1976-03-01

ROUTINE PROCEEDINGS


Mr. Leonel Beaudoin (Richmond):: Mr. Speaker, pursuant to the provisions of Standing Order 43, I ask the unanimous consent of the House to present a motion dealing with an urgent and important matter.
In view of the fact that the Quebec textile industry is increasingly threatened and urgently needs some correctives to restore a satisfactory economic stability, that most of its problems are due to rising imports and that the industry is comparatively isolated from the remainder of the Canadian economy, I move, seconded by the hon. member for Roberval (Mr. Gauthier):
That this House immediately discuss the condition of our textile industry to provide new policies liable to protect employment and assure Canadian markets and to consider the effectiveness of the suggestion made during the weekend by the Confederation of National Trade Unions for the establishment of the Textile and Clothing Board on a permanent basis.


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


Some hon. Members:: Agreed.


Some hon. Members:: No.


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



ORAL QUESTION PERIOD


Mr. Dan McKenzie (Winnipeg South Centre):: Mr. Speaker, I have a question for the Minister of Supply and Services. Yesterday in British Columbia the Minister of National Defence said that Canada was going ahead with the Lockheed LRPA purchase. Since the Lockheed LRPA
contract remains unsigned and the minister tells us this is because of long-term financial problems but declines to say what these are, is it part of this unsigned LRPA contract that Lockheed would provide a line of credit to Canada to enable production to get started?


Hon. Jean-Pierre Goyer (Minister of Supply and Services):: Mr. Speaker, from the beginning of negotiations with the Lockheed company, I said to the House that our problem was first of all a financing problem. Of course, events that have developed since then on the international scene prompt us to be more cautious in our negotiations with Lockheed due to the long term financing situation of this company.
Nevertheless, the main problem is one of financing. The Department of Supply and Services as well as the Department of National Defence are trying to find a solution with the co-operation of Lockheed; up to this point, the parties involved have not agreed on any of them.


A. Daniel McKenzie: Mr. Speaker, as the minister stated Lockheed is now unable to provide this credit, is it forcing the Canadian government to find the money to get production started? In other words, are we not talking about a short term financial problem rather than a long term financial problem?


Jean-Pierre Goyer: Mr. Speaker, it is as much a long term as a short term financing problem, according to the place one occupies in the negotiation, whether one is with Lockheed or with the Department of National Defence.
In any event, negotiations are going on and the government will take a decision in the near future, to clear the situation since Lockheed has already begun to plan its production.


THE CANADIAN ECONOMY
Mr. Edward Broadbent (Oshawa-Whitby):: Mr. Speaker, I had a question for either the Prime Minister or the Secretary of State for External Affairs, but since neither is here I shall raise another matter with the Minister of Finance. During the past 72 hours, has the minister reconsidered the government's position on the implications of removing the export levy in the anti-inflation program with particular reference to enabling the workers, as com-

March 1, 1976
Oral Questions
pared to the corporations, to get some of the benefits of removing this special tax in the sense of having permission to increase wages and salaries in excess of the minimum guidelines in the program?


Hon. Donald S. Macdonald (Minister of Finance):: I would say no to that, Mr. Speaker. We have laid emphasis on the importance of any excess revenues being used for reinvestment in Canada with the consequent job creating effect.


ANTI-INFLATION PROGRAM-DATE OF AMENDING OF APPEAL PROCEDURE
John Edward Broadbent: Mr. Speaker, of course the job creation effect does not bear on the salary benefits that may or may not be available. My supplementary question concerns the reference the minister made in his statement about amendments that would be forthcoming with regard to the appeal procedures in the legislation. Following the questions I put to the minister on this subject some two weeks ago, may I ask again when we can expect specific legislation? Can the minister tell the House what part of the appeal procedure the government intends to amend?


Donald Stovel Macdonald: Mr. Speaker, the matter is still under consideration. I think it would be more effective to wait until the announcement is made, then the hon. member will be able to see the exact manner in which we propose to proceed.


John Edward Broadbent: Can the minister at least tell the House when we can expect the legislation?


Donald Stovel Macdonald: As I say, Mr. Speaker, the matter is under consideration. The House will be advised just as soon as the final position is taken.


THE CANADIAN CONSTITUTION
Léonel Beaudoin: Mr. Speaker, since the right hon. Prime Minister is not here, I would like to direct my question to the Acting Prime Minister.
A report has been made public indicating that negotiations at the official level between Quebec and Ottawa about the constitution would have largely gone beyond the discussion stage and extend to questions dealing with protection of French culture in Canada, legislative primacy in immigration matters, regional disparities, proclamation text of a Canadian constitution, and so on. It even appears that the government of Canada would have made specific propositions on those matters to the government of Quebec. Could the Acting Prime Minister confirm or deny this report to the House and sum up the situation in those negotiations?


Hon. Mitchell Sharp (Acting Prime Minister):: Mr. Speaker, the situation at the moment is that some informal exploratory talks have been going on at official levels. There have been no formal presentations or proposals made to the provinces.


THE CANADIAN ECONOMY
Mr. Gordon Ritchie (Dauphin):: Mr. Speaker, in the absence of the Prime Minister I direct my question to the Acting Prime Minister. In view of the statement of the Prime Minister in Toronto over the weekend that Canadians are going through a period of reflection and redirection and that since the second world war they have been too busy getting richer, can the Acting Prime Minister tell us if the Prime Minister meant that Canadians should accept a less materialistic society?


Mitchell William Sharp: Mr. Speaker, I think it is probably a view shared by many Canadians, and I hope by most members of parliament, that we could have a better society if it were less materialistic.


Some hon. Members:: Oh, oh!


An hon. Member:: You are a fine example.


Mitchell William Sharp: We are very fortunate that in the postwar period there has been a very great increase in the wealth of Canada and in the incomes of Canadians, and we all hope that they can be used to better purpose than at the present time.


William Gordon Ritchie: The Prime Minister suggested that labour unions as well as corporations are among the big and powerful; does this mean that the many individual union members are amongst the powerful in the country?


Mitchell William Sharp: On a number of occasions the Prime Minister has made the point that there has been an increasing concentration of power, and, of course, that is just the opposite of individual responsibilities and individual rights.


NATIONAL DEFENCE
Mr. Donald W. Munro (Esquimalt-Saanich):: Mr. Speaker, in the absence of the Minister of National Defence and his parliamentary secretary, I should like to address a question to the Acting Prime Minister. It may not be possible for him to answer the question, but I should like to know why it was necessary to call in U.S. coastguard helicopters to rescue Canadian fishermen last week-
March 1, 1976

end, an event which resulted in the loss of another fisherman and another fishing vessel. Do we not have enough helicopters in our own service in order to meet safety needs, particularly when a fishing season is opening?


Mitchell William Sharp: Mr. Speaker, I will make inquiries as to the reasons for asking the United States for their very generous assistance to us.


TRANSPORT
Donald W. Munro: Mr. Speaker, I think we all appreciate this assistance when it is given, but I feel we should have our own service. In the absence of the Minister of Transport, perhaps his parliamentary secretary could make note of the following question: will it be possible to report that the examination into the events of the last fishing season, which resulted in a report and recommendation, terminated with an examination of all the fishing vessels before they went out on the present fishing season?


Mr. Ralph E. Goodale (Parliamentary Secretary to Minister of Transport):: Mr. Speaker, would the hon. member repeat the first part of that question? I am sorry, but I missed it.


Donald W. Munro: Last year there was a report prepared by the Ministry of Transport-at our insistence, I might add-and there were a number of recommendations in that report. I should like an assurance that those recommendations resulted in inspections of all fishing vessels before they went out on the present fishing season, and particularly on the west coast.


Ralph Goodale: I am not sure if I can give that firm assurance to the hon. member. I know there were extensive discussions earlier this year in connection with this matter with the people involved in the fishing industry. I will check specifically to see if the precise inspections which the hon. member has mentioned were in fact undertaken. However, substantial precautionary measures were taken by the Ministry of Transport prior to the beginning of this fishing season.


FISHERIES
Mr. Jack Marshall (Humber-St. George's-St. Barbe):: Mr. Speaker, my question is directed to the Minister of State (Fisheries). In view of the fact that the seal hunt will be starting in a few days, and since some 2,000 seal hunters are dependent on the seal hunt for their livelihood or a good part of their livelihood, has the minister yet received an application from the Greenpeace organization
Oral Questions
to enter the seal hunt in order to cause interference and damage, as they intend?


Hon. Romeo LeBlanc (Minister of State (Fisheries)):: Mr. Speaker, I should like to inform the hon. member that to my knowledge we have not received any application. I have made it clear publicly that if there are people representing different movements which want to observe the hunt but not interfere with it, we would make arrangements for them to do so. We have done this in the past for other movements which have strong feelings on this issue. The regulations which prohibit interference with the hunt are very clear. They have been on the books for a number of years, and they will be applied in the ordinary manner.


Jack Marshall: In order to avoid counterinterference by many fishermen who hunt seals, and in view of the fact that they are adamant in wanting to avoid any unfortunate incidents, will the minister accept my suggestion to have the green dye which they propose to use analyzed to discover its effect on seals and also the relationship of the mother seal to the pup, and if he has that information would he have this analysis carried out or direct the Food and Drug Directorate through the Minister of National Health and Welfare to carry out this analysis to ensure that the seal population in Newfoundland and the Atlantic region is not destroyed?


Roméo LeBlanc: I certainly agree completely with the premise of the hon. gentleman's question regarding the income of fishermen. It is for that very reason that regulations of the seal hunt have as their goal wise conservation because seal hunting is an important source of income. It represents in some cases $2,000 to $3,000 to individuals who have no access to other income at that time of the year.
As to the matter of dye, I have said that we have regulations to prevent interference with the hunt. I have asked my scientists to look into the implications of the use of dye, but I believe that the use of dye would not be any more acceptable than the use of aeroplanes or helicopters to frighten the herds when they are whelping.


THE CANADIAN ECONOMY
Mr. Lincoln M. Alexander (Hamilton West):: Mr. Speaker, I have a question for the Minister of Manpower and Immigration, but in his absence I will direct it to the Acting Prime Minister who at times is the source of all wisdom. My question has to do with the recent statement of the Ontario government which expects a very bad summer for students, up to a million of whom will be looking for jobs. Accordingly, it is attempting to meet this crisis situation. Does the Acting Prime Minister also believe this will be a bad summer for students with regard to available jobs for them and does he believe that present federal programs are adequate to meet the situation? Is the

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Oral Questions
whole matter under review and will a statement be made regarding this matter in due course?


Mitchell William Sharp: Mr. Speaker, the government has been inclined to forecast this sort of situation with regard to students this summer. It has been assigning its resources and trying to direct them toward the alleviation of this problem rather than dispersing them more widely. This has meant some changes in the program. We expect that we will be able to make better use of the money this year than we have in other years in relation to the employment of students. In that sense the matter is under review, but basically we have made our decisions.


Lincoln MacCauley Alexander: I imagine the answer to my initial question is that the government expects this will be a very bad summer with regard to employment for students. The fact of the matter is that Ontario has some one million students looking for jobs. The restraint program is restraining employers, thus reducing student employment in the summer. This has probably aggravated the situation in the provinces. Will the Acting Prime Minister assure the House and the students of Canada that this government will attempt to meet with industry, through chambers of commerce perhaps, and to meet with the colleagues of the Minister of Manpower and Immigration throughout the country so that they can devise steps to attack this very serious problem and thus reduce the high unemployment rate that is expected for Canada's students this summer?


Mitchell William Sharp: Mr. Speaker, this kind of procedure has been followed every year in the past. We have always encouraged employers to employ students. We have worked with the provincial governments, and that is what we are doing this year. I cannot say whether the problem will be worse this year than it was in other years, but it is always a serious problem.


ADEQUACY OF VOLUNTARY SUMMER WORK PROGRAMS FOR STUDENTS IN VIEW OF NEED FOR FUNDS FOR TUITION FEES
Mr. Bob Brisco (Kootenay West):: My question is for the Acting Prime Minister. In view of the fact that the Minister of Manpower and Immigration and the Secretary of State have introduced programs for voluntary summer work, by what stretch of the imagination does this government think that students will be in a position to volunteer for jobs without pay when they need to pay for their university courses, their tuition fees, their books and room and board?


Mitchell William Sharp: There are some students in Canada who do not have to depend on summer employment to obtain funds to attend school. I know that some of these people are generous and public spirited, so I hope my hon. friend is not trying to discourage them from doing voluntary work.


AMOUNT OF REDUCTION IN BUDGET FOR STUDENT SUMMER EMPLOYMENT PROGRAM
Mr. Andy Hogan (Cape Breton-East Richmond):: Mr. Speaker, may I direct a supplementary question to the

Acting Prime Minister? Are funds for the student program to be reduced from the $35 million level of last year to $20 million this year?


Mitchell William Sharp: Mr. Speaker, I do not remember the statistics. I will take the question as notice and try to answer tomorrow.


EXTERNAL AFFAIRS
Mr. T. C. Douglas (Nanaimo-Cowichan-The Islands):: Mr. Speaker, may I direct a question to the Acting Prime Minister about the projected construction of the Trident base at Bangor, in the state of Washington, on Puget Sound, some 60 miles from the Canadian border? In view of the action of Mayor Arthur Phillips of Vancouver, who has proclaimed Trident Concern Week and states that Trident is the most destructive weapon in history which, in its present location, will make the lower mainland of British Columbia and Vancouver Island part of a retaliatory target, may I ask the Acting Prime Minister if representations have been made by the Government of Canada to the United States protesting against the Trident base, in view of the potential danger to a large segment of the population of British Columbia?


Mitchell William Sharp: Mr. Speaker, I know there have been exchanges of views about this problem but I do not think the Canadian government has made formal protests about this matter, because I do not think that would be appropriate.


John Edward Broadbent: Why not?


Mitchell William Sharp: But there have been discussions between the two governments.


Thomas Clement (Tommy) Douglas: A supplementary question, Mr. Speaker. As the Minister of National Defence is reported by the press to have said in British Columbia this weekend that Canadians should welcome the Trident base and encourage the United States to build it because of the deterrent protection it gives Canadians, and as the Trident system, unlike the Poseidon system, is not a deterrent, but a first-strike weapon, does the Acting Prime Minister not believe that the time has come for the Canadian government to raise its voice in protest against this mad escalation of nuclear destructive capacity before it is too late?


Some hon. Members:: Hear, hear!


Mitchell William Sharp: No, Mr. Speaker. I gather that the Minister of National Defence shares my views about the nature of this problem, which we should discuss with the United States. I do not think that we should protest against the construction of an instrument that may help to maintain the peace which has prevailed in the world for quite some time between the great powers.


An hon. Member:: Then, you are both mad.
March 1, 1976


SUGGESTED WARNINGS ON ALCOHOLIC BEVERAGE CONTAINERS AND RESTRICTIONS ON ADVERTISING-GOVERNMENT POSITION
Mr. J. Robert Howie (York-Sunbury):: Mr. Speaker, my question is for the Minister of National Health and Welfare. Does the minister intend warnings to be placed on alcoholic beverage containers similar to warnings placed on packages containing tobacco products, and does he plan to introduce more comprehensive regulations requiring more meaningful warnings to be put on these products and restricting advertising?


Hon. Marc Lalonde (Minister of National Health and Welfare):: Mr. Speaker, last year I set up a departmental task force to consider alcoholism and techniques and methods which can be employed to reduce it. I expect a report in the next few weeks from the task force and will be able to advise the hon. member whether specific additional steps are planned.


PETRO-CANADA POSSIBLE ENTRY INTO REFINING AND MARKETING OF PETROLEUM PRODUCTS-GOVERNMENT POSITION
Mr. F. Oberle (Prince George-Peace River):: Mr. Speaker, my question is for the Minister of Energy, Mines and Resources. Considering the minister's expressed intention to direct the activities of the national petroleum company to the production, refining and marketing of petroleum products, and away from the less lucrative exploration for natural resources, can the minister inform this House, as he informed an audience in Pittsburgh recently, what form this new intrusion in the free market system will take? Does the government intend to provide Petro-Canada with further public funds in order to carry out that new activity?


Hon. Alastair Gillespie (Minister of Energy, Mines and Resources):: Mr. Speaker, I made it clear previously that the priorities of Petro-Canada are the exploration and development of Canada's far north resources.


Frank Oberle: Mr. Speaker, may I ask a short supplementary question? The minister expressed his intention to expand activities. Does the government intend to buy an existing system or marketing company, instead of starting its own activity?


Alastair William Gillespie: Mr. Speaker, Petro-Canada has already started its own activity, as the hon. member probably knows. The hon. member probably also knows that I stated on previous occasions, as did my predecessor, that at some point in time it may be of advantage to Petro-Canada to make an acquisition.
Oral Questions
[DOT] (M30)


REASON FOR RESIGNATION OF DR. WIGGINS FROM RESEARCH BRANCH-REQUEST FOR ASSURANCE RESEARCH PROJECTS CHOSEN ON BASIS OF MERIT
Mr. Paul Yewchuk (Athabasca):: Mr. Speaker, my question is to the Minister of National Health and Welfare. Was the resignation of Dr. Wiggins from the research branch of his department at least in part related to political interference with the selection procedure for research projects under the department's research and development program?


Marc Lalonde: Mr. Speaker, it was in no way connected, either directly or indirectly. Dr. Wiggins' resignation was a matter that had been discussed for quite a few months with the previous deputy minister as well as the present deputy minister. It was done purely at the administration level. It is the type of thing that one can expect in the public service once in a while.


Paul Yewchuk: Since my information is at variance with what the minister has stated, can he assure the House that he has taken all steps necessary to ensure that research projects are chosen purely on the basis of merit and for no other reason?


Marc Lalonde: Mr. Speaker, if the hon. member has any information to the contrary, I challenge him to make a charge on that basis because I certainly would not tolerate political interference with research projects. I have never done so and I do not intend to do so in the future. If the hon. member has any facts, he should have the courage to stand up and make the charge.


Paul Yewchuk: Mr. Speaker, I think the minister is a little sensitive over this. Because of that, he has failed to answer the question I asked him. Can the minister assure the House that all steps necessary have been taken to ensure that projects are chosen strictly on merit and for no other reason?


Marc Lalonde: Mr. Speaker, it is not a question of sensitivity. The hon. member has made a serious allegation. He lacks the courage to stand up and be very precise.


Some hon. Members:: Hear, hear!


Some hon. Members:: Oh, oh!


Marc Lalonde: There was an allegation in the hon. member's question. Therefore, it was quite proper for me to raise this. I am glad to note the hon. member is backing off quite fast. As to the hon. member's question, there have been no steps taken for the good reason that there was no need to modify the previous practice which was clearly that research projects were decided on and carried out purely on the basis of merit.

March 1, 1976
Oral Questions OLYMPIC GAMES


FEDERAL FINANCIAL ASSISTANCE-POSSIBILITY OF CHANGE IN GOVERNMENT POSITION IF QUEBEC AGREES TO CONSTITUTIONAL CHANGES
Right Hon. J. G. Diefenbaker (Prince Albert):: Mr. Speaker, my question is directed to the Acting Prime Minister. It has to do with further assistance asked for by the government of Quebec in connection with the large Olympic deficit. The Prime Minister has irrevocably stated over and over again that under no circumstances will further assistance be given. Has there been any change in the oft repeated declaration by the Prime Minister that no further assistance, other than that already provided for, will be given, regardless of any pressure?


Mitchell William Sharp: Mr. Speaker, I heard the Premier of Quebec make his statement. I have checked with the Prime Minister's office and I have had many conversations on the subject with the Prime Minister. As far as I know, there has been no change in Canadian government policy.


John George Diefenbaker: May I ask the Prime Minister whether, in view of the desire of the Prime Minister to bring about the patriation of the constitution or a new constitution and as he and the Premier of Quebec will be meeting this weekend, if the Premier of Quebec withdraws his objections to certain elements in the constitutional change that had its elementation in the Victoria Charter, the government of Canada will consider giving further assistance, provided the government of Quebec will agree to the amendments that the government of Canada wishes to make to the constitution?


Mitchell William Sharp: Mr. Speaker, I doubt whether the province of Quebec would change its views for those kinds of considerations. Therefore, I am a little surprised at the suggestion being made by the right hon. member for Prince Albert.



IMMIGRATION


Hon. Herb Gray (Windsor West):: Mr. Speaker, in the absence of the Minister of Manpower and Immigration, I will direct my question to the Acting Prime Minister. Is the government continuing to say, even with the authority it now has from Bill C-85, that it will exclude from Canada members of the PLO who are known terrorists? I ask this because the agreement the government signed with the United Nations to hold the Habitat conference here seems to oblige it to admit them if they are invited or designated by the Secretary General to attend that conference. Finally, in fact does not the signing of that agreement mean that to this extent, the government has stepped back from the policy on this stated last fall?


Mitchell William Sharp: That is not my impression, Mr. Speaker, but I will certainly check it with the Minister of Manpower and Immigration. As far

as I know, the Canadian government has never changed its view which was that we would admit observers from the PLO, but not known terrorists.



FINANCE


Mr. Eudore Allard (Rimouski):: Mr. Speaker, I want to put a question to the Minister of Finance.
Since the federal government incurred a deficit of more than $3.5 billion last year and since only one bank-the Royal Bank of Canada-saw its assets increase by $3.5 billion during the same period, could the Minister explain this deficit and this increase to the House?


Donald Stovel Macdonald: Mr. Speaker, I must say that for reasons that are well known we do not accept the hon. member's analysis of these matters. This difference in economic philosophy could perhaps be the subject of a debate in the House at some time, but I cannot give a short answer to the question at this point.



GOVERNMENT POSITION ON INTEREST RATES

Eudore Allard: Mr. Speaker, is the minister suggesting, by his reply, that current interest rates are normal?


Donald Stovel Macdonald: Mr. Speaker, would the hon. member please repeat his question?


Eudore Allard: Mr. Speaker, is the minister suggesting that current interest rates are normal?


Donald Stovel Macdonald: No, Mr. Speaker, I think they are very high indeed. That is, partly, because of present inflation in Canada. That is why we set up our control program.



REASON GREECE PURCHASED LOCKHEED AIRCRAFT RATHER THAN CANADIAN

Mr. Lome Nystrom (Yorkton-Melville):: Mr. Speaker, my question is to the Acting Prime Minister. In view of a call in Greece for an inquiry into that government's purchase of Lockheed transport airplanes rather than those of Canadair a few years ago, and in view of the fact that the Lockheed aircraft was the most expensive to purchase as well as the most expensive to operate, and because several officers in the armed forces preferred the Canadian aircraft, will the Acting Prime Minister, because of jobs in this country and so on, give the House an explanation as to
March 1, 1976

why the Greek government purchased the Lockheed aircraft over the Canadian?


Mitchell William Sharp: Mr. Speaker, it is my impression that this explanation was given to the House by my colleague, the Minister of National Defence, in which he justified the selection of Lockheed. It was selected purely on the basis of its general advantage to Canada.


Lorne Edmund Nystrom: I am talking about Greece, not Canada. I know the Acting Prime Minister is having a little difficulty. There has been a call in Greece for an inquiry to determine why that government purchased Lockheed transport airplanes rather than planes from Canadair despite the fact that Canadair aircraft are cheaper and operate much more efficiently according to air force officers in Greece itself. Bearing in mind the implication for employment in this country, does the Acting Prime Minister have an explanation from the Greek government as to why they purchased Lockheed aircraft rather than our own despite the fact they are much more expensive?


Mitchell William Sharp: No, Mr. Speaker, I do not. But I will inquire and ascertain whether there is some explanation, because we are anxious to sell our aircraft wherever we can.



REQUEST FOR LIST OF CONTRACTS FOR WHICH LOCKHEED WAS IN COMPETITION WITH CANADIAN FIRM

Lorne Edmund Nystrom: Can the Acting Prime Minister provide us with a list of all contracts in connection with which a Canadian aircraft firm was in direct competition with Lockheed?


Mitchell William Sharp: I do not know whether we would have that information. Most of the companies concerned are private companies and they would not necessarily provide us with that information. However, I will see what I can do to satisfy the hon. member's curiosity.



HOUSING


Mr. Stan Darling (Parry Sound-Muskoka):: Mr. Speaker, in the absence of the Minister of State for Urban Affairs I should like to direct a question to his parliamentary secretary and ask him whether he has any up-to-date information on the proposed residential rehabilitation assistance program which was to be announced. I know we would like to hear about it.


Mr. Jean-Robert Gauthier (Parliamentary Secretary to Minister of State for Urban Affairs):: Mr. Speaker, I can at least confirm some leaks which were put out last week, I do not know by whom. The maximum amount of money a home owner may borrow from CMHC to rehabilitate a house will be increased from $5,000 to $10,000 under
Oral Questions
the new RRAP regulations. The maximum amount of grant in the form of loan forgiveness is increased from $2,500 to $3,750. This grant portion of an RRAP loan is determined by various factors, including the size of the loan and the borrower's income. RRAP funds are intended primarily for moderate income persons who want to extend the useful lives of their houses.


Some hon. Members:: Speech!


Jean-Robert Gauthier: The program is not universal but is closely associated with the Neighbourhood Improvement Program which is helping many municipalities preserve and improve older urban neighbourhoods in danger of decay or destruction.


Some hon. Members:: Hear, hear!



NATIONAL PARKS


Mr. Dean Whiteway (Selkirk):: Mr. Speaker, my question is directed to the Minister of Indian Affairs and Northern Development. It has to do with a subject I raised in the House last week and, particularly, with a statement which the minister himself made last Friday. Now that he has had an opportunity over the weekend to reflect more deeply on the facts, can the hon. gentleman tell the House when he will make a second revision of the fee structure which will remove completely the fee structure presently governing admission to our four national historic parks.


Hon. Judd Buchanan (Minister of Indian Affairs and Northern Development):: That is not our intention, Mr. Speaker.


Dean Waldon Whiteway: Bearing in mind the marked decline in admissions and the reasons given by the minister last year when the fee structure was set up, and taking into consideration, also, the results in terms of revenue versus the expense incurred in collecting the money, would the minister undertake a study to determine whether any admission fee at all should be charged to those entering our parks?


J. Judd Buchanan: That type of study was conducted prior to the change which was announced last Friday.



PHARMACARE-GOVERNMENT INTENTIONS WITH REGARD TO ESTABLISHING PLAN

Mr. Frank Hamilton (Swift Current-Maple Creek):: Mr. Speaker, I have a question for the Minister of National Health and Welfare. Is it the intention of the government to establish a Canada wide drug plan?


Marc Lalonde: Would the hon. member clarify his question? Does he mean Pharmacare, or something else?

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Oral Questions


Frank Fletcher Hamilton: Yes, Pharmacare.


Marc Lalonde: There is no such intention at the present time.



AGRICULTURE


Mr. Gordon Towers (Red Deer):: Can the Minister of Agriculture explain to the House how he reconciles the importing of eggs into Canada, as was done prior to Christmas and again in recent weeks, with directions to Canadian producers to cut back production?


Hon. E. F. Whelan (Minister of Agriculture):: I am sure the hon. member knows that it has been customary to import eggs into Canada from time to time. A surprising factor has been the increase in Canadian consumption. The other day I used the figure of 9 per cent as representing the increase over and above any other months of January or February. I was wrong. The increase in consumption amounted to 14 per cent.


Thomas Gordon Towers: Can the minister tell the House whether or not it is cheaper to import eggs than to produce them in Canada?


Eugene Whelan: It is rather costly. CEMA had to pay the extra cost because the United States eggs coming in at that time were more expensive than were eggs in Canada.



NATIONAL PARKS


Mr. Heath Macquarrie (Hillsborough):: Mr. Speaker, may I direct a question to the Minister of Indian Affairs and Northern Development? It has to do with his weekend conferences in the Atlantic regions concerning entrance fees to national parks. Is the minister in a position to advise us whether he has won the support of the government of Prince Edward Island for his new scale of fees and, if not, will he give consideration to the suggestion implied in the supplementary of my hon. friend from Selkirk?


J. Judd Buchanan: Mr. Speaker, I think the position would have to be stated in this way: the government of Prince Edward Island is not elated at the concept of fees at all but is prepared, relunctantly, to accept them on this modified basis.



INQUIRY OF THE MINISTRY

Mr. Steven E. Paproski (Edmonton Centre):: Mr. Speaker, my question is addressed to the Acting Prime Minister. In scrutinizing the spending of the government for the fiscal year 1976-77 and the anticipated projection for 1978, would the hon. gentleman restrain the Prime Minister from spending $5.2 million on the East Block, bearing in mind that the new Leader of Her Majesty's Loyal Opposition will have some renovation plans of his own when he takes over as Prime Minister in 1978?


Some hon. Members:: Hear, hear!



FINANCE


Mr. Claude-Andre Lachance (Lafontaine-Rosemont):: Mr. Speaker, I should like to put a question to the Minister of Finance.
In light of the statements of the Minister of Industry, Trade and Commerce on the deterioration of our balance of payments deficit, is the government considering taking concrete steps to remedy the situation and more particularly to stagger capital demands so that they might not all come up at once and that Canadian savings might be able to finance major capital expenditure projects?


Donald Stovel Macdonald: Mr. Speaker, with regard to the last part of the question, I have already suggested to my provincial counterparts that we should have consultations with a view to setting up a more co-operative program with regard to capital needs in Canada.



ENVIRONMENTAL AFFAIRS


Mr. J. R. Holmes (Lambton-Kent):: Mr. Speaker, my question is to the Minister of the Environment and is supplementary to questions asked previously in this House regarding oil spills and environmental damage to the north. In view of the fact that a senior official in the Department of Northern Affairs monitoring environmental factors has stated that he has never seen an oil spill contingency plan, and bearing in mind the minister's interest in the ecology of the north as expressed by his answers in the House, will the hon. gentleman tell us whether he has developed, or is now developing, a comprehensive environment protection plan and, if so, when the details will be made known to the House?


Hon. Jean Marchand (Minister of the Environment):: Mr. Speaker, since there have been oil spills in the high
March 1, 1976

Seas or in Canadian waters, the Department of Transport, the Department of the Environment and even the companies concerned developed techniques to try to go around this difficulty, and technological studies are now being made on the possibility of extracting oil in the Beaufort Sea for example, where new techniques are contemplated to cope with this threat which can really destroy the environment. So we continue to seek means to prevent disasters of this kind.


John Robert Holmes: Would the minister now tell us whether or not he supports his department's contention that the offshore oil drilling planned for the summer by Dome Petroleum should not take place?


Jean Marchand: No decision has been reached on that subject.


Robert Hylton Brisco: I should like to ask the minister when we might expect a decision on this very delicate issue in view of the fact that our supplies of petroleum and natural gas are so limited?


Jean Marchand: The hon. member will recall that a few years ago we accepted that drilling should take place in the Beaufort Sea. In that context, bearing in mind the new technology which is being developed in order to protect the environment, I expect we shall find it necessary to reach a decision very shortly, probably during March.



NORTHERN CANADA POWER COMMISSION


Mr. Doug Neil (Moose Jaw):: Mr. Speaker, my question is directed to the Minister of Indian Affairs and Northern Development. On January 26 the hon. gentleman's department put out a news release or communique with respect to investigations into NCPC. In that news release there is an indication that the minister had requested the NCPC to postpone the increase in rates in the Yukon until May 1. Has the NCPC, in fact, frozen the rates to domestic users until May 1 in the Yukon?


J. Judd Buchanan: Yes, Mr. Speaker, it is my understanding that that has been done.


Douglas Charles Neil: Mr. Speaker, in view of the fact that domestic rates in the Northwest Territories have not been frozen and residents of Inuvik have been informed that the rates have been increased as at February 11, will the minister take some steps in the Northwest Territories to ensure the residents there that the freeze will be put on their rates until May 1?


J. Judd Buchanan: Mr. Speaker, I would have to check on that. There was to be an increase in the Northwest Territo-
Oral Questions
ries at the end of February but that was withdrawn, to the best of my knowledge, until next November. Perhaps this domestic increase to which the hon. member is referring flows from the increase last October, but I will have to look into that.



REASON FOR RESIGNATION OF DR. WIGGINS FROM RESEARCH BRANCH-REQUEST FOR STATEMENT

A. Daniel McKenzie: Mr. Speaker, I have a question for the Minister of National Health and Welfare that is supplementary to questions asked earlier by the hon. member for Athabasca. Will the minister make a statement on motions in the House explaining what factors led to the resignation of Dr. Wiggins in particular relating to the national health and research development program grants selection process?


Marc Lalonde: Mr. Speaker, the answer is no because, if we had to begin making statements in the House each time a civil servant resigns, we would be forever making statements.



PUBLIC SERVICE


Mr. Walter Baker (Grenville-Carleton):: Mr. Speaker, I have a question for the President of the Treasury Board having to do with the closing down of Information Canada and the fact that 383 staff members were asked to look elsewhere for employment. In view of the minister's assurance that most of these would be found alternative employment within the Public Service of Canada, and in view of the fact that only about one-third of them have been found employment up to this point and their termination date is March 31, 1976, can the minister assure the House that every effort is being made to relocate these people within the public service?


Hon. Jean Chretien (President of the Treasury Board):: Mr. Speaker, my answer is yes.


Walter David Baker: Mr. Speaker, in view of the statistics I have given, and the minister can no doubt check them, will the minister personally undertake to review this placement procedure which has led the minister to give the assurance he gave in view of the fact that up to this point the record is not nearly as good as it ought to appear?


Joseph Jacques Jean Chrétien: Mr. Speaker, I will check to see if the statistics mentioned by the hon. member are correct. I can assure him that every effort will be made to try to accom-

March 1, 1976
Oral Questions
modate these people within the public service. Perhaps I might also remind the hon. gentleman that on several occasions members of the opposition urged us to abolish Information Canada.



FISHERIES


Mr. John Gilbert (Broadview):: Mr. Speaker, I should like to ask whether the Minister of State for Fisheries will table the report he has received concerning the serious decline in the seal population and the necessity of decreasing quotas for the seal hunt?


Roméo LeBlanc: Mr. Speaker, it would help if I knew to which report the hon. member was alluding. If it is the first one which was given to me in early fall, and which was more pessimistic than the data indicated eventually, I can certainly undertake to make it available to the hon. member. The second meeting on the issue was a meeting that I attended, but I do not think there was a written report, but rather a verbal communication. I will certainly look into this because I want information to be available.


John Gilbert: Mr. Speaker, has the minister any studies with regard to alternative employment for persons who would be affected by a stoppage of the seal hunt and, if so, would he make those available at the same time?


Roméo LeBlanc: Mr. Speaker, I am afraid this is a non-starter, because even if alternative employment could be found the competition for the fish between seals and fishermen needing that fish, particularly herring, caplin and cod, would make it necessary for us to cull the herd.



COMMUNICATIONS


Mr. Perrin Beatty (Wellington-Grey-Dufferin-Water-loo):: Mr. Speaker, I wonder if I might ask the Minister of Communications whether she has had an opportunity to review the decision of the CRTC not to allow small community cable TV systems to accept advertising to offset the programming costs, and I ask this in light of the fact that the CRTC decision not to allow these small stations to continue accepting advertising will result in a deterioration of the amount of community programming available on these cable systems?


Hon. Jeanne Sauve (Minister of Communications):: Mr. Speaker, the CRTC regulation demanding that cable TV companies broadcast a certain amount of locally produced material can be justified by the money they make through cable operation. As for reviewing the policy to prevent the

companies from obtaining advertising revenues, I have not yet had the opportunity to do so. The hon. member should keep in mind that this policy concerning the limitation of potential revenues is derived from the fact that it is important not to separate the viewers on the one hand from the revenues related to the viewers on the other.


Henry Perrin Beatty: Mr. Speaker, I thank the minister for her answer. I am wondering if she intends to pursue this with the CRTC to get further information, and would she ask that the CRTC make public all studies it has done as to the effects of allowing cable television to accept advertising on the viability of other television and other media outlets in the affected area?


Jeanne Sauvé: Mr. Speaker, I think I have answered the hon. member's question regarding the rationale for this policy. The important point is not to split the source of income. However, as the hon. member suggests, I can discuss this matter with the CRTC chairman and ask him whether he can release the studies underlying his decision.



FISHERIES


Mr. Fred McCain (Carleton-Charlotte):: Mr. Speaker, in view of the loss suffered by the fishing industry as a result of last month's storms in items of equipment, boats, private wharves, buildings and processing facilities, will the Minister of State (Fisheries) advise the House what percentage of the replacement cost injured fishermen can expect under the present plans of reimbursement of loss?


Roméo LeBlanc: Mr. Speaker, I would have to check into this. I think there are different levels of compensation according to the type of equipment involved. I will look into it and try to answer the hon. member's question.


Fred Alward McCain: Mr. Speaker, in view of the rather poor income year which fishermen experienced last year, would the minister explore the possibility of a change in the regulations which would improve this reimbursement formula so it would approach replacement costs, in view of the fact that fishermen do not have enough money to return to business in many instances?


Roméo LeBlanc: Mr. Speaker, the hon. member is very familiar, I am sure, having served in provincial government circles, with all these agreements between the provinces and the federal government regarding the disaster formula. To bring about a change is extremely difficult. I would say to the hon. member that the problem of the income of the fishermen in the last year, especially in the area of the Bay of Fundy, is one with which I am very much concerned at the moment, but I believe we must not mix the two situations.
March 1, 1976


Fred Alward McCain: Mr. Speaker, I suggest that what governments do they can undo. In view of the need, would the Minister of State (Fisheries) consider making very strong representations to the government of which he is a member to reconsider these regulations which are going to impose hardships when the fishermen are reimbursed?


Roméo LeBlanc: Mr. Speaker, the initiative to trigger this program is very much with the provincial governments, and if the provincial government involved wants a change in the ground rules it should at least make representations to us. I have not heard of them yet.



PETRO-CANADA ALLEGED OFFER TO PURCHASE CANADIAN PETROFINA OPERATIONS-GOVERNMENT POSITION

Mr. Ron Huntington (Capilano):: Mr. Speaker, I have a supplementary question to the Minister of Industry, Trade and Commerce. Could the minister report to the House on the reaction of the Belgium directors of Petrofina to the approach by Petro-Can to purchase their Canadian Fina operations?


Alastair William Gillespie: This is the first I have heard of it, Mr. Speaker.



ROUTINE PROCEEDINGS


John Edward Broadbent: Mr. Speaker, I am rising on a question of privilege the nature of which I gave Your Honour notice earlier today. My question of privilege concerns the mailing out, at public expense, of political propaganda by the Liberal party to all recipients of the old age pension and family allowances. This was done in the form of a self-described "Message from the Prime Minister" and was mailed with the most recent family allowance and old age pension cheques to all recipients right across Canada.


Some hon. Members:: Oh, oh!


John Edward Broadbent: Mr. Speaker, a minister or government department might appropriately send out information directly to those affected by describing either a change in a program or a new program. Certainly it should be factual information. I am prepared to concede there are matters of judgment involved. The point is that it is appropriate, it seems to me, for a minister of the Crown to inform recipients of a particular program or changes in that program
Privilege-Mr. Broadbent
and no serious dispute could be entered upon or raised concerning such action.
I submit that the self-described "Message from the Prime Minister" does not in the slightest way fit into this category. It fails completely, in my judgment, to meet this reasonable test. I say this for two reasons. First, it is a general message on the anti-inflation program and has absolutely nothing to do with either family allowances or old age pensions. Second, and of even greater significance, it is, in my most serious judgment, in this form and content blatant political propaganda, in fact, on the government's anti-inflation program. It does not even pretend to be merely providing information on legislative changes. It offers argumentation in favour of those changes. A Liberal member says, "Absolutely". To illustrate my point, I wish to take a few quotations from the self-described "Message from the Prime Minister" to all Canadian old age pensioners and recipients of family allowance. First, in one paragraph in the opening part of the letter he says:
One problem is our own attitude-how we react to the fears and uncertainties of inflation.
Well, Mr. Speaker, that is an argument. There are many economists in this country who would say that is simply hogwash. Inflation has everything to do with structures in the economy, and nothing to do with attitudes. Further on he says:
-powerful groups-
He loves to single out these groups.
-have gone farther, pushing up their price and income demands an extra notch or two as insurance against their fears and expectations of even worse inflation. That is how Canadian inflation has grown.
Again, that is an argument about which there is serious economic and political dispute. Further on, at the back of the Prime Minister's letter, the judgmental attitude becomes even clearer. He says, on a section allegedly to provide information about the salary and wage controls:
Now that the law restrains price increases, it is fair and reasonable to expect restraint in incomes.
Could anything be more judgmental or less a mere description of factual change in the law? Later on in the same section he says:
Furthermore, a federal surtax of 10 per cent will be imposed in 1976 on taxable personal incomes in excess of $30,000.
When that was announced just before Christmas, we indicated that that in itself is not even a factual description and is very misleading. The tax involved is 35 cents- they did not notice that-for people whose income is $35,000 or more. I could go on. The fact is that what we have here is Liberal propaganda. I submit this action is an abuse of the power of the office of the Prime Minister (Mr. Trudeau) and constitutes an intrusion of the privileges of all opposition parties all of whom disagree deeply with at least some of the judgments expressed in the Prime Minister's letter. No opposition member of parliament could mail out, at public expense, such a letter. I submit that the Prime Minister is completely wrong in abusing his office by so doing.
This mailing would cost in the neighbourhood of $527,589 for the Liberals to produce on their own. That is a minimum estimate of the cost, based on one cent per leaflet which, considering the cost of paper, is pretty minimal-

March 1, 1976
Privilege-Mr. Broadbent
one cent per envelope and eight cents for a stamp. The cost of this propaganda of the Liberal Party of Canada would have been $527,589.
Mr. Speaker, if you rule that I have a prima facie case of privilege, I would move that this most serious matter be referred to the House committee on privileges and elections and that steps be taken to ensure that the Liberal Party of Canada reimburse the public treasury for this expense.


Marc Lalonde: Mr. Speaker, I am sure the House will have great difficulty in taking seriously the matter raised by the hon. member for Oshawa-Whitby (Mr. Broadbent). In effect, I would say this is just another typical case of NDP hypocrisy.


Some hon. Members:: Hear, hear!


Marc Lalonde: For the last several months this government has indeed sent Canadian citizens inserts with old age pension cheques and family allowance cheques, giving information to these citizens about the programs both in my department and other departments. I could send the hon. member for Winnipeg North Centre (Mr. Knowles) a whole series of them and he would find that they cover the many and various activities of the federal government. This government has always been extremely careful to see that anything being sent to citizens is based on legislstion and programs approved first by this parliament. Here, Mr. Speaker, I am not referring to instances like the Christmas letter sent out in the middle of the election by the former premier of British Columbia.


An hon. Member:: Right on.


Marc Lalonde: This letter was sent out on government stationery, at government expense, and had nothing to do with programs. Also, I am not referring to the letter recently sent out by the Premier of Saskatchewan-


John Edward Broadbent: I am not talking about-


Marc Lalonde: [DOT]-which was a personal letter from the Premier of Saskatchewan accompanying medicare premium information, mailed to all Saskatchewan residents at public expense. I am not referring to that because, Mr. Speaker, this government does not engage in this type of political propaganda.


Some hon. Members:: Hear, hear!


Marc Lalonde: The anti-inflation program is not the Liberal party's program. It is a government program based on legislation passed and approved by this parliament. It is a program that the hon. member might be pleased to hear has the support of all the provinces in this country. When the hon. member says it has nothing to do with the recipients, he has not even read his own speeches, because during the whole of the debate on the anti-inflation program he argued that the people who would be affected most by this program would be families, senior citizens and the like.
This cheque insert is addressed precisely to those people whom the hon. member said would be most affected by this

program, the senior citizens and Canadian families. This program will affect these people beneficially and, as we have said as a government, this program, in order to be a success or to achieve success, will have to have the support of Canadians across this country and will be very much dependent on the role played by the individuals in their activities. This was basically the message from the Prime Minister (Mr. Trudeau), that we must all, as Canadian citizens, do our share in the current inflation fight that has once more been endorsed by this parliament.


Some hon. Members:: Hear, hear!


Marc Lalonde: It is the height of irresponsibility for the hon. member for Oshawa-Whitby to raise this issue as a partisan issue when it is a matter that is being faced by the whole country. Our action in this regard is based on the will of parliament itself. He says it is argumentative. Certainly it is argumentative: it presents arguments; it is not purely statistics. I refer the hon. member to all the previous inserts; he will find arguments throughout them. They are fundamentally instruments to inform the public and make the public aware of reasons for various activities and programs.
I respectfully submit that the hon. member for Oshawa-Whitby has no point and no case and that this motion should be ruled out of order.


Some hon. Members:: Hear, hear!


Walter David Baker: Mr. Speaker, I hesitate somewhat to get into this "lovers' spat." It is probably an indication of the political climate of this country that these marriage partners have at least changed the double bed for twin beds. In any event, I read the document to which the hon. member for Oshawa-Whitby (Mr. Broadbent) referred and I was somewhat concerned about the message that it contained for the reasons that have been set forth by the hon. member for Oshawa-Whitby.
I am aware of the matters that have been raised by the Minister of National Health and Welfare (Mr. Lalonde) with respect to provincial governments of the political faith of the hon. member for Oshawa-Whitby, but what really concerns me, and where I think Canadian people and members of this parliament have a real beef, is that no one, neither the Prime Minister, the Minister of National Health and Welfare, nor anyone else, has come to this House to explain the flip-flop which has occurred since the election of 1974.


Some hon. Members:: Order.


Walter David Baker: If there is any explanation we should have it, and if the Canadian people have any quarrel whatsoever-and if this parliament, therefore, in terms of its privileges, has any quarrel-with the insert in the old age security and family allowance envelopes, then I think it is the absence of any explanation of the flip-flop which has heaped on this government a load of incredibility in terms of the people of this country and of this parliament.
March 1, 1976


Mr. Stanley Knowles (Winnipeg North Centre):: Mr. Speaker, I suggest that the Minister of National Health and Welfare (Mr. Lalonde) has demonstrated the desirability of this matter being referred to a standing committee so that a comparison can be made of the various inserts that we have had in old age pension and family allowance envelopes for the past number of months.


John Edward Broadbent: With Saskatchewan, too.


Stanley Howard Knowles: Most members in the House get these inserts either in their old age pension cheques or their family allowance cheques. I accept in general the statement made by the Minister of National Health and Welfare that most of the inserts have been based on matters that have been the subject of legislation by this parliament. But it takes an exception to test the rule. I wonder about the insert a couple of months ago which was sent to all old age pensioners, entitled "On Bird Watching". It was a catchy title and those of us who received it took a good look at it, but apparently it had to do with watching a bird, namely, a chicken or a turkey, being cooked. Was that based on legislation?


An hon. Member:: Liberals have a monopoly on turkeys.


Mr. Speaker:: Order, please. The point raised initially by the hon. member for Oshawa-Whitby (Mr. Broadbent) was a question of privilege having to do with a specific mailing over the signature of the Prime Minister (Mr. Trudeau) with family allowance and old age pension cheques. It did not refer to previous examples, and I would want to make sure that the hon. member for Oshawa-Whitby has raised a grievance, a matter of discussion or a matter of debate rather than a question of privilege. What is happening is that all hon. members who are getting into the discussion on the procedural point are proceeding to debate the matter, which persuades me more and more that it is a matter of debate and not a question of procedure. If there is a question of procedure involved, I would certainly like to hear it.


Stanley Howard Knowles: I quite agree with Your Honour that the leader of this party raised a specific point and that is what this point of privilege is all about. I was simply dealing with an attempt by the Minister of National Health and Welfare to bring in these other leaflets. I suggest that the one telling us how to cook chicken and turkey was not based on any legislation passed by this parliament.
The point about this leaflet entitled "A Message from the Prime Minister" is that it does not even pretend to be addressed to old age pensioners or family allowance recipients; it does not pretend to have anything to do with the work of the Department of National Health and Welfare. Some of the leaflets that have been inserted have had a relationship; this one has no connection at all. As for the argument that it is simply a description of the legislation, that does not stand up at all even when one reads it in cursory fashion. I suggest that the sum of money involved in doing this, and the abuse of the rights of members of parliament being indulged in by the Prime Minister, warrant a study of this matter by a special committee of the House. The real issue is that the government has taken advantage of its envelopes and its eight-cent postage to
Order Paper Questions
send out material that is purely propaganda and is not informational material for old age pensioners or family allowance recipients at all.


Léonel Beaudoin: Mr. Speaker, I find it a little difficult to speak after having heard the declaration of the leader of the New Democratic Party (Mr. Broadbent). However we, the members of the Social Credit Party of Canada, are also members of the opposition but, to be honest, one must say that the message which was sent, and I read it several times, should have informed the people not about the intention of the government, but about its accomplishments.
Lots of people in Canada do not get newspaper and do not know what they are entitled to receive every month, whether $129, or $121, or $138, or $133.40 for their old age security and whatever.
I congratulate the government for its honesty in sending a message to these people so that they know what to expect, what they have left for living.
And I think that the motion presented by the leader of the New Democratic Party is completely out of order in terms of the Canadian people's well-being. What the federal government does by way of legislation, respecting, among others the Department of National Health and Welfare, must be proven particularly in the province of Quebec.


Mr. Speaker:: As I indicated earlier, it is my impression that the conduct of an individual member in perhaps breaching any regulations which he may come under may be from time to time a matter of complaint, a specific charge, grievance, debate, public comment, and so on. In my opinion, it would take the most exceptional conduct to constitute even a prima facie case of privilege which ought to be referred to a standing committee.
The question of cost has been raised, and there seems to be some initial difficulty with that argument. The fact that the flier was not sent out in a separate envelope, under separate postage and expense, but was something included with something which was going to be sent out any way appeared somehow a fundamental argument as to cost.
My initial reaction is that this is a matter of grievance, debate and comment rather than a question of privilege. However, I feel that the hon. member for Oshawa-Whitby (Mr. Broadbent) has raised it in seriousness and perhaps I ought to examine the pamphlet and reflect on the matter for 24 hours before making a final ruling as to whether this constitutes a prima facie question of privilege. Accordingly, I will give my ruling tomorrow at three o'clock.


QUESTIONS ON THE ORDER PAPER
[Stage Direction]
(Questions answered orally are indicated by an asterisk.)
[Stage Direction]
March 1, 1976
Order Paper Questions
Mr.   J.-J. Blais@Parliamentary Secretary to President of the Privy Council: Mr. Speaker, the following questions will be answered today: Nos. 3,573, 3,934, 3,960, 4,036, 4,059 and 4,096.


Mr. Cossitt: What are the details of any government business received in the past several years by Urbanetics Ltd., including information on any contracts or money involved?


Mr. Hnatyshyn: 1.	What was the total amount paid to municipalities and provinces in lieu of taxes on federal property under the Municipal Grants Act for (a) 1960 (b) 1970 (c) 1974 (d) 1975?
2.	What was the amount each province received from payments to municipalities as compensation for that portion of property tax revenue lost and payments in lieu of taxes on federal property under the Municipal Grants Act for (a) 1960 (b) 1970 (c) 1974 (d) 1975?


Hon. C. M. Drury (Minister of Public Works):: See
answer to parliamentary question 3,359 answered on Mr. Jacques L. Trudel (Parliamentary Secretary to November 7, 1975.	Minister of Finance): 1.
Federal	Grants to Municipalities	Grants to Provinces	TotalFiscal	under Municipal Grants	under Real Property	GrantYear	Act	Grants Regulations	Payments(a)	1959-1960	$22,499,890	$ Nil	$22,499,890(b)	1969-1970	47,847,754	1,609,818	49,457,572(c)	1973-1974	63,285,410	2,099,186	65,384,596(d)	1974-1975	68,706,603	3,226,657	71,933,2602.	(a) 1959-60 Federal Fiscal Year	(b) 1969-70 Federal Fiscal Year	(c) 1973-74 Federal Fiscal Year	(d) 1974-75 Federal Fiscal Year	Grants to	Grants to	Grants to	Grants to	Total	Grants to	Grants to	Total	Grants to	Grants to	TotalProvince	Municipalities	Provinces	Municipalities	Provinces	Grants	Municipalities	Provinces	Grants	Municipalities	Provinces	GrantsNfld.	$ 75,765	$Nil	$ 241,538	$ Nil	$ 241,538	$ 417,826	$ Nil	$ 417,826	$ 746,941	$ Nil	$ 746,941P.E.I.	113,128	Nil	188,922	Nil	180,922	155,688	149,824	305,512	78,056	84,457	162,513N.S.	2,137,518	Nil	3,379,270	Nil	3,379,270	5,144,564	Nil	5,144,564	4,318,940	Nil	4,318,940N.B.	903,962	Nil	514,073	1,234,818	1,748,891	702,268	1,400,000	2,102,268	624,373	1,350,000	1,974,373Que.	3,958,070	Nil	9,450,289	Nil	9,450,289	14,446,826	Nil	14,446,826	14,359,035	Nil	14,359,035Ont.	9,771,124	Nil	22,368,914	Nil	22,368,914	27,379,159	Nil	27,379,159	32,018,657	Nil	32,018,657Man.	1,258,494	Nil	3,361,828	Nil	3,361,828	4,255,122	Nil	4,255,122	5,131,056	Nil	5,131,056Sask.	747,104	Nil	1,303,365	375,000	1,678,365	1,722,458	Nil	1,722,458	1,928,876	Nil	1,928,876Alta.	1,605,339	Nil	2,805,658	Nil	2,805,658	3,523,334	Nil	3,523,334	3,532,507	Nil	3,532,507B.C.	1,875,246	Nil	3,893,422	Nil	3,893,422	5,000,503	549,362	5,549,865	5,489,427	1,155,964	6,645,391Yukon	33,000	Nil	93,909	Nil	93,909	250,752	Nil	250,752	213,781	488,687	702,468N.W.T.	21,140	Nil	246,566	Nil	246,566	286,910	Nil	286,910	264,954	147,549	412,503Total	$22,499,890	$Nil	$47,847,754	$1,609,818	$49,457,572	$63,285,410	$2,099,186	$65,384,596	$68,706,603	$3,226,657	$71,933,260


Mr. Wenman: 1.	What is the classification of the post offices in each municipality in
the Constituency of Fraser Valley West?	[DOT]
2.	In each case, are there current plans to upgrade their classification?


Mr. Paul E. McRae (Parliamentary Secretary to Post master General):: 1.
Name	Classification	Group or GradeEssondale	Revenue	1Barnet	Revenue	1Bradner	Revenue	2Fort Langley	Semi-Staff	5Albion	Revenue	2Aldergrove	Staff	7Maple Ridge	Sub 3	-Port Coquitlam	Semi-Staff	8Port Coquitlam	Sub 3	-Maple Ridge	Sub 5	-Langley	Sub 1	-Mount Lehman	Semi-Staff	2New Westminster Milner	Postal Station Port Moody Revenue	5Maple Ridge	Staff	8Pitt Meadows	Semi-Staff	5Port Coquitlam	Sub 2	-Port Coquitlam	Sub 1	-Maple Ridge	Sub 1	-Langley	Semi-Staff	8New Westminster	Sub 38	-Whonnock	Revenue	6Alvin	Revenue	1Port Coquitlam	Sub 4	-
2. No changes are contemplated in staff post offices in Fraser Valley West. The upgrading of semi-staff and revenue post offices is dependent on the results of a periodical unit of work survey. No changes are contemplated for the sub post offices.


Mr. Baker (Grenville-Carleton): Did the Railway Transport Committee acknowledge receipt of a letter on December 2, 1972 and advise that the application for grade separation at the CNR tracks at Woodroffe Avenue in the Township of Nepean would be given "prompt attention" and, if so, on what date will the application be approved?


Ralph Goodale: The Canadian Transport Commission advises as follows: The Railway Transport Committee

March 1, 1976

acknowledged receipt of application for a grade separation at the Canadian National Railways' tracks at Woodroffe Avenue in the township of Nepean in December 1972. The application under Part II of the Railway Relocation and Crossing Act was received February 12, 1976 and is now being dealt with.


Mr. Hnatyshyn: Is the government considering a rebate tax on equipment purchased for use in an excavation and trenching business when such equipment is used for farm and/or municipal sewer and water?


Mr. Jacques L. Trudel (Parliamentary Secretary to Minister of Finance):: The government is not considering the introduction of such a rebate. Changes in taxation measures are normally considered in the context of budgetary policy and announced accordingly.


Mr. Gauthier (Roberval): 1.	What are the federal taxes in Quebec on each gallon of (a) gasoline
(b)	heating fuel (c) natural gas excluding the 12 per cent excise tax?
2.	During the past two years, how much did the government receive from such taxes?


Hon. Jack Cullen (Minister of National Revenue):: 1.
(a) Gasoline Grade 1, Sales Tax, 4.435 cents; Gasoline Grade 2, Sales Tax, 3.9 cents; Gasoline, low lead, Sales Tax, 3.9 cents; Gasoline, no lead, Sales Tax, 3.9 cents, (b) None.
(c)	None.
2. This information cannot be obtained because refiners consolidate tax payments on all products.


Mr.   J.-J. Blais@Parliamentary Secretary to President of the Privy Council: Mr. Speaker, if question No. 3,531 could be made an order for return, this document could be tabled immediately.


Mr. MacDonald (Egmont): With reference to the PEI Development Plan for each programme and project covered, what (a) were the actual expenditures in each year of Phase 1 (b) are the anticipated expenditures in the first two years of Phase 2?
Return tabled.


Mr.   J.-J. Blais@Parliamentary Secretary to President of the Privy Council: Mr. Speaker, would you be so kind as to call starred question No. 3,677?
Productivity and Trade
I ask, Mr. Speaker, that the remaining questions be allowed to stand.


Mr. Fairweather: 1.	Will the government restore the office of Sir John A. Macdonald in the East Block as near as may be to its original condition?
2.	Will the government open this historic office to the Canadian people?


Mr.   J.-J. Blais@Parliamentary Secretary to President of the Privy Council: Mr. Speaker, the answer to both paragraphs 1. and 2. is yes.



GOVERNMENT ORDERS


Mr. Sinclair Stevens (York-Simcoe) moved:: That this House deplores the lack of any effective government policies to deal with Canada's worsening trade performance and, especially, the government's failure to provide meaningful incentives to increase productivity and thereby strengthen the competitive position of Canada's finished and manufactured products.
He said: Mr. Speaker, in opening the debate on the motion before us today, I suggest to hon. members that there are really three separate questions to be dealt with in today's debate. The first is the worsening trade performance of the nation in relation to our trading partners around the world. The second is the question of the lack of productivity in our industry and the fact that the government has not provided meaningful incentives to increase productivity in the nation. Third, the competitive position of Canada's manufactured products is something that must be constantly before this House in that at the present time our manufactured export trade is deteriorating at an alarming rate.
Before getting into more formal remarks, I should mention that I am sorry the Minister of Industry, Trade and Commerce (Mr. Jamieson) is not with us today. I understand he is touring the far east. We wish him well on that trade venture, but I point out that in view of the fact that the government gave us notice only on Thursday that this was to be an opposition day, we had no alternative but to bring on a debate with respect to trade. We think it is one of the most urgent economic issues facing this nation today. In this connection, I am pleased to see that the former minister of industry, trade and commerce, the present Minister of Energy, Mines and Resources (Mr. Gillespie), is with us. Perhaps he will be joining in the debate, because there are many unanswered questions still on the order paper from when he was minister of industry, trade and commerce. I am also pleased to see that the
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Minister of Finance (Mr. Macdonald) is with us. Perhaps he will enter the debate and answer some of the questions which appear to exist with regard to trade itself.
Touching on that question, I point out that only last Thursday I asked a question of the Minister of Finance concerning the export levy and whether it was the intention to continue that levy in view of the fact that it must be discouraging our export trade. The minister at that time answered that he would be making a statement before very long. In fact, that evening-Thursday evening-he announced that the export levy was to be withdrawn. I mention that because surely that little incident in itself illustrates complete disorganization with respect to the government's approach in terms of encouraging trade for Canada. Last fall the government imposed an export levy which had a dampening effect on much of our export trade, and now, because of the difficulties which have arisen, it has to withdraw that proposition and should somehow explain to the nation why something which has caused a great deal of concern is now being suddenly dropped. I am pleased that the export levy has been dropped. I wish the government had had the foresight never to have imposed it in the first place.
I believe that the debate today is necessary, especially if we can hear presentations from government members, because the handling of the problem of our export imbalance is truly terribly vague. We know that the Prime Minister (Mr. Trudeau) has been musing about a new society and suggesting that there are certain villains who somehow are causing undue hardship for Canadians. I challenge that statement. I believe the Prime Minister is totally wrong in his assessment of what the problems are and I ask him to start naming some of the culprits he feels are the villains of today.
I say that because if we review the relative income share in Canada between corporate profits and labour income, we find that neither labour nor corporations have been taking an undue share of the national income, certainly since 1972. I point this out because the Bank of Canada published figures only this morning pointing out that in the fourth quarter of 1972, for example, corporation profit, after taxes, as a percentage of our national income was 9 per cent. Labour's income was 73.8 per cent in the fourth quarter of 1972. In the third quarter of 1975, corporate profits, after taxes, were still 9 per cent of our national income, while labour's share went down to 73 per cent. Is it not remarkable that in the United States labour's share of income is 75.3 per cent?
I believe figures of that kind should be cited more often, perhaps to put the lie to many of the statements which have been made by the Prime Minister in trying to avoid the main responsibility for the high unemployment and the high inflation in this country, namely, the responsibility of his government and its inept handling of the economy which we have witnessed over the last several years.


Some hon. Members:: Hear, hear!


Sinclair McKnight Stevens: Mr. Speaker, if I may, I should like first to put forth a few blunt facts. Last year, Canada had a $10 billion deficit in manufacturing trade. That compares to

the United States which had an $11 billion surplus in its over-all trade position. All in all, in 1975 Canada suffered its first merchandise trade deficit since 1960. Commodity imports exceeded exports by about $1 billion last year. Our over-all current account deficit-that is, the balance of trade in goods and services-was about $5 billion last year. This year it is estimated by the Bank of Montreal that we will be in deficit to the extent of about $4 billion. In two years there will be a total trade deficit of $9 billion.
We have been living beyond our means for some time, yet the government has done very little to correct the problem. Canada's credit rating around the world is being jeopardized as international bankers become alarmed at our increasing trade deficit, our rising foreign debt, our high inflation and lack of productivity in industry. We need, and we have needed, their credit in international terms to keep afloat. The present administration has been balancing their international accounts by adjusting our monetary system so that Canadian provinces and municipalities have become big borrowers in international markets.
Last year it is estimated that Canadian borrowers took down one-quarter of the total amount borrowed internationally by all countries combined. We borrowed, from foreign sources, approximately $4.7 billion to cover our trade deficit of $5 billion. Total world borrowings last year were some $19 billion. Imagine, a country with the resources we have in Canada having to beg and borrow all over the world to balance our trade deficit position! These borrowings have forced up our dollar by approximately five cents in relation to the United States dollar, and the Bank of Canada has maintained a high interest rate structure about 2 per cent to 3 per cent higher than in other countries to make it all work. It is only a few months ago that the Canadian dollar traded at 96 cents in relation to the United States dollar.
It is balanced trade, not foreign borrowing that is needed. By borrowing at relatively high rates outside Canada, we are mortgaging our future to pay for current spending. It is no different, I would suggest to the House, than a merchant who finishes his year and finds that while he sold to his customers some $100,000 worth of goods in the past year, he paid $105,000 for others. By covering the $5,000 deficit he is simply piling up a debt which he must service through payment of interest and repayment of principal in future years.
We have the highest paid mandarins in the world in Ottawa, and they appear to have made a colossal error in judgment. Through a series of misreadings, miscalculations and plain obtuseness they have jockeyed Canada so that we are failing and falling down a slippery slope which month by month will be harder and harder to reclimb. As the Canadian dollar rises in value, our exports become increasingly expensive for others to buy. This puts the lid on any strong economic recovery in Canada. What the nation needs is either a cutback on imports or, preferably, a substantial increase in exports.
There are no easy ways to accomplish this. It would help if the Canadian dollar dropped in value. In that way our exports would become cheaper abroad, making Canadian goods somewhat more competitive, and in turn our imports would be more expensive and difficult to buy. As it now
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stands, the situation must be handled with care and forethought or we will find Canada's future will be one of rising inflation with a rapidly declining standard of living.
In due course I should like to see Canada tackle a massive export sales program. Canada's future has to be an international future. We must become salesmen to the world, not just of our resources but of our manufactured goods, especially those with a high technology component. Our research and development has fallen behind in relation to our gross national product and to the amount expended by other countries. It must be increased to keep us competitive in world markets.
We are blessed with an abundance of resources that spell optimism for the future. One of our greatest natural resources is agriculture. We have an abundance of good, arable land in Prince Edward Island, in the Atlantic provinces, in Quebec, in Ontario, in the prairies, in British Columbia. Canada has the potential to be one of the world's greatest suppliers of food. But we must think positively. The government must now recognize the importance of the farmer to the security of the future. The world needs food, Canada can supply it. Food power is going to be more significant in the next decade than petro-power.
In this connection, Mr. Speaker, I was startled to sit in this House and hear the Minister of Agriculture (Mr. Whelan) talk about raising the import quota on cheese coming into this country to some 50 million pounds. A constituent in my riding went back to his home town of Bristol, England, and he told me that he could not buy Canadian cheese in the local cheese shop. He was told that Canadian cheese was being rationed, so little of it was available in England. What a ridiculous situation. We are importing more and more foreign-produced cheese at the same time as we are cutting down the export of our product; and we usdd to be one of the world leaders in the export of cheese.
Let us look at what the Americans did when caught in a situation similar to ours with a significant trade deficit back in 1972. In that year they had a deficit of $5 billion- no bigger than the present trade deficit in Canada. They felt the situation was intolerable, however, and went to their various producers, including agricultural producers, and told them to start producing and their products would be sold around the world. As a result of that activity, the economy was reversed from a $5 billion trade deficit to an $11 billion surplus within three years. Mr. Speaker, the same can be done in Canada. The same can be done with a government of vision, a government of decisiveness, a government that understands how to sell products all over the world.
Speaking of selling products all over the world, let us take one small example of how the United States managed to beat us in the sale of grain. As hon. members know, our grain is held in granaries in Canada and orders are processed after they are received. The grain is moved by our railways, if they are not struck, to our ports, if they are not struck, and eventually on to ships to go wherever the foreign market is, provided the ships are not struck. But what does the United States do? They place their grain in granaries around the world, for quick access, to be transported wherever the need arises. They have virtually put
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us in the position of being mere wholesalers of grain at the present time whereas they are retailers of the product.
In increasing our export trade it is essential that we increase productivity, especially in the manufacturing sector. It is in manufacturing that we have fallen behind so quickly and so regrettably. Among other western countries we have a lower percentage of our work force employed in manufacturing than any country except Ireland and Greece.
Today we are the largest importers of manufactured goods, importing more than any country in the world. We import, per capita, twice as much in manufactured goods as Europe, four times as much as the United States and ten times as much as Japan. The Canadian International Trade Centre recently reviewed Canada's trading patterns between 1930 and 1973. The centre paid particular attention to our 1974 trade. It said that our trade has deteriorated, especially in group four categories, manufactured goods of higher technology content. Unfortunately, we have been losing ground with the rest of the world in this area. We need to do more research and development, to produce and sell goods with a higher technology content. In short, our technology must be as good as the technology of the countries with which we compete.
In our debate on this motion we must impress on the government how necessary it is for Canada to take a responsible approach to its trading partners. Is it not ludicrous that the leader of this country's Liberal party should have chosen to go to Cuba at this very time, in the name of developing trade?


Steve Eugene Paproski: Shame!


Sinclair McKnight Stevens: That visit was undertaken despite reaction in the United States, our chief trading partner. Remember, we export to the United States 97 times more than we export to Cuba. While he was in Cuba, the leader of our Liberal party said:
Leaders must come to terms with reality in the world and accept that they have to deal with countries with different systems of government. Perhaps Canadians, particularly the Liberal party, are a little quicker to come to grips with these realities.
The leader of the Canadian Liberal party is also reported to have described Castro as being a "pragmatic" and "charismatic" leader, a man who, in the ideological context in which he moves, is a man of world stature.


An hon. Member:: Did he ask President Ford?


Sinclair McKnight Stevens: What a contrast to what United States President Gerald Ford said last week. He called Fidel Castro an international outlaw. In my view, the leader of the Liberal party of Canada was foolhardy in his actions and words while in Cuba. Perhaps the Prime Minister intends to drive away United States business with Canada and in that way make us less dependent on that trade. In that way he could diminish our American trade imbalance without increasing our trade with other countries. A year ago today the House will recall that the Prime Minister was in Europe trying to put into practice the so-called third option of Canadian foreign policy, a policy which was designed to lessen Canadian dependence on the United
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States. The Prime Minister wanted to diversify our export markets and to change our export mix away from the high proportion of resource exports in the Canadian economy.
The Prime Minister was trying to establish a contractual link with Europe in his trip of 12 months ago. Actually, diplomatic negotiations to do with the link began with a Canadian aide-memoire in November, 1972. Both this aide-memoire and a later one in April, 1974, were unsuccessful in generating European interest in a contractual link. According to the 1974 aide-memoire, Canada wanted an agreement that would foster the development of long-term commercial and economic relations between Canada and the Common Market.
The Prime Minister wanted the Europeans to recognize Canada as an entity distinct from the United States. As he said on March 5, 1975, he wanted the Europeans to recognize us as a distinct, advanced industrial society. I emphasize the words "advanced" and "industrial" as used by the Prime Minister. It is obvious from his statement that he wants Canada to become less dependent on the United States, and wants the European community to see Canada as something more than an exporter of resources. He wants them to see us as an exporter of manufactured goods. These objectives may seem laudable on paper or in speeches, but how likely is this government to fulfil them?
More importantly, how do the Europeans feel about the Canadian view of the contractual link? Sir Christopher Soames, vice-president of the EEC commission, has said that he is looking to Canada for resources. To start with, the EEC is looking for deals on uranium, forest products and non-ferrous metals. Europe is not interested in Canadian-manufactured product exports; it is interested in our resources. France would like to participate in the construction of a uranium enrichment plant near James Bay. This would entail heavy foreign investment from a non-United States source. It is true that this project would lessen our dependence on the U.S., but Canada would not be shifting away from a resource-based economy.
The contractual link is far from finalized. I think Canada should know that unless the agreement encompasses manufactured goods as well as resources, our economy will benefit far less than the Prime Minister has been promising. If Canada is to experience continuously deficits of $10 billion or even $7 billion and more on manufactured goods, it matters little in terms of Canadian jobs, growth and income where these deficits are created.
I turn now to the question of free trade. The Minister of Industry, Trade and Commerce is reported today to have said that Canada is in for a long-term struggle with yawning balance of payments deficits. I note that he chose to give this bad news from the safe distance of Hong Kong. The minister is trying to arrange trade deals abroad. Although I applaud his efforts to encourage exports, I wonder if the magnitude of our trade deficit can be reduced appreciably by a few deals arranged around the world. Certainly it is a start, but a problem of the size we face must be solved with equally large-ranging solutions. Surely we need to alter how we look at trade. We must make major alterations in that regard. We need a new approach to what we sell, how we sell it and at what price. This is more than just patching up the current system.

The Economic Council of Canada suggested one approach to overcome our trade difficulties: specifically, that Canada should switch to free trade. According to the Economic Council, our manufacturers are producing too many varieties of goods. Because of insufficient specialization, our unit costs are higher and many of our manufactured products would be non-competitive whether or not our wage structures were competitive in the international sphere. The council suggests that the removal of tariff protection on domestic manufactured products would force a radical restructuring of Canadian industry. We would produce fewer varieties of goods but would produce goods of higher quality. Thus, our unit costs would go down and we would be more competitive in selling our products abroad. That is the council's position. Obviously, it is not that simple; nor does the Economic Council try to make it that simple. The ECC's report on free trade provides in great detail an analysis of the problem and a solution for it. Hon. members may or may not agree with the analysis or the solution, but it is worth serious study and debate if only because the council, which was created to advise the federal government, was serious in presenting it.
The report was presented to parliament nearly nine months ago. The government has had time to study it, but has not said so far if the idea is acceptable or if it proposes to make a future policy statement on the matter. Here is a serious proposal which the present administration has treated lightly. Here we see the failure of the government to seek new solutions to an old problem. If it is the policy of the minister to make periodic trips abroad to sell what he can-if that is his idea for creating a new trade-we can expect an even worse export performance and higher trade deficits in future.
Your Honour will recall it was only last Wednesday that I questioned the Minister of Industry, Trade and Commerce concerning some of the activities now taking place in the Export Development Corporation. As the House knows, our party endorses the concept of giving financing for the development of export trade in this country. However, we have repeatedly voiced our protest at the activities of EDC which appears in favour of certain selected companies over and above the rank and file businessmen of Canada.
It is most regrettable that 52 per cent of the total financing through EDC in 1975 was signed for the benefit of three companies, namely, Marine Industries Limited, of Quebec, Badcock and Wilcox, a New York-controlled concern, and Hawker-Siddeley, a United Kingdom-controlled concern. Those three companies, respectively, received $129.5 million, $126 million and $109 million of financing benefits in that one year alone as far as signed contracts are concerned. We do not believe it is sufficient for the minister to simply say we should not quibble over who gets the money, it is creating jobs and what more do you want? What we want is equitable treatment of those funds to ensure that all businessmen in Canada have access to them, especially the small businessmen of this country.


Some hon. Members:: Hear, hear!
March 1, 1976


Sinclair McKnight Stevens: If we are to develop our export trade, especially in the manufactured field, it is essential that our small manufacturers get special assistance for such things as export development financing as opposed to the favourite few who can probably look after themselves much better than some of the smaller companies in this country. I wish to emphasize we believe it is necessary that the government co-ordinate their programs and somehow explain to the nation, certainly to this House, what is the interinvolvement with regard to those programs as far as the business community is concerned.
In this connection, on May 28 of last year, at page 6212 of Hansard the hon. member for Vaudreuil (Mr. Herbert), a sometimes supporter of the government, indicated 20 different federal organizations and related agencies which deal directly with Canadian export trade. He went through each agency, pointing out that it had some bearing on the trade. He specifically stated he had done so because he hoped the then minister, the present Minister of Energy, Mines and Resources, would respond and explain exactly how these various agencies work in a co-ordinated way to ensure their expansion in the nation. To the best of my knowledge, the hon. member is still waiting for an explanation from either the former minister or the present Minister of Industry, Trade and Commerce. That is not good enough.


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


Some hon. Members:: Agreed.


Sinclair McKnight Stevens: Thank you, Mr. Speaker. I thank hon. members for their courtesy in extending my time. If I may summarize, in dealing with the motion before us today it is urgent that the government first announce what incentives they intend to bring in to increase productivity in this country. Second, it is essential that they at least deal with the subject of free trade. Let us debate it. Let us have a meaningful discourse across the nation as to the advantages and disadvantages concerning this subject.
It is essential that the government announce an industrial strategy for the country, which is presumably to be worked out in conjunction with the provinces, labour, industry, business and consumer groups. It is not sufficient to have the former minister of industry, trade and commerce state as he did on May 28, at page 6208 of Hansard:
-I do not believe it is possible to devise and tailor a great big blueprint which might be called an industrial strategy for Canada. Indeed, I believe, as the government does, that the right way is to deal with each industry on a case by case basis.
The evidence shows that that is just not working. Our trade deficit is mounting. It is time we had an industrial strategy for this nation. It is also time that heavier emphasis were put on research and development to ensure that our manufacturers especially, and all of our businessmen, become more productive as far as their relationship to other countries and companies is concerned.
It is time that all disincentives with regard to agricultural production in this country were removed. No longer
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should our producers, farmers and fishermen be told that they should not produce. It is the government which should sell their products. It is essential that we develop a trade mentality in the nation and realize that our future is one of international trade. To that end, we must develop a better transportation system so that the goods we produce can be marketed more effectively around the world. The Export Development Corporation must be directed to favour smaller businessmen of this country as opposed to the favourite few, as has been their habit in the past.
Finally, it is time the Canadian dollar was allowed to fall, along with interst rates in this nation. It is unforgivable that this government has fallen into the trap of having high domestic interest rates, 2 per cent to 3 per cent higher than most other countries of the world. It is inflicting a hardship on our homeowners and those who must use credit to pay for their personal needs. It is not necessary. It is only necessary because of the ineptitude of the government which is trying to cover its $5 billion trade deficit by borrowing from foreigners at high interest rates. That can be ended. It must be ended for the sake of Canada's future.


The Acting Speaker (Mr. Turner):: The hon. member for Qu'Appelle-Moose Mountain (Mr. Hamilton).


Lorne Edmund Nystrom: Mr. Speaker, I rise on a point of order. With respect, is it not a tradition of the House that on opposition days the mover of the motion speaks, and then the lead-off speakers of the other parties have a chance to participate before the second speaker of the party that moves the motion?


The Acting Speaker (Mr. Turner):: The hon. member for Yorkton-Melville (Mr. Nystrom) will be the next speaker. The hon. member for Qu'Appelle-Moose Mountain.


Hon. Alvin Hamilton (Qu'Appelle-Moose Mountain):: Mr. Speaker, in introducing the position of the opposition, the hon. member for York-Simcoe (Mr. Stevens) gave the essential figures of the declining trade position of our country. In speaking to the motion, I want to emphasize what I think is the wide perspective of the situation that faces the Canadian people at the present time. There are two main subjects in this motion. The first is the trade performance of the government and second is the question of productivity of our industry, and that includes our government.
I wish to start by saying that a country like Canada, which is so dependent on world trade, has always to make its policies keeping in mind where it stands in the world of the present. To those of us who have been pondering this subject for a good many years, it is evident that the world is moving decisively and very quickly into the age of commodities. Over the last 200 years the world has been dominated by a military preponderance of one nation or a group of nations. We had the age of the deterrent of nuclear striking power. Now we are in an age, not of imperialism but an age where the demands of the people of the world are understood by all the people of all the countries as requesting some form of meeting their ordinary needs. These ordinary needs are the same in all countries, including Canada. The first is food, the second is shelter, and the third, the minimum health requirements of the people of the world.

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This means that we as a nation should recognize we are part of a worldwide demand picture. We must realize that the institutions we have used in world trade over the last few decades have to be altered. I do not propose to review those institutions in great detail, but I shall mention a few of the things that have been done over the last 30 years. We were aware of the international demand for commodities during the last war. Shortly afterwards, the nations of the world not only set up the United Nations but, under the aegis of that institution, established the International Monetary Fund, the International Development Bank and the Food and Agriculture Organization.
Through Canadian initiative in 1961, the world food program came into being. But in the whole of that period, the nations of the world failed to establish an international institution dealing with trade and development. The western nations responded to this gap by moving toward an agreement which became the Geneva Agreement on Tariffs and Trade-GATT. This organization could be defined very simply as a union of the wealthy nations of the world trying to improve the terms of trade on which they dealt with the rest of the world as well as their well-being generally.
Some have described these GATT arrangements among the wealthier nations as a rich man's club handing out crumbs at the gate to those who beg there. That may be an oversimplification of what happened in this field after the war, but I do know that there have been three world conferences, known as UNCTAD conferences, trying to set up a wider organization. But they have failed because of the difficulties encountered with international finance, huge amounts of money which were lent by various governments, leading to the horrendous situation in which we find ourselves today in which the developing countries are saddled with enormous debts together with ever-worsening terms of trade which, coupled with higher interest rates, make it almost impossible for them to escape from the impasse in which they find themselves.
I am not laying the blame for this situation upon the federal government of Canada. It is well known that our nation has made efforts, in the Group of Ten and in other groups, to resolve these problems of international finance. But there are things which could have been done and which we should try to do. The difficulty we are facing is not new to Canada. I invite hon. members to go back a few years. I am speaking of the period in which the government of Canada was led by my right hon. friend from Prince Albert (Mr. Diefenbaker). The same sort of situation faced us then.
I shall be very blunt, as I have been in the past, in saying this. Generally speaking, the advisers to the government of Canada have tended to be restrictive in the advice they give. Some may recall that a recession faced us when we took over in 1957. We fought like tigers to get out of it, and we were getting out of it in 1958 and 1959. Then the advisers to the government handed us a budget calling for higher taxes, tight money and the reduction of public expenditure, a budget which sent us into a worse recession than the one we had just experienced.
At that time, the elected members who formed the government decided they should take a hand in making the

decisions. In that period, 1959, 1960 and 1961, we ourselves determined the direction in which the country should go. We were the ones who, in that fight with senior management-I refer especially to the governor of the Bank of Canada-were to turn this country toward expansion. If hon. members look at the charts which tell the economic history of our country over the last 30 years, they will find that the longest period of steady growth upward was between February 1961, and February, 1968. This was because the government decided that it had some right, as representatives of the people, to say how the country should be run.
I shall not enter upon a long account of past history. I am simply saying that in my view the present government has arrived at such a point now. The Prime Minister (Mr. Trudeau) is always appealing to us to come forward with some ideas. I try to be helpful to him. I am continually standing up here and making positive suggestions; I am not always happy about the results. In 1964, 12 years ago, I pointed out that we needed new trading institutions. In a speech made in October, 1964, I spoke of the need for Canada, bearing in mind our interest in world trade, to exercise pressure to secure the formation of international commodity agreements which would give producers in all parts of the world a fair price for their products, so that they in turn would have the money with which to buy what they wanted to buy instead of depending on handouts from richer nations.
With the support of the hon. member for Nanaimo-Cowi-chan-The Islands (Mr. Douglas) we asked the government constantly from 1963 to 1968 to take a lead in this direction. But history shows that the administration, led at that time by Mr. Lester Pearson, turned its back on the concept of a new institution which would allow producers to receive a fair price for their products and that, instead, it joined with other countries such as the United States in electing for restrictive practices in world trade. I refer to GATT.
There is a further aspect of almost equal importance. Many importing countries need help not only financially but in their trading operations. If we want to sell goods to a country which does not have money with which to buy them, we must help it raise the level of its production and help it sell its goods on the international market. These are not new ideas, but they have fallen out of favour in the last 50 years. We need an international clearing house for short-term and medium-term loans to help finance the movement of goods for short periods, maybe for a few months.
I recall a dramatic moment in this House in the fall of 1963 when the minister of trade and commerce of that day said he was leaving for the opening meeting of the Kennedy round under GATT. My response from this side was, "You are going to GATT, you are taking the best mandarins of the civil service, and you will spend three or four years bargaining over percentages of decimal points. As far as I am concerned, speaking for the opposition, I am going to go to the People's Republic of China," and I used the earthy expression that I believed in going where the pastures were green and the cows were newly freshened. I point with some pride to the fact that in 1960 our total trade with the People's Republic of China was approxi-
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mately $400 million a year, and today it is around $8 billion to $9 billion a year.
When I rose in this House a few days ago and asked the Prime Minister when he was in Venezuela if he had time to speak to the Venezuelans, thanking them for buying the goods from the People's Republic of China so that the People's Republic of China could get the Canadian dollars the Venezuelans have from our oil purchases to help pay for our wheat, he said, "Yes. I had the time but I did not know about it." This is symptomatic of the complete failure of the government in the past 12 years to face up to the fact that trade is not a two-way street. It is not just a question of travelling around, saying hello and being nice and setting up trade offices. Somebody has to do things to make trade work. You need that type of institution. These things have developed over the years, and the new nations now call it the new economic order. I am saying to the government that if it wants ideas, the ideas have been here for years if it wants to use them. But the performance has not only been nil; it has been negative.
There are other things that should be kept in mind. Our own companies are negligent in Canada. Too many of them have thought their only job was to sell to the local city. Too many of them have never bothered going into the export market. The hon. member for York-Simcoe mentioned that we are now in the age of a need for food.
How many people remember the Favex group of the fruit and vegetable people who set up an export company and went out and peddled Canadian fruit and vegetables under one trade name? What happened to Favex? It stopped operating the minute the Diefenbaker government disappeared, because no one was there to push it. Some will remember the name of Excan where, under the pressure of the people on this side, the four big pools in western Canada formed an export company to sell Canadian grain. How much have they sold? I would think I would be safe in saying nil, because there is nobody there to push it. It is willing to sell if it has the push put to it. I would say simply that if you want to push Canadian companies into action, all you have to do to Excan is say, "Here is a $50 million guarantee. Go out and peddle this stuff. You can meet the Americans with a better quality of wheat, and you can take any share of the market that you want, but get out there and sell it." I summarize that point by saying simply that this world is desperately in need of food and fibre, and that is the challenge before not only our agricultural industry but our forestry industry as well.
I know the present Liberal government, in its defence, will come along and say it has sent trade missions all over the world. I have followed the progress of these trade missions as well as most members of this House. I know they are good things. I have watched the work of the Export Development Corporation and I know it is doing some good things. However, when I think of all the things that could be done, I am just appalled. The basic complaint I have against the government is that it cannot get away from its basic love of restrictions. I remember in 1970, at a time when it was clear that the world was in desperate need for grain, this government believed in the reports of its own experts and applied the LIFT program to all farmers. Ministers stood in their place and said we had to stop
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all farmers producing wheat that year. Today we cannot even meet the market needs.
Last Friday the minister announced outside the House a 35-million bushel sale of wheat to China. He was overjoyed at this sale. That sale of wheat to China was made under the original agreement of 1961. The Chinese would take more wheat if they could get it, but we do not have it because our reserves are at the lowest point in years.
All I am really trying to ask is, with all these opportunities, what is the government doing? For example, when is it going to get the co-operatives in Canada to go out and visit Chinese trade fairs twice a year and make sure all the goods they can sell in Canada are bought in China in order to help the farmers sell their wheat? Simpson's has moved, Eaton's has moved, but no hardware company has gone out into this area yet. There are lots of opportunities, but somebody has to put the sock to these companies in order to make them move.
We consume about $20 million worth of rice a year in Canada. Where do we buy that rice? I suggest we buy it from Louisiana and California. We can get just as good rice, but cheaper in China. No one does a thing about pushing people out there to bring it in, because all our companies that distribute rice in Canada are controlled by the holding companies that own the rice farms in Louisiana and California. This is why we need national selling and buying companies to get around these bottlenecks that some monopolistic business has set up in this world.
As the hon. member for York-Simcoe mentioned, here we are trying to get our export industries to help save us by getting rid of these deficits, but this government, with its love of restrictions, last fall at Thanksgiving not only put the chop to labour and businessmen but it put on an export tax. I was the member of parliament who on November 4 got up and asked the Minister of Finance (Mr. Macdonald) about this small little item I saw in the Thanksgiving statement on price and wage controls. I warned the businessmen and the labour unions that they had better get together if they were going to save jobs for the people of Canada and give Canadians a chance to compete. Thanks to those labour men and businessmen-and, above all, thanks to the provinces-they showed this government the error of its ways and we had this retreat by the Minister of Finance last week that I described as Napoleonic. The Prime Minister, who indicates his fantasies too openly, mentioned Austerlitz. I just wonder what happens when the Prime Minister lets his fantasies go to the end of the dream. We know what happens to those men who take a revolutionary government or a free government and make it into a dictatorship.
This government is married to restrictions. In 1974, after fighting a campaign across this country against the Conservatives who only advocated a 90-day freeze and only a few selective controls out of which we could get immediately, the Liberals gave their pledge to the people of Canada that they would not go into wage and price controls. They frightened the workingman, got him to vote for them and then betrayed him with these wage and price controls. I know that this love of restrictions the government has is not only unfair to labour and unfair to business but it is unfair to the whole country. It is putting a

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check on the efforts of the private business sector to get this country out of the recession.
Look at the indicators at the end of last January. Our economy started to move out of the recession in the first and second quarters of 1975. It was checked immediately in the last quarter, and the only thing that keeps us afloat today is the fact that our neighbour to the south, the United States, is still increasing its productivity, which is buoying us up. I know that this price and wage control is also inflationary. It even legislates the amount of inflation, 10 per cent, and it does not do anything to cure inflation.
The basic causes of inflation are well known. This is a posture the government has, and the technique of the Prime Minister is simply confrontation. Confrontation with labour and with business is the key. I would suggest to the government that it should face up to the facts. The country is concerned about the economics of this nation. The government should realize it has put the country into the wrong posture. It should change it toward one of expansion, using an expansionary period to get extra productivity. Productivity can come in many ways. It can come by bringing interest rates down.


The Acting Speaker (Mr. Turner):: Order, please. I regret to interrupt the hon. member, but the time allotted to him has expired.


Some hon. Members:: Carry on.


The Acting Speaker (Mr. Turner):: The hon. member may carry on if there is unanimous consent. Is there unanimous consent?


Some hon. Members:: Agreed.


Francis Alvin George Hamilton: I shall not abuse the privilege I have been given, Mr. Speaker. I just want to say there are many ways to increase this productivity. I am sorry the Minister of Labour (Mr. Munro) has left the House, because the way to get productivity out of labour is not to drive or force it. The same thing applies to business. You do not get anywhere with business, labour or Canadians generally by driving them. The only way a Canadian responds to a challenge is by leadership. Labour and business know they have many faults and they know that their extremes in the past few years have been part of the inflation problem, but there must be leadership of a positive nature.
I had intended to read a long list of ways in which to increase productivity, but I should like to conclude simply by saying that on the question of trade performance, for 12 years this government, regardless of its leader, has let the nation down. What we tried so hard to do under the leadership of the hon. member for Prince Edward-Hastings (Mr. Hees), and to a lesser extent some of the rest of us, was to turn the country into high gear on the manufacturing and resource side in order to obtain world markets. We have watched all our efforts to get this nation enthusiastically behind this drive disappear over the last 12 years. We are in the same situation now.
I have suggested to the government that the answer, contained in recommendations made to the government by

royal commissions and people around the world, is in two or three simple things. Turn your tax system around and give an incentive in the form of everything in the tax system to productivity either on the part of the workingman or the man who invests capital; give incentive to the man who saves money. In this way you will get productivity and we will get at this question of inflation much more easily. It is a separate problem, even if it is related. If our country is growing we will know in our hearts we are meeting the real needs of the people of the world and not only of Canadians. At the same time, we will have a feeling that we are getting ahead faster by working hard and growing than by living in a country that is moving toward more and more restrictions.


Lorne Edmund Nystrom: Mr. Speaker, I am very glad the hon. member for York-Simcoe (Mr. Stevens) has put down this motion today regarding trade, because I believe what is happening today in respect of Canada's trade picture, and what we will see happening in the future unless government policies change concerning the borrowing of billions of dollars in capital markets, and so on, is that there will be created for this country the most serious economic problems we have ever had. We have in this country really serious economic problems.
As we know, Canada is a country dominated by foreign investors. In many ways we are nothing but an economic unit and cannot make the decisions we must make if we are to turn this country around and provide jobs for ordinary Canadians. I look, for example, at the latest trade figures which came out in January, which show we had a trade deficit in Canada of $309 million, up from $91 million in December of last year. Importations in this country went up by 7 per cent to a record $3.1 billion. Exports declined marginally to $2.85 billion. What is happening is that we are seeing a trend in this country of exports dropping, and when exports drop there is an increase in unemployment. We have a government program of wage and price controls that is effectively bearing down primarily upon the workers in this country. If we put it all together, we will have in the next year or so an increased unemployment rate and more problems than we have today.
I think the time has come when we must have a reassessment of our economy in general so that we know where it is going. I think we must look at the situation in the long term. Certainly the short term is important and there are things we can do today, but in the long term we need an industrial strategy policy, a national industrial plan in which all parts of the country can play a much greater role. I look, first at what I think is the prime error that has been made in the past, which was touched on by the hon. member for Qu'Appelle-Moose Mountain (Mr. Hamilton). Primarily, we are a resource exporting nation. We export our raw materials and import finished goods. That alone means that we export business, which creates more unemployment in this country. When we have this type of branch line economy it means that if other economies are in trouble in the world or are suffering from a recession, we will be hurt because they will cut back on their purchase of our raw materials and unfinished goods.
All the taxation policies of this government in the past have been geared toward helping the resource section
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rather than the manufacturing groups. We have in this country, as a result, a whole series of small industries and factories which tend to mimic the industries and corporations in the United States. I think, when we talk about an industrial strategy for Canada, we must talk about rationalizing industry in this country and about specialization in certain industries in order to compete abroad.
We in this country must be concerned about independence, because one of the real consequences of an economy that is not controlled by ourselves is that when the other countries run into problems, a branch line economy will be the first to be affected. We see this in respect of the United States. If the United States has a trade deficit or unemployment, then the corporate entrepreneurs in the United States will place their interests in Canada at a level secondary to those in the United States. This is, of course, the natural reaction.
If we are to solve, in the long term, some of our industrial and trade problems, Canada must have independence in respect of its own economy. We must have independence if we want to have research and development in this country and the creation of more jobs and more research with which, hopefully, to spur on Canadian industrial development. I think this is a real problem we must face in the years to come if we are to have a nation called Canada a few years down the line.
What really concerns me in looking at the future is the spectacle of the amount of money that we may borrow in foreign money markets in order to develop certain projects in this country. The Department of Energy, Mines and Resources is now talking about borrowing some $115 billion between now and the end of this century. This amount of $115 billion is for projects such as the development of the tar sands, the James Bay project, other hydro projects, pipelines such as the Mackenzie Valley pipeline, and so on. What will it mean if we borrow $115 billion. I think it will have serious ramifications in respect of the Canadian economy in the future. If we make that decision, first of all we will be spending all the money we can possibly borrow to develop the type of economy that has already given us trouble, an economy that is not based on manufacturing and processing of resources in this country, and an economy which I feel will become more and more foreign owned.
If we borrow these sums of money as a country, or as a province in the case of Quebec with the James Bay project, or any other province, what will probably happen is that the Canadian dollar will increase in value, and when it does it will be even more difficult to sell our exports abroad, whether they be farm products or manufactured goods. That, in turn, will create more unemployment in this country and more of the type of problems we already have. Furthermore, I really question the necessity of going into debt to so great an extent to develop grandiose projects like the James Bay project or the pipelines that are now being talked about in northern Canada.
It is the type of direction in which this country is being dragged, not because the people can or want to go in that direction but because huge, multinational corporations think it is wise that we borrow money, that we explore those resources and sell them and to hell with the Canadi-
Productivity and Trade
an people or with the planning of the future of this country that we call Canada. That will be a real problem in the future.
Another problem we will have, particularly if we start borrowing these vast sums of money, will be to diversify our trade. Already we are putting all our eggs into one basket, the basket of the United States. When the U.S. runs into trouble, it will obviously affect us here very quickly. I believe that one of the objectives of this country should be seriously to diversify our trade. We can do that if we have foresight and courage. The U.S. is a very powerful nation and of course it will be our major trading partner, but they have their own problems. The EEC nations also have their own problems. So we as Canada should be looking at areas of the world that will complement the type of country in which we live.
As Canadians, we have almost everything in this country except a tropical climate and the kinds of things that are produced in that type of climate. It makes sense for us to have stronger trading links with the Caribbean countries or with Latin America so that it would be of benefit not only to us but to them. We should have trading links with countries that are complementary. That is why I think we should trade a lot more with countries such as Cuba. There is no reason why we should not be purchasing sugar and citrus fruits from the Caribbean nations and Latin America, rather than from the U.S. It would be good for us and it would also be good for the country to which I referred. We should also consider greater trade with China. I think our country should spend more time and effort in trying to develop meaningful trade with nations such as China. That will be important if we as a country want to develop our trade in the future.
Much has been said in this debate and other debates about incentives and the lack of incentives. I challenge the very idea of providing incentives as a way of solving trade problems. Last Friday in the House we heard the minister state that the export levy or charge which was to be imposed on companies in this country was being dropped. This will be of some aid to exporters, but I suggest it might distort many of the market conditions in this country by encouraging companies to divert production from domestic to export markets. Two or three years ago vast write-offs for manufacturing companies were introduced in the House, and corporate taxes for manufacturing companies were cut. Despite that, we are now moving into a crisis in our balance of trade. Our trade in manufactured goods has dropped drastically.
Corporations do not respond to carrots or to hand-outs that are given before the fact. There is no real proof that the type of tax cuts that have been given in this country have stimulated manufacturing. I believe the Conservative party is on the wrong track when its members argue, as the hon. member for York-Simcoe did today, that the solution is to provide more and more incentives and tax write-offs to manufacturing companies. Instead of that, what we need is a planned economy, an economy that is planned on behalf of all the people of this country, not planned by the large, multinational corporations.
One of our prime objectives should be to upgrade raw materials and resources prior to export. We do not need an economy that exports solely raw materials for the sake of
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making a few bucks in the short term. Only the national government can take a lead in providing us with an economy where we manufacture or process our raw materials. We need an economy where public ownership plays a much more meaningful and forceful role as a means of securing more independence for Canada.
I have already referred to an economy where there is more rationalization and specialization of industry. There are many areas in which this country could specialize and which are indigenous to Canada, areas into which we do not venture now because of commitments to certain multinational corporations. Let us look, for example, at the rail policy announced by the Minister of Transport (Mr. Lang). I see a strong indication that we will be phasing out our passenger trains in this country-which I know interests you, Mr. Speaker-and in their place purchasing more aircraft.
We know that the aircraft we will purchase in Canada will come from abroad and therefore provide jobs in other countries. But if we were to expand passenger service in Canada we could purchase cars in Canada, thus providing jobs for Canadians, because we have that technology here. LRC has a light, rapid and comfortable train developed in this country but it cannot sell its product to CPR or CNR. It will sell its product to Amtrack in the U.S. which has a train that travels at 140 miles an hour, a rapid and efficient service. That type of planning does not occur in Canada. We are here at the whim of multinational corporations. When they ask us to jump, we ask, "How high?" There is no planning here. We are just a reflection in the waters of the huge, multinational corporations. That will have to end if we are to develop a country that is worth living in in the years to come.
The other thing I wanted to mention in the debate today was the growing deficit in the trade pact with the U.S. under the autopact. As you know, the autopact was negotiated a number of years ago and worked to the advantage of Canadians for quite some time until recently when we started to accumulate an increasing deficit. Our trade in automobiles has gone from a surplus position in recent years to a very large deficit. While the autopact made a positive difference for a few years, that of course has taken a reversal from a deficit of over $700 million in 1965 to a deficit that has averaged much less, $200 million a year on average between 1965 and 1973. Our automotive jobs increased at a rate three times those in the U.S. during that period of time.
However, in recent years things have turned around from a small surplus of $204 million in 1970 to $230 million in 1971 and $75 million in 1972. Our auto trade balance has come back toward a more historical and normal position. In 1973 we had a deficit of $440 million in the auto trade; in 1974, a deficit of over $1,300 million; and for 1975 the full year's figures indicate a deficit in the range of $2.5 billion. So you can see in the auto trade, which is very important to a large part of this country, the trade position of Canada is changing very rapidly.
This is the big area of deficit so far as auto trade goes, although we also have a deficit on non-U.S. auto trade of some $500 million. Why is that? There is a tendency to blame this on our deteriorating competitive position. This, in turn, is usually blamed upon the workers, which is not

the case. Let us take a closer look at the situation, for the case in the automobile industry is similar to that in a great number of industries in Canada. Let us consider vehicles and parts. I will deal with vehicles today. In vehicle assembly we have a small surplus in trade, but there is a commensurate price differential between Canada and the U.S. and this is usually blamed on our high-cost industry. If this were the case, we would expect that higher prices to make up for higher costs would still result in similar profit levels on both sides of the border. However, in fact, profits in Canada are currently about $100 per car higher than in the United States, and in 1974 the Big Three made 22 per cent of their profits in Canada on 11 per cent of North American car sales, an amount high enough over the last decade to pay for all their new investment in Canada. This is on top of normal profits which have been high in the auto industry in the last decade.
As I have said, profits in this country are very, very high. Wages are at parity in Canada and the United States, and the higher pension costs in Canada are made up for by lower medical costs and lower supplementary unemployment benefit costs. It is not because of greater efficiency in the United States or economies of scale, because with the auto pact all production in North America is rationalized and efficient and there are economies of scale achieved on both sides of the border. Moreover, because of the high rate of new investment in vehicle assembly in Canada after 1965, our machinery is at least as efficient as that in the United States. Transportation costs are also about the same on both sides of the border. So the only conclusion we can come to is that the decision of the big car manufacturers is to wring more profits out of Canada.
When we consider the parts side of the argument, we see the same type of thing. That does not mean lack of productivity in Canadian workers, but it is the decision of the corporations to wring more profits out of Canadian industry. These are things we will have to stop if we are to develop our economy. We as Canadians collectively will have to make the decisions in this country in terms of planning and take the decision-making power away from the corporations in this country. The time has come to do that. The time has come when we should have that type of national development plan, when we the public should decide what are the important things to develop and not leave that process to the large corporations because when we leave it to them it is the ordinary Canadian who is injured.
We have an immense future in this country. We have an educated population. We have the resources, the institutions and the training which we need. We have a transportation system and the means to provide food. All we need now is a government which will put those things together into a policy which will process those resources and create jobs for Canadians. In many cases we have a large enough domestic market to keep going adequately in the manufacturing industry. It makes no sense at all to be importing many of the goods we are importing when we could be developing, processing and manufacturing these goods right here at home and providing jobs for Canadians.
These are things we will have to do. If we do not change our trade policy, and if we do not have an industrial
March 1, 1976

strategy in Canada, I really fear for our future. I fear for a country which will have to borrow over $100 billion for energy projects alone. If that occurs, in my opinion we will be nothing more than a satellite of the United States and a satellite of huge, multinational corporations. We will be supplying more and more raw material and becoming more hewers of wood and drawers of water. I do not think we have to go in that direction, because I think we can change this economy in a really meaningful way.
I hope the minister will speak today and tell us about some real changes in Canadian trade policy which will come about. I hope he will not just say the usual things; that there will be a few more trade missions; that we are trying to sell hard, smiling a lot and trying to obtain new markets. That type of thing is not good enough any longer. I want to see some really concrete changes in direction. Why cannot we say that we do not need the Mackenzie Valley pipeline at this time, that therefore we will not go ahead with it and that we will have a moratorium on making that decision? If we have to borrow money, we could use it in a much more positive way. We could use the resources of this country, plan our economy, process our raw materials and decentralize the industrial heartland of this country so that all Canadians can feel they are a greater part of it.
As a person from the prairies, I get sick and tired, year in and year out, seeing our food materials just being shipped out in an unprocessed state, or if processed in Canada, often being processed in Toronto. That type of thing could end if we had a government which was wedded to planning and redistribution of wealth amongst the regions and not wedded to the idea of pleasing the large, multinational corporations.


Alastair William Gillespie: Mr. Speaker, I am pleased to be able to enter this debate this afternoon on behalf of my colleague, the Minister of Industry, Trade and Commerce (Mr. Jamieson) who, as hon. members know, is drumming up business in Southeast Asia and trying to bring about some of the things which some hon. members here are anxious to see, that is, more export sales. However, as I listened to the debate this afternoon, I must say I had some rather peculiar sensations. First, who called the debate? This is an opposition day; the Tories called the debate. They have a new leader, and they are really concerned, they say, about export sales.


An hon. Member:: There is no leader here.


Alastair William Gillespie: There is no leader here. The lead-off speaker, the hon. member for York-Simcoe (Mr. Stevens), disappeared as soon as he gave his speech. The hon. member for Qu'Appelle-Moose Mountain (Mr. Hamilton) asked if he could speak second-


Some hon. Members:: Oh, oh!


Steve Eugene Paproski: Mr. Speaker, I should just like to bring to the attention of the House that the hon. member for York-Simcoe (Mr. Stevens) was delayed on a flight from Toronto or Hamilton this afternoon. He arrived here in time for the opposition motion. He is now preparing himself for committee meetings which will be held this
Productivity and Trade
evening, and I do not think that that kind of cheap shot from the minister-


Some hon. Members:: Oh, oh!


Alastair William Gillespie: Mr. Speaker, I can understand why the Tory members opposite might feel a little sensitive. They told the Canadian people, through their leadership convention, that they were going to come out swinging as a party. They were going to tell the people what they are for, not what they are against. They are so interested in telling us what they are for that they even leave the House. There are perhaps half a dozen in the House right now, and this is an opposition day.


Some hon. Members:: Shame!


Alastair William Gillespie: We cannot take the Tories seriously, and I doubt very much whether the Canadian people will be able to take them seriously.


Some hon. Members:: Hear, hear!


Alastair William Gillespie: I have a very high regard for the Conservative whip. I am not going to say anything more than this: I think we ought to check the list to see what committees are meeting this evening and find out whether the particular meeting he referred to is the kind of meeting which two of the hon. members who have spoken today are likely to attend. I leave it up to him, but we have our own ideas. I believe the committee involved is the Standing Committee on Privileges and Elections.
As I listened to the two Tory speakers, I wondered to myself, could those two hon. members be members of the same party? The hon. member for Qu'Appelle-Moose Mountain was suggesting that we should develop a national trading corporation; more particularly, a | national buying corporation which would buy Chinese rice. He was very specific; he mentioned Chinese rice. He felt that the government of Canada should create a national institution which would go to China and buy rice. I should like to ask the hon. member and other hon. members in his party whether this is really the philosophy of the Conservative party today. Would they form a national corporation which would go to foreign countries to purchase their merchandise and then sell that merchandise in Canada in competition with the private sector? In other words, are the Tories entering the massive intervention game? Are they rejecting free enterprise on one side of their party and endorsing it on the other?


Some hon. Members:: Hear, hear!


The Acting Speaker (Mr. Turner):: The hon. member for Qu'Appelle-Moose Mountain (Mr. Hamilton) on a point of order.


Francis Alvin George Hamilton: Mr. Speaker, in defence of my position, I wonder if the Minister would give me his reaction to the organizations I mentioned-Favex and Excan-which were surely not Crown corporations, Liberal-style, but private corporations.
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Alastair William Gillespie: Mr. Speaker, I will be very pleased to answer any questions at the end of my remarks. When the hon. member was speaking I resisted the temptation to interrupt him, so I hope he can do the same with me.
If you are going to set up a national corporation which is going to purchase rice from China, you have to ask yourself whether you should not also ask that corporation to purchase textiles from China, and footwear and other products. I put it to you, once you go down that path just a little way, you are likely to find yourself edging out the private enterprise system that the hon. member and most of his colleagues support. It is a very dangerous path.
I would suggest that perhaps it might be more profitable to look at the private sector. Hon. members would find that there are close to 700 trading companies in Canada, most of them small and capable of growing. I would think that is where the emphasis should be placed, and I can tell hon. members that is where the Canadian government is placing its emphasis-behind the small, private sector traders. A number of measures have been introduced to support these trading companies in Canada and I hope to deal with them before the end of my remarks.
Another aspect of the remarks of the hon. member for Qu'Appelle-Moose Mountain was very interesting. I suppose it might be described as a statement-I do not want to overdo this-to some extent replete with contradictions. I think it was a sincere speech but there were built-in contradictions. I have already mentioned one. On the one hand he was assailing restrictions, and on the other he was intervening through the back door, through a government agency. There was a second straight contradiction in his speech. He said, "You must push"-that was the verb he used-"You must push them", referring to the Canadian private sector corporation. Later, talking about productivity, he used the phrase "You must not drive them". I ask the hon. member, what is the difference between pushing and driving?
I listened very carefully to the speech of the hon. member for York-Simcoe. Since he had so much experience on the hustings lately, I had expected him to give us a real tub-thumper of a speech. I would have thought he would have refined some of his views rather more precisely, but I was disappointed, as were other members in this House.
The hon. member for York-Simcoe has to make up his mind if he wants Canadian exports to increase. For example, why does he attack the Export Development Corporation for lending too much money? We have heard this in the House and we have heard it in committee. If he really wants to support Canadian exports, why does he not support the Canadian Export Development Corporation, a corporation built to sustain Canadian exports? Instead of trying to create the impression that very few Canadian companies are benefiting from Canadian Export Development Corporation financing, why does he not tell the Canadian people that hundreds or thousands of Canadian companies are benefiting from it?
He tries to create the impression that there are a few large contracts and the only beneficiaries of Export Development Corporation financing are a few large companies. Anybody who knows the situation knows that is patently untrue. I should like to give a couple of examples of some not untypical Export Development Corporation

financing transactions in the last little while. The average number of Canadian companies supplying over $5,000 in goods and services would be in excess of 50 in most transactions; that is, 50 companies with over $5,000 in goods and services in a typical transaction.
Take the recent Export Development Corporation loan on telecommunication equipment to Turkey. The number of Canadian companies supplying in excess of $5,000 worth of components was 87; not one big company, but 87 companies participating in that contract with a minimum value of $5,000 of goods and services. Eight companies supplied over $100,000 worth of components each, for an aggregate of $2.4 million. The largest subcontract amounted to $971,000. Clearly, there are a large number of beneficiaries of Export Development Corporation financing, and they are spread across the country.
Let us look at another example, the sale of railway passenger cars. The Export Development Corporation loan to Mexico was $51 million. Some 38 Canadian companies supplied in excess of $10,000 each in components, the four largest companies aggregating $9.3 million, with the largest individual company securing $4.2 million of the business. I think this makes it very clear that large contracts are not for the sole benefit of a few very large corporations but are spread through the whole industrial fabric of Canada.
If the hon. member for York-Simcoe and the Conservative party are serious about being able to compete internationally-and I thought this was the burden of the remarks of the hon. member-it would seem to me they would then endeavour to inform the Canadian people of the benefits of Canadian Export Development Corporation financing, not the reverse. I would have thought they would have voted for the government's wage and price control measures as did one of their members, a former minister of trade and commerce.


Steve Eugene Paproski: Why don't you say why we did not?


Lincoln MacCauley Alexander: Why did we not?


Alastair William Gillespie: I think it is of some significance that a former minister of trade and commerce, the hon. member for Prince Edward-Hastings (Mr. Hees) alone among members of the Tory party had the courage, the insight to see that a system of wage and price controls was essential in Canada.


Some hon. Members:: Hear, hear!


Steve Eugene Paproski: Tell it the way it is.


Lincoln MacCauley Alexander: Tell the whole story.


Alastair William Gillespie: We had a problem of rising unit wage costs and we had to do something about it. We did something about it, and the only member who had the courage to say it had to be done was the hon. member for Prince Edward-Hastings. He understood the problem, but other members of his party had their blinkers on.


Lincoln MacCauley Alexander: Where were you in 1974?


Alastair William Gillespie: Let me give some of the numbers that have been referred to. I understand the problem opposite.
March 1, 1976


Steve Eugene Paproski: Not even the Minister of Finance (Mr. Macdonald) can stomach what the minister is saying. I see he is leaving.


Alastair William Gillespie: Mr. Speaker, I understand the vulnerability of hon. members opposite. But they introduced the motion; we did not.


Lincoln MacCauley Alexander: Speak to it, then.


Steve Eugene Paproski: The Minister of Finance has now left the House in obvious disgust.


Alastair William Gillespie: The hon. member for York-Simcoe talked about our balance of payments difficulties and export difficulties. It might be useful, for the sake of those interested, to put some facts on record. There is confusion about whether our exports were up or down last year. It depends on whether you look at volume or value. Similarly, there is confusion about our imports, about whether volume or value was up or down and what the trade balance was. Allow me to put on record the situation for 1975. True, Canadian export volume went down some 8 per cent last year, but the value of exports rose by 2 per cent, and export prices by some 10 per cent. This must be considered in the perspective of the general decline in the volume of world trade last year, a rare event, as in most years world trade rises by more than 9 per cent in volume terms.
It is noteworthy that most major industrial countries fared worse in general economic activity than did Canada last year. The official OECD record shows that the volume of industrial activity dropped by close to 9 per cent in seven major OECD countries. This is twice the rate of decline which occurred in Canada in the index of industrial production. The point is that even if our volume was down, we were in good company. The conditions which caused our decline existed worldwide.


Lincoln MacCauley Alexander: How can the minister say that?


Alastair William Gillespie: Well, if your customers are not economically healthy, if your customers do not have buying power and therefore cannot buy, you cannot expect them to buy your goods and you cannot expect them to buy other's goods. That happened in the world trading community last year.


Francis Alvin George Hamilton: Then how do you sell goods to China? They have no money.


Alastair William Gillespie: Quite apart from the OECD countries, the United States, our biggest market, was in an economic slump. The slump in that market, which traditionally has taken between 65 per cent and 70 per cent of Canadian output, was particularly difficult. It is estimated that the volume of U.S. imports from all countries declined by 14 per cent in 1975. Yes, Mr. Speaker. The United States, our biggest market, imported about 14 per cent less, in terms of volume, in 1975. Surely those figures tell the story with which Canadian manufacturers had to contend.
Let me now deal with some of the factors affecting our trade. Some hon. members will say that these are short term but others will recognize them as being of a longer
Productivity and Trade
term nature. One of the major factors affecting Canada's merchandise trade in 1975 was a swing to a deficit in Canada's trade balance on crude petroleum as exports declined by $355 million. Despite that, despite the decline in commodity prices from previous peak levels affecting lumber, wheat, copper and zinc; despite major strikes affecting the delivery of wheat and newsprint in particular; despite the worst slump in industrial activity in the post-war period among our major trading partners; despite our major market for automobiles, the United States, being worse than it has been for many, many years; despite the slump in U.S. housing activity which in particular affected Canadian lumber prices and volume, Canadian exports in total went up in value by 2 per cent. It is important to see these facts in their proper perspective. One must acknowledge that our imports went up even more, by 9 per cent. But that reflects the comparative strength of the buying power of the Canadian public vis-a-vis the buying power of the public in our major markets.
Our merchandise trade position showed a definite improvement during the course of 1975. All of the $800 million merchandise trade deficit which Canada registered on a balance of payments basis occurred in the first eight months of the year. In the last four months of the calendar year 1975, Canada's merchandise trade was in virtual balance, despite work stoppages affecting particularly our pulp and paper industry. Exports of end products, inedible, fared particularly well in 1975, being up about 12 per cent in value. Industrial machinery exports were up 21 per cent last year, and exports of agricultural machinery by 36 per cent. In January, 1976, Canadian exports of end products, inedible, were up some 21 per cent over the level of exports in the same month in 1975. Over-all, the value of exports went up by about 5 per cent.
I think one ought to bear those figures in mind. Although there is not much satisfaction in knowing that our volume went down, the value of exports went up by about 2 per cent and we should be encouraged by the trend of the last four months. We have made a good start this year. The 11.9 per cent increase in the value of end products, inedible, in 1975 over 1974 is a source of encouragement. Putting it another way, our end products, inedible exports rose at a rate six times greater than the average percentage increase with respect to all Canadian exports in 1975. The net increase of Canadian exports in dollar terms in that regard was significant. The record is not all black, as the hon. member for York-Simcoe tried to paint it.


Walter David Baker: No, it's mostly red.


Alastair William Gillespie: The hon. member for York-Simcoe referred to productivity. Certainly, we would have liked productivity in this country last year to be greater, but so would a lot of other countries have liked their productivity to be greater. Our critics opposite forget that you must look at productivity on a worldwide basis, on a country by country basis. It declines in a country when there is slack in the economy. Only when the economy is well out of a slump and bumping, as it were, upper levels of activity do productivity increases become significant. Again, an examination of the record will reveal that all is not black. Generally, Canada's productivity in manufacturing has been relatively favourable. During the decade 1964-1974, output per man-hour in Canadian manufacturing
March 1, 1976

Productivity and Trade
increased by 3.7 per cent per year, compared with an increase of only 3.2 per cent in the United States. In other words, the over-all increase in Canadian productivity has been slightly greater than the increase in the United States, a country with whose productivity we compare our own.
In 1975, Canada's output per man-hour was virtually flat, while output in the United States registered a decline of nearly 1 per cent. We all hope that our economy will pick up steam as the economies of our customers pick up steam. I do not think we can expect our economy to move ahead more rapidly than the economies of other countries; we cannot expect exports to increase more rapidly than the economies of other countries. Productivity will be related to that pick-up, or increase, in business.
I listened carefully to the hon. member for York-Simcoe. I wanted to hear his suggestions as to measures the government might take to improve the productivity of Canadian industry. I found him wanting, just as I suspect his new leader may find him wanting. His leader said that he would tell the Canadian people what the Progressive Conservative party supports. He said they have to get across to the Canadian people that the Tory party is a party that stands for things. He said they must be prepared to tell the Canadian people what those things are. I will be listening carefully in the future for positive suggestions as to what the Tory party stands for, how productivity can be increased-specific, constructive measures and not just more give-aways.
[DOT] <1710)
In the few minutes I have left I thought it might be useful to give hon. members a very brief view of the investment situation as we see it at the present time. I can only put it in these terms. If Canadian business was not investing significantly, one could say that it lacked confidence in government policies or lacked confidence in the future. However, if you look at the figures, you will find that Canadian industry is investing. Canadian business spending on new plant and equipment last year rose by 18 per cent in value terms. That, according to national accounts, was in the first nine months of 1975. In the United States, investment in new plant and equipment scarcely rose at all in value terms in calendar year 1975 and little buoyancy is expected in this sector in 1976. Reflect on that, members opposite. If the United States was flat as far as investment was concerned last year, and Canadian investment increased by 18 per cent, surely that tells a story about the Canadian business climate.
In Canada, a survey conducted among 300 large corporations suggested that these firms plan an increase in outlay of 28 per cent in 1976. This is probably not representative of the sector as a whole. But it does seem that business capital spending activity will outperform that of the United States by a wide margin. If we look at the record, that is probably a lot better than the picture some members opposite wish to paint.
Finally, I wish to deal with one or two of the initiatives. There is not a large amount of time left to me, but I think that members opposite must admit that the government's initiative with respect to negotiating a contractual link with Europe is a very important initiative. If they agree, I

would like to hear them say so. It would be very useful for the people of Canada to hear that the Tory party supports a successful contractual link. I would like to hear more from the Conservatives how they feel about sector negotiations in the MTN. If they believe, as we do, that sector negotiations are a very important initiative as far as Canada is concerned in this new round of trade talks, I wish they would say so. We would like to hear it. If the Conservatives feel as I do about the government's initiatives with respect to developing a new form of economic co-operation with Japan, one of our largest trading parties, they should say so. However, they seem to be mute when it comes to these matters. They are only interested, at least some of them, when there is an opposition day.
If they agree with us on the kinds of joint economic agreements we have negotiated with Iran, Mexico, Brazil, Cuba and others we are in the process of negotiating with respect to Middle East countries, why do they not say so? These are important initiatives.


Mr. Deputy Speaker:: Order, please. I regret to interrupt the hon. minister, but the time allotted to him has expired.


Some hon. Members:: Carry on.


Mr. Deputy Speaker:: There seems to be consent to allow the minister to complete his remarks. Is it agreed?


Some hon. Members:: Agreed.


Alastair William Gillespie: Mr. Speaker, I thank hon. members for their kindness and generosity. I will be concluding in a very few moments.
There are some important questions of Canadian trade policy which are too often ignored. The whole Latin American area is of massive potential as far as Canada is concerned. The InterAmerica Bank is a very important agency for developing trade in that area. The government, and I as former minister, spent a lot of time working on better trade relations in the Americas. The Prime Minister (Mr. Trudeau) was in Cuba, Venezuela and Mexico as recently as the last few weeks.


Lincoln MacCauley Alexander: Forget about it.


Alastair William Gillespie: He was there primarily for trade purposes. This is a vast area. I hope hon. members encourage businessmen in their constituencies to go to Latin America to discover for themselves some of those great trade opportunities. I am somewhat amused by the different attitudes toward Cuba and the U.S.S.R. On the one hand we were told that we had not been aggressive in competition as far as the U.S.S.R. was concerned because we lost to the Americans an order that should have come to Canada. In the next breath it was suggested that we seem to be wasting our time trying to write a similar volume of business with Cuba, very much closer to our doorstep. It is time the Tories recognized that Cuba is a major and growing market for Canadian goods, and started to encourage Canadian businessmen to sell into that market. It is totally ridiculous to suggest that we do business with the U.S.S.R. and at the same time hold back from doing business with Cuba.
March 1, 1976

There are a number of success stories with respect to the program for export market development. It is worth noting that H. A. Simons, of Vancouver, with the assistance of the export development program landed a $50 million design contract for a $500 million pulp and paper complex in Poland last year, by far the single biggest pulp and paper complex in Europe. This was done by a Canadian company in Vancouver with the assistance of the program for export market development, a branch of the Department of Industry, Trade and Commerce. Another Vancouver company was successful in putting together a consortium for a sawmilling operation in Iran. Another western company, ATCO Industries of Alberta and Montreal-


Steve Eugene Paproski: A good firm.


Alastair William Gillespie: It is a very good firm. They obtained contracts for prefabricated structures in Saudi Arabia to a total value of over $30 million after having obtained earlier multimillion contracts in Libya. They will tell you they got that contract with assistance from the Canadian government. With Export Development Corporation financing and the kind of export market development assistance I have referred to, RCA Canada has been awarded a $32 million telecommunication contract in the Congo.
I have enjoyed taking part in this debate because, as hon. members will recognize, I am familiar with many of the initiatives which have been taken over the past year. I hope very much that members opposite, instead of trying to paint a picture of gloom, will get ofct and help us persuade the Canadian business community to devote more attention to the export market.


Mr.   C.-A. Gauthier@Roberval: Mr. Speaker, the motion presented today is in my opinion most interesting. It reads as follows:
That this House deplores the lack of any effective government policies to deal with Canada's worsening trade performance and, especially, the government's failure to provide meaningful incentives to increase productivity-
To diversify the debate, I wish to discuss two points which particularly concern my area, the first being agriculture. I would also like to draw the attention of the government on that important poultry problem and blame it for doing nothing to protect our producers against the dumping of American poultry on our domestic markets. Consequently, the local market has reached saturation point and the producers are compelled to set quotas to such an extent that their business is unproductive. I happen to know the problem of a poultryman who has been fined for exceeding his production quota and told to reduce his production by half because the Quebec market has reached saturation point. And what is the cause? Certainly not the 17 producers in the Saguenay-Lac-Saint-Jean-Roberval area who have to produce at a loss in 1976 because they can use only 50 per cent of their facilities despite the fact they have the same maintenance costs, the same municipal taxes, the same insurance on buildings and the same depreciation to account for. No wonder there are so many bankruptcies in that sector in our area.
Productivity and Trade
I am not asking why there are only 17 producers remaining, who vegetate and try to continue to work for a few more years. And specially let us not ask why in the last few years we have lost 50 per cent of our regional quotas, when cartels grab these quotas to control more securely the production of our area, perhaps with American funds. And what does the government do? It has passed legislation against combines and dumping but these laws remain dead letters. Our wholesalers continue to import American chicken and the Minister of Industry, Trade and Commerce (Mr. Jamieson) has nothing to say about it. Worse than that, Mr. Speaker, when we try to find out what is happening, we realize he does not know it himself.
As recently as last week, I asked him how many import permits he had granted for the import of American chicken, and I mentioned to him that last year, 25 million pounds of American chicken had been imported in Canada. At least that is the figure known today, besides what goes on under the counter.
The minister does not even know how much permits he has issued. I would even believe he does not know that our Canadian buyers do not need permits to import American poultry for the Quebec market. And as evidence of those allegations, I might quote the question I asked the Minister of Industry, Trade and Commerce on July 24, 1976, which was as follows:
Considering that the poultry producers' quotas will be greatly reduced during the next months, which will in turn reduce their revenue, can the minister tell the House whether his department issued licences or permits for the importation of poultry during 1975? If so, can the minister tell if he did so on the recommendation of the Minister of Agriculture?
And the minister gave me this answer:
Mr. Speaker, I do not have that information in front of me. I ask the hon. member to permit me to take the question as notice. I will give him the information as rapidly as I can.
Mr. Speaker, I am still waiting for that answer. But meanwhile the producers keep crying for help.
Yet I was sure the government had had its lesson when in February 1975 a group of producers, frustrated by the inertia of the government with respect to truckloads of American chicken, decided to take justice in their own hands. From then on we have been able to read in the press about the battle the producers were waging. I quote from a newspaper article dated February 22, 1975:
Chickens slaughtered in Saint-Damase by angry farmers.
Mr. Speaker, those farmers were from the province of Quebec.
The protesters were up in arms against the local coop buying its chickens from the United States while the producers who held membership in the coop had to comply with the imposition of quotas amounting to 64 per cent of their usual allotment.
Who was responsible for all that, Mr. Speaker? We read further:
The chickens were earmarked for the Saint-Damase coop which operates the local slaughterhouse. The height of irony is that the president of the coop is Mr. Roger Landry who happens to be the president of the Quebec Federation of Chicken Producers ...
Mr. Speaker, it is astounding to read that. I continue to quote:

March 1, 1976
Productivity and Trade
.. . and of the Canadian Council of Chicken Producers. Rumours has it that Mr. Landry is the future president of the chicken marketing agency to be created by Ottawa.
If that is not a conflict of interest, Mr. Speaker, I wonder when there is one. And I also wonder what has become of the anti-combine legislation. Later in the month of March, we could see the procession at the doors of another purchaser and other interested producers. Here is what we could read on March 11, 1975:
Chicken producers "rebelling". They lay siege at the doors of a U.S. poultry importer. They rise particularly against the Maxi Poultry Company which imports millions of pounds of poultry every year, while domestic producers can produce at only 70 per cent of their capacity ...
And further on, we read this:
The case of Maxi Poultry proves to what extent poultry producers in Quebec are at the mercy of the companies that make profits on their backs without, however, sharing those benefits with the consumers ...
While Quebec producers have to set themselves quotas, to avoid finding themselves stuck with surpluses they cannot sell, since January 1 Maxi Poultry imported 1,243,435 pounds of poultry.
The president of that company said:
I import poultry to make up the shortage.
Can you imagine? "-to make up the shortage."! He has the gall to say further on, and I quote:
Quebec poultry producers are now experiencing difficulties because they are not interested in producing according to the demands of the marketplace, because they do not respect the quotas they set for themselves.
That, in any event, is the opinion expressed by Mr. Joe Freeman, ...
With the Freemans mixed up in this, Mr. Speaker, small wonder there are complications.
... general manager of Maxi Poultry at Ville des Laurentides, ...
Further on, he adds: As for me, I import only three million poultry a year. Another claims he imports two million. To my mind, Mr. Speaker, the poultry producers are right. I ask you: What are we to think of a monopoly at the production level, that also controls the meat and poultry market, the level of production and sale. That is what the small independent producers are up against at the present time. It is also the case of the one I spoke of a while ago. Are producers not being robbed glaringly? But that is what goes on. And that is what this government tolerates or encourages.
As time goes by fast, I shall take a few minutes to blame the government and the Minister of Agriculture (Mr. Whelan) in particular, with regard to dairy production. Last week, I welcomed some 60 dairy industrial milk producers of my riding of Roberval. Since then, several questions have been asked in the House to find out the minister's intentions concerning his dairy policy before April 1, 1976, so that the producers will know what to do about it. The answers have always been so evasive that dairy producers still wonder what is ahead of them. Indeed, on February 9,1 asked the following question:
Since Quebec industrial milk producers and the management of industrial plants are seriously concerned about the government milk policy, which would result in lower income for producers, may I ask the minister, through his parliamentary secretary, whether he will recommend an adjustment to the milk policy to favour better returns for milk producers?

The answer was as follows:
... the minister, who is absent for the whole week and is to speak to several agricultural organizations in western Canada, has been examining this question for several weeks already and he will put to the House within a month a new dairy policy for 1976-77.
I did not get any answer other than this one. Then I wanted to know whether the minister could give us an idea of his policy before March 15. I have not yet received an answer.
On February 17, my colleague asked another question on this subject, and I quote:
Considering that for some months industrial milk producers have been suffering financial losses which in turn unbalance many producers' budgets, is the Minister of Agriculture willing to present the government's dairy policy around March 15, in order to give the producer's union enough time to indicate their views on such policy ...
The minister answered:
The program will be announced as soon as possible... The dairy farmers of Canada know what they must do.
My colleague the hon. member for Bellechasse (Mr. Lambert) asked a supplementary and I quote:
As the minister just said to the House that he met with representatives of the dairy farmers, and as representatives of industrial milk producers made representations to some members of Parliament and as it would be in the interest of Canada, of industrial milk producers and of the dairy industry in general that such policy be known as soon as possible, can the minister make a little effort to present this policy before the last day of March?
And here is the answer:
.. . the main difficulty for industrial milk producers of Canada stems from the world surplus and from surplus production in Canada. We have not cut back subsidies, as some people say. We are still paying the same amount of money for the proper amount...
I insist on this because when you make a statement, you have to weigh your words.
.. . for the proper amount of dairy products, including industrial milk. As I said, we will announce the program earlier, if we can.
He probably thinks that farmers are stupid. He says to us: "We have not reduced the price". They have not reduced the price but they did reduce the allowable volume. That is the same thing as reducing the price. Then he maintains very seriously before the House that he did not reduce the price, but we know that he reduced the allowable volume. Same difference! This is why I think that when he says he will allow $2.66 a hundredweight but on only 60 per cent of the quotas, while assistance to transport will be levied at 100 per cent, this is hypocrisy. If only farmers were told the truth: "Indeed, we made a reduction."
This is the motive of the discussions I had during my last meeting with a group of farmers who came to see me. They were saying: He must think we are stupid! However, I realize we must put the cards on the table and explain the situation.
During the meeting I was presented a brief containing a study of the dairy policy during 1975, including what they will get in 1976. We know what happened in 1975. In the chapter on the deterioration of the anticipated net income, it is said that, from April to November 1975, the producers did not receive the $11.02 which had been announced. This indeed proves that, because of the increase in the export price, they did not receive the $11.02 in 1975. Because of the
March 1, 1976

increased cost of exported milk powder, from 15 cents before April 1 to 45 cents and finally to 90 cents, the producers made pressures as a result of which the price went down to 65 cents and a fund was created to compensate for the cost of export.
Then on November 4, 1975 came the crushing news: the Minister of Agriculture (Mr. Whelan) announced the basis of the new dairy policy for 1976-77. The total amount provided in the budget to help the dairy industry is reduced from $275 million to $262 million. Warehousing and marketing costs become payable on that sum. If as expected these costs amount to $40 million in 1976-77, the amount of the subsidies as such will go down from $266 million in 1975-76 to $262 million 1976-77. As it is being estimated that the market will require 9.5 billion pounds of milk, it follows that the maximum subsidy will be $2.34 a hundredweight. It is no longer a grant of $2.66 to the producer as compared to the subsidy of $2.66 announced last year. This represents a decrease of 32 cents per hundredweight. It is said further down that the minister and the Canadian Dairy Commission, on November 4, announced that dairy imports will double from 5 to 10 per cent. I realize that the time alloted to me is almost over, but I want to bring to the government's attention these two serious problems for our region. They must be solved in a way that will benefit our poultry and industrial milk producers.



PROCEEDINGS ON ADJOURNMENT MOTION


Mr. Deputy Speaker:: It is my duty, pursuant to Standing Order 40, to inform the House that the questions to be raised at the time of adjournement this evening are as follows: the hon. member for Esquimalt-Saanich (Mr. Munro)-Airports-Increased landing charges for light aircraft-Request for clarification of basis for increase; the hon. member for Carleton-Charlotte (Mr. McCain)-Inquiry of the Ministry-Space in Hull.



GOVERNMENT ORDERS


[Stage Direction]
The House resumed consideration of the motion of Mr. Stevens:
That this House deplores the lack o£ any effective government policies to deal with Canada's worsening trade performance and, especially, the government's failure to provide meaningful incentives to increase
Productivity and Trade
productivity and thereby strengthen the competitive export position of Canada's finished and manufactured products.
Mr. Bill Kempling (Halton-Wentworth):: Mr. Speaker, I should like to make a few comments on the remarks made by the Minister of Energy, Mines and Resources (Mr. Gillespie). I had rather expected a little more from him since he had previously been Minister of Industry, Trade and Commerce. However, he ran pretty well true to form. We watched him in his previous portfolio. Our main impression of him was that he was a sort of a nothing minister. He was very much a lightweight. Of course prior to that he had the portfolio of Science and Technology. That was also a mess. Now we see that portfolio being handled along with Public Works by a minister who, we understand, spends about four hours a week on it.
I was rather disappointed in the attitude of the minister when he spoke. He mentioned how many people are in the House. He was very critical of the hon. member for York-Simcoe (Mr. Stevens) for leaving the House after his speech. I might say for the information of the Minister that the other evening there was only one Liberal member of the committee present when we had a meeting of the Committee on Privileges and Elections. The chairman was there and the witness was there, but there was not one Liberal member. Before he starts taking cheap shots he had better look at his own club.


An hon. Member:: Where is the cabinet tonight?


William James Kempling: The minister also referred to the antiinflation legislation. I should like to read into the record here the comments of the Prime Minister (Mr. Trudeau) when he spoke in Sudbury in April, 1974, to the Ontario Liberals. The Prime Minister said that there is nothing wrong with our economy despite the doomsday sayers. He said that more Canadians have more money to spend than ever before and that inflation is not destroying our economy but is only having an unequal impact. He said we must fight it by throwing away the phony policy of price and wage controls. He said that prices are going up and therefore we need policies to increase supply. He said that we need to boost production, and if necessary legislate against profiteering. He said we must get after the big guys who are trying to make a fast buck. Then he said that "the government rejects the easy solution of wage and price controls and also the 90-day trial period suggested by the opposition who do not know what to do afterward."
He went on to conclude that controls do not stop inflation, that they did not stop inflation in the United States or in the United Kingdom, and that the rate of inflation doubled after the controls were introduced. In his final sentence he said that controls create changes, social injustice, and even violence. He said they are good for the big guy who can reclassify his position.


Lincoln MacCauley Alexander: When did they flip-flop?


William James Kempling: Oh yes! How phony can one be! Mr. Speaker, I do not want to put myself in the same class as the Minister of Energy, Mines and Resources. He has, as his colleague the Minister of Transport (Mr. Lang) says, tunnel vision. That is his major problem. We look at the trade situation and remember that he was the Minister of Industry, Trade and Commerce. We are in a mess. This

March 1, 1976
Productivity and Trade
seems to be his role. He gets into a department and gets that department in a mess. Then he gets out. However, I wish to reserve judgment in respect of the present Minister of Industry, Trade and Commerce (Mr. Jamieson) because he has taken over a mess which he wants to straighten out.
Let us look at a small industry in the time I have left. I have conducted a study of the auto pact. I have spoken to some of the manufacturers of automobiles and also some of the parts manufacturers. It is a rather dismal scene. We went in the auto pact in 1964 because we had a tremendous trade deficit in that account. Today it is larger than it was in 1964. I shall not become involved in the statistical game because I know statistics can be made to read in different ways.
I know the market has increased and that 40,000 or 50,000 jobs have been created in the interim. That is very good. However, we have a serious problem facing us down the road. I do not see very much happening. When we had the previous minister before the committee we could program his answers or read them from government releases. He never conveyed any real concern at all. He just gave "nothing" answers in any of his replies to questions. But I am looking at the real facts.
Rockwell Standard, a major manufacturer which had a plant in Tilsbury, had closed down. It has moved back to the United States. Eaton Yale Towne had a plant in London. It closed down and has gone back to the United States. Just last month a plant in Windsor, MGM Brakes, closed down with the loss of 60 jobs. It has gone back to the United States.
Why have these companies suddenly gone back to the United States? I spoke to the president of one company who said that they just do not like the economic climate in Canada, that they do not like the attitude of the government or the taxation system. He said they do not have much confidence in the future, and therefore have chosen to move their plant back to the United States and to export into Canada. Of course this will make our balance of payment problem even worse.
We used to play games with the minister before the committee. We talked about the secondary industry base. What a lot of flip-flopping he did on that! When we would ask him what his program was in respect of a secondary industry base in Canada his standard reply was that he did not think it was possible to establish a secondary industry base in Canada. Later on he changed his position. He said they would take a sectoral approach and rationalize industry. He said they would look at it in sectors.
I recall vividly the release about the footwear industry in 1973 concerning how great the program would be, that the Canadian shoe industry would be straightened out, and so on. What do we have today? I said the other day that the whole shoe industry is right on its uppers. We have a high level of imports. Imports are rising every year and our domestic production is going down. This represents a significant amount of money.
The total wholesale value last year in the shoe industry was about $650 million. We produced $350 million worth domestically, and we imported $280 million worth. Clearly some shoe manufacturers will go out of business. People in

the industry tell us that there is no way they can survive. What has happened to this great program that the former minister of industry, trade and commerce started? Where did it go wrong? Is it being up-graded? Why is something not being done about it?
I asked the Minister of Industry, Trade and Commerce whether he would look at voluntary quotas. He is on an Asian trip right now. We import the bulk of our footwear from Italy, Taiwan, South Korea, Spain, Poland, Hong Kong, Britain, and the U.S. On his trip he could take a look at voluntary or mandatory quotas to give a reasonable place to the footwear industry. He does not know whether he will go that far, but he does concede that tariffs alone may not be the solution. We started a program. I cannot tell you at this point how many millions of dollars we poured into the program, but it has been a failure and the record shows it.
The minister should get away from his philosophizing and get right down to men in the industry and talk to them. A man came to me on Saturday and related a typical situation. He has a business making clay pigeons. Total consumption is 35 million clay pigeons a year. This fellow produces 21 million and up, and the balance is produced by two other small manufacturers. Now there is a new company which has opened a plant in Canada to produce clay pigeons, but there is no market for them. These new people have been given government assistance to come into the country. The reason they were attracted here is that they will produce clay pigeons for the Olympics. The plant in Hamilton can produce all the clay pigeons that will be used in the Olympics in half a day, yet the government has attracted this foreign company here which will produce clay pigeons and take over the Canadian market even though we already have adequate production. The plant we have is working four days a week.
What are we going to do, and what can we do? I was down to the United States a few weeks ago, to Washington, and in spite of what the minister said about investment in plant and machinery in Canada and how he thought it would outstrip U.S. investment percentage-wise next year, I would be surprised if it does because they have an active industrial program down there primarily because they can get money at 5 per cent and 5'A per cent. They are operating on super prime down there, below the prime rate, at a !4 per cent or a Vi per cent below the prime rate, while our people are paying 9 per ent and 9 Vi per cent. That is the major reason why we do not have investment going into our country. It is something that we have to deal with rather fast.
Triple A rated accounts in the U.S. can borrow money at 5 per cent. Why have their rates gone down? If you look at the amount of money that is deposited in savings accounts you see the reason. The same is happening here in Canada. We have an absolute record high of deposits in savings accounts in Canada. In other words the consumer is not spending his money, he is putting it in the bank because he has no confidence in the future. Consequently, banks have a large amount of money available to lend. The result in the U.S. was that they had to reduce the prime rate because money was not going out into the market place.
The other thing that has happened in the United States, and I am sure it is happening here as well, is that a lot of

the money is in the short-term money market. Some large borrowers in the U.S. found that they could operate on short-term notes and get better rates from doing that than they could from the banks. Finally the banks had to react to it, and this is why they have gone down to a much lower interest rate than they had previously. This will have to happen here.
Some comments were made about the Common Market and about whether we believe it is a good thing or not. It is silly to say that it is not a good thing. Certainly it is a good thing and we want a good connection with the Common Market. But what we are concerned about is that the Common Market nations want from us our iron ore, uranium, pulp, and oil. They are not talking about our manufactured products. We are looking at a deficit in manufactured products of $9 billion in trade. The minister is pround of his record. I say his record smells.


Some hon. Members:: Hear, hear!


William James Kempling: What I want to seen happen with the Common Market is for us to get our manufactured products going back and forth. There was a conference of the electronic industry in Brussels. Canada was only an observer at that conference, and yet we have an electronic industry here.
The task which the government has in front of it is to create an atmosphere in which business and the consumer have confidence. The consumer will take his money out of the bank and spend it only if he has confidence that inflation will be contained, that we can prosper, that we will not be looking at high interest rates and a high level of inflation. I talk to business people all the time and they tell me they are putting off their planned expansion because they do not know what the future will bring. I think that if we could put some taxation incentives in place they could be very meaningful in working along with the anti-inflation program.
I would like to see us say to industry, "You can earn a lower rate of taxation if you do certain things such as increase your productivity, stabilize your pricing, maintain or increase your employment, and stabilize your labour situation by having no strikes. Then you can earn so many points, which means you will pay less in taxation and you will have greater profits." But in order to do that we must modify the profit section of the anti-inflation legislation. We could say the same thing to labour, "If your industry is more productive, if you have no strikes and a stable labour situation, then you also can earn a taxation credit." They would respond to that. I think it should be considered very seriously.
In travelling around as I do I talk to business people all the time. I find that our attitude abroad is always to look for special deals. We want special protection for Canada's special status.


Mr. Deputy Speaker:: Order, please. May I suggest to the House that since the hon. member has only an extra two or three minutes perhaps we could allow him to complete his remarks, and start after the dinner recess with a new speaker.
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William James Kempling: We have to be a little more venturesome, but I do not follow the minister's reasoning when he talks about going into Third World countries, forming joint ventures and exporting back into Canada. That will do nothing for our unemployment problem. He says we will get a piece of the action that way, but I do not think that is the real solution. I become concerned when I read the OECD reports and the prospects they forecast for us. It just does not look very encouraging at all. I think this is the time we have to move. We have to be venturesome and aggressive, but in order to do that we must have some changes in our taxation, and some incentives to move people and to get business to become more aggressive.
I want to make one final remark. The minister made reference to his great efforts in South America. Let me point out that we have had a great deficit with South America as far back as one can go. We have never been in a surplus position or even at a break-even point with regard to any of our trade with South America. For the minister to stand up and cite South America is an insult to this House. He should really be ashamed of that effort.


Mr. Deputy Speaker:: Order, please. It being six o'clock I do now leave the chair until eight o'clock tonight.
At 6.04 p.m. the House took recess.


[Stage Direction]
AFTER RECESS

The House resumed at 8 p.m.
Andrew Hogan: Madam Speaker, the Minister of Industry, Trade and Commerce (Mr. Jamieson) acknowledged in a recent statement about his trip to Hong Kong and Indonesia that as well as the auto pact it is the so-called invisible exports that are an essential problem, and the amounts of capital we need and are going to need will mean large increases in interest payments abroad for the use of that money, as well as the dividends that will be returned to the United States and other countries as a result of the trade imbalance.
The following figures suggest the present seriousness of the situation and the threat that is possible if this trend is not reversed in the latter part of the seventies by improvements in our merchandise accounts and/or a devaluation of our monetary unit. In 1970, the combined outlay for interest and dividends amounted to $1,550 million. By 1974 it had gone to $2,296 million. From 1971 to 1974 the total outflow rose by over 35.1 per cent. This is a very serious situation and, as the minister noted, it could be extremely serious for our country in the future.
On the occasion of the debate this evening I want to raise the question of Canada's trade with the underdeveloped world. The most recent figures that I have seen suggest that we are trading only about 11 per cent of our total goods, as exports, with these countries. Further, I think it is obvious to everyone in the House that, while aid is necessary to these countries, we should have long ago, and must not wait any longer, proceeded to improve our trade relations with them both as to our exports and also to

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allow them more favourable access to our internal markets under preferential treatment in order to improve their own economy and eventually become future customers for many of our goods.
We seem to have here, as in so many other of our economic policies or thrusts, fallen in with the thinking of the Americans as regards our trading relationships with the underdeveloped world. This type of thinking was espoused by Secretary of State Kissinger in his message of the special United Nations session on economic development in September, 1975. Mr. Kissinger's message to the special United Nations session on economic development in September, 1975, was, in my opinion, a profoundly small "c" conservative ideological document.
First of all Mr. Kissinger advanced a standard and utterly unrealistic American theory about how the developing countries will break out of the cycle of poverty. He said:
We believe that economic development is in the first instance an internal process. Either societies create the conditions for saving and investment, for innovation and ingenuity, for enterprise and industry which ultimately lead to self-sustaining economic growth, or they do not.
Practically every word in that sentence is a free enterprise slogan-and I emphasize slogan. More important, Mr. Kissinger asserts a crucial United States premise: the developing countries will advance just as we and other capitalist powers did, because that is the only way.
Second, Mr. Kissinger posits harmony in the relationship between rich countries and poor, not conflict. He said that the advanced nations have an interest in the growth of markets and production in the developing world. In turn the developing countries have a stake in the markets, technological innovation, and capital investment of the industrialized countries. The world market, as it is now constituted, will facilitate economic development in the Third World, particularly if everyone stops criticizing that great instrument of progress, the multinational corporation.
In his United Nations speech Mr. Kissinger merely warmed over Ricardo's famous theory of "comparative advantage" which, as first stated in 1817, teaches that if every country specializes in what it does best, everyone will benefit. It is a good theory, if its assumption occasionally approximated the real world, for its givens are: competitive markets in the sense of price competition, an inability of capital to migrate, uniform international wage rates, and full employment. Although nothing like these conditions has obtained during the past century and a half, the theory has remained enormously popular because it helps to rationalize the wealth and power of the capitalist world.
Considering the institutional environment of Ricardo's day, and judged by Britain's priorities, Ricardo's theoretical and actual support for free trade seemed justified. In fact Britain used the free trade doctrine to its advantage during the peak of its power as a colonial empire in the latter half of the eighteenth century. Anybody who picks up the most recent edition of Professor Paul Samuelson's best selling Fundamental Economics, the text book that every beginning economic student becomes acquainted

with at college, will find the basic argument for free trade summarized as follows:
Unhampered trade promotes a mutually profitable international division of labour, greatly enhances the potential real national product of all countries, and makes possible higher standards of living all over the globe.
I want to digress for a few minutes on this matter of Canada's trade relations with the Third World in order to comment on the recent report of the Economic Council of Canada affirming its support for Canadian free trade. Needless to say it was following the long tradition of economic thought just summarized. Indeed the various regions of Canada which are geographically diverse are often cited as an example of a free trade area. We know that we, of the Atlantic region, have suffered in the past from this sort of thinking. Actually we have suffered in large part from tariff policies enacted as a part of national policy since 1879.
In making these comments on the Economic Council's affirmation of free trade as a policy option for Canada during the latter half of the 1970's I would not want to fall into the trap of advocating a blatant protectionist policy for major sectors or industries in the Canadian economy during what is obviously a changing international and global economic framework. No. To repeat, we well know in the Atlantic region that high, hidden subsidies, or tariff protection for central Canadian manufacturing, have meant, among other things, that we have had to pay, for generation upon generation, high prices for built-in inefficiencies, in other words for protective policies which have been of benefit to central Canada. The "infant" industry argument for protection has meant that many infants in Ontario and Quebec have never grown up.
In the present general agreements on trade and tariff I hope that the broad trust of Canada's position to the developed countries will be more favourable to the free exchange of goods and services; I do not think we should be in favour of protectionism. The business firms of this country should spend more time on initiating and promoting productivity and efficiency, and less time crying for protection.
Having said that, I believe that the Economic Council of Canada has pushed the free trade argument as a policy option for Canada during the latter half of the 1970's too far. Its modern extensions of Ricardo's 1817 model are based on facts which bear little resemblance to the existing international political and economic order. In addition to the assumptions previously noted, the free trade model requires small, powerless, and passive trading firms, unimpeded flows of labour between countries and within national boundaries, the free flow of capital, and nonmanaged flexible exchange rates. Only when these institutional conditions are met will the participants in international trade experience any improvement in their real standards of living.
I remind the House that today's world is made up of multinational corporations, trading blocs, tariffs and quotas, immigration and emigration restrictions, and control of capital flows. The realities of the Canadian industrial scene suggest that increased specialization would be important only in the manufacturing sector. It is obvious that our resource sector is already highly specialized and,
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as far as I can see, those segments of service industries involved in international trade are also highly specialized. The process of specialization would require a higher degree of concentration in the manufacturing sector, which is already highly concentrated. Thus the free trade proposal, paradoxical though it seems, would conflict with the thrust of the proposed competition policy which this parliament will debate in 1976.
We should also consider the serious implications for the Foreign Investment Review Agency-but let us not deal with that at this time.
The process of manufacturing specialization in a branch plant economy such as Canada's will encounter an even more severe problem in the form of United States antitrust laws since these laws apply to the subsidiaries of U.S. corporations operating in other countries, including our own. We are said to have a comparative advantage in high technology industries yet a cursory perusal of Canada's trade figures throws a great deal of doubt on that statement. These industries seem to be performing poorly in foreign markets, and are only just holding their own, if not slipping, in the domestic market.
We must also consider that a substantial decline in employment in the manufacturing sector, compensated by a sharp increase in the share of aggregate employment accounted for by the service sector, could result in a marked deterioration in the productivity potential of the economy. Indeed it is possible that the initial productivity bonus stemming from specialization as the free trade model predicts, could in reality be completely offset with a time lag involving a lower trend in growth and over-all productivity. The massive industrial restructuring which would be required to maximize the potential benefits of free trade could not, I believe, take place in as orderly a manner as seems to be assumed by the Economic Council of Canada. This could not happen, I submit, even if we consider a relatively long adjustment period. In my opinion the only way to debate seriously the option of free trade is in the realistic context that free trade should be introduced simultaneously by all developed countries. A unilateral move by Canada would be unthinkable.
I now r'eturn to the question of Canada and the developed world's trade with the underdeveloped world. This surely is one of the most important matters facing all countries of the world at this time, developed and underdeveloped.
Let us look at what has happened to Third World economies in recent times. The years 1970-73 were favourable to developing nations. High prices stimulated the export of primary commodities and earnings rose 25 per cent a year, while imports increased only 20 per cent. So both corporate and government income in these countries went up; but at the same time Third World incomes continued to fall behind those of the advanced world, as 60 per cent of developing countries failed to maintain their per capita rates of agricultural production.
Agricultural output declined, despite the "Green Revolution". New and greatly improved types of grain need more water, making these societies more dependent on the weather than ever. They also require more petroleum-based fertilizer, which rose in cost 13 per cent per year between 1967 and 1972. Meanwhile the advanced nations
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were furiously trying to increase their own food output, further squeezing the world fertilizer market. The OPEC oil price increases dealt the Third World's increasingly mechanized agriculture another cruel blow.
So even in good years Third World agricultural production did not prosper. But what about manufacture?
Here the figures show that there was hardly any change in the real relative position of the developing countries in the world market. In 1960 they had 6.7 per cent of the total world manufacturing output; in 1970 they were still at 6.7 per cent, and in 1973 they reached 6.8 per cent. Since then they have been disastrously hurt by the current recession-the New York Times recently put their combined payments deficit at $35 billion for 1975-and have already lost their 0.1 per cent increment.
But these figures, as bad as they are, make reality too pretty. The Third World's share of heavy manufactures is less than 5 per cent and is dominated by a few products- clothes, consumer electronics, shoes-and a few low-wage havens like Taiwan, South Korea, and Singapore. Moreover, even during those good years of 1971-1973 the rapid accumulation of reserves in the Third World did not offset their external debts. The former rose from $1.8 billion to $8.8 billion, the latter from $7.9 billion to $15.7 billion.
In sum, even under the best conditions there has been no relative improvement in the position of the Third World in the world agricultural or industrial markets. Those best of conditions seem to be now over for the foreseeable future; the pattern of absolute per capita decline will once again take over.
Why does reality thus violate the Ricardo-Kidsinger theory? My answer relies heavily upon the work of some Third World economists, most notably Sami Amin. The theory has been called "the development of under-development." It holds that current forms of economic growth in the poor nations serve to intensify the structural conditions of their backwardness and, under present world market conditions, the Kissinger strategy will only institutionalize, not abolish, the inferior Third World position within the global economy. That could be a catastrophe for all of the free world.
Let us take one country, as an example, Gabon. Its per capita product today is roughly that of France in 1900, but its position clearly is different. France then possessed a developed capitalist infrastructure in which growth generated more growth, and it was competing in a not fully developed world market. Gabon, on the other hand, is a developed underdeveloped country in which the "spread effects" of internal growth are systematically and structurally limited, and whose fate is determined by an international division of labour that puts it at a disadvantage.
Let us look at some of the details. In the developing countries there is a vast labour reserve, either in the rural areas or the shanty towns, while we tourists hide in the hotels or on the beaches so we are not seen. This mass unemployment grew up under conditions of "urbanization without industrialization", which means that wages are low. In Europe, during the transition to capitalism, the artisans who were dispossessed by the new technologies became workers; in the Third World they became the

March 1, 1976
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under-employed. As a result the developing countries now lack internal markets, even when they have enclaves of high technology and productivity. "In the colonial model, industrialization employs fewer workers than it ruins artisans," Amin notes. Consequently developing nations must have export economies, which lack the national integration and self-reinforcing tendency to growth characteristic of the advanced economies.
At the Pacific Science Conference this summer, Dr. Moises Behar gave a dramatic illustration of this point. In Guatemala, he reported, the Mayans had built a coherent civilization upon corn and beans supplemented by fruits, vegetables and meat from wild animals. They tilled patches on cleared forest land, and then moved on, allowing the forest to reconstitute itself. But when the Europeans came they cleared the ground to grow coffee and raise beef, thus destroying the old-self-sufficient economy. Kissinger and others would say a productive investment had been made, but it retarded the development of the entire society.
Today similar trends are reinforced by the movement of international capital which sends capital-intensive technology into the Third World, creating enclaves of modernity, disrupting the old order and opening the way, not to development, but to continued under-development and dependence on the advanced economies.


The Acting Speaker (Mrs. Morin):: Order, please. I am sorry to interrupt the hon. member, but the time allotted to him has expired.


Andrew Hogan: I will only be another two minutes.


The Acting Speaker (Mrs. Morin):: This can only be done with unanimous consent. Is it agreed?


Some hon. Members:: Agreed.


Andrew Hogan: Of course in the future the Third World will increase its manufacturing capacity. The multinationals are locating more of their plants in the developing nations. One can even expect to see those countries take over what used to be the advanced industrial functions of the west. But this is happening only because new industries-computers, electronics, and the like-are becoming the leaders in the rich countries.
One can be sure that if the poorer countries are given the job of producing, say, more steel, then steel is of declining importance and profitability; more, the production of steel in the Third World will be organized in such a way that it will not lead to integrated development. This is not the result of a conspiracy by plutocrats; it is built into the very structure of both the world market and the various nations which comprise it. How does Canada and the U.S. and the developed world propose to deal with this grim reality?
I have to cut my speech because of the time factor. I want to stress that academic as this may sound in these hallowed halls, what is being discussed tonight is of extreme importance to generations of Canadians now growing up. We think we can live in a world where three quarters of the people control a small part of the resources. We think we can build a little wall around ourselves, the rich people, and say they are not going to get at us. We also have members opposite telling us not to worry about the sale of nuclear reactors, plutonium, and so on. They will

need to have another thought with regard to the next generation.
The Minister of Industry, Trade and Commerce made a three-day visit in order to drum up trade in Hong Kong and Indonesia. If my geography is correct, there is a country called Viet Nam between these two places. It is badly in need of rebuilding. They require building materials of all sorts. During that trip, why did the minister and his trade officials not deal officially with the Vietnamese to open initial talks on prospective trade that would mutually benefit both countries? It is ironic that the Japanese are doing so much trade with the Vietnamese and yet our leaders did not even take time to discuss possible trade with them.


Mr. Marcel Roy (Parliamentary Secretary to Minister of Industry, Trade and Commerce):: Madam Speaker, I am happy to take part in his debate on the motion of the hon. member for York-Simcoe (Mr. Stevens).
But after listening to the distinguished members who spoke before me, I would like to make a comparison between a centralized economy and a decentralized economy. In a centralized economy, the state is the sole decisionmaking centre. It tells businesses what to produce and how to produce it. It sets the time required to meet objectives and determines the structure and also the margin of wages. The planified economy co-ordination mechanisms are achieved through a "public plan" which replaces the market. The consumer does not dictate production; businesses produce according to the public plan, not according to the demand.
I think that in Canada we believe in private enterprise. We believe mostly in a decentralize economy. The economy is regulated by the market and not by a central authority according to an objective or a plan.
The administration of resources in Canada is largely determined by market forces. But after listening this afternoon to hon. members of the opposition, the minister said that they seemed to hold diametrically opposed views. I could easily have believed this when seeing the hon. member for York-Simcoe, during the recent convention, join the group which is completely opposed to the principle and the philosophy that he has always advocated in the House, and join the leader of the official opposition (Mr. Clark) rather than Mr. Wagner. As the Minister of Energy, Mines and Resources (Mr. Gillespie) said this afternoon, they are truly divided, they are diametrically opposed. For my part, however, Madam Speaker, I believe that the hon. member for Qu'Appelle-Moose Mountain and the hon. member for York-Simcoe do not hold diametrically opposed views, but are unaware of the same things concerning the same subject.
Because they are unaware of the same things, their opinions did not have the same objective.
It is very difficult for the Canadian government to fix its priorities while meeting the numerous demands it receives. As soon as someone declares that the Latin American market is important and that the government should send there a trade mission as soon as possible, somebody else
March 1, 1976

who might even belong to the same party suggests that the Pacific countries are equally important and that it is as pressing to send a trade mission over there.
This reminds me of the comments which we have heard this afternoon about the Prime Minister's visit to Cuba. I am always slightly disappointed when I hear the opposition criticize our Prime Minister (Mr. Trudeau) for his visit to Cuba, a country which has started its own industrialization. That country needs the capital, the technical aid and the North American technology which are necessary to its development.
In consequence, I think Canadian businessmen will be the first to benefit from this visit if they really want to export and exploit a market open to them.
But I think there is more to it than the simple commercial aspect of the question. For if Canada is to really stand up to its reputation of a country free from any prejudice, and respectuous of the political systems of other countries, without necessarily subscribing to them, this was all the more reason to take the opportunity to do it, although it is something we intend to forget when we consider the benefits of this visit to Cuba.
I would like to continue in the light of the benefits that we reaped from visits or exchanges. The Minister of Industry, Trade and Commerce (Mr. Jamieson) is now leading a Canadian delegation of several Canadian businessmen who will visit five very important countries with export potential. They will be visiting the South-East Asian countries, precisely to go and study with them to determine what is the potential for Canadian businessmen, industrialists, to go and tap that potential. In fact, in 1974, Canada exported for about $194 million worth to those five countries which are Malasia, Indonesia, Singapore, Thailand and the Philippines. That amount of $194 million of goods and services within those countries represented only 1 per cent of their total imports. Furthermore, if one considers Canadian imports from those countries, they reached $140 million, or 1 per cent of our total imports. That is one of the reasons-very important in my opinion-for those business tours to exchange ideas and techniques between Canada and those countries.
I would like now to assure hon. members that the department acquired an excellent knowledge of the Canadian industry. It compiled information on each industrial sector. In fact, if we want to open foreign market we must first know the technical potential of Canada. With that basic information and continuing to steer the export market we draft our policy for setting up an industrial strategy in the Department of Industry, Trade and Commerce.
And I would like deal with to a few aspects of that industrial strategy policy in the area of footwear, for example, to follow up on the question asked this afternoon by a member of the opposition. With respect to footwear an industrial strategy was announced by the department on November 20, 1975, following the preparation of a report that was tabled in the House on December 21, 1973, and the government following a study of various markets took position. Here are a few examples: leather shoes were exempted from the general preferential tariff; on four occasions, the Department of National Revenue realized that shoes from certain countries were underpriced and
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consequently it applied the appropriate correctives precisely to protect the Canadian shoe industry. On three occasions, manufacturers benefited from tariff reductions with respect to materials not available in Canada.
Several cases are currently under consideration. I want to point out that if at first that sectorial strategy applies only to the footwear, leather and tannery industries the Department of Industry, Trade and Commerce is now considering the possibility of extending the benefits not only to the footwear industry but also the rubber footwear subsector. And that step followed the suspension on August 28, 1975, of the general preferential tariff on rubber footwear and the restauration of the 20 per cent tariff of the most favoured nation. That is in answer to a question asked by an hon. member this afternoon.
About the clothing industry I think the hon. member for Halton-Wentworth (Mr. Kempling) outlined this afternoon our policy about the clothing industry. We are aware that small and average businesses today must sustain an increasingly sophisticated competition at the international fashion level and we wish to encourage Canadian businessmen to transfer part of their production abroad and to invade further the American and European markets to take advantage of more propitious conditions. It is by introducing new original styles, by specializing in good quality products for which prices are less decisive that some Canadian manufacturers have succeeded not only in keeping their position on the local market, but in being accepted on foreign markets.
The Canadian industry works on smaller production series than its American counterpart and thus it can be more flexible and adjust more readily to the constant changes and whims of fashion. I feel that the clothing industry will experience considerable expansion in the next few years. Indeed the Department of Industry, Trade and Commerce has authorized rather substantial investments to enable Canadian manufacturers to break onto the European market.
Now, I wish to add a few words concerning the points raised by the hon. member for Roberbal (Mr. Gauthier) who voiced his concern about cheese quotas which will be eventually announced. I think necessary to say a few words on the background of those imports. On June 6, 1975, we accepted an overall quota for the importation of 50 million pounds of cheese for the 1975 season.
In the light of the present production, if we consider for instance the dairy production, there is a tremendous increase in butter production-about 21 per cent-which contributed to boost milk powder stocks. Consider the following standards: four pounds of butter represent the production of eight pounds of milk powder from a hundredweight of fluid milk. Yet we now have in stock enormous quantities of milk powder as industrial milk processors preferred to process industrial milk powder into butter and step up powder milk production. But on the other hand, there is a decrease in cheese outpout in Canada. The Cheddar cheese production in Canada has slipped by about 6.8 per cent.
The decision concerning the import quota is to be determined after we have consulted farm organizations and

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considered the present market in Canada and the objective of the department and the Agriculture Department which is to promote cheese consumption in Canada. We believe that importing massive quantities of cheese as we did last year prompted the chain stores to set up and organize cheese displays containing not only 25 or 30 but 100 different kinds of cheese.
We wish to assure dairy producers that the objective of this cheese importation policy will not be in competition with Cheddar cheese now being made in Canada. It will rather be the importation of European cheese from 140 different firms representing 200 kinds of cheese which are not necessarily made in Canada. And we want to give to dairy producers the assurance that no Cheddar cheese production increase will be registered this year. We will definitively protect this Canadian consumption market.
On the contrary, we wish to increase our export sales of Cheddar cheese to England, where we lost a market of 37 million pounds when they entered the European Economic Community. I would like to be specific in this regard. I wish to inform dairy producers that this program does not run counter to their objectives, but that we should rather work together towards a common end, namely to increase the cheese production in Canada with a larger variety and a quality that satisfies more the consumer's taste.
I wish to deal now with the matter raised by the hon. member about the import of broilers in Canada. I would refer the hon. member to the debate that took place on the notorious National Farm Products Marketing Council. If he had attended these debates a little longer, he would know how the mechanism or structure of a broiler production agency or council is set up. At present, two products, eggs and turkeys, are governed by a quota system and sold through a national marketing board.
When he speaks of import permits for broilers, no such permit has been issued and no legislation has been passed in this regard, because producers have refused to become members of the National Farm Products Marketing Council. Only two kinds of producers have agreed to it, that is turkey and egg producers. I would like to assure the hon. Member that no import permit for broilers was issued because producers themselves have refused to get involved in a nation-wide quota system. They preferred having regulations within the province and as a result no permit is required for imports.
If we were dealing with import of turkeys, I would like to answer that question. About 4 million pounds of turkey were imported, pursuant to section 11 to the GATT agreement which states that any country that limits its production must plan its quota. These 4 million pounds represent 2 per cent of the whole Canadian turkey production. That 2 per cent has been established after discussions we had when we created thf National Farm Products Marketing Council, more specially 120 per cent of the import average in the last five years. The 4 million pounds, that is 2 per cent of the present Canadian consumption, constitute 120 per cent of the import average between 1969 and 1974 inclusive.
In concluding, Madam Speaker, I would like to mention a few points of interest to hon. members concerning departmental efforts, particularly information we issue to better inform Canadian businessmen and manufacturers. I

have here samples of all pamphlets published by our department. We should try to keep businessmen and manufacturers better informed about our department's assistance, specially concerning initiative programs, productivity increase, financial assistance for industries which try to export their products, export development, promotion programs and management programs. I tried to promote those programs in my riding last year when I invited businessmen and manufacturers to discuss the possibilities of assistance from the Department of Industry, Trade and Commerce for Canadian businessmen who want to take advantage of opportunities that could open up in export trade.
I therefore call on all members to try and better inform our businessmen and manufacturers of the potential within the department in the form of information brochures of every kind. To conclude, I commend the hon. member for York-Simcoe (Mr. Stevens) for raising today this important question. I believe the statistics referred to by the Minister of Energy, Mines and Resources fully answered the question raised by the hon. member.
In my view, the challenge is much more in the nature of a long term one than a matter of a single day's discussion. Every year brings new challenges to our society, and governments must play a part in meeting them efficiently. In 1975, unemployment and inflation were the major economic problems in Canada as well as in a number of other countries around the world. And other problems of the same size will be faced during 1976. It must be recognized how complex and difficult those problems are. For example, in order to fight inflation, the federal government had had extensive consultations with many organizations. Today they are asking for very close cooperation from consumers, corporations, trade unions-


The Acting Speaker (Mrs. Morin):: Order, please, I regret to interrupt the hon. member. If he is about to close his remarks, perhaps the House would consent to allow him a few more minutes, but his time has now expired. Does the House permit the hon. member to continue his remarks?


Some hon. Members:: Agreed.


Mr. Lambert (Edmonton West):: How many pages have you left to read?


Marcel-Claude Roy: I thank you, and in conclusion I would once more raise this challenge, a long term one rather than the subject of a single day's interest.
Therefore, consumers, entrepreneurs, labour unions and governments at all levels are requested to cooperate very closely in the anti-inflation program. Programs and policy must be developed with care if both current economic problems are to be solved.
We are all aware of the importance of our export trade, which accounts for more than 25 per cent of the Canadian dollar. These discussions provide the opportunity to exchange views and ideas for the common goal, which is the continued expansion of our exports sales.
March 1, 1976


The Acting Speaker (Mrs. Morin):: The hon. member for Peel-Dufferin-Waterloo.


Henry Perrin Beatty: Madam Speaker, I can understand your difficulty. My constituency is Wellington-Grey-Dufferin-Waterloo. I can understand your difficulty because it took me three years here to be able to remember that myself.
I will be quite brief this evening, but at the outset I want to extend my congratulations and appreciation to the hon. member for York-Simcoe (Mr. Stevens) for moving what I think is a very important motion which allows this House to debate the whole question of Canadian productivity and our balance of trade problem.
It is not a problem which deeply concerns people back home in our constituencies or one that we hear a great deal about in meetings in legion halls and church basements. However, it is a matter which affects every Canadian, whatever his age or occupation, on a very direct and constant basis every day. It is a matter of vital importance, and it is one which the government now is beginning to recognize will affect our future very greatly. Just this afternoon on the front page of the Toronto Star there was an article under the headline "Jamieson Calls Talks on Trade", the first part of which reads as follows:
Trade Minister Donald Jamieson has called a meeting in Ottawa next month to discuss Canada's growing balance of payments deficit which he described as "one of the most acute problems" the country faces.
The meeting will be attended by "40 or 50 of the most experienced people in the capital formation field," Jamieson said in a CBC interview in Hong Kong over the week end.
Jamieson's remarks came as financiers were warning publicly that Canada's international credit rating is in danger.
This gives an illustration of the problem which the government recognizes, the problem that our economy is suffering from at the present time, and something desperately needs to be done.
We heard earlier this afternoon from the Minister of Energy, Mines and Resources (Mr. Gillespie) who, in his former incarnation, was the minister of industry, trade and commerce. He left for the present minister, who is currently out of the country, a great number of unsolved problems. They are problems which will be very serious indeed if the government continues to ignore them.
Many Canadians are aware of what problems are caused by poor productivity on the part of the country. There are three of them which stand out in particular. The first is that a high rate of inflation is often the result of a poor level of domestic productivity. Second, our international balance of trade is affected by our failure to increase our productivity. Third, as a consequence of that, ultimately we are faced with a problem of high unemployment. At the present time we are suffering from all three of these problems, and the indications are that particularly with respect to unemployment the problem may become much worse in the future.
What is the present situation? The following facts will illustrate some of the problems we face right now. First, at present Canada is suffering from a $5 billion balance of trade deficit. If we consider our trade deficit with respect
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to manufactured goods, the figure is twice that, some $10 billion, but it is offset by the fact that Canada is shipping vast quantities of raw materials abroad. While this does something to reduce our international trade deficit, it means that we export jobs to other countries which would be kept here in Canada if we were to process our raw materials here, as opposed to shipping them abroad and buying them back at higher prices in the manufactured form.
Second, Canada is suffering at present from an endangered credit rating. Over the next few years it will be extremely important that we borrow money abroad to finance new ventures which will be very necessary in the future.
Saturday's Toronto Star featured a large article which outlined some of the problems caused by the loss of confidence in Canada's credit rating at the present time. The Star interviewed a banker-economist named Hans Mast, who is based in Zurich, Switzerland. He explained his feelings about Canada's credit rating at the present time. What Mr. Mast had to say is as follows: "Canada is no longer on our list of favoured countries for long term investment."
If this problem continues to get worse, Canadians will be faced in the future with great difficulty in attracting capital from abroad which it will need for expansion. It is very important to us that we be able to get this money if we are to keep Canadians at work and stimulate growth in our economy. This is why it is extremely important that we keep our credit rating at a very high level.
Third, in 1975 Canada experienced a year of negative per capita growth in our gross national product. That is a very serious situation, and internationally we stand up very poorly against other nations.
Fourth, Canada's productivity increased by an average of just over 2 per cent per year in the years between 1968 and 1973.
Fifth, real growth for 1976 is projected by the Minister of Finance (Mr. Macdonald) to be a figure of only 2 per cent, if we are able to make that.
Sixth, the Economic Council of Canada projections which have been done show that Canada will continue to be near the bottom of the list of industrialized countries registering economic growth in the next few years. This is a very serious situation which the United States shares; this is going to mean that North American manufactured goods will be priced out of world markets, and the effects will be felt on the domestic market.
The seventh problem we are faced with at present is that the sort of growth which is taking place in our gross national product is largely due to the growth in our labour force. It is not due to increasing productivity. Dian Cohen, the excellent freelance economist who writes in the Toronto Star and a number of other newspapers across Canada, pointed out in a recent column that between 1950 and 1955 some 70 per cent of the gross national product growth came as a result of our being a more efficient nation, and our incomes rose accordingly. Seventy cents of every dollar in the growth of our gross national product occurred from 1950 to 1955. At the present time, however, there are great changes being made.

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Productivity and Trade
Between 1973 and 1975 the situation was very different. According to Ms. Cohen the situation is that at present increases in productivity have been falling and now contribute only 40 per cent to real gross national product growth. This is an extremely serious problem, and it is one which we must be concerned about over the next few years.
The obvious question, once we can recognize the importance of the problem and that something must be done, is: what is it that governments can do? Obviously the most important thing the federal government must do is begin to show some leadership in our economy.
I have been interested to follow the trend of government growth in Canada over the last few years. Over the past while the trend has been toward increasing government domination of our gross national product. At present about 40 per cent of our gross national product is controlled by government of one level or another, and over the New Year's break Canadians were treated to the spectale of the Prime Minister (Mr. Trudeau) condemning the free market system, saying that free entreprise has failed in Canada, arguing that the government had to get yet bigger, and saying that Canadians will just have to live with the consequences of that.
I say to the Prime Minister that the problems we are faced with today, the problems of high inflation and high unemployment, are not the fault of business or labour; they are the fault of the government. This government in particular has shown very little restraint in its activities, and I do not think it serves Canadians well when it seeks to pass the buck and to blame Canadians for the problems created by the government itself.
In recent years when we have faced problems of unemployment it has been the trend to expect the government to try to create new jobs at the government level. When this happens it fuels the growth of government, increases the bureaucracy, stifles individual initiative, and it means that the percentage of the gross national product taken by the government increases.
By its nature government is unproductive and extremely inefficient. If real growth is to take place it will not happen in the public sector but in the private sector. The whole trend of government policy must be to get people back to work but, more important, to get them back to work in the private sector in meaningful jobs at decent salaries, with opportunities for advancement. Instead the government has taken the pessimistic approach to the problems of the economy. Its policy is to discourage the growth of new jobs in the private sector.
In an attempt to stimulate productivity in the private sector the government could start by removing some of the disincentives. I can give three examples of this from my own constituency which illustrate in part some of the problems with government policies.
The hon. member who spoke before me mentioned the problem of the government's dairy policy. In my constituency, which I think is fairly typical of rural constituencies across Canada, a large number of dairy farmers in recent years invested amounts as high as $100,000 in some cases to expand their dairy herds and increase their pro-

duction of milk. This was done at the insistence of government which argued that Canadian producers must produce more. Incentives were given by federal and provincial governments to encourage producers and now those in my area, having acted in good faith and increased their debts, find that their subsidy cheques for industrial milk have been slashed. As well, the government is considering vastly increasing the amount of cheese imported from abroad. This will only exacerbate the surplus of milk and milk products in Canada today.
I have written and made representations to the Minister of Agriculture (Mr. Whelan) and the Minister of Industry, Trade and Commerce (Mr. Jamieson), and stressed my concern about the effect the government's actions are having upon the livelihood of many dairy producers. I understand the ministers are looking into the matter to determine whether the increase in imports can be curtailed.
I do not think that is good enough, however. If the government is to show good faith to dairy producers it has an obligation to cut back the quota of cheese allowed into this country. Our dairy farmers should have some assurance that it is worth while to continue investing and working, and this is one area where the government could act.
The rationale given by the hon. member who spoke before me, and by the Minister of Industry, Trade and Commerce, is that Canadians cannot produce a sufficient variety of specialty cheeses to meet Canadian needs. Madam Speaker, if we are ever to develop an indigenous Canadian cheese industry which is healthy and viable we must give our cheese producers the protection we give manufacturers in other sectors of the economy.
In my constituency at Elmira, Ontario, there is an outlet which sells mostly Canadian cheese, and I am amazed at the variety offered. If Canadian dairy farmers were given incentives to produce, and the Canadian cheese industry were given the opportunity to fill the need in the market, new jobs would be created, productivity increased, and the economy strengthened.
Another example of where the government attitude is a disincentive occurred in my constituency last fall. A constituted manufactures assembling kits for sale to domestic retailers and for export. Sales were so good and were increasing so fast that, having paid salaries and overhead, he had difficulty paying the federal sales tax at the beginning of each month. The area he comes from does not have a great deal of industry and the jobs, he provided were desperately needed. His accounts receivable ran 50 days and he was having difficulty making ends meet, especially having to pay the federal sales tax at the beginning of the month. He felt his highest priority was to pay his workers. He proposed to the government that he be allowed to pay the sales tax later in the month, offered a penalty for late payment, and a guarantee of payment before the month's end.
The government's response was startling. One day when he was absent officials from the Department of National Revenue arrived and insisted that his wife-who did not have authority to sign cheques on behalf of the business- sign a cheque immediately for the amount of the sales tax for that month. They threatened to seize his accounts
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receivable unless the sales tax were paid immediately. This manufacturer was keeping people off the unemployment insurance rolls, Madam Speaker. He was paying federal sales tax and generating wealth in this country which would benefit all Canadians. The government's attitude was not one of encouragement but rather to smother him with so much with red tape that he was threatened with the possibility of having to go out of business.
I am pleased to report that when the matter was brought to the attention of the Minister of National Revenue (Mr. Cullen) he was responsive. An arrangement has been worked out so that payment can be made at a later date. But it should not have been necessary for this man to come to his member of parliament. He should never have run into difficulty with the bureaucrats who just put impediment after impediment in his path.
The third area which affects my constituents, although the plant is not in my constituency, is the situation at the consumer appliances division of Westinghouse Canada. Westinghouse Canada is attempting to sell its operation to another company and there are two bids, one from White Consolidated Industries which is foreign controlled, and the other from G.S.W. Ltd. A number of my constituents work at the Orangeville plant which employs about 200 people and I know the hon. member for Hamilton West (Mr. Alexander) has raised the matter of the Hamilton plant and the jobs there. The workers at the Orangeville plant are not unionized and are very concerned about their future.
The sale of Westinghouse Canada to White Consolidated Industries was blocked by the Foreign Investment Review Agency and I am not quarrelling with that. What bothers me is that the decision on whether the sale goes through has been delayed so long by the government. We expected a decision last week, but now the Minister of Industry, Trade and Commerce is away on a two-week trip to the Far East so the workers still have no assurance about their future. The effect on their morale is bad; they are concerned about their jobs, and they have a right to be concerned. For this reason I recently wrote to the minister expressing concern and saying that an early answer to this problem must be found. The paramount concern must be the protection of jobs of Canadian workers, and guarantees must be given. I know that GSW Ltd. has offered guarantees in its Hamilton and Orangeville plants, but I am not aware of guarantees given by White Consolidated Industries. That is of concern.


The Acting Speaker (Mrs. Morin):: Order, please. I regret to interrupt to hon. member, whose time has expired.


Some hon. Members:: Carry on.


The Acting Speaker (Mrs. Morin):: Does the House agree unanimously?


Some hon. Members:: Agreed.


An hon. Member:: For not more than one hour.
Productivity and Trade


Henry Perrin Beatty: Madam Speaker, my colleague says that I should speak for not more than one hour. I hope to be a good deal shorter than that.
I am concerned about the sale of Westinghouse Canada. At present the consumer appliance industry in Canada is divided into six roughly equal parts. The company which gains control of Westinghouse Canada will have dominance in the Canadian market, or will dominate the consumer appliance market. This is a matter for concern. The government's previous approach to an industrial strategy for Canada has been to take the sector by sector approach. It favoured control being exercised by a Canadian corporation in each sector. The Minister of Industry, Trade and Commerce should look closely at this matter. Of vital importance is the question of the productivity of Canadians, and decisions which could affect our ability to compete abroad. I am not saying that the minister should decide one way or another in this regard. I merely say that one criterion governing his actions should be the protection of jobs of affected workers and the need for Canadian dominance in this important sector.
As members of this House know, the government spends large amounts on big corporations. The hon. member for York-Simcoe mentioned the Export Development Corporation, which makes available hundreds of millions of dollars to large industries. I am concerned about the small businessman. We have paid too little attention to our small businessmen and farmers. They are the most productive. The wolf is never far from their door, and they must be productive in order to make ends meet. The government should pay some attention to this area, instead of making money available merely to big business. Compared to the big businessman, the small businessman is smothered in red tape, swamped by high taxes and must compete with the Unemployment Insurance Commission, which is in a dreadful mess.
Unlike the Prime Minister I am a strong advocate of the free market system. It is time to lift the burden from the back of the small businessman. It is time big business carried a share of the load. The government's priorities have been exactly the reverse. If the free market system is dead in Canada, as the Prime Minister suggests, it is dead largely because of government intervention, which protects large businesses but does little for small businesses.
The government should adjust the tax system to provide incentives for productivity. Under the present wage and price program workers may win up to 2 per cent for productivity increases. Many economists feel this figure is too low and that stronger emphasis should be given to encouraging increased worker productivity. I agree. The government should act in this area. I therefore hope the government will re-assess part of its controls program and allow greater incentives for productivity. For example, why not change the tax structure in such a way as to encourage workers to invest in their company? I find that concept exciting. It would give a worker a stake in his job, be an incentive to greater productivity, and give him some measure of security for the future. If our system needs improving the government should encourage incentives for industry, and encourage workers to invest in their firms.
Present day conditions are critical. If the government takes strong action to restore the health of the economy we

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Productivity and Trade
can prosper in Canada. If it does not, I predict greater inflation, spiralling unemployment, and a continuing decline in our balance of payments. This is not the time to mortgage our future.
The time has come for the administration to show leadership. The Canadian people are asking for it and the economy needs it. It remains to be seen if the government will supply it.


Robert Hylton Brisco: Madam Speaker, I confess to being relieved at being recognized. Earlier the minister referred to absentee members on my side. Our Whip said that some members are in committee, others in their offices, and still others preparing for committee meetings tonight. The minister seemed to imply that committee meetings this evening had no bearing on today's debate. I assume that members on the government side attend only one committee at a time, whereas members on my side serve on three or four.


Some hon. Members:: Hear, hear!


Robert Hylton Brisco: As the minister pointed the finger at us and charged us with absenteeism may I point out, for the record, that the attendance record of British Columbia members on both sides is good. But we are severely affected by weather conditions. Indeed I had some difficulty coming here today. I notice that the hon. member for Coast Chilcotin (Mr. Pearsall) is absent, as is the hon. member for Comox-Alberni (Mr. Anderson), no doubt because of inclement weather. Having set the record straight on attendance in this House, I shall proceed with the subject to be debated.
I am not an economist and cannot speak with the skill of an economist. All the same to my way of thinking, the motion, especially the second half, is of great importance. It speaks of the government's failure to provide meaningful incentives to increase productivity and thereby strengthen the competitive export position of Canada's finished and manufactured products. I agree.
Our economic endeavours often involve various ministries of the government. For instance, anyone who wants to establish a mine in the north, in the Arctic, must seek the co-operation of the Minister of Finance (Mr. Macdonald), the Minister of the Environment (Mr. Marchand), the Minister of National Revenue (Mr. Cullen), the Minister of Transport (Mr. Lang), the Minister of Energy, Mines and Resources (Mr. Gillespie), the minister responsible for industrial development, and the minister responsible for DREE. Is it any wonder that we have difficulty establishing industry, whether primary or secondary, whether raw materials to be shipped to Canada or from Canada, and whether it is raw materials to be refined or processed here or elsewhere? Is it any wonder we have difficulty getting the show on the road with the very complex bureaucracy the government has established and put in the way of the entrepreneurs?
I wish to give one specific example. How well I remember an address made by the government House leader in the Senate, in Trail in my constituency. He said to the gathered throng, "Give me one example of a Conservative

government's efforts toward development that has done anything for this riding. Give me one." Being somewhat of a knowledgeable fellow in that regard, I put up my hand. The government House leader in the Senate did not wish to recognize my interest. He ignored my attempt to be recognized.
That one example is worth mentioning because on it hinges a great deal of the development in this country. That was a program introduced by the last Conservative Prime Minister of Canada, the program Roads to Resources. A classic example of that is the Pine Point development. The government has been very concerned about the Pine Point development. It has felt all along that it has been a rip-off. It never even bothered to equate the cost of that project with the taxes that have been generated in the work force or with the dollars that have flowed into the treasury as a result of the raw materials. It did not even realize that the ore from Pine Point eventually ends up in the smelter in Trail. It has not bothered to look at a map.
That is an example of ignorance. It is not lack of attention, but pure and simple ignorance. Is it any wonder that any entrepreneur has difficulty establishing an industry or business in this nation? Obviously government ministers don't even know where Pine Point is. They would not even know there is a railway there except they thought it cost this nation a hell of a lot of money. They have not thought about how that money has been returned a hundredfold. They have not figured out that it has provided thousands of jobs. There problems that members of the government are faced with have been introduced by themselves because of the weakness in their own system.
Let us get into another area with reference to productivity in our foreign trade that is of concern. It has been proposed time and again, and we have seen some form of response from the government, although nothing very concrete, that tax incentives be provided so that Canadians can invest in their own industries with a reasonable return.
The sad fact is that there are many cases where it is of greater advantage to Canadians to invest in the United States and in its products and stocks than in our own Canadian firms. What a shame! What a sad reflection on the industry and the incentive of Canadians that the government is so insensitive to that particular need. How much this country could move ahead if the government simply recognized the need, and in fact the desire of Canadians to invest in their own country! That very desire is stifled and denied by the government. Then again, what else is new?
Look at the problems we have with inflation. Look what inflation has done to the costs of production. Look what it has done to the costs of labour. The government says it is the fault of labour and management. The government does not say whose fault it really is with any truthfulness. It knows where the fault lies. It proved that to Canadians when it did its flip-flop of a few weeks ago.


Some hon. Members:: Hear, hear!


Robert Hylton Brisco: This lack of action on the part of the government has driven up the costs of production. How does the government think the public feels when they can go across
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the line to the United States and buy Canadian made products for less than they can buy them in their own backyard?
There is one avenue that has not been examined. I mentioned the fact that there was a lack of co-ordination within various departments of government. One is the DREE program. I would like to ask how often does the Minister of Industry, Trade and Commerce consult with his counterpart cabinet minister, the minister responsible for the program called DREE? How often does he see him?


Steve Eugene Paproski: He hasn't been in the House for three weeks.


Robert Hylton Brisco: Of course the minister responsible for DREE has not been in the House for the past three weeks.


Some hon. Members:: Oh, oh!


Jack Sydney George (Bud) Cullen: Where did Joe go?


Robert Hylton Brisco: I want the Minister of National Revenue (Mr. Cullen) to know that God is watching.


Mr. MacFarlane:: When did you arrive-ten o'clock?


Robert Hylton Brisco: What a band of restless natives.


Some hon. Members:: Hear, hear!


Robert Hylton Brisco: To continue with what I have to say, at least on this side of the House it is worthy of some merit even if the hon. member for Hamilton Mountain (Mr. MacFarlane) has not recognized that fact. It takes him a while. He is a slow learner.
To continue, let me give one example of government co-operation. It is an example of how the Department of Industry, Trade and Commerce works with DREE. There is a firm called Swan Valley Foods located in Creston. They developed a very innovative, challenging new system of processing certain foods, particularly potatoes and other vegetables. I had the opportunity of taking one of their senior officials to the Department of Industry, Trade and Commerce to open up new avenues and roads of marketing their products overseas. I wonder whether the Department of Regional Economic Expansion would have suggested to this gentleman, this firm, or any other firm that they sponsor and assist with our tax dollars, to contact the Department of Industry, Trade and Commerce.
Just this week we received a release from the Department of Regional Economic Expansion. It makes reference to the fact that they have assisted 13 firms in Quebec. One firm manufactures fibre glass awnings and other metal products. Two firms manufacture kitchen and bathroom cupboards. Another manufactures door frames, and another ultra-fine knitted fabrics. Does anyone in the Department of Industry, Trade and Commerce know about these firms? If they do, quite frankly I would be very surprised.
I must say, however, that I was very pleased with the response we received in the office of the Minister of Industry, Trade and Commerce. His deputy was most cordial and helpful, but we had to seek him out. Surely the government does not think that every small entrepreneur has the
Productivity and Trade
imagination or perhaps knowledge of the government structure to know where to go in order to best market his products.
There is another firm in Kootenay West that manufactures a product for overseas markets. What has happened to this firm? It is now in a position to expand. It is in a position to produce a new product which is in heavy demand on the overseas market. What does DREE do? It shuts off the incentive grants for that riding. It cancelled the application by that firm which went in three months before the December 31 deadline. They had every opportunity to employ people, provide jobs, create tax dollars and bring money into this country, but what did DREE do? DREE preferred to cut them off at the pass.
I wish to read into the record the sad commentary of the Department of Regional Economic Expansion and the fact that that department has nothing to do with the Department of Industry, Trade and Commerce. It is about time the two got together. This concerned constituent, this concerned entrepreneur has written as follows:
As I mentioned to you, the expiry of DREE designation for this region has been a serious blow to my company as well as to the area. I know you will find the following information to be of interest and I hope you can encourage the proper authorities to give the situation the consideration it deserves.
Right on! What is my responsibility, or the responsibility of any member of this House? It is to write to the minister in charge and plead the case. This I did six weeks ago. Mr. Speaker, I have not even received a reply in the form of a cursory letter acknowledging receipt of mine. That is an example of the co-operation we get from across the way.


Some hon. Members:: Shame!


Robert Hylton Brisco: The gentleman goes on to say:
We have developed, at a direct cost in the order of $140,000, a utility-size gasoline-powered chain saw. Our hope to obtain DREE help to commit it to production was delayed by financial problems. Toward the end of 1975, as a result of corporate reorganization and a general improvement in the chain saw market, we were able to plan a means to produce the saw here, but this would clearly be conditional on a DREE grant of an appropriate amount.
In discussion with DREE officials it was realized that our application would be "tight" in terms of processing time, but optimism was expressed that it could be completed, and if not, that its status might continue as being "in process".
We learned this week that our application expired with the end of the region's designation.
I must observe that on the basis of the previously mentioned optimism we invested $4,875 in the cost of preparing our application and $12,700 in related capital studies costs. I am not suggesting we were misled; indeed, we expect our DREE contacts are as disappointed as we. However, those sums are obviously serious expenditures for a small company and they weren't committed lightly.
The letter continues:
Early in 1975, at the height of our financial problem, we had to investigate the sale of our new product design. It was evident that it could likely be purchased for manufacture in Europe. With this new turn of events, if foreseeably we cannot find other means to finance it here, and we have certainly tried, we may need to recover our money by that route.
Let me underline one of the phrases in that last paragraph-"it was evident that it could likely be purchased for manufacture in Europe." In this new turn of events it

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Productivity and Trade
was foreseeable, if they could not find other means to finance developments here, that they might have to recover their money in that way. In other words, the company would be forced to move to Europe to manufacture a product which could and should be manufactured right here.
What were the benefits to Canada, present and to come, which might be anticipated? The communication which I received goes on as follows:
Jobs
53 to start, rising to 93 in three years. These would be unskilled people, trained in Quadra, mostly under 25 years, and drawn from area unemployed.
Wages in the area $4 million over three years.
Exports (excluding the imported content)
$11 million over three years.
Sales
$14 million over three years.
"Lost" expenditure on goods, services in Canada $13 million.
This gentlemen goes on to say:
We were created by DREE and have qualified for two DREE grants totalling $256,000 of which $148,000 has been received to date. Consider what Canada has gained from this investment in 39 months of our operation:
Jobs
120 presently employed.
Payroll
$4 million, of which about $980,000 was remitted to the Receiver General.
Exports (excluding the imported content)
More than $10 million.
Domestic purchases More than $14 million.
Pay attention, you Liberals on the other side who are not listening:	this is what the government's investment
through DREE produced in 39 months of operation.
Those concerned may be interested to know as well that Quadra is 45 per cent owned, with shared control, by 222 local people-businessmen, professional people, clerks, secretaries and so on. These are people within my own community, within my own riding, who had the fortitude and, in many cases, the few pension bucks to pay out of their own pockets in order to start a new industry with the assistance of the DREE program. But there is a problem. DREE and the Minister of Industry, Trade and Commerce had not been working together.
I would venture to say that if the Minister of Industry, Trade and Commerce had an opportunity to read what I have said tonight he would say to the minister responsible for economic development, "Don't you think it makes good common sense to fund that industry and generate more jobs and more dollars for Canada?"


Mr. Deputy Speaker:: Order. I regret to interrupt the hon. member but the time allotted to him has expired.


Some hon. Members:: Carry on!


Mr. Deputy Speaker:: Does the House give consent to the hon. member who has the floor to continue?


Some hon. Members:: Agreed.


Marc Lalonde: We want more!


Robert Hylton Brisco: Thank you, Mr. Speaker. I thank the minister. I wish to continue to read from the letter I have been quoting.
My shareholders are very proud of the fact that not only have they generated a successful industrial development here, but it is also an example of what Canada so vitally needs-the manufacture of an export product in an area which is otherwise totally dependent on resource industries.
Herein lies one of the cardinal problems confronting the operation of any DREE program. If hon. members will look at the news release put out by the Minister of Regional Economic Expansion (Mr. Lessard) they will find that the province of Quebec and the Maritime provinces are frequently recipients of DREE grants earmarked and geared toward the development of secondary industry, manufacturing items for export and so on. But what has happened in British Columbia? What has happened in Kootenay West and the area designated under the DREE program? Development there has simply been shut down by a government which is apparently not interested, if the minister is any example, bearing in mind that I am still waiting for an initial response to my letter of six weeks ago. The government has no feelings of sensitivity toward the needs of these people and the economy of the depressed areas of British Columbia.
On the basis of the above remarks my constituent who writes about this says:
Of course X must plead the case of my shareholders, but as a businessman I must also observe that the federal government seeded, and has been amply repaid for its seeding of the area. It has taken a lot of local time, effort and money to generate an atmosphere for development. What a shame it will be to turn the clock back.
I must conclude by saying that the industrial secondary industry clock in Kootenay West has been turned back by the government.


Mr. Peter Stollery (Spadirta):: Mr. Speaker, this area of world trade is an area in which I do not maintain that I have any particular expertise, but as one coming from metropolitan Toronto and as one who was brought up in the metropolitan Toronto area, I often reflect on the days during my boyhood in Toronto when there were about three major manufacturing industries there. As I recall those industries they were Massey-Harris, John Inglish, and possibly the Canada Wire and Cable Company although I cannot remember whether that started off as a wartime industry.
I recall so well that when any one of those two, three of four industries was on strike one always knew that somebody's father was on strike. We always knew the people involved, because in effect in the wartime period there were so few factories and industries in metropolitan Toronto that when any one of them was on strike the entire community was affected. What I believe must be impressed on one is the tremendous change that has occurred over the past 25 or 30 years. Then one could drive from Oshawa around to Niagara Falls and see three or four manufacturing operations, whereas today one can drive past hundreds and hundreds of large and small plants and
March 1, 1976

warehouses as well as the other various aspects of a highly productive region of Canada.
I think it is worth pointing out to members of the House the tremendous change that has taken place in such a relatively short period of time. In my memory, which certainly does not go back too far, I recall when Canada was nothing but an exporter of primary products, as well as of some tractors and a few other relatively minor manufactured goods. The change that has taken place over that 25 or 30 year period is, I believe, a tremendous achievement in the area from which I come.
I think those of us who come from Metro when we talk about the establishment of new industries are somewhat less enthusiastic about it than we are about the establishment of industries in other parts of Canada where jobs are crucial because of the tremendously high unemployment. Those of us from the metropolitan Toronto area are certainly less interested in 1976 than we would have been in 1947. I find it difficult to understand that the government's policies-and of course this goes back to the postwar area-have been so bad when we can have a member from British Columbia complaining about the problems of entrepreneurs in British Columbia, especially when we consider that the concept of entrepreneurs in his area 30 years ago would have been quite unusual.
If we talk about trade I do not see how we can exclude ourselves from the rest of the industrialised world. I think we would be remiss in forgetting that since 1970 the world has been in a state of economic chaos. We should remember that the energy component of every manufactured item and every item that affects our lives has increased eight times since 1970.
A barrel of Arabian light crude, which I think is what is used in the oil business as the base price, in 1970 was priced at something in the area of $1.50 a barrel, while today it is $11.50 a barrel. I should like to point out to members that the cost of producing that barrel of oil is 17 cents, while the cost to have it piped into a tanker in the Arabian Gulf, or wherever most of it comes from, I believe is 27 cents. I do not understand how one can talk about international trade and the terrific disruptions which have occurred in international trade without taking this crucial fact into consideration.
It is clear that this eight-fold increase brought about by mostly non-industrialised countries is the most significant factor since the industrial revolution began in 1770. This is the first time the industrialised countries in fact have not had the power to force their views on a non-industrialised part of the world. This surely has affected Canadian trade patterns in respect of manufactured goods, as it has affected the trade patterns of our trading partners.
I should like to point out to hon. members that when the Prime Minister (Mr. Trudeau) made his important trip to Mexico, Cuba, and Venezuela, a lot of attention was given by members opposite to his stop in Cuba. I have not heard a great deal about the visit he made to Venezuela. I think it is important that we have the facts straight. The fact is that 7 per cent of all Venezuelan exports comes to Canada and involves mainly oil. The amount of our exports going to Venezuela is so small that it could hardly be measured on a scale.
The Prime Minister went to Venezuela to assist in that situation, but members opposite are far more interested in making rather ludicrous comments about his stop in Cuba
Productivity and Trade
because, to them, that sounds better. They really are not interested in the attempt of the Prime Minister to encourage Canadian industry and Canadian trade with countries like Venezuela with which traditionnally we have not done too much export manufacturing business. I know that hon. members opposite are far more interested in the fact that he stopped in Havana, but they have no interest in the real value of the visit which took place when the Prime Minister continued on to Venezuela.
I should like to point out that we have had this disruption in trade since 1970, and it has been a world-wide phenomenon. I think it is worth pointing out some of the possibilities that some hon. members opposite may be promoting. One of them is that possibly we should cut back on Canadian tourists going abroad; that would have a significant effect on our balance of payments and our trade picture.
For the information of hon. members, Canadians have a wealthy society. I think it could be said that we have the wealthiest society in the world, if tourism is any indication. Canada is the largest tourist market in the world. Canadians spend more money abroad than any other people on earth, which is an indication that Canadians have money to spend and that they have jobs. Many of those jobs are in the manufacturing sector, about which hon. members opposite seem to be so concerned. I do not think it would be a positive step to start restricting the money which Canadians spend abroad. It is good for Canadians to get around, learn things, and benefit from all the other side effects which are associated with the fact that they have become such great world travellers over the past 15 or 20 years.
I should like also to point out that I have never pretended to be an expert on world trade, but I think the credit we extended to the Soviet Union last year was a positive step in selling Canadian goods. The credit to Indonesia which was announced yesterday by the Minister of Industry, Trade and Commerce (Mr. Jamieson) was a positive step toward selling Canadian goods. I do not have the list in front of me of countries to which we have extended credit, but I know that it is a substantial one. It is also worth pointing out the contractual link with the European Economic Community. The fact is that we have taken this kind of step to break away from our close arrangement with the United States and our dependency on one market. To try to extend that market into the European community is a good move. I think it is a positive step which is being taken by the Government of Canada.
As one who drives around to factories and manufacturing areas I cannot help but be impressed, not by the low productivity and the small amount of emphasis which has been put on the export of manufactured goods, but on the contrary, by the fact that on balance our productivity is good. We have made terrific efforts-and they have been successful efforts, as the last 20 years show-to sell our manufactured goods overseas.


Frank Fletcher Hamilton: Mr. Speaker, the two main points in the motion before us tonight which was moved by the hon. member for York-Simcoe (Mr. Stevens) are the alarming trade figures and

March 1, 1976
Productivity and Trade
declining productivity. I suspect that the GNP figures to be released on Wednesday will show the worst performance for the Canadian economy in the past 20 years.
The hon. member for Kootenay West (Mr. Brisco) had some interesting things to say about DREE, and I suggest as a start that the government should scrap some of the political gimmickery of regional grants and subsidies and substitute some tax incentives and some new banking controls if it hopes to overcome regional economic disparity. We need tax incentives for investors as an alternative to some of these ad hoc grants, because incentives can vary between industries and regions of this country. An alternative to tax incentives might be for the federal government to vary its reserve deposit requirements of chartered banks according to the type of investments they make. We could use the tax system to help further our agricultural industry by allowing agricultural producers to build up a tax free kitty when years are good and draw it out when years are bad. This would create much needed savings in this country for the investment Canada must have.
Canada's image abroad is that of a country living beyond its means. For example, we are seen paying our workers in some industries more than their American counterparts, even though our productivity is lower. We are borrowing huge amounts to pay our trade bills to foreigners. We have embraced a financial way of life which is endangering Canada's high credit standing in the world's money centres. It is almost impossible now to interest foreign investors in most Canadian stocks.
In dealing with Canada the manager of the international division of Shell International Petroleum Company said the following:
I have observed some things going on over there that are very reminiscent of what was happening in Britain a few years ago, and it makes me worry.
Some of his concerns are high inflation and the general intrusion of government into business policy making. Our Prime Minister (Mr. Trudeau) says he wants more government, not less, and now we have the complicated prices and incomes controls before us.
From New York we hear that Canada is on the threshold of finding it more difficult to borrow there. The effect of a thumbs down attitude toward Canadian borrowers could be dramatic, because if the foreign money well goes dry Canadian corporations and government will be stampeding for the pool of capital available in Canada, and ordinary Canadians will suffer as a result. There is no question that interest rates on house mortgages and car loans would climb even higher than they are today. Tax bills of all kinds would go up. Needed spending for new hydro projects, roads, hospitals and schools would have to be cut back.
Canada's earnings from exports of goods and services lagged far behind the cost of imports in 1975, to the tune of probably more than $5 billion. Our country's big foreign borrowings enabled it virtually to balance its international books. Nevertheless, Canada's recent borrowing success could be misleading. It was based on good will and a high credit rating built up in earlier years. We have had the benefit of the doubt, but our friends are becoming increasingly concerned. They recall that for a generation in Britain successive governments wrestled with the economic

problems created by perpetual foreign trade deficits which inevitably produced heavy reliance on borrowing outside the country.
To encourage the massive inflow of-


Mr. Deputy Speaker:: It is with regret that I now must interrupt the hon. member, but it is my duty to inform the House that, it being ten o'clock, pursuant to Standing Order 58 (11) proceedings on the motion have now expired.



PROCEEDINGS ON ADJOURNMENT MOTION

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

Donald W. Munro: Mr. Speaker, on Friday last as recorded at page 11271 of Hansard the Minister of Transport (Mr. Lang) replied to a question I put relating to increases in the charges levied against flying clubs for the use of airports. I was not satisfied with the reply for reasons which I shall outline; hence my appearance on the late show this evening. I am glad to see that the parliamentary secretary to the minister is here to provide some answers to the questions I shall be raising.
My calculations are based on figures supplied to me by the Victoria Flying Club in my riding. They show increases in hourly rates of 533 per cent, that is, from 30 cents per hour to $1.90 per hour for flying training. By any ordinary calculation that is certainly over 500 per cent, yet the minister claimed:
... the fee increase over all, if one does not isolate one particular aspect, represents an increase in the order of 5 per cent.
I find that not only difficult to accept, Mr. Speaker, I cannnot accept it. How does the minister calculate an increase of 5 per cent when he has in front of him all the figures from 30 cents per hour to $1.90 per hour for flying? What does the minister mean by "the fee increase over all?" The fee charged on commercial usage? Fees charged for car rental stands? Parking fees charged at airports, and the new fees for flying training clubs? Are they all jumbled together? Does this all amount to 5 per cent? I doubt if you added them all together and put them on the basis of past charges that you would get 5 per cent. You would get something nearer 95 per cent. I should like to know where the 5 per cent comes from, and that is my first question.
Let me produce some figures-admittedly from one particular aspect of the trade, the flying training aspect which
March 1, 1976

is an important area in Canada. It is the area our flying clubs use to produce much needed pilots for our commercial flying industry. It is an important industry and it is being charged out of existence.
In the Victoria flying training club alone the new charges, using the 1975 figures for flying hours, will add $17,600 to the fees charged last year. This represents one replacement aircraft, a Cessna 150, a light training aircraft. From where does this come? It comes from the increase from 30 cents per hour to $1.90 per hour, on the basis of something in the order of 13,000 hours being flown for training in that particular aircraft. On the basis of a $1,000 fee for the first licence, obtained for 70-odd flying hours, this might be between 7 per cent and 8 per cent if you work it out. Is this what the minister had in mind when he talked about 5 per cent?
The Victoria Flying Club is only one of the 39 clubs that are members of the Royal Canadian Flying Clubs Association. That association alone records some 200,000 flying training hours flown by pilots each year. I ask the minister: if this is where they are going to get their revenue who is to pay these extra charges? This is not the first time that the Department of Transport has increased charges for pilot training. In the late 1960's the pilot training subsidy of $100 per pilot was dropped. It represented something in the order of a 15 per cent to 20 per cent increase in fees. Now the pilot is being asked to assume another load. Over the last 18 or 20 years pilots have been asked to assume an increasing burden, and the clubs even more.
I wonder whether the parliamentary secretary can assure this House that the director of flying safety was consulted in the development of the new fee schedule. I have a feeling he was not, Mr. Speaker, and indeed I have some reason to believe he was not.
How were these levels determined if, as is assumed, they were expected to be calculated on a user-pay basis? Is the pilot in training wearing out the runway 533 per cent more now than last year? How were these charges arrived at when it is known that two more phases of charges are arriving? Why does the Department of Transport not bring out the whole package and discuss it with the flying training clubs that are performing a great service to this country? They are providing the pilots we need for our commercial systems.
Why does the government not publish charges to be levied under phases I, II and III, so that clubs will know what they face? Of course they will operate with outdated equipment for which they will pay. What about maintaining the currency of licences? This will be an added charge for the man who has a licence and must keep it up to date. What charges will the new phases I, II and III involve? Will these charges apply to visual flight rules? Will they apply to visual flight rule approaches, or only to guided approaches? Why does the ministry not spell out the whole package? An additional $2.60 is to be charged for what are called casual landings, that is, when you land at another airport than the one at which you are training. That is an additional fee pilots are asked to assume.
We were unable earlier to get sales tax removed from aircraft, despite arguments showing that they are a cheaper mode of transport than automobiles. Now there is a new
Adjournment Debate
levy. When is the pilot training industry to stop being the target of the government's revenue hunters?


Ralph Goodale: Mr. Speaker, my hon. friend raised a number of issues in his remarks. It is difficult, of course, to reply to all his questions in the brief period available, and to provide the mathematical substantiation for the calculations but I hope I shall be able to shed some light on the situation this evening.
Presently, aircraft owned by a flying club or commercial flying school and engaged in flying training are subject to a landing fee of 30 cents for each hour flown by the aircraft. If one assumes, as is the case, that an aircraft normally performs ten touch and go landings per hour of training, the fee of 30 cents per hour is equivalent to three cents per landing. At present owners of private aircraft of
5,000	pounds or less do not pay landing fees at ministry of transport airports except Montreal, Toronto and Vancouver.
It should also be mentioned that the practice of not identifying aircraft doing local landings except at the three airports I previously mentioned prevents the billing of such landings.
The Minister of Transport (Mr. Lang) has indicated that he will soon announce increases in user charges to obtain a larger percentage of revenue from users rather than from taxpayers. The minister has already said in the House that the increases would be in the order of 30 per cent.
The increased fees for individual landings will apply to the last landing of an aircraft engaged in flying training, at a rate of $1.30 per last landing, assuming the purchase of a package.


Donald W. Munro: I wonder what the Anti-Inflation Board thinks of that.


Ralph Goodale: To make this possible, the first take-off and last landing of all local flights will be recorded with the identification of the aircraft.
The fee of 30 cents per hour of flying training will be replaced as a "landing fee" by a new "service fee" of 60 cents per hour during flying training. At present each flying training landing produces revenue of three cents. For flying training of air crew personnel of a Canadian air carrier the landing fee applicable is 20 per cent of the corresponding normal landing fee. If, for comparison purposes, we compute the discount actually given to flying clubs, they only pay 3 per cent of the actual minimum landing fee of $1. The objective is that the charge applicable to flying training landings should be, on the average, 20 per cent of the normal landing fee. For owners of private aircraft over 5,000 pounds the impact of the proposed fee structure will be close to a straight 30 per cent increase in landing fees.
The case of aircraft owned by flying clubs or commercial flying schools is peculiar. The actual increase in fee would represent an increase of over 500 per cent when compared directly to the 1947 figure. Nevertheless, if we assume that the increase will be passed in the normal course to the customer, the corresponding impact on an hour of flying
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March 1, 1976
Adjournment Debate
training would be about 6 per cent. From this point of view it is a reasonable increase.


INQUIRY OF THE MINISTRY-SPACE IN HULL
Fred Alward McCain: Mr. Speaker, my question of December 3, 1975, was directed to the government House leader on behalf of veterans for a very specific reason. It has been my privilege to have known the Minister of Veterans Affairs (Mr. MacDonald) for a few years, and I know the warmth and depth of sympathy which he extends to those who served their country in the armed forces. He is, indeed, a very sincere person and would extend a helping hand to those who have been deprived of some of their capabilities as a result of enlistment in our armed forces.
The general attitude of the government in respect of these people would indicate to me that government policy has restricted the flow of funds for the proper consideration of the need of veterans. Since the date of my question the estimates have been released for fiscal 1975-76.
The Minister of Veterans Affairs has advised the members of this House that the needs of the veterans for pension and for War Veterans Allowance as a result of World War II has not as yet reached its peak, that the demand is increasing as veterans grow older. In spite of this the budget of the Veterans Affairs Department has not been one of those with the largest rate of expansion for financial requirements, but the financial end of the requirement is only one aspect of the problem.
Not too long ago a veteran was advised that he was three hundred and eighty-ninth on the list of applicants for reconsideration of pension entitlement. This man has been in a state of declining health for the last five years, and has had several trips to hospital. If the old system were still in place so that a veteran could get treated by a competent, permanent staff of the department in consultation with specialists, the entitlement of the veteran would be almost automatically reconsidered after discharge from hospital.
Since the War Veterans' Hospital in Saint John has virtually disappeared, and since the veterans are now being treated at their local hospitals by local doctors and local consultants, the review of the case no longer seems to be automatic. The few doctors remaining on staff of the department apparently do not have the authority to rule on the basis of the local family doctor's report, and it seems to cause an unnecessary number of appearances before the Pensions Entitlement Board and the Appeal Board.
I am quite prepared to acknowledge that the responsibilities of government are not always easy to fulfil, but it is imperative that a proper perspective of the requirements of the various groups of citizens of this country be retained, and it is the duty of members of this House to draw to the attention of government the weaknesses as they appear in the system. Certainly the treatment of veterans has developed as one of those weaknesses.
The loss of perspective, of course, is not entirely restricted to the Department of Veterans Affairs. I would like to cite an example to support my case on behalf of the veterans. Let us take, for example, the action of government and its various departments as it would relate to the

city of Moncton, New Brunswick. In The Ottawa Journal today on page nine there is an article by Dorothy Dearborn outlining the decrease in employment opportunity in that city. The CNR, a government corporation, has laid off 120 people. CFB Moncton Supply Depot may be eliminated with the loss of another 500 jobs. In addition to this, the construction of a Department of Transport building for which tenders have been called has either been cancelled or delayed, and there has been a reduction in DREE money for highway construction in the area.
This means that in four fields the Government of Canada has reduced employment opportunity from the anticipated level in one city in Canada in moves which were virtually simultaneous, at a time when the same city has just lost one of its major employers. This certainly illustrates a total lack of co-ordination of government programs and planning. I submit to you, Sir, that this is equally true of the attitude taken by the Department of Veterans Affairs toward the need for prompt consideration of pension applications and appeal board applications, as well as toward the need for a general re-assessment of the whole structure which administers this whole aspect of our society.
These remarks really do not need a reply unless the government House leader in his position of responsibility is prepared to undertake a re-assessment of this important social needs. On the day I raised this issue the government indicated that it could spend money where it wanted to by virtue of its new contract with Campeau for rental space to accommodate 6,000 civil servants in the city of Hull. If such a project could be undertaken on a lease basis, surely it is only fair to ask the hon. gentleman, as House leader, to give comparable consideration to means of calling attention to the needs of veterans and to extending to them, as the law of the land requires, the benefit of the "reasonable doubt" principle as extended by the courts.
As things are, the principle of "reasonable doubt" does not seem to be taking into account when a veteran applies for a pension. The letter of the regulations pertaining to his eligibility is a guide; "reasonable doubt" is precluded as a guideline and the veteran is denied his moral rights. This is a matter for total government consideration and I ask the House leader to extend his wholeheated assistance to the Minister of Veterans Affairs and those for whom his department is responsible.
The delay is unnecessary. There are capable people who would accept temporary employment to facilitate the work of the boards. There are doctors prepared to put their services at the disposal of the department. To make things even easier, temporary boards could be established to assess some of these cases-they could visit some of these small communities where veterans are being treated in hospitals. Let us remember the consideration they showed our country when we needed them. Now they need us. Let us consider them in the light in which they considered us when they enlisted for us.


Ralph Goodale: Mr. Speaker, first let me express regret on behalf of the Minister of Veterans Affairs (Mr. MacDonald) that he is not able to respond personally to the hon. member tonight. He would normally do so but unfortunately he cannot be present this evening and he
March 1, 1976

has asked me to reply on his behalf. I appreciate the manner in which the hon. member began his remarks by expressing a sincere word of commendation for the minister who, as we know, is held in high regard by all hon. members of the House.
The minister and the department obviously cannot accept the basic implication in the hon. member's question as worded in Hansard that veterans are being treated with some sort of austerity. I shall not take the time of the House tonight by going into chapter and verse with regard to the various benefits which are provided by the department but I know, upon the advice of the minister and from my personal observations, that Canadian veterans enjoy the most comprehensive benefits in the world, and that the
Adjournment Debate
monetary levels of those benefits compare favourably with similar benefits anywhere. Of course we are not satisfied with that standard, but the comparison with other countries is important.
In Canada veterans have, as citizens, access to the benefits of all federal, provincial and municipal programs and, in some cases, something substantially more because of their status as veterans. If the hon. member would bring any specific cases he is interested in to the attention of the minister, I know the minister would be delighted to have them investigated and dealt with promptly.


Fred Alward McCain: How would you like to be 389th on that list?
Motion agreed to and the House adjourned at 10.21 p.m.
21419-29V2

Tuesday, March 2, 1976