better if I talked to the hon. gentleman about specific items he has in mind, because the treatment is not necessarily uniform.
Oral Questions


ENVIRONMENTAL AFFAIRS
William Herbert Jarvis: Mr. Speaker, may I direct my supplementary question to the Minister of the Environment? Is it the minister's view that the accelerated capital cost allowances program has been successful and does the minister think that the program should be extended for at least one more year?


Mr. Speaker:: Order, please. With respect, that is seeking an opinion of the minister rather than information.


PERFORMING ARTS
Mr.  R. Gordon L. Fairweather@Fundy-Royal: Mr. Speaker, I wonder if I could risk a diversion to a happier aspect of life in our country and ask the Secretary of State if he will join with me in a salute to the National Ballet of Canada on the twenty-fifth anniversary of its founding, an event brilliantly celebrated in its home city of Toronto?


Some hon. Members:: Hear, hear!


Hon. John Roberts (Secretary of State):: Mr. Speaker, 1 welcome the opportunity to join in the remarks of the distinguished hon. member. Last Friday I was at the performance of the National Ballet, to mark its twenty-fifth anniversary. On that occasion I made a short speech to congratulate Celia Franka for her splendid work over the past twenty-five years in making this company one of the most extraordinary and important parts of Canada's cultural heritage.


IMMIGRATION
Mr. Louis Duclos (Montmorency):: Mr. Speaker, my question is for the Minister of Manpower and Immigration.
Could the minister tell the House what his department intends to do in the case of the Chilean citizen, Mr. Romeo Humberto Ponce Bustos and his family who, although they have been living in Montreal for more than a year, will soon be deported and who would undoubtedly be in danger if they had to go back to Chile after being deported from Canada?


Jack Sydney George (Bud) Cullen: Mr. Speaker, I thank the hon. member for his representations on behalf of this particular family. I had looked into the matter personally. They have gone through all the appeal

November 16, 1976
Oral Questions
procedures and a deportation order has been made. Consequently, my department is bound by that order. However, in the light of the facts as 1 have studied them in that particular file, I can say that there is a procedure whereby the deportation order may be executed, but they may be able to arrange, on that particular basis, to be re-admitted under a minister's permit. I am looking into that at present.


EXTERNAL AFFAIRS
Mr. Stuart Leggatt (New Westminster):: Mr. Speaker, my question directed to the Prime Minister concerns the apology the Prime Minister made to the prime minister of Japan recently for the conduct of the Canadian government and Canadians toward Japanese Canadians during the last world war. Would the Prime Minister advise the House if he intends to apologize in Canada to Canadians of Japanese descent for the conduct of the Canadian government at that time? Also, will he advise if he has anything more tangible in mind than an apology, considering the decision of the Supreme Court, which dismissed claims by Japanese Canadians against that injustice?


Pierre Elliott Trudeau: Mr. Speaker, 1 think the hon. member would be better informed for his question if he read what I stated in Japan rather than reading apparently the many reports and letters to newspapers on the subject. I never used the word "apologize." I never used "intention of apologizing." I explained that part of our history and its relation to people of Japanese origin. I was doing it in the Canadian embassy, on Canadian soil, to a largely Canadian audience. 1 was reciting part of our history. It is well known to everyone. It was not stated by way of apology. It was stated by way of explaining that relations between us have indeed improved since the days when they were not very good at the turn of the century and since the days during and following the second world war, when certain regrettable actions were taken. But the thrust of the speech, the toast 1 was making, was to indicate that Canadians of Japanese origin were indeed good citizens and had attained prominence in every part of Canada and in every part of Canadian life. I wish the hon. member would refer to that statement if he wants to ask some further questions.


Stuart Malcolm Leggatt: Mr. Speaker, 1 thank the Prime Minister for asking me to refer to his statement, which I have in front of me. He indicated that Canadians had deprived Canadian Japanese of their civil rights during World War II. If that is not an apology, I do not know what is. The Prime Minister did not indicate whether he would do anything more tangible than use words to describe the injustice upon Japanese Canadians at that time. At that meeting, did the government of Japan or

the Prime Minister of Japan apologize to Canadians for the conduct of the Japanese government in terms of their treatment of Canadian prisoners of war during World War II?


Pierre Elliott Trudeau: Mr. Speaker, the hon. member says he has the statement in front of him. If he refers to it, he will see there is no indication of an apology. There is a statement of facts which are admitted on all sides. 1 do not think it is beyond our capabilities as a country to realize that some things in the past were not very glorious. There is no great mistake in referring to it. If the hon. member would like other countries to do the same, he could refer to them. Maybe he will get them to recognize things in their past which are not very glorious.


SUPPLY AND SERVICES
Allan Bruce McKinnon: Mr. Speaker, my question is for the Minister of Supply and Services. The Secretary of State for External Affairs and the Minister of National Defence have announced the purchase of Leopard I tanks. Leaving aside the relative merit of the Leopard I tank, as opposed to other main battle tanks, and the impossibility of up-gunning the Leopard I, will the Minister of Supply and Services table the contract as was done with the LRPA?


Hon. Jean-Pierre Goyer (Minister of Supply and Services):: Mr. Speaker, 1 see no objection in making available to any hon. member any contract we pass with our suppliers. However, each time we negotiate a contract I have to table it before the House. I think that the situation is thus more complicated. The hon. member may well ask my department to consult the contracts and he will get the full cooperation of mv officers. If not, he just has to tell me and I will look into it personally.


THE CANADIAN ECONOMY
Mr. Gordon Ritchie (Dauphin):: Mr. Speaker, I have a question for the Prime Minister. Can the Prime Minister confirm, as stated in today's Ottawa Journal, that last week he had been briefed by the Minister of Finance to the effect that massive federal spending will be needed to mop up unemployment in Quebec and Atlantic Canada?


Pierre Elliott Trudeau: Mr. Speaker, I do not know to what rumour or item the hon. member is referring. 1 would make it quite clear that the Minister of Finance and I from time to time, do discuss the economic situation of the country. We intend continuing bringing
November 16, 1976

answers to the most pressing economic concerns of the country.


EXTERNAL AFFAIRS
Mr. John C. Crosbie (St. John's West):: Mr. Speaker, 1 wish to direct a question to the Secretary of State for External Affairs. The minister will recall that the United States forces moved out of the north side of the Argentia naval station several years ago, leaving vacant various buildings and facilities having potential for industrial development in the area. They imposed a stipulation that they can reclaim these with 30 days notice, preventing any development. Has the minister had any discussions with the United States authorities on this in an attempt to get that condition changed? If so, when will those discussions be concluded? When will there be an announcement of some change or is there likely to be a change in that stipulation?


Hon. Donald C. Jamieson (Secretary of State for External Affairs):: Mr. Speaker, the discussions are certainly taking place, in fact as recently as three weeks ago. That is why I can respond by saying I was encouraged by the results of those discussions and expect to get some word soon from the United States authorities. However, 1 have no idea as to the specific date or time when I will hear from them.


GARRISON DIVERSION-REASON FOR GRANTING INTERNATIONAL JOINT COMMISSION ADDITIONAL TIME TO MAKE REPORT
Mr. Dean Whiteway (Selkirk):: Mr. Speaker, my question is to the same minister. It has to do with the Garrison diversion project and the recent diplomatic note sent by Canada to the United States asking for a moratorium on construction. On what fact did the government base its decision in August to allow the 1JC an extension of eight months for its final report, a decision that was made after the subcommittee on appropriations and after the President of the United States signed $23.5 million for next year's construction? What facts led the government to agree to an extension with the knowledge that next year's construction funds had already been appropriated?


Mr. Speaker:: With due respect, I am sure the hon. member will realize that is a matter not to be pursued here in that manner but before the committee.
Oral Questions


GOVERNMENT ADMINISTRATION
Donald Frank Mazankowski: Mr. Speaker, 1 have a question for the President of the Treasury Board. Given the fact that the purchase, repair and upkeep category of spending has increases averaging 16 per cent proposed in the Supplementary Estimates (B), and having regard for the phenomenal increases experienced in purchase, repair and upkeep for 197576 over 1974-75 averaging a staggering 450 per cent, most of which was also put through by the use of mid-year supplementary estimates, can the minister advise the House whether this was a legitimate mid-year breakdown in various departments of government or whether this route is being used as an illegitimate way of securing funds for additional government expenditures within the departments?


Robert Knight Andras: Mr. Speaker, it is certainly my impression that it is a totally legitimate method. I will be glad to go into detail or have somebody do that when those supplementary estimates are before the appropriate committee for full examination.


Donald Frank Mazankowski: If the minister considers an increase of 450 per cent in this category to be legitimate, is he reviewing the guidelines and perhaps recommending to the departments that they buy machinery which is less prone to breakdown? Is he investigating the manner in which this appropriation is taking place? In particular, can the minister advise why this category for the Anti-Inflation Board has increased 460 per cent in this year's Supplementary Estimates (B)?


Robert Knight Andras: Mr. Speaker, the hon. member usually asks the question, have you stopped beating your wife. I will give a detailed answer so it will be percisely on the record when I appear or when that item appears before the committee.


FOREIGN INVESTMENT
Mr. Bill Kempling (Halton-Wentworth):: Mr. Speaker, I wish to direct a question to the Minister of Industry, Trade and Commerce. In the negotiations on the merger of Canadian General Electric and General Steel Wares and the proposed acquisition of the Westinghouse appliance division announced last Wednesday, was there any discussion regarding tariffs on imported appliances with CGE and GSW?


Joseph Jacques Jean Chrétien: Mr. Speaker, the question of tariffs as they apply to household appliances was not brought up during the negotiations I have had with the people concerned.

November 16, 1976
Order Paper Questions


POSSIBILITY OF CHANGE IN TARIFF ON APPLIANCES AFTER WESTINGHOUSE APPLIANCE DIVISION ACQUIRED
William James Kempling: In view of the dominant position this proposed new company will have in the appliance industry in Canada and noting that it was stressed at the press conference, the export potential of the new company, was there a quid pro quo that once the new company is established and operating and production rationalization achieved that tariffs on imported appliances would be adjusted to allow the new company to offer a full line of appliances for sale or to assist it exporting some of its lines?
[ Translation]


Joseph Jacques Jean Chrétien: No, Mr. Speaker, there has never been any talk of giving that industry a special status. I even believe that the president of one of the two companies observed that, because of the general negotiations now in progress in Geneva with regard to tariffs, he felt that lowering the tariffs internationally might even improve competition for that group of companies, both in the domestic and the export markets.


ENVIRONMENTAL AFFAIRS
Mr. Bob Wenman (Fraser Valley West):: Mr. Speaker, my question is directed to the Minister of the Environment. Has the hon. gentleman recommended an extension of the accelerated write-off provisions affecting pollution control abatement equipment to his colleague, the Minister of Finance?


Roméo LeBlanc: My
officials, at my request, are now engaged in conversations with officials of the Department of Finance, and the minister and 1 will be discussing this matter.



ROUTINE PROCEEDINGS


[Stage Direction]
(Questions answered orally are indicated by an asterisk.)
Ralph Goodale: Mr. Speaker, the following questions will be answered today: 283, 362, 635 and 646.
[Mr. Chretien.)


Mr. Huntington: 1.	For the ferry systems from (a) Cape Tormentinc, New Brunswick to Borden, Prince Edward Island (b) Caribou. Nova Scotia to Wood Islands. Prince Edward Island, what was the (i) total annual revenue (ii) annual cost (iii) annual loss for the years 1971 to 1975?
2.	If there was a loss, was the loss subsidized (a) directly and, if so, from what source (b) indirectly and, if so, to what account was it charged?


Mr. Marcel Roy (Parliamentary Secretary to Minister of Transport):: Transport Canada advises as follows: 1. (a) For the ferry systems from Cape Tormentine, N.B. to Borden, P.E.l. the revenues, expenses, and deficits paid by the federal government for the calendar years 1971 to 1975 inclusive are:
Year	(i) Revenues	(ii) Expenses	(iii) Deficits1971	$2,318,684	$ 7,824,392	$ 5,505,7081972	2,590,063	8,578,070	5,988,0071973	2,732,503	11,080,198	8,347,6951974	3,232,525	13,965,147	10,732,6221975	3,696,171	17,220,457	13,524,286
The Canadian Transport Commission advises as follows: 1. (b) (i) (ii) (iii) This is propriety information relating to the operations of a private carrier and as such is not made public.
Transport Canada advises as follows: 2. Deficits arising from the operation of the ferry service from Cape Tormentine to Borden were paid by the Department of Transport to the operator of the ferry service, Canadian National Railway Company, and are reflected in Department of Transport Vote 40. The Canadian Transport Commission advises as follows: The Wood Islands, P.E.l. to Caribou, N.S. service receives an operating subsidy administered by the Water Transport Committee of the Canadian Transport Commission. The subsidy for the last four years has been in the amount of: 1971-72, $1,000,000; 1972-73, $1,449,000; 1973-74, $2,000,000; 197475, $2,400,000.


Mr. Munro (Esquimalt-Saanich): 1.	Are all radio beacons installed at Victoria International Airport in working order and operating and, if not (a) how many (b) in each case (i) which one (ii) where is it located (iii) on what date was it taken out of service and for what reason (iv) on what date will it be re-activated?
2.	What alternative guidance devices, if any, were put in temporary service to assist aircraft in their approach and transit movements?
3.	Were all regular and potential users of these beacons notified in an appropriate way of the change or changes?
4.	How much in advance was notice given of de-activation, and by what method (a) domestically (b) to foreign operators?


Marcel-Claude Roy: 2.	The low frequency Gordon Head non-directional beacon was installed at the Victoria VOR site as an alternative guidance device.
3.	Yes.
4.	Three days, (a) Class I Notice to Airmen, (b) Class 1 Notice to Airmen.


Mr. Beatty: 1.	What is the distribution policy of the Anti-Inflation Board concerning copies of its decisions and news releases?
2.	(a) How many names were on the AIB's regular mailing list prior to June 23, 1976 (b) what categories of individuals and organizations are included?
3.	What was the unit cost of the envelopes customarily used by the AIB for public mailing of news releases and similar material prior to June 23, 1976?
4.	What was the total cost to the taxpayer including supplies, labour and postal expenses for an average mailing by the AIB in the month of May, 1976?
5.	What is the practice of the AIB concerning sending more than one mailing a week to weekly newspapers?
6.	Was the AIB, prior to June 23, 1976, aware that some of the individuals on their mailing list had been receiving as many as five or seven separate mailings on one day and, if so, does it intend to eliminate this practice in future?


Mr. Bob Kaplan (Parliamentary Secretary to Minister of Finance):: 1. News releases and decisions of the Board are distributed on a selective basis to those with interest in particular subjects.
2.	(a) The AIB has no regular mailing list. Each individual mailing is selective, (b) Daily newspapers, 113; weekly newspapers, 725; individuals, 705; arbitrators, 441; associations, labor, 267; industry and business, 246; professionals, 242; consumers, 50; construction industries, 101.
3.	$34 per 1,000.
4.	$332.
5.	Since June 7, the AIB has made one mailing per week to the weekly newspapers.
6.	Yes. Once a week mailings were established beginning June 7 for all except the daily newspapers.


Mr. Beatty: 1.	Did the government purchase any foreign beef for use in federal institutions and, if so (a) what was the dollar value of any such beef purchased over the twelve month period prior to July 12, 1976 (b) in what institutions was it used?
2.	Does the government make a conscious effort to purchase Canadian agricultural goods over foreign imports for use in federal institutions and, if so, what are the guidelines dealing with such purchases, by whom were they issued and on what date were they issued?


Jean-Pierre Goyer: In so far as the Department of Supply and Services is concerned; 1. No. (a) Not applicable; (b) not applicable.
2. Yes. It is the policy of the Department of Supply and Services to consider foreign content in the assessment of tenders and to give preference to Canadian products to the extent of 10 per cent of the difference in the foreign content.
Order Paper Questions
The guidelines is Cabinet Directive dated May 18, 1950, confirmed by Cabinet Decision dated June 8, 1965.


Ralph Goodale: Mr. Speaker, would you be so kind as to call starred questions Nos. 319 and 320?


Mr. Orlikow: 1.	How many wage and salary agreements reached between employers and their unions have been received by the Anti-Inflation Board for approval by (a) May 1, 1976 (b) June 1, 1976 (c) July 1, 1976 (d) August 1, 1976 (e) September 1, 1976 (0 October 1, 1976?
2.	How many were decided upon by the Board and the decisions conveyed to the applicants by October 1, 1976?


Mr. Ross Milne (Parliamentary Secretary to Minister of Communications):: Perhaps I might answer question No. 319, Mr. Speaker. 1. Wage and salary plans and agreements between employers and their employees required under the AntiInflation Program are known as Compensation Reports (AIB-2). The number of Compensation Reports received by the Anti-Inflation Board for approval by the date indicated was: May 1, 1976, 8107; June 1, 1976, 10512; July 1, 1976, 13373; August 1, 1976, 16531; Sept. 1, 1976, 18271; Oct. 1, 1976, 21733.
2. The number of Compensation Reports decided upon by the Anti-Inflation Board and decisions conveyed to the applicants by October 1, 1976 was 15004.


Mr. Orlikow: 1.	How many wage and salary agreements reached between employers and their unions have been received by the Anti-Inflation Board for approval by (a) January 1, 1976 (b) February 1, 1976 (c) March 1, 1976 (d) April 1, 1976?
2.	How many were decided upon by the Board and the decisions conveyed to the applicants by April 1, 1976?


William Ross Milne: 1. The number of Compensation Reports received by the Anti-Inflation Board by the dates indicated was: January 1, 1976, 230; February 1, 1976, 400; March 1, 1976, 651; April 1, 1976, 4510.
2. The number of Compensation Reports decided upon by the Anti-Inflation Board by April 1, 1976 was 2706 and the number of decisions conveyed to the applicants was 327. Up to July 1, 1976 the Anti-Inflation Board was not signifying approval of Compensation Reports that were found to be within the guidelines.

November 16, 1976
Restraint of Government Expenditures Mr. Ralph E. Goodaie (Parliamentary Secretary to President of the Privy Council): Mr. Speaker, I ask that the remaining questions be allowed to stand.


Mr. Speaker:: Shall the remaining questions stand?


Some hon. Members:: Agreed.



GOVERNMENT ORDERS


[Stage Direction]
The House resumed consideration of the motion of Mr. Andras that Bill C-19, to amend or repeal certain statutes to enable restraint of government expenditures, be read the second time and referred to the Standing Committee on Miscellaneous Estimates.
Leslie Gordon Benjamin: Mr. Speaker, 1 wish to use my remaining seven or eight minutes to expand on the remarks I made before the lunch hour in which I indicated that the loss of the subsidy, the At-East rates on flour milled in western Canada and exported through the Port of Halifax, amounts to more than 69 cents per hundred pounds, on flour milled in Ontario and exported through Halifax, amount to more than 81 cents per hundred pounds, and that the removal of these rates handicaps our grain producers and millers to the point at which they will likely lose sales on the international grain and flour market.
The milling industry and those engaged in grain production have enough problems as it is without the government attempting to show restraint in the wrong direction. International sales have been declining steadily. The Canadian share of international sales of commercial flour has fallen from 31 per cent to 11 per cent in the 20 years between 1954 and 1974. Yet what do we find? We find the government trying to save about $3 million on flour exports and $8 million on grain shipped to the Atlantic ports and to the St. Lawrence ports, a paltry SI 1 million, while on the other side of the coin, the loss of those rates will mean unemployment in the mills and in the terminals on Georgian Bay and on the Atlantic coast; it will mean lost flour sales, and I submit that these costs, when added together, will prove to be far in excess of any amount which the government might save through the cancellation of the At-East rates.
The government wants to show restraint. The Minister of Transport (Mr. Lang) has the nerve, on this pretext, to try to do away with part of the Railway Act, one of the few things the grain processors and the people of Atlantic Canada have left to them. The minister is trying to do away with it in the name of restraint. Yet he himself flies his friends to his brother-in-law's party in Regina via Saskatoon at the cost of
[Mr. Milnc-I
some $10,222. Of course, he had, naturally, to take some fellows from the press gallery along with him. He had to take some musicians along from the press gallery to his brother-inlaw's birthday party; he went to Saskatoon first, and then down to Regina on that little jaunt. No restraint was shown there, Mr. Speaker. Maybe he was trying to help his brother-in-law who is running for the leadership of the Saskatchewan Liberal Party. I do not know what kind of relationship exists there, because the hon. gentleman's brother-in-law now says that the Saskatchewan Liberal Party should separate from the federal Liberal Party. What effect that will have upon this relationship, i don't know. But 1 do wish the Minister of Transport would quit talking out of both sides of his mouth.
He wants the grain elevator operators of Atlantic Canada and the lower St. Lawrence and Georgian Bay to show restraint, to pick up the tab and compete on their own against the United States and the EEC. The reality is that in all industrialized nations flour milling is subsidized. Both the United States and the EEC, our main competitors in the international market, give heavy support to their flour industries. The loss of the At-East rates, bearing in mind this sort of competition, means that our millers' share of what they have left of the international market is bound to suffer. Surely, this is the worst time of all for even the present Minister of Transport to take the kind of action he proposes.
This is an item which must be deleted. I hope the government got a message last night. The people of Quebec sent a message to the Government of Canada. Indeed, they sent a message to all of us. They are demanding fundamental changes in their economy and in their society. They intend to get things like an automobile insurance plan which will save the average motorist in the province $500 or $600 a year. They intend to get social and economic changes on a scale never known before in the province. In the light of a message of that kind, it seems to me the Minister of Transport, or at least his colleagues from the Province of Quebec and Atlantic Canada, should insist that clause 15 be deleted from this bill when it comes before the committee. To ignore the geography of our country, to ignore the distances that flour and grain for milling purposes has to be moved is to fly in the face of all good sense and economic reality. Surely this is not an area in which to try to exercise government restraint. What is involved here is an investment rather than a subsidy. What is really happening is that all the people of Canada are sharing in the cost of delivering flour and wheat for milling purposes to export positions where they can compete on a fair basis with exports from the United States and the EEC. To ask those millers and grain producers to pick up 69 or 70 cents a hundred pounds of flour milled in western Canada, and in Saskatoon in particular, or 82 cents a hundred pounds for flour milled inland in western Ontario or at the bay ports in Ontario, is to deny them any success in flour sales outside of our borders. It just is not fair to ask them to compete by themselves against the treasuries of the United States and the kind of financial resources the European Economic Community has.
November 16, 1976

Surely this is a time when the government of Canada should provide additional aid and comfort, not detract from what minimal support the "at and east" rates gave the milling industry of Canada. We know that it is the intention on the part of Maple Leaf Mills, a large multinational corporation owned in the United States, and Lever Bros, who are a subsidiary of Unilever of Belgium, another multinational corporation that brings us Lux toilet soap and so on, to build a mill and storage depot at Windsor, Ontario. This may be great for them but it will not be great for ports along Georgian Bay, or the ports of Halifax, Saint John, Montreal and Quebec City. It will not be great for the flour mill that the wheat producers own in Saskatoon. This effort to destroy the small benefit that our milling industry and grain producers get out of the transportation act is outrageous.


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


Some hon. Members:: Agreed.


Leslie Gordon Benjamin: Mr. Speaker, I will be through very shortly and 1 thank my hon. friends for their kindness in allowing me to continue.
The Canadian Millers Association and its chairman, one Mr. J. F. Blakeney-no relation, by the way, to the premier of Saskatchewan-has also written to the minister expressing their distress at the government's announcement that the subsidy will be removed or abolished. In his letter to the minister he cites why they are distressed. I would have thought that the minister, this great friend of the Canadian farmer and of the producers of processed products from the grain industry, would have much greater concern as a western member of parliament than this. I do not see w here they can arrive at any significant element of restraint in government spending by abolishing this kind of rate. The cost through lost export sales and the increase in unemployment will be much greater than the subsidy. Surely, this is some kind of backward economics.
I also want to suggest that the whole movement of grain by water through the St. Lawrence, with some attempt to increase the amount going through Vancouver, has been vital in the winter months for flour and for the movement of grain for milling purposes. While the Minister of Transport (Mr. Lang) and some of his people who support inland terminals might have visions of grandeur about unit trains, once they have tried them for that kind of distance for any length of time they will find that the costs are greater and will be greater than what the "at and east" rates cost the national treasury.
From whatever way you look at it, Mr. Speaker, this attempt at so-called restraint is not going to save money for the people of Canada. In fact, it will cost them more money than the cancellation of the rates would cost. Movement through the maritime ports and through several of the bay ports is very important. They have no extensive feed grain
Restraint of Government Expenditures traffic. Traffic in grain for milling purposes and for flour is extremely important to them. There seems to be little disagreement with the predictions made by the millers association, of which all of us have received a copy, that rail rates will increase by roughly $18 a ton, an increase that they have been advised will likely mean the loss of their Cuban market, and thereby the loss of most of our remaining commercial market for export. This would affect mills from Saskatchewan to Halifax; and the producers will have lost a market for about 20 million bushels of wheat that the millers exported commercially last year.
Our customers seem to have little alternative, Mr. Speaker, and our millers seem to have little alternative. The Cubans insist on carrying flour on their own ships and refuse to pick up on the west coast. They cannot use unit trains, as the need for bagging flour precludes the bulk loading and unloading which is required to make the concept of a unit train viable. So unit trains for the movement of flour are going to be much more expensive.
The value of exports of mill products last year was $132 million, and 12 per cent of that was food aid. This government wants to remove the "at and east" rates, which relieved the cost of those products, some of which went for food aid, by as much as 82 cents per hundred pounds. It is difficult to know whether the removal of the subsidy would eliminate the movement of grain through the maritime ports. The rates for moving this grain already exceed the cost of shipping via Vancouver to Europe by over 20 cents a bushel. Removing the "at and east" rates just compounds that felony to the tune of 60 to 80 cents per hundred pounds.
The actual impact will depend on other developments. If the unit train is viable, then the current volume through the maritimes would continue and the producers would suffer no loss. But I doubt that they are going to be viable. Certainly, I do not believe they will be viable for the movement of flour. If unit trains do not work, then the current volume could continue, but at decreased return to the producers because the Wheat Board would have to absorb the increased rates.
If transport manages to clear up traffic snarls and jams at elevators on the Vancouver route, more winter shipments could go via Vancouver. But Vancouver is already congested and has all it can handle. It will be a while yet before any increased storage is in place at that port. In the meantime the government is prepared, in order to try and save a few million dollars which will not really be a saving, to victimize ports along Georgian Bay, the ports of Halifax, Quebec City, Saint John and Montreal, by placing in jeopardy the viability of what remaining Canadian owned flour mills we have, turning them over to the tender mercies of multinational corporations who are not interested in the welfare and good order of Canadian producers and Canadian millers. What appears to be a possible $11 million saving in so-called subsidies for grain and flour movement to Atlantic and eastern ports would in effect, mean a far greater cost to Canadian taxpayers, workers and farmers.
I repeat my opening remarks, Mr. Speaker. Our freight rate system must recognize our geography, our climate, where it is

November 16, 1976
Restraint of Government Expenditures
our crops are raised and where our flour is milled. It must take that into account when we attempt to make sales in Europe, in central and southern America and in the Soviet Union. The only way we can do that is through a system of transportation rates that allows us to compete with other countries which are already subsidizing their flour milling industry to a great extent.


Mr. John Wise (Elgin):: Mr. Speaker, although you know that quite frequently we in this party vary considerably in respect of party philosophy with our good friends sitting to our left, before I begin my remarks may I make the comment that what has been said by the hon. member for Regina-Lake Centre (Mr. Benjamin) in criticism of the government has been quite right. Elis comments with reference to this legislation, particularly in respect of Clause 15, the repeal of Section 272 of the Railway Act, are quite right as well. However, I wish to caution the hon. member that what he said concerning my colleague from Moose Jaw and the rest of my colleagues is quite wrong.
We on this side of the House, and indeed the Canadian public, have called upon the government time and time again to demonstrate by deed and action some restraint in government spending. The record clearly shows that this government talks about restraint, preaches restraint and expects the segments of our society to practise restraint, while in reality it continues to spend more and more itself. In other words, 1 am sure there would be unanimous agreement that this government does not practise what it preaches. The government tells people in all regions of the country to do as it says but not as it does.
In general this bill is a pretty good example of government window-dressing designed to make clear that it is spending less money when exactly the opposite is the case. The over-all effect of Bill C-19 will be of little or no significance. It brings into law certain measures already in practice and indicates other measures that are to be taken. Given the record of this government in the general area of belt tightening, one would be tempted to say it is losing the battle of the bulge. Is it any wonder people become skeptical about a government bill termed "the government expenditures restraint act"? The President of the Treasury Board (Mr. Andras) has indicated a reduction of $1.5 billion of expenditures would result from the passage of this bill. Given the past record of this government one is encouraged to say, as a result of these measures at least, that this simply will not happen. Upon review of this bill and in light of other planned programs, it is obvious that what will really take place is a reshuffling of dollars and a deferral of payments. Only time will reveal the exact savings if any, and 1 detect a distinct absence of optimism in the minds of many Canadians.
Usually it is difficult in respect of bills this type which cover a wide range of subjects to arrive at a position, be it for or against. This bill, however, contains one clause that resolves our difficulties in this regard. In fact, because of this particu-
(Mr. Benjamin.]
lar clause and its rather surprising presence in this bill one is left with no choice but to oppose the entire piece of legislation. I must admit that I am genuinely surprised the government has not seen fit to eliminate Clause 15 which calls for the repeal of Section 272 of the Railway Act commonly referred to as the "at and east" rates.
On many previous occasions I have spoken in this House about the lack of concern this government has shown in respect of the agricultural industry. 1 have spoken about the lack of effective programs, the lack of government action to resolve pressing problems in the agricultural industry and the low priority given by this government to industry generally. Clause 15 is simply another glaring example of this government's attitude toward Canada's farm community. On the same subject one now continually hears the comment across this country that the influence of the Minister of Agriculture (Mr. Whelan) within cabinet has eroded to the point of insignificance. That has been obvious to us on this side of the House for months. The fact that the people in the industry now recognize this to be the case simply proves that although you can fool some of the people some of the time, there is no way that you can fool all of the people all of the time, especially when the people happen to be those involved in our agricultural industry.
I was glad to read in the speech of my colleague from Halifax-East Hants that he had reviewed the minister's performance before the standing committee on May 4, 1976. Certain aspects of the minister's statements concerning the removal of the "at and east" rates are very interesting and revealing. During that meeting both the chairman and the vice-chairman of the Canadian Livestock Feed Board, Dr. Perrault and Mr. Sonneveld, made it abundantly clear that if the clause was not withdrawn some very major problems would result.
Such action would compound the already hazardous situation with respect to available storage of feed grains for emergency purposes in the St. Lawrence region, particularly at the Montreal and Quebec City ports. I am certain that Quebec livestock feeders will not take kindly to any such measures and rightly so. It was made clear by the chairman that such a move would prove detrimental to the ports in the Georgian Bay area as well. The Minister of Agriculture also made interesting comments on that very subject. He stated in response to a question from my colleague from Red Deer that he was not in agreement with the measure and went on to indicate that he thought it was "absolutely nuts". I asked the minister if he would be supporting our motion requesting that this clause be withdrawn. The minister did not reply to that question directly but commented to the effect that I must have had a private detective watching his mail because I knew exactly what he was doing. This was May 4, 1976, six months ago, and was in relation to Bill C-87 which provided for the repeal of Section 272. Six months later Bill C-19 was introduced and Clause 15 reappeared.
The result of the representations of the Minister of Agriculture can now be determined as having been absolutely nil. He
November 16, 1976

has of course been swept aside before by such cabinet ministers as finance, industry, trade and commerce and now by transport. Because of the fact that Clause 15 reappears today in this bill we are led to believe, as my colleague from Qu'Appelle-Moose Mountain commented this morning, that we should not be surprised if in the not too distant future, given the track record of this government, a bill would be introduced calling for the repeal of the Crowsnest Pass rates. When the committee is considering this bill we will all look forward to the minister speaking in defence of the industry he supposedly represents. It is true that a program has been announced to assist Canada's 39 milling plants, down from 78 only 20 years ago. However, this program will not ease the situation of tight storage for feed grains in eastern Ontario and Quebec, nor will it resolve the problems of the inland elevators.
The Minister of Transport (Mr. Lang) and the Minister of Agriculture might suggest that additional storage be built for this purpose. That was promised at the time of the change in the feed grains policy last summer. That promise was not kept and no such additional storage space is in existence today nor is it likely to be for some time in the future. The addition of more storage space would in fact only alleviate some of the difficulties experienced by the St. Lawrence ports. Again, it would accomplish absolutely nothing toward solving the dilemma of the Georgian Bay region elevators.
This is not a minor issue as it might seem to be on the surface. It is a major and vital concern of a national nature. The eastern ports will be adversely affected if this subsidy is removed. I refer specifically to the ports of Halifax, St. John's, Montreal, Sorel, Trois-Rivieres and Quebec. The western wheat farmers in all three prairie provinces as well as the wheat producers in my province of Ontario stand to be adversely affected if this ill-conceived legislation is allowed to pass. Canada, as a whole, stands to lose, not only because of the damage 1 have just mentioned, but because of the very real possibility of a loss of export sales due to the increased grain prices which will ultimately result if the transportation subsidy is removed.
At a time when export markets are increasingly hard to come by, the government has made a decision which will sharply worsen our already eroding position in export flour markets. I cannot understand how this decision can be of benefit to Canada, and 1 am certain that if a thorough cost-benefit analysis had been undertaken, this legislation would never have seen the light of day.
According to the Canadian National Millers Association, this piece of legislation represents proposed rail rate increases of $17.64 to $22.05 per metric ton on flour exports. This completely unexpected and ill-advised restraint measure will virtually guarantee the speedy demise of an already eroded export flour trade. This will ultimately result in increased costs to the government and subsequently to the economy of Canada.
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The Minister of Agriculture (Mr. Whelan) has suggested that more and more countries are milling their own flour, thus implying that there may be decreasing demand for flour exports. This is certainly not the case at all, although if this subsidy is removed, there will undoubtedly follow a further decreasing demand for Canada's high prices flour exports. As it is now, only Canada and Australia have experienced substantial declines in this regard. The United States level has held fairly constant since 1954, while the European Common Market has expanded its exports over a ten year period from 15 million hundredweight to 64 million hundredweight.
As a matter of fact, some countries such as those in Africa and the West Indies have no flour milling capacity so that the only way our grain can enter those countries is in the form of flour. Contrary to what the minister may say, a world market still exists for flour and what we now have to decide is whether or not Canada is going to remain in a competitive position as an exporter to this market. As we are all aware, Russia has been purchasing a substantial amount of flour annually from Canada. However, each year's sale must be negotiated on an individual basis, and export business can only be maintained if Canadian wheat and flour prices remain competitive. The Canadian National Millers Association judge this situation to be critical and maintain that further business with Russia could be in serious jeopardy. A cost-benefit analysis would no doubt illustrate that savings made in eliminating the subsidy would be more than offset by the subsequent loss of export sales that would surely follow.
What about Canada's food aid program? A large proportion of flour exports, almost 12 per cent, is CIDA sponsored. If we assume that this international aid is to be continued, then we are dealing, in this instance, with a straight transfer of the extra costs from one departmental budget to another.
Another aspect of this legislation which must be seriously considered is the impending unemployment and hardship that must inevitably result if the subsidy is removed. There would be more plant closures in the milling industry, which worked at 76.8 per cent capacity in 1975, as well as more layoffs of the 3,000 persons directly engaged in the industry. Export flour is one commodity which generates significant employment for labour in eastern ports and a reduction in flour exports will have a telling impact on employment in an area in which unemployment already is far in excess of an acceptable level. Side effects such as unemployment and direct effects such as loss of revenue, would not come into play, of course, if Canada could maintain, rather I should say regain, its competitive position. What is needed, Mr. Speaker, are not measures to further erode that position, but measures to breathe new life into our sagging position as an exporting nation.
Canadian flour exports have been steadily declining for the past 20 years in spite of a growing pattern of world demand for this product. In 1954, Canadian millers were exporting over 20 million hundredweights of flour annually. By 1975, exports had dropped over 50 per cent to approximately 8'/2 million hundredweights. The commercial component of export flour sales alone, which totalled over 19 million hundredweights in

November 16, 1976
Restraint of Government Expenditures 1954, amounted to less than Wi million hundredweights. In 1975, during the same period, world demand for flour rose from 64l/2 million hundredweights to 95 million. In percentage terms, Canada's share of the world flour trade has declined from 31 per cent to 11 per cent.
The implementation of subsidy programs by many foreign governments, especially the U.S. and EEC countries combined with the lack of any similar assistance from the Canadian government, is the single most important factor that has led to the deterioration of Canada's position in the world flour trade. Virtually all other major flour exporting nations have recognized the need to support their milling industries and in recent years have moved to bolster export performance with a full range of subsidy programs.
In competition with American mills, Canada almost invariably has had higher seaboard costs. Even with the subsidy on the movement of export flour and the hold-down on flour rates, the comparative cost of American export flour remains below Canadian export prices. This government's proposed action will only serve to aggravate this competitive disadvantage as Canadian flour will be an additional $17.64 per metric ton out of line should the subsidy and the "hold-down" be eliminated. I am informed also that the elimination of the present subsidy could mean the loss to Canada of about $28 million annually in "value-added" processing activities, much of this in already economically depressed areas. I might add that this amount is not adjusted by conventional economical multiplier factors or it would be considerably higher.
As the milling industry is a purchaser of goods and services, the loss of the export flour trade will lead to corresponding declines in a number of complementary industries. These industries include manufacturers of bags, machinery and equipment, transportation services, dock labour and pilotage. Total expenditures in this regard have been estimated to approach $65 million a year. Here again, no conventional economic multipliers have been applied.
Some markets for grain can only be met by the export of flour. If Canadian flour cannot remain competitive, these grain sales will be lost. This is especially true of -arkets where there is no milling capacity as lost sales in these areas will not be exchanged for purchases of grain. Canadian millers are a major consumer of Canadian wheat, milling an average of 90 million bushels a year. This means, in effect, that Canadian millers process one entire wheat crop every five to six years.
So far, the bulk of attention has been focused on the unnecessary hardship that will be imposed on the western grain farmer and miller, and upon the port facilities of Quebec and the Maritimes. I would like, at this point, to add a few brief words about the potential damage this legislation will inflict upon the farmers, the inland terminal workers of Ontario, Ontario wheat producers, as well as the hardship it will cause on inland terminal workers, particularly in Ontario and the Georgian Bay region.
The Ontario wheat growers are going to be subject to reduced returns as a result of this legislation. In order to avoid lost sales through increasing the price, if indeed that can be
[Mr. Wise.)
done, the producer will be forced into picking up the tab in making up the difference in transportation costs. The Ontario wheat producers marketing board has made a strong protest to the government on this matter, a protest which apparently has fallen on deaf ears-or at least it might have fallen on ears attached to a head which has no influence on the federal cabinet. Inland terminals which stand to be adversely affected are located along Georgian Bay and Lake Huron and in such places as Prescott, Collingwood, Midland, Owen Sound, Sarnia, Port Colborne, Toronto and Kingston.
In conclusion, I ask the government to delete clause 15 from Bill C-19. It has been clearly illustrated that jobs, revenue and valuable export markets will be in serious jeopardy if this clause should become law. The amount of money which could be saved is extremely insignificant. The saving is not a worthy one when equated with these damaging results, particularly when there are so many other areas of federal spending which could be reduced without the harmful effects which will surely accompany the passage of this bill, particularly with respect to clause 15.


Mr. Paul E. McRae (Parliamentary Secretary to Minister of National Health and Welfare):: Mr. Speaker, I am pleased to have an opportunity to speak about Bill C-19, the restraint legislation. I do not think there is anyone sitting in this House who is not in favour of restraint. I think that is a universally accepted notion, but the question appears to be where we are to restrain ourselves. The guiding principle seems to be that we want restraint, but not restraint on anything affecting our own sphere. That is becoming a Canadian principle. We would like to see the other guy cut back, but not ourselves. That is a problem facing us all.
1 have heard members of all three opposition parties talk about restraint. Particularly I have heard members of the Tory Party say that almost the only reason for inflation is high government spending. The hon. member for York-Simcoe (Mr. Stevens) talked about how he could cut literally billions from government spending, but I have not heard any concrete examples of how this could actually be done. Let us talk about a couple of examples in the last year.


An hon. Member:: Talk about Otto Lang.


Paul Edmund McRae: Let us talk about Bill C-68 of last winter. It actually took a whole year to get this bill through from the time it was introduced to the time it was completed. What did that bill do? It was to limit the increase in medical expenses to 13 per cent from the previous open-ended arrangement. We were saying that in the first year the provisions of that bill would be applicable we would allow an increase in medical spending of only 13 per cent; in the second year, 11 per cent, and in the third year, 9 per cent. At the same time inflation was being reduced to 6 per cent or 6.5 per cent. It was a reasonable proposition.
I understand the NDP because for years and years it has been saying that we should spend more money in some areas.
November 16, 1976

Elowever, if we were to add up the cost of some of the programs they have proposed over the years, the results would be astronomical. There is, however, a humanity in that party in this respect. On the other hand, the Tory Party has been saying that we must restrain, cut spending in every way and leave things to the private sector. Yet both those parties took the same action and opposed the bill. A better way of putting it would be to say that they filibustered the bill. I think the Liberal Party and the government showed humanity with respect to that bill, but it was humanity with responsibility and that is the role a government must play.
Let us take a look at something a little more recent.


An hon. Member:: Otto Lang.


Paul Edmund McRae: There was a motion under Standing Order 43 moved the other day by a member of the NDP which had to do with pensions in the civil service. It had to do with widows' pensions or spouses' pensions, and one of the features of that motion was that spouses' pensions should eventually rise to 100 per cent of the pension of the two people in a given family. That would have amounted to a definite increase in the cost of the civil service and in the cost of civil service pensions. When the vote was taken, the party of restraint, the Tory Party, voted for that motion. They thought that the government should consider granting a pension of 100 per cent of the amount that it would be for both parties to the remaining spouse. Was that an act of restraint? It certainly was not.


Mr. Dick:: How about Otto Lang? Is that an act of restraint?


An hon. Member:: Order.


The Acting Speaker (Mr. Turner):: Order, please. The Standing Orders provide that a member should be allowed to speak without interruption. 1 suggest that we listen.


Paul Edmund McRae: I would prefer not to get into a long argument, but if we would like to compare-


Stanley Howard Knowles: Mr. Speaker, I rise on a point of order, since there seems to have been an interruption for that purpose. It is also a rule that one cannot reflect on a vote taken in the same session. The hon. member can talk all he wants about what happened last session, but he cannot reflect on a vote which was taken in this session.


Paul Edmund McRae: I can accept that statement. I would like to deal with the Minister of Transport (Mr. Lang) since some of this occurred in this session. Without getting into a long argument about individual trips-


Walter David Baker: Don't be too specific.


Paul Edmund McRae: -in one case we voted for an item which would likely cost something in excess of $50 million, and in an other we are talking about a total government expenditure for a year of $3 million. There is a difference between $50 million
Restraint of Government Expenditures
to $100 million and $3 million, so without defending Mr. Lang-


Stanley Howard Knowles: Order.


Paul Edmund McRae: -because I am sure he can defend himself extremely well-


Donald Frank Mazankowski: He is the Minister of Transport.


Paul Edmund McRae: I am sorry. That is not the way he was referred to by hon. members.


The Acting Speaker (Mr. Turner):: I suggest that the hon. member refer to all hon members in this House either by their title or by their riding.


Some hon. Members:: Hear, hear!


Paul Edmund McRae: I am sorry, Mr. Speaker. I got carried away because 1 heard the minister's name used often on the other side.
If we are looking for methods of restraint, we should be looking at how governments can restrain themselves. We must look at government spending in toto, the kinds of government spending and the amounts governments spend. Of the $42 billion, $43 billion or $44 billion this fiscal year, which will be the amount the government will likely spend, in round figures 30 per cent of that is used to operate the total government. It provides for the armed forces, the Post Office and all activities of the federal government. It provides all the services for which this government is responsible. Transfer payments account for the remaining 70 per cent. Where do these transfer payments, which amount to over $30 billion, go? Other levels of government receive 8.1 per cent in the form of the Canadian Assistance Plan, in the form of health and welfare payments and in the form of equalization. There is some feeling in the country that in terms of equalization this all goes to the province of Quebec which, of course, is not true.


Walter David Baker: Don't be silly.


Paul Edmund McRae: Equalization payments go to seven of the ten provinces. On a percentage basis the Atlantic provinces get the most, and although Saskatchewan and Manitoba also receive some, they get the least.
The second item is payments to individuals totalling about $9 billion or 23.6 per cent of the total. This is paid in the form of Canada Pension Plan, Old Age Pensions, the Guaranteed Income Supplement and so on. One of the major factors contributing to increased government costs over the last three years has been the need to increase the amount of money going to individuals because of inflation in the economy. We have had to substantially increase old age pensions, widows' pensions, veterans' pensions and so on, and we have had to index them so that the people will have enough money to live on. To say that these are contributing factors to inflation is to say that old age pensioners, veterans and such people are causing
1054

November 16, 1976
Restraint of Government Expenditures inflation. It was necessary to increase considerably the amounts of money in these areas. It was especially necessary to introduce the guaranteed income supplement to make sure these people had enough to sustain them in inflationary times. This is something a humane government does but it has to be done with some restraint and responsibility.
Another big area involving payments to people is family allowances. I have heard members of the opposition speak about cutting back but I have never heard anybody specify where they might cut back except in this one area. I have heard discussions about cutting back in the area of family allowances or paying family allowances on a needs basis.


The Acting Speaker (Mr. Turner):: Order, please. The hon. member for Lanark-Renfrew-Carleton (Mr. Dick) on a point of order.


Paul Wyatt Dick: Mr. Speaker, I wonder if the hon. parliamentary secretary rather than just being vague would have the courtesy to be specific about where he has heard such a thing. I know it was our party that proposed indexing.


The Acting Speaker (Mr. Turner):: Order, please. That is not a point of order; that is a question.


Paul Wyatt Dick: Will he answer the question? He cannot.


Paul Edmund McRae: No, I cannot place the names.


An hon. Member:: It was the hon. member for Comox-Alber-ni (Mr. Anderson), one of your own.


Paul Edmund McRae: Mr. Speaker, I shall look up some references 1 have.


Walter David Baker: Mr. Speaker, a point of order. I am sure it is well within the rules of the House to inform a colleague. For his information, the member who indicated the position that he has just accused us of taking, quite wrongfully, was the hon. member for Comox-Alberni (Mr. Anderson), his colleague.


Stanley Howard Knowles: Yesterday.


Paul Edmund McRae: Mr. Speaker, I would be pleased to look at my references. I believe I can furnish the information about the reference to paying family allowances on some kind of needs basis or changing them so that they only go to those who need them. I will say in this I am referring to the Tory opposition, not the NDP, because we can be sure where there is money to be spent they want to spend even more.
To continue, if we are to cut government spending in a big way then it has to be in some of these areas. The next area is subsidies. In this fiscal year the federal government paid out something in the neighbourhood of $2.2 billion; close to 6 per cent of the total federal budget goes to subsidies. When 1 refer to subsidies, Mr. Speaker, I am talking about subsidies to all groups and not just to Crown corporations because they are dealt with in another clause of the bill. We are talking about

subsidies to do some of the things that many members of this House feel must be done.
I was not happy to hear the Minister of Transport (Mr. Lang) suggest that we be concerned about subsidies in terms of the user-pay concept. I am afraid 1 do not agree with that concept because Canada has been built on the opposite concept. In some way this has to be a nation which shares. The user-pay concept might not work and I have a great deal of difficulty with it. I therefore have difficulty in criticizing most of the subsidies as the whole country is based on developing some equality between all regions. In my opinion, user-pay is an unethical concept.
To move on to some other items, Mr. Speaker, $4.6 billion or 12.1 per cent of federal spending is for Crown corporations. In this area we have had a hard fight in the last two or three years to get an organization like Petro-Canada, a Crown corporation, to do something for Canadians in the field of petroleum. 1 feel that Petro-Canada, Panarctic, Canadian National Railways, Air Canada and so on are Crown corporations which should be supported with subsidies or some kind of funding. These transfer items make up 70 per cent of the total federal budget. The last item is the national debt which takes $4.6 billion or 12 per cent of the total federal budget. No one would suggest we could cut very much there. As a matter of fact, the increasing expenditures there stem mostly from the fact that inflation has caused increases in interest rates and therefore government expenditures have increased.
Mr. Speaker, I do not believe that government spending is the only, or even the most important, cause of inflation. I think a good deal of government spending is inflationary but the vast majority of increases in government spending have been as a result of inflation. They may contribute but because of inflation they have been necessary. If we look at inflation in the year 1973-74 we find we are talking about world inflation caused basically by an excess of demand over supply. The demand seen in 1973-74 was extremely heavy. That is why I think the Tory Party was wrong in the spring of 1974 and the election of 1974 in saying they would bring in controls- although I admit a change was occurring. At that particular time, we were trying to control something which was caused by an excess of demand and a shortage of supply. Controls at that point probably would have made the situation considerably worse.
However, there was a distinct change between the spring and summer of 1974 and the fall of 1975, and this is the key to the matter. During the summer of 1974 one could still say that inflation was caused by excessive demand. As the Prime Minister (Mr. Trudeau) said in the throne speech debate of the fall of 1974, wages were not a major contributing factor to inflation at that point. Nevertheless, between October, 1974, and October, 1975, wage settlements averaged 21.8 per cent, or more than double the size of average wage settlements in the United States. Therefore, in the fall of 1975 we faced some serious wage demands.
November 16, 1976


Robert Hylton Brisco: There was pressure from the people.


Paul Edmund McRae: We faced the sort of demands we had not faced earlier. For example, the postal workers were asking for 71 per cent more, certain teacher groups 40 per cent and more, and so it went. In the summer and fall of 1975 we faced a great many unreasonable demands on the economy. In the spring of 1975 we asked the labour movement and the business community to restrain their demands voluntarily. Unfortunately, our endeavour did not succeed, so that by the fall of 1975 we faced cost-push inflation and had to deal with it. It then became necessary to introduce controls.
Without question, in the little more than one year which has elapsed since October, 1975, we have contained inflation. The inflation rate for the period October, 1975, to October, 1976, was about 6.2 per cent, as compared with 10.6 per cent for the period October, 1974, to October, 1975. Clearly, the inflation rate has declined substantially. True, many factors are responsible for the decline, but controls are a major factor. At the same time, wage rate increases which were running at slightly under 22 per cent in the first half of 1975 declined one year later to around 11 per cent. Clearly, since wage increases average about 11 per cent and inflation about 6.2 per cent, even if one does not allow for some productivity gains one can say that the workingman and the average Canadian is now basically better off-and this improvement can be largely attributed to controls.
Those who say we are controlling only wages but not profits I say are mistaken. It is not true. In real dollars, profits declined in the order of 7 per cent in the past year. We have considered wages and squeezed profits in our attempt to cut back the rate of inflation. Although some may claim they have been dealt with unjustly, generally speaking Canadians have benefited from this government's anti-inflation program. Therefore, it can be said that the government's anti-inflation program has reduced inflation.
Other cost factors have yet to make themselves felt and we shall need to control them if we are to keep inflation under control. This coming winter we face the alarming prospect of more than 7 per cent of our work force being jobless. We shall need to create jobs. This will involve government spending which in turn will create inflationary pressures.
Other capital programs which will arise in future will create distortions in our economy. Specifically 1 am thinking of the $180 billion in capital which it is projected we shall need during the next 15 years to develop energy. That sum, on a reasonably amortized basis, works out at something over $3,000 per family per year in this country in terms of present-day dollars. Such expenditures could well create tremendous inflationary pressures.
I think it is well to remember what has happened with respect to the James Bay project. When I was first elected to this House it was said that the James Bay project would cost between $3 billion and $4 billion. Now one hears that the project will cost between $15 b illion and $16 billion. One can see the effects of inflation-and such costs are quoted in
Restraint of Government Expenditures present-day dollars. 1 think the Liberal government of Quebec was defeated in the recent election partly because the enormous cost of the project was distorting the economy of Quebec. The project was creating tremendous expectations in Quebec, expectations which were inflationary.
Therefore, when we consider that we shall need to spend $180 billion over 15 years for energy development, it is clear that we shall see many distortions in the Canadian economy. If we are to avoid such distortions, we must consider a reduced use of energy, and energy conservation. Only if we cut back on energy demands will we survive unscathed. But that is another story. As I say, the $180 billion we shall spend on capital needs over a 15-year period will create tremendous inflationary pressures in our economy. This means that we shall not be able to do many of the things we want to do and we shall need to change many of our ways.
Let me repeat my point. Although we can solve some of our difficulties with a certain amount of restraint, there are real limits to the amount of restraint we can tolerate without totally distorting the economy. As I said, 70 per cent of the federal budget is spent on various kinds of transfer payments; only 30 per cent is spent on the operation of the government. Therefore, if there is to be restraint in spending, it will have to come in the area of transfer payments and I do not believe we can cut spending in those areas without substantially hurting the Canadian public. In future we shall face continuous inflationary pressures, particularly from capital spending for energy development. Consequently, I foresee a long-term need for a government anti-inflation program. We must restrain the demand of both the private and public sectors on our resources. As a nation, we must all restrain our demands.


Mr. G. W. Baldwin (Peace River):: Mr. Speaker, if the hon. member who just sat down believes what he said-and I think he is sincere and usually believes what he says-one can only say that the government operates on the basis that it can fool some of the people most of the time, and fool its own backbenchers all of the time.


Maurice Adrian Dionne: And the opposition tries to fool all the people all of the time.


Gerald William Baldwin: This bill seeks to amend or repeal certain statutes to enable restraint of government expenditures. Its short title is "government expenditures restraint act". The operative words in the full title are "restraint of government expenditures." I agree with the objective, intention and reasons of the bill. Inflation is the number one problem in this country and in other parts of the world. The government has not done a great deal about it and is not doing very much with it in this bill. This is cosmetic legislation designed to deceive, delude and fool people.
Let us talk a little about inflation. That is what the hon. member was doing. To a large extent, inflation is a question of psychology. It was obviously with that in mind that this government, little more than a year ago, produced the anti-
8000 l-67>/2

November 16, 1976
Restraint of Government Expenditures inflation program and the legislation on which it was based. The government had fought an election 14 months before, challenging and denying the validity of the proposals advanced by this party and other people in Canada. A short time before October 13, 1975, the government said it was categorically opposed to controls and had no intention of introducing them. That is the most certain reason the program was doomed to failure.
It is psychology upon which inflation feeds itself. 1 do not think there is any doubt about that. People have a very understandable desire to protect themselves from the storms of increasing prices, from the danger of prices of goods and commodities being increased. They want to protect themselves to ensure they have adequate savings against that sort of situation. When they demand increases either in wages or in the price of the commodities they sell, they not only make allowance for the current year but the next year as well. The cumulative effect is the reason for inflation.
On October 13 and 14, 1975, the Prime Minister (Mr. Trudeau) solemnly announced to the people of Canada that he was going to bring about the end of inflation. He stated that we were to have controls, and explained the way they were going to work. If at that time there were some fairly well indexed and buttressed reasons for the government's position, that might have been a saleable proposition. However, the people of Canada do not believe this Prime Minister; they do not believe this government, a government with a record of deception, slyness and an incapacity to tell the truth about situations dealing with inflation. They are just not believable.
When the anti-inflation program was announced and the legislation brought down, the people shrugged their shoulders and turned away from it. The psychological aspect which should have been the standard core of the program was eliminated from the beginning. When over the years a government practices organized deception, it is not easy to persuade the public that they have changed their attitude. That is one of the reasons a provincial government was defeated yesterday.
The hon. member asked us to believe that this government is taking logical, reasonable and believable steps at this time to deal with the program which will bring about a cessation or diminution of inflation. He stated that Bill C-19 is a vehicle designed to achieve that effect. He cannot expect the public of Canada to buy that kind of proposition.
There are ways in which it can be done. It will not be easy. The public has become cynical. People do not accept the word of government at this stage. They have been told on many occasions, over many years, by the Prime Minister and by successive Ministers of Finance that inflation is beaten. That is almost like a cease-fire in Lebanon which seems to happen every two or three days. Therefore, the public do not believe this government when it tells that story. It would not be impossible for this government, if it were really determined, to deal with the question of inflation by trying to create in the minds of people an honest and sincere belief that they are going to exercise restraint in government expenditures.

The hon. member spoke about James Bay. I am glad he did. It reminded me of a statement which 1 made not very long ago and which I will again call to the attention of the House. Practically all the programs initiated by governments in Canada over the past 20 or 25 years, with one or two exceptions, have more than exceeded their estimated cost. When these programs are brought down, whether they involve construction expenditures or are social benefit programs, some indication is given as to what the cost is likely to be. On every occasion, with one or two exceptions, that estimate has been exceeded. I do not know whether the estimate was made falsely, with gross negligence, from ignorance, or outright lying: that, I cannot tell. I could list the programs but I do not have the time. However, in each and every case they have more than exceeded, by a substantial amount, the original cost. When you pile these programs one on top of another, it becomes the basis of inflation which has racked this country and other countries of the world. The belief that you can have guns and butter was one of the reasons that led the Germans into the last war, thinking they could finance an operation of that kind.
When these programs are finally brought to fruition the costs are infinitely increased. Add them together and you find you need more taxation to pay for them. Taxation means that the people providing the goods and services in this country have to charge more. That creates inflation. That is not a bad situation for the wealthy or the powerful unions which have the capacity of obtaining higher wages or better prices for commodities. However, for the old, the infirm or those on small, fixed wages it becomes an impossible situation. There is no question about it; we are going to be faced with this problem until a government of this country comes to grips with the question of restraint.
I want to suggest to the government one or two things they can do if they are sincere. They can tell the public the truth about what it costs to operate this country. It is impossible for even an intelligent person to examine the blue book on estimates and come up with any firm knowledge about what is intended. Over the last eight or nine years the number of votes in the estimates has increased. The language has become unintelligible. There are a great many $1 items which provide for the expenditure of money by order in council or regulation about which we never get to find the facts.
There has been foisted upon the taxpayers of this country a system by which moneys are taken out of their pockets in connection with estimates which in many cases we are unable to examine with any degree of clarity. Even if the estimates have been extended and made intelligible to us, there is no system available to parliament for conducting a reasonable examination of them to determine whether they involve the expenditure of money in which the country should be engaged. There is no system at all. There is a fixed calendar date on which estimates are deemed to have been passed. The main purpose of parliament, which is to refuse to grant supply until all grievances have been ventilated, has gone by the board. If
November 16. 1976

this government wants to persuade the people of Canada that it finally wishes to exercise restraint, it will take the initiative by providing ways and means by which control can be exercised. My hon. friend from Vegreville (Mr. Mazankowski) has been questioning members of the treasury bench for some time with these things in mind. The reaction has not been very favourable, and if the reaction to my proposals is the same as it has been to his questions, I do not think much notice will be taken of them.
There is one other suggestion 1 would make. It is that we find some means whereby, when the government is introducing legislation or planning programs of any kind, it is compelled to make known to the House precisely what expenditure is involved. If the government reintroduces, for example, a bill varying the unemployment insurance benefits, or dealing with immigration, no such legislation should be considered unless it contains a clause setting out the probable cost. Such open disclosure would have a salutary, wholesome effect in restraining government expenditure.
We forget, now, how much we were told 25 years ago what the St. Lawrence Seaway would cost. Were we ever told the probable cost of the medical and hospital insurance schemes, both of them intrinsically useful proposals? We were never told the truth about what they would cost. It might well be that had we known what those costs would be, restraints would have been placed upon the degree to which they were implemented. It is this failure on the part of the government to be honest and truthful in connection with public expenditure which has made the public so unwilling to accept half-measures such as those now before us.
I submit that my proposition makes sense. If you or I, Mr. Speaker, decide to write a letter to one of our constituents, we know that such a letter might very well be published and we are careful to state the facts as they are. I feel the government should be compelled to follow a similar course when it comes to legislation and new projects. Take, for example, Bill C-20, the next bill on the order paper, the bill concerning the Auditor General. This is a bill of which I am very much in favour and it is one to which a price-tag could be attached. It is my strong belief that in order to persuade the public that the government means what it says, more truth must be conveyed to them with regard to programs of expenditure.
I offer those two suggestions to government and government members and, in conclusion, I say to them that if Bill C-19 is the only answer the government has to the refusal of the public to accept its sincerity when it comes to the question of restraint in government spending, they have lost the case before it has even come to court.


Paul Wyatt Dick: Mr. Speaker, I should like to make a brief comment on the complaint of my hon. friend from Peace River (Mr. Baldwin) that government estimates are not spelled out clearly. This is a matter which has been of concern to me since my arrival in this House four years ago. I have often wondered why the government did not issue a true budget. Maybe it should be 50, 60 or 70 pages long, with the various programs, the number of man-years in
Restraint of Government Expenditures each program, the number of personnel and the expenditure set out so that people could scrutinize closely each department and what they proposed to spend-much as they would do in the case of a corporation budget or even a family budget-so they might know what was planned. Then if more than was necessary was spent, they could zero in and find out exactly why that program was over budget. Indeed, if a program did not make use of all the funds allotted to it, the funds for the program could be trimmed in future years to what was actually needed. I have often felt this would not only help members of parliament in their scrutiny of government affairs, but would clear away secrecy by putting the figures in the books in an intelligible form so that most members of parliament would understand them in addition to the public.
Today we are discussing Bill C-19 which is part of the government's program of restraint. The government decided, on the day before Thanksgiving last year, 1975, that they had bungled the job, that they were going to swallow themselves and reverse their former position, introduce controls and at the same time exercise restraint in government spending. This bill is laughable if it is really going to deal with government restraint. It is a bill which is going to wipe out some provisions which cost some money, but it does not go to the core of the problem. The core of the problem is that the government embarks on programs and does not reassess older programs to see whether they should be continued or, in fact, discontinued. Last year we heard the government was going to cut out the CYC, the Opportunities for Youth program and cut down the LIP program. Then, of course, we heard in the Speech from the Throne and through the Minister of Manpower that they were going to introduce new programs which virtually would pick up the slack which they had originally cut out a year before in their so-called restraint program.
There is one aspect of this bill which greatly concerns me. I think it is a phony issue which the government has included in its restraint package. That is something that is false and misleading. The fact is that the government, through the Minister of Finance (Mr. Macdonald), has stated on previous occasions that one of the best ways of increasing industrial productivity is to encourage development of high technology and innovative new processes. At that time the Minister of Finance went on to say that this was a high-risk business and a difficult one into which to attract venture capital. However, the minister promised to look at the problem and to do so on a priority basis, whatever that might mean. I suppose that means whenever a new government is formed to take over from the tired bones that are presently on the treasury benches.
Clause 10 of the bill would wipe out the Industrial Research and Development Incentives Act. This seems, to me, to be a retrograde step. On March 10 of this year the Department of Industry, Trade and Commerce announced that after providing more than $220 million in research and development funds to some 3,000 Canadian companies during the last nine years, the Industrial Research and Development Incentives Act, known as IRDIA, would come to an end this year. The fact is

November 16, 1976
Restraint of Government Expenditures that the government is announcing it is going to wipe out the Industrial Research and Development Incentives Act, and this after the Minister of Finance has stated that the way to increase industrial productivity is to encourage the development of high technology and innovative new processes. So it seems that the government are speaking out of both sides of their mouth at the same time. I say clause 10 is a very retrograde step.
It strikes me that over the last nine years many industries in this country, especially those involved in the technological area of computers and new electronic hardware which is so commonly used, have taken advantage of this kind of government support to improve their products and to make themselves more competitive in markets throughout Canada and overseas. We have heard that the government is going to replace the Industrial Research and Development Incentives Act with some other new legislation. But what, Mr. Speaker? The government has not had the guts to tell the House with what they are going to replace this legislation. The government is so secretive that it does not want to tell the Canadian people how it is going to increase technology, research and development in this country by some new legislation or through some new proposals. By passing this bill the government wants us to wipe out the existing support that is provided, and leave us in the dark as to what new programs it has in this very important area.
Is this because the government is in the habit of being so secretive about all its programs? Is this because the government really does not have a program with which to replace the Industrial Research and Development Incentives Act? Or is the program such that the government is afraid to let the Canadian people scrutinize it to see whether it is as good as the one the government wants to do away with? I believe the government is afraid of scrutiny. Perhaps it is going to wait until the next budget or till some other time when it will try to introduce a program and have it shoved through parliament in short order without thorough examination. That program may not be as beneficial to Canadian industry and to the Canadian economy as the present program.
At the present time we are approaching an unemployment level in Canada of 8 per cent, and will probably be at this level next May. We have this level because industry is not producing at capacity or anything like capacity, and because the economy is on a downturn. I would say that both of these unfortunate situations are to a large extent the result of the ineptitude of the present government in handling the economy by putting the country first rather than wanting to do the best for all its citizens.
Instead, Mr. Speaker, the government has from time to time taken a rather partisan view and has put the Liberal party before the country. They have taken a number of politically expedient steps, such as swallowing themselves on the antiinflation measures when only a year before they had been saying they would not want to freeze prices at high levels and freeze wages at low levels. They said the leader of the Con-
(Mr. Dick.]
servative party had advocated this during the campaign, and that they had counter-attacked.
During the 1974 campaign the Liberal party used the advertising gimmick of showing a picture of the hon. member for Halifax (Mr. Stanfield) pushing an ice cream cooler around and saying, "They are going to freeze your wages at a low level, and zap!". That is the kind of "intelligent" comment that the Prime Minister uses all the time. Perhaps this is what happens with governments which are corrupt, which are bungling and which are feeding upon themselves for their own political purposes. Then, finally, the populace wakes up and throws them out for whatever alternative is available, in the hope that they will get truthful and open government.
As I say, Mr. Speaker, the government had to swallow itself. Having denounced one program, a year later it introduced that which was denounced. This government is afraid to come clean with the Canadian people as to where it intends to go. This government has created a climate in which business and free enterprise are not willing to expand. This government has created a climate in which people are not investing in the expansion of existing facilities or in new facilities. People in Canada and outside Canada who might be interested in investing in this country are reluctant to expand the manufacturing capacity of the Canadian economy.
Instead, Mr. Speaker, more and more we are finding manufacturing concerns which might have expanded in Canada going south of the border or to other countries where the economic environment is better for them. Indeed, it appears that a subsidiary of Northern Telecom, a company that used to be called Bell Northern and which is 66 per cent owned by Bell Canada, the mother of all Canadian telecommunications firms and which we liked to think of as "Mother Bell", a great Canadian enterprise, is opening a plant in California which will employ 12,000 people. Why is it that those jobs are not here in Canada? We have many more Northern Telecom plants in Canada, but this new facility is going to California, their having phased-out their microsystems plant in this country.
It seems, Mr. Speaker, the reason is that they cannot get the productivity they require. They cannot have the wage rates that are necessary in this country to be competitive in world markets, and the environment, created largely by this government, has not been of a sufficiently strong nature to encourage business. I believe that business and manufacturing are important to this country. If Canada is to grow and to prosper, we will need jobs so our people can be employed. Canada cannot afford 8 per cent unemployment. Canada cannot afford to have a situation where 46.7 per cent of the 780,000 people who are unemployed today are the youth of this country between the ages of 16 and 24. They represent almost 50 per cent of the unemployed people in this country.
The youth with whom I have spoken are not interested in grants such as through the LIP program, OFY or the suggestion that they be quiet this year and see what will be done next
November 16, 1976

year. They are interested in a growing economy, an expanding economy which will produce jobs so there will be a place where they can go to obtain a job with a future, security and opportunities for advancement. They want a worth-while form of employment rather than a make-work project. But this government continually falls back on these make-work projects because it has not created the climate for business and enterprise in this country. Indeed, the businesses and enterprises which might have expanded have postponed their expansion until the climate improves. As I have indicated, one can talk to many businessmen or people in the financial sector who will indicate that many businesses have decided to carry on their expansion outside Canada, perhaps in the United States, in the Caribbean, in Malaysia or in Ireland where there are tax-free zones. They certainly are not doing it here.
If we are to prosper and retain a high standard of living, Canada needs a manufacturing industry with high technology which is competitive in the world. What do we have? We have a government which would wipe out one of the only important programs we have, the Industrial Research and Development Incentives Act. We read comments in the press to the effect that Canada is stumbling along without a science policy, that Canada's science policy is headed for disaster and that the government has only played with a science policy. A former Liberal member in this House, now Senator Maurice Lamon-tagne, headed a royal commission in respect of a science policy for Canada. Yet this government is not doing anything about this.
At that time the minister indicated that he believed Canada needed an investment in science and technology. The Senate Special Committee on Science Policy, under the chairmanship of Senator Maurice Lamontagne, made an exhaustive study of Canada's research and development efforts with respect to this country's economic needs and issued a three-volume report entitled "A Science Policy for Canada". The third volume recommended that Canada should steadily increase its support of research and development, such as through the Industrial Research and Development Incentives Act, I may suggest.
As I was saying, the third volume recommended that Canada should steadily increase its support of research and development and achieve by 1980-only 3'/2 years from now- 2.5 per cent of our gross national product. It indicated that a corresponding increase should have been made for support of basic research, scientific research in our universities and other research institutions. A recent Statistics Canada survey of leading performers shows that the in-house research and development expenditures, as a percentage of the gross national product, declined in terms of current dollars to about .37 per cent in 1973 from .44 per cent in 1967.
Although the government set up the Senate Special Committee on Science Policy under Liberal Senator Maurice Lamontagne, a former cabinet minister in the Pearson days, to look at a science policy, as recently as 1973 our contribution has been declining to a point where it is .37 per cent of the gross national product. Again may I suggest that .37 per cent is a long way from the figure of 2.5 per cent which, as has been
Restraint of Government Expenditures indicated, is what we need if we are to be a technologically-based industrial nation.
Because we do not have our manufacturing on a proper base, Canada ends up selling more resources. We say we will mine a little more of our natural resources and send them abroad in the unprocessed form. We say that we will cut more of the trees in our forests and send them abroad in the unprocessed state. We say that we will take whatever we can for our wheat crops and send them abroad. This country has not advanced in the way of becoming a nation truly based on an industrial technology. Instead, the government takes the retrograde step of cutting out one of the acts which is most beneficial.
Earlier I heard the parliamentary secretary from Fort William indicate that this bill is a step toward cutting out excess government expenditures, that it is a restraint measure. He said that no one has suggested ways in which the government could cut down on its spending. Of course, 1 was so bold as to interrupt him at that point and suggest that perhaps the government could cut down its spending by disallowing the Minister of Transport (Mr. Lang) to spend $750,000 flying around in his private jet. He did not like that. 1 doubt that the head of any other corporation in this country spends so much money on his personal travel habits.
On many occasions members of this party have pointed out that we do not believe the government needs to spend $1 billion a year on consultants. Why does the government hire consultants all the time? Is it because the expertise is not available in the public service? Of course not. Our public service is filled with competent, able people who want to do a good job. They have the competence to analyse and to make studies and projections in respect of projects which are to go ahead; but instead the government goes outside and hires private consultants in the belief that in that way it can get off the hook. If the government follows the recommendations of the consultants, and the advice should turn out to be bad, then it can say that it followed the advice of the private consultants.
The fact is that the government is spending the money twice, because it already has the expertise. We do not think Canada needs to spend $1 billion a year on outside consultants when we have competent civil servants who want to do a good, thorough job. The minister mentioned Petro-Can. I believe our party advised the government that it did not need to spend money setting up its own private Crown corporation. We felt that the private sector could perhaps do a better job than Petro-Can.
Of course, the minister talked about PanArctic. He felt that Canadians had a good investment in PanArctic but, again, it required the government to put out money. It also required the government to put out a great deal of money to set up the Canadian Development Corporation. Perhaps the government should reassess its priorities rather than delving into the private sector. Perhaps the government should spend its money on running the affairs of the country rather than dabbling in

November 16, 1976
Restraint of Government Expenditures areas in which it will probably not do nearly as well as the private sector is doing.
Of course, the government may be able to achieve some restraint in DREE. I happen to come from a constituency a large part of which was especially designated for a number of years under DREE and now, under the Regional Development Incentives Act, is eligible for DREE grants. But the strange thing is that of the 16 or so companies that received DREE grants in my constituency, over 50 per cent have gone bankrupt. I am not sure that the successful ones really needed government money to make the investment, such as Union Carbide, that small international firm, Chase Nuclear, Noran-da Metals-all very small firms. They are the ones which received DREE grants and which are successful in my area, but the other firms went bankrupt. Of course, the promoter did not lose his shirt, but he did not advance much money, anyhow, when he tried to follow on a government grant.
That is what is going on in DREE. The first DREE grant that was made in New Brunswick went to the McCain food people who, of course, were the people in New Brunswick who supported the present Prime Minister (Mr. Trudeau) when he was running for leadership. I am sure there was no pork-barrelling done in that situation. It is just that my eyes keep deceiving me when I see these big firms getting the money, and I wonder why they always support the Liberal party.
Perhaps there should be some cuts in the DREE area. Perhaps the government should reassess itself. We now have 32 cabinet ministers, the largest number of cabinet ministers we have had at any time since confederation. Is the government more complicated, or do they just need more idiots to do the bungling job they are doing? A lot of them do not appear to have any responsibility. I understand that there is one minister without portfolio whose only responsibility is to be the whip of the party, and that was his position before he was appointed minister. I do not know whether he has any other responsibilities in the House, but perhaps they will think of something in the near future. I wonder if he gets double salary!
What the government needs to do is put forth what they have in the way of policy to replace the Industrial Research and Development Incentives Act. I think they should tell the people what they can expect from the government before they wipe out what was in the past. If you are on an island, you want to build a bridge in front of you before you cut down the bridge behind you and isolate yourself.
As I indicated earlier, Senator Lamontagne, in his report, indicated that Canada had to make a sizeable investment in science and technology so as to maintain our standard of living and build a good industrial base for our society. Perhaps I should also say that the Organization of Economic Co-operation and Development indicated that of the 12 most prosperous countries in the world which it had surveyed and which were spending various percentages of their gross national product on research and development, Canada stood tenth. There were nine other countries ahead of us, namely, the United States, France, the United Kingdom, Sweden, Germany, the Netherlands, Belgium, Japan and Norway. So we end up with those

who really believe in making the iavestment, but, oddly enough, among those countries are a number of countries which happen to be ahead of us in their standard of living.
In saying that Canada is tenth in line and that we are flying by the seat of our pants, I am trying to express concern about the small amount of money that the Canadian government has encouraged should be spent on research and development. In order to show the concern that many people in this country have had about this, I should like to read an extract from a letter written to me by a constituent, a small company which started a year and a half ago with four founders and which has now grown to the extent of employing 19 people. In its second full year of operation it appears that this company will have a capital of half a million dollars. Perhaps I can sum up by indicating that it got its start because it had $19,000 in the form of an industrial research and development grant and is now employing 19 people rather than four. I believe this is the type of program which business needs in this country.
May 1 call it five o'clock, Mr. Speaker?



PROCEEDINGS ON ADJOURNMENT MOTION


Mr. Deputy Speaker:: Order, please. It is my duty, pursuant to Standing Order 40, to inform the House that the questions to be raised at the time of adjournment are as follows: the hon. member for Halifax-East Hants (Mr. McCleave)-Central Mortgage and Housing Corporation-Allegation borrowers asked to use lawyers selected by corporation; the hon. member for Medicine Hat (Mr. Hargrave)-Agriculture-Request for assurance beef quotas applicable only to meat in transit to Canada on October 17; the hon. member for Cape Breton-East Richmond (Mr. Hogan)-Energy-Reason for failure to subsidize cost of electricity in Atlantic region.

It being five o'clock, the House will now proceed to the consideration of private members' business as listed on today's order paper, namely, public bills, private bills, notices of motions.
November 16, 1976



PRIVATE MEMBERS' PUBLIC BILLS


Mr. Deputy Speaker:: Item No. 1, in the name of the hon. member for Lotbiniere (Mr. Fortin)?


Some hon. Members:: Stand.


Mr. Deputy Speaker:: Stand at the request of the government. Item No. 3, in the name of the hon. member for Capilano (Mr. Huntington)?


Some hon. Members:: Stand.


Mr. Deputy Speaker:: Stand at the request of the government. Item No. 7, in the name of the hon. member for Scarborough West (Mr. Martin).


Some hon. Members:: Stand.


Mr. Deputy Speaker:: Stand at the request of the government.


Donald W. Munro: that Bill C-208, to amend the Criminal Code (humane traps) be read the second time and referred to the Standing Committee on Justice and Legal Affairs.
He said: Mr. Speaker, in rising at second reading of this bill I want to make it clear that I have no intention of speaking at great length, and I also want to express my appreciation to those hon. members from all sides of the House who have indicated their support for this bill.
There is support for this bill from hon. members on both sides of the House and among citizens of the country, and from associations such as the Association for the Protection of Furbearing Animals. I have also received petitions from a number of parts of the country. For example, I have a petition from Nepean High School here in Ottawa signed by a number of students. There is also a petition from Kingston, Ontario, signed by 1,586 members of the Humane Society of Kingston.
My desire to be brief is motivated by the hope that others will also speak briefly in support of this measure and that before six o'clock we can vote to have it referred to a committee, or at least to have its subject matter referred to a committee.
This bill is designed to meet a variety of Canadian demands. There is a general demand for a device which will trap animals in a manner which does not cause them agony and suffering nor cause them to die of starvation, bloodletting, or as victims of predators. Second, the demand is for a device which will enable those whose livelihood depends on furs to continue their trade in the knowledge that they have not been the cause of
Humane Animal Traps
agony and suffering nor of condemning living creatures to die of starvation, suffering, or as victims of predators.
I want to make it very clear at the outset that it is not my intention to destroy the trapping industry or to interfere with it in any way. 1 know Canadian history and the role trapping has played therein. We need to apply modern technology to this long standing Canadian enterprise.
There is a third demand which I am hoping to meet, and that is the demand of Canadian trappers for a device which will give them a good pelt and not a damaged one.
Of the traps in use today, the most common are the leg-hold and the wire snare. These do not serve the purposes nor meet the demands 1 have already recorded. Both these devices produce results such as those this bill is trying to avoid: agony, suffering, starvation, victimization and, frequently, damaged pelts.
How, then, do 1 propose to meet these demands and replace these vicious instruments with better ones? The bill seeks to encourage the development of alternative trapping devices. The simple purport of this bill is to develop alternative trapping devices which can be rated by the Minister of State (Fisheries) and the Environment (Mr. LeBlanc) as preferable to the ones now in use. Once these alternative devices are available-and it may be a different device for each size or kind of animal-the existing devices will be banned, whether they be leg-hold traps, snares, or any other type of trap which inflicts cruel and unusual punishment on furbearing animals. By banning, this bill stipulates that the very setting of such a device causing unnecessary cruelty, when a better device is available, is a criminal offence and punishable accordingly. It also stipulates that the manufacture, import or sale of the less desirable device is likewise a criminal offence and therefore also punishable accordingly.
One is bound to ask how such devices are to be developed and brought to the attention, first, of the ministry for testing and approval, and subsequently, to the attention of the trade and the industry?
In September, 1973, a federal-provincial committee on humane trapping was established to test and develop better trapping devices. This committee was set up and funded by the ten provinces, the federal government and the two territories. It has had at its disposal something like $75,000 per year for a five year program, but only 30 per cent of that allocation goes toward trap development. Most of the remainder, unfortunately, goes toward administrative costs. It does seem to be underfunded. In the first two years of its existence no funds whatever were allocated for trap testing. To the best of my knowledge some 100 traps have been submitted to the committee, but less than ten devices in the short time following those two years have been found worthy of further tests. Therefore halfway through its term the committee offers very little hope of real achievement, judging by its performance so far.
We are bound to ask ourselves whether the committee is under-funded or whether it is well administered. We do not
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November 16, 1976
Humane Animal Traps
know. I think this bill and this reference to a committee will offer us an opportunity to find out.
I should therefore like the bill or its intent to be referred to a committee where we can summon spokesmen of this federal-provincial group and secure from them an accounting of their activities. We should also be able to have interested organizations appear before the committee and give evidence and advice.
It seems to me that this federal-provincial committee ought to be providing, in addition to its other services, incentive grants for invention, as well as testing devices already on the drawing boards. One of the traps tested by the committee was invented, I am told, without financial support from the committee by an elderly experienced trapper who, for lack of funds, was obliged to scavenge the material for his working model from junk yards and secondhand shops. This enterprise ought to have been assisted and encouraged. The inventor ought at least to have been recompensed for his input.
Another way of getting things done and of getting proper devices developed would be for the committee to offer inducements to private and public research communities to inquire more closely into this important activity. There are people who rely on it for their livelihood. We are not denying that, and we are not trying to deny them their livelihood.
The two suggestions, together with extended funding from the same sources, are the only ones which can possibly produce results which all desire. In order to get this process under way I most earnestly request this House to let us proceed, before six o'clock, to a vote on this measure and to get it into a committee where the desired action and publicity can be obtained.
In conclusion, if this does not meet with the approval of hon. members on the government side, I would like to make a suggestion. If the government is not prepared to let the bill go to a committee, perhaps some hon. member opposite could be induced to move a relevant motion to have at least its subject matter referred to a committee, and I hope an hon. member opposite will so move. In that event I hope no objection will be raised on any side of the House to this procedural device, it being understood, of course, that once the motion is moved, discussion can continue. It would not cut off discussion, provided also, of course, that we end discussion just before six o'clock.


Mr. Hugh A. Anderson (Comox-Alberni):: Mr. Speaker, first of all 1 should like to commend the hon. member for Esquimalt-Saanich (Mr. Munro), whose constituency is not too far down the road from Comox-Alberni, for raising the subject he has briefly discussed.
I think all of us in this House would agree that the present inhumane way of trapping in Canada is something of which we are not very proud. It would be fair to say that for several hundred years we have used a method of trapping which is inhumane and barbaric and which we would not allow in killing domestic animals for consumption. 1 think the hon.
[Mr. Munro (Esquimalt-Saanich).j
member should be commended for drawing the attention of the House to this matter and to the fact that for the last two years a federal-provincial committee has been studying the subject. The present effort to develop traps which would be more humane than the traditional leg-hold trap is an example of the useful role the federal government plays in an area which is basically under provincial legislation.
The Canadian Wildlife Service of the Department of Fisheries and the Environment, following provincial requests in 1973, assisted in establishing a federal-provincial committee for humane trapping and has provided considerable expertise and financing for this very worthy project. Traps selected by the committee as worthy of serious study are presently being tested by the Canadian Wildlife Service. From the results of the early phases of this testing program the Canadian Wildlife Service will develop scientific criteria for the committee by which the committee can evaluate other traps.
After the first phase of laboratory work and field testing the Wildlife Service will help the committee to develop scientifically valid standards for humane traps. These standards can then be used by provincial governments in their regulation of trapping. I emphasize that the provinces will be charged with the ultimate responsibility of bringing the regulations into force regarding humane trapping.
The federal-provincial committee for humane trapping has a five-year program due to be finalized in 1979. The committee has a difficult task because the technology of steel traps has been extensively developed over a period of 100 or 200 years without producing any satisfactory alternative to the use of the leg-hold traps. I think it is unrealistic to expect a replacement of this within one or two years. The need to replace the leg-hold trap is clearly indicated, but to expect the necessary technology to be developed in a short space of time is unrealistic.
The Department of Fisheries and the Environment fully supports the work of the federal-provincial committee for humane trapping. When this program is complete, national standards for humane trapping will be available to all Canadian jurisdictions vis-a-vis the question of regulating trapping. I think that would be the time to consider legislative means of enforcing the use of humane traps in Canada. In my opinion, such legislation, prior to the completion of the committee's work, would be to act without the required knowledge.
Having some doubt about whether the hon. member's bill is constitutional and whether the federal government has any jurisdiction over the use of leg-hold traps, I would like to propose an amendment that the subject matter be referred not to the Standing Committee on Justice and Legal Affairs but to the Standing Committee on Fisheries and Forestry, and I realize this can only be done by unanimous consent. I was pleased when the hon. member remarked that this was satisfactory to him and that it would not end debate which would continue until the appointed hour. Mr. Speaker, I would therefore ask for the unanimous consent of the House to put the amendment.


The Acting Speaker (Mr. Ethier):: Is it agreed?
November 16, 1976


Some hon. Members:: Agreed.


Hugh Alan Anderson: 1 move, seconded by the hon. member for Restigouche (Mr. Harquail):
That the motion be amended by deleting therefrom all the words after the word "that" and substituting therefor the following:
Bill C-208, an act to amend the Criminal Code (humane traps), be not now read a second time but that the order be discharged, the bill withdrawn and the subject matter thereof be referred to the Standing Committee on Fisheries and Forestry.


The Acting Speaker (Mr. Ethier):: Shall the amendment carry?


Some hon. Members:: Agreed.


The Acting Speaker (Mr. Ethier):: Shall the motion, as amended, carry?


Mr. Wally Firth (Northwest Territories):: Mr. Speaker, at the outset 1 wish to state my opposition to Bill C-208 as it now stands. While I can appreciate the motives behind this bill, 1 feel that the House should consider the full implications of this legislation. As a northerner and one who has spent some time on the trapline, and who has frozen his butt a few times when out trying to make a living, I am particularly concerned with the effect this bill will have on the trappers and their traditional means of making a living in the north. If the bill is passed as it now reads it will place severe burdens on individuals who have enough problems meeting day-to-day working conditions as hunters and trappers.
The hon. member who introduced this bill may not realize that most trappers operate individually. They have no big corporation to provide operating capital and expense accounts. The trapper must finance his entire enterprise out of his own pocket. Hon. members may be interested to note that the trappers of Canada are one of the few genuine private enterprisers left in this country. There may be fewer of these individual enterprisers left if this bill becomes law.
For the information of hon. members I would point out that a dozen standard six size 11/2 traps cost $28.80 at the Hudson's Bay store in Inuvik, Northwest Territories. The average trapper needs at least 200 or 300 traps. This means that the trapper will have to pay out over $500 to $600 to obtain a new line of trapping equipment. This would be about $600 over and above all of his other operating expenses. I believe the average income of a trapper in the north is around $1,500 or $2,000 per year.
As it is now, the trapper has to invest a lot of his money to replace traps each year that are lost, that are worn out, that are broken, and in some cases maybe even traps that have been stolen. Now the hon. member from Esquimalt-Saanich (Mr. Munro) wants to add a new financial burden for hard-working individuals.
I should point out to this House that the trapper, for all of his hard work in the field, only makes a small percentage of the sales price of the finished item. Any trapper in Canada can quickly tell this House how tiny is the trapper's share in the price of a fur coat, for example.
Humane Animal Traps
The cost of traps is only a small part of the trapper's operating expenses. He must furnish his own transportation in order to operate. His transportation could consist of a dog team, which is costly to operate, or of a motor toboggan, and 1 do not need to tell hon. members how costly they are. I expect most hon. members already know. The trapper must buy a lot of camping equipment, which is most expensive, and lots of expensive winter clothing if he is to survive and operate in the extreme northern temperatures. And it gets very cold; temperatures go to well below zero. As well, food is expensive in all of northern Canada. For example in Yellowknife food costs at least 30 per cent more than in Edmonton which is only 1,000 miles away by gravel highway. The trapper must buy large quantities of food in order to work for long periods on his traplines and earn his living.
Trapping is a traditional way of life in northern Canada. As it is the trapper makes but a meagre living from his hard work.
I have known many trappers, and can assure hon. members here that they are hard workers who enjoy their line of work. They are not interested in welfare but many could be forced on to welfare rolls if this bill were to pass, since their operating costs would rise.
I feel that in this proposed bill the hon. member for Esquimalt-Saanich has his priorities completely confused. The effect of the bill would be to punish trappers for pursuing their traditional way of living. The bill would class as criminals trappers who do not have money to invest immediately for a new line of traps.
The bill, if passed, would place an unfair burden on the RCMP, members which would be required to patrol trap lines across the north. It would place a great burden as well on game officers, conservation officers, and environmental inspectors. All of these people have better things to do than harass hard-working individuals pursuing a line of work which has long been traditional in the north.
1 submit that the bill uses a negative approach to gain a positive response. Its logic is all wrong. Why not use a positive approach to gain a positive response?
If the hon. member wants trappers to purchase a new kind of trap the federal government should provide an incentive for the purchase of such traps and not punish those trying to make a living under difficult conditions.


Donald W. Munro: I never introduced the kind of bill the hon. member describes.


Walter (Wally) Firth: I would recommend an amendment to the Regional Development Incentives Act. The government could provide grants to all trappers using the new humane traps mentioned earlier, if the new traps become available. In so doing the government would be encouraging a line of work which has enjoyed a long tradition in this country, and would not be punishing people for wanting to work at something they have known all their lives. Trapping is the only means of making a living that some northern people know.
80001 -68%

November 16, 1976
Humane Animal Traps


Mr. W. Kenneth Robinson (Toronto-Lakeshore):: Mr. Speaker, I congratulate the hon. member for Esquimalt-Saanich (Mr. Munro) for bringing forward Bill C-208 for discussion. I subscribe to its purposes. The explanatory note reads:
The purpose of this amendment is to prohibit the use of leg-hold snares and other inhumane types of trap where a practical alternative is now available or becomes available in the future, to promote the eventual phasing-out of such traps, and to encourage the correct setting of traps meant to cause instantaneous death.
1 should like to take this opportunity, Mr. Speaker, to voice my support for my colleague's efforts to prohibit the use of leg-hold traps and other cruel trapping methods. It is sometimes necessary to provide a stimulus for change and this is one of those times. The hon. member for Esquimalt-Saanich should be congratulated for providing us with a reasonable bill that should commend itself to the House.
The bill before us now has two key aspects. The first is to eliminate a method of trapping which can only be described as inhumane, namely, the leg-hold snare. The second and by no means less important feature is the provision made for practicality. The proposed amendment is not a wild-eyed reform; rather, it is a considered solution to a serious problem. The hon. member calls for the prohibition of certain traditional methods of trapping only where practical alternatives are now available. This approach is laudable because the hon. member has made the necessary distinction between traps specifically and trapping generally. The proposed amendment would not destroy the livelihood of trappers. It does not prohibit trapping, just the use of those traps which cause the animal prolonged suffering. Because of this the enforcement of this amendment would be both reasonable and practicable.
As hon. members know, a number of Canadians-and here 1 refer to our native people as well as white trappers-depend on the hunt or the fur trade for their livelihood and in some cases for their existence. An industry as long established as fur trapping should not be lightly disturbed. The seal hunters of Newfoundland are all too familiar with this phenomenon. No, Mr. Speaker, this bill provides, instead, for the needs of the people most directly involved in any alteration in the terms of the fur trade. It will not deprive the trapper of the essential tools of his trade at the stroke of a far-off pen.
The burden of change does not lie merely on our consciences and our attitudes, sitting as we are in the relative comfort of an urban environment. It lies on those who must bear the cost. For example, a fur trapper with an income of about $7,000 a year finds it necessary to invest some of that income in the purchase and maintenance of his equipment. A leg-hold trap runs in price from $2 to $5. Multiply this by 30 or 40 and the cost, if the average price per trap is $3.50, is about $105. Moreover, the weight of the leg-hold trap is one and a half pounds; multiply this by 30, and the trapper must transport 45 pounds of traps to his trapline.
One alternative to the leg-hold trap is the Conibear trap. It has been argued that this trap is a reasonable replacement. However, there are two basic points that must be looked at. First, this type of trap will cost from $14 to $25; 30 traps at

$25 each will cost the trapper $750. You will recognize that this is a considerable expenditure indeed. Furthermore, this trap weights four pounds ten ounces. The total weight of 30 traps would in this case be 123 pounds. I would not like to be the person, Mr. Speaker, who had to carry 30 or 40 Conibear traps through woods in winter. We wish to show, therefore, that we are not simply enacting a reform in a small economic sector whose importance is relatively small. We are trying, through this bill, to take into consideration the needs and the interests of the people directly and indirectly involved.
I have already mentioned the Conibear trap as an alternative currently available to the leg-hold trap. I have pointed out that its weight and cost disqualify it as a reasonable and logical choice to replace the leg-hold variety. There are, however, other types of traps which have to be considered.
The federal-provincial committee on humane trapping has advertised for and has received a number of designs. In fact over 100 proposed patented models have been submitted to the committee for their consideration. Testing and evaluating are a painstaking process and, as a result, the committee will not present its final recommendations for another three years. However, there are also four types of traps that have been mechanically tested for the committee by the Canadian Standards Association. These traps are the Bigelow, the Hanson, the Dahlgner and the Instant Killer traps. Each of these traps has its commendable points, not the least of which is that each is a non-leg snare; but each is also exceedingly heavy. The Bigelow, for example, weighs two and a half pounds. The Instant Killer weighs about six pounds. Multiply that by 30 again and you will come up with another impossibly heavy load. This may seem like an excessively gloomy presentation of the actual situation in the trapping industry. Nevertheless, the existence of several varieties of substitutes shows that the problem has been solved in principle.
The requirements for an alternative trapping method are known; they are cost, weight, force, and holding technique. Refinements are necessary but the basic technology exists. While current models are not practical replacements for the leg-hold trap it has been shown that substitutes do exist in theory. What is required is a concentrated effort to refine the present possibilities, to remove those features that make the traps mentioned and others, unrealistic. By putting the force of law behind this proposal the impetus will exist to effect these changes.
U730)	.
As Canadians we pride ourselves on being civilized and humane. We also take pride in our equitable nature. The passage of this bill will allow us to continue to extol these virtues. However, if the leg-hold trap is allowed to remain, our sincerity and integrity will be subject to question. By passing this bill, Mr. Speaker, our concern will have the force of action to its credit and it will not simply be dismissed as a series of platitudes.
At present the efforts being made by the federal-provincial committee are most commendable. By carefully considering
November 16, 1976

each proposal the committee is maintaining its credibility as the legitimate testing agent for new types of traps. By careful consultation with the Ontario Veterinary'College at the University of Guelph the medical integrity of its inquiries is being preserved. By passing this bill, force will be given to the concerted efforts of the members of this committee and it will provide a good example for provincial governments.
I think it is necessary to make clear that the provinces must take an active interest in this issue. The committee is in the process of developing standards and methods of safe trapping. These standards, when they are formally tabled, will be enforced in all federal jurisdictions where trapping is carried out. It is necessary for provinces to see that the federal government is not making idle jestures. By passing this amendment, the provincial governments will have to take action. It is, after all, the provinces that are responsible for the management and control of fur-bearing animals. The federal government can provide the data for a restructuring of the trapping policy. It can make adjustments in its own legislation, in keeping with the spirit of the data. It cannot, however, change provincial statutes. By force of example, this amendment will provide the necessary impetus for change.
This bill is a rational, well-thought-out proposal. It is reasonable in tone and it combines the idea of humane treatment of animals with practicality. It sets a precedent for provincial governments to follow. Finally, and perhaps most important, it protects both the trapper and people concerned with humane trapping.
In conclusion, Mr. Speaker, I would ask my colleagues in the House to support the measure brought forward by the hon. member for Esquimalt-Saanich to prohibit the use of leg-hold traps. I congratulate my colleague, the hon. member for Comox-Alberni (Mr. Anderson), on moving the motion that the substance of the bill be referred to the Standing Committee on Fisheries and Forestry.


Mr. J. Robert Howie (York-Sunbury):: Mr. Speaker, 1 commend my colleague from Esquimalt-Saanich (Mr. Munro) for drawing to the attention of the House this very serious matter and for giving leadership in doing some thing constructive about it. He has given consideration to the whole trapping industry.
My interest in this subject was prompted by my admiration for the work of the wife of a former member of this chamber, Mrs. Hugh John Flemming. Mrs. Flemming is a great Canadian who lives in my constituency. She founded the Kindness Clubs whose good work is now international in scope.
I would like to voice my strong support for this bill asking for an amendment to the Criminal Code to prohibit the use of leg-hold snares and other inhumane types of traps. The leg-hold trap is the most barbaric form of torture man has inflicted on the animal kingdom. As its name suggests, the trap catches its victim around the leg or paw and holds it in a vice-like grip between steel jaws. The trapped animal or bird awaits death by thirst, starvation or exposure, torture that can
Humane Animal Traps
last for days and even weeks. Another way of dying is for the victim to rip off or chew off a foot or leg.
About three million fur-bearing animals are trapped each year in Canada during the Five month trapping season. It has been estimated, however, that six million unwanted birds and animals-eagles, owls, porcupines, woodpeckers, etc.-are accidentally caught and die needlessly because of the continued use of the leg-hold trap.
The primitive leg-hold trap is the main method of catching our fur-bearing animals in Canada. A trap was invented and has been on the market for almost 20 years, called the Conibear trap, with the use of which animals caught in it die either instantly or in a matter of seconds. This trap does have disadvantages such as cost and it is not really effective for the dog family; wolf, fox, and coyote. Fox is the most important of these commercially and only accounts for 1 'h per cent of pelts sold. More research is needed to improve this trap, and even though it is better than the present leg-hold trap, still it is not widely used.
In September, 1973, a federal-provincial committee for humane trapping was called for, and an eight-member committee was created by the federal-provincial wildlife conference. After a full six months, a co-ordinator was hired to organize its work, so the Committee could not begin operations until mid-1974. Eight months after it was formed, the committee decided upon its aims and objectives.
The committee's mandate is to co-ordinate and encourage the development of humane trapping methods and devices; and to recommend to the provinces traps and trapping techniques which will provide, in so far as the state of the science and the art will allow, the greatest "humaneness" in holding or killing fur-bearing animals.
This sounds all very well and good, but what has the committee accomplished? To date, over 100 devices have been submitted to the committee for consideration. Of these, only three are undergoing final testing, and four are in the initial stages of testing for mechanical and biological suitability. If the results from these tests are satisfactory, the committee will submit these devices for field testing. In other words, not one device has arrived at the final stages of testing. The reason for this is simple. This worth-while committee does not have enough money to finance its operations properly.
It is good that the government has initiated a committee to look into this matter, but it would be showing real concern if it were to finance the committee's operations properly so that a solution could be found quickly and thereby stop the needless cruelty to our wildlife.
In concluding, it states in the proposed bill that the government should amend the Criminal Code to prohibit the use of inhumane animal traps where a practical alternative is now available or becomes available. This definitely receives my support, and this is where the government's financial support is needed to alleviate the problem of the lack of progress in the development of a quick-kill trap that would improve the humaneness of trapping and also satisfy trappers' needs.

November 16, 1976
Humane Animal Traps
I would also support the phasing-out period as it is recognized that it is not practical to have immediate banning of existing trapping methods where no completely viable alternative is available to the trapper. The government could also assist by subsidizing part of the cost of replacing old traps with the new more humane type.
It is not enough that the government recognize the inhumanity of the leg-hold trap, but is should take a stand by giving enough financial support so that the necessary research can be done as quickly as possible and with the incentive of financial assistance in helping the trapper to replace the old traps. A time will come when this primitive form of trapping will become a thing of the past. There should be no more delays.


Mr. Maurice Harquail (Restigouche):: Mr. Speaker, first I wish to congratulate the hon. member for Esquimalt-Saanich (Mr. Munro) on his initiative. However, we have seen in the last half hour or so that Bill C-208 as it was presented no longer exists. However, with the unanimous consent and agreement of the House its subject matter will be referred for consideration to the Standing Committee on Fisheries and Forestry.
There are two points that should be identified when discussing a matter such as this. One is with regard to consideration for those people who are gainfully employed in the fur industry. No mention has been made of any discussion that might have been undertaken with regard to protecting the position of those who secure their livelihood through this industry. All too often, although with good intention, we move in the direction of bringing ourselves to a point where some harm can be done to Canadians who rely completely on this type of livelihood.
The other point is that more consideration should be given to taking action with regard to education. More educational programs should be encouraged. I hope this point will be considered by members of the standing committee and that they will make some recommendation or suggestion. Funds could be made available to encourage the presentation in the media, and through educational television programs, of the whole story of the use of leg-hold traps in Canada. Perhaps progress might be quickly made if programs on television were to show the agony these fur-bearing animals must endure when caught in traps of the type described.
The government should certainly be concerned about the type of trapping to be permitted in Canada. Something certainly should be done. The government has made its position clear. I understand that the University of Guelph has received some $60,000 for work in this field, and I would recommend that more be done in this regard in addition to reaching whatever areas we can through educational programs to train people who will eventually earn their living by trapping. I understand that a committee has already been set up, with federal input, to look into this subject. Despite the possibility of some difficulty with regard to jurisdiction, I believe this is a topic which can very well be brought up by a private member

in an effort to move more quickly, through co-operation and discussion, to bring about the result we all desire.
I conclude by restating that when we consider this question we should deal not only with the method of trapping used but with the whole question of employment or unemployment. I am always a little concerned when we talk about acting in a way which might solve one problem only to create or worsen another. I personally am hopeful that various departments of government, such as the Department of Fisheries and the Environment or the Ministry of Science and Technology could find a more humane method of trapping animals. One might think that in these days of advanced technology there would be no need to be concerned about the use of out-dated trapping devices. I would hope that this measure, when it is brought before a committtee, will be studied with the help of specialized witnesses, people who are experts in the field, so that action may be taken to correct the situation which presently exists.


John Gilbert: Mr. Speaker, it was not my intention to speak in this debate, but I have heard so many fine speeches that 1 am tempted and inspired to speak. The reason 1 am tempted and inspired to speak is that I wonder whether we should not widen the reference with regard to the topic. The topic at the moment is inhumane leg-hold traps, and the committee is going to discuss this topic.
1 have had the opportunity to see other types of inhumane killing. Two years ago I went to the Magdalen Islands to see the seal hunt. I saw little seals being struck on the head with clubs and very little has been done with regard to that. Some of us in this party are strongly opposed to it. At the same time we realize the economic difficulties which confront people who hunt the seals. Our leader went down to Newfoundland and spoke to some of the sealers, and they told him about the financial hardship which would be caused if the seal hunt were banned.
The hon. member for the Northwest Territories (Mr. Firth) has drawn attention to the financial hardship which would be caused if there were some form of prohibition against hunting, more especially the hunting of the fox and other fur-bearing animals.
It is important that any study should include the economic consequences which would follow total prohibition. I hope that when the measure gets to the committee its terms of reference can be widened to include consideration of the economic and financial consequences which would follow total prohibition. I notice that one of the members from Newfoundland appears anxious to get up and speak on this subject. He is probably familiar with the seal hunt and familiar with the economic and financial implications of the seal hunt for Newfoundland. I hope that the hon. member for Esquimalt-Saanich (Mr. Munro)-it is always a very difficult riding to pronounce. It almost sounds like Eskimo sandwich.


Donald W. Munro: Saanich. S-a-a-n-i-c-h.
November 16, 1976


John Gilbert: Thank you. I always thank my colleagues for their kindness in helping me. I hope the hon. member who introduced this bill will bring forward another bill dealing with kindness to human beings. One of the members who preceded me talked about Hugh John Flemming's wife forming a kindness to animals club. It is about time there was a kindness club directed to human beings. I would think that a former diplomat, a member who has been attached to diplomatic missions across the world, would bring forward a bill abolishing nuclear weapons which kill people by the thousands. When I think of Nagasaki and Hiroshima it occurs to me that his next bill should be concerned with kindness to human beings.
I also hope the hon. member will widen the parameters to include killing in slaughter houses. What is humane about hitting a cow over the head with a big hammer, or slashing the throat of a chicken or turkey? I notice 1 have the support of the hon. member for Niagara Falls (Mr. Young). Therefore, although it is important that the hon. member has brought the bill before the House at this time, it is rather narrow in scope. It should really include the wider sphere of the humane treatment of other animals, more especially the humane treatment of human beings. I look forward to the hon. member introducing other bills in the House dealing with human beings, but I am very happy that this bill is going to committee.


Mr. Roger Young (Niagara Falls):: Mr. Speaker, I should like to thank the hon. member for Broadview (Mr. Gilbert) for noticing my nod of agreement with him. My thoughts are somewhat in line with part of what he said, and I shall explain what 1 mean. I am not going to speak for a long time because I want to be off my feet before the hour of six o'clock to allow the subject matter of this bill to proceed to committee.
I heard some speeches this evening, Mr. Speaker, which made me want to make a few comments that might put the situation in a little bit off balance. We have spoken about the killing of animals. The hon. member for Broadview referred to this exactly as I would have said it. There is no really nice way to die, whether it is in terms of humans or animals. It is death, and that is pretty final.
I heard the hon. member who originally proposed the bill this evening talk in terms of "cruel and unusual punishment", which is something that usually comes up more in a debate on capital punishment than in terms of leg-hold traps for animals. I wonder whether he would have brought out some of his sentiments in that other debate.
1 grew up on a farm, Mr. Speaker, and I have seen birth and I have seen death. I have lived with animals, and 1 have had to put down animals as humanely as possible when they have been injured or born deformed. It is not a nice thing to do. But I want to disabuse the House of the notion that all those people who trap and all those who manufacture and sell traps are unfeeling, bloodthirsty, and blood lusting, that they are uncaring monsters.


Donald W. Munro: I did not say that.
Humane Animal Traps


Roger Carl Young: Well, Mr. Speaker, there are some who seem to feel that. I did not say that that was an exact quote, but there are some people, whether in this House or outside in the country, who seem to feel that way. I happen to come from a riding which has within its boundaries the largest manufacturer of animal traps in this country, so 1 think I can speak with some knowledge.


Donald W. Munro: Ah!


Roger Carl Young: 1 am not speaking entirely on their behalf either. The hon. member says "Ah!". I have spoken to them several times about the products that they are selling and about the upgrading of their traps and the revisions they are trying to make.


Donald W. Munro: They could build better mousetraps.


Roger Carl Young: They tried to build better mousetraps. They tried to build all kinds of better traps. This firm-I will not name it-I can tell the hon. member was the first to bring the Conibear trap on to the market, the most humane trap that we have today. They have also sold for many years the Victor leg-hold trap. I can tell the hon. member, who may not know this, that the Victor leg-hold trap has now been revised to the point where there are offset jaws, where there are inset pads, where there are no teeth in the jaws which close on the trap. All of this makes a trap more humane for an animal, Mr. Speaker, but it does not come out in the bill the hon. member is talking about.
I do not necessarily like to see this, but I can also point out, from checking market sales, that about 20 per cent of the sales of traps in this country today are made up of the Conibear trap, or more humane trap, and about 80 per cent are made up of the leg-hold variety. I think that says one thing to all of us here and to the people in this country: the market rules. Sales rule. If there is not a suitable alternative, the trapper is not going to buy it. He just cannot buy it today.
The hon. member's bill would subject manufacturers, sellers, and importers of traps to criminal punishment. I do not think it is fair to do this in the absence of a viable alternative. That is what I did not like in particular about the hon. member's bill, which I would have spoken very heartily against, because I think it is unfair treatment to those who are trying to produce a better trap.


Donald W. Munro: The bill has been withdrawn.


Roger Carl Young: The bill has been withdrawn, but I know from conversations with some of these manufacturers over the past couple of years, and as late as this afternoon, of the number of committees to which they belong. 1 know of the number of study sessions that they go to, and 1 know the amount of expense they go to in trying to develop more humane traps. So I do not think we should just load this all on to the backs of the trap manufacturer or the trapper, as was so well pointed out by the hon. member for Northwest Territories (Mr. Firth).

November 16, 1976
Restraint of Government Expenditures
Those people do not have a large association to do their bartering and bargaining for them, to plead their case; and I think the hon. member for Northwest Territories did an excellent job this evening of putting that point of view forward.
I just wanted to bring a bit of balance to the discussion, Mr. Speaker. More of these points can be brought out in committee. I know that the manufacturers, the industry and sales people would welcome this kind of discussion in committee because it might give a lot of fresh air to a discussion of the matter and allow both sides of the picture to be brought out.
I have a great deal of sympathy and feeling for the hon. member's plea on behalf of animals. 1 much prefer to go to the zoo. I am not a hunter or a trapper myself. I have not shot a gun for years, and I much prefer to see wildlife on film or through the lens of a camera than I do through the sights of a rifle. But let me just say this to bring a little balance to the discussion. 1 am glad that the subject matter can go to committee and not the bill itself.


The Acting Speaker (Mr. Ethier):: Order, please. Is it the pleasure of the House to adopt the motion?


Some hon. Members:: Agreed.
Motion (Mr. Munro (Esquimalt-Saanich)) as amended, agreed to.


The Acting Speaker (Mr. Ethier):: Accordingly, the subject matter of the bill stands referred to the Standing Committee on Fisheries and Forestry.
The hour appointed for the consideration of private members' business having expired, I do now leave the chair until eight o'clock p.m.
At six o'clock the House took recess.


[Stage Direction]
AFTER RECESS

The House resumed at 8 p.m.


[Stage Direction]
The House resumed consideration of the motion of Mr. Andras that Bill C-19, to amend or repeal certain statutes to enable restraint of government expenditures, be read the second time and referred to the Standing Committee on Miscellaneous Estimates.
Mr. Peter Elzinga (Pembina):: Mr. Speaker, as one who enters this debate after it has gone on for some time 1 am sure

part of what I have to say will be repetitive. In my opinion, however, it bears repeating. Let us hope that some of these comments will not fall on deaf ears.
1 read with interest the speeches in respect of Bill C-19. I wish to comment on two of them. My good friend, the hon. member for Vegreville (Mr. Mazankowski), gave an excellent speech on government mismanagement. Some of his remarks are worth repeating. His comments in this House are always well researched and I wish to commend him on his valued contribution to this debate.
This is not a genuine government restraint bill. In the areas where it proposes to exercise restraint the result will probably be much more costly in terms of the human and financial resources of this country. My good friend, the hon. member for Edmonton West (Mr. Lambert), also commented that this bill does not contain very much so far as restraint is concerned. He was right. Governments are notorious for not practising what they preach. But the gall of a federal government which preaches, and indeed forces, restraint on everybody but itself is becoming truly indefensible.
The latest example of the "do as I say not as I do" theory is in the supplementary spending estimates announced by the federal government, together with suggestions of what the year's total federal outlay will be. The recently announced estimates total $594 million, which prompted the President of the Treasury Board (Mr. Andras) to gloat that they were significantly lower than in previous years. This, he said, reflects the government's determination to restrain the growth of federal expenditures, an integral part of the anti-inflation program.
In the next breath, and before rejoicing could take place at such a marvellous example of belt tightening, the President of the Treasury Board estimated that federal expenditures this year may total $42.2 billion, $6 billion more than the year before. That implies that another $2 billion supplementary spending is still to come, and that total federal spending for 1976-77 will have risen by an astounding 16 per cent. This is what we have from a government which has been urging restraint on business and industry, which has been cutting back wage increases to 10 per cent or less, and which has legislated a reduction in profits; a government so committed to restraint that it managed to keep the watchdog of it all, the Anti-Inflation Board, down to a budget merely double the original one.
It would not have been so had had the supplementary estimates included a large amount for programs desired to relieve the cripplingly high unemployment rate; but they do not. Of the $594 million only about 15 per cent will go for manpower programs such as local initiatives and training schemes. Much of the remainder will go for vital undertakings such as a $25 million loan to Jamaica, $63 million in subsidies to railway companies, and $33 million for further bilingualism development payments!
The government may find it impossible to hold the confidence and the attention of Canadians the next time it preaches restraint but practises wild over-spending. What we on this
November 16, 1976

side of the House want is a united Canada, a Canada that includes Quebec and which offers equality of opportunity to all the people of our great nation. I believe the great majority of westerners are moderate, open-minded, and good willed in their perception of fellow Canadians everywhere, including French-speaking Canadians. These reasonable views are being corrupted and debased in terms of perception elsewhere, not by westerners, but by a belief, fostered indirectly by Liberal politicians and adopted without examination by other citizens who ought to know better, that any breath of opposition to either the Liberal party or to its official bilingualism program is by definition racist. That just simply is not so.
The Trudeau administration has been despised in western Canada for more than five yearp, not because of its bilingualism policies, but because it has provided astonishingly bad government. It has failed to comprehend,, let alone face, some of the deep-seated western anxieties about that region's own role in Confederation, and Bill C-19 is a fine example of that. It has failed to provide even a modicum of sensible government for the nation as a whole.
In a more local sense, the government has plundered Alberta's natural resources in a manner which, had it tried even a fraction of it in Ontario or Quebec, would have led to the fall of the ministry within a few weeks of the attempt.
It is important to restate a western view and to refute some of these dismal propositions at this time because the growing mythology has implications far broader than just a general smear of western Canadians. It suggests that the national Conservative party under our capable leader cannot by definition lead this divided country, and it merely panders to the Liberal notion that they, and they alone, are fit to govern.
Make no mistake about it, Mr. Speaker, lots of westerners regard aspects of the bilingualism policy with disfavour-not so much because those aspects are sinister but because they are silly. The packaging and labelling regulations, in combination with the grim dictate that the dismal chemicals that comprise so much of modern food be listed in the two languages, produce a two-tongue clutter in this region to the general benefit of no one.
The expensive attempt to educate civil servants in a second language was known to be a failure in western Canada long before the government acknowledged it. Westerners argued for years that the way to approach language was through the schools. Instead of learning about these things and seeking to assist them, the new Secretary of State (Mr. Roberts) sits in Toronto and gives interviews, including the hoary old yarn about the westerner who supposedly believed that a mountie would one day tell him that he must learn French. This man, Mr. Speaker, promises to succeed fittingly his predecessor as a promoter of narrow nationalism which is as repugnant to western Canadians as it is to Quebecers because it seeks to bottle up all Canadians in their own juices and insulate our tender minds from people in other parts of our country.
Restraint of Government Expenditures
There are many perfectly legitimate points of discussion surrounding Quebec's relationship with the other nine provinces. There always have been, there always will be. We know that in Alberta with particular force, because many of Quebec's positions are also Alberta's positions. The two provincial governments had a relationship that was among the closest of any that has existed between two governments in this all too often squabbling nation. That relationship is perfectly well known to Lougheed's voters, and they do not attack him for it.
One constant western preoccupation is with transportation of people and goods. It is surely self-evident that mutual understanding between people would be greatly enhanced in this vast country by the provision of cheap and easy travel. Instead, the Liberal government doggedly espouses a user-pay transportation formula which militates most strongly against those in the extremities of the nation. They have increased the obstacles to travel, not decreased them, except for members of their own jet set.
We have a Minister of Transport (Mr. Lang) who has cost the Canadian taxpayer some $740,000 for his air transportation, when commercial flights are available to him which would cost the taxpayer a great deal less, flights that the majority of other MPs use. Of this $740,000, some $8,000 was used by him to attend last year's Grey Cup game, and in excess of $10,000 was used by him to attend a party put on by his brother-in-law.
What kind of credibility can the government possibly expect when we see one of the ministers of the government wantonly spending tax dollars whenever the whim strikes him to take to the air? After all, Saskatoon is not exactly an isolated, inacess-ible outpost that cannot be reached by regular daily flights.
Bill C-19 is insincere, Mr. Speaker. It is designed to persuade the general public that this is only the tip of the iceberg, and simply indicates the kind of savings efforts the government is making. I am appalled at the way in which the government can play games with figures when it wants to sell a particular philosophy or policy. This government's instincts for manipulating for political gain never cease to amaze me.
We all know there is lots of room for the government to tidy and tighten its own operations. I refer specifically to the way in which the government, its agencies and departments, control their internal financing. I do not suppose improvements in this area would attract too much attention in the press, nevertheless restoring proper financial and parliamentary control is one of the gut issues we face.
The financial control and the management systems of the Government of Canada, its agencies and departments, are significantly below acceptable standards of quality and effectiveness, and I do not know how long the government expects the Canadian people to swallow the blatant inadequacies and devious techniques that it has fostered. What we want in Canada, Mr. Speaker, is a government that is willing to deal with its citizens openly and honestly, not a government that hides the truth.

November 16, 1976
Restraint of Government Expenditures
I am willing to bet that the Canadian leader who first talks simply and clearly to the Canadian people will draw a fair number of doubters to his side. People nowadays are sophisticated. They will hand the palm not to those who promise perfection or who claim never to have failed, but to those who, despite their limitations, will try hard to do the best they can, and do so with integrity and intelligence. Doing otherwise reveals either the politician's own insecurity or his contempt for the people he is elected to serve.
I believe that the Canadian people are seeking new voices, new ideas and new leaders and, although the government has its limits and cannot solve all problems, we as Canadians reject the view that we must accept failure and mediocrity. That is not our Canadian heritage.
Admittedly our party has not been perfect; none is. We have made mistakes and we have paid for them, but ours is a party with a tradition of leadership, compassion and progress, ours is a party that makes its major investments in people, and we strongly believe that the test of any government is not how popular it is with the powerful, but how honestly and fairly it deals with the many who must depend on it. Business, labour, agriculture, education, science, and government must not struggle in isolation from one another but should strive towards mutual goals and shared opportunities, and that is the type of government we would have under the leadership of the Leader of the Official Opposition (Mr. Clark).


Mr. Frank Maine (Wellington):: Mr. Speaker, in dealing with Bill C-19 which repeals certain statutes thus enabling the government to restrain government expenditures, I would like to comment on the necessity for cut backs in government spending. This message from voters across Canada in the last several months has been loud and clear. We need help in fighting inflation and we need it from all parts of the country. We must convince the public that the government is serious in its intention, and the best way to convince people is to show' them by example.
In times of restraint we must decide which programs can be eliminated or cut back so that we can reduce our own spending. These must be programs, the elimination of which would not materially reduce the well being of Canadians. Therefore one of the things we can do is to eliminate spending on programs which have outlived their usefulness or programs which we cannot afford in times of restraint.
Some programs have fulfilled the intentions which they were designed to fulfil and funding should not be continued by the federal government, but if desired can be replaced by other forms of funding such as from the private sector. There are other programs that started off as good ideas but that did not quite work out the way the government had intended them to work out, and this fact must be recognized and the programs ended.
There are other programs the objectives of which the government had a specific intention to fulfil, and these objectives
[Mr. Elzinga.J
have been fulfilled. Therefore once a program has fulfilled its objective, it should be terminated. Three examples of this are the Company of Young Canadians, Information Canada, and the program relating to the Industrial Research and Development Incentives Act, commonly known as 1RD1A. 1 think the termination of these programs demonstrates the approach of the federal government in reviewing its policies; looking at what can be done; and discontinuing programs which outlive their usefulness.
1 would like to deal in a little more detail with the IRD1A program since that is the one with which [ am most familiar, having dealt with it for most of the ten years of its existence. It began in 1966 and had a definite positive effect on industrial research and development for most of the last ten years. It was intended to encourage industrial research.
The program provided that any increase in research expenditure by a company over a base level determined by an average of the previous five years would result in a benefit to the company of a tax credit of 150 per cent. So as long as companies increased research and development, there was a benefit involved. This benefit was used by many industrial establishments in Canada. Most of the research laboratories which have been built, have been built in the last ten years, and the companies involved have benefited directly from this legislation. However, companies cannot keep building new laboratories just to take advantage of this tax benefit, and there are very few companies which have taken advantage of this in the last two years.
Essentially companies do not keep increasing their research and development efforts indefinitely. There is a levelling off in research expenditures. When that happens, the base level climbs up to the expenditure level, and therefore no amount of research expenditure qualifies for this tax benefit. As a result, the program has outlived its usefulness. It has done its job. There are no benefits being derived from it by way of tax rebates. With one or two exceptions that is where we are today. I think the maintenance of that program would only create increased and unnecessary paperwork, and both government and industry can well do without that.
In the whole area of industrial research and development the incentives which have been provided have been reviewed in this last year. Gordon Sharwood, a consultant on contract with the Department of Industry, Trade and Commerce, has conducted a comprehensive study with the cooperation of M.O.S.S.T. officials to look at government programs on research and development to see how they could be updated and made more effective. One of the suggestions has been to terminate programs which are no longer effective. Other suggestions relate to changing the format of programs now in existence, and these suggestions are being considered and new programs are currently being worked out.
Reviewing past legislation, we find that the IRDIA program has certainly done its job and has outlived its usefulness, and 1 think it is completely incorrect to conclude that the government is not interested in or is not supporting industrial research and development. This was the comment some people
November 16, 1976

made when they read the intentions of the government in the budget earlier this year relating to the termination of the 1RD1A program.
1 would like to refute the argument that the government is not interested in supporting or encouraging industrial research or development and express my support for the termination of this program. This indicates that we are cleaning house, reviewing our legislation, trying to improve the efficiency of our programs and cutting down government expenditures where we can, in this very crucial time of restraint.


William James Kempling: Mr. Speaker, 1 want to make a few comments on Bill C-19, the government's program to restrain government expenditures. 1 do not think anyone who has a feel for the economy will disagree that expenditures have to be cut back and that government spending is one of the problems we have.


Mr. Hogan:: I disagree strongly.


William James Kempling: The thing which bothers most hon. members on this side is the method used to cut back programs and the effect that will have on certain parts of the country. The hon. member for Wellington (Mr. Maine) spoke about the IRDIA program, and as far as that program went, it did a pretty good job. The major beneficiaries of that program were very large corporations which had research and development facilities and which were able to make use of such a program. I do not think very many small companies or medium sized companies in this country really took very much advantage of IRDIA. 1 am not saying it is the fault of the government that those companies did not take advantage of it. Perhaps the department failed to realize the difficulties which faced small and medium sized companies.
I am looking forward to learning what new programs will be introduced, and I know many people in small and medium sized companies who are very interested in research and development programs. One of the problems is that they do not have the means to accumulate the funds required to carry out a research and development project. I think this is the key to the problem they face. Many small and medium sized companies have the desire to grow into larger companies which would have know-how, which would have market sense, and which would want to sell products, but in fact their problem is cash and cash flow, and I suggest that the Minister of Finance (Mr. Macdonald) and the Minister of Industry, Trade and Commerce (Mr. Chretien) should consider this proposition seriously.
Small and medium sized companies should be allowed to accumulate a sum of money over a period of three to five years. The mechanism for saving that money is beside the point. That can be worked out; it is a matter of regulation. However, the problem is that they cannot undertake to develop a product to sell in the domestic market because they just do not have the means to accumulate the money required. The only time they really spend money on research and development is when they are at a very high level of earnings. Then if
Restraint of Government Expenditures the market happens to turn down, the first thing they scrap is any research and development they have undertaken.
I think it would be possible and realistic to put a provision into our Income Tax Act which would allow these small and medium sized companies to accumulate a sum of perhaps $35,000, $50,000 or $100,000 over a period of three to five years with a specific purpose in mind. We must, of course, be sure that they carry it through because if they are going to accumulate money to use for research and development, we want to know it is used for research and development and not for something else.
This is one of the problems facing the small and medium sized industries in this country and one of the reasons why we do not have a strong secondary industry base. These companies just do not have the wherewithal to undertake realistic research programs. 1 know this from personal experience with companies I have been associated with in my business life. Periodically someone would suggest that we could make an imported product in this country, but it always came down to a question of where the money would come from for the tooling, etcetera that was required. It becomes a matter of dollars and cents and it is a pretty dismal prospect trying to raise money for an idea in the private sector.
Companies should be allowed to accumulate money in a special fund for research and development so that they would have the opportunity to complete their projects. This would help produce goods for the domestic market and perhaps reduce imports, thereby over time helping our balance of payments position. It would also help build the secondary industry base we so desperately need.
I think we all agree that the effects of government spending are part of the over-all problems which face most countries in the western world, though perhaps they are felt more acutely in Canada than elsewhere. The people of this country are very well aware that we must do something to reduce government spending. The effect on the economy and the business community's lack of confidence in the economy are apparent.
Just last week a company in my constituency gave one year's notice to its employees. They say they are going to pull out of Canada and go back to their home country because they do not like the atmosphere and the economy here. If we made a list of the companies that have decided to pull out of Canada or who are talking that way, it would be quite a significant list.
The lack of confidence in the government and the economy in general is tied to several things, and of course the whole spectre of inflation is at the root of it. People on the street see the government asking everyone to tighten their belts but notice the government does not appear to be tightening its own. As I said earlier, cutting out some of these programs will have a disproportionate effect on certain regions of the country. We have to look at this question because for several years we have been proceeding on the concept of universality, but if we make across the board cuts the disadvantaged areas of the country will be affected very dramatically.

November 16, 1976
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We should ask ourselves how effective the DREE program has been. It would be interesting to do a study of these programs and the industries that move from one part of the country to another. How many are still operating today? The theory behind the program was good-moving industry from an area where there was difficulty getting labour to an area where there was a surplus of labour. In fact, however, many of the industries that moved either could not find labour in the new area or were not able to train people, and ended up importing labour from their original location. DREE is something that has to be considered when we examine the effectiveness of government spending on industry, jobs, and so on in this country.
We must also look at the whole area of inflation and its relationship to the reduction of government spending. It is argued that wage demands are causing inflation but I think we should try to lay that one to rest. Wage demands are only reacting to inflation, not causing it. People do not know what the rate of inflation is going to be when their contract ends, so instead of signing a three year contract they sign for one year and try to get the most out of it.
It comes down to a matter of putting confidence back into the economy, Mr. Speaker, but the question is how is this to be done? Some people argue that increased prices cause inflation, but this is not reflected in company profits across the country so I do not think that can be called a contributing factor.
Very little has been done to reduce high interest rates and this is of very real concern to anyone who is in business or is contemplating a research and development project. The high cost of money prohibits many companies from undertaking such projects, particularly in view of the uncertainty in the economy.
The debates in this House and in committees should reflect what must be done to lower inflation, and what cuts must be made in government spending. I hope the matter will be taken to committee for thorough discussion.
Little has been said by the Minister of Finance, the Minister of Industry, Trade and Commerce, or anyone on the front benches about the relationship between the money supply and government spending. If you examine all the economic theories preached by the classical economists one thing comes through, and that is that in any country the money supply should not increase beyond the increase in the Gross National Product. In this country, however, as in most western countries, we have allowed this to happen. We have been printing vast sums of money for a number of years. Every time we do that every dollar in circulation is worth less.
We have run up serious balance of payment deficits and imported money from off-shore to offset those deficits. At present we face the prospect of paying about $740 million a year interest on that off-shore money. If projections come true, because action with regard to the money supply was not taken earlier and government spending not cut back earlier, by the end of this year or the first quarter of next year we shall be
[Mr. Kempling.J
paying out interest at the rate of $1 billion a year. As one can see, there is an important relationship between the money supply, the level of government spending, trade deficits, and industrial activity in this country.	'
I find most disheartening the decline in the number of active manufacturing concerns and the decline of employment in manufacturing industries, some of which, not possessing the resources for competing in the market place, have become service companies. For example, we hear of the shoe industry crying out that it cannot compete with imports, yet the largest importers of shoes are shoe manufacturers themselves. Not being able to compete with imports, such companies have cut back on manufacturing. The net result of inadequate depreciation allowances, the taxation syndrome of the last ten or 15 years, and the pressures of inflation, has been a scarcity of funds available for replacing machinery and updating plant for*? competitive purposes. Such companies, not being able to keep abreast of current technology, have become service industries.
Some entrepreneurs in this country have engaged consulting engineers and built turnkey plants which have been shipped overseas. I do not oppose this as I think we must share our technology with others, but I am bothered by knowing that many of the plants we have erected off-shore are more productive than similar plants operating in Canada. We end up competing with the production of those plants on world markets. That I find disturbing. We must correct this situation.
We must allow our industries a number of years in which to upgrade their facilities and expand operations. We must make available generous tax allowances and funds for research and development. We must allow our companies to acquire, either domestically or elsewhere, the best available technology, in order that they may compete and offset to some extent the very high labour rates we pay in this country.
Earlier this year when I was in Japan I recall talking to some Japanese industrialists; we were talking about labour rates, technology and like matters. Possessing few natural resources, the Japanese must import 90 per cent the resources they use in the manufacturing industry. They said to me, "We have to be better managers and use superior technology to compete on the world market." I must say they are doing an excellent job. That must be our attitude. We must use the most advanced technology available if we are to be competitive on world markets. We have the resources in this country but pay very high labour rates. In order to offset the effect of these high rates, we must use the most advanced technology possible in industry.
I sincerely hope that when the Minister of Finance brings down the budget he will consider allowing our small and medium-sized industries to accumulate money over three to five years which they can spend on research and development.
I hope he will also make provision for allowing our industries to upgrade their technology and the quality of machinery in plants, for only in that way can we be more productive. Unless we do this we may face the prospect of asking workers in certain industries to take pay cuts of 25 per cent, 30 per cent, and even 40 per cent.
November 16, 1976

The only way out of the dilemma is to set in motion mechanisms whereby our industry, our small and mediumsized businesses-I am not forgetting our large industries, but mention small and medium-sized ones because they are of particular concern to me-can upgrade plant and equipment and acquire modern technology. Our companies must be allowed to accumulate funds with which to undertake the development of industrial projects in Canada. If we do this we shall take a giant step forward in providing employment. But before this can be done we must restore confidence in our economy. People must be confident that our economy is going forward.
1 suppose that what I am saying the Minister of Finance has heard many times; nevertheless it bears repeating that we must control government spending and control expansion of the money supply. Normally when one mentions the control of the money supply one is perceived as talking of a tight money policy. But curtailing the money supply need not result in a tight money policy. We can increase the velocity of money in circulation, but only if we restore confidence in the government and in the economy-in other words only if people are confident that we are going to move ahead economically.
We have on deposit in this country vast amounts of money in savings accounts. Many of our small and medium-sized businesses have retained undistributed, surplus moneys. Many businesses would like to invest such money in energy projects, for example, but our present taxation rules make it impossible to do this to advantage. We have within our company accounts and savings accounts vast sums of money for doing those things I suggest must be done, but they will only be done if people regain confidence in the economy and the government were to be forward looking and say, "In three or four years we shall work toward a balanced budget and control the money supply; the money supply will not increase at a rate greater than the growth in the Gross National Product." If the government were to do this, confidence in the economy would be restored and money available for investment released.
I have spoken at length in an attempt to convey my point of view. I do not like to be emotional in debate; I try to be constructive, not destructive, and like to feel I am making a useful contribution to the deliberations of this House. I hope that those opposite who must wrestle with these matters will take my remarks into consideration when new legislation is put forward.


Mr. David Orlikow (Winnipeg North):: Mr. Speaker, we are debating Bill C-19 which gives legal authority to the Government of Canada to restrain government expenditures. It is the wrong program at the wrong time, being implemented in the wrong way.
Yesterday an election took place in the province of Quebec. It may have been the most important provincial election ever to take place in Canada. I do not believe that any of us can assess the consequences of that election at this time. I am, as are all members of the party to which I belong, a believer in
Restraint of Government Expenditures one Canada. I cannot willingly accept the idea that one province, be it Quebec or any other province, should want to separate from the rest of Canada.
Many polls were taken in the weeks preceding yesterday's election in Quebec. Those polls were right on in predicting the percentage of the votes which one party, the Parti Quebecois, would get, 40 per cent. But that was not the only poll. People were also asked what they thought of the idea of a separate state of Quebec. The results which were published were very interesting. They showed that less than 20 per cent of the people in Quebec desire a separate state.
I have to ask myself, as should the Prime Minister (Mr. Trudeau), the Minister of Finance (Mr. Macdonald), and the rest of the government, if 20 per cent of the people of Quebec want a separate state, why did 40 per cent vote for the Parti Quebecois? The reasons are obvious.
First, they had a very corrupt government. One need only look at the history of the Olympics. The federal government was involved because it helped finance the Olympics. There was one illustration after another of corruption and thievery. The people of Quebec, and quite properly so, saw that they could not get anything else from that Quebec Liberal government. The people of Quebec were tired of the large scale unemployment which they had, unemployment foisted upon them by a provincial Liberal government and a federal Liberal government.
Today questions were directed to the Prime Minister and the Minister of Finance. They were asked whether in light of yesterday's election and in light of the unemployment situation right across the country they were giving fresh consideration to job creation programs. We got the same answer we have been getting since October, 1975, that inflation is more important than unemployment.
Years ago we protested about the waste created by unemployment. We protested about the misery and poverty it created. We were told it was not a serious question. That was in 1973 when, under the former minister of Finance, Mr. Turner, unemployment was 6 per cent. What do we see now? I wish to quote from the November 10, 1976, edition of the Globe and Mail:
The unemployment rate for October hit 7.6 per cent, the highest seasonally adjusted rate since an equivalent figure in May. 1961, Statistics Canada reports . . .
This year's previous highest jobless rate was 7.4 per cent last April . . .
The government agency said all provinces, with the exception of British Columbia, Newfoundland and Alberta showed increases in their unemployment rates . . .
For men aged 15 to 24 the jobless rate rose by two percentage points to 13.3 per cent while for men 25 and older the rate climbed by 0.6 of a point to 4.9 per cent.
Let us look at the provincial figures. In Quebec, which has the highest number of unemployed of any province, some 234,000, the rate is 10.1 per cent, up from the previous 9.7 per cent. In my province of Manitoba the rate rose to 4.9 per cent. In Saskatchewan it jumped to 4.2 per cent, and in Alberta remained steady at 3.7 per cent. The prairie figures do not include the very large percentage of 70 to 90 per cent of native

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Restraint of Government Expenditures people living on reserves. They have never been included in our unemployment figures.
Is it any wonder that people in the province of Quebec say that they have had enough? They felt they had to vote for a party which had separatism as one of its main principles. Even though they did not agree with that principle, they had no other alternative at this time.
Today and on earlier occasions the Prime Minister and Minister of Finance were asked what they intended to do. They said that unemployment is not serious, that it is regional. The fact is that every region has the same problem. They say that it is temporary, they have to worry about inflation and, in fact, they are winning the fight against inflation. The government and the Minister of Finance are wrong on both counts. When I make this kind of claim the minister will say that I am being partisan and political. Therefore I will put on the record the views of two people who are quite well known in this country. They hold responsible positions and can by no stretch of the imagination be called radicals, left wing, socialist, or whatever epithet the Minister of Finance is using at the present time.
I wish to first quote a former chairman of the Economic Council. He has done much better for himself in his present position as vice-president of International Nickel than the recently resigned chairman of the Economic Council who will be an opposition member in the National Assembly in the province of Quebec. Here is what Arthur Smith had to say in Winnipeg less than ten days ago. I quote from the Globe and Mail'.
There is close to a 50-50 chance that Canada is heading for the worst period of economic slack since the I930's, according to Arthur Smith, of Toronto, a vice-president of Inco Ltd. of Toronto and a past chairman of both the Economic Council of Canada and the Conference Board in Canada.
Don McGillivray, the national economics editor of Southam Press, was reported in the Montreal Gazette of November 10, 1976, where he was discussing the unemployment figures which I just put on the record. In dealing with the job the present Minister of Finance is doing he writes, and I quote:
Mr. Macdonald's economic policy, as set forth in his budget speech only five months ago, is in tatters.
Rising unemployment is not the only chilly breeze blowing through the holes in his costume.
He forecast in May that 250,000 new jobs would be created in Canada this year. He is going to fall a little short. In first 10 months of the year, 114,000 new jobs have appeared.
That is less that half the figure the minister predicted in his budget speech a few months ago. He says:
Mr. Macdonald was relying on business investment to sustain "the expansion" next year. But the latest investment survey by the Department of Industry, Trade and Commerce shows a pattern of postponed investment with failure of market demand as the most frequently cited reason.
The article goes on to say:
The minister rejected suggestions . . . that the anti-inflation program had anything to do with the slow growth of the gross national product despite the fact that the investment outlook survey had just reported that 13 per cent of companies cut back their investment plans because of the program.
(Mr. Orlikow.J
But when it is a question whether the anti-inflation program has cut inflation in Canada, Mr. Macdonald and other members of the government give the program a generous helping of credit despite the fact that the same kind of slowing in prices had occurred in the U.S. and elsewhere.
Mr. McGillivray concludes his column by saying:
Perhaps Mr. Macdonald's attempt to maintain that "our primary concern should still be the level of Canadian inflation" is just a holding action. Perhaps he is really considering a change of policy to get the economy out of its stagnation but has not had time yet to work it out in detail and so is not ready to announce it.
It is to be hoped that this is so. Usually Canadian governments wait so long to make sure that the trend is clear that the trend-whether to inflation or recession-becomes unstoppable.
That is precisely where we stand at the present time. Later,
I shall discuss what we believe could be done and should in the field of job creation. I want to deal now, with another aspect. Why do the people of Canada, including the people of Quebec, feel so dissatisfied with governments whether federal or provincial?
In the last 25 years we have seen a host of income distribution programs-health insurance, hospital insurance, family allowances and so on. One could go through a whole alphabet of programs which have been inaugurated in this country, most of them by Liberal governments because Liberal governments have been in power for most of the past 30 or 40 years. But if one looks at the studies carried out by Statistics Canada with regard to income, one comes across a very disturbing fact, at least it is disturbing to me. It is that in the last 25 years there has been no significant improvement in the terms of income distribution. If anything, the distribution of income among the various income groups has become less equitable.
In 1951 the income received by the bottom fifth of the population, the percentage of the GNP which went to the bottom 20 per cent, was just 4.4. In 1974, the last year for which we have figures, despite all the things we have done, despite the belief of most Canadians that we have improved the relative share enjoyed by the bottom 20 per cent, the percentage which went to that least wealthy segment was, not 4.4 per cent as in 1951, but just 4 per cent.
What about the top fifth? In 1951 the top 20 per cent of income earners got 42.8 per cent of the Gross National Product. In 1974, 23 years later, despite all the income distribution programs, despite all the welfare programs and health programs, despite the change in old age pension scales, the Canada Pension Plan and everything else, the top 20 per cent were still getting over 42 per cent of the Gross National Product. I am not saying that the bottom fifth of the income earners are living more poorly now in absolute terms than they were 25 years ago. What the figures show is that we have not moved toward a more equitable distribution of the goods and services which we produce in such great abundance.
This is not surprising, I suppose, bearing in mind the conclusions of a rapport which came out this month, a report prepared for the National Council of Welfare which is an agency funded by the federal government whose members include 21 organizations representing social service professionals and welfare recipients across Canada. The study is entitled
November 16, 1976

"The Hidden Welfare System". What does it show? It shows that our present tax system allows the federal government to transfer billions of dollars through inequitable income tax deductions and exemptions. The report estimates that there are 17 subsidies such as education deductions and registered home ownership plans which cost the government $6.4 billion in lost revenue in 1974, the bulk going to high income taxpayers.
The Council prepared a chart based on information from the Department of National Revenue which showed that the average benefit per taxpayer from the 17 subsidies in 1974 was about $244 for those with incomes of less than $5,000. But persons earning more than $50,000 realized a tax saving of about $4,000. Well, "to those who have shall be given", as 1 have heard hon. members say on other occasions.
The Council gives a number of illustrations of the way in which the system works. It points out, for example, that a person earning between $5,000 and $10,000 a year who places $1,000 in a registered home ownership savings plan is entitled to a tax saving of $264 a year, while a person earning between $15,000 and $20,000 saves $365 under the same plan. The chairman of the committee which prepared the report, Mr. Douglas Barr of Toronto, says:
It makes sense that the wealthy should pay more than the poor. What people do not realize is that the system of subsidies is totally regressive and allows the rich who can take advantage of interest income deductions and RHOSP to pay proportionately less tax.
We have heard a great deal about the way in which this government and governments in general have been too hard on the business community. One would think that business in Canada is being driven to the wall. Well, a former Liberal cabinet minister, Eric Kierans, made a speech about a week ago to a very respectable organization, The Conference Board. Let me put on record some of the statements he made in the course of that speech which he entitled "Is the Mixed Enterprise System Dying?" Mr. Kierans stated:
With the exception of the United Kingdom, 1 doubt that any nation in the world has given its corporate 1000 a more handsome gift package of subsidies, tax allowances, two-year write-offs, deductibility of merger costs, cheap loans, export credits and insurance than our present Trudeau government.
Later he went on to say:
The goal of the corporation is profit, or at least 99'/' per cent profit since a half cent of every profit dollar is given away for charitable purposes. One cannot say that the corporate sector has not achieved its purpose during the last five years.
May I point out that these are five years in which we have had a Liberal government headed by the present Prime Minister.
He went on to point out that profits increased 12.8 per cent in 1971, 23.3 per cent in 1972, 34.4 per cent in 1973, 27.2 per cent in 1974, before they levelled off with a slight decline of 2.9 per cent in 1975. In other words profits increased from $7.7 billion in 1970 to $17.8 billion in 1975, or 131 per cent. Yet unfriendly Ottawa, in the words of one outstanding Canadian chief executive, does not understand free enterprise.
Restraint of Government Expenditures
Despite the popular impression, corporate income tax rates declined during that five year period. In 1970 corporations paid an effective federal rate of 29.6 per cent on their $7.7 billion of profits; in 1975 the effective federal rate was 26.6 per cent on profits of $ 17.8 billion.
Then Mr. Kierans went on to give four examples of corporations-the Royal Bank, the CPR, the Noranda group, and Imperial Oil-which in the years from 1970 to 1975 increased the value of their assets by almost as much as in the 50 to 75 years of their existence prior thereto. It is no wonder that when we have that kind of tax system you get people so desperate, so disillusioned with Liberal governments both federal and provincial, that they vote for a party with whose basic principles they do not agree.
I want to talk for a few moments about another reason why the people of Quebec voted the way they did. Again let me say I regret that the people of Quebec felt it necessary or advisable to vote for a party which is separatist. 1 want to quote from the The Canadian magazine, June 7, 1975, issue carried in the Winnipeg Tribune. In an article entitled "The Real Losers", by Mary Kate Rowan, she writes about what life is like in the city of Montreal, in the province of Quebec, for which we were able to find over $1 billion for a two week extravaganza. This is the kind of thing she puts on the record about the city of Montreal which Liberal governments, federal and provincial, have permitted and still permit:
In Canada it's estimated that 25 per cent of all children live in poverty. In the city of Montreal, the figure is 46 per cent, almost double the national average.
In Montreal, the same city that is spending $320 million on the futuristic Olympic stadium, 15,000 dwelling units don't have hot water. In 10,625 homes people live without a bathtub or shower.
Then she writes that when the school council of the Island of Montreal had $3.4 million to give to schools in low income areas, they decided to send out three researchers to find out exactly where the poor areas were. They found that in greater Montreal just under one quarter of the children under 15 could be classed as poor. In the actual city of Montreal the figure rises to 46 per cent.
According to the Montreal health department which did a survey at one low income parent, downtown public school, they found that half the children lived in a home that had either no bathtub or no hot water, or lacked both; that 21 per cent of the children were considered to be malnourished, and over 25 per cent were underweight or short for their age. And so on, Mr. Speaker.
Why do governments permit this, Mr. Speaker? Why do Liberal governments become involved in an Olympic spectacular rather than building housing for the poor? Why did the government get involved in constructing Mirabel airport rather than undertaking a school lunch program? They did so because they convinced themselves that what we need to do is to fight inflation, and they are fighting inflation on the backs of the poor, the poverty stricken and the unemployed.
The bill we are discussing legalizes the cutting off of job creation programs such as OFY, and cutbacks in programs such as LIP and LEAP. This is not the time to discuss some of

November 16, 1976
Restraint of Government Expenditures the very fundamental criticisms we have made of those programs, but it is obvious to most people who want to be objective and realistic that the government's manpower programs are in a shambles. One does not have to be an opposition politician, or in a provincial government, the Department of Manpower, departments in colleges and universities, or a department of education expert, to know that government programs are in a shambles.
The C.D. Howe Institute, which is no radical, revolutionary organization-


Andrew Hogan: A very right-wing organization.


David Orlikow: "A very right-wing organization", says my colleague from Cape Breton-East Richmond-commissioned a study of job creation programs by a Barbara Goldman, a former associate economist at the institute. She found that current manpower programs are heavily weighted toward training, even though the training given does not often match labour market requirements. Anybody who walks around any city in Canada and talks to the people knows-I hope that the minister will pay some attention at some point, even if not tonight-that direct job creation programs help to cut unemployment without exacerbating inflation. She found that Canada has not been stingy in its manpower policies. The department is expected to spend, she says, S830 million in the current fiscal year, but the money has not been efficiently spent, partly because of the stop-go policies of the government. Those were political decisions that were made by the government.
She then gives some examples. In June, 1975, the then finance minister announced a $450 million direct employment program to last two years. When he did that the unemployment rate was 7.1 per cent. In December of 1975, when unemployment was 7.3 per cent, the then president of the treasury board announced cuts in manpower programs of over $100 million. Similarly, this year unemployment in the month of May was back at the level of 7.15 per cent, the Minister of Finance reaffirmed the government's interest in direct job creation, but the then manpower minister had already warned that no new programs could be expected before this fall. And we have not had any, Mr. Speaker.
Miss Goldman pointed out that the spending cuts were heaviest in the innovative job creation programs and that the reductions came there because those programs did not have the built-in bureaucratic safeguards and inertia that the older training programs have. She pointed out that at the peak in 1972-73 only 32 per cent of Ottawa's manpower budget went to job creation. Most of the rest, she said, goes to training and to Canada Manpower Centres, even though CMC's are known to have a poor placement record and the training all to often equips people for jobs that do not exist. She went on to illustrate how much of the money for training is spent for training people in farming and fishing when there are not sufficient jobs in those fields.

She makes some very concrete suggestions. She proposes a program giving long-term jobs to people who otherwise would not be able to work at all. This would be similar to the present Local Employment Assistance Program. She proposes a second program providing short-term jobs in community services for people in transition to the regular labour market. Services would be provided on a permanent basis, but the jobs would be short-term. This would be similar to the former Local Initiatives Program. She suggests a third program to be used only when unemployment hits a cyclical high, to provide short-term jobs on special projects involving recreation or environmental cleanups-projects which can be easily started and stopped.
I find it interesting that the C.D. Howe Institute would sponsor a study which in many ways reaches precisely the same conclusions members of our party have been advocating for some considerable time. We have argued, and will continue to argue, that this country cannot afford the kind of unemployment we have, and in fact cannot afford unemployment. The Minister of Finance of course will say that he cannot in this period of inflation inaugurate programs which would put the populace to work.
It is obvious to us that when we have the kind of unemployment we have, with over 700,000 people out of work, we are losing approximately $4 billion a year in terms of lost production, and that the taxes which would be derived by the three levels of government, if we had full employment, would represent something in the neighbourhood of $1!4 billion to $ 11/2 billion, and that the money therefore would be much better spent than in the way we are spending it now dealing with unemployment through unemployment insurance and welfare at the local levels.
We believe, as does the President elect of the United States, Mr. Carter, that this country can have and should have full employment. We want to end the frustration and humiliation suffered by the unemployed. We want to end the alienation in the community, the family disintegration, and the social confrontation which accompany long-term unemployment. We want to end the waste in human resources which reduces our potential wealth as a nation. We can see that a Liberal government has not adopted the principle of full employment and will not adopt that principle.
As I said at the beginning of my speech, we were not surprised that the people of Quebec rejected the Liberal government of Quebec which was a partner in this policy of encouraging and permitting the kind of large scale unemployment which this country had not seen since the hungry thirties. This government has shown itself to be unwilling and unable to end unemployment. In 1970 the government sought to fight inflation by creating further unemployment. Its success in fighting inflation then, as now, was an illusion. However, the government did create high unemployment at that time and therefore encouraged the growth of social problems while reducing the potential wealth of the country.
In recent years the Liberal government has paid lip service to the objective of full employment. The government had its
November 16, 1976

LIP program, its LEAP program, its OFY and so on, but it has not operated these in a serious, broad and consistent attack on unemployment. It has used these as political ploys too often manipulated for partisan purposes. These have never been part of a serious mass campaign against unemployment. The programs they have permitted and which we are discussing today reflect this. They bear no consistent relationship to national unemployment or to the needs of this country.
Now we are getting a new approach. Instead of the 4 per cent unemployment which some ten years ago was considered by the government and by members of the Economic Council to be full employment-or as the Economic Council said in 1965, 3 per cent-now we are given the rationale that probably 6 per cent unemployment is full employment. Why? Because there are two members of a family working, as if people work only because they want to, as if they do not work in order to buy a house in these days when two incomes are required to meet the mortgage payments with an interest rate of around 12 per cent.
We believe, and have outlined on many occasions, that this country can and must have full employment. I think the lesson of the election of yesterday is that the people of Quebec will not stand for unemployment of 10 per cent or more, and that is what forced them to vote for a party with which they do not agree on a very fundamental issue, the question of a separate status for Quebec.
We believe that if the country is to be kept together and is to meet the needs of the Canadian people, is to do the things which are required to make life comfortable and enjoyable for all the people of this country, we must adopt programs which will insure full employment, not just full employment in the city of Toronto, the city of Hamilton, but also in the Mari-times, in Quebec, and in the inter-lake area of Manitoba. We believe this can and should be done and we believe this government has completely misunderstood the needs and desires of the Canadian people. We believe the government must change its course. I suggest that if it wants to survive politically it must change course very quickly of its fate will be that suffered by its party in Quebec yesterday.


Arthur Jacob (Jake) Epp: Mr. Speaker, in making a number of comments on the contents of Bill C-19 I want to show members of the House that for all intents and purposes this bill is another cosmetic approach by the government to cover up what has become a long standing problem between the government and the Canadian people, that is, that this government is correctly perceived by the Canadian taxpayers as having become in the last years the spender of the public purse to such a degree that it has completely lost control of the amounts of money that are being spent. Now that the government is preaching restraint one can almost compare it to a drunken sailor trying to preach temperance.
The government has not committed itself to a restraint program on government spending, but rather it has committed itself to doing something about its perceptual problem, that is,
Restraint of Government Expenditures the perception which exists among Canadians that the government has lost control over its spending. The government does not want to stop spending, although it may make slight modifications in it, and it wants to continue on the path which it has set for itself, but it hopes that the Canadian people will not perceive it as the high finance spender which it has turned out to be.
Let us take a look at some of the clauses in Bill C-19. First of all, let us take a look at the repeal of section 272 of the Railway Act. By repealing this section I understand the government would like to abolish the subsidy on the movement of grain and flour to ports in central and eastern Canada. In testimony before the Standing Committee on Agriculture the Minister of Agriculture (Mr. Whelan) indicated that there would be a saving of approximately $11 million. One must say that any attempt the government makes at saving money, if it is a well thought out and considered plan, must be lauded, but when you look a little further you Find that the Minister of Transport (Mr. Lang) then gave a $9 million subsidy, which offsets the saving which the government was going to make. The irony of this is that in the cabinet they cannot agree on whether or not the section should be repealed in the first place.
The Minister of Transport wants the section repealed, but what does the Minister of Agriculture say, who supposedly should have some say in the management of the ports on the Great Lakes and the movement of grain to central and eastern Canada? In report No. 84 of the Standing Committee on Agriculture dated May 4, 1976, the Minister of Agriculture had the following to say about this bill. I should indicate that the same clause was before the House before the summer recess, but it was brought back. The Minister of Agriculture said the following at the meeting of the standing committee:
The ships will not stay loaded in the ports because it is the last run they can make in the fall, if they are down to the St. Lawrence they will not have time to get back to the lakehead to load and come into the bay port elevator. So you can rail that grain out in the winter because you will lose the subsidy on that movement of grain by rail. That amounts to about $11 million, if 1 remember correctly.
The hon. member for Red Deer (Mr. Towers) then said:
You are in agreement with that bill then.
And the minister replied:
No, I am not. I think it is nuts. I want to clarify that; that part on which 1 voiced my opinion, I think, is very wrong.


Mr. Parent:: Who said that?


Arthur Jacob (Jake) Epp: I hear an hon. member opposite from the province of Ontario questioning that statement. I suggest they check with the Minister of Agriculture to see whether or not he said it because it is on the record, or they could check with his executive assistant or a few other people. Who speaks for agriculture, the high flying Minister of Transport, the Minister of Agriculture, or the Minister of Finance (Mr. Macdonald)? The point to be made is that eastern interests, farmers in Ontario and Atlantic Canada, do not want a subsidy such as has now been offered by the Minister of Transport to the flour milling industry. What they want is the retention of section 272 and the retention of at and east rates.

November 16, 1976
Restraint of Government Expenditures
We in western Canada have learned to know the Minister of Transport and we do not trust him. I say to him that if there is any further erosion of the Crowsnest rates, he will be in mighty trouble. 1 do not believe this is the first step in his demise. Tie took it himself when he stepped into the plane, but this is another step. I repeat to the minister very clearly that in no way will western, central, and eastern Canadians accept his continual tampering with freight rates without any compensatory action, and they will not accept his attitude that he is always right even though the world is against him. That is the attitude which he is continually portraying. Everybody is out of step except our Otto.
Who speaks on the question of the repeal? Is it the Minister of Agriculture who has said in committee, and it is on the record, in the way that only he can say it, that the bill is worthless, or is it the Minister of Transport who is trying to convince the Canadian people that the government is saving the taxpayers' money? What kind of flim-flam shell game is this? I agree that this is a significant sum, but it pales in comparison with the $740,000 for a public aircraft that the minister has used. If the minister is travelling specifically on government business and he cannot fit into commercial airline schedules, then government planes are there for the use of ministers, but what did the minister use that plane for? I guess that must have been one of the highest flying cocktail parties in Canada's history. Also he went to the Grey Cup game to represent the Minister of National Health and Welfare (Mr. Lalonde), who at that time had the responsibility for fitness and amateur sport. I find it surprising that he went to a professional game in that capacity. But be that as it may, 1 wonder why the Minister of Transport had to fly there when the Prime Minister (Mr. Trudeau) was already there representing the government.


Walter David Baker: He was there to hold the flower.


Arthur Jacob (Jake) Epp: We are now talking about restraint. The minister has flown to exotic places! He keeps on mentioning Grande Prairie. There is nothing wrong with Grande Prairie. In our modern age when people travel long distances by jet, a condition called jet lag develops. We do not have jet lag with this minister. We have jet Lang, but not jet lag.


Otto Emil Lang: You should try that one back home.


Arthur Jacob (Jake) Epp: The minister says I should try that one back home. Well, we have, and we find that our constituents agree with us. They think it is unconscionable that the minister has spent the money he has.


Gilbert Parent: What about when you flew back with him?


Arthur Jacob (Jake) Epp: I did not fly back with him.


Gilbert Parent: You have never flown back?
[Mr. Epp.)


Arthur Jacob (Jake) Epp: Never. I was not even invited, and after I am finished with my speech hon. members will see why.


Mr. MacFariane:: That's what's wrong; he didn't invite you.


Arthur Jacob (Jake) Epp: We will get to that in a minute. The point 1 am making-and obviously it has struck a responsive note opposite-is that Canadians will follow leadership but not the kind of leadership that the high-flying minister has shown.
Let us go on to another program, the Company of Young Canadians. This bill would end the existence of the CYC but in fact it ceased to exist on April 1, 1976. The CYC programs received much criticism, and many of the programs of the CYC could be described as social animation. Frankly I believe that the CYC should never have been started, and when it was abolished and given a decent burial, that was one of the best things which ever happened to it.
It is interesting that the last time the representatives of the CYC appeared before our committee, we asked them specifically about their projects, and they were not quite sure about the projects they had, but they said they would give us a list in due time. Approximately ten days ago, even though the CYC ceased to exist on April 1, 1976, those representatives finally came in with their annual report. But for what year? 1974. How can the government continue to fund groups, literally giving them carte blanche, and then go back to the Canadian people and say that it has a firm hand on the till and that it has control of its spending? The government obviously does not have that control. The lesson of the CYC is one all of us should keep in mind, and it is this: it was much easier to establish the CYC with its minimal cost benefit for the communities in which it served than to give it a decent burial, because once programs have been established by the government-


An hon. Member:: It supported education.


Arthur Jacob (Jake) Epp: If the hon. member is capable or rising and making a speech, I would be pleased to give him the floor. He probably needs the exercise.
The point is that programs initiated by the government are not easily discontinued, because people get locked into programs, and they become self-perpetuating. It is very difficult, from a political point of view, to end a program once it is established, and it behooves this government and every political party and every provincial government not to accept at face value every program which might look good on the surface, and to institute it, only to find out that over the years those programs cannot be ended.


Maurice Adrian Dionne: Your constituents bought that idea.


Arthur Jacob (Jake) Epp: No, they did not. They elected me and defeated the former Liberal member.


Some hon. Members:: Hear, hear!
November 16, 1976


Maurice Adrian Dionne: They bought something that looked good on the surface.


Arthur Jacob (Jake) Epp: That hon. member makes more speeches sitting down than on his feet. I wonder if tonight is his night to make his debut.
The government has introduced programs like CYC, and they have gone on year after year. Finally I can give the government credit for ending CYC. The point is, why start it in the first place? Was it a political sop for a specific group of people to gain their support?


Robert Hylton Brisco: The Prime Minister's friends.


Angus (Gus) MacFarlane: He is your best resource, more important than oil or anything else.


Robert Hylton Brisco: The Prime Minister?


Angus (Gus) MacFarlane: No, you.


Arthur Jacob (Jake) Epp: I think we should be careful when we talk about the Prime Minister's friends in this august body.


Mr. Neil:: He hasn't any friends left.


Maurice Adrian Dionne: Don't bet your last buck on that.


Gilbert Parent: Call it ten o'clock, Jake.


Arthur Jacob (Jake) Epp: 1 thank the hon. member for St. Catharine's (Mr. Parent). He just showed us that he does have some intelligence, a trait he has not shown here before.
The point which has to be made is that the type of student who applied under programs such as the CYC was not from lower income groups. Lower income students needed summer jobs and part time jobs while they were going to school. They needed summer jobs if they were to continue their studies the following year. Applications to CYC were made after the New Year, and very often approvals were not announced until just before the end of the university year at the end of April or beginning of May.
Students from lower income groups who had to have money to continue school the following year could not apply anyhow, and more often than not students of middle and upper income families were the ones who received grants under OFY or CYC. Those programs were not helping those students who could not further their education if they were unable to get summer employment which paid them adequately.
What about the Local Initiatives Program? That is another program for which the government is very famous. Last year before the standing committee the former minister, who is now the President of the Treasury Board (Mr. Andras), said that LIP would be phased out and that last year was the last year we would see it. He then talked about an ongoing year round full employment strategy. Well, LIP is back with us for this year, and it had to be brought back because of our high unemployment rate.
Restraint of Government Expenditures


Gilbert Parent: Did you get any grants in your area?


Arthur Jacob (Jake) Epp: 1 will talk about that in a minute. The government had to bring back LIP simply to reduce unemployment in specific areas. Those of us who have seen LIP programs finish at the end of May or June know that the tragedy of such programs is that people become dependent on them. There have been many good programs, Mr. Speaker, and 1 am not going to condemn them. Community halls and arenas have been built. Indeed the list is as long as you would care to make it. Very often because of the short term nature of LIP we find that we have created a dependency on government funding and that the people involved have not made arrangements to step into a permanent job. Sometimes they will take a summer job or go on unemployment insurance with the hope of getting back on a LIP program the next winter. As a result the dependency factor is built in. This is not only degrading to the individual but places him and his family in tremendous difficulty because there is no permanency.


An hon. Member:: Are you for it?


Arthur Jacob (Jake) Epp: The hon. member asks if I am for it. I guess that is how Liberals operate-as long as there is payola they are involved. They think that is the essence of government. That is not the essence, Mr. Speaker. Government is not the only vehicle which creates jobs; they are created through the private sector.
The Speech from the Throne talked about a year-round strategy for breaking new ground. 1 guess what that means is that we spend more and more. But it is taxpayers' money, Mr. Speaker, and as long as we create jobs, short term or long term with taxpayers' money, the dependency factor is there. We have created a dependency factor through U1C, LIP, OFY, CYC, LEAP, and any other program the government has at the present time. This is degrading because it does not allow the individual to function on his own initiative.
Bill C-19 will also put an end to Information Canada, the propaganda institution established by the government to spread the good word about what is happening in the land. Now that it has been abolished and given a burial-1 do not believe it was a decent burial because it did not deserve it-the individual departments have picked up the slack and are turning out the propaganda on their own letterheads. The most glaring example was circulated by the Minister of National Health and Welfare. He made a partisan speech-which he is entitled to do of course-and it was circulated across Canada under guise of a release from the Department of National Health and Welfare.
The hon. member for Northumberland-Miramichi (Mr. Dionne) just made the second longest speech of his career- five words.


Maurice Adrian Dionne: At least 1 know when to quit.

November 16, 1976
Adjournment Debate


Arthur Jacob (Jake) Epp: He has just proved again, Mr. Speaker, that he does not. I should like to ask the minister why, if the government is truly committed to restraint, are public funds spent by his department to disseminate information concerning public health and why does the minister use those funds to send out Liberal party propaganda under the guise of departmental information?


Douglas Charles Neil: He was talking about the sickness of the Liberal party.


Arthur Jacob (Jake) Epp: My colleague says the minister was sending it out through the Department of National Health and Welfare because he was speaking about the sickness of the Liberal party. Maybe that is the best reason yet.
We must get back to the question of how much government spending can be justified. I have heard members of the New Democratic Party speak about employment strategies and the need for more spending. 1 imagine they are already heating up the printing presses in Manitoba in the riding of St. Boniface which is represented by the Minister without Portfolio (Mr. Guay). The NDP have a grandiose program but they have not put a price on it yet-they will do that later. At the same time the NDP premier of Manitoba has brought in a restraint program to cut back spending. Mr. Speaker, may 1 call it ten o'clock?


Some hon. Members:: Hear, hear!



PROCEEDINGS ON ADJOURNMENT MOTION

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

Mr. Robert McCleave (Halifax-East Hants):: Mr. Speaker, for a few minutes may I pursue a theme that 1 have turned to on other occasions in this House concerning the practice of a Crown corporation, namely, Central Mortgage and Housing Corporation, with regard to patronage.
First of all I say there is a time for patronage, and a time when it should not be exercised. Unfortunately during the lifetime of CMHC there has been an occasion when patronage should not have been exercised. I do not fault the present government any more then I do the previous government or the one prior to that; I simply say the practice is morally wrong and indefensible.

If you or 1 were in charge of a government department, Mr. Speaker, and had to choose a lawyer to conduct some case in the courts, it would naturally be expected that we would look to those who had vigorously seen to it that we were sent to this place. We would not want to look to those who had tried to keep us away from it. In that sense, all other things being equal and the lawyers being good, I think nobody would fault our sense of discrimination.
On the other hand if you or I were in charge of a lending agency and a person came to us to borrow money secured by a contract or mortgage, it would be wrong of us to tell such a person that he or she must choose from among a certain number of lawyers who would transact such business, and deny to that person the right to choose his or her own lawyer.


Walter David Baker: Shame!


Robert Jardine McCleave: That is what Central Mortgage and Housing Corporation is doing today, and what it has done for years.


Walter David Baker: We will have to change that.


Robert Jardine McCleave: Other mortgage companies used to follow such policy. If you or I went to them and wanted to borrow money, they would say to us, "You will have to choose a lawyer from this list," and you would have to use one of the lawyers on the list. That used to be the practice in days of yore. Now, Mr. Speaker, every lending corporation across Canada of which I know allows the borrower to use the lawyer of his or her choice. And so it should be, not only from the standpoint of freedom of choice but also because most of our legal societies are now protected by good insurance schemes, which means that nobody really gets hurt in cases of mistake. Under such schemes all the lawyers in a particular province pay money into a bar fund and, if mistakes are made in the course of a year either through carelessness or negligence, money is paid out from the common fund and nobody suffers the consequences of a sharp blow.
I say to Central Mortgage and Housing Corporation, it is time they lost their maidenly timidity and ventured forth into the mainstream of practice, as followed by other lending institutions. They have nothing to fear. However, knowing something about CMHC I must go further than that and say it is time the corporation told the Minister of State for Urban Affairs (Mr. Ouellet) who reports for the corporation in this House, to tell the Minister of Justice (Mr. Basford) that it is simply unacceptable for a lending corporation in this day and age, given all the protection available to CMHC, to insist on the right to name the lawyer who shall act on behalf of the borrower.
May I also make it clear that such lists of lawyers are drawn up with great care. Knowing my hon. friends opposite, it is safe to say that the best Liberal lawyers across Canada will be on the list. 1 say nothing about that, since 1 know the public will not suffer harm. I know all due attention will be paid to
November 16, 1976

those who are told they must choose a lawyer on such lists. But when a person is so told to choose, it derogates from his or her right of free choice and in that sense is wrong. Further, I would think such practice offends the basic principles of liberalism or free choice, if such principles are still practised by hon. members opposite.
Finally, in presenting my mildly worded case, may 1 say this: When I raised the question initially in the present session of parliament a lady called me up and said, "Mr. McCleave, you are on the right track absolutely; they showed me a list"- this lady was from Dartmouth-"I had to choose a lawyer from the list and he charged me $200 more than my neighbour in the same subdivision was charged, who also took out a CMHC mortgage." She said, "I just guessed wrong, Mr. McCleave; 1 hope you win this war." So do I, Mr. Speaker. We will find out from the parliamentary secretary if 1 have won.
Mr. Jean-Robert Gauthier* (Parliamentary Secretary to Minister of State for Urban Affairs): Mr. Speaker, contrary to the allegation made by the hon. member for Halifax-East Hants (Mr. McCleave) on November 1, Central Mortgage and Housing Corporation follows the normal practice of mortgage lenders in selecting the legal agent to process mortgage documents. He is employed to search and report on title, to register the mortgage and advance the mortgage funds, and to certify to CMHC that its mortgage constitutes a first charge on the property. In the case of loans for the provision of housing to persons of low income, requests for the employment of the borrower's solicitor or notary are in many cases granted where the employment will produce a financial advantage to the borrower. In addition, in the case of loans on existing housing, where the borrower has employed a solicitor or notary to carry out the work of acquiring the title to the property, CMHC may employ the borrower's solicitor or notary to act on behalf of CMHC.
CMHC has, as a general rule, followed the practice of all government departments and agencies and employed agents approved by the Minister of Justice (Mr. Basford). The present practice with respect to CMHC is that, with the approval of the Minister of Justice, as the hon. member so generously stated, the Minister of State for Urban Affairs (Mr. Ouellet) from time to time provides the corporation with the names of legal agents who may be employed for these purposes in various municipalities throughout the country.
In summary, of the 231,000 new housing units started in Canada in 1975, less than 6 per cent would require the services of legal agents selected by CMHC.


AGRICULTURE-REQUEST FOR ASSURANCE BEEF QUOTAS APPLICABLE ONLY TO MEAT IN TRANSIT TO CANADA ON OCTOBER 17
Mr. Bert Hargrave (Medicine Hat):: Mr. Speaker, my remarks tonight relate to some further comments on the subject of offshore beef imports from Australia and New
Adjournment Debate
Zealand. In particular they will deal with my question to the Minister of Agriculture (Mr. Whelan) on October 27.
I commend the minister most sincerely for three comments he made in his response to me on that occasion. First is his statement with respect to negotiations that are "still being discussed with both New Zealand and Australian officials." It is important that these discussions should continue with regard to offshore beef imports into Canada.
Second is the minister's admission, finally, that these imports had been entering Canada prior to the "six cent under" agreement "for as much as 31 cents per pound less than it was selling in the United States". That is a significant admission in that the minister and his senior staff people would never admit to any discount in price until after the agreement last June which introduced the "six cent under" rule.
Third is his firm statement, and I quote:
New negotiations will take place; I hope the result will be that meat shipped to Canada will be sold at a price no different from that of meat shipped to the United States under the quota system which has been imposed 

I hope the minister can convince his colleague, the Minister of Industry, Trade and Commerce (Mr. Chretien), that this is the only way these offshore beef imports can be regulated as to price. After all why should a pound of offshore beef be worth any less in Canada than the same pound of beef in the United States?
That "six cent under" rule as it now operates on offshore beef imports represents a total loss already sustained by Canadian cattle producers of somewhere between $30 million and $40 million. This admission to me in that reply of October 27 is a clear indication that the minister was over-ruled in cabinet by the Minister of Industry, Trade and Commerce or that he, the Minister of Agriculture has since changed his mind on the fairness of this "six cent under" rule.
While I agree with the three comments of the minister in his response to me in the House on October 27, I continue to disagree completely with his continued reference to the United States cattle and beef industry as a supply management system simply because that country has its own meat import law with power to impose quotas by presidential order. American cattle and beef producers continue to have complete freedom of choice as to how they wish to market their production and there is absolutely no supply management of their production.
It is very reassuring to note that in a recent speech to the Canadian Simmental Association on November 12 the minister finally admitted that these offshore beef imports do affect our prices. In that speech he made this statement:
Beef imports into Canada, particularly from Oceanic countries, have been large this year. They affected our prices somewhat.
He could have been just a little more specific by saying the effect was to depress our prices somewhat. That would have been the understatement of the year. After all, why was this new import quota imposed last month if it was not because of depressed cattle prices in Canada?

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In the same speech the minister stated he had imposed import quotas on beef from the U.S.A., Australia, New Zealand and Argentina until December, 1975-last year. Let us set the record straight. As early as April, 1975, the Canadian Cattlemen's Association requested the removal of those 1975 quotas because we were then on an export fat cattle market basis and it was on August 7, 1975, that the minister lifted those earlier quotas, not in December.
In the minister's speech to the Canadian Farm Writers' Federation in Toronto on this subject of offshore beef imports, commenting on the failure of the United States and Australia to live up to the "gentleman's agreement" he warned-and here I am quoting from the London Free Press of November 13-that Canada would "respond accordingly to those countries next year for breaking the agreement." Surely we should understand by now that retaliatory action at the border is no way to bargain successfully at the negotiating table. Canada did not sign the voluntary import beef quota agreement though other countries such as Australia, New Zealand, and Mexico did sign. And when Canadian beef exports exceeded our allotment of 64.5 million pounds, set by the United States, is it any wonder that the United States finally triggered its meat import law?
It now seems that the minister is considering the establishment of a new import-export corporation to regulate the flow of all products, including eggs. Could this be an admission that our existing import-export permits legislation is not able to do the job? Canada's recent counter-quota on beef imports was imposed under this authority, and this is the vehicle which the report of the Beef Inquiry Commission recommended. Whatever authority is devised or used to restrict present unlimited access to Canadian beef markets, that is to say after the end of 1976 quotas, it is surely time that the new legislation was administered completely by the Minister of Agriculture and not by the Minister of Industry, Trade and Commerce.
The minister is well aware of the representations on this subject of import controls which have been made to him on several recent occasions by the CCA. These are well considered and detailed examinations of the entire subject and are certainly worthy of his attention. Until now he has failed to indicate why Canada should not employ a meat import law. If he does not intend to use such a device I think he owes it to Canadian cattle producers to explain why he will not do so. The CCA has recommended that a Canadian beef import law could deal with the import situation.
[ Translation]


Mr.   Iren@: Mr. Speaker, on October 27, the hon. member put a few questions to the minister about the steps that had been taken to protect Canadian beef producers following the U.S. decision to set up quotas. I hope the hon. member will find tonight's answer satisfactory.
In a press release on October 13 last the Minister of Agriculture (Mr. Whelan) announced that the federal govern-

ment was acting to safeguard the Canadian market from any disruption which might follow from those U.S. measures. That clearly indicates our intention to limit Australian and New Zealand beef imports should they threaten the Canadian market. That announcement, of course, is contrary to the comment the hon. member made on October 1 5, and I quote:
The announcement in no way indicates any intention to limit or reduce Australian or New Zealand beef imports.
Since at first the full effect of the U.S. measures were not obvious as regards Canadian exports and the possible movement of beef to the Canadian market, the first step of course was to establish a working basis in the form of consultations with the United States, Australia and New Zealand and put beef and veal under individual import permits. Afterwards, as announced on October 19, an import quota of 17.5 million pounds was set for the period of October 18, 1976 to December 31, 1976. The Canadian quota is based on average imports in the last quarter of the years 1971, 1972 and 1973 adjusted to provide for reductions in exports to the United States and distributed over the period of October 18 to December 31. The share alloted to each country will be based on their past performance vis-a-vis that base. Products already in transit will be included in the quotas. If the quantities exceed the country's quota the products will be kept in bonded warehouses thus respecting quotas. The clearance of meats will be controlled to reduce a possible market glut. Individual import permits will be required for each shipment under this regulation. This quota is less that of the last quarter of 1975, 20.6 million pounds, whereas there also were import quotas much lower than those of the last quarter during the period between 1971 and 1973, 31.1 million pounds. Consequently, it is obvious that imports will be reduced, and the government took measures to protect the Canadian cattle industry and avoid any glut on the market.
In order to be imported to Canada pursuant to the regulations, the documents must indicate that the meat was in transit at midnight on October 17, 1976. No importat is allowed if the destination is not specified. Diversion of meat to Canada from a third country will be eliminated.
Mr. Speaker, the hon. member indicated several times that Australia and New Zealand ignore the 6-cent agreement. The Minister of Agriculture said to the House on October 27 that he had no evidence to show that meat had been sold in Canada outside of the Agreement. Of course, there might be cases when beef meat was stored in Canadian warehouses before the agreement was put into force. Any reduction of the price of this product would be partially modified by the storage costs.
Canada kept its border with the United States open to answer the wishes of the Canadian beef producers. Up until December 1975, there were import quotas on beef meat coming from the United States, Australia, New Zealand and Argentina but at that time the beef producers asked that these quotas be withdrawn. However, since the United States have applied an import quota system, the situation has changed and we quickly took the necessary measures to offset the adverse effects of these quotas on Canadian prices.
November 16, 1976


ENERGY-REASON FOR FAILURE TO SUBSIDIZE COST OF ELECTRICITY IN ATLANTIC REGION
Andrew Hogan: Mr. Speaker, in answering my questions on the failure of the federal government to subsidize increasing costs of electricity in the Atlantic region, especially Nova Scotia, the Minister of Energy, Mines and Resources (Mr. Gillespie) claimed that his department has to consider not only the present prices of imported oil but also the future increases. He said to me that his department has to look at the whole question in terms of a longer period "than the period to which the hon. gentleman referred".
In my first question I had dealt with the fact that a surplus of funds that were intended to be used by the federal government for oil import subsidies is allowed to increase quarter by quarter, month by month, and day by day. Part of our so-called energy policy includes an oil import compensation scheme whereby the federal government compensates oil companies for the higher cost of imported oil in return for their undertaking to sell oil at the Canadian wellhead price.
The funds for this purpose come from the export tax on oil and petroleum products, as well as the proceeds of a ten cents a gallon excise tax which was brought in last year. In my question I noted that the surplus for the third quarter of 1976 was a little less than $100 million.
The picture for the first three quarters of 1976 looks like this. In the first quarter the oil export tax was $812 million, in the second quarter $820 million, and in the third quarter $542 million. The gasoline excise tax in the first quarter was $510 million, as it was in the second and third quarters. The oil import subsidy in the first quarter was $1,268 million, in the second quarter $1,188 million, and in the third quarter $958 million. The surplus in the first quarter was $54 million, in the second quarter $142 million, and in the third quarter $94 million. We are now in the fourth quarter. The quoted surplus shows that indeed there is a significant amount that can be paid out to Nova Scotia in order to help low income and middle income power users in that province.
The minister is arguing that there might be an increase by the cartel of the oil producing export countries next year and that time dimension has to be considered. We agree with him to some extent and we know that there is a strong possibility that there will be an OPEC oil price increase of at least 5 to 10 per cent in the new year. I wanted a guarantee though that any surplus that would still be in that fund would go to help offset future needs of the provinces of Nova Scotia and Prince Edward Island, especially, at least for the next three to four years until they get their energy program, including the use of more Cape Breton coal and their new rate structure and their conservation program into full swing. The surplus figures I have read show that the moneys are already available for a special subsidy for next year in any case.
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The minister, once again in answering my questions refers to the fact that the federal government will have provided very close to $1 billion to Atlantic Canada to offset the increases in oil prices. Now, the minister has used this figure in the House before and 1 have challenged him, as I do again, to prove this figure because the figure really relates, as far as I can find out, to all of the area east of the Ottawa Valley, which is the dividing line for the oil import compensation subsidy, and includes a good deal of the province of Quebec. If this is not the case, let the minister tell us so unequivocally tonight, but as of this date I consider the minister to be deceiving the people of Canada, deliberately or otherwise, when he keeps referring to this $1 billion figure as having been the compensation for Atlantic Canada alone, since the province of Quebec is valued, to some extent, in that figure.
The minister has further said in one of his answers to me that an automatic increase in the equalization arrangements entered into by the federal government and the province of Nova Scotia, including an automatic increase in equalization this year, can be applied to offset the oil price increase. Again the automatic increase he refers to is, I think, in the neighbourhood of $10 million. But surely the minister, in taking this interpretation of how the equalization grant increase might be applied in Nova Scotia, is grossly misinterpreting the meaning behind the equalization grants.
These equalization revenues, which are raised by taxation from all Canadian taxpayers, including corporations, come out of the general revenues of the Government of Canada. They were meant, and are still meant, to provide for such fundamental services as education, social services, and health care. The idea was that these services would be much more inferior in the lower income provinces without these equalization grants. Thus they were meant to guarantee that in respect to these services there would be no second class citizens in the Canadian confederation. To ask, at a time when the federal government is reducing its cost sharing agreements on health and hospital care, and when these and education demands are needed in the low income regions, that any automatic increases in the equalization grants be put towards decreasing power costs is, to my mind, a very serious distortion of the meaning of equalization.
The minister should know that one of the most important characteristics of the equalization of revenues notion under our Canadian federal setup is that equalization is a non-conditional transfer. In other words, the federal government cannot, and does not, have any say in the use of those funds for special emergencies such as the increase in power costs.
The minister has, time and again in this House, brought up the fact that the Premier of Nova Scotia has refused to allow him to make public their submission to his department in seeking a special subsidy arrangement. We, who represent Nova Scotia constituencies in this federal House, find it very difficult also to accept why Mr. Regan does not allow this to be made public. We were indeed shocked to find out recently on the Wreck Cove power project in Nova Scotia that the

November 16, 1976
Adjournment Debate
Nova Scotia Power Corporation has not yet signed a contract, which amounts to an open-ended one with the major contractor. Our party in the province has demanded, and rightfully so, a special public investigation of that project.
The minister has, from time to time, also mentioned other criticisms of the Nova Scotia government's energy policy and energy conservation policy. 1 am not really interested, Mr. Speaker, in any squabble the minister has with the Nova Scotia government, or the Nova Scotia Power Corporation, and who said what or who should have done such and such. The major reason for an interim subsidy for Nova Scotia is because the power rates have increased 50 per cent last year and will likely average another 50 per cent this year.
Thus it is of great importance for the federal government to give an interim subsidy of $15 million to $20 million a year for the next four or five years. This is the best way to keep the low income groups from being tagged with too heavy a payment for power costs. The federal government should insist that any subsidy be used to relieve the bills of low and middle income people. After all, the AIB does not control the sales taxes and the property taxes and other types of licensing services, which are increasing in a very real way for these people.
The need for the subsidy has to be related to the general effects of the federal restraint program on Nova Scotia, where there is now some 10.8 per cent unemployed and where there is increasing unemployment, even in the relatively well-off Halifax metropolitan area. Unemployment in Cape Breton Island is about 20 per cent now. It is a national scandal to see people running out of UIC benefits and forced on welfare, and with LIP grants slashed and no major job schemes in the offing. We in Nova Scotia and the Atlantic region are generally, along with Quebec, paying a proportionately higher price for the government's attempt at stability through the restraint policy than any other provinces of Canada.


Alastair William Gillespie: Mr. Speaker, I welcome this opportunity to respond to the hon. member for Cape Breton-East Richmond (Mr. Hogan). He and I both have similar interests in protecting those Canadians who are least able to protect themselves from the high cost of energy. Indeed the government's policy has been to protect all Canadians from the massive increases of 1973 and since and, as far as possible, to protect them with respect to the possible forthcoming increase next January.
The government has moved up the price of oil in Canada in measured steps significantly below the international price. Indeed the international price is approximately 50 per cent higher than it is in Canada and, 1 am pleased to say, no group
of citizens has benefited more from this policy than the citizens of Nova Scotia and the Maritimes.
The hon. member asked me to confirm whether or not the figure of $1 billion was correct. I can confirm that by the end of this year it will be very close to $1 billion for the four Atlantic provinces, and that the highest per capita assistance has been to the citizens of his province.
He also referred to the automatic increase with respect to equalization payments. There would not have been close to $10 million increase in the equalization payments this year if it had not been for one reason, that is, the increase in the price of oil which was to provide, under the terms of the federal-provincial arrangements, an equalization strictly related to oil, and $10 million is the increase which the province of Nova Scotia will attract for purposes of generating electric power from oil.
In the last minute or so I have and I would like to make one or two other points. The hon. member has suggested that there is some degree of symmetry between the costs of the excise tax on the one hand, the export tax on the other hand, and the oil import compensation. I would point out to him that virtually all government expenditures are met out of the Consolidated Revenue Fund and it is not usual to attribute particular revenue streams to particular uses. This principle holds good for the oil import compensation program. Indeed if he goes back over the years he will find that revenues from the two sources I have mentioned have not been sufficient to meet the expenditures of the oil import compensation fund.
Second, I do not think he recognizes that the excise tax was also introduced as a conservation measure, a disincentive to the wasteful use of energy which for too long has been regarded by Canadians as cheap and therefore to be wasted. I do not think, in other words, that he can make the argument that if there is a temporary surplus during the course of a fiscal year, that is any more reason to expect a reduction or an additional payment. If that principle were adopted, the federal government during that period of the year would have to provide some kind of tax reduction because the national accounts were in temporary surplus.


Mr. Deputy Speaker:: Order, please.


Alastair William Gillespie: I think we have to look at the whole oil import compensation fund in a much longer time frame than the hon. member has mentioned.


Mr. Deputy Speaker:: Order, please. The minister has gone beyond his time.
The motion to adjourn the House is now deemed to have been adopted. Accordingly, this House stands adjourned until tomorrow at 2 p.m.
Motion agreed to and the House adjourned at 10.31 p.m.


END OF VOLUME I